[Congressional Record Volume 142, Number 131 (Friday, September 20, 1996)]
[Senate]
[Pages S11096-S11101]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              THE HEALTH CENTERS CONSOLIDATION ACT OF 1996

                                 ______
                                 

                      KASSABAUM AMENDMENT NO. 5397

  Mr. LOTT (for Mrs. Kassebaum) proposed an amendment to the bill (S. 
1044) to amend title III of the Public Health Service Act to 
consolidate and reauthorize provisions relating to health centers, and 
for other purposes; as follows:

       Strike out all after the enacting clause and insert in lieu 
     thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Health Centers Consolidation 
     Act of 1996''.

     SEC. 2. CONSOLIDATION AND REAUTHORIZATION OF PROVISIONS.

       Subpart I of part D of title III of the Public Health 
     Service Act (42 U.S.C. 254b et seq.) is amended to read as 
     follows:

                      ``Subpart I--Health Centers

     ``SEC. 330. HEALTH CENTERS.

       ``(a) Definition of Health Center.--
       ``(1) In general.--For purposes of this section, the term 
     `health center' means an entity that serves a population that 
     is medically underserved, or a special medically underserved 
     population comprised of migratory and seasonal agricultural 
     workers, the homeless, and residents of public housing, by 
     providing, either through the staff and supporting resources 
     of the center or through contracts or cooperative 
     arrangements--
       ``(A) required primary health services (as defined in 
     subsection (b)(1)); and
       ``(B) as may be appropriate for particular centers, 
     additional health services (as defined in subsection (b)(2)) 
     necessary for the adequate support of the primary health 
     services required under subparagraph (A);

     for all residents of the area served by the center (hereafter 
     referred to in this section as the `catchment area').
       ``(2) Limitation.--The requirement in paragraph (1) to 
     provide services for all residents within a catchment area 
     shall not apply in the case of a health center receiving a 
     grant only under subsection (g), (h), or (i).
       ``(b) Definitions.--For purposes of this section:
       ``(1) Required primary health services.--
       ``(A) In general.--The term `required primary health 
     services' means--
       ``(i) basic health services which, for purposes of this 
     section, shall consist of--

       ``(I) health services related to family medicine, internal 
     medicine, pediatrics, obstetrics, or gynecology that are 
     furnished by physicians and where appropriate, physician 
     assistants, nurse practitioners, and nurse midwives;
       ``(II) diagnostic laboratory and radiologic services;
       ``(III) preventive health services, including--

       ``(aa) prenatal and perinatal services;
       ``(bb) screening for breast and cervical cancer;
       ``(cc) well-child services;
       ``(dd) immunizations against vaccine-preventable diseases;
       ``(ee) screenings for elevated blood lead levels, 
     communicable diseases, and cholesterol;
       ``(ff) pediatric eye, ear, and dental screenings to 
     determine the need for vision and hearing correction and 
     dental care;
       ``(gg) voluntary family planning services; and
       ``(hh) preventive dental services;

       ``(IV) emergency medical services; and
       ``(V) pharmaceutical services as may be appropriate for 
     particular centers;

       ``(ii) referrals to providers of medical services and other 
     health-related services (including substance abuse and mental 
     health services);
       ``(iii) patient case management services (including 
     counseling, referral, and follow-up services) and other 
     services designed to assist health center patients in 
     establishing eligibility for and gaining access to Federal, 
     State, and local programs that provide or financially support 
     the provision of medical, social, educational, or other 
     related services;
       ``(iv) services that enable individuals to use the services 
     of the health center (including outreach and transportation 
     services and, if a substantial number of the individuals in 
     the population served by a center are of limited English-
     speaking ability, the services of appropriate personnel 
     fluent in the language spoken by a predominant number of such 
     individuals); and
       ``(v) education of patients and the general population 
     served by the health center regarding the availability and 
     proper use of health services.
       ``(B) Exception.--With respect to a health center that 
     receives a grant only under subsection (g), the Secretary, 
     upon a showing of good cause, shall--
       ``(i) waive the requirement that the center provide all 
     required primary health services under this paragraph; and
       ``(ii) approve, as appropriate, the provision of certain 
     required primary health services only during certain periods 
     of the year.
       ``(2) Additional health services.--The term `additional 
     health services' means services that are not included as 
     required primary health services and that are appropriate to 
     meet the health needs of the population served by the health 
     center involved. Such term may include--
       ``(A) environmental health services, including--
       ``(i) the detection and alleviation of unhealthful 
     conditions associated with water supply;
       ``(ii) sewage treatment;
       ``(iii) solid waste disposal;
       ``(iv) rodent and parasitic infestation;
       ``(v) field sanitation;
       ``(vi) housing; and
       ``(vii) other environmental factors related to health; and
       ``(B) in the case of health centers receiving grants under 
     subsection (g), special occupation-related health services 
     for migratory and seasonal agricultural workers, including--
       ``(i) screening for and control of infectious diseases, 
     including parasitic diseases; and
       ``(ii) injury prevention programs, including prevention of 
     exposure to unsafe levels of agricultural chemicals including 
     pesticides.
       ``(3) Medically underserved populations.--
       ``(A) In general.--The term `medically underserved 
     population' means the population of an urban or rural area 
     designated by the Secretary as an area with a shortage of 
     personal health services or a population group designated by 
     the Secretary as having a shortage of such services.
       ``(B) Criteria.--In carrying out subparagraph (A), the 
     Secretary shall prescribe criteria for determining the 
     specific shortages of personal health services of an area or 
     population group. Such criteria shall--
       ``(i) take into account comments received by the Secretary 
     from the chief executive officer of a State and local 
     officials in a State; and
       ``(ii) include factors indicative of the health status of a 
     population group or residents of an area, the ability of the 
     residents of an area or of a population group to pay for 
     health services and their accessibility to them, and the 
     availability of health professionals to residents of an area 
     or to a population group.
       ``(C) Limitation.--The Secretary may not designate a 
     medically underserved population in a State or terminate the 
     designation of such a population unless, prior to such 
     designation or termination, the Secretary provides reasonable 
     notice and opportunity for comment and consults with--
       ``(i) the chief executive officer of such State;
       ``(ii) local officials in such State; and
       ``(iii) the organization, if any, which represents a 
     majority of health centers in such State.
       ``(D) Permissible designation.--The Secretary may designate 
     a medically underserved population that does not meet the 
     criteria established under subparagraph (B) if the chief 
     executive officer of the State in which such population is 
     located and local officials of such State recommend the 
     designation of such population based on unusual local 
     conditions which are a barrier to access to or the 
     availability of personal health services.
       ``(c) Planning Grants.--
       ``(1) In general.--
       ``(A) Centers.--The Secretary may make grants to public and 
     nonprofit private entities for projects to plan and develop 
     health centers which will serve medically underserved 
     populations. A project for which a grant may be made under 
     this subsection may include the cost of the acquisition and 
     lease of buildings and equipment (including the costs of 
     amortizing the principal of, and paying the interest on, 
     loans) and shall include--
       ``(i) an assessment of the need that the population 
     proposed to be served by the health center for which the 
     project is undertaken has for required primary health 
     services and additional health services;
       ``(ii) the design of a health center program for such 
     population based on such assessment;
       ``(iii) efforts to secure, within the proposed catchment 
     area of such center, financial and professional assistance 
     and support for the project;
       ``(iv) initiation and encouragement of continuing community 
     involvement in the development and operation of the project; 
     and
       ``(v) proposed linkages between the center and other 
     appropriate provider entities, such as health departments, 
     local hospitals, and rural health clinics, to provide better 
     coordinated, higher quality, and more cost-effective 
     health care services.

[[Page S11097]]

       ``(B) Comprehensive service delivery networks and plans.--
     The Secretary may make grants to health centers that receive 
     assistance under this section to enable the centers to plan 
     and develop a network or plan for the provision of health 
     services, which may include the provision of health services 
     on a prepaid basis or through another managed care 
     arrangement, to some or to all of the individuals which the 
     centers serve. Such a grant may only be made for such a 
     center if--
       ``(i) the center has received grants under subsection 
     (e)(1)(A) for at least 2 consecutive years preceding the year 
     of the grant under this subparagraph or has otherwise 
     demonstrated, as required by the Secretary, that such center 
     has been providing primary care services for at least the 2 
     consecutive years immediately preceding such year; and
       ``(ii) the center provides assurances satisfactory to the 
     Secretary that the provision of such services on a prepaid 
     basis, or under another managed care arrangement, will not 
     result in the diminution of the level or quality of health 
     services provided to the medically underserved population 
     served prior to the grant under this subparagraph.

     Any such grant may include the acquisition and lease of 
     buildings and equipment which may include data and 
     information systems (including the costs of amortizing the 
     principal of, and paying the interest on, loans), and 
     providing training and technical assistance related to the 
     provision of health services on a prepaid basis or under 
     another managed care arrangement, and for other purposes that 
     promote the development of managed care networks and plans.
       ``(2) Limitation.--Not more than two grants may be made 
     under this subsection for the same project, except that upon 
     a showing of good cause, the Secretary may make additional 
     grant awards.
       ``(d) Managed Care Loan Guarantee Program.--
       ``(1) Establishment.--
       ``(A) In general.--The Secretary shall establish a program 
     under which the Secretary may, in accordance with this 
     subsection and to the extent that appropriations are provided 
     in advance for such program, guarantee the principal and 
     interest on loans made by non-Federal lenders to health 
     centers funded under this section for the costs of developing 
     and operating managed care networks or plans.
       ``(B) Use of funds.--Loan funds guaranteed under this 
     subsection may be used--
       ``(i) to establish reserves for the furnishing of services 
     on a pre-paid basis; or
       ``(ii) for costs incurred by the center or centers, 
     otherwise permitted under this section, as the Secretary 
     determines are necessary to enable a center or centers to 
     develop, operate, and own the network or plan.
       ``(C) Publication of guidance.--Prior to considering an 
     application submitted under this subsection, the Secretary 
     shall publish guidelines to provide guidance on the 
     implementation of this section. The Secretary shall make such 
     guidelines available to the universe of parties affected 
     under this subsection, distribute such guidelines to such 
     parties upon the request of such parties, and provide a copy 
     of such guidelines to the appropriate committees of Congress.
       ``(2) Protection of financial interests.--
       ``(A) In general.--The Secretary may not approve a loan 
     guarantee for a project under this subsection unless the 
     Secretary determines that--
       ``(i) the terms, conditions, security (if any), and 
     schedule and amount of repayments with respect to the loan 
     are sufficient to protect the financial interests of the 
     United States and are otherwise reasonable, including a 
     determination that the rate of interest does not exceed such 
     percent per annum on the principal obligation outstanding as 
     the Secretary determines to be reasonable, taking into 
     account the range of interest rates prevailing in the private 
     market for similar loans and the risks assumed by the United 
     States, except that the Secretary may not require as security 
     any center asset that is, or may be, needed by the center or 
     centers involved to provide health services;
       ``(ii) the loan would not be available on reasonable terms 
     and conditions without the guarantee under this subsection; 
     and
       ``(iii) amounts appropriated for the program under this 
     subsection are sufficient to provide loan guarantees under 
     this subsection.
       ``(B) Recovery of payments.--
       ``(i) In general.--The United States shall be entitled to 
     recover from the applicant for a loan guarantee under this 
     subsection the amount of any payment made pursuant to such 
     guarantee, unless the Secretary for good cause waives such 
     right of recovery (subject to appropriations remaining 
     available to permit such a waiver) and, upon making any such 
     payment, the United States shall be subrogated to all of the 
     rights of the recipient of the payments with respect to which 
     the guarantee was made. Amounts recovered under this clause 
     shall be credited as reimbursements to the financing account 
     of the program.
       ``(ii) Modification of terms and conditions.--To the extent 
     permitted by clause (iii) and subject to the requirements of 
     section 504(e) of the Credit Reform Act of 1990 (2 U.S.C. 
     661c(e)), any terms and conditions applicable to a loan 
     guarantee under this subsection (including terms and 
     conditions imposed under clause (iv)) may be modified or 
     waived by the Secretary to the extent the Secretary 
     determines it to be consistent with the financial interest of 
     the United States.
       ``(iii) Incontestability.--Any loan guarantee made by the 
     Secretary under this subsection shall be incontestable--

       ``(I) in the hands of an applicant on whose behalf such 
     guarantee is made unless the applicant engaged in fraud or 
     misrepresentation in securing such guarantee; and
       ``(II) as to any person (or successor in interest) who 
     makes or contracts to make a loan to such applicant in 
     reliance thereon unless such person (or successor in 
     interest) engaged in fraud or misrepresentation in making or 
     contracting to make such loan.

       ``(iv) Further terms and conditions.--Guarantees of loans 
     under this subsection shall be subject to such further terms 
     and conditions as the Secretary determines to be necessary to 
     assure that the purposes of this section will be achieved.
       ``(3) Loan origination fees.--
       ``(A) In general.--The Secretary shall collect a loan 
     origination fee with respect to loans to be guaranteed under 
     this subsection, except as provided in subparagraph (C).
       ``(B) Amount.--The amount of a loan origination fee 
     collected by the Secretary under subparagraph (A) shall be 
     equal to the estimated long term cost of the loan guarantees 
     involved to the Federal Government (excluding administrative 
     costs), calculated on a net present value basis, after taking 
     into account any appropriations that may be made for the 
     purpose of offsetting such costs, and in accordance with the 
     criteria used to award loan guarantees under this subsection.
       ``(C) Waiver.--The Secretary may waive the loan origination 
     fee for a health center applicant who demonstrates to the 
     Secretary that the applicant will be unable to meet the 
     conditions of the loan if the applicant incurs the additional 
     cost of the fee.
       ``(4) Defaults.--
       ``(A) In general.--Subject to the requirements of the 
     Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), the 
     Secretary may take such action as may be necessary to prevent 
     a default on a loan guaranteed under this subsection, 
     including the waiver of regulatory conditions, deferral of 
     loan payments, renegotiation of loans, and the expenditure of 
     funds for technical and consultative assistance, for the 
     temporary payment of the interest and principal on such a 
     loan, and for other purposes. Any such expenditure made under 
     the preceding sentence on behalf of a health center or 
     centers shall be made under such terms and conditions as the 
     Secretary shall prescribe, including the implementation of 
     such organizational, operational, and financial reforms as 
     the Secretary determines are appropriate and the disclosure 
     of such financial or other information as the Secretary may 
     require to determine the extent of the implementation of such 
     reforms.
       ``(B) Foreclosure.--The Secretary may take such action, 
     consistent with State law respecting foreclosure procedures 
     and, with respect to reserves required for furnishing 
     services on a prepaid basis, subject to the consent of the 
     affected States, as the Secretary determines appropriate to 
     protect the interest of the United States in the event of a 
     default on a loan guaranteed under this subsection, except 
     that the Secretary may only foreclose on assets offered as 
     security (if any) in accordance with paragraph (2)(A)(i).
       ``(5) Limitation.--Not more than one loan guarantee may be 
     made under this subsection for the same network or plan, 
     except that upon a showing of good cause the Secretary may 
     make additional loan guarantees.
       ``(6) Annual report.--Not later than April 1, 1998, and 
     each April 1 thereafter, the Secretary shall prepare and 
     submit to the appropriate committees of Congress a report 
     concerning loan guarantees provided under this subsection. 
     Such report shall include--
       ``(A) a description of the number, amount, and use of funds 
     received under each loan guarantee provided under this 
     subsection;
       ``(B) a description of any defaults with respect to such 
     loans and an analysis of the reasons for such defaults, if 
     any; and
       ``(C) a description of the steps that may have been taken 
     by the Secretary to assist an entity in avoiding such a 
     default.
       ``(7) Program evaluation.--Not later than June 30, 1999, 
     the Secretary shall prepare and submit to the appropriate 
     committees of Congress a report containing an evaluation of 
     the program authorized under this subsection. Such evaluation 
     shall include a recommendation with respect to whether or not 
     the loan guarantee program under this subsection should be 
     continued and, if so, any modifications that should be made 
     to such program.
       ``(8) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection 
     such sums as may be necessary.
       ``(e) Operating Grants.--
       ``(1) Authority.--
       ``(A) In general.--The Secretary may make grants for the 
     costs of the operation of public and nonprofit private health 
     centers that provide health services to medically underserved 
     populations.
       ``(B) Entities that fail to meet certain requirements.--The 
     Secretary may make grants, for a period of not to exceed 2-
     years, for the costs of the operation of public and nonprofit 
     private entities which provide health services to medically 
     underserved populations but with respect to which the 
     Secretary is unable to make each of the determinations 
     required by subsection (j)(3).

[[Page S11098]]

       ``(2) Use of funds.--The costs for which a grant may be 
     made under subparagraph (A) or (B) of paragraph (1) may 
     include the costs of acquiring and leasing buildings and 
     equipment (including the costs of amortizing the principal 
     of, and paying interest on, loans), and the costs of 
     providing training related to the provision of required 
     primary health services and additional health services and to 
     the management of health center programs.
       ``(3) Construction.--The Secretary may award grants which 
     may be used to pay the costs associated with expanding and 
     modernizing existing buildings or constructing new buildings 
     (including the costs of amortizing the principal of, and 
     paying the interest on, loans) for projects approved prior to 
     October 1, 1996.
       ``(4) Limitation.--Not more than two grants may be made 
     under subparagraph (B) of paragraph (1) for the same entity.
       ``(5) Amount.--
       ``(A) In general.--The amount of any grant made in any 
     fiscal year under paragraph (1) to a health center shall be 
     determined by the Secretary, but may not exceed the amount by 
     which the costs of operation of the center in such fiscal 
     year exceed the total of--
       ``(i) State, local, and other operational funding provided 
     to the center; and
       ``(ii) the fees, premiums, and third-party reimbursements, 
     which the center may reasonably be expected to receive for 
     its operations in such fiscal year.
       ``(B) Payments.--Payments under grants under subparagraph 
     (A) or (B) of paragraph (1) shall be made in advance or by 
     way of reimbursement and in such installments as the 
     Secretary finds necessary and adjustments may be made for 
     overpayments or underpayments.
       ``(C) Use of nongrant funds.--Nongrant funds described in 
     clauses (i) and (ii) of subparagraph (A), including any such 
     funds in excess of those originally expected, shall be used 
     as permitted under this section, and may be used for such 
     other purposes as are not specifically prohibited under this 
     section if such use furthers the objectives of the project.
       ``(f) Infant Mortality Grants.--
       ``(1) In general.--The Secretary may make grants to health 
     centers for the purpose of assisting such centers in--
       ``(A) providing comprehensive health care and support 
     services for the reduction of--
       ``(i) the incidence of infant mortality; and
       ``(ii) morbidity among children who are less than 3 years 
     of age; and
       ``(B) developing and coordinating service and referral 
     arrangements between health centers and other entities for 
     the health management of pregnant women and children 
     described in subparagraph (A).
       ``(2) Priority.--In making grants under this subsection the 
     Secretary shall give priority to health centers providing 
     services to any medically underserved population among which 
     there is a substantial incidence of infant mortality or among 
     which there is a significant increase in the incidence of 
     infant mortality.
       ``(3) Requirements.--The Secretary may make a grant under 
     this subsection only if the health center involved agrees 
     that--
       ``(A) the center will coordinate the provision of services 
     under the grant to each of the recipients of the services;
       ``(B) such services will be continuous for each such 
     recipient;
       ``(C) the center will provide follow-up services for 
     individuals who are referred by the center for services 
     described in paragraph (1);
       ``(D) the grant will be expended to supplement, and not 
     supplant, the expenditures of the center for primary health 
     services (including prenatal care) with respect to the 
     purpose described in this subsection; and
       ``(E) the center will coordinate the provision of services 
     with other maternal and child health providers operating in 
     the catchment area.
       ``(g) Migratory and Seasonal Agricultural Workers.--
       ``(1) In general.--The Secretary may award grants for the 
     purposes described in subsections (c), (e), and (f) for the 
     planning and delivery of services to a special medically 
     underserved population comprised of--
       ``(A) migratory agricultural workers, seasonal agricultural 
     workers, and members of the families of such migratory and 
     seasonal agricultural workers who are within a designated 
     catchment area; and
       ``(B) individuals who have previously been migratory 
     agricultural workers but who no longer meet the requirements 
     of subparagraph (A) of paragraph (3) because of age or 
     disability and members of the families of such individuals 
     who are within such catchment area.
       ``(2) Environmental concerns.--The Secretary may enter into 
     grants or contracts under this subsection with public and 
     private entities to--
       ``(A) assist the States in the implementation and 
     enforcement of acceptable environmental health standards, 
     including enforcement of standards for sanitation in 
     migratory agricultural worker labor camps, and applicable 
     Federal and State pesticide control standards; and
       ``(B) conduct projects and studies to assist the several 
     States and entities which have received grants or contracts 
     under this section in the assessment of problems related to 
     camp and field sanitation, exposure to unsafe levels of 
     agricultural chemicals including pesticides, and other 
     environmental health hazards to which migratory agricultural 
     workers and members of their families are exposed.
       ``(3) Definitions.--For purposes of this subsection:
       ``(A) Migratory agricultural worker.--The term `migratory 
     agricultural worker' means an individual whose principal 
     employment is in agriculture on a seasonal basis, who has 
     been so employed within the last 24 months, and who 
     establishes for the purposes of such employment a temporary 
     abode.
       ``(B) Seasonal agricultural worker.--The term `seasonal 
     agricultural worker' means an individual whose principal 
     employment is in agriculture on a seasonal basis and who is 
     not a migratory agricultural worker.
       ``(C) Agriculture.--The term `agriculture' means farming in 
     all its branches, including--
       ``(i) cultivation and tillage of the soil;
       ``(ii) the production, cultivation, growing, and harvesting 
     of any commodity grown on, in, or as an adjunct to or part of 
     a commodity grown in or on, the land; and
       ``(iii) any practice (including preparation and processing 
     for market and delivery to storage or to market or to 
     carriers for transportation to market) performed by a farmer 
     or on a farm incident to or in conjunction with an activity 
     described in clause (ii).
       ``(h) Homeless Population.--
       ``(1) In general.--The Secretary may award grants for the 
     purposes described in subsections (c), (e), and (f) for the 
     planning and delivery of services to a special medically 
     underserved population comprised of homeless individuals, 
     including grants for innovative programs that provide 
     outreach and comprehensive primary health services to 
     homeless children and children at risk of homelessness.
       ``(2) Required services.--In addition to required primary 
     health services (as defined in subsection (b)(1)), an entity 
     that receives a grant under this subsection shall be required 
     to provide substance abuse services as a condition of such 
     grant.
       ``(3) Supplement not supplant requirement.--A grant awarded 
     under this subsection shall be expended to supplement, and 
     not supplant, the expenditures of the health center and the 
     value of in kind contributions for the delivery of services 
     to the population described in paragraph (1).
       ``(4) Definitions.--For purposes of this section:
       ``(A) Homeless individual.--The term `homeless individual' 
     means an individual who lacks housing (without regard to 
     whether the individual is a member of a family), including an 
     individual whose primary residence during the night is a 
     supervised public or private facility that provides temporary 
     living accommodations and an individual who is a resident in 
     transitional housing.
       ``(B) Substance abuse.--The term `substance abuse' has the 
     same meaning given such term in section 534(4).
       ``(C) Substance abuse services.--The term `substance abuse 
     services' includes detoxification and residential treatment 
     for substance abuse provided in settings other than 
     hospitals.
       ``(i) Residents of Public Housing.--
       ``(1) In general.--The Secretary may award grants for the 
     purposes described in subsections (c), (e), and (f) for the 
     planning and delivery of services to a special medically 
     underserved population comprised of residents of public 
     housing (such term, for purposes of this subsection, shall 
     have the same meaning given such term in section 3(b)(1) of 
     the United States Housing Act of 1937) and individuals living 
     in areas immediately accessible to such public housing.
       ``(2) Supplement not supplant.--A grant awarded under this 
     subsection shall be expended to supplement, and not supplant, 
     the expenditures of the health center and the value of in 
     kind contributions for the delivery of services to the 
     population described in paragraph (1).
       ``(3) Consultation with residents.--The Secretary may not 
     make a grant under paragraph (1) unless, with respect to the 
     residents of the public housing involved, the applicant for 
     the grant--
       ``(A) has consulted with the residents in the preparation 
     of the application for the grant; and
       ``(B) agrees to provide for ongoing consultation with the 
     residents regarding the planning and administration of the 
     program carried out with the grant.
       ``(j) Applications.--
       ``(1) Submission.--No grant may be made under this section 
     unless an application therefore is submitted to, and approved 
     by, the Secretary. Such an application shall be submitted in 
     such form and manner and shall contain such information as 
     the Secretary shall prescribe.
       ``(2) Description of need.--An application for a grant 
     under subparagraph (A) or (B) of subsection (e)(1) for a 
     health center shall include--
       ``(A) a description of the need for health services in the 
     catchment area of the center;
       ``(B) a demonstration by the applicant that the area or the 
     population group to be served by the applicant has a shortage 
     of personal health services; and
       ``(C) a demonstration that the center will be located so 
     that it will provide services to the greatest number of 
     individuals residing in the catchment area or included in 
     such population group.


[[Page S11099]]


     Such a demonstration shall be made on the basis of the 
     criteria prescribed by the Secretary under subsection (b)(3) 
     or on any other criteria which the Secretary may prescribe to 
     determine if the area or population group to be served by the 
     applicant has a shortage of personal health services. In 
     considering an application for a grant under subparagraph (A) 
     or (B) of subsection (e)(1), the Secretary may require as a 
     condition to the approval of such application an assurance 
     that the applicant will provide any health service defined 
     under paragraphs (1) and (2) of subsection (b) that the 
     Secretary finds is needed to meet specific health needs of 
     the area to be served by the applicant. Such a finding shall 
     be made in writing and a copy shall be provided to the 
     applicant.
       ``(3) Requirements.--Except as provided in subsection 
     (e)(1)(B), the Secretary may not approve an application for a 
     grant under subparagraph (A) or (B) of subsection (e)(1) 
     unless the Secretary determines that the entity for which the 
     application is submitted is a health center (within the 
     meaning of subsection (a)) and that--
       ``(A) the required primary health services of the center 
     will be available and accessible in the catchment area of the 
     center promptly, as appropriate, and in a manner which 
     assures continuity;
       ``(B) the center has made and will continue to make every 
     reasonable effort to establish and maintain collaborative 
     relationships with other health care providers in the 
     catchment area of the center;
       ``(C) the center will have an ongoing quality improvement 
     system that includes clinical services and management, and 
     that maintains the confidentiality of patient records;
       ``(D) the center will demonstrate its financial 
     responsibility by the use of such accounting procedures and 
     other requirements as may be prescribed by the Secretary;
       ``(E) the center--
       ``(i) has or will have a contractual or other arrangement 
     with the agency of the State, in which it provides services, 
     which administers or supervises the administration of a State 
     plan approved under title XIX of the Social Security Act for 
     the payment of all or a part of the center's costs in 
     providing health services to persons who are eligible for 
     medical assistance under such a State plan; or
       ``(ii) has made or will make every reasonable effort to 
     enter into such an arrangement;
       ``(F) the center has made or will make and will continue to 
     make every reasonable effort to collect appropriate 
     reimbursement for its costs in providing health services to 
     persons who are entitled to insurance benefits under title 
     XVIII of the Social Security Act, to medical assistance under 
     a State plan approved under title XIX of such Act, or to 
     assistance for medical expenses under any other public 
     assistance program or private health insurance program;
       ``(G) the center--
       ``(i) has prepared a schedule of fees or payments for the 
     provision of its services consistent with locally prevailing 
     rates or charges and designed to cover its reasonable costs 
     of operation and has prepared a corresponding schedule of 
     discounts to be applied to the payment of such fees or 
     payments, which discounts are adjusted on the basis of the 
     patient's ability to pay;
       ``(ii) has made and will continue to make every reasonable 
     effort--

       ``(I) to secure from patients payment for services in 
     accordance with such schedules; and
       ``(II) to collect reimbursement for health services to 
     persons described in subparagraph (F) on the basis of the 
     full amount of fees and payments for such services without 
     application of any discount; and

       ``(iii) has submitted to the Secretary such reports as the 
     Secretary may require to determine compliance with this 
     subparagraph;
       ``(H) the center has established a governing board which 
     except in the case of an entity operated by an Indian tribe 
     or tribal or Indian organization under the Indian Self-
     Determination Act or an urban Indian organization under the 
     Indian Health Care Improvement Act (25 U.S.C. 1651 et seq.)--
       ``(i) is composed of individuals, a majority of whom are 
     being served by the center and who, as a group, represent the 
     individuals being served by the center;
       ``(ii) meets at least once a month, selects the services to 
     be provided by the center, schedules the hours during which 
     such services will be provided, approves the center's annual 
     budget, approves the selection of a director for the center, 
     and, except in the case of a governing board of a public 
     center (as defined in the second sentence of this paragraph), 
     establishes general policies for the center; and
       ``(iii) in the case of an application for a second or 
     subsequent grant for a public center, has approved the 
     application or if the governing body has not approved the 
     application, the failure of the governing body to approve the 
     application was unreasonable;

     except that, upon a showing of good cause the Secretary shall 
     waive, for the length of the project period, all or part of 
     the requirements of this subparagraph in the case of a health 
     center that receives a grant pursuant to subsection (g), (h), 
     (i), or (p);
       ``(I) the center has developed--
       ``(i) an overall plan and budget that meets the 
     requirements of the Secretary; and
       ``(ii) an effective procedure for compiling and reporting 
     to the Secretary such statistics and other information as the 
     Secretary may require relating to--

       ``(I) the costs of its operations;
       ``(II) the patterns of use of its services;
       ``(III) the availability, accessibility, and acceptability 
     of its services; and
       ``(IV) such other matters relating to operations of the 
     applicant as the Secretary may require;

       ``(J) the center will review periodically its catchment 
     area to--
       ``(i) ensure that the size of such area is such that the 
     services to be provided through the center (including any 
     satellite) are available and accessible to the residents of 
     the area promptly and as appropriate;
       ``(ii) ensure that the boundaries of such area conform, to 
     the extent practicable, to relevant boundaries of political 
     subdivisions, school districts, and Federal and State health 
     and social service programs; and
       ``(iii) ensure that the boundaries of such area eliminate, 
     to the extent possible, barriers to access to the services of 
     the center, including barriers resulting from the area's 
     physical characteristics, its residential patterns, its 
     economic and social grouping, and available transportation;
       ``(K) in the case of a center which serves a population 
     including a substantial proportion of individuals of limited 
     English-speaking ability, the center has--
       ``(i) developed a plan and made arrangements responsive to 
     the needs of such population for providing services to the 
     extent practicable in the language and cultural context most 
     appropriate to such individuals; and
       ``(ii) identified an individual on its staff who is fluent 
     in both that language and in English and whose 
     responsibilities shall include providing guidance to such 
     individuals and to appropriate staff members with respect to 
     cultural sensitivities and bridging linguistic and cultural 
     differences; and
       ``(L) the center, has developed an ongoing referral 
     relationship with one or more hospitals.

     For purposes of subparagraph (H), the term `public center' 
     means a health center funded (or to be funded) through a 
     grant under this section to a public agency.
       ``(4) Approval of new or expanded service applications.--
     The Secretary shall approve applications for grants under 
     subparagraph (A) or (B) of subsection (e)(1) for health 
     centers which--
       ``(A) have not received a previous grant under such 
     subsection; or
       ``(B) have applied for such a grant to expand their 
     services;

     in such a manner that the ratio of the medically underserved 
     populations in rural areas which may be expected to use the 
     services provided by such centers to the medically 
     underserved populations in urban areas which may be expected 
     to use the services provided by such centers is not less than 
     two to three or greater than three to two.
       ``(k) Technical and Other Assistance.--The Secretary may 
     provide (either through the Department of Health and Human 
     Services or by grant or contract) all necessary technical and 
     other nonfinancial assistance (including fiscal and program 
     management assistance and training in such management) to any 
     public or private nonprofit entity to assist entities in 
     developing plans for, or operating as, health centers, and in 
     meeting the requirements of subsection (j)(2).
       ``(l) Authorization of Appropriations.--
       ``(1) In general.--For the purpose of carrying out this 
     section, in addition to the amounts authorized to be 
     appropriated under subsection (d), there are authorized to be 
     appropriated $802,124,000 for fiscal year 1997, and such sums 
     as may be necessary for each of the fiscal years 1998 through 
     2001.
       ``(2) Special provisions.--
       ``(A) Public centers.--The Secretary may not expend in any 
     fiscal year, for grants under this section to public centers 
     (as defined in the second sentence of subsection (j)(3)) the 
     governing boards of which (as described in subsection 
     (j)(3)(G)(ii)) do not establish general policies for such 
     centers, an amount which exceeds 5 percent of the amounts 
     appropriated under this section for that fiscal year. For 
     purposes of applying the preceding sentence, the term `public 
     centers' shall not include health centers that receive grants 
     pursuant to subsection (h) or (i).
       ``(B) Distribution of grants.--
       ``(i) Fiscal year 1997.--For fiscal year 1997, the 
     Secretary, in awarding grants under this section shall ensure 
     that the amounts made available under each of subsections 
     (g), (h), and (i) in such fiscal year bears the same 
     relationship to the total amount appropriated for such fiscal 
     year under paragraph (1) as the amounts appropriated for 
     fiscal year 1996 under each of sections 329, 340, and 340A 
     (as such sections existed one day prior to the date of 
     enactment of this section) bears to the total amount 
     appropriated under sections 329, 330, 340, and 340A (as such 
     sections existed one day prior to the date of enactment of 
     this section) for such fiscal year.
       ``(ii) Fiscal years 1998 and 1999.--For each of the fiscal 
     years 1998 and 1999, the Secretary, in awarding grants under 
     this section shall ensure that the proportion of the amounts 
     made available under each of subsections (g), (h), and (i) is 
     equal to the proportion of amounts made available under each 
     such subsection for the previous fiscal year, as such amounts 
     relate to the total amounts appropriated for the previous 
     fiscal year involved, increased or decreased by not more than 
     10 percent.

[[Page S11100]]

       ``(3) Funding report.--The Secretary shall annually prepare 
     and submit to the appropriate committees of Congress a report 
     concerning the distribution of funds under this section that 
     are provided to meet the health care needs of medically 
     underserved populations, including the homeless, residents of 
     public housing, and migratory and seasonal agricultural 
     workers, and the appropriateness of the delivery systems 
     involved in responding to the needs of the particular 
     populations. Such report shall include an assessment of the 
     relative health care access needs of the targeted populations 
     and the rationale for any substantial changes in the 
     distribution of funds.
       ``(m) Memorandum of Agreement.--In carrying out this 
     section, the Secretary may enter into a memorandum of 
     agreement with a State. Such memorandum may include, where 
     appropriate, provisions permitting such State to--
       ``(1) analyze the need for primary health services for 
     medically underserved populations within such State;
       ``(2) assist in the planning and development of new health 
     centers;
       ``(3) review and comment upon annual program plans and 
     budgets of health centers, including comments upon 
     allocations of health care resources in the State;
       ``(4) assist health centers in the development of clinical 
     practices and fiscal and administrative systems through a 
     technical assistance plan which is responsive to the requests 
     of health centers; and
       ``(5) share information and data relevant to the operation 
     of new and existing health centers.
       ``(n) Records.--
       ``(1) In general.--Each entity which receives a grant under 
     subsection (e) shall establish and maintain such records as 
     the Secretary shall require.
       ``(2) Availability.--Each entity which is required to 
     establish and maintain records under this subsection shall 
     make such books, documents, papers, and records available to 
     the Secretary or the Comptroller General of the United 
     States, or any of their duly authorized representatives, for 
     examination, copying or mechanical reproduction on or off the 
     premises of such entity upon a reasonable request therefore. 
     The Secretary and the Comptroller General of the United 
     States, or any of their duly authorized representatives, 
     shall have the authority to conduct such examination, 
     copying, and reproduction.
       ``(o) Delegation of Authority.--The Secretary may delegate 
     the authority to administer the programs authorized by this 
     section to any office, except that the authority to enter 
     into, modify, or issue approvals with respect to grants or 
     contracts may be delegated only within the central office of 
     the Health Resources and Services Administration.
       ``(p) Special Consideration.--In making grants under this 
     section, the Secretary shall give special consideration to 
     the unique needs of sparsely populated rural areas, including 
     giving priority in the awarding of grants for new health 
     centers under subsections (c) and (e), and the granting of 
     waivers as appropriate and permitted under subsections 
     (b)(1)(B)(i) and (j)(3)(G).
       ``(q) Audits.--
       ``(1) In general.--Each entity which receives a grant under 
     this section shall provide for an independent annual 
     financial audit of any books, accounts, financial records, 
     files, and other papers and property which relate to the 
     disposition or use of the funds received under such grant and 
     such other funds received by or allocated to the project for 
     which such grant was made. For purposes of assuring accurate, 
     current, and complete disclosure of the disposition or use of 
     the funds received, each such audit shall be conducted in 
     accordance with generally accepted accounting principles. 
     Each audit shall evaluate--
       ``(A) the entity's implementation of the guidelines 
     established by the Secretary respecting cost accounting,
       ``(B) the processes used by the entity to meet the 
     financial and program reporting requirements of the 
     Secretary, and
       ``(C) the billing and collection procedures of the entity 
     and the relation of the procedures to its fee schedule and 
     schedule of discounts and to the availability of health 
     insurance and public programs to pay for the health services 
     it provides.

     A report of each such audit shall be filed with the Secretary 
     at such time and in such manner as the Secretary may require.
       ``(2) Records.--Each entity which receives a grant under 
     this section shall establish and maintain such records as the 
     Secretary shall by regulation require to facilitate the audit 
     required by paragraph (1). The Secretary may specify by 
     regulation the form and manner in which such records shall be 
     established and maintained.
       ``(3) Availability of records.--Each entity which is 
     required to establish and maintain records or to provide for 
     and audit under this subsection shall make such books, 
     documents, papers, and records available to the Secretary or 
     the Comptroller General of the United States, or any of their 
     duly authorized representatives, for examination, copying or 
     mechanical reproduction on or off the premises of such entity 
     upon a reasonable request therefore. The Secretary and the 
     Comptroller General of the United States, or any of their 
     duly authorized representatives, shall have the authority to 
     conduct such examination, copying, and reproduction.
       ``(4) Waiver.--The Secretary may, under appropriate 
     circumstances, waive the application of all or part of the 
     requirements of this subsection with respect to an entity.''.

     SEC. 3. RURAL HEALTH OUTREACH, NETWORK DEVELOPMENT, AND 
                   TELEMEDICINE GRANT PROGRAM.

       (a) In General.--Subpart I of part D of title III of the 
     Public Health Service Act (42 U.S.C. 254b et seq.) (as 
     amended by section 2) is further amended by adding at the end 
     thereof the following new section:

     ``SEC. 330A. RURAL HEALTH OUTREACH, NETWORK DEVELOPMENT, AND 
                   TELEMEDICINE GRANT PROGRAM.

       ``(a) Administration.--The rural health services outreach 
     demonstration grant program established under section 301 
     shall be administered by the Office of Rural Health Policy 
     (of the Health Resources and Services Administration), in 
     consultation with State rural health offices or other 
     appropriate State governmental entities.
       ``(b) Grants.--Under the program referred to in subsection 
     (a), the Secretary, acting through the Director of the Office 
     of Rural Health Policy, may award grants to expand access to, 
     coordinate, restrain the cost of, and improve the quality of 
     essential health care services, including preventive and 
     emergency services, through the development of integrated 
     health care delivery systems or networks in rural areas and 
     regions.
       ``(c) Eligible Networks.--
       ``(1) Outreach networks.--To be eligible to receive a grant 
     under this section, an entity shall--
       ``(A) be a rural public or nonprofit private entity that is 
     or represents a network or potential network that includes 
     three or more health care providers or other entities that 
     provide or support the delivery of health care services; and
       ``(B) in consultation with the State office of rural health 
     or other appropriate State entity, prepare and submit to the 
     Secretary an application, at such time, in such manner, and 
     containing such information as the Secretary may require, 
     including--
       ``(i) a description of the activities which the applicant 
     intends to carry out using amounts provided under the grant;
       ``(ii) a plan for continuing the project after Federal 
     support is ended;
       ``(iii) a description of the manner in which the activities 
     funded under the grant will meet health care needs of 
     underserved rural populations within the State; and
       ``(iv) a description of how the local community or region 
     to be served by the network or proposed network will be 
     involved in the development and ongoing operations of the 
     network.
       ``(2) For-profit entities.--An eligible network may include 
     for-profit entities so long as the network grantee is a 
     nonprofit entity.
       ``(3) Telemedicine networks.--
       ``(A) In general.--An entity that is a health care provider 
     and a member of an existing or proposed telemedicine network, 
     or an entity that is a consortium of health care providers 
     that are members of an existing or proposed telemedicine 
     network shall be eligible for a grant under this section.
       ``(B) Requirement.--A telemedicine network referred to in 
     subparagraph (A) shall, at a minimum, be composed of--
       ``(i) a multispecialty entity that is located in an urban 
     or rural area, which can provide 24-hour a day access to a 
     range of specialty care; and
       ``(ii) at least two rural health care facilities, which may 
     include rural hospitals, rural physician offices, rural 
     health clinics, rural community health clinics, and rural 
     nursing homes.
       ``(d) Preference.--In awarding grants under this section, 
     the Secretary shall give preference to applicant networks 
     that include--
       ``(1) a majority of the health care providers serving in 
     the area or region to be served by the network;
       ``(2) any federally qualified health centers, rural health 
     clinics, and local public health departments serving in the 
     area or region;
       ``(3) outpatient mental health providers serving in the 
     area or region; or
       ``(4) appropriate social service providers, such as 
     agencies on aging, school systems, and providers under the 
     women, infants, and children program, to improve access to 
     and coordination of health care services.
       ``(e) Use of Funds.--
       ``(1) In general.--Amounts provided under grants awarded 
     under this section shall be used--
       ``(A) for the planning and development of integrated self-
     sustaining health care networks; and
       ``(B) for the initial provision of services.
       ``(2) Expenditures in rural areas.--
       ``(A) In general.--In awarding a grant under this section, 
     the Secretary shall ensure that not less than 50 percent of 
     the grant award is expended in a rural area or to provide 
     services to residents of rural areas.
       ``(B) Telemedicine networks.--An entity described in 
     subsection (c)(3) may not use in excess of--
       ``(i) 40 percent of the amounts provided under a grant 
     under this section to carry out activities under paragraph 
     (3)(A)(iii); and
       ``(ii) 20 percent of the amounts provided under a grant 
     under this section to pay for the indirect costs associated 
     with carrying out the purposes of such grant.
       ``(3) Telemedicine networks.--
       ``(A) In general.--An entity described in subsection 
     (c)(3), may use amounts provided under a grant under this 
     section to--

[[Page S11101]]

       ``(i) demonstrate the use of telemedicine in facilitating 
     the development of rural health care networks and for 
     improving access to health care services for rural citizens;
       ``(ii) provide a baseline of information for a systematic 
     evaluation of telemedicine systems serving rural areas;
       ``(iii) purchase or lease and install equipment; and
       ``(iv) operate the telemedicine system and evaluate the 
     telemedicine system.
       ``(B) Limitations.--An entity described in subsection 
     (c)(3), may not use amounts provided under a grant under this 
     section--
       ``(i) to build or acquire real property;
       ``(ii) purchase or install transmission equipment (such as 
     laying cable or telephone lines, microwave towers, satellite 
     dishes, amplifiers, and digital switching equipment); or
       ``(iii) for construction, except that such funds may be 
     expended for minor renovations relating to the installation 
     of equipment;
       ``(f) Term of Grants.--Funding may not be provided to a 
     network under this section for in excess of a 3-year period.
       ``(g) Authorization of Appropriations.--For the purpose of 
     carrying out this section there are authorized to be 
     appropriated $36,000,000 for fiscal year 1997, and such sums 
     as may be necessary for each of the fiscal years 1998 through 
     2001.''.
       (b) Transition.--The Secretary of Health and Human Services 
     shall ensure the continued funding of grants made, or 
     contracts or cooperative agreements entered into, under 
     subpart I of part D of title III of the Public Health Service 
     Act (42 U.S.C. 254b et seq.) (as such subpart existed on the 
     day prior to the date of enactment of this Act), until the 
     expiration of the grant period or the term of the contract or 
     cooperative agreement. Such funding shall be continued under 
     the same terms and conditions as were in effect on the date 
     on which the grant, contract or cooperative agreement was 
     awarded, subject to the availability of appropriations.

     SEC. 4. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) In General.--The Public Health Service Act is amended--
       (1) in section 224(g)(4) (42 U.S.C. 233(g)(4)), by striking 
     ``under'' and all that follows through the end thereof and 
     inserting ``under section 330.'';
       (2) in section 340C(a)(2) (42 U.S.C. 256c) by striking 
     ``under'' and all that follows through the end thereof and 
     inserting ``with assistance provided under section 330.''; 
     and
       (3) by repealing subparts V and VI of part D of title III 
     (42 U.S.C. 256 et seq.).
       (b) Social Security Act.--The Social Security Act is 
     amended--
       (1) in clauses (i) and (ii)(I) of section 1861(aa)(4)(A) 
     (42 U.S.C. 1395x(aa)(4)(A)(i) and (ii)(I)) by striking 
     ``section 329, 330, or 340'' and inserting ``section 330 
     (other than subsection (h))''; and
       (2) in clauses (i) and (ii)(II) of section 1905(l)(2)(B) 
     (42 U.S.C. 1396d(l)(2)(B)(i) and (ii)(II)) by striking 
     ``section 329, 330, 340, or 340A'' and inserting ``section 
     330''.
       (c) References.--Whenever any reference is made in any 
     provision of law, regulation, rule, record, or document to a 
     community health center, migrant health center, public 
     housing health center, or homeless health center, such 
     reference shall be considered a reference to a health center.
       (d) FTCA Clarification.--For purposes of section 224(k)(3) 
     of the Public Health Service Act (42 U.S.C. 233(k)(3)), 
     transfers from the fund described in such section for fiscal 
     year 1996 shall be deemed to have occurred prior to December 
     31, 1995.
       (e) Additional Amendments.--After consultation with the 
     appropriate committees of the Congress, the Secretary of 
     Health and Human Services shall prepare and submit to the 
     Congress a legislative proposal in the form of an 
     implementing bill containing technical and conforming 
     amendments to reflect the changes made by this Act.

     SEC. 5. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall become 
     effective on October 1, 1997.

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