The text of the bill below is as of Jan 4, 1975 (Passed Congress).
You are reading a bill enacted 17,615 days ago. In the intervening time subsequent legislation may have amended or repealed the provisions below.
88 STAT. ] PUBLIC LAW 93-641~JAN. 4, 1975 2225
Public Law 93-641
AN A C T J a n u a r y 4, 1975
To amend the Public Health Service Act to assure the development of a national [s. 2994]
health policy a n d of effective State and area health planning and resources
development programs, and for other purposes.
He it enacted hy the Senate and House of Represemtatlves of the
Ignited, /States of America in Congress assembled. National Health
•' ^ ' P l a n n i n g and R e -
sources Develop-
SIIORT T I T I J - : : TABLE OF C O N T E N T S ment Act of 1974.
• • 42 u s e 300k
SECTION 1. This Act may be cited as the "National Health Planning "°'^*
and Resoui'ces Development Act of 1974".
TABLE OF CONTENTS
Sec. 1. Short t i t l e ; table of contents.
Sec. '2. Findings and purpose.
Sec. 3. Revision of health planning programs under the Public Health Service Act.
• T I T L E XV—NATIONAL H E A L T H PLANNING AND D E V E L O P M E N T
•'PART A—NATIONAL GUIDELINES EOR H E A L T H P L A N N I N G
"Sec. 1501. National guidelines for health planning.
"Sec. 1502. National health priorities.
•'Sec. 1503. National Council on Health Planning and Development.
" P A R T B — H E A L T H SYSTEMS AGENCIES
"Sec. 1511. Health service areas.
"Sec. 1512. Health systems agencies.
"Sec. 1513. Functions of health systems agencies.
"Sec. 1514. Assistance to entities desiring to be designated a s health systems
agencies.
"Stc. 1515. Designation of health systems agencies.
"Sec. 1516. Planning grants.
" P A R T C — S T A T E H E A L T H P L A N N I N G AND DEVELOPMENT
"Sec. 1521. Designation of State health planning and development agencies.
"Sec. 1522. State administrative program.
"Sec. 1523. State health planning and development functions.
"Sec. 1524. Statewide Health Coordinating Council.
•'Sec. 1525. G r a n t s for State health planning a n d development.
•'Sec. 1526. G r a n t s for rate regulation.
" P A R T D — G E N E R A L 1*ROVISIONS
••See. 1531. Definitions.
"Sec. 1532. Procedures and criteria for reviews of proposed health system
changes.
•'Sec. 1533. Technical assistance for health systems agencies and State health
planning a n d development agencies.
•'Sec. 1534. Centers for health planning.
•'Sec. 1535. Review by t h e Secretary.
••Sec. 1536. Special provisions for certain States a n d Territories."
Sec. 4. Revision of health resources development programs under the Public
Health Service Act.
•TITLE X V I — H E A L T H R E S O U R C E S D E V E L O P M E N T
"1»ART A—PURPOSE, STATE P L A N , AND PROJECT APPROVAL
••Sec. 1601. Purpose.
•"Sec. 1602. General regulations.
•'Sec. 1603. State medical facilities plan.
••Sec. 1604. Approval of projects.
2226 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
T A B L E O F CONTENTS—Continued
" T I T L E X V I — H E A L T H R E S O U R C E S DEVELOPMENT—Continued
"PART B—ALLOTMENTS
"Sec. 1610. Allotments.
"Sec. 1611. P a y m e n t s from allotments.
"Sec. 1612. Withholding of payments a n d other compliance actions.
"Sec. 1613. Authorization of appropriations.
" P A E T C — L O A N S AND LOAN GUARANTEES
"Sec. 1620. Authority for loans a n d loan guarantees.
"Sec. 1621. Allocation among States.
"Sec. 1622. General provisions relating to loan guarantees a n d loans.
" P A R T D — P R O J E C T GRANTS
"Sec. 1625. Project grants.
" P A R T E — G E N E R A L PROVISIONS
"Sec. 1630. Judicial review.
"Sec. 1631. Recovery,
"Sec. 1632. State control of operations.
"Sec. 1633. Definitions.
"Sec. 1634, Financial s t a t e m e n t s ; records and audit.
"Sec. 1635. Technical assistance.
" P A R T F—^AREA H E A L T H SERVICES DEVELOPMENT F U N D S
"Sec. 1640. Area health services development funds."
Sec, 5. Miscellaneous a n d transitional provisions.
Sec. 6. Advisory committees.
Sec. 7. Agency reports.
Sec. 8. Technical amendment.
FINDINGS AND PURPOSE
42 u s e 300k. SEC. 2. (a) The Congress makes the following findings:
(1) The achievement of equal access to quality health care at a
reasonable cost is a priority of the Federal Government.
(2) The massive infusion of Federal funds into the existing
health care system has contributed to inflationary increases in the
cost of health care and failed to produce an adequate supply or
distribution of health resources, and consequently has not made
possible equal access for everyone to such resources.
(3) The many and increasing responses to these problems by
the public sector (Federal, State, and local) and the private sector
have not resulted in a comprehensive, rational approach to the
present—
(A) lack of uniformly effective methods of delivering
health care;
(B) maldistribution of health care facilities and man-
power; and
(C) increasing cost of health care.
(4) Increases in the cost of health care, particularly of hospital
stays, have been uncontrollable and inflationary, and there are
presently inadequate incentives for the use of appropriate alter-
native levels of health care, and for the substitution of ambula-
tory and intermediate care for inpatient hospital care.
(5) Since the health care provider is one of the most important
participants in any health care delivery system, health policy
must address the legitimate needs and concerns of the provider
if it is to achieve meaningful results; and, thus, it is imperative
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2227
that the provider be encouraged to play an active role in develop-
ing health policy at all levels.
(6) Large segments of the public are lacking in basic knowl-
edge regarding proper personal health care and methods for
effective use of available health services,
(b) In recognition of the magnitude of the problems described in
subsection (a) and the urgency placed on their solution, it is the
purpose of this Act to facilitate the development of recommendations
for a national health planning policy, to augment areawide and State
planning for health services, manpower, and facilities, and to author-
ize financial assistance for the development of resources to further
that policy.
REVISION o r HEALTH PLANNING PROGRAMS UNDER THE
PUBLIC HEALTH SERVICE ACT
SEC. 3. The Public Health Service Act is amended by adding at 42 u s e 201
the end the following new title: " '"'
" T I T L E X V — N A T I O N A L H E A L T H P L A N N I N G AND
DEVELOPMENT
" P A R T A—NATIONAL GUIDELINES FOR HEALTH PLANNING
" N A T I O N A L GUIDELINES FOR HEALTH PLANNING
"SEC. 1501. (a) The Secretary shall, within eighteen months after 42 use 3ook-i,
the date of the enactment of this title, by regulation issue guidelines
concerning national health planning policy and shall, as he deems
appropriate, by regulation revise such guidelines. Eegulations under
this subsection shall be promulgated in accordance with section 553
of title 5, United States Code.
"(b) The Secretary shall include in the guidelines issued under
subsection (a) the following:
"(1) Standards respecting the appropriate supply, distribu-
tion, and organization of health resources.
"(2) A statement of national health planning goals developed
after consideration of the priorities, set forth in section 1502,
which goals, to the maximum extent practicable, shall be
expressed in quantitative terms.
"(c) I n issuing guidelines under subsection (a) the Secretary shall
consult with and solicit recommendations and comments from the
health systems agencies designated under part B, the State health ^°^'' P- 2229.
planning and development agencies designated under part C, the ^°^^' P- 2242.
Statewide Health Coordinating Councils established under part C,
associations and specialty societies representing medical and other
health care providers, and the National Council on Health Planning
and Development established by section 1503.
"NATIONAL HEALTH PRIORITIES
"SEC. 1502. The Congress finds that the following deserve priority ^2 use 3ook-2.
consideration in the formulation of national health planning goals
and in the development and operation of Federal, State, and area
health planning and resources development programs:
"(1) The provision of primary care services for medically
underserved populations, especially those which are located in
rural or economically depressed areas.
2228 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(2) Tlie development of imilti-iiistitutional systems for eoordi-
nation or consolidation of institutional health services (inchiding
obstetric, pediatric, emer<yency medical, intensive and coronary
care, and radiation therapy services).
"(3) The development of medical group practices (especially
those whose sei'vices are appropriately coordinated or integrated
with institution.al health servicer), health maintenance organiza-
tions, and other organized systems for* the pi'ovis'on of health
care.
"(4) The training and increased utilization of physician assist-
ants, especially nurse clinicians.
"(5) The development of nnilti-institutiomil ari-angements for
the sharing of support services necessary to all health service
institutions.
"(6) The promotion of activities to achieve needed improve-
ments in the quality of health services, including needs identified
by the revicAv activities of Professional Standards Review Orga-
42 u s e 1320c. nizations under part B of title XT of the Social Security Act.
"(7) The development by health service institutions of the
capacity to provide various levels of care (including intensive
care, acute general care, and extended care) on a geographically
integrated basis.
"(8) The promotion of activities for the prevention of disease,
including studies of nutritional and environmental factors affect-
ing health and the provision of preventive health care services.
"(9) The adoption of uniform cost accoiniting. simplified
reimbursement, and utilization reporting systems and improved
uianagement procedures for health service institutions.
"(10) The development of effective methods of educating the
general public concerning proper personal (including preventive)
health care and methods for effective use of available health
services.
" N A T I O N A L C O U N C I L O N irKALTir I'LANNING AND nKVELOPMKNT
Establishment "SEC. 1508. (a) There is established in the Department of Health,
42 u s e 300k-3
Education, and Welfare an advisory council to be known as the
Xational Council on Health Planning and I)eveloi)ment (hereinafter
in this section referred to as the 'Council'). The Coimcil shall advise,
consult with, and make recommendations to, the Secretary with
respect to (1) the develo])ment of national guidelines under section
1501. (2) the implementation and administration of this title and
Post, p. 2258. |.j|.|p X V I . and (3) an evaluation of the implications of new medical
technology for the organization, delivery, and equitable distribution
of health care services.
Membership. " ( b ) ( 1 ) The Couucil shall be composed of fifteen members. The
Chief Medical Director of the Veterans' Administration, tlie Assistant
Secretary for Health and Environment of the Department of Defense,
and the Assistant Secretary for Health of the Department of Health,
Education, and Welfare shall be nonvoting ex officio members of the
Council. The remaining members shall be appointed by the Secretary
and shall be persons who, as a result of their training, experience, or
attainments, are exceptionally well qualified to assist in cai'rying out
the functions of the Council. Of the voting members, not less than
five shall be persons who are not providers of health services, not
more than three shall be officers or employees of the Federal Govern-
jnent. not less than three shall be members of governing bodies of
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2229
health systems agencies designated under part B, and not less than
three shall be members of Statewide Health Coordinating Councils
under section 1524. The two major political parties shall have equal ^°^*' P- ^^''^'^^
representation among the voting members on the Council.
"(2) The term of office of voting members of the Council shall be '^"'"^ °^ °"^'=^-
six years, except that—
" ( A ) of the members first appointed to the Council, four shall
be appointed for terms of two years and four shall be appointed
for terms of four years, as designated by the Secretary at the
time of appointment; and
" ( B ) any member appointed to fill a vacancy occurring prior
to the expiration of the term for which his predecessor was
appointed shall be appointed only for the remainder of such
term.
A member may serve after the expiration of his term until his suc-
cessor has taken office.
"(3) The chairman of the Council shall be selected by the voting
members from among their number. The term of office of the chairman
of the Council shall be the lesser of three years or the period remaining
in his term of office as a member of the Council.
" ( c ) ( 1 ) Except as provided in paragraph (2), the members of compensation.
the Council shall each be entitled to receive the daily equivalent of the
annual rate of basic pay in effect for grade GS-18 of the General
Schedule for each day (including traveltime) during which they are note. 5 u s e 5332
engaged in the actual performance of duties vested in the Council.
" (2) Members of the Council who are full-time officers or employees
of the United States shall receive no additional pay on account of
their service on the Council.
" (3) While away from their homes or regular places of business in Travel ex-
the performance of services for the Council, members of the Council P^"^^^-
shall be allowed travel expenses, including per diem in lieu of sub-
sistence, in the same manner as persons employed intermittently in
the Government service are allowed expenses under section 5703(b)
of title 5, United States Code.
" ( d ) The Council may appoint, fix the pay of, and prescribe the
functions of such personnel as are necessary to carry out its func-
tions. In addition, the Council may procure the services of experts and consultants"^
consultants as authorized by section 3109 of title 5, United States Code,
but without regard to the last sentence of such section.
"(e) The provisions of section 14(a) of the Federal Advisory Com-
mittee Act shall not apply with respect to the Council. s use app„ i.
"PART B — H E A L T H SYSTEMS AGENCIES
"HEALTH SERVICE AREAS
"SEC. 1511. (a) There shall be established, in accordance with this J2'usc'^'oT/?'"
section, health service areas throughout the United States with respect
to which health systems agencies shall be designated under section
1515. Each health service area shall meet the following requirements: Requirements.
" (1) The area shall be a geographic region appropriate for the
effective planning and development of health services, determined
on the basis of factors including population and the availability
of resources to provide all necessary health services for residents
of the area.
"(2) To the extent practicable, the area shall include at least
one center for the provision of highly specialized health services.
2230 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(3) The area, upon its establishment, shall lun-e a population
of not less than five hundred thousand or more than three million;
except that—
" ( A ) the population of an area may be more than three million
if the area includes a standard metropolitan statistical area (as
determined by the Office of Management and Burltret) with a
population of more than three million, and
" ( B ) the population of an area may—
" ( i ) be less than five hundred thousand if the area com-
prises an entire State which lias a population of less than
five hundred thousand, or
"(ii) be less than—
" (I) five hundred thousand (but not less than two hun-
dred thousand) in unusual circumstances (as determined
by the Secretary), or
" ( I I ) two hundred thousand in highly unusual cir-
cumstances (as determined by the Secretary).
if the Governor of each State in which the area is located
determines, with the approval of the Secretai-y, tliat the area
meets the other requirements of this subsection.
"(4) To the maximum extent feasible, the boundaries of the
area shall be appropriately coordinated with the boundaries of
42 u s e 1320C-1. areas designated under section 1152 of the Social Security Act for
Professional Standards Beview Organizations, existing regional
planning areas, and State planning and administrative areas.
The boimdaries of a health service area shall be established so that, in
the planning and development of health services to be offered within
the health service area, any economic or geographic barrier to the
receipt of such services in nonmetropolitan areas is taken into account.
The boundaries of health service areas shall be established so as to
recognize the differences in health planning and health services devel-
opment needs between nonmetropolitan and metropolitan areas. Each
standard metropolitan statistical area shall be entirely wathin the
boundaries of one health service area, except that if the Governor of
each State in which a standard metropolitan statistical area is located
determines, with the approval of the Secretary, that in order to meet
the other requirements of this subsection a health service area should
contain only part of the standard metropolitan statistical area, then
such statistical area shall not be required to be entirely Avithin the
boundaries of such health service area.
Notice to Gov- " ( b ) ( 1 ) Within thirty days following the date of the enactment
of this title, the Secretary shall simultaneously give to the Governor
of each State written notice of the initiation of proceedings to establish
health service areas throughout the Ignited States. Each notice shall
contain the following:
" ( A ) A statement of the requirement (in subsection (a)) of
the establishment of health sei-vice areas throughout the United
States.
" ( B ) A statement of the criteria prescribed by subsection (a)
for health service areas and the procedures prescribed by this sub-
section for the designation of health service area boundaries.
" ( C ) A request that the Governor receiving the notice (i) desig-
nate the boundaries of health service areas within his State, and,
where appropriate and in cooperation with the Governors of
adjoining States, designate the boundaries within his State of
health service areas located both in his State and in adjoining
States, and (ii) submit (in such form and manner as the Secretary
shall specify) to the Secretary, within one hundred and twenty
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2231
days of the date of enactment of this title, such boundary desig-
nations together with comments, submitted by the entities referred
to in paragraph (2), with respect to such designations.
At the time such notice is given under this paragraph to each c.J^"^^',''^*'""'"
r^ , ^ 1 iP 1T 1 • • 1 - 1 - 1 1 1 Fsaeral Register.
(governor, the becretary shall publish as a notice m the l<ederal
Register a statement of the giving of his notice to the Governor and
the criteria and procedures contained in such notice.
"(2) Each State's Governor shall in the development of boundaries
for health service areas consult with and solicit the views of
the chief executive officer or agency of the political subdivisions within
the State, the State agency which administers or supervises
the administration of the State's health planning functions under a
State plan approved under section 314(a), each entity within the '*2 use 246.
State which has developed a comprehensive regional, metropolitan,
or other local area plan or plans referred to in section 314(b),
and each regional medical program established in the State under the
title I X . ^^ 42 u s e 299.
"(3) (A) Within two hundred and ten days after the date of pe^dem^Re'TsJer.
enactment of this title, the Secretary shall publish as a notice in the
Federal Register the liealtli service area boundarv designations. The
boundaries for health service areas submitted by the Governors shall,
except as otherwise provided in subparagraph ( B ) , constitute upon
their publication in the Federal Register the boundaries for such
health service areas.
" ( B ) (i) If the Secretary determines that a boundary submitted ^^"^""^IW'^f'
to him for a health service area does not meet the requirements of sub- in FecL^rai Regis-
section ( a ) , he shall, after consultation Avith the Governor who t<^r-
submitted such boundary, make such revision in the boundary for such
area (and as necessary, in the boundaries for adioining health service
areas) as may be necessary to meet such requirements and publish
such revised boundary (or boundaries) ; and the revised boundary
(or boundaries) shnll uron publication in the Federal Register con-
stitute the boundarv (or boundaries) for such health service area
(or areas). The Secretnry shall notify the Governor of each
State in Avhich is located a health service area whose boundary is
revised under this clause of the boundary revision and the reasons for
such revision.
"(ii) In the case of areas of the United States not included within °'^^'" health
the boundaries for health service areas submitted to the Secretary publication'in'
.•'s requested under the notice under paragraph (1), the Secretary Federal Register.
shall establish and publisli in the Federal Register health service
area boundaries which include such areas. The Secretary shall
notifv the Governor of each State in which is located a health service
areri, the boundarv for which is established under this clause
of the boundaries etablished. In carryiiiQf out the requirement of this
clause, the Secretary may make such revisions in boundaries submitted
under subparagraph (A) as he determines are necessaiy to meet
the requirement of subsection (a) for the establishment of health
service areas throughout the TTnited States.
"(4) The Secretary shall review on a continuing basis and at the Review.
request of any Governor or designated health systems agency the
appropriateness of the boundaries of the health service areas estab-
lished under paragraph (3) and, if he determines that a boundary
for a health service area no longer meets the T'equirements of subsec-
tion ( a ) , he mav revise the l>oundaries in accordance with the proce-
dures prescribed by paragraph ( 3 ) ( B ) ( i i ) for the establishment of
boundaries of health service areas which include areas not included in
boundaries submitted by the Governors. If the Secretary acts on his
2232 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
own initiative to revise the boundaries of any health service area, he
shall consult with the Governor of the appropriate State or States,
the entities referred to in paragraph (2), the appropriate health
Ante, p . 2229. systems agency or agencies designated under part B and the appro-
priate Statewide Health Coordinating Council established under part
Post, p. 2242. C. A request for boundary revision shall be made only after consulta-
tion with the Governor of the appropriate State or States, the entities
referred to in paragraph (2), the appropriate designated health sys-
tems agencies, and the appropriate established Statewide Health
Coordinating Council and shall include the comments concerning the
revision made by the entities consulted in requesting the revision.
"(5) Within one year after the date of the enactment of this title
the Secretary shall complete the procedures for the initial establish-
ment of the boundaries of health service areas which (except as pro-
Post, p . 2257. vided in section 1535) include the geographic area of all the States.
"(c) Notwithstanding any other requirement of this section, an
area—
"(1) for which has been developed a comprehensive regional,
metropolitan area, or other local area plan referred to in section
42 u s e 246. 314(b), and
" (2) which otherwise meets the requirements of subsection ( a ) ,
shall be designated by the Secretary as a health service area unless
the Governor of any State in which such area is located, upon a finding
that another area is a more appropriate region for the effective plan-
ning and developlnent of health resources, waives such requirement.
HEALTH SYSTEMS AGENCIES
42 u s e 300Z-1. "SEC. 1512. (a) DEFINITION.—For purposes of this title, the term
'health systems agency' means an entity which is organized and oper-
ated in the manner described in subsection (b) and which is capable,
as determined by the Secretary, of performing each of the functions
Standards and
criteria.
described in section 1513. The Secretary shall by regulation establish
standards and criteria for the requirements of subsection (b) and sec-
tion 1513.
"(b) (1) LEGAL STRUCTURE.—A health systems agency for a health
service area shall be—
" ( A ) a nonprofit private corporation (or similar legal mecha-
nism such as a public benefit corporation) which is incorporated
in the State in which the largest part of the population of the
health service area resides, which is not a subsidiary of, or other-
wise controlled by, any other private or public corporation or other
legal entity, and which only engages in health planning and devel-
opment functions;
" ( B ) a public regional planning body if (i) it has a governing
board composed of a majority of elected officials of units of general
local government or it is authorized by State law (in effect before
the date of enactment of this subsection) to carry out health plan-
ning and review functions such as those described in section 1513,
and (ii) its planning area is identical to the health service area;
or
" ( C ) a single unit of general local government if the area of the
jurisdiction of that unit is identical to the health service area.
A health systems agency may not be an educational institution or oper-
ate such an institution.
"(2) STAFF.—
" ( A ) EXPERTISE.—^A health systems agency shall have a staff
which provides the agency with expertise in at least the following:
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2233
(i) Administration, (ii) the gathering and analysis of data, (iii)
health planning, and (iv) development and use of health resources.
The functions of planning and of development of health resources
shall be conducted by staffs with skills appropriate to each
function.
" ( B ) SIZE AND EMPLOYMENT.—The size of the professional staff
of any health systems agency shall be not less than five, except that
if the quotient of the population (rounded to the next highest one
hundred thousand) of the health service area which the agency
serves divided by one hundred thousand is greater than five, the
minimum size of the professional staff shall be the lesser of (i)
- such quotient, or (ii) twenty-five. The members of the staff shall
be selected, paid, promoted, and discharged in accordance with
such system as the agency may establish, except that the rate of pay
for any position shall not be less than the rate of pay prevailing in
the health service area for similar positions in other public or
private health service entities. If necessary for the performance of Consultants and
contracted serv-
its functions, a health systems agency may employ consultants and
may contract with individuals and entities for the provision of
services. Compensation for consultants and for contracted services
shall be established in accordance with standards established by
regulation by the Secretary.
"(3) GOVERNING BODY.—
" ( A ) I N GENERAL.—A health systems agency which is a public
regional planning body or unit of general local government shall,
in addition to any other governing body, have a governing body
for health planning, which is established in accordance with sub-
paragraph ( C ) , which shall have the responsibilities prescribed
by subparagraph ( B ) , and which has exclusive authority to per-
form for the agency the functions described in section 1513, Any
other health systems agency shall have a governing body com-
posed, in accordance with subparagraph (C), of not less than ten
members and of not more than thirty members, except that the
number of members may exceed thirty if the governing body has
established another unit (referred to in this paragraph as an
'executive committee') composed, in accordance with subpara-
graph (C), of not more than twenty-five members of the govern-
ing body and has delegated to that unit the authority to take such
action (other than the establishment and revision of the plans
referred to in subparagraph (B) (ii)) as the governing body is
authorized to take.
" ( B ) RESPONSIBILITIES.—The governing body—
"(i) shall be responsible for the internal affairs of the
health systems agency, including matters relating to the staff
of the agency, the agency's budget, and procedures and cri-
teria (developed and published pursuant to section 1532) Post, p. 2251.
applicable to its functions under subsections (e), (f), and
(g) of section 1513;
"(ii) shall be responsible for the establishment of the
health systems plan and annual implementation plan i-equired
by section 1513(b);
"(iii) shall be responsible for the approval of grants and Grants and con
contracts made and entered into under section 1513(c) ( 3 ) ; '"^'''^' ^PP'°''^^-
"(iv) shall be responsible for the approval of all actions
taken pursuant to subsections (e), (f), (g), and ( h ) , of sec-
tion 1513;
" ( v ) shall (I) issue an annual report concerning the Report.
activities of the agency, ( I I ) include in that report the health
2234 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
systems plan and annual implementation plan developed by
the agency, and a listing of the agency's income, expenditures,
assets, and liabilities, and ( I I I ) make the report readily
available to the residents of the health service area and the
various communications media serving such area;
" (vi) shall reimburse its members for their reasonable costs
incurred in attending meetings of the governing body;
" (vii) shall meet at least once in each calendar quarter of a
year and shall meet at least two additional times in a year
unless its executive committee meets at least twice in that
year; and
"(viii) shall (I) conduct its business meetings in public,
( I I ) give adequate notice to the public of such meetings, and
( I I I ) make its records and data available, upon request, to
the public.
The governing body (and executive committee (if any)) of a
health systems agency shall act only by vote of a majority of its
members present and voting at a meeting called upon adequate
notice to all of its members and at which a quorum is in attend-
ance. A quorum for a governing body and executive committee
shall be not less than one-half of its members.
" ( C ) COMPOSITION.—The membership of the governing body
and the executive committee (if any) of an agency shall meet
the following requirements:
"(i) A majority (but not more than 60 per centum of the
members) shall be residents of the health service area served
by the entity who are consumers of health care and who are
not (nor within the twelve months preceding appointment
been) providers of health care and who are broadly represent-
ative of the social, economic, linguistic and racial populations,
geographic areas of the health service area, and major
purchasers of health care.
"(ii) The remainder of the members shall be residents of
the health service area served by the agency who are providers
of health care and who represent (I) physicians (particuliifly
practicing physicians), dentists, nurses, and other health
professionals, ( I I ) health care institutions (particularly hos-
pitals, long-term care facilities, and health maintenance
organizations), ( I I I ) health care insurers, (IV) health pro-
fessional schools, and (V) the allied health professions. Not
less than one-third of the providers of health care who are
members of the governing Dody or executive committee of a
health systems agency shall be direct providers of health care
(as described in section 1531 ( 3 ) ) .
"(iii) The membership shall—
" ( I ) include (either through consumer or provider
members) public elected officials and other representa-
tives of governmental authorities in the agency's health
service area and representatives of public and private
agencies in the area concerned with health,
" ( I I ) include a percentage of individuals who reside
in nonmetropolitan areas within the health service area
which percentage is equal to the percentage of residents
of the area who reside in nonmetropolitan areas, and
" ( I I I ) if the health systems agency serves an area in
which there is located one or more hospitals or other
health care facilities of the Veterans' Administration,
include, as an ex officio member, an individual whom the
Chief Medical Director of the Veterans' Administration
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2235
shall have designated for such purpose, and if the agency
serves an area in which there is located one or more
qualified health maintenance organizations (within the
meaning of section 1310), include at least one member who 42 use 3ooe-9.
is representative of such organizations,
"(iv) If, in the exercise of its functions, a governing body
or executive committee appoints a subcommittee of its mem-
bers or an advisory group, it shall, to the extent practicable,
make its appointments to any such subcommittee or group in
such a manner as to provide the representation on such sub-
committee or group described in this subparagraph.
"(4) INDIVIDUAL LIABILITY.—No individual who, as a member or
employee of a health systems agency, shall, by reason of his perform-
ance of any duty, function, or activity required of, or authorized to
be undertaken by, the agency under this title, be liable for the pay-
ment of damages under any law of the United States or any State
(or political subdivision thereof) if he has acted within the scope of
such duty, function, or activity, has exercised due care, and has acted,
with respect to that performance, without malice toward any person
affected by it.
" ( 5 ) PRIVATE CONTRIBUTIONS.—No health systems agency may
accept any funds or contributions of services or facilities from any
individual or private entity which has a financial, fiduciary, or other
direct interest in the development, expansion, or support of health
resources unless, in the case of an entity, it is an organization described
in section 509(a) of the Internal Kevenue Code of 1954 and is not ^a use 509.
directly engaged in the provision of health care in the health service
area of the agency. For purposes of this paragraph, an entity shall
not be considered to have such an interest solely on the basis of its pro-
viding (directly or indirectly) health care for its employees.
"(6) OTHER REQUIREMENTS.—Each health system agency shall—
" ( A ) make such reports, in such form and containing such Reports; record-
information, concerning its structure, operations, performance of ^^P'"^-
functions, and other matters as the Secretary may from time to
time require, and keep such records and afford such access thereto
as the Secretary may find necessary to verify such reports;
" ( B ) provide for such fiscal control and fund accounting
procedures as the Secretary may require to assure proper disburse-
ment of, and accounting for, amounts received from the Secre-
tary under this title and section 1640; and ^°^'' P- -273.
(C) permit the Secretary and the Comptroller General of the
United States, or their representatives, to have access for the
purpose of audit and examination to any books, documents, papers,
and records pertinent to the disposition of amounts received from
the Secretary under this title and section 1640.
"(c) SuBAREA COUNCILS.—A health systems agency may establish Establishment.
subarea advisory councils representing parts of the agencies' health
service area to advise the governing body of the agency on the perform-
ance of its functions. The composition of a subarea advisory council
shall conform to the requirements of subsection ( b ) ( 3 ) ( C ) .
"FUNCTIONS or HEALTH SYSTEMS AGENCIES
"SEC. 1513; (a) For the purpose of— ^ ^2 use 300/-2.
"(1) improving the health of residents of a health service area,
"(2) increasing the accessibility (including overcoming geo-
graphic, architectural, and transportation barriers), acceptability,
continuity, and quality of the health services provided tnem,
"(3) restraining increases in the cost of providing them health
services, and
2236 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(4) preventing unnecessary duplication of health resources,
each health systems agency shall have as its primary responsibility the
the provision of effective health plamiing for its health service area
and the promotion of the development within the area of health
services, manpov^er, and facilities which meet identified needs, reduce
documented inefficiencies, and implement the health plans of the
agency. To meet its primary responsibility, a health systems agency
shall carry out the functions described in subsections (b) through
(g) of this section.
"(b) I n providing health planning and resources development for
its health service area, a health systems agency shall perform the
following functions:
"(1) The agency shall assemble and analyze data concerning—
" ( A ) the status (and its determinants) of the health of
the residents of its health service area,
" ( B ) the status of the health care delivery system in the
area and the use of that system by the residents of the area,
" ( C ) the effect the area's health care delivery system has
on the health of the residents of the area,
" ( D ) the number, type, and location of the area's health
resources, including health services, manpower, and facilitieF,
" ( E ) the patterns of utilization of the area's health
resources, and
" ( F ) the environmental and occupational exposure factors
affecting immediate and long-term health conditions.
Coordination jj^ Carrying out this paragraph, the agency shall to the maximum
witri c o o p e r a t i v e »/c^ J . ^ J L 7 c 5 « y
system. cxteut practicable use existing data (including data developed under
Federal health programs) and coordinate its activities with the coop-
42 use 242d. erative system provided for under section 306 (e).
pian.^^*^ ^^^'^"^ "(2) The agency shall, after appropriate consideration of the
Establishment. recommcuded national guidelines for health planning policy
issued by the Secretary under section 1501, the priorities ^ t forth
in section 1502, and the data developed pursuant to paragraph (1),
establish, annually review, and amend as necessary a health sys-
tems plan (hereinafter in this title referred to as the ' H S P ' )
which shall be a detailed statement of goals (A) describing a
healthful environment and health systems in the area which,
when developed, will assure that quality health services will be
availaJDle and accessible in a manner which assures continuity of
care, at reasonable cost, for all residents of the area; (B) which
are responsive to the unique needs and resources of the area; and
(C) which take into account and is consistent with the national
guidelines for health planning policy issued by the Secretary
under section 1501 respecting supply, distribution, and organiza-
"^^""6. tion of health resources and services. Before establishing an H S P ,
a health systems agency shall conduct a public hearing on the
proposed H S P and shall give interested persons an opportunity
Notice. ^Q submit their views orally and in writing. Not less than thirty
days prior to such hearing, the agency shall publish in at least
two newspapers of general circulation throughout its health serv-
ice area a notice of its consideration of the proposed H S P , the
time and place of the hearing, the place at w^hich interested per-
sons may consult the H S P in advance of the hearing, and the place
and period during which to submit Avritten comments to the
agency on the H S P .
Annual impie- u/gx rpj^ ageucy sliall estabUsli, annuallv review, and amend
mentation plan. V/ » '' , . , . ' . i " / i • JLL. • J.\.-
Establishment. as nccessary an annual implementation plan (herematter m this
title referred to as the ' A I P ' ) which describes objectives which
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2237
will achieve the goals of tlie H S P and priorities among the
objectives. I n establishing the A I P , the agency shall give priority
to those objectives which will maximally improve the health of
the residents of the area, as determined on the basis of the relation
of the cost of attaining such objectives to their benefits, and which
are fitted to the special needs of the area.
"(4) The agency shall develop and publish specific plans and p l a n s and proj-
ects.
projects for achieving the objectives established in the A I P .
"(c) A health systems agency shall implement its H S P and A I P ,
and in implementing the plans it shall perform at least the following
functions:
"(1) The agency shall seek, to the extent practicable, to imple-
ment its H S P and A I P with the assistance of individuals and
public and private entities in its health service area.
"(2) The agency may provide, in accordance with the priorities
established in the A I P , technical assistance to individuals and
public and private entities for the development of projects and
programs which the agency determines are necessary to achieve
the health systems described in the H S P , including assistance in
meeting the requirements of the agency prescribed under section
1532(b).
"(3) The agency shall, in accordance with the priorities estab- Grants and con-
tracts.
lished in the A I P , make grants to public and nonprofit private
entities and enter into contracts with individuals and public and
nonprofit private entities to assist them in planning and develop-
ing projects and programs which the agency determines are neces-
sary for the achievement of the health systems described in the
H S P . Such grants and contracts shall be made fronv the Area
Health Services Development Fund of the agency established
with funds provided under grants made under section 1640. No Post, p. 2273.
grants or contract under this subsection may be used (A) to pay
the costs incurred by an entity or individual in the delivery of
health services (as defined in regulations of the Secretary), or
(B) for the cost of construction or modernization of medical
facilities. No single grant or contract made or entered into under
this paragraph shall be available for obligation beyond the one
year period beginning on the date the grant or conti'act was made
or entered into. If an individual or entity receives a grant or Limitation.
contract under this paragraph for a project or program, such
individual or entity may receive only one more such grant or
contract for such project or program.
" ( d ) Each health systems agency shall coordinate its activities Coordination.
with—
"(1) each Professional Standards Review Organization (des-
ignated under section 1152 of the Social Security A c t ) , 42 u s e 1320C.1.
"(2) entities referred to in paragraphs (1) and (2) of section
204(a) of the Demonstration Cities and Metropolitan Develop-
ment Act of 1966 and regional and local entities the views of 42 u s e 3334.
which are required to be considered under regulations prescribed
under section 403 of the Intergoverimiental Cooperation Act of
1968 to carry out section 401(b) of such Act, 42 u s e 4233,
4231.
"(3) other appropriate general or special purpose regional
planning or administrative agencies, and
" (4) any other appropriate entity,
in the health system agency's health service area. The agency shall,
as appropriate, secure data from them for use in the agency's planning
and development activities, enter into agreements with them which
Avill assure that actions taken by such entities which alter the area's
2238 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
health system will be taken in a manner which is consistent with the
H S P and the A I P in effect for the area, and, to the extent practicable,
provide technical assistance to such entities.
Use of Federal "(e) (1) (A) Except as provided in subparagraph ( B ) , each health
funds, approval.
systems agency shall review and approve or disapprove each proposed
use within its health service area of Federal funds—
"(i) appropriated under this Act, the Community Mental
42 use 2681
note. Health Centers Act, or the Comprehensive Alcohol Abuse and
Alcoholism Prevention, Treatment, and Rehabilitation Act of
42 use 4551 1970 for grants, contracts, loans, or loan guarantees for the
note.
development, expansion, or support of health resources; or
"(ii) made available by the State in which the health service
area is located (from an allotment to the State under an Act
referred to in clause (i)) for grants or contracts for the develop-
ment, expansion, or support of health resources.
" ( B ) A health systems agency shall not review and approve or
disapprove the proposed use within its health service area of Federal
funds appropriated for grants or contracts under title IV, V I I , or
42 u s e 281, V I I I of this Act unless the grants or contracts are to be made, entered
292, 296. into, or used to support the development of health resources intended
for use in the health service area or the delivery of health services.
In the case of a proposed use within the health service area of a health
systems agency of Federal funds described in subparagraph (A) by
an Indian tribe or inter-tribal Indian organization for any program
or project which will be located within or will specifically serve—
" (i) a federally-recognized Indian reservation,
"(ii) any land area in Oklahoma which is held in trust by the
United States for Indians or which is a restricted Indian-owned
land area, or
"(iii) a Native village in Alaska (as defined in section 3(c) of
43 u s e 1602. the Alaska Native Claims Settlement Act),
a health systems agency shall only review and comment on such
proposed use,
"(2) Notwithstanding any other provision of this Act or any other
Act referred to in paragraph (1), the Secretary shall allow a health
systems agency sixty days to make the review required by such
paragraph. If an agency disapproves a proposed use in its health
service area of Federal funds described in paragraph (1), the Secretary
may not make such Federal funds available for such use until he has
made, upon request of the entity making such proposal, a review of
the agency decision. In making any such review of any agency decision,
the Secretary shall give the appropriate State health planning and
development agency an opportunity to consider the decision of the
liealth systems agency and to submit to the Secretary its comments on
the decision. The Secretary, after taking into consideration such State
agency's comments (if any), may make such Federal funds available
for such use, notwithstanding the disapproval of the health systems
agency. Each such decision by the Secretary to make funds available
shall be submitted to the appropriate health systems agency and State
health planning and development agency and shall contain a detailed
statement of the reasons for the decision.
Information to "(3) Each health systems agency shall provide each Indian tribe
Indian tribes or
organizations. or inter-tribal Indian organization which is located within the agency's
health service area information respecting the availability of the
Federal funds described in the first sentence of this subsection.
"(f) To assist State health planning and development agencies in
carrying out their functions under paragraphs (4) and (5) of section
1523(a) each health systems agency shall review and make recommen-
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2239
dations to the appropriate State health planning and development
agency respecting the need for new institutional health services pro-
posed to be offered or developed in the health service area of such
health systems agency.
Institutional
" ( g ) (1) Except as provided in paragraph (2), each health systems health s e r v i c e s ,
agency shall review on a periodic basis (but at least every five years) review.
all institutional health services offered in the health service area of
the agency and shall make recommendations to the State health plan-
ning and development agency designated under section 1521 for eacn
State in which the health systems agency's health service area is located
respecting the appropriateness in the area of such services.
"(2) A health systems agency shall complete its initial review of
existing institutional health services within three yeai-s after the date
of the agency's designation under section 1515 (c).
" ( h ) Each health systems agency shall annually recommend to
the State health planning and development agency designated for each
State in which the health systems agency's health service area is
located (1) projects for the modernization, construction, and conver-
sion of medical facilities in the agency's health service area which
projects will achieve the H S P and A I P of the health systems
agency, and (2) priorities among such projects.
"ASSISTANCE TO E N T I T I E S DESIRING TO BE DESIGNATED AS HEALTH
SYSTEMS AGENCIES
"SEC. 1514. The Secretary may provide all necessary technical and 42 u s e 300Z-3.
other nonfinancial assistance (including the preparation of prototype
plans of organization and operation) to nonprofit private entities
(including entities presently receiving financial assistance under sec-
tion 314(b) or title I X or as experimental health service delivery sys- 42 u s e 246, 299,
242b.
tems under section 304) which—
"(1) express a desire to be designated as health systems agen-
cies, and
"(2) the Secretary determines have a potential to meet the
requirements of a health systems agency specified in sections 1512
and 1513,
to assist such entities in developing applications to be submitted to
the Secretary under section 1515 and otherwise in preparing to meet
the requirements of this part for designation as a health systems
agency.
"DESIGNATION OF H E A L T H S Y S T E M S AGENCIES
"SEC. 1515. (a) At the earliest practicable date after the establish- Agreements.
42 u s e 300i-4.
ment under section 1511 of health service areas (but not later than
eighteen months after the date of enactment of this title) the Secretary
shall enter into agreements in accordance with this section for the des-
ignation of health systems agencies for such areas.
" ( b ) ( 1 ) The Secretary may enter into agreements with entities
under which the entities would be designated as the health systems
agencies for health service areas on a conditional basis with a view
to determining their ability to meet the requirements of section 1512
(b), and their capacity to perform the functions prescribed by section
1513.
"(2) During any period of conditional designation (which may
not exceed 24 months), the Secretary may require that the entity con-
ditionally designated meet only such of the requirements of section
1512(b) and perform only such of the functions prescribed by section
1513 as he determines such entity to be capable of meeting and per-
forming. The number and type of such requirements and functions
2240 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
shall, during the period of conditional designation, be progressively
increased as the entity conditionally designated becomes capable of
added responsibility so that, by the end of such period, the agency may
be considered for designation under subsection (c).
Termination. "(3) ^^^y agreement under which any entity is conditionally desig-
nated as a health systems agency may be terminated by such entity
upon ninety days notice to the Secretary or by the Secretary upon
ninety days notice to such entity.
Conditional " ^4) ^''j^g Secretary may not enter into an agreement with any entity
esigna ion. uudcr paragraph (1) for conditional designation as a health systems
agency for a health service area until—
" ( A ) the entity has submitted an application for such designa-
tion which contains assurances satisfactory to the Secretary that
upon completion of the period of conditional designation the
applicant will be organized and operated in the manner described
in section 1512(b) and will be qualified to perform the functions
prescribed by section 1513;
" ( B ) a plan for the orderly assumption and implementation of
the functions of a health systems agency has been received from
the applicant and approved by the Secretary; and
" ( C ) the Secretary has consulted with the Governor of each
State in which such health service area is located and with such
other State and local officials as he may deem appropriate, with
respect to such designation.
I n considering such applications, the Secretary shall give priority to
an application which has been recommended for approval by each
42 use 246. entity which has developed a plan referred to in section 314(b) for
all or part of the health service area with respect to which the appli-
cation was submitted, and each regional medical program estab-
42 use 299. lished in such area under title I X .
"(c) (1) The Secretary shall enter into an agreement with an entity
for its designation as a health systems agency if, on the basis of an
application under paragraph (2) (and, in the case of an entity con-
ditionally designated, on the basis of its performance during a period
of conditional designation under subsection (b) as a health systems
agency for a health service area), the Secretary determines that such
entity is capable of fulfilling, in a satisfactory manner, the require-
Renewai. mcuts aud fuuctious of a health systems agency. Any such agreement
inider this subsection with an entity may be renewed in accordance
with paragraph (3), shall contain such provisions respecting the
requirements of sections 1512 (b) and 1513 and such conditions designed
to carry out the purpose of this title, as the Secretary may prescribe,
and shall be for a term of not to exceed twelve months; except that.
Termination. prior to the expiratlou of such term, such agreement may be
terminated—
" ( A ) by the entity at such time and upon such notice to the
Secretary as he may by regidation prescribe, or
" ( B ) by the Secretary, at such time and upon such notice to
the entity as the Secretary may by regulation prescribe, if the
Secretary determines that the entity is not complying with or
effectively carrying out the provisions of such agreement.
Application. £« ^g) The Secretary may not enter into an agreement with any entity
under paragraph (1) for designation as a health systems agency for a
health service area unless the entity has submitted an application to
the Secretary for designation as a health systems agency, and the
Governor of each State in which the area is located has been consulted
respecting such designation of such entity. Such an application shall
contain assurances satisfactory to the Secretary that the applicant
meets the requirements of section 1512(b) and is qualified to perform
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2241
or is performing the functions prescribed by section 1513. I n consider- Priority.
mg such applications, the Secretary shall give priority to an applica-
tion which has been recommended for approval by (A) each entity
which has developed a plan referred to in section 314(b) for all or "^^ use 240.
part of the health service area with respect to which the application
was submitted, and (B) each regional medical program established
in such area under title I X . 42 use 299.
"(3) An agreement under this subsection for the designation of a Renewal.
health systems agency may be renewed by the Secretary for a period
not to exceed twelve months if upon review (as provided in section
1535) of the agency's operation and performance of its functions, he Post, p . 2256.
determines that it has fulfilled, in a satisfactory manner, the functions
of a health systems agency prescribed by section 1513 and continues to
meet the requirements of section 1512 (b).
" ( d ) If a designation under subsection (b) or (c) of a health systems
agency for a health services area is terminated before the date pre-
scribed for its expiration, the Secretary shall, upon application and in
accordance with subsection (b) or (c) (as the Secretary determines
appropriate), enter into a designation agreement with another entity
to be the health systems agency for such area.
aP L A N N I N G GRANTS
"SEC. 1516. (a) The Secretary shall make in each fiscal year a grant 42 use 300Z-5.
to each health systems agency with which there is in effect a designa-
tion agreement under subsection (b) or (c) of section 1515. A grant
under this subsection shall be made on such conditions as the Secretary
determines is appropriate, shall be used by a health systems agency
for compensation of agency personnel, collection of data, planning,
and the performance of the functions of the agency, and shall be avail-
able for obligation for a period not to exceed the period for which its
designation agreement is entered into or renewed (as the case may be).
A health systems agency may use funds under a grant under this sub- Use of fund:-
section to make payments under contracts with other entities to assist restriction.
the health systems agency in the performance of its functions; but it
shall not use funds under such a grant to make payments under a
grant or contract with another entity for the development or delivery
of health services or resources.
"(b) (1) The amount of any grant under subsection (a) to a health
systems agency designated under section 1515(b) shall be determined
by the Secretary. The amount of any grant under subsection (a) to
any health systems agency designated under section 1515(c) shall be
the lesser of—
" ( A ) the product of $0.50 and the population of the health
service area for which tlie agency is designated, or
" ( B ) $3,750,000,
unless the agencv would receive a greater amount under paragraph
(2) or (3).
"(2) (A) If the application of a health systems agency for such a non^'pedera" funds
grant contains assurances satisfactory to the Secretary that the agency
will expend or obligate in the period in which such grant will be
available for obligation non-Federal funds meeting the requirements
of subparagraph (B) for the purposes for which such grant may be
made, the amount of such grant shall be the sum of—
" (i) the amount determined under paragraph (1), and
"(ii) the lesser of (I) the amount of such non-Federal funds
with respect to which the assurances were made, or ( I I ) the
product of $0.25 and the population of the health service area for
which the agency is designated.
2242 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
" ( B ) The non-Federal funds which an agency may use for the pur-
pose of obtaining a grant under subsection (a) which is computed on
the basis of the formula prescribed by subparagraph (A) shall—
"(i) not include any funds contributed to the agency by any
individual or private entity which has a financial, fiduciary, or
other direct interest in the development, expansion, or support
of health resources, and
"(ii) be funds which are not paid to the agency for the per-
foi-mance of particular services by it and which are otherwise
contributed to the agency without conditions as to their use other
than the condition that the funds shall be used for the purposes
for which a grant made under this section may be used.
"(3) The amount of a grant under subsection (a) to a health systems
agency designated under section 1515 (c) may not be less than $175,000.
Appropriations. u^^^ ^-j^^ ^Qr the purpose of making payments pursuant to grants
made under subsection ( a ) , there are authorized to be appropriated
$60,000,000 for the fiscal year ending June ,30, 1975, $90,000,000 for
the fiscal year ending June 30, 1976, and $125,000,000 for the fiscal
year ending June 30,1977.
" (2) Notwithstanding subsection ( b ) , if the total of the grants to be
made under this section to health systems agencies for any fiscal year
exceeds the total of the amounts appropriated under paragraph (1)
for that fiscal year, the amount of the grant for that fiscal year to
each health systems agency shall be an amount which bears the same
ratio to the amount determined for that agency for that fiscal year
under subsection (b) as the total of the amounts appropriated under
paragraph (1) for that fiscal year bears to the total amount required
to make grants to all health systems agencies in accordance with the
applicable provision of subsection (b) ; except that the amount of any
grant to a health systems agency for any fiscal year shall not be less
than $175,000, unless the amount appropriated for that fiscal year
under paragraph (1) is less than the amount required to make such
M grant to each health systems agency.
"PART C—STATE HEALTH PLANNING AND DEVELOPMENT
"DESIGNATION or STATE HEALTH PLANNING AND DEVELOPMENT
AGENCIES
42 use 300m. "SEC. 1521. (a) For the purpose of the performance within each
State of the health planning and development functions prescribed
by section 1523, the Secretary shall enter into and renew agreements
(described in subsection (b)) for the designation of a State health
planning and development agency for each State other than a State
for which the Secretary may not under subsection (d) enter into,
continue in effect, or renew such an agreement.
" ( b ) ( 1 ) A designation agreement under subsection (a) is an
agreement with the Governor of a State for the designation of an
agency (selected by the Governor) of the government of that State
as the State health planning and development agency (hereinafter
in this part referred to as the 'State Agency') to administer the State
administrative program prescribed by section 1522 and to carry out
the State's health planning and development functions prescribed by
Conditions. sectiou 1523. The Secretary may not enter into such an agreement
with the Governor of a State unless—
" ( A ) there has been submitted by the State a State adminis-
trative program which has been approved by the Secretary,
" ( B ) an application has been made to the Secretary for such
an agreement and the application contains assurances satisfactory
STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2243
to the Secretary that the agency selected by the Governor for
designation as the State Agency has the authority and resources
to administer the State administrative program of the State and
to carry out the health planning and development functions pre-
scribed by section 1523, and
" ( C ) in the case of an agreement entered into under paragraph
(3), there has been established for the State a Statewide Health
Coordinating Council meeting the requirements of section 1524.
"(2) (A) The agreement entered into with a Governor of a State
under subsection (a) may provide for the designation of a State
Agency on a conditional basis with a view to determining the capacity
of the designated State Agency to administer the State administra-
tive program of the State and to carry out the health planning and
development functions prescribed by section 1523. The Secretary shall
require as a condition to the entering into of such an agreement that
the Governor submit on behalf of the agency to be designated a plan
for the agency's orderly assumption and implementation of such
functions.
" ( B ) The period of an agreement described in subparagraph (A) Period of agree-
ment.
may not exceed twenty-four months. During such period the Secretary
may require that the designated State Agency perform only
such of the functions of a State Agency prescribed by section 1523
as he determines it is capable of performing. The number and type
of such functions shall, during such period, be progressively increased
as the designated State Agency becomes capable of added responsi-
bility, so that by the end of such period the designated State
Agency may be considered for designation under paragraph (3).
" ( C ) Any agreement with a Governor of a State entered into under Termination.
subparagraph (A) may be terminated by the Governor upon ninety
days' notice to the Secretary or by the Secretary upon ninety days'
notice to the Governor.
"(3) If, on the basis of an application for designation as a State State Agency,
designation.
Agency (and, in the case of an agency conditionally designated under
paragraph (2), on the basis of its performance under an agreement
with a Governor of a State entered into under such paragraph), the
Secretary determines that the agency is capable of fulfilling, in a
satisfactory manner, the responsibilities of a State Agency, he
shall enter into an agreement with the Governor of the State aesig-
nating the agency as the State Agency for the State. No such Application sub-
mittal to Secre-
agreement may be made unless an application therefor is submitted tary.
to, and approved by, the Secretary. Any such agreement shall be for
a term of not to exceed twelve months, except that, prior to the
expiration of such term, such agreement may be terminated— Termination,
" ( A ) by the Governor at such time and upon such notice
to the Secretary as he may by regulation prescribe, or
" ( B ) by the Secretary, at such time and upon such notice
to the Governor as the Secretary may by regulation prescribe,
if the Secretary determines that the designated State Agency is
not complying with or effectively carrying out the provisions of
such agreement.
An agreement under this paragraph shall contain such provisions as
the Secretary may require to assure that the requirements of this
part respecting State Agencies are complied with.
"(4) An agreement entered into under paragraph (3) for Renewal,
the designation of a State Agency may be renewed by the Secretary
for a period not to exceed twelve months if he determines that it has
fulfilled, in a satisfactory manner, the responsibilities of a State
Agency during the period of the agreement to be renewed and if the
2244 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
applicable State administrative program continues to meet the
requirements of section 1522.
"(c) If a designation agreement with the Governor of a State
entered into under subsection (b)(2) or (b)(3) is terminated before
the date prescribed for its expiration, the Secretary shall, upon
application and in accordance with subsection (b) (2), or (b) (3) (as
the Secretary determines appropriate), enter into another agreement
with the Governor for the designation of a State Agency.
" ( d ) If, upon the expiration of the fourth fiscal year which begins
after the calendar year in which the National Health Policy, Planning,
and Resources Development Act of 1974 is enacted, an agreement under
this section for the designation of a State Agency for a State is not in
effect, the Secretary may not make any allotment, grant, loan, or loan
guarantee, or enter into any contract, under this Act, the Community
42 use 2681 Mental Health Centers Act, or the Comprehensive Alcohol Abuse and
°42 use
note. 4551 Alcoholism Prevention, Treatment, and Rehabilitation Act of 1970 for
note. the development, expansion, or support of health resources in such
State until such time as such an agreement is in effect.
"STATE ADMINISTRATIVE PROGRAM
42 use 3oom-i. "SEC. 1522. (a) A State administrative program (hereinafter in
this section referred to as the 'State Program') is a program for the
performance within the State by its State Agency of the functions pre-
conditions, scribed by section 1523. The Secretary may not approve a State Pro-
gram for a State unless it—
" (1) meets the requirements of subsection (b) ;
"(2) has been submitted to the Secretary by the Governor of
the State at such time and in such detail, and contains or is accom-
panied by such information, as the Secretary deems necessary;
and
" (3) has been submitted to the Secretary only after the Gover-
nor of the State has afforded to the general public of the State a
reasonable opportunity for a presentation of views on the State
Program.
" ( b ) The State Program of a State must—•
"(1) provide for the performance within the State (after the
designation of a State Agency and in accordance with the designa-
tion agreement) of the functions prescribed by section 1523 and
specify the State Agency of the State as the sole agency for the
performance of such functions (except as provided in subsection
(b) of such section) and for the administration of the State
Program;
"(2) contain or be supported by satisfactory evidence that
the State Agency has under State law the authority to carry
out such functions and the State Program in accordance with
this part and contain a current budget for the operation of the
State Agency;
"(3) provide for adequate consultation with, and authority
for, the Statewide Health Coordinating Council (prescribed by
section 1524), in carrying out such functions and the State
Program;
"(4) (A) set forth in such detail as the Secretary may pre-
scribe the qualifications for personnel having responsibilities in
the performance of such functions and the State Program, and
require the State Agency to have a professional staff for planning
and a professional staff for development, which staffs shall be of
such size and meet such qualifications as the Secretary may
prescribe;
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2245
" ( B ) provide for such methods of administration as are found
by the Secretary to be necessary for the proper and efficient
administration of such functions and the State Program, including
methods relating to the establishment and maintenance of per-
sonnel standards on a merit basis consistent with such standards
as are or may be established by the Civil Service Commission
under section 208(a) of the Intergovernmental Personnel Act of
1970 (Public Law 91-648), but the Secretary shall exercise no 42 u s e 4728.
authority with respect to the selection, tenure of office, and com-
pensation of any individual employed in accordance with the
methods relating to personnel standards on a merit basis estab-
lished and maintained in conformity with this paragraph;
"(5) require the State Agency to perform its functions in
accordance with procedures and criteria established and published
by it, which procedures and criteria shall conform to the require-
ments of section 1532;
" (6) require the State Agency to (A) conduct its business meet-
ings in public, (B) give adequate notice to the public of such meet-
ings, and (C) make its records and data available, upon request,
to the public;
"(7) (A) provide for the coordination (in accordance with
regulations of the Secretary) with the cooperative system pro-
vided for under section 306 (e) of the activities of the State Agency Ante, p. 365.
for the collection, retrieval, analysis, reporting, and publication
of statistical and other information related to liealth and health
care, and (B) require providers of health care doing business in Reports.
the State to make statistical and other reports of cuch informa-
tion to the State Agency;
"(8) provide, in accordance with methods and procedures pre- afua°i^n"'^^
scribed or approved by the Secretary, for the evaluation, at least
annually, of the performance by the State Agency of its functions
and of their economic effectiveness ;
" (9) provide that the State Agency will from time to time, and Review of state
in any event not less often than annually, review the State Pro- P''"^''^'"'
gram and submit to the Secretary required modifications;
"(10) require the State Agency to make such reports, in such Reports; record-
form and containing such information, concerning its structure, ''^^P'"^-
operations, performance of functions, and other matters as the
Secretary may from time to time require, and keep such records
and afford such access thereto as the Secretary may find necessary
to verify such reports;
"(11) require the State Agency to provide for such fiscal con-
trol and fund accounting procedures as the Secretary may
require to assure proper disbursement of, and accounting for,
amounts received from the Secretary under this title;
"(12) permit the Secretary and the Comptroller General of the ^"'^^'•
United States, or their representatives, to have access for the
purpose of audit and examination to any books, documents,
papers, and records of the State Agency pertinent to the disposi-
tion of amounts received from the Secretary under this title; and
"(13) provide that if the State Agency makes a decision in
the performance of a function under paragraph (3), (4), (5), or
(6) of section 1523(a) or under title X V I which is inconsistent P°S(, p. 2258.
with a recommendation made under subsection (f), ( g ) , or (h)
of section 1513 by a health systems agency within the State—
" ( A ) such decision (and the record upon which it was
made) shall, upon request of the health systems agency, be
reviewed, under an appeals mechanism consistent with State
38-194 O - 76 - 59 Pt. 2
2246 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
law governinf^ the practices and procedures of administra-
tive agencies, by an agency of the State (other than the State
health planning and development agency) designated by the
Governor, and
" ( B ) the decision of the reviewing agency shall for pur-
Post, p. 2258. poses of this title and title X V I be considered the decision
of the State health planning and development agency.
State Program, n(^Q^ 'pj-^g Secretary shall approve any State Program and any
vfew""^^ ^" '^^' modification thereof which complies with subsections (a) and (b). The
Secretary shall review for compliance with the requirements of this
part the specifications of and operations under each State Program
approved by him. Such review shall be conducted not less often than
once each year.
"STATE HEALTH PLANNING AND DEVELOPMENT FUNCTIONS
42 use 3oom-2. ug^c. 1523. (a) Each State Agency of a State designated under
section 1521(b) (3) shall, except as authorized under subsection (b),
perform within the State the follow^ing functions:
"(1) Conduct the health planning activities of the State and
implement those parts of the State health plan (under section
1524(c) (2)) and the plans of the health systems agencies within
the State which relate to the government of the State.
Preliminary "(2) Prepare aud review and revise as necessary (but at least
p an. annually) a preliminary State health plan which shall be made
up of the H S P ' s of the health systems agencies within the State.
Such preliminary plan may, as found necessary by the State
Agency, contain such revisions of such H S P ' s to achieve their
appropriate coordination or to deal more effectively with state-
stit'ewidl^H'e°aith widc health needs. Such preliminary plan shall be submitted to
Coordinating tlic Statcwldc Health Coordinating Council of the State for
^°""'''^" approval or disapproval and for use in developing the State health
plan referred to in section 1524(c).
faciutle'^^'^/an^ "(^) ^^slst the Statewide Health Coordinating Council of the
review. ' State in the review of the State medical facilities plan required
Post, p. 2259. under section 1603, and in the performance of its functions
generally.
"(4) (A) Serve as the designated planning agency of the State
42 use i320a-i. ^^^ ^^^ purposcs of sectiou 1122 of the Social Security Act if the
State has made an agreement pursuant to such section, and (B)
administer a State certificate of need program which applies to
new institutional health services proposed to be offered or devel-
oped within the State and which is satisfactory to the Secretary.
Such program shall provide for review and determination of need
prior to the time such services, facilities, and organizations are
offered or developed or substantial expenditures are undertaken
in preparation for such offering or development, and provide that
only those services, facilities, and organizations found to be
needed shall be offered or developed in the State. In performing
its functions under this paragraph the State Agency shall con-
sider recommendations made by health systems agencies under
section 1513(f).
"(5) After consideration of recommendations submitted by
health systems agencies under section 1413(f) respecting new
institutional health services proposed to be offered within the
State, make findings as to the need for such services.
"(6) Review on a periodic basis (but not less often than every
five years) all institutional health services being offered in the
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2247
State and, after consideration of recommendations submitted by
health systems agencies under section 1513(g) respecting the
appropriateness of such services, make public its findings.
" ( b ) ( 1 ) Any function described in subsection (a) may be per-
formed by another agency of the Stat« government upon request of
the Governor under an agreement with the State Agency satisfactory
to the Secretary.
"(2) The requirement of paragraph ( 4 ) ( B ) of subsection (a) shall
not apply to a State Agency of a State until the expiration of the
first regular session of the legislature of such State which begins after
the date of enactment of this title.
" (3) A State Agency shall complete its findings with respect to the
appropriateness of any existing institutional health service within
one year after the date a health systems agency has made its recom-
mendation under section 1513(g) with respect to the appropriateness
of the service.
"(c) If a State Agency makes a decision in carrying out a function statement to
health systems
described m paragraph (4), (5), (6), or (7) of subsection (a) which agency.
is not consistent with the goals of the applicable H S P or the priorities
of the applicable A I P , the State Agency shall submit to the appropri-
ate health systems agency a detailed statement of the reasons for
the inconsistency.
"STATEWIDE HEALTH COORDINATING COUNCIL
"SEC. 1524. (a) A State health planning and development agency "^^ ^^'^ 3oom-3.
designated under section 1521 shall be advised by a Statewide Health
Coordinating Council (hereinafter in this section referred to as the
'SHCC') which (1) is organized in the manner described by siibsec-
tion (b), and (2) performs the functions listed in subsection (c).
" ( b ) ( 1 ) A SHCC of a State shall be composed in the following Membership.
manner:
" ( A ) (i) A SHCC shall have no fewer than sixteen representa-
tives appointed by the Governor of the State from lists of at
least five nominees submitted to the Governor by each of the health
systems agencies designated for health service areas which fall,
in whole or in part, within the State.
"(ii) Each such health systems agency shall be entitled to the
same number of representatives on the SHCC.
"(iii) Each such health systems agency shall be entitled to at
least two representatives on the SHCC. Of the representatives of
a health systems agency, not less than one-half shall be individuals
who are consumers of health care and who are not providers of
health care.
" ( B ) In addition to the appointments made under subpara-
graph ( A ) , the Governor of the State may appoint such persons
(including State officials, public elected officials, and other repre-
sentatives of governmental authorities within the State) to serve
on the SHCC as he deems appropriate; except that (i) the number
of persons appointed to the SHCC under this subparagraph may
not exceed 40 per centum of the total membership of the SHCC,
and (ii) a majority of the persons appointed by the Governor
shall be consumers of health care who are not also providers of
health care.
" ( C ) Not less than one-third of the providers of health care
who are members of a SHCC shall be direct providers of health
care (as described in section 1531 ( 3 ) ) .
2248 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
" ( D ) Where two or more hospitals or other health care facilities
of the Veterans' Administration are located in a State, the SHCC
shall, in addition to the appointed members, include, as an ex
officio member, an individual whom the Chief Medical Director of
the Veterans' Administration shall have designated as a repre-
sentative of such facilities.
Chairman. "(2) The SHCC shall select from among its members a chairman.
Meetings. "(3) The SHCC shall conduct all of its business meetings in public,
and shall meet at least once in each calendar quarter of a year.
"(c) A SHCC shall perform the following functions:
Report. "(1) Review annually and coordinate the H S P and A I P of
each health systems agency within the State and report to the
Secretary, for purposes of his review under section 1535(c), its
comments on such H S P and A I P .
"(2) (A) Prepare and review and revise as necessary (but at
least annually) a State health plan which shall be made up of
the H S P ' s of the health systems agencies within the State. Such
plan may, as found necessary by the SHCC, contain revisions of
such H S P ' s to achieve their appropriate coordination or to deal
more effectively with statewide health needs. Each health systems
agency which participates in the SHCC shall make available to
the SHCC its H S P for each year for integration into the State
health plan and shall, as required by the SHCC, revise its H S P
to achieve appropriate coordination with the H S P ' s of the other
agencies which participate in the SHCC or to deal more effectively
with statewide health needs.
Hearing. " ( B ) In the preparation and revision of the State health plan,
the SHCC shall review and consider the preliminary State health
plan submitted by the State agency under section 1523(a)(2),
and shall conduct a public hearing on the plan as proposed and
shall give interested persons an opportunity to submit their views
orally and in writing. Not less than thirty days prior to any such
hearing, the SHCC shall publish in at least two newspapers of
general circulation in the State a notice of its consideration of
the proposed plan, the time and place of the hearing, the place at
which interested persons may consult the plan in advance of the
hearing, and the place and period during which to direct written
comment to the SHCC on the plan.
6 u d g e t , review
and report. "(3) Review annually the budget of each such health systems
agency and report to the Secretary, for purposes of his review
under section 1535(a), its comments on such budget.
Applications for "(4) Review applications submitted by such health systems
grants, review and
report. agencies for grants under sections 1516 and 1640 and report to the
Post, p. 2273. Secretary its comments on such applications.
"(5) Advise the State Agency of the State generally on the
performance of its functions.
" (6) Review annually and approve or disap])rove any State plan
and any application (and any revision of a State plan or appli-
cation) submitted to the Secretary as a condition to the receipt
of any funds under allotments made to States under this Act, the
42 u s e 2681
note.
Community Mental Health Centers Act, or the Comprehensive
Alcohol Abuse and Alcoholism Prevention, Treatment, and
42 u s e 4551 Rehabilitation Act of 1970. Notwithstanding any other provision
note.
of this Act or any other Act referred to in the preceding sentence,
the Secretary shall allow a SHCC sixty days to make the review
required by such sentence. If a SHCC disapproves such a State
plan or application, the Secretary may not make Federal funds
available under such State plan or application until he has made,
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2249
upon request of the Governor of the State which submitted such
plan or application or another agency of such State, a review of
the SHCC decision. If after such review the Secretary decides
to make such funds available, the decision by the Secretary to
make such funds available shall be submitted to the SPICC and
shall contain a detailed statement of the reasons for the decision.
((GRANTS FOR STATE HEALTH PLANNING AND DEVELOPMENT
"SEC. 1525. (a) The Secretary shall make grants to State health ^^ use 3oom-4.
planning and development agencies designated under subsection
(b) (2) or (b) (3) of section 1521 to assist them in meeting the costs
of their operation. Any grant made under this subsection to a State
Agency shall be available for obligation only for a period not to exceed
the period for which its designation agreement is entered into or
Limitation.
renewed. The amount of any grant made under this subsection shall
be determined by the Secretary, except that no grant to a designated
State Agency may exceed 75 per centum of its operation costs (as
determined under regulations of the Secretary) during the period for
which the grant is available for obligation.
"(b) Grants under subsection (a) shall be made on such terms and
conditions as the Secretary may prescribe; except that the Secretary
may not make a grant to a State Agency unless he receives satisfactory
assurances that the State Agency will expend in performing the func-
tions prescribed by section 1523 during the fiscal year for which the
grant is sought an amount of funds from non-Federal sources which
is at least as great as the average amount of funds expended, in the
three years immediately preceding the fiscal year for which such grant
is sought, by the State, for which such State Agency has been desig-
nated, for the purposes for which funds under such grant may be used
(excluding expenditures of a nonrecurring nature).
"(c) For the purpose of making payments under grants under Appropriations.
subsection ( a ) , there are authorized to be appropriated $25,000,000
for the fiscal year ending June 30, 1975, $30,000,000 for the fiscal year
ending June 30, 1976, and $35,000,000 for the fiscal year ending
June 30,1977.
" G R A N T S F O R R A T E REGULATION
"SEC. 1526. (a) For the purpose of demonstrating the effectiveness '•^ use aoom-s.
of State Agencies regulating rates for the provision of health care,
the Secretary may make to a State Agency designated, under an agree-
ment entered into under section 1521(b)(3), for a State which (in
accordance with regulations prescribed by the Secretary) has indicated
an intent to regulate (not later than six months after the date of the
enactment of this title) rates for the provision of health care within
the State. Not more than six State Agencies may receive grants under Limitation.
this subsection.
" ( b ) (1) A State Agency which receives a grant under subsection Requirements.
(a) shall—
" (A) provide the Secretary satisfactory evidence that the State
Agency has under State law the authority to carry out rate regula-
tion functions in accordance with this section and provide the
Secretary a current budget for the performance of such functions
by i t ;
" ( B ) set forth in such detail as the Secretary may prescribe
the qualifications for personnel having responsibility in the per-
formance of such functions, and shall have a professional staff
for rate regulation, which staff shall be headed by a Director;
2250 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
" ( C ) provide for such methods of administration as fomid
by the Secretary to be necessary for the proper and efficient admin-
istration of such functions;
" ( D ) perform its functions in accordance with procedures
established and published by it, which procedures shall conform
to the requirements of section 1532;
" ( E ) comply with the requirements prescribed by paragraphs
(6) through (12) of section 1522(b) with respect to the functions
prescribed by subsection (a) ;
" ( F ) provide for the establishment of a procedure under which
the State Agency will obtain the recommendation of the appro-
priate health systems agency prior to conducting a review of the
rates charged or proposed to be charged for services; and
" ( G ) meet such other requirements as the Secretary may pre-
scribe.
"(2) I n prescribing requirements under paragraph (1) of this sub-
section, the Secretary shall consider the manner in which a State
Agency shall perform its functions under a grant under subsection
( a ) , including whether the State Agency should—
" ( A ) permit those engaged in the delivery of health services
to retain savings accruing to them from effective management and
cost control,
" ( B ) create incentives at each point in the delivery of health
services for utilization of the most economical modes of services
feasible,
" ( C ) document the need for and cost implications of each new
service for which a determination of reimbursement rates is
sought, and
" ( D ) employ for each type or class of person engaged in the
delivery of health services—
"(i) a unit for determining the reimbursement rates, and
"(ii) a base for determining rates of change in the reim-
bursement rates,
which unit and base are satisfactory to the Secretary.
Terms and con-
ditions.
"(c) Grants under subsection (a) shall be made on such terms and
conditions as the Secretary may prescribe, except that (1) such a grant
shall be available for obligation only during the one-year period
beginning on the date such grant was made, and (2) no State Agency
mav receive more than three grants tinder subsection ( a ) .
Report to secre- (d) Each State Agcucy which receives a grant under subsection
tary. (a) shall report to the Secretary (in such form and manner as he shall
prescribe) on the effectiveness of the rate regulation program assisted
fsT"*^*'° ^°"' by such grant. The Secretary shall report annually to the Congress on
gress the effectiveness of the programs assisted by the grants authorized by
subsection (a).
Appropriations. "(e) Thcrc are authorized to be appropriated to make payments
under grants under subsection (a), $4,000,000 for the fiscal year end-
ing June 30, 1975, $5,000,000 for the fiscal year ending June 30, 1976,
and $6,000,000 for the fiscal year ending June 30,1977.
"PART D—GENERAL PROVISIONS
a DEFINITIONS
42usc3oon. "SEC. 1531. FoT purposcs of this title t
"(1) The term 'State' includes the District of Columbia and the
Commonwealth of Puerto Rico.
" (2) The term 'Governor' means the chief executive officer of a State
or his designee.
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2251
" (3) The term 'provider of health care' means an individual—
" ( A ) who is a direct provider of health care (including a phy-
sician, dentist, nurse, podiatrist, or physician assistant) in that
the individual's primary current activity is the provision of health
care to individuals or the administration of facilities or institu-
tions (including hospitals, long-term care facilities, outpatient
facilities, and health maintenance organizations) in which such
care is provided and, when required by State law, the individual
has received professional training in the provision of such care or
in such administration and is licensed or certified for such pro-
vision or administration; or
" ( B ) who is an indirect provider of health care in that the
individual—
"(i) holds a fiduciary position with, or has a fiduciary
interest in, any entity described in subclause ( I I ) or (IV) of
clause (ii) ;
"(ii) receives (either directly or through his spouse) more
than one-tenth of his gross annual income from any one or
combination of the following:
" ( I ) Fees or other compensation for research into or
instruction in the provision of health caie.
" ( I I ) Entities engaged in the provision of health care
or in such research or instruction.
" ( I l l ) Producing or supplying drugs or other articles
for individuals or entities for use in the provision of or
in research into or instruction in the provision of health
care.
" ( I V ) Entities engaged in producing drugs or such
other articles,
"(iii) is a member of the immediate family of an individual
described in subparagraph (A) or in clause (i), (ii), or (iv)
of subparagraph (B) ; or
"(iv) is engaged in issuing any policy or contract of
individual or group health insurance or hospital or medical
service benefits.
"(4) the term 'health resources' includes health services, health
professions personnel, and health facilities, except that such term does
not include Christian Science sanatoriums operated, or listed and cer-
tified, by the First Church of Christ, Scientist, Boston, Massachusetts.
"(5) The term 'institutional health services' means the health serv-
ices provided through health care facilities and health maintenance
organizations (as such facilities and organizations are defined in
regulations prescribed under section 1122 of the Social Security Act) ^2 use i320a-i.
and includes the entities through which such services are provided.
"PROCEDURES AND CRITERIA FOR R E V I E W S o r PROPOSED HEALTH
SYSTEM CHANGES
"SEC. 1532. (a) I n conducting reviews pursuant to subsections (e), 42 use soon-i.
(f), and (g) of section 1513 or in conducting any other reviews of pro-
posed or existing health services, each health systems agency shall
(except to the extent approved by the Secretary) follow procedures,
and apply criteria, developed and published by the agency in accord-
ance with regulations of the Secretary; and in performing its review
functions under section 1523, a State Agency shall (except to the
extent approved by the Secretary) follow procedures, and apply cri-
teria, developed and published by the State Agency in accordance with
regulations of the Secretary. Procedures and criteria for reviews by
2252 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
health systems agencies and States Agencies may vary according to the
purpose for which a particular review is being conducted or the type
of health services being reviewed.
Requirements. "(J3) Each health systems agency and State Agency shall include
in the procedures required by subsection (a) at least the following:
"(1) Written notification to affected persons of the beginning
of a review\
" (2) Schedules for reviews which provide that no review shall,
to the extent practicable, take longer than ninety days from the
date the notification described in paragraph (1) is made.
"(3) Provision for persons subject to a review to submit to the
agency or State Agency (in such form and manner as the agency
or State Agency shall prescribe and publish) such information as
the agency or State Agency may require concerning the subject of
such review.
"(4) Submission of applications (subject to review by a health
systems agency or a State Agency) made under this Act or other
provisions of law- for Federal financial assistance for health serv-
ices to the health systems agency or State Agency at such time and
in such manner as it may require.
"(5) Submission of periodic reports by providers of health
services and other persons subject to agency or State Agency
review respecting the development of proposals subject to review.
" (6) Provision for written findings which state the basis for any
final decision or recommendation made by the agency or State
Agency.
"(7) Notification of providers of health services and other per-
sons subject to agency or State Agency review^ of the status of the
agency or State Agency review of the health services or proposals
subject to review, findings made in the course of such review, and
other appropriate information respecting such review.
"(8) Provision for public hearings in the course of agency or
State Agency review if requested bv persons directly affected by
the review; and provision for public hearings, for good cause
shown, respecting agency and State Agency decisions.
"(9) Preparation and publication of regular reports by the
agency and State Agency of the reviews being conducted (includ-
ing a statement concerning the status of each such review) and
of the reviews completed by the agency and State Ajjencv (includ-
ing a general statement of the findings and decisions made in
the course of such review^s) since the publication of the last
such report.
" (10) Access by the general public to all applications reviewed
by the agency and State Agency and to all other Avritten materials
pertinent to any agency or State Agency review\
"(11) I n the case of construction projects, submission to the
agency and State Agency by the entities proposing the projects of
letters of intent in such detail as may be necessary to inform the
agency and State Agency of the scope and nature of the projects
at the earliest possible opportunity in the course of planning of
such construction projects.
"(c) Criteria required by subsection (a) for health systems agency
and State Agency review shall include consideration of at least the
following:
"(1) The relationship of the health services being reviewed to
the applicable H S P and A I P .
"(2) The relationship of services reviewed to the long-range
development plan (if any) of the person providing or proposing
such services.
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2253
"(3) The need that the population served or to be served by
such services has for such services.
"(4) The availability of alternatives, less costly, or more
effective methods of providing such services.
"(5) The relationship of services reviewed to the existing
health care system of the area in which such services are provided
or proposed to be provided.
" (6) I n the case of health services proposed to be provided, the
availability of resources (including health manpower, manage-
ment personnel, and funds for capital and operating needs) for
the provision of such services and the availability of alternative
uses of such resources for the provision of other health services,
" (7) The special needs and circumstances of those entities which
provide a substantial portion of their services or resources, or both,
to individuals not residing in the health service areas in which the
entities are located or in adjacent health service areas. Such enti-
ties may include medical and other health professions schools,
multidisciplinary clinics, specialty centers, and such other entities
as the Secretary may by regulation prescribe,
" (8) The special needs and circumstances of health maintenance
organizations for which assistance may be provided under title
XIII. 42 u s e 300e.
" (9) In the case of a construction project—
" ( A ) the costs and methods of the proposed construction,
and
" ( B ) the probable impact of the construction project
reviewed on the costs of providing health services by the
person proposing such construction project.
' " T E C H N I C A L ASSISTANCE FOR H E A L T H SYSTEMS AGENCIES AND STATE
H E A L T H P L A N N I N G A N D DEVELOPMENT AGENCIES
"SEC. 1533. (a) The Secretary shall provide (directly or through ^^ use 300n.2.
grants or contracts, or both) to designated health systems agencies and
State Agencies (1) assistance in developing their health plans and
approaches to planning various types of health services, (2) technical
materials, including methodologies, policies, and standards appro-
priate for use in health planning, and (3) other technical assistance
as may be necessary in order that such agencies may properly perform
their functions.
" ( b ) The Secretary shall include in the materials provided under
subsection (a) the following:
" ( 1 ) ( A ) Specification of the minimum data needed to deter-
mine the health status of the residents of a health service area
and the determinants of such status.
" ( B ) Specification of the minimum data needed to determine
the status of the health resources and services of a health service
area.
" ( C ) Specification of the minimum data needed to describe the
use of health resources and services within a health service area.
"(2) Planning approaches, methodologies, policies, and stand-
ards which shall be consistent with the guidelines established by
the Secretary under section 1501 for appropriate planning and ^"'^' P- 2227.
development of health resources, and which shall cover the
priorities listed in section 1502.
"(3) Guidelines for the organization and operation of health Guidelines.
systems agencies and State Agencies including guideline's for—
" ( A ) the structure of a health systems agency, consistent
with section 1512(b), and of a State Agency, consistent with
section 1522;
2254 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
" ( B ) the conduct of the planning and development
processes;
" ( C ) the performance of health systems agency functions
in accordance with section 1513; and
" ( D ) the performance of State Agency functions in
accordance with section 1523.
National h e a l t h "(c) I n order to facilitate the exchange of information concerning
planning informa-
tion center. health services, health resources, and health planning and resources
Establishment. development practice and methodology, the Secretary shall establish
a national health planning information center to support the health
planning and resources development programs of health systems
agencies, State Agencies, and other entities concerned with health
planning and resources development; to provide access to current
information on health planning and resources development; and to
provide information for use in the analysis of issues and problems
related to health planning and resources development.
" ( d ) The Secretary shall establish the following within one year of
the date of enactment of this title:
Operation c o s t "(1) A uniform system for calculating the aggregate cost of
system.
operation and the aggregate volume of services provided by health
services institutions as defined by the Secretary in regulations.
Such system shall provide for the calculation of the aggregate
volume to be based on:
" ( A ) The number of patient days;
" ( B ) The number of patient admissions;
"(C) The number of out-patient visits; and
" ( D ) Other relevant factors as determined by the
Secretary.
Cost accounting "(2) A uniform system for cost accounting and calculating
system.
the volume of services provided by health services institutions.
Such system shall:
" ( A ) Include the establishment of specific cost centers
and, where appropriate, subcost centers.
" ( B ) Include the designation of an appropriate volume
factor for each cost center.
" ( C ) Provide for an appropriate application of such sys-
tem in the different types of institutions (including hospitals,
nursing homes, and other types of health services institu-
tions), and different sizes of such types of institutions.
R a t e s , calcula- "(3) A uniform system for calculating rates to be charged to
tion system. health insurers and other health institutions payors by health
service institutions. Such system shall:
" ( A ) Be based on an all-inclusive rate f»r various cate-
gories of patients (including, but not limited to individuals
receiving medical, surgical, pediatric, obstetric, and psychi-
atric institutional health services).
" ( B ) Provide that sach rates reflect the true cost of pro-
viding services to each such category of patients. The system
shall provide that revenues derived from patients in one cate-
gory shall not be used to support the provision of services to
patients in any other category.
" ( C ) Provide for an appropriate application of such sys-
tem in the different types of institutions (including hospitals,
nursing homes, and other types of health service institutions)
and different sizes of such types of institutions.
" ( D ) Provide that differences in rates to various classes
of purchasers (including health insurers, direct service pay-
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2255
ors, and other health institution payors) be based on justified
and documented differences in the costs of opei-ation of health
service institutions made possible by the actions of such
purchasers.
"(4) A classification system for health services institutions. syslem^'^'''^"°"
Such classification system shall quantitatively describe and j^roup
health services institutions of the various types. Factors included
in such classification system shall include—
" ( A ) the number of beds operated by an institution;
" ( B ) the geographic location of an institution;
" ( C ) the operation of a postgraduate physician training
program by an institution; and
" ( D ) the complexity of services provided by an institution.
"(5) A uniform system for the reporting by health services Reporting sys-
institutions of—
" ( A ) the aggregate cost of operation and the aggregate
volume of services, as calculated in accordance with the sys-
tem established by the Secretary under paragraph (1) ;
" ( B ) the costs and volume of services at various cost
centers, and subcost centers, as calculated in accordance with
the system established by the Secretary under paragraph
( 2 ) ; and
"(C) rates, by category of patient and class of purchaser,
as calculated in accordance with the system established by
the Secretary under paragraph (3).
Such system shall provide for an appropriate application of such
system in the different types of institutions (including hospitals,
nursing homes, and other types of health services institutions)
and different sizes of such institutions.
" C E X T E R S FOR H E A L T H PLANNING
"SEC. 1534. (a) For the purposes of assisting the Secretary in carry- 42 use soon-s.
ing out this title, providing such technical and consulting assistance
as health systems agencies and State Agencies may from time to time
require, conducting research, studies and analyses of health planning
and resources development, and developing health planning
approaches, methodologies, policies, and standards, the Secretary shall
by grants or contracts, or both, assist public or private nonprofit
entities in meeting the costs of planning and developing new centers,
and operating existing and new centers, for multidisciplinary health
plannmg development and assistance. To the extent practicable, the
Secretary shall provide assistance under this section so that at least
five such centers will be in operation by June 30,1976.
"(b) (1) No grant or contract may be made under this section for
planning or developing a center unless the Secretary determines that
when it is operational it will meet the requirements listed in paragraph
(2) and no grant or contract may be made under this section for
operation of a center unless the center meets such requirements.
"(2) The requirements referred to in paragraph (1) are as follows: Requirements.
" ( A ) There shall be a full-time director of the center who
possesses a demonstrated capacity for substantial accomplish-
ment and leadership in the field of health planning and resources
development, and there shall be such additional professional
staff as may be appropriate.
" ( B ) The staff of the center shall represent a diversity of
relevant disciplines.
2256 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
" ( C ) Such additional requirements as the Secretary may by
regulation prescribe.
"(c) Centers assisted under this section (1) may enter into arrange-
ments with health systems agencies and State Agencies for the
provision of such services as may be appropriate and necessary in
assisting the agencies and State Agencies in performing their func-
tions under section 1513 or 1523, respectively, and (2) shall use
methods (satisfactory to the Secretary) to disseminate to such agencies
and State Agencies such planning approaches, methodoligies, policies
and standards as they develop.
Appropriations. ^^ (d) For the purposc of making payments pursuant to grants and
contracts under subsection (a) there are authorized to be appropriated
$5,000,000 for the fiscal year ending June 30, 1975, $8,000,000 for the
fiscal year ending June 30, 1976, and $10,000,000 for the fiscal year
ending June 30,1977.
li REVIEW BY T H E SECRETARY
an^cTapprovar'^" "SEC. 1535. (a) The Secretary shall review and approve or disap-
42 use 300n-4. provc the annual budget of each designated health systems agency
and State Agency. In making such review and approval or disapproval
the Secretary shall consider the comments of Statewide Health
Coordinating Councils submitted under section 1524(c) (3). Informa-
tion submitted to the Secretary by a health systems agency or a State
Agency in connection with the Secretary's review under this subsection
shall be made available by the Secretary, upon request, to the
appropriate committees (and their subcommittees) of the Congress.
Performance "(b) The Secretary shall prescribe performance standards covering
the structure, operation, and performance of the functions of each
designated health systems agency and State Agency, and he shall
establish a reporting system based on the performance standards
that allows for continuous review of the structure, operation, and
performance of the functions of such agencies.
"(c) The Secretary shall review in detail at least every three years
the structure, operation, and performance of the functions of each
designated health systems agency to determine—
"(1) the adequacy of the H S P of the agency for meeting the
needs of the residents of the area for a healthful environment
and for accessible, acceptable and continuous quality health care
at reasonable costs, and the effectiveness of the A I P in achieving
the system described in the H S P ;
"(2) if the structure, operation, and performance of the func-
tions of the agency meet the requirements of sections 1512(b)
Ante, pp. 2232, and 1513;
2235
"(3) the extent to which the agency's governing body (and
executive committee (if any)) represents the residents of the
health service area for which the agency is designated;
"(4) the professional credentials and competence of the staff
of the agency;
"(5) the appropriateness of the data assembled pursuant to
section 1513(b) (1) and the quality of the analyses of such data;
" (6) the extent to which technical and financial assistance from
the agency have been utilized in an effective manner to achieve
goals and objectives of the H S P and the A I P ; and
"(7) the extent to which it may be demonstrated that—
" ( A ) the health of the residents in the agency's health
service area has been improved;
" ( B ) the accessibility, acceptability, continuity, and qual-
ity of health care in such area has been improved; and
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2257
" ( C ) increases in costs of the provision of health care
have been restrained.
" ( d ) The Secretary shall review in detail at least every three years
the structure, operation, and performance of the functions of each
designated State Agency to determine—
"(1) the adequacy of the State health plan of the Statewide
Health Coordinating Council prepared under section 1524(c) (2)
in meeting the needs of the residents of the State for a healthful
environment and for accessible, acceptable, and continuous qual-
ity health care at reasonable costs;
"(2) if the structure, operation, and performance of the func-
tions of the State Agency meet the requirements of sections 1522
and 1523;
"(3) the extent to which the Statewide Health Coordinating
Council has a membership meeting, and has performed in a
manner consistent with, the requirements of section 1524;
"(4) the professional credentials and competence of the staff
of the State Agency;
"(5) the extent to which financial assistance provided under
title X V I by the State Agency has been used in an effective man- ^°^'' P- ^258.
ner to achieve the State's health plan under section 1524(c) ( 2 ) ;
and
" (6) the extent to which it may be demonstrated that—
" ( A ) the health of the residents of the State has been
improved;
" ( B ) the accessibility, acceptability, continuity, and quality
of health care in the State has been improved; and
" ( C ) increases in costs of the provision of health care have
been restrained.
((SPECIAL PROVISIONS FOR C E R T A I N STATES A N D TERRITORIES
"SEC. 1536. (a) Any State which— 42 use aoon-s.
"(1) has no county or municipal public health institution or
department, and
"(2) has, prior to the date of enactment of this title, main-
tained a health planning system Avhich substantially complies
with the purposes of this title,
and the Virgin Islands, Guam, the Trust Territories in the Pacific
Islands, and American Samoa shall each be considered in accordance
with subsection (b) to be a State for purposes of this title.
" ( b ) In the case of an entity which under subsection (a) is to be
considered a State for purposes of this title—
"(1) no health service area shall be established within it,
"(2) no health systems agency shall be designated for it,
"(3) the State Agency designated for it under section 1521
may, in addition to the functions prescribed by section 1523, per-
form the functions prescribed by section 1513 and shall be eligible
to receive grants authorized by sections 1516 and 1640, and
"(4) the chief executive office shall appoint the Statewide
Health Coordinating Council prescribed by section 1524 in accord-
ance with the regulation of the Secretary."
REVISION OF H E A L T H RESOURCES DEVELOPMENT PROGRAMS UNDER T H E
P U B L I C H E A L T H SERVICE ACT
SEC. 4. The Public Health Service Act, as amended by section 3,
is amended by adding after title X V the following new title: Ante, p . 2227.
2258 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"TITLE XVI—HEALTH RESOURCES DEVELOPMENT
"PART A—PURPOSE, STATE PLAN, AND PROJECT XAPPROVAL
"PURPOSE
42 use 3ooo. "SEC. 1601. I t is the purpose of this title to provide assistance,
Post, p. 2 262. through allotments under part B and loans and loan guarantees
Post, p. 2264. ^^^ interest subsidies under part C, for projects for—
"(1) modernization of medical facilities;
" (2) construction of new outpatient medical facilities;
"(3) construction of new inpatient medical facilities in areas
which have experienced (as determined under regulations of the
Secretary) recent rapid population growth; and
"(4) conversion of existing medical facilities for the provision
of new health services,
and to provide assistance, through grants under part D, for construc-
tion and modernization projects designed to prevent or eliminate
safety hazards in medical facilities or to avoid noncompliance by such
facilities with licensure or accreditation standards.
"GENERAL REGULATIONS
42 use 300O-1. "SEC. 1602. The Secretary shall by regulation—
"(1) prescribe the general manner in which the State Agency
of each State shall determine for the State medical facilities plan
under section 1603 the priority among projects within the State
for which assistance is available under this title, based on the
relative need of different areas within the State for such projects
and giving special consideration—
" ( A ) to projects for medical facilities serving areas
with relatively small financial resources and for medical
facilities serving rural communities,
" ( B ) in the case of projects for modernization of medical
facilities, to projects for facilities serving densely populated
areas,
" ( C ) in the case of projects for construction of outpatient
medical facilities, to projects that will be located in, and pro-
vide services for residents of, areas determined by the Sec-
retary to be rural or urban poverty areas,
" (D) to projects designed to (i) eliminate or prevent immi-
nent safety hazards as defined by Federal, State, or local fire,
building, or life safety codes or regulations, or (ii) avoid
noncompliance with State or voluntary licensure or accredita-
tion standards, and
" ( E ) to projects for medical facilities which, alone or in
conjunction with other facilities, will provide comprehensive
health care, including outpatient and preventive care as well
as hospitalization;
"(2) prescribe for medical facilities projects assisted under this
title general standards of construction, modernization, and equip-
ment for medical facilities of different classes and in different
types of location;
"(3) prescribe criteria for determining needs for medical facil-
ity beds and needs for medical facilities, and for developing plans
for the distribution of such beds and facilities;
"(4) prescribe criteria for determining the extent to which
existing medical facilities are in need of modernization;
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2259
"(5) require each State medical facilities plan under section
1503 to provide for adequate medical facilities for all persons
residing in the State and adequate facilities to furnish needed
health services for persons unable to pay therefor; and
"(6) prescribe the general manner in which each entity which
receives financial assistance under this title or has received finan-
cial assistance under this title or title V I shall be required to com- '^^ ^^^ 291.
ply with the assurances required to be made at the time such
assistance was received and the means by which such entity shall
be required to demonstrate compliance with such assurances.
An entity subject to the requirements prescribed pursuant to para-
graph (6) respecting compliance with assurances made in connection
with receipt of hnancial assistance shall submit periodically to the
Secretary data and information which reasonably supports the
entity's compliance with such assurances. The Secretary may not waive
the requirement of the preceding sentence.
u,STATE MEDICAL FACILmES PLAN
"SEC. 1603. (a) Before an application for assistance under this '•^ use 300C-2.
title (other than part D) for a medical facility project described in ^°^^' P- 2268.
section 1601 may be approved, the State Agency of the State in which
such project is located must have submitted to the Secretary and had
approved by him a State medical facilities plan. To be approved
by the Secretary a State medical facilities plan for a State must—
"(1) prescribe that the State Agency of the State shall admin-
ister or supervise the administration of the plan and contain evi-
dence satisfactory to the Secretary that the State Agency has the
authority to carry out the plan in conformity with this title;
" (2) prescribe that the Statewide Health Coordinating Council
of tiie State shall advise and consult vrith tb.e State Agency in
carrying out the plan;
" (3) be approved by the Statewide Health Coordinating Coun-
cil as consistent with the State health plan developed pursuant to
section 1524(c) (2) ;
"(4) set forth, in accordance with criteria established in regu-
lations prescribed under section 1602(a) and on the basis of a
statewide inventory of existing medical facilities, a survey of
need, and the plans of health systems agencies within the State—
" ( A ) the number and type of medical facility beds and
medical facilities needed to provide adequate inpatient care
to people residing in the State, and a plan for the distribution
of such beds and facilities in health services ai'eas throughout
the State,
" ( B ) the number and type of outpatient and other medical
facilities needed to provide adequate public health services
and outpatient care to people residing in the State, and a
plan for the distribution of such facilities in healtli service
areas throughout the State, and
" ( C ) the extent to which existing medical facilities in the
State are in need of modernization or conversion to new uses;
" (5) set forth a program for the State for assistance under this
title for projects described in section 1601, which program shall
indicate the type of assistance which should be made available
to each project and shall conform to the assessment of need set
forth pursuant to paragraph (4) and regulations promulgated
under section 1602(a) ;
2260 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(6) set foith (in accordance with regulations promulgated
under section 1602(a)) priorities for the provision of assistance
under this title for projects in the program set forth pursuant to
paragraph ( 4 ) ;
"(7) provide minimum requirements (to be fixed in the discre-
tion of the State Agency) for the maintenance and operation of
facilities which receive assistance under this title, and provide for
enforcement of such standards;
"(8) provide for affording to every applicant for assistance
for a medical facilities project under this title an opportunity
for a hearing before the State Agency; and
" (9) provide that the State Agency will from time to time, but
not less often than annually, review the plan and submit to the
Secretary any modifications thereof which it considers necessary.
"(b) The Secretary shall approve any State medical facilities plan
and any modification thereof which complies with the provisions of
subsection (a) if the State Agency, as determined under the review
made under section 1535(d), is organized and operated in the manner
prescribed by section 1522 and is carrying out its functions under sec-
tion 1523 in a manner satisfactory to the Secretary. If any such plan
or modification thereof shall have been disapproved by the Secretary
for failure to comply with subsection ( a ) , the Secretary shall, upon
request of the State Agency, afford it an opportunity for hearing.
"APPROVAL or PROJECTS
42 use 300O-3. "SEC. 1604. (a) For each project described in section 1601 and
included within a State's State medical facilities plan approved
under section 1603 there shall be submitted to the Secretary, through
the State's State Agency, an application. An application for a grant
under section 1625 shall be submitted directly to the Secretary. Except
as provided in section 1625, the applicant under such an application
may be a State, a political subdivision of a State or any other public
entity, or a private nonprofit entity. If two or more entities join in a
project, an application for such project may be filed by any of such
entities or by all of them.
xid^ementt°" ^^' " ( b ) ( 1 ) Exccpt as authoHzed uudcr paragraph (2), an application
for any project shall set forth—
" ( A ) in the case of a modernization project for a medical
facility for continuation of existing health services, a finding
by the State Agency of a continued need for such services, and,
in the case of any other project for a medical facility, a finding by
the State Agency of the need for the new health services to be
provided through the medical facility upon completion of the
project;
" ( B ) a description of the site of such project;
" ( C ) plans and specifications therefor which meet the require-
ments of the regulations prescribed under section 1602(a) ;
" ( D ) reasonable assurance that title to such site is or will be
vested in one or more of the entities filing the application or in a
public or other nonprofit entity which is to operate the facility
on completion of the project;
" ( E ) reasonable assurance that adequate financial support will
be available for the completion of the project and for its mainte-
nance and operation when completed, and, for the purpose of
determining if the requirements of this subparagraph are met.
Federal assistance provided directly to a medical facility which is
located in an area determined by the Secretary to be an urban or
rural poverty area or through benefits provided individuals
served at such facility shall be considered as financial support;
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2261
" ( F ) the type of assistance being sought under this title for the
project;
" ( G ) except in the case of a project under section 1625, a certiti-
cation by the State Agency of the Federal share for the project;
" ( H ) reasonable assurance that all laborers and mechanics
employed by contractors or subcontractors in the performance of
work on a project will be paid wages at rates not less than those
prevailing on similar construction in the locality as determined
by the Secretary of Labor in accordance with the Act of March 3,
1931 (40 U.S.C. 276a—276a-5, known as the Davis-Bacon Act), J^^ use 276a
and the Secretary of Labor shall have with respect to such labor
standards the authority and functions set forth in Reorganization
Plan Numbered 14 of 1950 (15 F.R. 3176; 5 U.S.C. Appendix)
and section 2 of the Act of June 13,1934 (40 U.S.C. 276c) ;
" ( I ) in the cast of a project for the construction or moderniza-
tion of an outpatient facility, reasonable assurance that the serv-
ices of a general hospital will be available to patients at such
facility who are in need of hospital care; and
" ( J ) reasonable assurance that at all times after such applica-
tion is approved- (i) the facility or portion thereof to be con-
structed, or modernized, or converted w-ill be made available to
all persons residing or employed in the area served by the facility,
and (ii) there will be made available in the facility or portion
thereof to be constructed, modernized, or converted a reasonable
volume of services to persons unable to pay therefor and the Sec-
retary, in determining the reasonableness of the volume of sei-vices
provided, shall take into consideration the extent to which com-
pliance is feasible from a financial viewpoint.
"(2) (A) The Secretary may waive— waiver.
"(i) the requirements of subparagraph (C) of paragraph (1)
for compliance with modernization and equipment standards pre-
scribed pursuant to section 1602(a) (2), and
"(ii) the requirement of subparagrap]i (D) of paragraph (1)
respecting title to a project site,
in the case of an application for a project described in subparagraph
" ( B ) A project referred to in subparagraph (A) is a project—
" ( i ) for the modernization of an outpatient medical facility
which will provide general purpose liealth services, which is not
part of a hospital, and which will serve a medically underserved
population as defined in section 1633 or as designated by a health
systems agency, and
"(ii) for which the applicant seeks (I) not more than $20,000
from the allotments made under part B to the State in which it is ^°^'' P- 2262.
located, or ( I I ) a loan under i)art C the principal amount of ^°^^- P- 2264.
which does not exceed $20,000.
"(c) The Secretary shall approve an application submitted under
subsection (b) (other than an application for a grant under section
1625) if—
"(1) in the case of a project to be assisted from an allotment
made under part B, there are sufficient funds in such allotment to
pay the Federal share of the project; and
"(2) the Secretary finds that—
" ( A ) the application (i) is in conformity with the State
medical facilities plan approved under section 1603, (ii) has
been approved and recommended by the State Agency, (iii)
is for a project which is entitled to priority over other proj-
ects within the State as determined in accordance with the
3R.1C)4 n - 7R - fin Pt 9.
2262 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
approved State medical facilities plan, and (iv) contains
the assurances required by subsection ( b ) ; and
" ( B ) the plans and specifications for the project meet the
requirements of the regulations prescribed pursuant to sec-
tion 1602(a).
" ( d ) No application (other than an application for a grant under
section 1625) shall be disapproved until the Secretary has afforded
the State Agency an opportunity for a hearing.
"(e) Amendment of any approved application shall be subject to
approval in the same manner as an original application.
"(f) Each application shall be reviewed by health systems agencies
Ante, p. 2 2 3 5 .
in accordance with section 1513(e).
"PART B—ALLOTMENTS
"ALLOTMENTS
42 use 3oop. "SEC. 1610. (a) For each fiscal year, the Secretary shall, in accord-
ance with regulations, make from sums appropriated for such fiscal
year under section 1513 allotments among the States on the basis of
the population, the financial need, and need for medical facilities
projects described in section 1601 of the respective States. The popu-
lation of the States shall be determined on the basis of the latest
figures certified by the Secretary of Commerce.
" ( b ) (1) The allotment to any State (other than Guam, American
Samoa, the Virgin Islands, or the Trust Territory of the Pacific
Islands) for any fiscal year shall be not less than $1,000,000; and the
allotment to Guam, American Samoa, the Virgin Islands, and the
Trust Territory of the Pacific Islands for any fiscal year shall be not
less than $500,000 each.
"(2) Notwithstanding paragraph (1), if the amount appropriated
under section 1613 for any fiscal year is less than the amount required
to provide allotments in accordance with paragraph (1), the amount
of the allotment to any State for such fiscal year shall be an amount
which bears the same ratio to the amount prescribed for such State
by paragraph (1) as the amount appropriated for such fiscal year
bears to the amount of appropriations needed to make allotments
to all the States in accordance with paragraph (1).
"(c) Any amount allotted to a State for a fiscal year under subsec-
tion (a) and remaining unobligated at the end of such year shall
remain available to such State, for the purpose for which made, for
the next two fiscal years (and for such years only), in addition to the
amounts allotted to such State for such purposes for such next two
fiscal years; except that any such amount which is unobligated at
the end of the first of such next two years and which the Secretary
determines will remain unobligated at the close of the second of such
next two years may be reallotted by the Secretary, to be available for
the purposes for which made until the close of the second of such
next two years, to other States which have need therefor, on such basis
as the Secretary deems equitable and consistent with the purposes of
this title. Any amount so reallotted to a State shall be in addition to
the amounts allotted and available to the State for the same period.
"PAYMENTS FROM ALLOTMENTS
42 use 3oop-i. "SEC. 1611. (a) If with respect to any medical facility project
approved under section 1604 the State Agency certifies (upon the
basis of inspection by it) to the Secretary that, in accordance with
approved plans and specifications, work has been performed upon
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2263
the project or purchases have been made for it and that payment from
the applicable allotment of the State in which the project is located is
due for the project, the Secretary shall, except as provided in subsec-
tion (b), make such payment to the State.
"(b) The Secretary is authorized to not make payments to a State ^j^^^/^^"' '"^'
pursuant to subsection (a) in the following circumstances:
"(1) If such State is not authorized by law to make payments
for an approved medical facility project from the payment to be
made by the Secretary pursuant to subsection ( a ) , or if the State
so requests, the Secretary shall make the payment from the State
allotment directly to the applicant for such project.
"(2) If the Secretary, after investigation or otherwise, has
reason to believe that any act (or failure to act) has occurred
requiring action pursuant to section 1612, payment by the Secre-
tary may, after he has given the State Agency notice and
opportunity for hearing pursuant to such section, be withheld, in
whole or in part, pending corrective action or action based on such
hearing.
I n no event may the total of payments made under subsection (a) with
respect to any project exceed an amount equal to the Federal share
of such project.
"(c) In case an amendment to an approved application is approved
as provided in section 1604 or the estimated cost of a project is revised
upward, any additional payment with respect thereto may be made
from the applicable allotment of the State for the fiscal year in which
such amendment or revision is approved.
" ( d ) In any fiscal year—
"(1) not more than 20 per centum of the amount of a State's
allotment available for obligation in that fiscal year may be obli-
gated for projects in the State for construction of new facilities
for the provision of inpatient health care to persons residing in
areas of the State which have experienced recent rapid population
growth; and
"(2) not less than 25 per centum of the amount of a State's
allotment available for obligation in that fiscal year shall be obli-
gated for projects for outpatient facilities which will serve
medically underserved populations.
In the administration of this part, the Secretary shall seek to assure ^"""^^ projects.
that in each fiscal year at least one half of the amount obligated for
projects pursuant to paragraph (2) shall be obligated for projects
which will serve rural medically underserved populations.
"WITHHOLDING OF PAYMENTS AND OTHER COMPLIANCE ACTIONS
"SEC. 1612. (a) Whenever the Secretary, after reasonable notice and '^^ "^"^ 3oop-2.
opportunity for hearing to the State Agency concerned finds—
" (1) that the State Agency is not complying substantially with
the provisions required by section 1603 to be included in its State
medical facilities plan,
"(2) that any assurance required to be given in an application
filed under section 1604 is not being or cannot be carried out, or
"(3) that there is a substantial failure to carry out plans and
specifications approved by the Secretary under section 1604,
the Secretary shall take the action authorized by subsection (b) unless,
in the case of compliance with assurances, the Secretary requires com-
pliance by other means authorized by law.
" ( b ) (1) Upon a finding described in subsection (a) and after notice
to the State Agency concerned, the Secretary may—
2264 PUBLIC LAW 93-641-J AN. 4, 1975 [88 STAT.
" ( A ) withhold from all projects within the State with respect
to which the finding was made fuither payments from the State's
allotment under section 1610, or
" ( B ) withhold from the specific projects with respect to which
the finding was made further payments from the applicable State
allotment under section 1610.
"(2) Payments may be withheld, in whole or in part, under para-
graph (1)—
" (A) until the basis for the finding upon which the withholding
was made no longer exists, or
" ( B ) if corrective action to make such finding inapplicable
cannot be made, until the State concerned repays or arranges for
the repayment of Federal funds paid under this part for projects
which because of the finding are not entitled to such funds.
Periodic inves- "((>) The Sccrctary shall investigate and ascertain, on a periodic
ligations. basis, with respect to each entity which is receiving financial assistance
imder this title or which has received financial assistance under title
42 use 291. y j Qp i^jjjg title, the extent of compliance by such entity with the
assurances required to be made at the time such assistance was received.
If the Secretary finds that such an entity has failed to comply with
any such assurance, the Secretary shall take the action authorized by
subsection (b) or take any other action authorized by law (including
an action for specific performance brought by the Attorney General
upon request of the Secretary) which will effect compliance by the
entity with such assurances. An appropriate action to effectuate com-
pliance with any such assurance may be brought by a person other
than the Secretary only if a complaint has been filed by such person
with the Secretary and the Secretary has dismissed such complaint
or the Attorney General has not brought a civil action for compliance
with such assurance within 6 months after the date on which the
complaint was filed with the Secretary.
"AUTHORIZATION OF APPROPRIATIONS
42 use 3oop-3. "SEC. 1613. Except as provided in section 1625(d), there are author-
ized to be appropriated for allotments under section 1510 $125,000,000
for the fiscal year ending June 30,1975, $130,000,000 for the fiscal year
ending June 30, 1976, and $135,000,000 for the fiscal year ending
June 30, 1977.
"PART C—LOANS AND LOAN GUARANTKES
"AUTHORITY FOR LOANS AND I.OAN GUARANTEES
42 use 3ooq. "gEo. 1620. (a) The Secretary, during the period beginning July 1,
1974, and ending June 30, 1977, may, in accordance with this part,
make loans from the fund established under section 1622(d) to pay
the Federal share of projects approved under section 1604.
"(b) (1) The Secretary, during the period beginning July 1, 1974,
and ending June 30,1977, may, in accordance with this part, guarantee
to—
" ( i ) non-Federal lenders for their loans to nonprofit private
entities for medical facilities projects, and
"(ii) the Federal Financing Bank for its loans to nonprofit
private entities for such projects,
payment of principal and interest on such loans if applications for
assistance for such projects under this title have been approved under
section 1604.
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2265
"(2) In the case of a guarantee of any loan to a nonprofit private ^^l^^^''''^' ^''^'
entity under this title, the Secretary shall pay, to the holder of such
loan and for and on behalf of the project for which the loan was
made amounts sufficient to reduce by 8 per centum per annum the net
effective interest rate otherwise payable on such loan. Each holder of
such a loan which is guaranteed under this title shall have a con-
tractual right to receive from the United States interest payments
required by the preceding sentence.
"(c) The cumulative total of the principal of the loans outstanding Limitations.
at any time with respect to which guarantees have been issued, or
which have been directly made, may not exceed such limitations as
may be specified in appropriation Acts.
" ( d ) The Secretary, with the consent of the Secretary of Housing HUD assistance.
and Urban Development, shall obtain from the Department of Hous-
ing and Urban Development such assistance with respect to the
administration of this part as will promote efficiency and economy
thereof.
"ALLOCATION AMONG THE STATES
"SEC. 1621. (a) For each fiscal year, the'total amount of principal 42 u s e 300q-l.
of—
"(1) loans to nonprofit private entities which may be guar-
anteed, or
"(2) loans which may be directly made,
under this part shall be allotted by the Secretary among the States,
in accordance with regulations, on the basis of the population, finan-
cial need, and need for medical facilities projects described in section
1601 of the respective States. The population of the States shall be
determined on the basis of the latest figures certified by the Secretary
of Commerce.
" ( b ) Any amount allotted to a State for a fiscal year under funar^avriiabiuty
subsection (a) and remaining unobligated at the end of such year shall to state.
remain available to such State, for the purpose for which made,
for the next two fiscal years (and for such years only), in addition
to the amounts allotted to such State for such purposes for such
next two fiscal years; except that any such amount w^hich is unob- Reallotments.
ligated at the end of the first of such next two years and which
the Secretary determines will remain unobligated at the close of the
second of such next two years may be reallotted by the Secretary,
to be available for the purposes for which made until the close of the
second of such next two years, to other States which have need there-
for, on such basis as the Secretary deems equitable and consistent
with the purposes of this title. Any amount so reallotted to a State
shall be in addition to the amounts allotted and available to the State
for the same period.
"GENERAL PROVISIONS RELATING TO LOAN GUARANTEES AND LOANS
"SEC. 1622. (a) (1) The Secretary may not approve a loan guar- 42 u s e 300q-
antee for a project under this part unless he determines that (A) the
terms, conditions, security (if any), and schedule and amount of
repayments with respect to the loan are sufficient to protect the finan-
cial interests of the United States and are otherwise reasonable, includ-
ing a determination that the rate of interest does not exceed such per
centum per annum on the principal obligation outstanding as the
Secretary determines to be reasonable, taking into account the range
of interest rates prevailing in the private market for similar loans
and the risks assumed by the United States, and (B) the loan would
2266 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
not be available on reasonable terms and conditions without the
guarantee under this part.
Payment re- "(2) (A) The United States shall be entitled to recover from the
overy.
applicant for a loan guarantee under this part the amount of any
payment made pursuant to such guarantee, unless the Secretary for
good cause waives such right of recovery; and, upon making any such
payment, the United States shall be subrogated to all of the rights of
the recipient of the payments with respect to which the guarantee was
made.
Terms and con- " ( B ) To the extent permitted by subparagraph (C), any terms and
ditions, modifica-
tion. conditions applicable to a loan guarantee under this part (including
terms and conditions imposed under subparagraph ( D ) ) may be modi-
fied by the Secretary to the extent he determines it to be consistent
with the financial interest of the United States.
" ( C ) Any loan guarantee made by the Secretary under this part
shall be incontestable (i) in the hands of an applicant on whose behalf
such guarantee is made unless the applicant engaged in fraud or mis-
representation in securing such guarantee, and (ii) as to any person
(or his successor in interest) who makes or contracts to make a loan
to such applicant in reliance thereon unless such person (or his suc-
cessor in interest) engaged in fraud or misrepresentation in making
or contracting to make such loan.
" ( D ) Guarantees of loans under this part shall be subject to such
further terms and conditions as the Secretary determines to be neces-
sary to assure that the purposes of this title will be achieved.
Loan approval " ( b ) ( 1 ) The Secretary may not approve a loan under this part
conditions.
unless—
" ( A ) the Secretary is reasonably satisfied that the applicant
under the project for which the loan would be made will be able
to make payments of principal and interest thereon when due, and
" ( B ) the applicant provides the Secretary with reasonable
assurances that there will be available to it such additional funds
as may be necessary to complete the project or undertaking with
respect to which such loan is requested.
"(2) Any loan made under this part shall (A) have such security,
(B) have such maturity date, (C) be repayable in such installments,
(D) bear interest at a rate comparable to the current rate of interest
prevailing, on the date the loan is made, with respect to loans guaran-
teed under this part, minus 3 per centum per annum, and (E) be
subject to such other terms and conditions (including provisions for
recovery in case of default), as the Secretary determines to be neces-
sary to carry out the purposes of this title while adequately protecting
the financial interests of the United States.
"(3) The Secretary may, for good cause but with due regard to the
financial interests of the United States, waive any right of recovery
which he has by reasons of the failure of a borrower to make payments
of principal of and interest on a loan made under this part, except
that if such loan is sold and guaranteed, any such waiver shall have
no effect upon the Secretary's guarantee of timely payment of principal
and interest.
Sale o f l o a n s . "(c) (1) The Secretary shall from time to time, but with due regard
to the financial interests of the United States, sell loans made under
this part either on the private market or to the Federal National
Mortgage Association in accordance with section 302 of the Federal
12 u s e 1717. National Mortgage Association Charter Act or to the Federal Financ-
ing Bank.
"(2) Any loan so sold shall be sold for an amount which is equal
(or approximately equal) to the amount of the unpaid principal of
such loans as of time of sale.
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2267
Agreements with
"(3) (A) The Secretary is authorized to enter into an agreement loan purchaser.
with the purchaser of any loan sold under this part under which the
Secretary agrees—
"(i) to guarantee to such purchaser (and any successor in
interest to such purchaser) payments of the principal and interest
payable under such loan, and
"(ii) to pay as an interest subsidy to such purchaser (and any
successor in interest of such purchaser) amounts which, when
added to the amount of interest payable on such loan, are equiv-
alent to a reasonable rate of interest on such loan as determined
by the Secretary after taking into account the range of prevailing
interest rates in the private market on similar loans and the
risks assumed by the United States.
" ( B ) Any agreement under subparagraph ( A ) —
"(i) may provide that the Secretary shall act as agent of any
such purchaser, for the purpose of collecting from the entity to
which such loan was made and paying over to such purchaser
any payments of principal and interest payable by such entity
under such loan;
"(ii) may provide for the repurchase by the Secretary of any
such loan on such terms and conditions as may be specified in the
agreement ;
"(iii) shall provide that, in the event of any default by the
entity to which such loan was made in payment of principal or
interest due on such loan, the Secretary shall, upon notification to
the purchaser (or to the successor in interest of such purchaser),
have the option to close out such loan (and any obligations of the
Secretary with respect thereto) by paying to the purchaser (or
liis successor in interest) the total amount of outstandiniy princi-
pal and interest due thereon at the time of such notification;
and
"(iv) shall provide that, in the event such loan is closed out as
provided in clause (iii), or in the event of any other loss incurred
by the Secretary by reason of the failure of such entity to make
payments of principal or interest on such loan, the Secretary shall
be subrogated to all rights of such purchaser for recovery of such
loss from such entity.
"(4) Amounts received by the Secretary as proceeds from the sale
of loans under this subsection shall be deposited in the fund established
under subsection ( d ) .
" ( d ) (1) There is established in the Treasury a loan and loan guar- ^^"^"^ ^"/ ^"^'""
antee fund (hereinafter in this subsection referred to as the 'fund') ""VsLbUshment.
which shall be available to the Secretary without fiscal year limitation,
in such amounts as may be specified from time to time in appropria-
tion Acts—
" (A) to enable him to make loans under this part,
" ( B ) to enable him to discharge his responsibilities under loan
guarantees issued by him under this part,
" (C) for payment of interest under section 1620 (b) (2) on loans
guaranteed under this part,
" ( D ) for repurchase of loans under subsection (c) (3) ( B ) , and
" ( E ) for payment of interest on loans which are sold and
guaranteed.
There are authorized to be appropriated from time to time such Appropriation.
amounts as may be necessary to provide the sums required for the
fund. There shall also be deposited in the fund amounts received by
the Secretary in connection with loans and loan guarantees under this
part and other property or assets derived by him from his operations
2268 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
respecting such loans and loan guarantees, including any money
derived from the sale of assets,
"(2) If at any time the sums in the funds are insufficient to enable
the Secretary—
" ( A ) to make payments of interest under section 1620(b) (2),
" ( B ) to otherwise comply with guarantees under this part of
loans to nonprofit private entities,
"(C) in the case of a loan which was made, sold, and guaran-
teed under this part, to make to the purchaser of such loan pay-
ments of principal and interest on such loan after default by the
entity to which the loan was made, or
" ( D ) to repurchase loans under subsection ( c ) ( 3 ) ( B ) , and
" ( E ) to make payments of interest on loans which are sold and
guaranteed,
Notes or other
obligations. he is authorized to issue to the Secretary of the Treasury notes or
other obligations in such for-ms and denominations, bearing such
maturities, and subject to such terms and conditions, as may be pre-
scribed by the Secretary with the approval of the Secretary of the
Treasury. Such notes or other obligations shall bear interest at a
rate determined by the Secretary of the Treasury, taking into con-
sideration the current average market yield on outstanding market-
able obligations of the United States of comparable maturities during
the month preceding the issuance of the notes or other obligations.
The Secretary of the Treasury shall pui'chase any notes and other
obligations issued under this pai-agraph and for that purpose he may
use as a public debt transaction the proceeds from the sale of any
31 u s e 774. securities issued under the Second Liberty Bond Act, and the pur-
poses for which the securities may be issued under that Act are
extended to include any purchase of such notes and obligations. The
Secretary of the Treasury may at any time sell any of the notes or
other obligations acquired by him under this paragraph. All redemp-
tions, purchases, and sales by the Secretary of the Treasury of such
notes or other obligations shall be treated as a public debt transactions
of the United States. Sums borrowed under this paragraph shall be
deposited in the fund and redemption of such notes and obligations
shall be made by the Secretary from the fund.
Transfer of " ( e ) ( 1 ) The assets, commitments, obligations, and outstanding
funds.
balances of the loan guarantee and loan fund established in the
42 use 291J-6. Treasury by section 626 shall be transferred to the fund established
by subsection (d) of this section.
Appropriation. "(^2) To provldc additional capitalization for the fund established
imder subsection (d) there are authorized to be appropriated to the
fund, such sums as may be necessary for the fiscal years ending
June 80, 1975, June 30, 1976, and June 30, 1977.
"PART D — P R O J E C T GRANTS
"PROJECT GRANTS
42 use 300r. "SEC. 1625. (a) The Secretary may make grants for construction
or modernization projects designed to (1) eliminate or prevent immi-
nent safety hazards as defined by Federal, State, or local fire, building,
or life safety codes or regulations, or (2) avoid noncompliance with
State or voluntary licensure or accreditation standards. A grant inider
this subsection may only be made to a State or political subdivision of
a State, including any city, town, county, borough, hospital district
authority, or public or quasi-public corporation, for a project described
in the preceding sentence for any medical facility owned or operated
by it.
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2269
"(b) An application for a grant under subsection (a) may not be
approved under section 1604 unless it contains assurances satisfactory
to the Secretary that the applicant making the application would not
be able to complete the project for which the application is submitted
without the grant applied for.
"(c) The amount of any grant under subsection (a) may not cost limitation.
exceed 75 per centum of the cost of the project for which the grant is
made unless the project is located in an area determined by the
Secretary to be an urban or rural poverty area, in which case the
grant may cover up to 100 per centum of such costs.
" ( d ) Of the sums appropriated under section 1613 for a fis'^al
year, there shall be made available for grants under subsection (a) for
such fiscal year 22 per centum of such sums.
"PART E—GENERAL PROVISIONS
"JUDICIAL REVIEW
"SEC. 1 a m If— 42 use 300s.
"(1) the Secretary refuses to approve an application for a
project submitted under section 1604, the State Agency through
which such application was submitted, or
"(2) any State is dissatisfied Avith, or any entity will be
adversely aft'ected by, the Secretary's action under section 1612,
such State or entity,
may appeal to the ITnited Sta^^os court of appeals for the circuit h\
which such State Agency, State, or entity is located, by filing
a petition with such court within sixty davs after such action. A copv
of the petition sluil] be forthwith transmitted by the clerk of the court
to the Secretary, or any officer designated by him for that
purpose. The Secretary thereujion shall file in the court the record
of the proceedings on Avhich he based his action, as provided in section
2112 of title 28. Ignited States Code. Upon the filing of such petition,
the court shall have jurisdiction to affirm the action of the Secretary
or to set it aside, in whole or in part, temporarily or permanently,
but until the filing of the record, the Secretary may modify or set
aside his order. The findings of the Secretary as to the facts, if
supported by substantial evidence, shall be conclusive, but the
court, for good cause shown, may remand the case to the Secretary
to take further evidence, and the Secretary may thereupon make new
or modified findings of fact and may modify his previous action,
and shall file in the court the record of the further proceedings. Such
new or modified findings of fact shall likewise be conclusive
if supported by substantial evidence. The judgment of the court
affirming or setting aside, in whole or in part, any action of the
Secretarv shall be final, subject to review by the Supreme Court of
tlie United States upon certiorari or certification as provided in sec-
tion 1254 of title 28. United States Code. Tlie commencement of pro-
ceedings under this section shall not, unless so specifically
ordered by the Court, operate as a stay of the Secretary's action.
a RECOVERY
"SEC. 16.S1. (a) If any facility constructed, modernized, or con- 42 u s e 300S-1.
verted with funds provided under this title is, at any time
within twenty years after the completion of such construction,
modernization, or conversion with such funds—
"(1) sold or transferred to any person or entity (A) which
is not qualified to file an applica^^ion under section 1604, or /'B)
which is not approved as a transferee by the State Agency of the
State in which such facility is located, or its successor; or
2270 PUBUC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(2) not used as a medical facility, and the Secretary has not
determined that there is good cause for termination of such use,
the United States shall be entitled to recover from either the
transferor- or the transferee in the case of a sale or transfer or from
the owner in the case of termination of use an amount bearing the
same ratio to the then value (as determined by the agreement
of the parties or by action brought in the district court of the United
States for the district in which the facility is situated) of so
much of such facility as constituted an approved project or projects,
as the amount of the Federal participation bore to the cost of the
construction, modernization, or conversion of such project or projects.
Such right of recovery shall not constitute a lien upon such facility
prior to judgment.
Waiver. "(b) The Sccrctary may waive the recovery rights of the United
States under subsection (a) with respect to a facility in any State—
"(1) if (as determined under regulations prescribed by the
Secretary) the amount which could be recovered under subsection
(a) with respect to such facility is applied to the development,
expansion, or support of another medical facility located in such
State which has been approved by the Statewide Health Coordi-
nating Council for such State as consistent with the State health
Ante, p. 2247. plan established pursuant to section 1524(c) ; or
"(2) if the Secretary determines, in accordance with regula-
tions, that there is good cause for waiving such requirement with
respect to such facility.
If the amount which the United States is entitled to recover under
subsection (a) exceeds 90 per centum of the total cost of the con-
struction or modernization project for a facility, a waiver under this
subsection shall only apply with respect to an amount which is not
more than 90 per centum of such total cost. The Secretary may not
waive a right of recovery which arose one year before the date of the
enactment of this title.
"STATE CONTROL OF OPERATIONS
42 use 300S-2. "SEO. 1632. Except as otherwise specifically provided, nothing in
this title shall be construed as conferring on any Federal officer or
employee the right to exercise any supervision or control over the
administration, personnel, maintenance, or operation of any facility
with respect to which any funds have been or may be expended under
this title.
"DEFINITIONS
42 u s e 300S-3. "SEC. 1633. For the purposes of this title—
"(1) The term 'State' includes the Commonwealth of Puerto Rico,
Guam, American Samoa, the Trust Territory of the Pacific Islands,
the Virgin Islands, and the District of Columbia.
"(2) The term 'Federal share' means the proportion of the cost of
a medical facilities project which the State Agency determines the
Federal Government will provide under allotment payments or a loan
or loan guarantee under this title, except that—
" (A) in the case of a modernization project—
" ( i ) described in section 1604(b) (2) ( B ) , and
"(ii) the application for which received a waiver under
section 1 6 0 4 ( b ) ( 2 ) ( A ) ,
the proportion of the cost of such project to be paid by the Fed-
eral Government under allotment payments or a loan may not
exceed $20,000 and may not exceed 100 per centum of the first
$6,000 of the cost of such project and 66% per centum of the
next $21,000 of such cost,
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2271
" ( B ) in the case of a project (other than a project described
in subparagraph ( A ) ) to be assisted from an allotment made
under part B, the proportion of the cost of such project to be paid
by the Federal Government may not exceed 66% unless the proj-
ect is located in an area determined by the Secretary to be an urban
or rural poverty area, in which case the proportion of the cost
of such project to be paid by the Federal Government may be
100 per centum, and
" ( C ) in the case of a project (other than a project described
in subparagraph ( A ) ) to be assisted with a loan or loan guarantee
made under part C, the principal amount of the loan directly
made or guaranteed for such project, when added to any other
assistance provided the project under this title, may not exceed
90 per centum of the cost of such project unless the project is
located in an area determined by the Secretary to be an urban or
I'ural i)overty area, in which case the principal amount, when
added to other assistance under this title, may cover up to 100
per centum of the cost of the project.
"(3) The term 'hospital' includes general, tuberculosis, and other
types of hospitals, and related facilities, such as laboratories, out-
patient departments, nurses' home facilities, extended care facilities,
facilities related to programs for home health services, self-care units,
and central service facilities, operated in connection with hospitals,
and also includes education or training facilities for health profes-
sonal personnel operated as an integral part of a hospital, but does
not include any hospital furnishing primarily domiciliary care.
"(4) The term 'public health center' means a publicly owned facil-
ity for the provision of public health services, including related pub-
licly owned facilities such as laboratories, clinics, and administrative
offices operated in connection with such a facility.
"(5) The term 'nonprofit' as applied to any facility means a facility
which is owned and operated by one or more nonprofit corporations
or associations no part of the net earnings of which inures, or may
lawfully inure, to the benefit of any private shareholder or individual.
" (6) The term 'outpatient medical facility' means a medical facility
(located in or apart from a hospital) for the diagnosis or diagnosis
and treatment of ambulatory patients (including ambulatory
inpatients) —
" ( A ) which is operated in connection with a hospital,
" ( B ) in which patient care is under the professional supervi-
sion of persons licensed to practice medicine or surgery in the State,
or in the case of dental diagnosis or treatment, under the profes-
sional supervision of persons licensed to practice dentistry in the
State; or
"(C) which offers to patients not requiring hospitalization the
services of licensed physicians in various medical specialties, and
which provides to its patients a reasonably full-range of diag-
nostic and treatment services.
"(7) The term 'rehabilitation facility' means a facility which is
operated for the primary purpose of assisting in the rehabilitation of
disabled persons through an integrated program of—
" ( A ) medical evaluation and services, and
" ( B ) psychological, social, or vocational evaluation and
services,
under competent professional supervision, and in the case of which
the major portion of the required evaluation and services is furnished
within the facility; and either the facility is operated in connection
with a hospital, or all medical and related health services are pre-
scribed by, or are under the general direction of, persons licensed to
practice medicine or surgery in the State.
2272 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(8) The term 'facility for long-term care' means a facility
(including a skilled nursing or intermediate care facility) providing
in-patient care for convalescent or chronic disease patients who
required skilled nursing or intermediate care and related medical
services—
" ( A ) which is a hospital (other than a hospital primarily for
the care and treatment of mentally ill or tuberculous patients)
or is operated in connection with a hospital, or
" ( B ) in which such care and medical services are prescribed
by, or are performed under the general direction of, persons
licensed to practice medicine or surgery in the State.
"(9) The term 'construction' means construction of new buildings
and initial equipment of such buildings and, in any case in which it
will help to provide a service not previously provided in the com-
munity, equipment of any buildings; including architects' fees, but
excluding the cost of off-site improvements and, except with respect
to public health centers, the cost of the acquisition of land.
"(10) The term 'cost' as applied to construction, modernization, or
conversion means the amount found by the Secretary to be necessary
for construction, modernization, or conversion, respectively, under a
project, except that, in the case of a modernization project or a project
Ante, p. 2268. assisted under part D, such term does not include any amount found
by the Secretary to be attributable to expansion of the bed capacity
of any facility.
"(11) The term 'modernization' includes the alteration, expansion,
major repair (to the extent permitted by regulations), remodeling,
replacement, and renovation of existing buildings (including initial
equipment thereof), and the replacement of obsolete equipment of
existing buildings.
"(12) The term 'title,' when used with reference to a site for a
project, means a fee simple, or such other estate or interest (including
a leasehold on which the rental does not exceed 4 per centum of the
value of the land) as the Secretary finds sufficient to assure for a period
of not less than twenty-five years' undisturbed use and possession for
the purposes of construction, modei'nization, or conversion and opera-
tion of the project for a period of not less than (A) twenty years in
the case of a project assisted under an allotment or grant under this
title, or (B) the term of repayment of a loan made or guaranteed under
this title in the case of a project assisted by a loan or loan guarantee.
"(13) The term 'medical facility' means a hospital, public health
center, outpatient medical facility, rehabilitation facility, facility for
long-term care, or other facility (as may be designated by the
Secretary) for the provision of health care to ambulatory patients.
"(14) The term 'State Agency' means the State health planning
Ante, p. 2227. and development agency of a State designated under title X I V .
"(15) The term 'urban or rural ])overty area' means an urban or
rural geographical area (as defined by the Secretary) in which a
percentage (as defined by the Secretary in accordance with the next
sentence) of the residents of the area have incomes below the poverty
level (as defined by the Secretary,of Commerce). The percentage
referred to in the preceding sentence shall be defined so that the
percentage of the population of the United States residing in urban
and rural poverty areas is—
" ( A ) not more than the percentage of the total population of
the United States with incomes below the poverty level (as so
defined) plus five per centum, and
" ( B ) not less than such percentage minus five per centum.
"(16) The term 'medically underserved population' means the
population of an urban or rural area designated by the Secretary as
an area with a shortage of health facilities or a population group
designated by the Secretary as having a shortage of such facilities.
88 STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2273
"FINANCIAL STATEMENTS ; KEGORDS AND AUDIT
"SEC. 1634. (a) I n the case of any facility for which an allotment ^2 use 3oos-4.
payment, grant, loan, or loan guarantee has been made under this title,
the applicant for such payment, grant, loan, or loan guarantee (or, if
appropriate, such other person as the Secretary may prescribe) shall
file at least annually with the State Agency for the State in which the
facility is located a statement which shall be in such form, and con-
tain such information, as the Secretary may require to accurately
show—
" (1) the financial operations of the facility, and
" (2) the costs to the facility of providing health services in the
facility and the charges made by the facility for providing such
services,
during the period with respect to which the statement is filed.
"(b) (1) Each entity receiving Federal assistance under this title Recordkeeping.
shall keep such records as the Secretary shall prescribe, including rec-
ords which fully disclose the amount and disposition by such entity
of the proceeds of such assistance, the total cost of the project in
connection with which such assistance is given or used, the amount
of that portion of the cost of the project supplied by other sources, and
such other records as will facilitate an effective audit.
"(2) The Secretary and the Comptroller General of the United Audit.
States, or any of their duly authorized representatives, shall have
access for the purpose of audit and examination to any books, docu-
ments, papers, and records of such entities which in the opinion of
the Secretary or the Comptroller General may be related or pertinent
to the assistance referred to in paragraph (1).
"(c) Each such entity shall file at least annually with the Secretary
a statement which shall be in such form, and contain such information,
as the Secretary may require to accurately show—
"(1) the financial operations o{ the facility constructed or
modernized with such assistance, and
"(2) the costs to such facility of providing health services in
such facility, and the charges made for such services, during the
period with respect to which the statement is filed.
<'i
TECHNICAL ASSISTANCE
"SEC. 1635. The Secretary shall provide (either through the Depart- ^2 use 300 s-s.
ment of Health, Education, and Welfare or by contract) all necessary
technical and other nonfinancial assistance to any public or other non-
profit entity which is eligible to apply for assistance under this title to
assist such entity in developing applications to be submitted to the
Secretary under section 1604. Tlie Secretary shall make every effort to
inform eligible applicants of the availability of assistance under this
title.
"PART F—^AREA HEALTH SERVICES DEVELOPMENT FUNDS
"DEVELOPMENT GRANTS FOR AREA HEALTH SERVICES DEVELOPMENT
FUNDS
"SEC. 1640. (a) The Secretary shall make in each fiscal year a grant ^2 use 3oot.
to each health system agency—
" (1) with which there is in effect a designation agreement under
section 1515(c), Ante, p. 2239.
"(2) which has in effect an H S P and A I P reviewed by the
Statewide Health Coordinating Council, and
2274 PUBLIC LAW 93-641-JAN. 4, 1975 [88 STAT.
"(3) which, as determined under the review made under sec-
Ante, p . 2256. tion 1535(c), is organized and operated in the manner prescribed
Ante, p. 2232. by section 1512(b) and is performing its functions under section
Ante, p . 2235. 1513 in a manner satisfactory to the Secretary,
to enable the agency to establish and maintain an Area Health Serv-
ices Development Fund from wdiich it may make grants and enter into
contracts in accordance with section 1513 (c) (3).
"(b) (1) Except as provided in paragraph (2), the amount of any
grant under subsection (a) shall be determined by the Secretary after
taking into consideration the population of the health service area for
which the health systems agency is designated, the average family
income of the area, and the supply of health services in the area.
Limitation. "(2) The amoimt of any grant under subsection (a) to a health
syst-ems agency for any fiscal year may not exceed the product of
$1 and the population of the health service area for which such
agency is designated.
"(c) No grant may be made under subsection (a) unless an appli-
cation therefor has been submitted to, and approved by, the Secretary.
Such an application shall be submitted in such form and manner and
contain such information as the Secretary may require.
Appropriations. "(d) For the purpose of making payments pursuant to grants under
subsection (a), there are authorized to be appropriated $25,000,000
for the fiscal vear ending June 30, 1975, $75,000,000 for the fiscal vear
ending June\30, 1976, and $120,000,000 for the fiscal year ending
June 30,1977."
MISCELLANP:OUS AND TRANSITIONAL PROVISIONS
Appropriations. SEC. 5. (a)(1) There are authorized to be appropriated for the fiscal
42 u s e 300m
note. year ending June 30, 1975, and the next fiscal year such sums as may
be necessary to make grants under section 314(a) of the Public Health
42 u s e 246. Service Act, except that no grant made to a State with funds appro-
priated under this paragraph shall be available for obligation
beyond—
(A) three months after the date on which a State health
planning and development agency is designated for such State
under section 1421 of such Act, or
(B) June 30,1976,
whichever is later.
42 u s e 300^4 (2) There are authorized to be appropriated for the fiscal year
note.
ending June 30, 1975, and the next fiscal year such sums as may be
necessary to make gi-ants under section 304 of the Public Health
42 u s e 242b. Service Act for experimental heaHJi services delivery systems, section
42 u s e 299. 314(b) of such Act, and title I X of such Act, except that no grant
made with funds appropriated under this paragraph shall be available
for obligation beyond the later of (A) June 30, 1976, or (B) three
months after the date on which a health systems agency has been
designated under section 1415 of such Act for a health service area
which includes the area of the entity for which a grant is made under
such section 304, 314(b), or title I X .
42 u s e 291b (b) Any State which has in the fiscal year ending June 30, 1975,
note.
or the next fiscal year funds available for obligation from its allot-
42 u s e 291a. ments under part A of title V I of the Public Health Service Act may
in such fiscal year use for the proper and efficient administration
during such year of its State plan approved under such part an
amount of such funds which does not exceed 4 per centum of such funds
or $100,000, whichever is less.
STAT. ] PUBLIC LAW 93-641-JAN. 4, 1975 2275
(c) A reference in any law or regulation—
42 u s e 300m
(1) to the agency of a State which administers or supervises the note.
administration of a State's health planning functions inider a
State plan approved under section 314(a) of the Public Health
Service Act shall in the case of a State for which a State Health '^^ "sc 246.
planning and development agency has been designated under
section 1521 of such Act be considered a I'eference to tlie State ^"''^' P- 2242.
agency designated under such section 1521 ;
(2) to an agency or organization which has developed a com- ^^ use 300/-4
prehensive regional, luetropolitan, or other local area plan or note.
plans referred to in section 314(b) of the Public Health Service
Act shall if all or part of the ai'ea covered by such plan or plans
is within a health service area established under section 1511 of
An te, p.. 2 2 2 9 .
the Public Health Service Act be considered a reference to the
health systems agency designated under section 1515 of such Act Ante, p . 2239.
for such health service area; and
(3) to a regional medical program assisted under title I X of 42 use 300m
note
the Public Health Service Act shall if the progi'am is located in 42 use 299.
a State for which a State health planning and development agency
has been designated under section 1521 of the Public Health
Service Act be considered a reference to such State agency,
(d) Section 316 of the Public Health Service Act is repealed. Repeal.
42 use 247a.
ADVISORY CO^IMI'ITEK
SEC. 6. (a) An advisory committee established by or pursuant to Termination.
42 use 217a
the Public Health Service Act, the Mental Retardation Facilities and note.
42 201
Community Mental Health Centers Construction Act of 1963, or the note,
use
Comprehensive Alcohol Abuse and Alcoholism Prevention, Treat- 42 use 2661
ment, and Rehabilitation Act of 1970 shall terminate at such time note.
42
as may be specifically prescribed by an Act of Congress enacted after use 4551
note.
the date of the enactment of this Act.
(b) The Secretary of Health, Education, and Welfare shall report, Reports to con-
gressional com-
within one year after the date of the enactuient of this Act, to the mittees.
Couunittee on Labor and Public Welfare of the Senate and the Com-
mittee on Interstate and Foreign Commerce of the House of Repre-
sentatives (1) the purpose and use of each advisory committee
established by or pursuant to the Public Health Service Act, the
Mental Retardation Facilities and Couununity Mental Health Cen-
ters Construction Act of 1963, or the Comprehensive Alcohol Abuse
and Alcoholism Prevention, Treatment, and Rehabilitation Act of
1970 and (2) his I'ecommendations respecting the termination of
each such advisory committee.
AGENCY REPORTS
SEC. T . T h e Secretary of Health, Education, and Welfare shall J,Z°^J°^Z'-
report, within one year of the date of the enactment of this Act, to mittees.
the Committee on Labor and Public Welfare of the Senate and the ^^^^ ^^'^ ^^^
Committee on Interstate and Foreign Commerce of the Llouse of
Representatives (1) the identity of each report required to be made
by the Secretary under the Public Health Service Act, the Mental
Retardation Facilities and Community Mental Health Centers Con-
struction Act of 1963, or the Comprehensive Alcohol Abuse and
Alcoholism Prevention, Treatment, and Rehabilitation Act of 1970
to the Congress (or any committee thereof), (2) the provision of such
Acts which requires each such report, (3) the purj)ose of each such
report, and (4) the due date for each such report. The report of the
2276 PUBLIC LAW 93-642-JAN. 4, 1975 [88 STAT.
Secretary under this section may include such recommendations as
he considers appropriate for termination or consolidation of any such
reporting requirements.
TECHNICAL A M E N D M E N T
42 u s e 300e-4. SEC. 8. Section 1305(b)(1) of the Public Health Service Act is
amended to read as follows:
" (b) (1) Except as provided in paragraph (2), the aggregate amount
of principal of loans made or guaranteed, or both, under this section
for a health maintenance organization may not exceed $2,500,000.
I n any fiscal year, the amount disbursed under a loan or loans made or
guaranteed under this section for a health maintenance organization
may not exceed $1,000,000,000."
Approved January 4, 1975.
Public Law 93-642
January 4, 1975 AN ACT
[S.3548] To establish the Harry S Truman memorial scholarships, and for other purposes.
Be it enacted hy the Senate and House of Representatives of the
Harry S Truman United States of America in Congress assembled, That this Act may
Memorial Scholar-
ship Act. be cited as the "Harry S Truman Memorial Scholarship Act".
20 u s e 2001
note.
S T A T E M E N T OF F I N D I N G S
20 u s e 2001. SEC. 2. The Congress finds that—
because a high regard for the public trust and a lively exercise
of political talents were outstanding characteristics of the thirty-
third President of the United States;
because a special interest of the man from Independence in
American history and a broad knowledge and understanding of
the American political and economic system gained by study and
experience in county and National Government culminated in
the leadership of America remembered for the quality of his char-
acter, courage, and commonsense;
because of the desirability of encouraging young people to
recognize and provide service in the highest and best traditions of
the American political system at all levels of government, it is
especially appropriate to honor former President Harry S
Truman through the creation of a perpetual education scholar-
ship program to develop increased opportunities for young
Americans to prepare and pursue careers in public service.
DEFINITIONS
20 u s e 2002. SEC. 3. As used in this Act, the term—
(1) "Board" means the Board of Trustees of the Harry S
Truman Scholarship Foundation;
