H.R. 196 (103rd): Health Equity and Access Improvement Act of 1992

103rd Congress, 1993–1994. Text as of Jan 05, 1993 (Introduced).

Status & Summary | PDF | Source: GPO

HR 196 IH

103d CONGRESS

1st Session

H. R. 196

To provide improved access to health care, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. HOUGHTON introduced the following bill; which was referred jointly to the Committees on Ways and Means, Energy and Commerce, and the Judiciary


A BILL

To provide improved access to health care, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    This Act may be cited as the ‘Health Equity and Access Improvement Act of 1992’.

    (b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

      Sec. 1. Short title; table of contents.

TITLE I--TAX INCENTIVES FOR HEALTH CARE ACCESS

      Sec. 101. Refundable health expenses tax credit.

      Sec. 102. Individual tax deduction for health insurance costs.

      Sec. 103. Credit for employers to provide health insurance.

      Sec. 104. Deductibility for self-employed individuals.

      Sec. 105. Revenue incentives for practice in rural areas.

TITLE II--HEALTH CARE REFORM PROVISIONS

Subtitle A--Model Health Care Insurance Benefits Plan

      Sec. 201. Model health care insurance benefits plan.

      Sec. 202. Definitions.

Subtitle B--Managed Care

      Sec. 211. Development of standards for managed care plans.

      Sec. 212. Preemption of provisions relating to managed care.

Subtitle C--Small Employer Purchasing Groups

      Sec. 221. Qualified small employer purchasing groups.

      Sec. 222. Preemption from insurance mandates for small employer purchasing groups.

Subtitle D--Insurance Market Reform

      Sec. 231. Failure to satisfy certain standards for health care insurance provided to small employers.

Subtitle E--Uniform Standards for Reporting Services and Processing Claims

      Sec. 241. Application and establishment of uniform standards.

      Sec. 242. Effective date.

TITLE III--MEDICAL LIABILITY REFORM

Subtitle A--Definitions and Findings

      Sec. 301. Definitions.

      Sec. 302. Effect on interstate commerce.

Subtitle B--Expedited Medical Malpractice Settlements

      Sec. 311. Expedited medical malpractice settlements.

Subtitle C--Alternative Dispute Resolution Procedures

      Sec. 321. Establishment of board of advisors.

      Sec. 322. Development of State voluntary dispute resolution procedures.

      Sec. 323. Application of existing procedures, rebuttable presumption.

Subtitle D--Uniform Standards for Medical Malpractice Cases

      Sec. 331. Application to civil actions.

      Sec. 332. Damages.

      Sec. 333. Joint and several liability for noneconomic damages.

      Sec. 334. Uniform statute of limitations.

      Sec. 335. Special protection for obstetricians and gynecologists.

Subtitle E--Uniform Disciplinary Reforms

      Sec. 341. Requirement of compliance.

      Sec. 342. Funds for State disciplinary activities.

      Sec. 343. Membership of State health care practitioner boards.

      Sec. 344. Immunity for members of State health care practitioner boards.

      Sec. 345. Risk management programs.

      Sec. 346. Punitive damages.

Subtitle F--Medical Products

      Sec. 351. Limitation on award of punitive damages in product liability actions involving drugs and devices.

Subtitle G--Community Health Centers

      Sec. 361. Community and migrant health centers risk retention group.

Subtitle H--Miscellaneous Provisions

      Sec. 371. Severability.

      Sec. 372. Compliance.

TITLE IV--PUBLIC HEALTH PROVISIONS

Subtitle A--New Basic Health Care Program

      Sec. 401. Establishment of BasiCare program.

      Sec. 402. GAO study of payments under BasiCare.

Subtitle B--Medicaid Provisions

      Sec. 411. Expansion of medicaid waiver authority.

      Sec. 412. Establishment of Federal Medical Waiver Demonstration Board.

TITLE V--MEDICALLY UNDERSERVED AREAS

Subtitle A--Public Health Service Act Provisions

      Sec. 501. National Health Service Corps.

      Sec. 502. Establishment of grant program.

      Sec. 503. Establishment of new program to provide funds to allow federally qualified health centers and other entities or organizations to provide expanded services to medically underserved individuals.

      Sec. 504. Rural mental health outreach grants.

      Sec. 505. Health professions training.

      Sec. 506. Area health education centers.

      Sec. 507. Rural health extension networks.

      Sec. 508. Rural managed care cooperatives.

Subtitle B--Provision Relating to Social Security

      Sec. 511. Rural health care transition grant program.

      Sec. 512. Essential access community hospital program.

TITLE VI--INCENTIVES TO ENCOURAGE PREVENTIVE SERVICES

      Sec. 601. Preventive services tax credit.

      Sec. 602. Increase in authorization for childhood immunizations.

TITLE VII--TAX TREATMENT OF LONG-TERM CARE INSURANCE AND PLANS

Subtitle A--Treatment of Long-Term Care Insurance

      Sec. 701. Qualified long-term care insurance treated as accident and health insurance for purposes of taxation of life insurance companies.

      Sec. 702. Qualified long-term care insurance treated as accident and health insurance for purposes of exclusion for benefits received under such insurance and for employer contributions for such insurance.

      Sec. 703. Exclusion from gross income for amounts withdrawn from individual retirement plans or 401(k) plans for qualified long-term care insurance.

      Sec. 704. Exchange of life insurance policy for qualified long-term care policy not taxable.

Subtitle B--Employer Funding of Medical Benefits

      Sec. 711. Medical benefits for retired employees and their spouses and dependents.

      Sec. 712. Treatment of health benefits accounts.

Subtitle C--Reverse Mortgage Insurance for Older Americans.

      Sec. 721. Maximum amount insured.

Subtitle D--Income Tax Credits

      Sec. 731. Refundable credit for custodial care of certain dependents in taxpayer’s home.

      Sec. 732. Credit for expenses for long-term care services provided to certain independent persons requiring such care.

Subtitle E--Treatment of Accelerated Death Benefits

      Sec. 741. Tax treatment of accelerated death benefits under life insurance contracts.

      Sec. 742. Tax treatment of companies issuing qualified accelerated death benefit riders.

Subtitle F--Federal National Long-Term Care Reinsurance Corporation

      Sec. 751. Authorization for establishment of corporation.

      Sec. 752. Board of directors and officers.

      Sec. 753. Purpose and authority of corporation.

      Sec. 754. Capitalization.

      Sec. 755. Exemption from state regulation and taxation.

      Sec. 756. Audit and annual report.

      Sec. 757. Protection of name.

TITLE VIII--IMPROVEMENTS IN PORTABILITY OF PRIVATE HEALTH INSURANCE

      Sec. 801. Excise tax imposed on failure to provide for preexisting condition.

TITLE I--TAX INCENTIVES FOR HEALTH CARE ACCESS

SEC. 101. REFUNDABLE HEALTH EXPENSES TAX CREDIT.

    (a) IN GENERAL- Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable personal credits) is amended by inserting after section 34 the following new section:

‘SEC. 34A. HEALTH EXPENSES.

    ‘(a) ALLOWANCE OF CREDIT- In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the qualified health expenses paid by such individual during the taxable year.

    ‘(b) QUALIFIED HEALTH EXPENSES- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘qualified health expenses’ means amounts paid during the taxable year for medical care (within the meaning of section 213(d)(1)).

      ‘(2) DOLLAR LIMIT ON QUALIFIED HEALTH EXPENSES- The amount of the qualified health expenses paid during any taxable year which may be taken into account under subsection (a) shall not exceed--

        ‘(A) $600, in the case of a taxpayer described in section 1(c) or 1(d), and

        ‘(B) $1,200, in the case of any other taxpayer.

      For purposes of this paragraph, the rule of section 219(g)(4) shall apply.

      ‘(3) PHASEOUT- In the case of any taxpayer whose adjusted gross income exceeds $10,000 ($20,000, in the case of a taxpayer described in paragraph (2)(B)), the dollar amounts under paragraph (2) shall be reduced (but not below zero) by an amount equal to 10 percent of such excess.

      ‘(4) ELECTION NOT TO TAKE CREDIT- A taxpayer may elect for any taxable year to have amounts described in paragraph (1) not treated as qualified health expenses.

    ‘(c) SPECIAL RULES- For purposes of this section--

      ‘(1) COORDINATION WITH ADVANCE PAYMENT AND MINIMUM TAX- Rules similar to the rules of subsections (g) and (h) of section 32 shall apply to any credit to which this section applies.

      ‘(2) SUBSIDIZED EXPENSES- No expense shall be treated as a qualified health expense if--

        ‘(A) such expense is paid, reimbursed, or subsidized (whether by being disregarded for purposes of another program or otherwise) by the Federal Government, a State or local government, or any agency or instrumentality thereof, and

        ‘(B) the payment, reimbursement, or subsidy of such expense is not includable in the gross income of the recipient.

    ‘(d) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.’.

    (b) ADVANCE PAYMENT OF CREDIT- Chapter 25 of the Internal Revenue Code of 1986 (relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following new section:

‘SEC. 3507A. ADVANCE PAYMENT OF HEALTH EXPENSES CREDIT.

    ‘(a) GENERAL RULE- Except as otherwise provided in this section, every employer making payment of wages with respect to whom a health expenses eligibility certificate is in effect shall, at the time of paying such wages, make an additional payment equal to such employee’s health expenses advance amount.

    ‘(b) HEALTH EXPENSES ELIGIBILITY CERTIFICATE- For purposes of this title, a health expenses eligibility certificate is a statement furnished by an employee to the employer which--

      ‘(1) certifies that the employee will be eligible to receive the credit provided by section 34A for the taxable year,

      ‘(2) certifies that the employee does not have a health expenses eligibility certificate in effect for the calendar year with respect to the payment of wages by another employer,

      ‘(3) states whether or not the employee’s spouse has a health expenses eligibility certificate in effect, and

      ‘(4) estimates the amount of qualified health expenses (as defined in section 34A(b)) for the calendar year.

    For purposes of this section, a certificate shall be treated as being in effect with respect to a spouse if such a certificate will be in effect on the first status determination date following the date on which the employee furnishes the statement in question.

    ‘(c) HEALTH EXPENSES ADVANCE AMOUNT-

      ‘(1) IN GENERAL- For purposes of this title, the term ‘health expenses advance amount’ means, with respect to any payroll period, the amount determined--

        ‘(A) on the basis of the employee’s wages from the employer for such period,

        ‘(B) on the basis of the employee’s estimated qualified health expenses included in the health expenses eligibility certificate, and

        ‘(C) in accordance with tables provided by the Secretary.

      ‘(2) ADVANCE AMOUNT TABLES- The tables referred to in paragraph (1)(C) shall be similar in form to the tables prescribed under section 3402 and, to the maximum extent feasible, shall be coordinated with such tables and the tables prescribed under section 3507(c).

    ‘(d) OTHER RULES- For purposes of this section, rules similar to the rules of subsections (d) and (e) of section 3507 shall apply.

    ‘(e) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.’.

    (c) TERMINATION OF HEALTH INSURANCE CREDIT- Section 32 of the Internal Revenue Code of 1986 (relating to earned income credit) is amended by adding at the end thereof the following new subsection:

    ‘(d) TERMINATION OF HEALTH INSURANCE CREDIT- In the case of taxable years beginning after December 31, 1992, the health insurance credit percentage shall be equal to 0 percent.’.

    (d) CONFORMING AMENDMENT- Section 213 of the Internal Revenue Code of 1986 (relating to deduction for medical, dental, etc., expenses) is amended by striking subsections (e) and (f) and by inserting the following new subsection:

    ‘(e) COORDINATION WITH HEALTH EXPENSES CREDIT UNDER SECTION 34A- The amount otherwise taken into account under subsection (a) as expenses paid for medical care shall be reduced by the amount (if any) of the health expenses credit allowable to the taxpayer for the taxable year under section 34A.’.

    (e) CLERICAL AMENDMENTS-

      (1) The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 34 the following new item:

‘Sec. 34A. Health expenses.’.

      (2) The table of sections for chapter 25 of such Code is amended by adding after the item relating to section 3507 the following new item:

‘Sec. 3507A. Advance payment of health expenses credit.’.

    (f) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1992.

SEC. 102. INDIVIDUAL TAX DEDUCTION FOR HEALTH INSURANCE COSTS.

    (a) FULL DEDUCTION ALLOWED- Subsection (a) of section 213 of the Internal Revenue Code of 1986 (relating to deduction for medical, dental, etc., expenses) is amended to read as follows:

    ‘(a) ALLOWANCE OF DEDUCTION-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), there shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, the taxpayer’s spouse, or a dependent (as defined in section 152).

      ‘(2) SPECIAL DOLLAR LIMITATION- Expenses for medical care described in subparagraphs (A) and (B) of subsection (d)(1) shall be taken into account under subsection (a) only to the extent that such expenses exceed 7.5 percent of the taxpayer’s adjusted gross income for the taxable year.’.

    (b) DEDUCTION AVAILABLE FOR NONITEMIZERS-

      (1) IN GENERAL- Section 213 of the Internal Revenue Code of 1986, as amended by section 101(d), is further amended by adding at the end thereof the following new subsection:

    ‘(f) RULE FOR NONITEMIZATION OF DEDUCTIONS- In the case of an individual who does not itemize his deductions for the taxable year, the amount allowable under subsection (a) for the taxable year with respect to expenses described in subsection (d)(1)(C) shall be taken into account as a direct health insurance deduction under section 63.’.

      (2) DEFINITION OF TAXABLE INCOME-

        (A) IN GENERAL- Section 63(b) of such Code (relating to individuals who do not itemize their deductions) is amended--

          (i) by striking ‘and’ at the end of paragraph (1),

          (ii) by striking the period at the end of paragraph (2) and inserting ‘, and’, and

          (iii) by adding at the end thereof the following new paragraph:

      ‘(3) the direct health insurance deduction.’.

        (B) DIRECT HEALTH INSURANCE DEDUCTION DEFINED- Section 63 of such Code (defining taxable income) is amended by adding at the end thereof the following new subsection:

    ‘(h) DIRECT HEALTH INSURANCE DEDUCTION- For purposes of this section, the term ‘direct health insurance deduction’ means that portion of the amount allowable under section 213(a) which is taken as a direct health insurance deduction for the taxable year under section 213(f).’.

        (C) CONFORMING AMENDMENT- Section 63(d) of such Code (defining itemized deductions) is amended--

          (i) by striking ‘and’ at the end of paragraph (1),

          (ii) by striking the period at the end of paragraph (2) and inserting ‘, and’, and

          (iii) by adding at the end thereof the following new paragraph:

      ‘(3) the direct health insurance deduction.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1992.

SEC. 103. CREDIT FOR EMPLOYERS TO PROVIDE HEALTH INSURANCE.

    (a) ALLOWANCE OF CREDIT- Section 38(b) of the Internal Revenue Code of 1986 (defining general business credit) is amended by striking ‘plus’ at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting ‘, plus’, and by adding at the end thereof the following new paragraph:

      ‘(8) the employer health insurance credit.’

    (b) EMPLOYER HEALTH INSURANCE CREDIT- Subpart D of part IV of subchapter A of chapter 1 of such Code (relating to business related credits) is amended by adding at the end thereof the following new section:

‘SEC. 45. EMPLOYER HEALTH INSURANCE CREDIT.

    ‘(a) GENERAL RULE- For purposes of section 38, the amount of the employer health insurance credit determined under this section for the taxable year is an amount equal to the sum of--

      ‘(1) the small employer basic health insurance credit,

      ‘(2) the managed care credit,

      ‘(3) the dependent coverage credit, and

      ‘(4) the small employer purchasing group health insurance credit.

    ‘(b) DEFINITION OF SMALL EMPLOYER BASIC HEALTH INSURANCE CREDIT, MANAGED CARE CREDIT, DEPENDENT COVERAGE CREDIT, AND SMALL EMPLOYER PURCHASING GROUP HEALTH INSURANCE CREDIT-

      ‘(1) SMALL EMPLOYER BASIC HEALTH INSURANCE CREDIT- The small employer basic health insurance credit of any eligible employer which is an eligible small employer is 25 percent of the qualified health care costs of such employer beginning with the first full taxable year in which such employer offers health-care coverage to employees of such employer, reduced (but not below zero percentage) by 5 percentage points for each taxable year thereafter.

      ‘(2) MANAGED CARE CREDIT- The managed care credit of any eligible employer is 25 percent of the approved managed care plan costs of such employer beginning with the first full taxable year in which such employer offers an approved managed care plan (within the meaning of section 162(m)(3)(B)) to employees of such employer for the taxable year, reduced (but not below zero percent) by 5 percentage points for each taxable year thereafter.

      ‘(3) DEPENDENT COVERAGE CREDIT- The dependent coverage credit of any eligible employer is 25 percent of the qualified dependent coverage costs of such employer beginning with the first full taxable year in which such employer offers health-care coverage to dependents of employees of such employer for the taxable year, reduced (but not below zero percent) by 5 percentage points for each taxable year thereafter.

      ‘(4) SMALL EMPLOYER PURCHASING GROUP HEALTH INSURANCE CREDIT- The small employer purchasing group health insurance credit of any eligible small employer which is a member of a qualified small employer purchasing group is 20 percent of the qualified health care costs of such employer for the taxable year.

    ‘(c) ELIGIBLE EMPLOYER- An employer is eligible for a small employer basic health insurance credit, managed care credit, and dependent coverage credit under this section if such employer (or any predecessor employer) has never provided health-care coverage, an approved managed care plan, or dependent coverage for its employees (as the case may be) at any time before the calendar year in which occurs the first full taxable year described in paragraphs (1), (2), or (3) of subsection (b), respectively.

    ‘(d) DEFINITIONS- For purposes of this section--

      ‘(1) QUALIFIED HEALTH CARE COSTS- The term ‘qualified health care costs’ means the amounts paid by the employer for health-care coverage of its employees.

      ‘(2) APPROVED MANAGED CARE PLAN COSTS-

        ‘(A) IN GENERAL- The term ‘approved managed care plan costs’ means the amounts paid by the employer for an approved managed care plan for the employees of such employer.

        ‘(B) APPROVED MANAGED CARE PLAN- The term ‘approved managed care plan’ means a managed care plan meeting the requirements of section 202(2) of the Health Equity and Access Improvement Act of 1992.

      ‘(3) QUALIFIED DEPENDENT COVERAGE COSTS- The term ‘qualified dependent coverage costs’ means the amounts paid by the employer for health-care coverage of the dependents of employees of such employer.

      ‘(4) ELIGIBLE SMALL EMPLOYER-

        ‘(A) IN GENERAL- The term ‘eligible small employer’ means any person--

          ‘(i) which, on an average business day during the preceding taxable year, had more than 2 but less than 100 employees, and

          ‘(ii) at least 60 percent of the employees of which during the taxable year received health-care coverage described in paragraph (1).

        ‘(B) AGGREGATION RULES- All members of the same controlled group of corporations (within the meaning of section 52(a)) and all persons under common control (within the meaning of section 52(b)) shall be treated as 1 person.

        ‘(C) EMPLOYEE- The term ‘employee’ shall not include--

          ‘(i) a self-employed individual as defined in section 401(c)(1), or

          ‘(ii) an employee who works less than 20 hours per week.

      ‘(5) QUALIFIED SMALL EMPLOYER PURCHASING GROUP- The term ‘qualified small employer purchasing group’ has the meaning given such term by section 221(a) of the Health Equity and Access Improvement Act of 1992.

    ‘(e) COORDINATION WITH DEDUCTION- No deduction shall be allowable under this chapter for any qualified health care costs taken into account in computing the amount of the credit under section 38.’.

    (c) CONFORMING AMENDMENT- Section 39(d) of such Code is amended by adding at the end thereof the following new paragraph:

      ‘(3) NO CARRYBACK OF EMPLOYER HEALTH INSURANCE CREDIT BEFORE 1993- No portion of the unused business credit for any taxable year which is attributable to the credit determined under section 45(a) (relating to employer health insurance credit) may be carried to a taxable year beginning before January 1, 1992.’.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1992.

SEC. 104. DEDUCTIBILITY FOR SELF-EMPLOYED INDIVIDUALS.

    (a) IN GENERAL- Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 (relating to special rules for health insurance costs of self-employed individuals) is amended by striking ‘25 percent of’.

    (b) DEDUCTION MADE PERMANENT- Section 162(l) of the Internal Revenue Code of 1986 is amended by striking paragraph (6).

    (c) CONFORMING AMENDMENT- Subparagraph (B) of section 162(l)(3) of the Internal Revenue Code of 1986 (relating to coordination with medical deduction, etc.) is amended--

      (1) by striking ‘health insurance credit’ and inserting ‘health expenses credit and employer health insurance credit’,

      (2) by striking ‘section 32’ and inserting ‘section 34A with respect to such insurance and section 38, respectively’, and

      (3) by striking ‘CREDIT’ in the heading thereof and inserting ‘CREDITS’.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1992.

SEC. 105. REVENUE INCENTIVES FOR PRACTICE IN RURAL AREAS.

    (a) NONREFUNDABLE CREDIT FOR CERTAIN PRIMARY HEALTH SERVICES PROVIDERS-

      (1) IN GENERAL- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25 the following new section:

‘SEC. 25A. PRIMARY HEALTH SERVICES PROVIDERS.

    ‘(a) ALLOWANCE OF CREDIT- In the case of a qualified primary health services provider, there is allowed as a credit against the tax imposed by this chapter for any taxable year in a mandatory service period an amount equal to the product of--

      ‘(1) the lesser of--

        ‘(A) the number of months of such period occurring in such taxable year, or

        ‘(B) 36 months, reduced by the number of months taken into account under this paragraph with respect to such provider for all preceding taxable years (whether or not in the same mandatory service period), multiplied by

      ‘(2) $1,000 ($500 in the case of a qualified health services provider who is a physician assistant or a nurse practitioner).

    ‘(b) QUALIFIED PRIMARY HEALTH SERVICES PROVIDER- For purposes of this section, the term ‘qualified primary health services provider’ means any physician, physician assistant, or nurse practitioner who for any month during a mandatory service period is certified by the Bureau to be a primary health services provider who--

      ‘(1) is providing primary health services--

        ‘(A) full time, and

        ‘(B) to individuals at least 80 percent of whom reside in a rural health professional shortage area,

      ‘(2) is not receiving during such year a scholarship under the National Health Service Corps Scholarship Program or a loan repayment under the National Health Service Corps Loan Repayment Program,

      ‘(3) is not fulfilling service obligations under such Programs, and

      ‘(4) has not defaulted on such obligations.

    ‘(c) MANDATORY SERVICE PERIOD- For purposes of this section, the term ‘mandatory service period’ means the period of 60 consecutive calendar months beginning with the first month the taxpayer is a qualified primary health services provider.

    ‘(d) DEFINITIONS AND SPECIAL RULES- For purposes of this section--

      ‘(1) BUREAU- The term ‘Bureau’ means the Bureau of Health Care Delivery and Assistance, Health Resources and Services Administration of the United States Public Health Service.

      ‘(2) PHYSICIAN- The term ‘physician’ has the meaning given to such term by section 1861(r) of the Social Security Act.

      ‘(3) PHYSICIAN ASSISTANT; NURSE PRACTITIONER- The terms ‘physician assistant’ and ‘nurse practitioner’ have the meanings given to such terms by section 1861(aa)(3) of the Social Security Act.

      ‘(4) PRIMARY HEALTH SERVICES PROVIDER- The term ‘primary health services provider’ means a provider of primary health services (as defined in section 330(b)(1) of the Public Health Service Act).

      ‘(5) RURAL HEALTH PROFESSIONAL SHORTAGE AREA- The term ‘rural health professional shortage area’ means--

        ‘(A) a class 1 or class 2 health professional shortage area (as defined in section 332(a)(1)(A) of the Public Health Service Act) in a rural area (as determined under section 1886(d)(2)(D) of the Social Security Act), or

        ‘(B) an area which is determined by the Secretary of Health and Human Services as equivalent to an area described in subparagraph (A) and which is designated by the Bureau of the Census as not urbanized.

    ‘(e) RECAPTURE OF CREDIT-

      ‘(1) IN GENERAL- If, during any taxable year, there is a recapture event, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of--

        ‘(A) the applicable percentage, and

        ‘(B) the aggregate unrecaptured credits allowed to such taxpayer under this section for all prior taxable years.

      ‘(2) Applicable recapture percentage-

        ‘(A) IN GENERAL- For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:

‘If the recapture

--The applicable recap-

event occurs during:

--ture percentage is:

Months 1-24

--100

Months 25-36

--75

Months 37-48

--50

Months 49-60

--25

Months 61 and thereafter

--0.

        ‘(B) TIMING- For purposes of subparagraph (A), month 1 shall begin on the first day of the mandatory service period.

      ‘(3) RECAPTURE EVENT DEFINED-

        ‘(A) IN GENERAL- For purposes of this subsection, the term ‘recapture event’ means the failure of the taxpayer to be a qualified primary health services provider for any month during any mandatory service period.

        ‘(B) CESSATION OF DESIGNATION- The cessation of the designation of any area as a rural health professional shortage area after the beginning of the mandatory service period for any taxpayer shall not constitute a recapture event.

        ‘(C) SECRETARIAL WAIVER- The Secretary may waive any recapture event caused by extraordinary circumstances.

      ‘(4) NO CREDITS AGAINST TAX- Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part.’.

      (2) CLERICAL AMENDMENT- The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25 the following new item:

‘Sec. 25A. Primary health services providers.’.

      (3) EFFECTIVE DATE- The amendments made by this subsection shall apply to taxable years beginning after December 31, 1992.

    (b) NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENTS EXCLUDED FROM GROSS INCOME-

      (1) IN GENERAL- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by redesignating section 136 as section 137 and by inserting after section 135 the following new section:

‘SEC. 136. NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENTS.

    ‘(a) GENERAL RULE- Gross income shall not include any qualified loan repayment.

    ‘(b) QUALIFIED LOAN REPAYMENT- For purposes of this section, the term ‘qualified loan repayment’ means any payment made on behalf of the taxpayer by the National Health Service Corps Loan Repayment Program under section 338B(g) of the Public Health Service Act.’.

      (2) CONFORMING AMENDMENT- Paragraph (3) of section 338B(g) of the Public Health Service Act is amended by striking ‘Federal, State, or local’ and inserting ‘State or local’.

      (3) CLERICAL AMENDMENT- The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 136 and inserting the following:

‘Sec. 136. National Health Service Corps loan repayments.

‘Sec. 137. Cross references to other Acts.’.

      (4) EFFECTIVE DATE- The amendments made by this subsection shall apply to payments made under section 338B(g) of the Public Health Service Act after the date of the enactment of this Act.

    (c) EXPENSING OF MEDICAL EQUIPMENT-

      (1) IN GENERAL- Section 179 of the Internal Revenue Code of 1986 (relating to election to expense of certain depreciable business assets) is amended--

        (A) by striking paragraph (1) of subsection (b) and inserting the following:

      ‘(1) DOLLAR LIMITATION-

        ‘(A) GENERAL RULE- The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $10,000.

        ‘(B) RURAL HEALTH CARE PROPERTY- In the case of rural health care property, the aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $25,000, reduced by the amount otherwise taken into account under subsection (a) for such year.’; and

        (B) by adding at the end of subsection (d) the following new paragraph:

      ‘(11) RURAL HEALTH CARE PROPERTY- For purposes of this section, the term ‘rural health care property’ means section 179 property used by a physician (as defined in section 1861(r) of the Social Security Act) in the active conduct of such physician’s full-time trade or business of providing primary health services (as defined in section 330(b)(1) of the Public Health Service Act) in a rural health professional shortage area (as defined in section 25A(d)(5)).’.

      (2) EFFECTIVE DATE- The amendments made by this subsection shall apply to property placed in service after December 31, 1992, in taxable years ending after such date.

    (d) DEDUCTION FOR STUDENT LOAN PAYMENTS BY MEDICAL PROFESSIONALS PRACTICING IN RURAL AREAS-

      (1) INTEREST ON STUDENT LOANS NOT TREATED AS PERSONAL INTEREST- Section 163(h)(2) of the Internal Revenue Code of 1986 (defining personal interest) is amended by striking ‘and’ at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting ‘, and’, and by adding at the end thereof the following new subparagraph:

      ‘(F) any qualified medical education interest (within the meaning of subsection (k)).’.

      (2) QUALIFIED MEDICAL EDUCATION INTEREST DEFINED- Section 163 of such Code (relating to interest expenses) is amended by redesignating subsection (k) as subsection (l) and by inserting after subsection (j) the following new subsection:

    ‘(k) Qualified Medical Education Interest of Medical Professionals Practicing in Rural Areas-

      ‘(1) IN GENERAL- For purposes of subsection (h)(2)(F), the term ‘qualified medical education interest’ means an amount which bears the same ratio to the interest paid on qualified educational loans during the taxable year by an individual performing services under a qualified rural medical practice agreement as--

        ‘(A) the number of months during the taxable year during which such services were performed, bears to

        ‘(B) the number of months in the taxable year.

      ‘(2) DOLLAR LIMITATION- The aggregate amount which may be treated as qualified medical education interest for any taxable year with respect to any individual shall not exceed $5,000.

      ‘(3) QUALIFIED RURAL MEDICAL PRACTICE AGREEMENT- For purposes of this subsection--

        ‘(A) IN GENERAL- The term ‘qualified rural medical practice agreement’ means a written agreement between an individual and an applicable rural community under which the individual agrees--

          ‘(i) in the case of a medical doctor, upon completion of the individual’s residency (or internship if no residency is required), or

          ‘(ii) in the case of a registered nurse, nurse practitioner, or physician’s assistant, upon completion of the education to which the qualified education loan relates,

        to perform full-time services as such a medical professional in the applicable rural community for a period of 24 consecutive months. An individual and an applicable rural community may elect to have the agreement apply for 36 consecutive months rather than 24 months.

        ‘(B) SPECIAL RULE FOR COMPUTING PERIODS- An individual shall be treated as meeting the 24 or 36 consecutive month requirement under subparagraph (A) if, during each 12-consecutive month period within either such period, the individual performs full-time services as a medical doctor, registered nurse, nurse practitioner, or physician’s assistant, whichever applies, in the applicable rural community during 9 of the months in such 12-consecutive month period. For purposes of this subsection, an individual meeting the requirements of the preceding sentence shall be treated as performing services during the entire 12-month period.

        ‘(C) APPLICABLE RURAL COMMUNITY- The term ‘applicable rural community’ means--

          ‘(i) any political subdivision of a State which--

            ‘(I) has a population of 5,000 or less, and

            ‘(II) has a per capita income of $15,000 or less, or

          ‘(ii) an Indian reservation which has a per capita income of $15,000 or less.

      ‘(4) QUALIFIED EDUCATIONAL LOAN- The term ‘qualified educational loan’ means any indebtedness to pay qualified tuition and related expenses (within the meaning of section 117(b)) and reasonable living expenses--

        ‘(A) which are paid or incurred--

          ‘(i) as a candidate for a degree as a medical doctor at an educational institution described in section 170(b)(1)(A)(ii), or

          ‘(ii) in connection with courses of instruction at such an institution necessary for certification as a registered nurse, nurse practitioner, or physician’s assistant, and

        ‘(B) which are paid or incurred within a reasonable time before or after such indebtedness is incurred.

      ‘(5) RECAPTURE- If an individual fails to carry out a qualified rural medical practice agreement during any taxable year, then--

        ‘(A) no deduction with respect to such agreement shall be allowable by reason of subsection (h)(2)(F) for such taxable year and any subsequent taxable year, and

        ‘(B) there shall be included in gross income for such taxable year the aggregate amount of the deductions allowable under this section (by reason of subsection (h)(2)(F)) for all preceding taxable years.

      ‘(6) DEFINITIONS- For purposes of this subsection, the terms ‘registered nurse’, ‘nurse practitioner’, and ‘physician’s assistant’ have the meaning given such terms by section 1861 of the Social Security Act.’.

      (3) DEDUCTION ALLOWED IN COMPUTING ADJUSTED GROSS INCOME- Section 62(a) of such Code is amended by inserting after paragraph (13) the following new paragraph:

      ‘(14) INTEREST ON STUDENT LOANS OF RURAL HEALTH PROFESSIONALS- The deduction allowable by reason of section 163(h)(2)(F) (relating to student loan payments of medical professionals practicing in rural areas).’.

      (4) EFFECTIVE DATE- The amendments made by this subsection shall apply to taxable years beginning after December 31, 1991.

TITLE II--HEALTH CARE REFORM PROVISIONS

Subtitle A--Model Health Care Insurance Benefits Plan

SEC. 201. MODEL HEALTH CARE INSURANCE BENEFITS PLAN.

    (a) IN GENERAL- The Secretary shall request that the NAIC--

      (1) develop a model health care insurance benefits plan that shall contain standards that entities offering health care insurance policies should meet with respect to the benefits and coverage provided under such policies, and

      (2) report to the Secretary on such standards, not later than 1 year after the date of enactment of this Act.

    If the NAIC develops such a plan by such date and the Secretary finds that such plan implements the requirements of subsection (c), such plan shall be the model health care insurance benefits plan under this Act.

    (b) ROLE OF THE SECRETARY IN ABSENCE OF NAIC PLAN- If the NAIC fails to develop and report a model health care insurance benefits plan by the date specified in subsection (a) or the Secretary finds that such plan does not implement the requirements of subsection (c), the Secretary shall develop and publish such a plan, by not later than eighteen months after the date of enactment of this Act. Such plan shall then be the plan under this Act.

    (c) CONTENTS- The standards under the model benefits plan should require--

      (1) that coverage be provided under health care insurance policies for basic hospital, medical and surgical services, including preventative care services determined appropriate by the Secretary;

      (2) reasonable cost sharing by the beneficiaries under such policies; and

      (3) appropriate copayments and deductibles.

SEC. 202. DEFINITIONS.

    As used in this title:

      (1) HEALTH CARE INSURANCE- The term ‘health care insurance’ means any hospital or medical expense incurred policy or certificate, hospital or medical service plan contract, health maintenance subscriber contract, multiple employer welfare arrangement, other employee welfare plan (as defined in the Employee Retirement Income Security Act of 1974), or any other health insurance arrangement, and includes an employment-related reinsurance plan, but does not include--

        (A) a self-insured health care insurance plan; or

        (B) any of the following offered by an insurer--

          (i) accident only, dental only, or disability income only insurance,

          (ii) coverage issued as a supplement to liability insurance,

          (iii) worker’s compensation or similar insurance, or

          (iv) automobile medical-payment insurance.

      (2) MANAGED CARE PLAN- The term ‘managed care plan’ means a health care insurance plan in which the insurer offering such plan utilizes the standards recommended under section 211 concerning the benefits and coverage under such plan.

      (3) MODEL BENEFITS PLAN- The term ‘model benefits plan’ means the model health care insurance benefits plan developed under section 201(a).

      (4) NAIC- The term ‘NAIC’ means the National Association of Insurance Commissioners.

      (5) SECRETARY- The term ‘Secretary’ means the Secretary of Health and Human Services.

      (6) SMALL EMPLOYER-

        (A) IN GENERAL- The term ‘small employer’ means any employer which, on an average business day during the preceding taxable year, had more than 2 but less than 100 employees.

        (B) EMPLOYEE- The term ‘employee’ shall not include--

          (i) a self-employed individual as defined in section 401(c)(1) of the Internal Revenue Code of 1986, or

          (ii) an employee who works less than 20 hours per week.

Subtitle B--Managed Care

SEC. 211. DEVELOPMENT OF STANDARDS FOR MANAGED CARE PLANS.

    (a) IN GENERAL- Not later than 1 year after the date of enactment of this Act, the Secretary, taking into account recommendations of the Managed Care Advisory Committee, shall develop recommended standards that insurers offering managed care plans should meet with respect to the benefits, coverage, and delivery systems provided under such plans. Such standards shall encompass the standards by which managed care entities operate.

    (b) MANAGED CARE ADVISORY COMMITTEE-

      (1) ESTABLISHMENT- There shall be established a Managed Care Advisory Committee (hereinafter referred to as the ‘Committee’).

      (2) MEMBERSHIP- The Committee shall be composed of 5 members appointed by the Secretary, each member representing 1 of the following areas:

        (A) Health care professionals.

        (B) Managed care industry.

        (C) Academia (with specific expertise in managed care plans).

        (D) Business management.

        (E) Organized labor.

      (3) COMPENSATION-

        (A) IN GENERAL- Members of the Committee shall serve without compensation.

        (B) EXPENSES, ETC., REIMBURSED- While away from their homes or regular places of business on the business of the Committee, the members may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code, for persons employed intermittently in Government service.

        (C) APPLICATION OF ACT- The provisions of the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply with respect to the Committee.

        (D) SUPPORT- The Secretary shall supply such necessary office facilities, office supplies, support services, and related expenses as necessary to carry out the functions of the Committee.

SEC. 212. PREEMPTION OF PROVISIONS RELATING TO MANAGED CARE.

    In the case of a managed care plan meeting the recommended standards under section 211 that is offered by an insurer, the following provisions of State law are preempted and may not be enforced against the managed care plan with respect to an insurer offering such plan:

      (1) RESTRICTIONS ON REIMBURSEMENT RATES OR SELECTIVE CONTRACTING- Any law that restricts the ability of the insurer to negotiate reimbursement rates with health care providers or to contract selectively with one provider or a limited number of providers.

      (2) RESTRICTIONS ON DIFFERENTIAL FINANCIAL INCENTIVES- Any law that limits the financial incentives that the managed care plan may require a beneficiary to pay when a non-plan provider is used on a non-emergency basis.

      (3) RESTRICTIONS ON UTILIZATION REVIEW METHODS-

        (A) IN GENERAL- Any law that--

          (i) prohibits utilization review of any or all treatments and conditions;

          (ii) requires that such review be made by a resident of the State in which the treatment is to be offered or by an individual licensed in such State, or by a physician in any particular specialty or with any board certified specialty of the same medical specialty as the provider whose services are being rendered;

          (iii) requires the use of specified standards of health care practice in such review or requires the disclosure of the specific criteria used in such review;

          (iv) requires payments to providers for the expenses of responding to utilization review requests; or

          (v) imposes liability for delays in performing such review.

        (B) CONSTRUCTION- Nothing in subparagraph (A)(ii) shall be construed as prohibiting a State from requiring that utilization review be conducted by a licensed health care professional, or requiring that any appeal from such a review be made by a licensed physician or by a licensed physician in any particular specialty or with any board certified specialty of the same medical specialty as the provider whose services are being rendered.

      (4) RESTRICTIONS ON BENEFITS- Any law that mandates benefits under the managed care plan that are greater than the benefits recommended under the standards developed under section 211.

Subtitle C--Small Employer Purchasing Groups

SEC. 221. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

    (a) DEFINED- For purposes of this title, an entity is a qualified small employer purchasing group if--

      (1) the entity submits an application to the Secretary at such time, in such form and containing such information as the Secretary may require; and

      (2) on the basis of information contained in the application and any other information the Secretary may require, the Secretary determines that--

        (A) the entity is administered solely under the authority and control of its member employers;

        (B) the membership of the entity consists solely of small employers (except that an employer member of the group may retain its membership in the group if, after the Secretary determines that the entity meets the requirements of this subsection, the number of employees of the employer member increases to more than 100);

        (C) with respect to each State in which its members are located, the entity consists of not fewer than 100 employers;

        (D) at the time the entity submits its application, the health care insurance plans with respect to the employer members of the entity are in compliance with applicable State laws and the model benefits plan relating to such plans;

        (E) the health care insurance plans of the entity and the employer members of the entity are not self-insured plans;

        (F) each enrollee in the program of the entity may enroll with any participating carrier that offers health care insurance coverage in the geographic area in which the enrollee resides; and

        (G) such entity will be a nonprofit entity; and

      (3) such entity has a board of directors as described in subsection (b) with authority to act as described in subsection (c).

    (b) OPERATIONS- A small employer purchasing group shall be administered by a board of directors. The members of such board shall be elected by the employers that are members of the group, and such board members shall serve at the pleasure of the majority of such employers.

    (c) DUTIES OF BOARD-

      (1) IN GENERAL- The board shall have the authority to--

        (A) enter into contracts with carriers to provide health care insurance coverage to eligible employees and their dependents;

        (B) enter into other contracts as are necessary or proper to carry out the provisions of this subtitle;

        (C) employ necessary staff;

        (D) appoint committees as necessary to provide technical assistance in the operation of the entity’s program;

        (E) assess participating employers a reasonable fee for necessary costs in connection with the program;

        (F) undertake activities necessary to administer the program including marketing and publicizing the program and assuring carrier, employer, and enrollee compliance with program requirements;

        (G) issue rules and regulations necessary to carry out the purpose of this subtitle; and

        (H) accept and expend funds received through fees, grants, appropriations, or other appropriate and lawful means.

      (2) PROGRAM MANAGEMENT-

        (A) GEOGRAPHIC AREAS OF COVERAGE- The board shall establish geographic areas within which participating carriers may offer health care insurance coverage to eligible employees and dependents. The board shall contract with sufficient numbers and types of carriers in an area to assure that employees have a choice from among a reasonable number and type of competing health care insurance carriers.

        (B) CONTRACT REQUIREMENTS-

          (i) IN GENERAL- The board shall enter into contracts with qualified carriers for the purpose of providing health care insurance coverage to eligible employees and dependents, and shall pay qualified carriers on at least a monthly basis at the contracted rates.

          (ii) GENERAL QUALIFICATIONS OF CARRIERS- Participating carriers shall be qualified if such carriers have--

            (I) adequate administrative management,

            (II) financial solvency, and

            (III) the ability to assume the risk of providing and paying for covered services.

          A participating carrier may utilize reinsurance, provider risk sharing, and other appropriate mechanisms to share a portion of the risk described in subclause (III). The board may establish risk adjustment mechanisms that can be utilized to address circumstances where a participating carrier has a significantly disproportionate share of high risk or low risk enrollees based upon valid data provided by carrier. Any such risk adjustment mechanism may be developed and applied only after consultation with the participating carriers.

        (C) PROGRAM STANDARDS- The board shall require that participating carriers that contract with or employ health care providers shall have mechanisms to accomplish at least the following, satisfactory to the program:

          (i) Review the quality of care covered.

          (ii) Review the appropriateness of care covered.

          (iii) Provide accessible health services.

        (D) UNIFORMITY OF BENEFITS- The board shall assure that participating carriers--

          (i) shall offer substantially similar benefits to enrollees in the program, except that enrollees cost sharing required by participating carriers may vary according to the basic method of operation of the carrier, and

          (ii) shall not vary rates to small employers or enrollees in the program on account of claim experience, health status or duration from issue.

        (E) PAYMENT MECHANISM- The board shall establish a mechanism to collect premiums from small employers, including remittance of the enrollee’s share of the premium.

      (3) NOTIFICATION OF PROGRAM BENEFITS- The board shall use appropriate and efficient means to notify employers of the availability of sponsored health care insurance coverage from the program. The board shall make available marketing materials which accurately summarize the carriers’ insurance plans and rates which are offered through the program. A participating carrier may contract with an agent or broker to provide marketing, advertising, or presentation proposals or otherwise disseminate information regarding coverage or services or rates offered in connection with the program.

      (4) CONDITIONS OF PARTICIPATION-

        (A) IN GENERAL- The board shall establish conditions of participation for small employers and enrollees that--

          (i) assure that the entity is a valid small employer purchasing group and is not formed for the purpose of securing health care insurance coverage;

          (ii) assure that individuals in the group are not added for the purpose of securing such coverage;

          (iii) require that a specified percentage of employees and dependents obtain health care insurance coverage;

          (iv) require minimum employer contributions; and

          (v) require prepayment of premiums or other mechanisms to assure that payment will be made for coverage.

        (B) MINIMUM PARTICIPATION- The board may require participating employers to agree to participate in the program for a specified minimum period of time and may include in any participation agreements with employers a requirement for a financial deposit or provision for a financial penalty, which would be invoked in the event the employer violates the participation agreement.

    (d) GRANTS-

      (1) AUTHORITY- The Secretary may award grants to qualified small employer purchasing groups to assist such groups in paying the expenditures associated with the formation and initial operations of such groups.

      (2) APPLICATION- To be eligible to receive a grant under this subsection, a qualified small employer purchasing group shall request such a grant as part of the application submitted by such group under subsection (a)(1).

      (3) AUTHORIZATION OF APPROPRIATIONS- There are authorized to award grants under this subsection, such sums as may be necessary.

    (e) FREEDOM OF CONTRACT- Nothing in this subtitle shall be construed to prohibit a participating carrier from offering health care insurance coverage to small employers that are not participating in the program of a small employer purchasing group.

SEC. 222. PREEMPTION FROM INSURANCE MANDATES FOR SMALL EMPLOYER PURCHASING GROUPS.

    (a) FINDING- Congress finds that qualified small employer purchasing groups organized for the purpose of obtaining health insurance for the employer members of such groups affect interstate commerce.

    (b) PREEMPTION OF STATE MANDATES- In the case of a qualified small employer purchasing group, no provision of State law shall apply that requires the offering, as part of the health care insurance plan with respect to an employer member of such a group, of any services, category of care, or services of any class or type of provider that is in excess of that recommended under the model benefit plan.

Subtitle D--Insurance Market Reform

SEC. 231. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH CARE INSURANCE PROVIDED TO SMALL EMPLOYERS.

    (a) IN GENERAL- Subchapter L of chapter 1 of the Internal Revenue Code of 1986 (relating to insurance companies) is amended by adding at the end thereof the following new part:

‘PART IV--HEALTH CARE INSURANCE PROVIDED TO SMALL EMPLOYERS

‘Sec. 850. Failure to satisfy standards for health care insurance of small employers.

‘Sec. 850A. General issuance requirements.

‘Sec. 850B. Specific contractual requirements.

‘Sec. 850C. State compliance agreements.

‘Sec. 850D. Definitions and other rules.

‘SEC. 850. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH CARE INSURANCE OF SMALL EMPLOYERS.

    ‘(a) GENERAL RULE- No health insurance contract issued to an eligible small employer shall be treated as a contract for purposes of section 807 or 832 if the issuer of such a contract fails to meet at any time during any taxable year--

      ‘(1) the general issuance requirements of section 850A, or

      ‘(2) the specific contractual requirements of section 850B.

    ‘(b) LIMITATION-

      ‘(1) SECTION NOT TO APPLY WHERE FAILURE NOT DISCOVERED EXERCISING REASONABLE DILIGENCE- Subsection (a) shall not apply with respect to any failure for which it is established to the satisfaction of the Secretary that the person described in such subsection did not know, or exercising reasonable diligence would not have known, that such failure existed.

      ‘(2) SECTION NOT TO APPLY WHERE FAILURES CORRECTED WITHIN 30 DAYS- Subsection (a) shall not apply with respect to any failure if--

        ‘(A) such failure was due to reasonable cause and not to willful neglect, and

        ‘(B) such failure is corrected during the 30-day period beginning on the 1st date any of the persons described in such subsection knew, or exercising reasonable diligence would have known, that such failure existed.

      ‘(3) WAIVER BY SECRETARY- In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive the application of subsection (a).

‘SEC. 850A. GENERAL ISSUANCE REQUIREMENTS.

    ‘(a) GENERAL RULE- The requirements of this section are met if a person meets--

      ‘(1) the mandatory policy requirements of subsection (b),

      ‘(2) the guaranteed issue requirements of subsection (c), and

      ‘(3) the mandatory registration and disclosure requirements of subsection (d).

    ‘(b) MANDATORY POLICY REQUIREMENTS-

      ‘(1) IN GENERAL- The requirements of this subsection are met if any person issuing a health care insurance contract to any eligible small employer makes available to such employer a health care insurance contract which--

        ‘(A) provides benefits and coverage consistent with the model health care insurance benefits plan developed under section 201 of the Health Equity and Access Improvement Act of 1992, and

        ‘(B) is for a term of not less than 12 months.

      ‘(2) PRICING AND MARKETING REQUIREMENTS- The requirements of paragraph (1) are not met unless--

        ‘(A) the price at which the contract described in paragraph (1) is made available is not greater than the price for such contract determined on the same basis as prices for other health care insurance contracts within the same class of business made available by the person to eligible small employers, and

        ‘(B) such contract is made available to eligible small employers using at least the marketing methods and other sales practices which are used in selling such other contracts.

    ‘(c) GUARANTEED ISSUE-

      ‘(1) IN GENERAL- The requirements of this subsection are met if the person offering health care insurance contracts to eligible small employers issues such a contract to any eligible small employer seeking to enter into such a contract.

      ‘(2) FINANCIAL CAPACITY EXCEPTION- Paragraph (1) shall not require any person to issue a health care insurance contract to the extent that the issuance of such contract would result in such person violating the financial solvency standards (if any) established by the State in which such contract is to be issued.

      ‘(3) DELIVERY CAPACITY EXCEPTION- Paragraph (1) shall not require any person to issue a health care insurance contract to the extent that the issuance of such contract would result, upon demonstration to the Secretary, in such person exceeding its administrative capacity to serve previously enrolled groups and individuals (and additional individuals who will be expected to enroll because of affiliation with such previously enrolled groups).

      ‘(4) EXCEPTION FOR CERTAIN EMPLOYERS- Paragraph (1) shall not apply to a failure to issue a health care insurance contract to an eligible small employer if--

        ‘(A) such employer is unable to pay the premium for such contract, or

        ‘(B) in the case of an eligible small employer with fewer than 15 employees, such employer fails to enroll a minimum percentage of the employer’s eligible employees for coverage under such contract, so long as such percentage is enforced uniformly for all eligible small employers of comparable size.

      ‘(5) EXCEPTION FOR ALTERNATIVE STATE PROGRAMS-

        ‘(A) IN GENERAL- Paragraph (1) shall not apply if the State in which the health care insurance contract is issued--

          ‘(i) has a program which--

            ‘(I) assures the availability of health care insurance contracts to eligible small employers through the equitable distribution of high risk groups among all persons offering such contracts to such employers, and

            ‘(II) is consistent with a model program developed by the NAIC;

          ‘(ii) has a qualified State-run reinsurance program, or

          ‘(iii) has a program which the Secretary of Health and Human Services has determined assures all eligible small employers in the State an opportunity to purchase a health care insurance contract without regard to any risk characteristic.

        ‘(B) REINSURANCE PROGRAM-

          ‘(i) PROGRAM REQUIREMENTS- For purposes of subparagraph (A)(ii), a State-run reinsurance program is qualified if such program is one of the NAIC reinsurance program models developed under clause (ii) or is a variation of one of such models, as approved by the Secretary of Health and Human Services.

          ‘(ii) MODELS- Not later than the 120 days after the date of the enactment of the Health Equity and Access Improvement Act of 1992, the NAIC shall develop several models for a reinsurance program, including options for program funding.

    ‘(d) MANDATORY REGISTRATION AND DISCLOSURE REQUIREMENTS- The requirements of this subsection are met if the person offering health care insurance contracts to eligible small employers in any State--

      ‘(1) registers with the State commissioner or superintendent of insurance or other State authority responsible for regulation of health insurance,

      ‘(2) fully discloses the rating practices for small employer health care insurance contracts at the time such person offers a health care insurance contract to an eligible small employer, and

      ‘(3) fully discloses the terms for renewal of the contract at the time of the offering of such contract and at least 90 days before the expiration of such contract.

‘SEC. 850B. SPECIFIC CONTRACTUAL REQUIREMENTS.

    ‘(a) GENERAL RULE- The requirements of this section are met if the following requirements are met:

      ‘(1) The coverage requirements of subsection (b).

      ‘(2) The rating requirements of subsection (c).

    ‘(b) COVERAGE REQUIREMENTS-

      ‘(1) IN GENERAL- The requirements of this subsection are met with respect to any health care insurance contract if, under the terms and operation of the contract, the following requirements are met:

        ‘(A) GUARANTEED ELIGIBILITY- No eligible employee (and the spouse or any dependent child of the employee eligible for coverage) may be excluded from coverage under the contract.

        ‘(B) LIMITATIONS ON COVERAGE OF PREEXISTING CONDITIONS- Any limitation under the contract on any preexisting condition--

          ‘(i) may not extend beyond the 6-month period beginning with the date an insured is first covered by the contract, and

          ‘(ii) may only apply to preexisting conditions which manifested themselves, or for which medical care or advice was sought or recommended, during the 3-month period preceding the date an insured is first covered by the contract.

        ‘(C) GUARANTEED RENEWABILITY-

          ‘(i) IN GENERAL- The contract must be renewed at the election of the eligible small employer unless the contract is terminated for cause.

          ‘(ii) CAUSE- For purposes of this subparagraph, the term ‘cause’ means--

            ‘(I) nonpayment of the required premiums;

            ‘(II) fraud or misrepresentation of the employer or, with respect to coverage of individual insureds, the insureds or their representatives;

            ‘(III) noncompliance with the contract’s minimum participation requirements;

            ‘(IV) noncompliance with the contract’s employer contribution requirements; or

            ‘(V) repeated misuse of a provider network provision in the contract.

      ‘(2) WAITING PERIODS- Paragraph (1)(A) shall not apply to any period an employee is excluded from coverage under the contract solely by reason of a requirement applicable to all employees that a minimum period of service with the employer is required before the employee is eligible for such coverage.

      ‘(3) DETERMINATION OF PERIODS FOR RULES RELATING TO PREEXISTING CONDITIONS- For purposes of paragraph (1)(B), the date on which an insured is first covered by a contract shall be the earlier of--

        ‘(A) the date on which coverage under such contract begins, or

        ‘(B) the first day of any continuous period--

          ‘(i) during which the insured was covered under 1 or more other health insurance arrangements, and

          ‘(ii) which does not end more than 120 days before the date employment with the employer begins.

      ‘(4) CESSATION OF SMALL EMPLOYER HEALTH INSURANCE BUSINESS-

        ‘(A) IN GENERAL- Except as otherwise provided in this paragraph, a person shall not be treated as failing to meet the requirements of paragraph (1)(C) if such person terminates the class of business which includes the health care insurance contract.

        ‘(B) NOTICE REQUIREMENT- Subparagraph (A) shall apply only if the person gives notice of the decision to terminate at least 90 days before the expiration of the contract.

        ‘(C) 5-YEAR MORATORIUM- If, within 5 years of the year in which a person terminates a class of business under subparagraph (A), such person establishes a new class of business, the issuance of such contracts in that year shall be treated as a failure to which this section applies.

        ‘(D) TRANSFERS- If, upon a failure to renew a contract to which subparagraph (A) applies, a person offers to transfer such contract to another class of business, such transfer must be made without regard to risk characteristics.

    ‘(c) RATING REQUIREMENTS-

      ‘(1) IN GENERAL- The requirements of this subsection are met if--

        ‘(A) the requirements of paragraphs (2) and (3) are met, and

        ‘(B) any increase in any premium rate under the renewal contract over the corresponding rate under the health care insurance contract being renewed does not exceed the applicable annual adjusted increase.

      ‘(2) LIMIT ON VARIATION OF PREMIUMS BETWEEN CLASSES OF BUSINESS-

        ‘(A) IN GENERAL- The requirements of this paragraph are met if the index rate for a rating period for any class of business of the insurer does not exceed the index rate for any other class of business by more than 20 percent.

        ‘(B) EXCEPTIONS- Subparagraph (A) shall not apply to a class of business if--

          ‘(i) the class is one for which the insurer does not reject, and never has rejected, eligible small employers included within the class of business or otherwise eligible employees and dependents who enroll on a timely basis, based upon risk characteristics,

          ‘(ii) the insurer does not transfer, and never has transferred, a health care insurance contract involuntarily into or out of the class of business, and

          ‘(iii) the class of business is currently available for purchase.

      ‘(3) LIMIT ON VARIATION IN PREMIUM RATES WITHIN A CLASS OF BUSINESS- The requirements of this paragraph are met if the premium rates charged during a rating period to eligible small employers with similar case characteristics (other than risk characteristics) for the same or similar coverage, or the rates which could be charged to such employers under the rating system for that class of business, do not vary from the index rate by more than 20 percent of the index rate.

      ‘(4) APPLICABLE ANNUAL ADJUSTED INCREASE- For purposes of paragraph (1)(B)--

        ‘(A) IN GENERAL- The applicable annual adjusted increase is an amount equal to the sum of--

          ‘(i) the applicable percentage of the premium rate under the health care insurance contract being renewed, plus

          ‘(ii) any increase in the rate under the renewal contract due to any change in coverage or to any change of case characteristics (other than risk characteristics), plus

          ‘(iii) 5 percentage points.

        ‘(B) APPLICABLE PERCENTAGE-

          ‘(i) IN GENERAL- For purposes of subparagraph (A), the applicable percentage is the percentage (if any) by which--

            ‘(I) the premium rate for newly issued contracts for substantially similar coverage for an employer with similar case characteristics (other than risk characteristics) as the employer under the health care insurance contract (determined on the 1st day of the rating period applicable to such contracts), exceeds

            ‘(II) such rate on the 1st day of the rating period applicable to the contract being renewed.

          ‘(ii) CASES WHERE NO NEW BUSINESS- If no new contracts are being issued for a class of business during any rating period, the applicable percentage shall be the percentage (if any) by which the base premium rate determined under paragraph (5)(B) with respect to the renewal contract exceeds such rate for the contract to be renewed.

      ‘(5) DEFINITIONS- For purposes of this subsection--

        ‘(A) INDEX RATE- The term ‘index rate’ means, with respect to a class of business, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate for that class.

        ‘(B) BASE PREMIUM RATE- The term ‘base premium rate’ means, for each class of business for each rating period, the lowest premium rate which could have been charged under a rating system for that class of business by the insurer to eligible small employers with similar case characteristics (other than risk characteristics) for health care insurance contracts with the same or similar coverage.

‘SEC. 850C. STATE COMPLIANCE AGREEMENTS.

    ‘(a) AGREEMENTS- The Secretary of Health and Human Services may enter into an agreement with any State--

      ‘(1) to apply the standards set by the NAIC for health care insurance contracts in lieu of the requirements of this subchapter, and

      ‘(2) to provide for the State to make the initial determination as to whether a person is in compliance with such standards for purposes of applying the sanctions under section 850.

    ‘(b) STANDARDS- An agreement may be entered into under subsection (a)(1) only if--

      ‘(1) the chief executive officer of the State requests such agreement be entered into,

      ‘(2) the Secretary of Health and Human Services determines that the NAIC standards to be applied under the agreement will carry out the purposes of this subchapter, and

      ‘(3) the Secretary determines that the NAIC standards to be applied under the agreement will apply to substantially all health care insurance contracts issued in such State to eligible small employers.

    ‘(c) TERMINATION- The Secretary of Health and Human Services shall terminate any agreement if the Secretary determines that the application of NAIC standards by the State ceases to carry out the purposes of this subchapter.

    ‘(d) NAIC STANDARDS- Not later than the 270 days after the date of the enactment of the Health Equity and Access Improvement Act of 1992, the NAIC shall develop standards which provide for requirements substantially similar to the requirements of this subchapter.

‘SEC. 850D. DEFINITIONS AND OTHER RULES.

    For purposes of this part--

      ‘(1) HEALTH CARE INSURANCE- The term ‘health care insurance’ means any hospital or medical expense incurred policy or certificate, hospital or medical service plan contract, health maintenance subscriber contract, multiple employer welfare arrangement, other employee welfare plan (as defined in the Employee Retirement Income Security Act of 1974), or any other health insurance arrangement, and includes an employment-related reinsurance plan, but does not include--

        ‘(A) a self-insured health care insurance plan; or

        ‘(B) any of the following offered by an insurer--

          ‘(i) accident only, dental only, or disability income only insurance,

          ‘(ii) coverage issued as a supplement to liability insurance,

          ‘(iii) worker’s compensation or similar insurance, or

          ‘(iv) automobile medical-payment insurance.

      ‘(2) CLASS OF BUSINESS-

        ‘(A) IN GENERAL- Except as provided in subparagraph (B), the term ‘class of business’ means, with respect to health care insurance provided to eligible small employers, all health care insurance provided to such employers.

        ‘(B) ESTABLISHMENT OF GROUPINGS-

          ‘(i) IN GENERAL- An issuer may establish separate classes of business with respect to health care insurance provided to eligible small employers but only if such classes are based on 1 or more of the following:

            ‘(I) Business marketed and sold through persons not participating in the marketing and sale of such insurance to other eligible small employers.

            ‘(II) Business acquired from other insurers as a distinct grouping.

            ‘(III) Business provided through an association of not less than 20 eligible small employers which was established for purposes other than obtaining insurance.

            ‘(IV) Business related to managed care plans (as defined in section 202(2) of the Health Equity and Access Improvement Act of 1992).

            ‘(V) Any other business which the Secretary of Health and Human Services determines needs to be separately grouped to prevent a substantial threat to the solvency of the insurer.

          ‘(ii) EXCEPTION ALLOWED- Except as provided in subparagraph (C), an insurer may not establish more than one distinct group of eligible small employers for each category specified in clause (i).

        ‘(C) SPECIAL RULE- An insurer may establish up to 2 groups under each category in subparagraph (A) or (B) to account for differences in characteristics (other than differences in plan benefits) of health insurance plans that are expected to produce substantial variation in health care costs.

      ‘(2) CHARACTERISTICS-

        ‘(A) IN GENERAL- The term ‘characteristics’ means, with respect to any insurance rating system, the factors used in determining rates.

        ‘(B) RISK CHARACTERISTICS- The term ‘risk characteristics’ means factors related to the health risks of individuals, including health status, prior claims experience, the duration since the date of issue of a health insurance plan or arrangement, industry, and occupation.

        ‘(C) GEOGRAPHIC FACTORS-

          ‘(i) IN GENERAL- In applying geographic location as a characteristic, an insurer may not use for purposes of this subchapter areas smaller than 3-digit postal zip code areas.

          ‘(ii) STUDY AND REPORT- Not later than 120 days after the date of the enactment of the Health Equity and Access Improvement Act of 1992, the Comptroller General of the United States shall study and report to the Congress concerning--

            ‘(I) insurance industry practices in determining the geographic boundaries of communities used for setting rates,

            ‘(II) the feasibility and desirability of establishing standardized geographic communities for setting rates, and

            ‘(III) the effect such standardized geographic communities would have on rates charged small employers.

      ‘(3) ELIGIBLE SMALL EMPLOYER-

        ‘(A) IN GENERAL- The term ‘eligible small employer’ means any person which, on an average business day during the preceding taxable year, had more than 2 but less than 50 employees.

        ‘(B) AGGREGATION RULES- All members of the same controlled group of corporations (within the meaning of section 52(a)) and all persons under common control (within the meaning of section 52(b)) shall be treated as 1 person.

        ‘(C) EMPLOYEE- The term ‘employee’ shall not include--

          ‘(i) a self-employed individual as defined in section 401(c)(1), or

          ‘(ii) an employee who works less than 20 hours per week.

      ‘(4) NAIC- The term ‘NAIC’ means the National Association of Insurance Commissioners.’

    (b) CONFORMING AMENDMENT- Subchapter L of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new item:

‘Part IV. Health care insurance provided to small employers.’

    (c) EFFECTIVE DATES-

      (1) IN GENERAL- The amendments made by this section shall apply to contracts issued, or renewed, after the date of the enactment of this Act.

      (2) GUARANTEED ISSUE- The provisions of section 850A(c) of the Internal Revenue Code of 1986, as added by this section, shall apply to contracts which are issued, or renewed, after the date which is 18 months after the date of the enactment of this Act.

      (3) PREMIUM RANGE- In the case of any contract in effect on the date of the enactment of this Act, the provisions of section 850B(c)(1)(A) of such Code, as added by this section, shall not apply to the premiums under such contract or any renewal contract for benefits provided during the period beginning on such date and ending on the last day of the 2nd plan year beginning after such date.

Subtitle E--Uniform Standards for Reporting Services and Processing Claims

SEC. 241. APPLICATION AND ESTABLISHMENT OF UNIFORM STANDARDS.

    (a) IN GENERAL- Each entity providing medical or other health care services shall comply with the uniform standards for reporting health care services and processing claims established by the National Association of Insurance Commissioners (hereafter in this section referred to as ‘NAIC’) under subsection (b)(1) (or, if applicable, by the Secretary of Health and Human Services under subsection (b)(2)).

    (b) ESTABLISHMENT OF STANDARDS-

      (1) ROLE OF NAIC- Not later than 18 months after the date of the enactment of this Act, the NAIC shall establish and submit to the Secretary of Health and Human Services (hereafter in this section referred to as the ‘Secretary’) uniform standards for processing claims for medical or other health services and for reporting the delivery of such services to a national data collection entity.

      (2) ESTABLISHMENT BY SECRETARY- If the NAIC fails to establish standards under paragraph (1), or if the Secretary finds that the standards established by the NAIC fail to promote efficiency and cost-effectiveness in the delivery and reporting of medically appropriate health care services, the Secretary shall establish the uniform standards described under paragraph (1).

      (3) REVIEW AND UPDATING OF STANDARDS- The Secretary shall periodically review the standards established under this subsection, and may revise the standards to ensure that the standards continue to promote efficiency and cost-effectiveness in the delivery and reporting of medically appropriate health care services.

SEC. 242. EFFECTIVE DATE.

    Section 241 shall apply with respect to medical or other health care services provided on or after the expiration of the 2-year period that begins on the date of the enactment of this Act.

TITLE III--MEDICAL LIABILITY REFORM

Subtitle A--Definitions and Findings

SEC. 301. DEFINITIONS.

    As used in this title:

      (1) BOARD OF ADVISORS- The term ‘Board of Advisors’ means the Alternative Dispute Resolution Board of Advisors established under section 321.

      (2) CLAIMANT- The term ‘claimant’ means any person who brings a civil action that is subject to the requirements of this Act, and any person on whose behalf such an action is brought. If such an action is brought through or on behalf of an estate, such term includes the claimant’s decedent, or if such an action is brought through or on behalf of a minor or incompetent, such term includes the claimant’s parent or guardian.

      (3) CLEAR AND CONVINCING EVIDENCE- The term ‘clear and convincing evidence’ is that measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. The level of proof required to satisfy such standard is more than that required under preponderance of the evidence, but less than that required for proof beyond a reasonable doubt.

      (4) MEDICAL MALPRACTICE ACTION- The term ‘medical malpractice action’ includes any action involving a claim, third-party claim, cross-claim, counterclaim, or contribution claim in a civil action in which a health care provider is alleged to be liable for harm caused by such health care provider.

      (5) NONECONOMIC DAMAGES- The term ‘noneconomic damages’ means subjective, nonmonetary losses including, pain, suffering, inconvenience, mental suffering, emotional distress, loss of society and companionship, loss of consortium, and injury to reputation and humiliation. Such term does not include objectively verifiable monetary losses including medical expenses, loss of earnings, burial costs, loss of use of property, costs of obtaining substitute domestic services, rehabilitation and training expenses, loss of employment, or loss of business or employment opportunities.

      (6) SECRETARY- The term ‘Secretary’ means the Secretary of Health and Human Services.

      (7) STATE- The term ‘State’ means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and any other territory or possession of the United States, or any political subdivision thereof.

SEC. 302. EFFECT ON INTERSTATE COMMERCE.

    Congress finds that the health care and insurance industries are industries affecting interstate commerce and the medical malpractice litigation systems existing throughout the United States impact on interstate commerce by contributing to the high cost of health care and premiums for malpractice insurance purchased by health care providers.

Subtitle B--Expedited Medical Malpractice Settlements

SEC. 311. EXPEDITED MEDICAL MALPRACTICE SETTLEMENTS.

    (a) RIGHT TO BRING ACTION- Any claimant may bring a civil action for damages against a person for harm caused during the provision of medical care pursuant to applicable State law, except to the extent that such law is superseded by this subtitle.

    (b) SETTLEMENT OFFERS-

      (1) BY CLAIMANT- Any claimant may, in addition to any claim for relief made in accordance with State law as provided for in subsection (a), include in the complaint filed by such complainant an offer of settlement for a specific dollar amount.

      (2) BY DEFENDANT- Within 60 days after service of the complaint of a claimant of the type referred to in paragraph (1), or within the time permitted pursuant to State law for a responsive pleading, whichever is longer, the defendant may make an offer of settlement for a specific dollar amount, except that if such pleading includes a motion to dismiss in accordance with applicable State law, the defendant may tender such relief to the claimant within 10 days after the determination of the court regarding such motion.

    (c) EXTENSION OF TIME-

      (1) AUTHORITY- In any case in which an offer of settlement is made pursuant to subsection (b), the court may, upon motion made prior to the expiration of the applicable period for response, enter an order extending such period.

      (2) CONTENTS OF EXTENSION ORDER- Any order extending the period for response under paragraph (1) shall contain a schedule for discovery of evidence material to the issue of the appropriate amount of relief, and shall not extend such period for more than 60 days. Any such motion shall be accompanied by a supporting affidavit of the moving party setting forth the reasons why such extension is necessary to promote the interests of justice and stating that the information likely to be discovered is material, and is not, after reasonable inquiry, otherwise available to the moving party.

    (d) REJECTION OF OFFER BY DEFENDANT OFFEREE- If the defendant, as offeree, does not accept the offer of settlement made by a claimant in accordance with subsection (b)(1) within the time permitted pursuant to State law for a responsive pleading or, if such pleading includes a motion to dismiss in accordance with applicable law, within 30 days after the court’s determination regarding such motion, and a verdict is entered in such action equal to or greater than the specific dollar amount of such offer of settlement, the court shall enter judgment against the defendant and shall include in such judgment an amount for the claimant’s reasonable attorney’s fees and costs. Such fees shall be offset against any fees owed by the claimant to the claimant’s attorney by reason of the verdict.

    (e) REJECTION OF OFFER BY CLAIMANT OFFEREE- If the claimant, as offeree, does not accept the offer of settlement made by a defendant in accordance with subsection (b)(2) within 30 days after the date on which such offer is made and a verdict is entered in such action equal to or less than the specific dollar amount of such offer of settlement, the court shall reduce the amount of the verdict in such action by an amount equal to the reasonable attorney’s fees and costs owed by the defendant to the defendant’s attorney by reason of the verdict, except that the amount of such reduction shall not exceed that portion of the verdict which is allocable to noneconomic loss and economic loss for which the claimant has received or will receive collateral benefits.

    (f) CALCULATION OF ATTORNEY’S FEES- For purposes of this section, attorney’s fees shall be calculated on the basis of an hourly rate that should not exceed that which is considered acceptable in the community in which the attorney practices, considering the attorney’s qualifications and experience and the complexity of the case.

Subtitle C--Alternative Dispute Resolution Procedures

SEC. 321. ESTABLISHMENT OF BOARD OF ADVISORS.

    (a) IN GENERAL- The Secretary shall establish an Alternative Dispute Resolution Board of Advisors to make recommendations to the Secretary concerning the establishment of a model voluntary alternative dispute resolution program.

    (b) COMPOSITION- The Board of Advisors shall be composed of members to be appointed by the Secretary. Such members shall include representatives of--

      (1) patient advocacy groups;

      (2) State governments;

      (3) physicians groups;

      (4) hospitals;

      (5) health and medical malpractice insurers;

      (6) medical product manufacturers; and

      (7) other professions or industries determined appropriate by the Secretary.

    (c) DUTIES OF BOARD- The Board of Advisors shall--

      (1) provide advice and assistance to representatives from State governments concerning the establishment of alternative dispute resolution systems; and

      (2) not later than 1 year after the date of enactment of this Act, submit a recommendation to the Secretary for the implementation of a model voluntary alternative dispute resolution system.

    (d) APPROVAL BY SECRETARY- The Secretary shall approve the model system submitted under subsection (c)(2) with any modifications that the Secretary determines appropriate.

SEC. 322. DEVELOPMENT OF STATE VOLUNTARY DISPUTE RESOLUTION PROCEDURES.

    (a) PROGRAM TO ENCOURAGE ADOPTION- The Secretary shall develop and implement a program to encourage States to develop and implement voluntary alternative dispute resolution procedures that meet the requirements of this title.

    (b) FAILURE TO ADOPT PROCEDURES- With respect to a State that has not adopted alternative dispute resolution procedures that meet the requirements of this title by the date that occurs 2 years after the date of enactment of this Act, such State shall be required to adopt the model voluntary dispute resolution procedure system approved by the Secretary under section 321(d).

SEC. 323. APPLICATION OF EXISTING PROCEDURES, REBUTTABLE PRESUMPTION.

    (a) OFFER TO PROCEED- With respect to a State that has an alternative dispute resolution system in effect that meets the requirements of this title, in lieu of or in addition to making an offer of settlement under section 311, a claimant or defendant may, within the time permitted for the making of such an offer under section 311, offer to proceed pursuant to any voluntary alternative dispute resolution procedure established or recognized under the law of the State in which the civil action for damages for harm caused through a medical procedure is brought or under the rules of the court in which such action is maintained.

    (b) REFUSAL TO PROCEED- If the recipient of an offer to proceed under subsection (a) refuses to proceed pursuant to an alternative dispute resolution procedure and the court determines that such refusal was unreasonable or not in good faith, the court shall assess reasonable attorney’s fees and costs against the offeree.

    (c) REBUTTABLE PRESUMPTION- For the purposes of this section, there shall be created a rebuttable presumption that a refusal by an offeree under subsection (b) to proceed pursuant to an alternative dispute resolution procedure was unreasonable or not in good faith, if a verdict is rendered in favor of the offeror.

Subtitle D--Uniform Standards for Medical Malpractice Cases

SEC. 331. APPLICATION TO CIVIL ACTIONS.

    This subtitle shall apply to any medical malpractice action brought in any Federal or State court and any medical malpractice claim resolved through an alternative dispute resolution system.

SEC. 332. DAMAGES.

    (a) PAYMENTS- With respect to a civil action or claim of the type referred to in section 331, no person may be required to pay more than $100,000 in a single payment for future losses, but such person shall be permitted to make such payments on a periodic basis. The periods for such payments shall be determined by the court, based upon projections of such future losses. This subsection shall apply to awards of plaintiff’s damages.

    (b) LIMITATION ON NONECONOMIC DAMAGES- With respect to a civil action or claim of the type referred to in section 331, the total amount of damages that may be awarded to an individual and the family members of such individual for noneconomic losses resulting from an injury alleged under such action or claim may not exceed $250,000, regardless of the number of health care professionals and health care providers against whom the claim is brought or the number of claims brought with respect to the injury.

    (c) MANDATORY OFFSETS FOR DAMAGES PAID BY A COLLATERAL SOURCE-

      (1) IN GENERAL- With respect to a civil action or claim of the type referred to in section 331, the total amount of damages received by an individual under such action or claim shall be reduced, in accordance with paragraph (2), by any other payment that has been, or will be, made to an individual to compensate such individual for the injury that was the subject of such action or claim.

      (2) AMOUNT OF REDUCTION- The amount by which an award of damages to an individual for an injury shall be reduced under paragraph (1) shall be--

        (A) the total amount of any payments (other than such award) that have been made or that will be made to such individual to compensate such individual for the injury that was the subject of the action or claim; minus

        (B) the amount paid by such individual (or by the spouse, parent, or legal guardian of such individual) to secure the payments described in subparagraph (A).

    (d) ATTORNEYS’ FEES- With respect to a civil action or claim of the type referred to in section 331, attorneys’ fees may not exceed--

      (1) 25 percent of the first $150,000 of any award or settlement under such action or claim; and

      (2) 15 percent of any additional amounts in excess of $150,000.

SEC. 333. JOINT AND SEVERAL LIABILITY FOR NONECONOMIC DAMAGES.

    (a) IN GENERAL- With respect to a civil action or claim of the type referred to in section 331, the liability of each defendant for noneconomic damages shall be several only and shall not be joint. Each defendant shall be liable only for the amount of noneconomic damages allocated to such defendant in direct proportion to such defendant’s percentage of responsibility as determined under subsection (b).

    (b) PROPORTION OF RESPONSIBILITY- For purposes of this section, the trier of fact shall determine the proportion of responsibility of each party for the claimant’s harm.

SEC. 334. UNIFORM STATUTE OF LIMITATIONS.

    (a) IN GENERAL- Except as provided in subsection (b), no medical malpractice civil action may be initiated after the expiration of the 2-year period that begins on the date on which the alleged injury should reasonably have been discovered, but in no event later than 4 years after the date of the alleged occurrence of the injury.

    (b) EXCEPTION FOR MINORS- In the case of an alleged injury suffered by a minor who has not attained 6 years of age, no medical malpractice claim may be initiated after the expiration of the 2-year period that begins on the date on which the alleged injury should reasonably have been discovered, but in no event later than 4 years after the date of the alleged occurrence of the injury or the date on which the minor attains 8 years of age, whichever is later.

SEC. 335. PROVISION FOR DROP IN DELIVERIES

    With respect to a civil action of the type referred to in section 331, for alleged medical malpractice related to services provided during the delivery of a baby, a court shall only find in favor of the claimant if such malpractice on the part of the defendant health care professional is proven by clear and convincing evidence, except that such evidentiary standard shall only apply if a defendant did not previously provide prenatal care to the claimant for this pregnancy, was not part of group practice that previously treated the claimant during the pregnancy resulting in this delivery, or was not providing coverage pursuant to an agreement with another health care professional for this delivery.

Subtitle E--Uniform Disciplinary Reforms

SEC. 341. REQUIREMENT OF COMPLIANCE.

    Not later than 2 years after the date of enactment of this Act, a State shall comply with the requirements of this subtitle.

SEC. 342. FUNDS FOR STATE DISCIPLINARY ACTIVITIES.

    Each State shall allocate the total amount of fees paid to the State in each year for the licensing or certification of each type of health care practitioner, or an amount of State funds equal to such total amount, to the State agency or agencies responsible for the conduct of licensing and disciplinary actions with respect to such type of health care practitioner.

SEC. 343. MEMBERSHIP OF STATE HEALTH CARE PRACTITIONER BOARDS.

    Each State shall permit the general public to be represented on State health care practitioner disciplinary boards. Not less than 25 percent of the membership of each such health care practitioner disciplinary board shall be appointed from among the general public.

SEC. 344. IMMUNITY FOR MEMBERS OF STATE HEALTH CARE PRACTITIONER BOARDS.

    There shall be no monetary liability on the part of, and no cause of action for damages shall arise against, any current or former member, officer, administrator, staff member, committee member, examiner, representative, agent, employee, consultant, witness, or any other individual serving or having served on a State health care practitioner disciplinary board, either as a part of the board’s operation or as an individual, as a result of any act, omission, proceeding, conduct or decision related to the duties of such individual undertaken or performed in good faith and within the scope of the function of the board.

SEC. 345. RISK MANAGEMENT PROGRAMS.

    Not later than 2 years after the date of enactment of this Act, each State shall have in effect a Statewide risk management program, to reduce the incidence of medical malpractice that meets any regulations promulgated by the Secretary for the establishment of such program.

SEC. 346. PUNITIVE DAMAGES.

    (a) TRUST FUND- Each State shall establish a health care disciplinary trust fund consisting of such amounts as are transferred to the trust fund under subsection (b).

    (b) TRANSFER OF AMOUNTS- Each State shall require that all awards of punitive damages resulting from all medical malpractice and medical products civil actions in that State be transferred to the trust fund established under subsection (a) in the State.

    (c) OBLIGATIONS FROM TRUST FUND- The chief executive officer of a State shall obligate such sums as are available in the trust fund established in that State under subsection (a) to provide additional resources to State health care practitioner disciplinary boards for the disciplining of health care practitioners and to provide additional resources for consumer protection activities of the State.

Subtitle F--Medical Products

SEC. 351. LIMITATION ON AWARD OF PUNITIVE DAMAGES IN PRODUCT LIABILITY ACTIONS INVOLVING DRUGS AND DEVICES.

    (a) DEFINITIONS- As used in this section:

      (1) DEVICE- The term ‘device’ has the meaning given the term in section 201(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)).

      (2) DRUG- The term ‘drug’ has the meaning given the term in section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)).

      (3) HEALTH CARE PRODUCER- The term ‘health care producer’ means any firm or business enterprise that designs, manufactures, produces, or sells a drug or device that is the subject of a liability action.

    (b) LIMITATION-

      (1) IN GENERAL- Punitive damages otherwise permitted by applicable law shall not be awarded in an action under this Act against a health care producer of a drug or device that caused the harm complained of by the claimant if--

        (A) the drug or device--

          (i) was subject to approval under section 505 (21 U.S.C. 355) or premarket approval under section 515 (21 U.S.C. 360e), respectively, of the Federal Food, Drug, and Cosmetic Act, by the Food and Drug Administration, with respect to--

            (I) the safety of the formulation or performance of the aspect of the drug or device that caused the harm; or

            (II) the adequacy of the packaging or labeling of the drug or device; and

          (ii) was approved by the Food and Drug Administration; or

        (B) the drug or device is generally recognized as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable regulations, including packaging and labeling regulations.

      (2) WITHHELD INFORMATION; MISREPRESENTATION; ILLEGAL PAYMENT- The provisions of paragraph (1) shall not apply in any case in which the defendant--

        (A) withheld from or misrepresented to the Food and Drug Administration or any other agency or official of the Federal Government information that is material and relevant to the performance of the drug or device; or

        (B) made an illegal payment to an official of the Food and Drug Administration for the purpose of securing approval of the drug or device.

    (c) SEPARATE PROCEEDING-

      (1) CONSIDERATIONS- At the request of the health care producer in an action described in subsection (b), the trier of fact shall consider in a separate proceeding--

        (A) whether punitive damages are to be awarded and the amount of the award; or

        (B) the amount of punitive damages following a determination of punitive liability.

      (2) EVIDENCE- If a separate proceeding is requested in accordance with paragraph (1), evidence relevant only to the claim of punitive damages, as determined by applicable State law, shall be inadmissible in any proceeding to determine whether compensatory damages are to be awarded.

    (d) AMOUNT OF PUNITIVE DAMAGES- In determining the amount of punitive damages in an action described in subsection (b) or (c), the trier of fact shall consider all relevant evidence, including--

      (1) the financial condition of the health care producer;

      (2) the severity of the harm caused by the conduct of the health care producer;

      (3) the duration of the conduct or any concealment of the conduct by the health care producer;

      (4) the profitability of the conduct to the health care producer;

      (5) the number of products sold by the health care producer of the kind causing the harm complained of by the claimant;

      (6) awards of punitive or exemplary damages to persons similarly situated to the claimant;

      (7) prospective awards of compensatory damages to persons similarly situated to the claimant;

      (8) any criminal penalties imposed on the health care producer as a result of the conduct complained of by the claimant; and

      (9) the amount of any civil fines assessed against the defendant as a result of the conduct complained of by the claimant.

    (e) STRICT LIABILITY DEFENSE- In a civil action brought by a claimant in a Federal or State court under which the claimant alleges that a health care producer of a drug or device is strictly liable to such claimant for injuries sustained from the use of such drug or device, a showing by the defendant that such drug or devices was subject to approval and was approved by the Food and Drug Administration as described in subsection (b)(1)(A) shall be an absolute defense to such strict liability claims.

Subtitle G--Community Health Centers

SEC. 361. COMMUNITY AND MIGRANT HEALTH CENTERS RISK RETENTION GROUP.

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

‘SEC. 330A. RISK RETENTION GROUP.

    ‘(a) GRANT- The Secretary shall make a grant to an entity that represents recipients of assistance under section 329 and 330 to enable such entity to develop a business plan as described in subsection (b)(2) and establish a nationwide risk retention group as provided for in Liability Risk Retention Act of 1986 (15 U.S.C. 3901 et seq.), and that meets the requirements of this section.

    ‘(b) BUSINESS PLAN AND FORMATION-

      ‘(1) DEVELOPMENT AND ESTABLISHMENT-

        ‘(A) IN GENERAL- Not later than September 30, 1993, the grantee shall develop a business plan as described in paragraph (2) and have established a risk retention group that meets the requirements of section 2(4) of the Product Liability Risk Retention Act of 1981 (15 U.S.C. 3901(2)(4)).

        ‘(B) ESTABLISHMENT- In establishing the risk retention group under subparagraph (A), the grantee shall take all steps, in accordance with this subsection, necessary to enable such group to be prepared to issue insurance policies under this section.

      ‘(2) BUSINESS PLAN- The grantee shall develop a plan for the operation of the risk retention group that shall include all actuarial reports and studies conducted with respect to the formation, capitalization, and operation of the group.

      ‘(3) STRUCTURE, RIGHTS, AND DUTIES OF THE RISK RETENTION GROUP-

        ‘(A) BOARD OF DIRECTORS-

          ‘(i) APPOINTMENT- The board of directors of the risk retention group shall consist of 12 members to be appointed by the recipient of the grant under subsection (a), and approved as provided in clause (ii).

          ‘(ii) APPROVAL- The initial members appointed under clause (i) shall be approved by the Secretary, and shall serve for a term as provided in clause (iii). All subsequent members shall be subject to the approval of the members of the risk retention group.

          ‘(iii) TERMS- The recipient of the grant under subsection (a) shall appoint the members of the board under clause (i) as follows:

            ‘(I) Four members shall be appointed for an initial term of 1 year.

            ‘(II) Four members shall be appointed for an initial term of 2 years.

            ‘(III) Four members shall be appointed for an initial term of 3 years.

          Members serving terms other than initial terms shall serve for 3 years. Members may serve successive terms.

          ‘(iv) EXECUTIVE DIRECTOR- The Executive Director of the board shall be elected by the members of the board, and shall serve at the pleasure of such members.

          ‘(v) VACANCIES- Vacancies on the board shall be filled through a vote of the remaining members of the board, subject to the approval of the members of the risk retention group.

        ‘(B) BYLAWS- The board shall develop the bylaws of the risk retention group that shall be subject to the disapproval of the Secretary. Any changes that the board desires to make in such bylaws shall also be subject to the disapproval of the Secretary. The Secretary shall provide the board with 90 days notice of the Secretary’s intent to disapprove a bylaw.

        ‘(C) ADMINISTRATION- The risk retention group may negotiate with other entities for the purposes of managing and administering the risk retention group, and for purposes of obtaining reinsurance.

        ‘(D) PROVISION OF INSURANCE- The risk retention group shall provide professional liability insurance, and other types of profitable insurance approved for issuance by the Secretary, to migrant and community health centers that receive assistance under sections 329 and 330 and that meet the requirements of subparagraph (E).

        ‘(E) PARTICIPANTS-

          ‘(i) IN GENERAL- Except as provided in clause (ii), all community and migrant health centers that receive assistance under section 329 and 330 shall become members in the risk retention group established under this section and shall purchase the professional liability insurance that is offered by such group for such centers and any health care staff or personnel employed by such centers or under contract with such centers. All professional staff members of such centers shall be eligible to obtain the insurance offered by such group.

          ‘(ii) EXCEPTIONS-

            ‘(I) GOOD CAUSE- The Secretary may, on a showing of good cause by the center, exempt such center from the requirements of clause (i).

            ‘(II) FAILURE TO MEET CONDITIONS- If the risk retention group determines that a center is not complying with the established underwriting standards, such group may decline to provide insurance to such center. The risk retention group shall provide a center with 60 days notice of a decision by the group not to provide insurance to such center.

            ‘(III) HEARING- Prior to the Secretary granting an exemption or severance as requested in an application submitted under subclause (I), the Secretary shall require that the applicant provide evidence concerning its application and shall afford the risk retention group an opportunity to address the allegations contained in such application. The Secretary may grant the center temporary relief under this subparagraph without a hearing in emergency situations.

        ‘(F) APPLICABILITY OF INSURANCE TO CLAIMS- Insurance provided by the risk retention group under this section shall apply to all claims filed against a covered community or migrant health center after the initiation of insurance coverage by the risk retention group, including acts that occur prior to coverage under this section that are not covered by other insurance.

    ‘(c) SUBMISSION OF BUSINESS PLAN TO OUTSIDE EXPERTS- After the development of the business plan and the establishment of the risk retention group as required under subsection (b), the risk retention group shall enter into a contract with individuals or entities who are insurance, financing, and business experts to require such individuals or entities to analyze and audit the group. Such individuals and entities shall provide the group with an evaluation of such plan and group.

    ‘(d) SUBMISSION OF PLAN AND EVALUATION-

      ‘(1) IN GENERAL- The risk retention group shall submit to the Secretary the business plan required under subsection (b) and the evaluation completed under subsection (c) to the Secretary.

      ‘(2) DETERMINATION BY SECRETARY- Not later than September 30, 1993, the Secretary shall make a determination, based on the plan and evaluation submitted under paragraph (1), of whether the operation of the risk retention group results in an increase in the amount of funds available for use by community and migrant health centers and other entities that receive assistance under sections 329 and 330 in the 2-year period ending on September 30, 1995.

      ‘(3) IMPLEMENTATION- If the Secretary makes an affirmative determination under paragraph (1), the Secretary shall permit the implementation of the plan and the operation of the risk retention group as provided for in this section, and shall capitalize such group as provided for in subsection (e)(2).

    ‘(e) FUNDING-

      ‘(1) CAPITALIZATION- There are authorized to be appropriated to carry out this section, $40,000,000 for each of the fiscal years 1993 and 1994. Amounts appropriated under this paragraph may only be made available if the Secretary makes an affirmative determination under subsection (d)(2).

      ‘(2) REMAINING ASSETS- All assets of the risk retention group that remain after the dissolution of such group shall become the property of the Secretary who shall use such assets to pay the remaining expenses of the group.

      ‘(3) SAVINGS- Any amount saved by the grantees under sections 329 and 330 as a result of the establishment of the risk retention group shall be utilized--

        ‘(A) to provide additional services of the type permitted under section 329 or 330, as appropriate; and

        ‘(B) to defend against medical malpractice claims arising from services provided by such grantees.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 329(h)(1)(A) of the Public Health Service Act (42 U.S.C. 254b(h)(1)(A)) is amended by striking ‘1991’ and inserting ‘1994’.

      (2) Section 330(g)(2)(A) of such Act (42 U.S.C. 254b(h)(1)(A)) is amended by inserting ‘, and such sums as may be necessary for fiscal year 1993’ after ‘1991’.

Subtitle H--Miscellaneous Provisions

SEC. 371. SEVERABILITY.

    If any provision of this title, or an amendment made by this title, or the application of such provision to any person or circumstance is held to be unconstitutional, the remainder of this title and the amendments made by this title, and the application of the provisions of such to any person or circumstance shall not be affected thereby.

SEC. 372. COMPLIANCE.

    Except as otherwise specifically provided, not later than 2 years after the date of enactment of this Act, a State shall enact, adopt, or otherwise comply with the provisions of this title.

TITLE IV--PUBLIC HEALTH PROVISIONS

Subtitle A--New Basic Health Care Program

SEC. 401. ESTABLISHMENT OF BASICARE PROGRAM.

    (a) IN GENERAL- The Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the end thereof the following new title:

‘TITLE XXI--BASICARE

‘TABLE OF CONTENTS OF TITLE

      ‘Sec. 2101. Appropriation.

      ‘Sec. 2102. State plans for BasiCare assistance.

      ‘Sec. 2103. Payment to States.

      ‘Sec. 2104. Quality assurance.

      ‘Sec. 2105. Definitions.

‘APPROPRIATION

    ‘SEC. 2101. For the purpose of providing basic health care benefits to low-income uninsured individuals not eligible for coverage under title XIX of this Act, there is hereby authorized to be appropriated for each fiscal year a sum sufficient to carry out the purposes of this title. The sums made available under this section shall be used for making payments to States which have submitted, and had approved by the Secretary, State plans for BasiCare assistance.

‘STATE PLANS FOR BASICARE ASSISTANCE

    ‘SEC. 2102. (a) IN GENERAL- A State plan for BasiCare assistance must--

      ‘(1) provide either for the establishment or designation of a single State agency to administer or supervise the administration of the program established under this title;

      ‘(2) provide for financial participation by the State equal to the non-Federal share of the expenditures under the plan with respect to which payments under section 2103 are authorized by this title;

      ‘(3) provide health assistance to all eligible individuals described in subsection (b), and at the option of the State, subsets of basic medical and social benefits to subgroups of such eligible individuals;

      ‘(4) meet the quality assurance requirements of section 2104;

      ‘(5) provide that the State will not modify its State plan under title XIX of this Act so as to result in individuals eligible under the State’s plan under such title becoming eligible for enrollment under BasiCare;

      ‘(6) meet the requirements of paragraphs (4), (6), (7), (19), (45), (46), (48), and (49) of section 1902(a); and

      ‘(7) meet such further requirements as the Secretary may specify.

    ‘(b) ELIGIBILITY FOR BASICARE- An individual is eligible to receive benefits under this title if such individual--

      ‘(1) has a family income below 200 percent of the income official poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981);

      ‘(2) is not otherwise eligible for medical assistance under a State plan under title XIX of this Act; and

      ‘(3) is not otherwise covered under a health plan offered by the individual’s employer.

‘PAYMENT TO STATES

    ‘SEC. 2103. (a) IN GENERAL- From the sums appropriated therefor (subject to the expenditure limitation described in subsection (b)), the Secretary shall pay to each State which has a plan approved under this title, for each quarter, beginning with the quarter commencing January 1, 1993--

      ‘(1) an amount equal to the Federal health assistance percentage (as defined in section 2105(b)); plus

      ‘(2) an amount equal to 3 percent of the average per person expenditures under the plan for each individual under the plan enrolled in a managed care setting (including health maintenance organizations, community health centers and such other types of providers as designated by the Secretary).

    ‘(b) LIMIT ON FEDERAL EXPENDITURES AS HEALTH ASSISTANCE- Payments under this section to a State may not exceed an average of $10,000 per year, per enrolled individual.

    ‘(c) COST-SHARING- (1) With respect to individuals eligible for health assistance under this title whose income is between 100 and 200 percent of the income official poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981), the State may impose such deductibles, copayments or premiums with respect to such individual’s coverage under this title as the State may deem appropriate, subject to the limitation in paragraph (2).

    ‘(2) A State may not impose a deductible, copayment or premium with respect to an individual described in paragraph (1) that is in excess of 5 percent of such individual’s gross income during a calendar year.

‘QUALITY ASSURANCE

    ‘SEC. 2104. The Secretary shall establish a program to assure the quality of services provided under this title. In establishing such program, the Secretary shall provide that Federal employees and contractors are utilized in ensuring compliance with the quality assurance provisions of this title and provide for criteria to disallow payment under section 2103 for services found not to meet the quality assurance provisions of this title established by the Secretary.

‘DEFINITIONS

    ‘SEC. 2105. (a) HEALTH ASSISTANCE- For purposes of this title, the term ‘health assistance’ means a set of basic medical and social benefits as defined by the State, including services provided in skilled nursing facilities or in other long-term care settings for a period not to exceed 45 days in a calendar year.

    ‘(b) FEDERAL HEALTH ASSISTANCE PERCENTAGE- For purposes of this title, the term ‘Federal health assistance percentage’ means the Federal medical assistance percentage as defined in section 1905(b).’.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall become effective with respect to payments for health assistance beginning on or after January 1, 1993.

SEC. 402. GAO STUDY OF PAYMENTS UNDER BASICARE.

    The Comptroller General of the Government Accounting Office shall study and report to Congress by no later than January 1, 1995, on payments to providers of services under title XXI of the Social Security Act and shall include in such report recommendations on whether or not payments under such title to managed care programs need to be increased in order to encourage greater participation of such entities under such title.

SEC. 411. EXPANSION OF MEDICAID WAIVER AUTHORITY.

    (a) IN GENERAL- Section 1115 of the Social Security Act (42 U.S.C. 1315) is amended by adding at the end the following new subsection:

    ‘(e)(1) Notwithstanding any other provision of this title, with respect to any waiver granted by the Secretary under title XIX (except waivers under section 1915(c)) after such a waiver has been in effect for over a period of 3 years, the Secretary shall not require a State operating under such a waiver to conduct an independent assessment of such waiver unless the State proposes a substantial (as determined by the Secretary) amendment to the waiver agreement.

    ‘(2) Any waiver granted under title XIX which has been in effect for over a period of 3 years shall be considered, at the option of a State, to be a permanent amendment to the State’s plan for medical assistance in effect under section 1902.’.

    (b) EFFECTIVE DATE- The amendment made by subsection (a) shall become effective with respect to waivers granted under title XIX of the Social Security Act beginning before, on or after January 1, 1993.

SEC. 412. ESTABLISHMENT OF FEDERAL MEDICAL WAIVER DEMONSTRATION BOARD.

    (a) ESTABLISHMENT- There is established a board to be known as the Federal Medical Waiver Demonstration Board (hereinafter referred to as the ‘Board’).

    (b) MEMBERSHIP- The Board shall be composed of--

      (1) the Secretary of Health and Human Services;

      (2) the Secretary of Labor; and

      (3) the Secretary of Veterans Affairs.

    (c) DUTIES AND POWERS OF THE BOARD-

      (1) REVIEW OF STATE APPLICATIONS- The Board shall review applications submitted by States to conduct health care related demonstration projects in the State and shall approve within 3 months of receiving such applications those applications which meet the requirements of this section. The Board in reviewing and approving the application of a State shall make a determination whether such application provides for a demonstration project which--

        (A) would provide that at least 95 percent of the residents of the State would have access to basic health care services (as defined by the Board);

        (B) would improve the delivery of and increase access to health care services for a significant number of individuals in the State; and

        (C) would assure the quality of care of health care services provided under such project.

      (2) DEVELOPMENT OF MODEL STATE PLANS- The Board shall develop and publish in the Federal Register, no later than 6 months after the date of enactment of this Act, at least 3 different model health care delivery plans that provide for new approaches that may be adopted by States in providing and furnishing health care services to residents of the State.

      (3) WAIVER OF CERTAIN FEDERAL HEALTH RELATED PROVISIONS- The Board upon approving the application of a State to conduct a demonstration project under this section shall waive to the extent necessary to allow the State to conduct such a demonstration project the following provisions of Federal law:

        (A) The Public Health Service Act.

        (B) Subject to paragraph (4), title XVIII of the Social Security Act.

        (C) Titles XIX and XXI of the Social Security Act.

        (D) All health care programs operated under laws administered by the Secretary of Veterans Affairs.

        (E) The Employee Retirement Income Security Act of 1974.

      (4) LIMITED WAIVER OF MEDICARE- The Board may waive the provisions of title XVIII of the Social Security Act only if a State provides that all individuals residing in the State receiving benefits under the medicare program under such title are eligible for health care benefits under the program operated by the State under a waiver granted under this section and that such health care benefits provided to such individuals are equal in amount, duration, and scope to the benefits provided under such title.

    (d) 3-YEAR RENEWAL OF WAIVER- A waiver approved by the Board for a State shall be in effect in the State for a 36-month period commencing from the date of such approval. At the end of the 36-month period such waiver shall be renewed unless the Board determines that the State is not substantially in compliance with the requirements described in subparagraphs (A) through (C) of subsection (c)(1).

    (e) BUDGET NEUTRALITY- The Board in carrying out its duties under this section shall provide that total Federal expenditures under the programs for which waivers are granted under this section are no greater than what such expenditures would have been but for the waivers granted under this section.

TITLE V--MEDICALLY UNDERSERVED AREAS

Subtitle A--Public Health Service Act Provisions

SEC. 501. NATIONAL HEALTH SERVICE CORPS.

    Section 338H(b) of the Public Health Service Act (42 U.S.C. 254q(b)) is amended--

      (1) in paragraph (1), by striking ‘and such sums’ and all that follows through the end thereof and inserting ‘$118,900,000 for each of the fiscal years 1993 through 1997.’; and

      (2) in paragraph (2)--

        (A) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively; and

        (B) by inserting before subparagraph (B) (as so redesignated) the following new subparagraph:

        ‘(A) IN GENERAL- Of the amount appropriated under paragraph (1) for each fiscal year, the Secretary shall utilize 25 percent of such amount to carry out section 338A and 75 percent of such amount to carry out section 338B.’.

SEC. 502. ESTABLISHMENT OF GRANT PROGRAM.

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

‘SEC. 330A. COMMUNITY BASED PRIMARY HEALTH CARE GRANT PROGRAM.

    ‘(a) ESTABLISHMENT- The Secretary shall establish and administer a program to provide allotments to States to enable such States to provide grants for the creation or enhancement of community based primary health care entities that provide services to pregnant women and children up to age three.

    ‘(b) ALLOTMENTS TO STATES-

      ‘(1) IN GENERAL- From the amounts available for allotment under subsection (h) for a fiscal year, the Secretary shall allot to each State an amount equal to the product of the grant share of the State (as determined under paragraph (2)) multiplied by the amount available for allotment for such fiscal year.

      ‘(2) GRANT SHARE-

        ‘(A) IN GENERAL- For purposes of paragraph (1), the grant share of a State shall be the product of the need-adjusted population of the State (as determined under subparagraph (B)) multiplied by the Federal matching percentage of the State (as determined under subparagraph (C)), expressed as a percentage of the sum of the products of such factors for all States.

        ‘(B) NEED-ADJUSTED POPULATION-

          ‘(i) IN GENERAL- For purposes of subparagraph (A), the need-adjusted population of a State shall be the product of the total population of the State (as estimated by the Secretary of Commerce) multiplied by the need index of the State (as determined under clause (ii)).

          ‘(ii) NEED INDEX- For purposes of clause (i), the need index of a State shall be the ratio of--

            ‘(I) the weighted sum of the geographic percentage of the State (as determined under clause (iii)), the poverty percentage of the State (as determined under clause (iv)), and the multiple grant percentage of the State (as determined under clause (v)); to

            ‘(II) the general population percentage of the State (as determined under clause (vi)).

          ‘(iii) GEOGRAPHIC PERCENTAGE-

            ‘(I) IN GENERAL- For purposes of clause (ii)(I), the geographic percentage of the State shall be the estimated population of the State that is residing in nonurbanized areas (as determined under subclause (II)) expressed as a percentage of the total nonurbanized population of all States.

            ‘(II) NONURBANIZED POPULATION- For purposes of subclause (I), the estimated population of the State that is residing in non-urbanized areas shall be one minus the urbanized population of the State (as determined using the most recent decennial census), expressed as a percentage of the total population of the State (as determined using the most recent decennial census), multiplied by the current estimated population of the State.

          ‘(iv) POVERTY PERCENTAGE- For purposes of clause (ii)(I), the poverty percentage of the State shall be the estimated number of people residing in the State with incomes below 200 percent of the income official poverty line (as determined by the Office of Management and Budget) expressed as a percentage of the total number of such people residing in all States.

          ‘(v) MULTIPLE GRANT PERCENTAGE- For purposes of clause (ii)(I), the multiple grant percentage of the State shall be the amount of Federal funding received by the State under grants awarded under sections 329, 330 and 340, expressed as a percentage of the total amounts received under such grants by all States. With respect to a State, such amount shall not exceed twice the general population percentage of the State under clause (vi) or be less than one half of the States general population percentage.

          ‘(vi) GENERAL POPULATION PERCENTAGE- For purposes of clause (ii)(II), the general population percentage of the State shall be the total population of the State (as determined by the Secretary of Commerce) expressed as a percentage of the total population of all States.

        ‘(C) FEDERAL MATCHING PERCENTAGE-

          ‘(i) IN GENERAL- For purposes of subparagraph (A), the Federal matching percentage of the State shall be equal to one less the State matching percentage (as determined under clause (ii)).

          ‘(ii) STATE MATCHING PERCENTAGE- For purposes of clause (ii), the State matching percentage of the State shall be 0.25 multiplied by the ratio of the total taxable resource percentage (as determined under clause (iii)) to the need-adjusted population of the State (as determined under subparagraph (B)).

          ‘(iii) TOTAL TAXABLE RESOURCE PERCENTAGE- For purposes of clause (ii), the total taxable resources percentage of the State shall be the total taxable resources of a State (as determined by the Secretary of the Treasury) expressed as a percentage of the sum of the total taxable resources of all States.

      ‘(3) ANNUAL ESTIMATES-

        ‘(A) IN GENERAL- If the Secretary of Commerce does not produce the annual estimates required under paragraph (2)(B)(iv), such estimates shall be determined by multiplying the percentage of the population of the State that is below 200 percent of the income official poverty line as determined using the most recent decennial census by the most recent estimate of the total population of the State. Except as provided in subparagraph (B), the calculations required under this subparagraph shall be made based on the most recent 3 year average of the total taxable resources of individuals within the State.

        ‘(B) DISTRICT OF COLUMBIA- Notwithstanding subparagraph (A), the calculations required under such subparagraph with respect to the District of Columbia shall be based on the most recent 3 year average of the personal income of individuals residing within the District as a percentage of the personal income for all individuals residing within the District, as determined by the Secretary of Commerce.

      ‘(4) MATCHING REQUIREMENT- A State that receives an allotment under this section shall make available State resources (either directly or indirectly) to carry out this section in an amount that shall equal the State matching percentage for the State (as determined under paragraph (2)(C)(II)) divided by the Federal matching percentage (as determined under paragraph (2)(C)).

    ‘(c) APPLICATION-

      ‘(1) IN GENERAL- To be eligible to receive an allotment under this section, a State shall prepare and submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may by regulation require.

      ‘(2) ASSURANCES- A State application submitted under paragraph (1) shall contain an assurance that--

        ‘(A) the State will use amounts received under it’s allotment consistent with the requirements of this section; and

        ‘(B) the State will provide, from non-Federal sources, the amounts required under subsection (b)(4).

    ‘(d) USE OF FUNDS-

      ‘(1) IN GENERAL- The State shall use amounts received under this section to award grants to eligible public and nonprofit private entities, or consortia of such entities, within the State to enable such entities or consortia to provide services of the type described in paragraph (2) of section 329(h) to pregnant women and children up to age three.

      ‘(2) ELIGIBILITY- To be eligible to receive a grant under paragraph (1), an entity or consortium shall--

        ‘(A) prepare and submit to the administering entity of the State, an application at such time, in such manner and containing such information as such administering entity may require, including a plan for the provision of services;

        ‘(B) provide assurances that services will be provided under the grant at fee rates established or determined in accordance with section 330(e)(3)(F); and

        ‘(C) provide assurances that in the case of services provided to individuals with health insurance, such insurance shall be used as the primary source of payment for such services.

      ‘(3) TARGET POPULATIONS- Entities or consortia receiving grants under paragraph (1) shall, in providing the services described in paragraph (3), substantially target populations of pregnant women and children within the State who--

        ‘(A) lack the health care coverage, or ability to pay, for primary or supplemental health care services; or

        ‘(B) reside in medically underserved or health professional shortage areas, areas certified as underserved under the rural health clinic program, or other areas determined appropriate by the State, within the State.

      ‘(4) PRIORITY- In awarding grants under paragraph (1), the State shall--

        ‘(A) give priority to entities or consortia that can demonstrate through the plan submitted under paragraph (2) that--

          ‘(i) the services provided under the grant will expand the availability of primary care services to the maximum number of pregnant women and children who have no access to such care on the date of the grant award; and

          ‘(ii) the delivery of services under the grant will be cost-effective; and

        ‘(B) ensure that an equitable distribution of funds is achieved among urban and rural entities or consortia.

    ‘(e) REPORTS AND AUDITS- Each State shall prepare and submit to the Secretary annual reports concerning the State’s activities under this section which shall be in such form and contain such information as the Secretary determines appropriate. Each such State shall establish fiscal control and fund accounting procedures as may be necessary to assure that amounts received under this section are being disbursed properly and are accounted for, and include the results of audits conducted under such procedures in the reports submitted under this subsection.

    ‘(f) PAYMENTS-

      ‘(1) ENTITLEMENT- Each State for which an application has been approved by the Secretary under this section shall be entitled to payments under this section for each fiscal year in an amount not to exceed the State’s allotment under subsection (b) to be expended by the State in accordance with the terms of the application for the fiscal year for which the allotment is to be made.

      ‘(2) METHOD OF PAYMENTS- The Secretary may make payments to a State in installments, and in advance or, by way of reimbursement, with necessary adjustments on account of overpayments or underpayments, as the Secretary may determine.

      ‘(3) STATE SPENDING OF PAYMENTS- Payments to a State from the allotment under subsection (b) for any fiscal year must be expended by the State in that fiscal year or in the succeeding fiscal year.

    ‘(g) DEFINITION- As used in this section, the term ‘administering entity of the State’ means the agency or official designated by the chief executive officer of the State to administer the amounts provided to the State under this section.

    ‘(h) FUNDING- Notwithstanding any other provision of law, the Secretary shall use 50 percent of the amounts that the Secretary is required to utilize under section 330B(h) in each fiscal year to carry out this section.’.

SEC. 503. ESTABLISHMENT OF NEW PROGRAM TO PROVIDE FUNDS TO ALLOW FEDERALLY QUALIFIED HEALTH CENTERS AND OTHER ENTITIES OR ORGANIZATIONS TO PROVIDE EXPANDED SERVICES TO MEDICALLY UNDERSERVED INDIVIDUALS.

    (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 502) is further amended by adding at the end thereof the following new section:

‘SEC. 330B. ESTABLISHMENT OF NEW PROGRAM TO PROVIDE FUNDS TO ALLOW FEDERALLY QUALIFIED HEALTH CENTERS AND OTHER ENTITIES OR ORGANIZATIONS TO PROVIDE EXPANDED SERVICES TO MEDICALLY UNDERSERVED INDIVIDUALS.

    ‘(a) ESTABLISHMENT OF HEALTH SERVICES ACCESS PROGRAM- From amounts appropriated under this section, the Secretary shall, acting through the Bureau of Health Care Delivery Assistance, award grants under this section to federally qualified health centers (hereinafter referred to in this section as ‘FQHC’s’) and other entities and organizations submitting applications under this section (as described in subsection (c)) for the purpose of providing access to services for medically underserved populations (as defined in section 330(b)(3)) or in high impact areas (as defined in section 329(a)(5)) not currently being served by a FQHC.

    ‘(b) ELIGIBILITY FOR GRANTS-

      ‘(1) IN GENERAL- The Secretary shall award grants under this section to entities or organizations described in this paragraph and paragraph (2) which have submitted a proposal to the Secretary to expand such entities or organizations operations (including expansions to new sites (as determined necessary by the Secretary)) to serve medically underserved populations or high impact areas not currently served by a FQHC and which--

        ‘(A) have as of January 1, 1992, been certified by the Secretary as a FQHC under section 1905(l)(2)(B) of the Social Security Act;

        ‘(B) have submitted applications to the Secretary to qualify as FQHC’s under such section 1905(l)(2)(B); or

        ‘(C) have submitted a plan to the Secretary which provides that the entity will meet the requirements to qualify as a FQHC when operational.

      ‘(2) NON FQHC ENTITIES-

        ‘(A) ELIGIBILITY- The Secretary shall also make grants under this section to public or private nonprofit agencies, health care entities or organizations which meet the requirements necessary to qualify as a FQHC except, the requirement that such entity have a consumer majority governing board and which have submitted a proposal to the Secretary to provide those services provided by a FQHC as defined in section 1905(l)(2)(B) of the Social Security Act and which are designed to promote access to primary care services or to reduce reliance on hospital emergency rooms or other high cost providers of primary health care services, provided such proposal is developed by the entity or organizations (or such entities or organizations acting in a consortium in a community) with the review and approval of the Governor of the State in which such entity or organization is located.

        ‘(B) LIMITATION- The Secretary shall provide in making grants to entities or organizations described in this paragraph that no more than 10 percent of the funds provided for grants under this section shall be made available for grants to such entities or organizations.

    ‘(c) APPLICATION REQUIREMENTS-

      ‘(1) IN GENERAL- In order to be eligible to receive a grant under this section, a FQHC or other entity or organization must submit an application in such form and at such time as the Secretary shall prescribe and which meets the requirements of this subsection.

      ‘(2) REQUIREMENTS- An application submitted under this section must provide--

        ‘(A)(i) for a schedule of fees or payments for the provision of the services provided by the entity designed to cover its reasonable costs of operations; and

        ‘(ii) for a corresponding schedule of discounts to be applied to such fees or payments, based upon the patient’s ability to pay (determined by using a sliding scale formula based on the income of the patient);

        ‘(B) assurances that the entity or organization provides services to persons who are eligible for benefits under title XVIII of the Social Security Act, for medical assistance under title XIX of such Act or for assistance for medical expenses under any other public assistance program or private health insurance program; and

        ‘(C) assurances that the entity or organization has made and will continue to make every reasonable effort to collect reimbursement for services--

          ‘(i) from persons eligible for assistance under any of the programs described in subparagraph (B); and

          ‘(ii) from patients not entitled to benefits under any such programs.

    ‘(d) LIMITATIONS ON USE OF FUNDS-

      ‘(1) IN GENERAL- From the amounts awarded to an entity or organization under this section, funds may be used for purposes of planning but may only be expended for the costs of--

        ‘(A) assessing the needs of the populations or proposed areas to be served;

        ‘(B) preparing a description of how the needs identified will be met;

        ‘(C) development of an implementation plan that addresses--

          ‘(i) recruitment and training of personnel; and

          ‘(ii) activities necessary to achieve operational status in order to meet FQHC requirements under 1905(l)(2)(B) of the Social Security Act.

      ‘(2) RECRUITING, TRAINING AND COMPENSATION OF STAFF- From the amounts awarded to an entity or organization under this section, funds may be used for the purposes of paying for the costs of recruiting, training and compensating staff (clinical and associated administrative personnel (to the extent such costs are not already reimbursed under title XIX of the Social Security Act or any other State or Federal program)) to the extent necessary to allow the entity to operate at new or expanded existing sites.

      ‘(3) FACILITIES AND EQUIPMENT- From the amounts awarded to an entity or organization under this section, funds may be expended for the purposes of acquiring facilities and equipment but only for the costs of--

        ‘(A) construction of new buildings (to the extent that new construction is found to be the most cost-efficient approach by the Secretary);

        ‘(B) acquiring, expanding, or modernizing of existing facilities;

        ‘(C) purchasing essential (as determined by the Secretary) equipment; and

        ‘(D) amortization of principal and payment of interest on loans obtained for purposes of site construction, acquisition, modernization, or expansion, as well as necessary equipment.

      ‘(4) SERVICES- From the amounts awarded to an entity or organization under this section, funds may be expended for the payment of services but only for the costs of--

        ‘(A) providing or arranging for the provision of all services through the entity necessary to qualify such entity as a FQHC under section 1905(l)(2)(B) of the Social Security Act;

        ‘(B) providing or arranging for any other service that a FQHC may provide and be reimbursed for under title XIX of such Act; and

        ‘(C) providing any unreimbursed costs of providing services as described in section 330(a) to patients.

    ‘(e) PRIORITIES IN THE AWARDING OF GRANTS-

      ‘(1) CERTIFIED FQHC’S- The Secretary shall give priority in awarding grants under this section to entities which have, as of January 1, 1992, been certified as a FQHC under section 1905(l)(2)(B) of the Social Security Act and which have submitted a proposal to the Secretary to expand their operations (including expansion to new sites) to serve medically underserved populations for high impact areas not currently served by a FQHC. The Secretary shall give first priority in awarding grants under this section to those FQHCs or other entities which propose to serve populations with the highest degree of unmet need, and which can demonstrate the ability to expand their operations in the most efficient manner.

      ‘(2) QUALIFIED FQHC’S- The Secretary shall give second priority in awarding grants to entities which have submitted applications to the Secretary which demonstrate that the entity will qualify as a FQHC under section 1905(l)(2)(B) of the Social Security Act before it provides or arranges for the provision of services supported by funds awarded under this section, and which are serving or proposing to serve medically underserved populations or high impact areas which are not currently served (or proposed to be served) by a FQHC.

      ‘(3) EXPANDED SERVICES AND PROJECTS- The Secretary shall give third priority in awarding grants in subsequent years to those FQHCs or other entities which have provided for expanded services and project and are able to demonstrate that such entity will incur significant unreimbursed costs in providing such expanded services.

    ‘(f) RETURN OF FUNDS TO SECRETARY FOR COSTS REIMBURSED FROM OTHER SOURCES- To the extent that an entity or organization receiving funds under this section is reimbursed from another source for the provision of services to an individual, and does not use such increased reimbursement to expand services furnished, areas served, to compensate for costs of unreimbursed services provided to patients, or to promote recruitment, training, or retention of personnel, such excess revenues shall be returned to the Secretary.

    ‘(g) TERMINATION OF GRANTS-

      ‘(1) FAILURE TO MEET FQHC REQUIREMENTS-

        ‘(A) IN GENERAL- With respect to any entity that is receiving funds awarded under this section and which subsequently fails to meet the requirements to qualify as a FQHC under section 1905(l)(2)(B) or is an entity that is not required to meet the requirements to qualify as a FQHC under section 1905(l)(2)(B) of the Social Security Act but fails to meet the requirements of this section, the Secretary shall terminate the award of funds under this section to such entity.

        ‘(B) NOTICE- Prior to any termination of funds under this section to an entity, the entities shall be entitled to 60 days prior notice of termination and, as provided by the Secretary in regulations, an opportunity to correct any deficiencies in order to allow the entity to continue to receive funds under this section.

      ‘(2) REQUIREMENTS- Upon any termination of funding under this section, the Secretary may (to the extent practicable)--

        ‘(A) sell any property (including equipment) acquired or constructed by the entity using funds made available under this section or transfer such property to another FQHC, provided, that the Secretary shall reimburse any costs which were incurred by the entity in acquiring or constructing such property (including equipment) which were not supported by grants under this section; and

        ‘(B) recoup any funds provided to an entity terminated under this section.

    ‘(h) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $400,000,000 for fiscal year 1993, $800,000,000 for fiscal year 1994, $1,200,000,000 for fiscal year 1995, $1,600,000,000 for fiscal year 1996, and $1,600,000,000 for fiscal year 1997.’.

    (b) EFFECTIVE DATE- The amendments made by subsection (a) shall become effective with respect to services furnished by a federally qualified health center or other qualifying entity described in this section beginning on or after October 1, 1992.

    (c) STUDY AND REPORT ON SERVICES PROVIDED BY COMMUNITY HEALTH CENTERS AND HOSPITALS-

      (1) IN GENERAL- The Secretary of Health and Human Services (hereinafter referred to in this subsection as the ‘Secretary’) shall provide for a study to examine the relationship and interaction between community health centers and hospitals in providing services to individuals residing in medically underserved areas. The Secretary shall ensure that the National Rural Research Centers participate in such study.

      (2) REPORT- The Secretary shall provide to the appropriate committees of Congress a report summarizing the findings of the study within 90 days of the end of each project year and shall include in such report recommendations on methods to improve the coordination of and provision of services in medically underserved areas by community health centers and hospitals.

      (3) AUTHORIZATION- There are authorized to be appropriated to carry out the study provided for in this subsection $150,000 for each of fiscal years 1993 and 1994.

SEC. 504. RURAL MENTAL HEALTH OUTREACH GRANTS.

    Subpart 3 of part B of title V of the Public Health Service Act (42 U.S.C. 290cc-11 et seq.) is amended by adding at the end thereof the following new section:

‘SEC. 520A. RURAL MENTAL HEALTH OUTREACH GRANTS.

    ‘(a) IN GENERAL- The Secretary may award competitive grants to eligible entities to enable such entities to develop and implement a plan for mental health outreach programs in rural areas.

    ‘(b) ELIGIBLE ENTITIES- To be eligible to receive a grant under subsection (a) an entity shall--

      ‘(1) prepare and submit to the Secretary an application at such time, in such form and containing such information as the Secretary may require, including a description of the activities that the entity intends to undertake using grant funds; and

      ‘(2) meet such other requirements as the Secretary determines appropriate.

    ‘(c) PRIORITY- In awarding grants under subsection (a), the Secretary shall give priority to applications that place emphasis on mental health services for the elderly or children. Priority shall also be given to applications that involve relationships between the applicant and rural managed care cooperatives.

    ‘(d) MATCHING REQUIREMENT- An entity that receives a grant under subsection (a) shall make available (directly or through donations from public or private entities), non-Federal contributions toward the costs of the operations of the network in an amount equal to the amount of the grant.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $5,000,000 for each of the fiscal years 1993 through 1997.’.

SEC. 505. HEALTH PROFESSIONS TRAINING.

    (a) MEDICALLY UNDERSERVED AREA TRAINING INCENTIVES- Part A of title VII of the Public Health Service Act (42 U.S.C. 292 et seq.) is amended by adding at the end thereof the following new section:

‘SEC. 711. PRIORITIES IN AWARDING OF GRANTS.

    ‘(a) ALLOCATION OF COMPETITIVE GRANT FUNDS- In awarding competitive grants under this title or title VIII, the Secretary shall, among applicants that meet the eligibility requirements under such titles, give priority to entities submitting applications that--

      ‘(1) can demonstrate that such entities--

        ‘(A) have a high permanent rate for placing graduates in practice settings which serve residents of medically underserved communities; and

        ‘(B) have a curriculum that includes--

          ‘(i) the rotation of medical students and residents to clinical settings the focus of which is to serve medically underserved communities;

          ‘(ii) the appointment of health professionals whose practices serve medically underserved communities to act as preceptors to supervise training in such settings;

          ‘(iii) classroom instruction on practice opportunities involving medically underserved communities;

          ‘(iv) service contingent scholarship or loan repayment programs for students and residents to encourage practice in or service to underserved communities;

          ‘(v) the recruitment of students who are most likely to elect to practice in or provide service to medically underserved communities;

          ‘(vi) other training methodologies that demonstrate a significant commitment to the expansion of the proportion of graduates that elect to practice in or serve the needs of medically underserved communities; or

      ‘(2) contain an organized plan for the expeditious development of the placement rate and curriculum described in paragraph (1).

    ‘(b) SERVICE IN MEDICALLY UNDERSERVED COMMUNITIES- Not less than 50 percent of the amounts appropriated for fiscal year 1996, and for each subsequent fiscal year, for competitive grants under this title or title VIII, shall be used to award grants to institutions that are otherwise eligible for grants under such titles, and that can demonstrate that--

      ‘(1) not less than 15 percent of the graduates of such institutions during the preceding 2-year period are engaged in full-time practice serving the needs of medically underserved communities; or

      ‘(2) the number of the graduates of such institutions that are practicing in a medically underserved community has increased by not less than 50 percent over that proportion of such graduates for the previous 2-year period.

    ‘(c) WAIVERS- A health professions school may petition the Secretary for a temporary waiver of the priorities of this section. Such waiver shall be approved if the health professions school demonstrates that the State in which such school is located is not suffering from a shortage of primary care providers, as determined by the Secretary. Such waiver shall not be for a period in excess of 2 years.

    ‘(d) DEFINITIONS- As used in this section:

      ‘(1) GRADUATE- The term ‘graduate’ means, unless otherwise specified, an individual who has successfully completed all training and residency requirements necessary for full certification in the health professions discipline that such individual has selected.

      ‘(2) MEDICALLY UNDERSERVED COMMUNITY- The term ‘medically underserved community’ means--

        ‘(A) an area designated under section 332 as a health professional shortage area;

        ‘(B) an area designated as a medically underserved area under this Act;

        ‘(C) populations served by migrant health centers under section 329, community health centers under section 330, or Federally qualified health centers under section 1905(l)(2)(B) of the Social Security Act;

        ‘(D) a community that is certified as underserved by the Secretary for purposes of participation in the rural health clinic program under title XVIII of the Social Security Act; or

        ‘(E) a community that meets the criteria for the designation described in subparagraph (A) or (B) but that has not been so designated.’.

    (b) MEDICALLY UNDERSERVED AREA TRAINING GRANTS- Part F of title VII (42 U.S.C. 295g et seq.) of such Act is amended by adding at the end thereof the following new section:

‘SEC. 790B. MEDICALLY UNDERSERVED AREA TRAINING GRANT PROGRAM.

    ‘(a) GRANTS- The Secretary shall award grants to health professions institutions to expand training programs that are targeted at those individuals desiring to practice in or serve the needs of medically underserved communities.

    ‘(b) PLAN- As part of an application submitted for a grant under this section, the applicant shall prepare and submit a plan that describes the proposed use of funds that may be provided to the applicant under the grant.

    ‘(c) PRIORITY- In awarding grants under this section, the Secretary shall give priority to applicants that demonstrate the greatest likelihood of expanding the proportion of graduates who choose to practice in or serve the needs of medically underserved areas.

    ‘(d) USE OF FUNDS- An institution that receives a grant under this section shall use amounts received under such grant to establish or enhance procedures or efforts to--

      ‘(1) rotate health professions students from such institution to clinical settings the focus of which is to serve the residents of medically underserved communities;

      ‘(2) appoint health professionals whose practices serve medically underserved areas to serve as preceptors to supervise training in such settings;

      ‘(3) provide classroom instruction on practice opportunities involving medically underserved communities;

      ‘(4) provide service contingent scholarship or loan repayment programs for students and residents to encourage practice in or service to underserved communities;

      ‘(5) recruit students who are most likely to elect to practice in or provide service to medically underserved communities; or

      ‘(6) provide other training methodologies that demonstrate a significant commitment to the expansion of the proportion of graduates that elect to practice in or serve the needs of medically underserved communities.

    ‘(e) ADMINISTRATION-

      ‘(1) REQUIRED CONTRIBUTION- An institution that receives a grant under this section shall contribute, from non-Federal sources, either in cash or in-kind, an amount equal to the amount of the grant to the activities to be undertaken with the grant funds.

      ‘(2) LIMITATION- An institution that receives a grant under this section, shall use amounts received under such grant to supplement, not supplant, amounts made available by such institution for activities of the type described in subsection (d) in the fiscal year preceding the year for which the grant is received.

    ‘(f) DEFINITIONS- As used in this section:

      ‘(1) GRADUATE- The term ‘graduate’ means, unless otherwise specified, an individual who has successfully completed all training and residency requirements necessary for full certification in the health professions discipline that such individual has selected.

      ‘(2) MEDICALLY UNDERSERVED COMMUNITY- The term ‘medically underserved community’ means--

        ‘(A) an area designated under section 332 as a health professional shortage area;

        ‘(B) an area designated as a medically underserved area under this Act;

        ‘(C) populations served by migrant health centers under section 329, community health centers under section 330, or Federally qualified health centers under section 1905(l)(2)(B) of the Social Security Act;

        ‘(D) a community that is certified as underserved by the Secretary for purposes of participation in the rural health clinic program under title XVIII of the Social Security Act; or

        ‘(E) a community that meets the criteria for the designation described in subparagraph (A) or (B) but that has not been so designated.

    ‘(g) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $15,000,000 for each of the fiscal years 1993 and 1994, and such sums as may be necessary for each of the fiscal years 1995 through 1997.’.

    (c) HEALTH PROFESSIONS TRAINING GRANTS- Part F of title VII (42 U.S.C. 295g et seq.) of such Act (as amended by subsection (b)) is further amended by adding at the end thereof the following new section:

‘SEC. 790C. HEALTH PROFESSIONS INTEGRATION GRANT PROGRAM.

    ‘(a) GRANTS- The Secretary shall award grants to eligible regional consortia to enhance and expand coordination among various health professions programs, particularly in medically underserved rural areas.

    ‘(b) ELIGIBLE REGIONAL CONSORTIUM-

      ‘(1) IN GENERAL- To be eligible to receive a grant under subsection (a), an entity must--

        ‘(A) be a regional consortium consisting of at least one medical school and at least one other health professions school that is not a medical school; and

        ‘(B) prepare and submit an application containing a plan of the type described in paragraph (2).

      ‘(2) PLAN- As part of the application submitted by a consortium under paragraph (1)(B), the consortium shall prepare and submit a plan that describes the proposed use of funds that may be provided to the consortium under the grant.

    ‘(c) USE OF FUNDS- A consortium that receives a grant under this section shall use amounts received under such grant to establish or enhance--

      ‘(1) strategies for better clinical cooperation among different types of health professionals;

      ‘(2) classroom instruction on integrated practice opportunities, particularly targeted toward rural areas;

      ‘(3) integrated clinical clerkship programs that make use of students in differing health professions schools; or

      ‘(4) other training methodologies that demonstrate a significant commitment to the expansion of clinical cooperation among different types of health professionals, particularly in underserved rural areas.

    ‘(d) LIMITATION- A consortium that receives a grant under this section, shall use amounts received under such grant to supplement, not supplant, amounts made available by such institution for activities of the type described in subsection (c) in the fiscal year preceding the year for which the grant is received.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $7,000,000 for each of the fiscal years 1993 and 1994, and such sums as may be necessary for each of the fiscal years 1995 through 1997.’.

SEC. 506. AREA HEALTH EDUCATION CENTERS.

    (a) STIPENDS FOR PERSONNEL- Section 781(a) of the Public Health Service Act (42 U.S.C. 295g-1(a)) is amended by adding at the end thereof the following new paragraph:

    ‘(3)(A) The Secretary may award grants under this section to rural communities to enable such communities to provide stipends to physicians, nurses or other health professional trainees to encourage such individuals to continue to provide health care services in such rural communities.

    ‘(B) A community that receives a grant under subparagraph (A) shall make available (directly or through donations from public or private entities), non-Federal contributions towards the costs of the operations of the network in an amount equal to the amount of the grant.’.

    (b) REAUTHORIZATION- Section 781(h) of such Act (42 U.S.C. 295g-1(h)) is amended to read as follows:

    ‘(h)(1) For purposes of carrying out this section, other than subsection (f), there are authorized to be appropriated $40,000,000 for each of the fiscal years 1993 through 1997.

    ‘(2) For purposes of carrying out subsection (f), there are authorized to be appropriated $12,000,000 for each of the fiscal years 1993 through 1997.

    ‘(3) A contract entered into under this section after the date of enactment of this subsection shall require that the entity awarded such contract make available (directly or through donations from public or private entities), during the fourth and remaining years of the contract, non-Federal contributions equal to--

      ‘(A) for the fourth year for which such contract is in effect, $3 for every $7 of Federal funds provided under the contract in such year;

      ‘(B) for the fifth year for which such contract is in effect, $4 for every $6 of Federal funds provided under the contract in such year; and

      ‘(C) for the sixth and subsequent years for which such contract is in effect, $1 for every $1 of Federal funds provided under the contract in such year.’.

SEC. 507. RURAL HEALTH EXTENSION NETWORKS.

    Title XVII of the Public Health Service Act (42 U.S.C. 300u et seq.) is amended by adding at the end thereof the following new section:

‘SEC. 1707. RURAL HEALTH EXTENSION NETWORKS.

    ‘(a) GRANTS- The Secretary, acting through the Health Resources and Services Administration, may award competitive grants to eligible entities to enable such entities to facilitate the development of networks among rural and urban health care providers to preserve and share health care resources and enhance the quality and availability of health care in rural areas. Such networks may be statewide or regionalized in focus.

    ‘(b) ELIGIBLE ENTITIES- To be eligible to receive a grant under subsection (a) an entity shall--

      ‘(1) be a rural health extension network that meets the requirements of subsection (c);

      ‘(2) prepare and submit to the Secretary an application at such time, in such form and containing such information as the Secretary may require; and

      ‘(3) meets such other requirements as the Secretary determines appropriate.

    ‘(c) NETWORKS- For purposes of subsection (b)(1), a rural health extension network shall be an association or consortium of three or more rural health care providers, and may include one or more urban health care providers, for the purpose of applying for a grant under this section and using amounts received under such grant to provide the services described in subsection (d).

    ‘(d) SERVICES-

      ‘(1) IN GENERAL- An entity that receives a grant under subsection (a) shall use amounts received under such grant to--

        ‘(A) provide education and community decision-making support for health care providers in the rural areas served by the network;

        ‘(B) utilize existing health care provider education programs, including but not limited to, the program for area health education centers under section 781, to provide educational services to health care providers in the areas served by the network;

        ‘(C) make appropriately trained facilitators available to health care providers located in the areas served by the network to assist such providers in developing cooperative approaches to health care in such area;

        ‘(D) facilitate linkage building through the organization of discussion and planning groups and the dissemination of information concerning the health care resources where available, within the area served by the network;

        ‘(E) support telecommunications and consultative projects to link rural hospitals and other health care providers, and urban or tertiary hospitals in the areas served by the network; or

        ‘(F) carry out any other activity determined appropriate by the Secretary.

      ‘(2) EDUCATION- In carrying out activities under paragraph (1)(B), an entity shall support the development of an information and resource sharing system, including elements targeted towards high risk populations and focusing on health promotion, to facilitate the ability of rural health care providers to have access to needed health care information. Such activities may include the provision of training to enable individuals to serve as coordinators of health education programs in rural areas.

      ‘(3) COLLECTION AND DISSEMINATION OF DATA- The chief executive officer of a State shall designate a State agency that shall be responsible for collecting and regularly disseminating information concerning the activities of the rural health extension networks in that State.

    ‘(e) MATCHING REQUIREMENT- An entity that receives a grant under subsection (a) shall make available (directly or through donations from public or private entities), non-Federal contributions towards the costs of the operations of the network in an amount equal to the amount of the grant.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $10,000,000 for each of the fiscal years 1993 through 1997.

    ‘(g) DEFINITION- As used in this section and section 1708, the term ‘rural health care providers’ means health care professionals and hospitals located in rural areas. The Secretary shall ensure that for purposes of this definition, rural areas shall include any area that meets any applicable Federal or State definition of rural area.’.

SEC. 508. RURAL MANAGED CARE COOPERATIVES.

    Title XVII of the Public Health Service Act (42 U.S.C. 300u et seq.) as amended by section 507 is further amended by adding at the end thereof the following new section:

‘SEC. 1708. RURAL MANAGED CARE COOPERATIVES.

    ‘(a) GRANTS- The Secretary, acting through the Health Resources and Services Administration, may award competitive grants to eligible entities to enable such entities to develop and administer cooperatives in rural areas that will establish an effective case management and reimbursement system designed to support the economic viability of essential public or private health services, facilities, health care systems and health care resources in such rural areas.

    ‘(b) ELIGIBLE ENTITIES- To be eligible to receive a grant under subsection (a) an entity shall--

      ‘(1) prepare and submit to the Secretary an application at such time, in such form and containing such information as the Secretary may require, including a description of the cooperative that the entity intends to develop and operate using grant funds; and

      ‘(2) meet such other requirements as the Secretary determines appropriate.

    ‘(c) COOPERATIVES-

      ‘(1) IN GENERAL- Amounts provided under a grant awarded under subsection (a) shall be used to establish and operate a cooperative made up of all types of health care providers, hospitals, primary access hospitals, other alternate rural health care facilities, physicians, rural health clinics, rural nurse practitioners and physician assistant practitioners, public health departments and others located in, but not restricted to, the rural areas to be served by the cooperative.

      ‘(2) BOARD OF DIRECTORS- A cooperative established under paragraph (1) shall be administered by a board of directors elected by the members of the cooperative, a majority of whom shall represent rural providers from the local community and include representatives from the local community. Such directors shall serve at the pleasure of such members.

      ‘(3) EXECUTIVE DIRECTOR- The members of a cooperative established under paragraph (1) shall elect an executive director who shall serve as the chief operating officer of the cooperative. The executive director shall be responsible for conducting the day to day operation of the cooperative including--

        ‘(A) maintaining an accounting system for the cooperative;

        ‘(B) maintaining the business records of the cooperative;

        ‘(C) negotiating contracts with provider members of the cooperative; and

        ‘(D) coordinating the membership and programs of the cooperative.

      ‘(4) REIMBURSEMENTS-

        ‘(A) NEGOTIATIONS- A cooperative established under paragraph (1) shall facilitate negotiations among member health care providers and third party payers concerning the rates at which such providers will be reimbursed for services provided to individuals for which such payers may be liable.

        ‘(B) AGREEMENTS- Agreements reached under subparagraph (A) shall be binding on the members of the cooperative.

        ‘(C) EMPLOYERS- Employer entities may become members of a cooperative established under paragraph (a) in order to provide, through a member third party payer, health insurance coverage for employees of such entities. Deductibles shall only be charged to employees covered under such insurance if such employees receive health care services from a provider that is not a member of the cooperative if similar services would have been available from a member provider.

        ‘(D) MALPRACTICE INSURANCE- A cooperative established under subsection (a) shall be responsible for identifying and implementing a malpractice insurance program that shall include a requirement that such cooperative assume responsibility for the payment of a portion of the malpractice insurance premium of providers members.

      ‘(5) MANAGED CARE AND PRACTICE STANDARDS- A cooperative established under paragraph (1) shall establish joint case management and patient care practice standards programs that health care providers that are members of such cooperative must meet to be eligible to participate in agreements entered into under paragraph (4). Such standards shall be developed by such provider members and shall be subject to the approval of a majority of the board of directors. Such programs shall include cost and quality of care guidelines including a requirement that such providers make available preadmission screening, selective case management services, joint patient care practice standards development and compliance and joint utilization review.

      ‘(6) CONFIDENTIALITY- Patients records, records of peer review, utilization review, and quality assurance proceedings conducted by the cooperative should be considered confidential and protected from release outside of the cooperative. The provider members of the cooperative shall be indemnified by the cooperative for the good faith participation by such members in such the required activities.

    ‘(d) LINKAGES- A cooperative shall create linkages among member health care providers, employers, and payers for the joint consultation and formulation of the types, rates, costs, and quality of health care provided in rural areas served by the cooperative.

    ‘(e) MATCHING REQUIREMENT- An entity that receives a grant under subsection (a) shall make available (directly or through donations from public or private entities), non-Federal contributions towards the costs of the operations of the network in an amount equal to the amount of the grant.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $15,000,000 for each of the fiscal years 1993 through 1997.’.

Subtitle B--Provision Relating to Social Security

SEC. 511. RURAL HEALTH CARE TRANSITION GRANT PROGRAM.

    Section 4005(e)(9) of the Omnibus Budget Reconciliation Act of 1987 (42 U.S.C. 1395ww note) is amended by striking ‘$15,000,000’ and all that follows through the end thereof and inserting ‘$50,000,000 for each of the fiscal years 1993 through 1997.’.

SEC. 512. ESSENTIAL ACCESS COMMUNITY HOSPITAL PROGRAM.

    Section 1820(k) of the Social Security Act (42 U.S.C. 1395i-4(k)) is amended to read as follows:

    ‘(k) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section, $50,000,000 for each of the fiscal years 1993 through 1997.’.

TITLE VI--INCENTIVES TO ENCOURAGE PREVENTIVE SERVICES

SEC. 601. PREVENTIVE SERVICES TAX CREDIT.

    (a) IN GENERAL- Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits), as amended by section 101, is further amended by inserting after section 34A the following new section:

‘SEC. 34B. PREVENTIVE SERVICES CREDIT.

    ‘(a) ALLOWANCE OF CREDIT- There shall be allowed as a credit against the tax imposed by this subtitle for the taxable year expenditures paid or incurred during the taxable year for any qualified preventive services which are included in the list under subsection (c) and which are not compensated by insurance or otherwise, as follows:

      ‘(1) ELIGIBLE INDIVIDUAL- In the case of an eligible individual, the amount of the credit allowable under this subsection shall not exceed--

        ‘(A) $250, or

        ‘(B) $200 in the case of a taxpayer with taxable income for the taxable year in excess of the maximum rate of taxable income to which the 15-percent rate applies under the applicable table under section 1.

      ‘(2) QUALIFIED PREVENTIVE SERVICES PROVIDER- In the case of a qualified preventive services provider, the amount of the credit allowable under this subsection shall be an amount equal to the product of--

        ‘(A) the lower of--

          ‘(i) the usual and customary charges for qualified preventive services, or

          ‘(ii) the rate of payment established by the Health Care Financing Administration for qualified preventive services,

        multiplied by--

        ‘(B) the number of qualified preventive services provided without charge during the taxable year to qualifying low-income individuals.

    ‘(b) DEFINITIONS- For purposes of subsection (a)--

      ‘(1) ELIGIBLE INDIVIDUAL- The term ‘eligible individual’ means an individual who is--

        ‘(A) the taxpayer,

        ‘(B) the taxpayer’s spouse, or

        ‘(C) any individual for whom the taxpayer is allowed an exemption under section 151.

      ‘(2) QUALIFIED PREVENTIVE SERVICES PROVIDER- The term ‘qualified preventive services provider’ means a medical practitioner, facility, hospital, laboratory, or similar institution licensed under State law to provide 1 or more qualified preventive services.

      ‘(3) QUALIFYING LOW-INCOME INDIVIDUAL- The term ‘qualifying low-income individual’ means an individual--

        ‘(A) whose income level does not exceed 150 percent of the official poverty line (as defined by the Office of Management and Budget and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved, and

        ‘(B) with respect to whom identifying information is maintained.

    ‘(c) QUALIFIED PREVENTIVE SERVICES-

      ‘(1) IN GENERAL- For purposes of this section, the Secretary, after consultation with the Secretary of Health and Human Services and cancer research and prevention organizations, shall publish, not later than December 31, 1992, and annually thereafter, a list of preventive services which qualify for the credit allowable under this section.

      ‘(2) PREVENTIVE SERVICES-

        ‘(A) IN GENERAL- The list of preventive services which qualify under this section shall include at least the following:

          ‘(i) Cancer screening tests.

          ‘(ii) Childhood immunization.

          ‘(iii) Well child care.

        ‘(B) CANCER SCREENING TESTS- The term ‘cancer screening tests’ shall include at least the following:

          ‘(i) Physical breast examination and mammogram for female breast cancer.

          ‘(ii) Digital rectal examination, proctosigmoidoscopy, and blood stool test for colon and rectum cancer.

          ‘(iii) Rectal examination for prostate cancer.

          ‘(iv) Pap test for uterine cancer.

          ‘(v) Pelvic examination for ovarian cancer.

    ‘(d) IDENTIFYING INFORMATION- No credit shall be allowed under this section unless the qualified preventive services provider maintains, to the satisfaction of the Secretary, adequate records regarding the name and address, date of services, and type of services provided with respect to each qualifying low-income individual with respect to whom a credit is claimed.’.

    (b) COORDINATION WITH DEDUCTIONS FOR MEDICAL EXPENSES- Section 213(e) of such Code (relating to coordination with health expenses credit under section 34A), as added by section 101, is amended--

      (1) by inserting ‘and the amount (if any) of the preventive services credit allowable to the taxpayer for the taxable year under section 34B(a)(1)’ before the end period; and

      (2) by inserting ‘AND PREVENTIVE SERVICES CREDIT UNDER SECTION 34B’ in the heading after ‘SECTION 34A’.

    (c) CLERICAL AMENDMENT- The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code, as amended by section 101, is further amended by inserting after the item relating to section 34A the following new item:

‘Sec. 34B. Preventive services credit.’.

    (d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1992.

SEC. 602. INCREASE IN AUTHORIZATION FOR CHILDHOOD IMMUNIZATIONS.

    Section 317(j)(1)(B) of the Public Health Service Act (42 U.S.C. 247b(j)(1)(B)) is amended by striking ‘such sums as may be necessary’ and inserting ‘$238,865,000 for fiscal year 1993, and $240,000,000 for each of the fiscal years 1994 through 1997’.