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Page:United States Statutes at Large Volume 95.djvu/819

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 793

CHAPTER 3-PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS (PSRO'S) MAKING DELEGATED REVIEW OPTIONAL

SEC. 2111. Section 1155(e) of the Social Security Act is amended by 42 USC i320c-4. striking out "shall utilize" and inserting in lieu thereof "may utilize. ASSESSMENT OP PSRO PERFORMANCE

SEC. 2112. (a)(1) Section 1154 of the Social Security Act is amended 42 USC 1320C-3. by adding at the end the following new subsection: "(g)(1) The Secretary shall, not later than September 30, 1981, identify and specify those requirements imposed by the Secretary with respect to the performance of Professional Standards Review Organizations which the Secretary will use for the assessment of the performance of such Organizations under this subsection. Such requirements shall include requirements relating to the effectiveness of such Organizations in (A) monitoring the quality of patient care, (B) reducing unnecessary utilization, and (C) managing its activities efficiently. "(2) Based on such requirements, the Secretary shall assess and determine the relative performance of each of such Organizations designated, conditionally or otherwise, as of September 30, 1981. "(3) If the Secretary determines that such an Organization has a relatively ineffective or inefficient performance, the Secretary may refuse to renew an agreement with the Organization under this part, except that, in exercising the Secretary's authority under this paragraph in fiscal year 1982, the sum of the number of Organizations with respect to which agreements are not renewed under this paragraph and under any other provision of this Act in the fiscal year may not exceed 30 percent of the number of such Organizations with agreements under this part on May 1, 1981.". 42 USC 1320C-1. (2)(A) Section 1152(d) of such Act is amended— (i) by striking out "for a term of 12 months" and inserting in lieu thereof "for a term of not longer than 12 months"; (ii) by striking out "at such time and upon such reasonable notice to the organization as may be prescribed in regulations" and inserting in lieu thereof "upon 90 days notice to the organization"; and (iii) by striking out "(after providing such organization with an opportunity for a formal hearing on the matter)". (B) Sections 1152(d) and 1154(d) of such Act are each amended by adding at the end the following sentence: "A termination of an agreement by the Secretary under this subsection shall not be subject to judicial review.". (C) The amendment made by subparagraph (A)(iii) shall apply to Effective date. agreements entered into on or after the date of the enactment of this 42 USC 1320C-1 note. Act. (D) The Secretary of Health and Human Services shall, not later 42 USC 1320C-3 than September 30, 1982, report to the Congress on his assessment note. (under section 1154(g) of the Social Security Act) of the relative performance of Professional Standards Review Organizations and on any determinations made not to renew agreements with such Organizations on the basis of such performance. (b)(1) The first sentence of subsection (b) of section 1154 of such Act 42 USC i320c-3 is amended—

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Page:United States Statutes at Large Volume 95.djvu/820

 95 STAT. 794

PUBLIC LAW 97-35—AUG. 13, 1981 (A) by striking out "(other than ancillary, ambulatory care, and long-term care services)" and (B) by striking out "under subsection (f)(2) or subsection (f)(4)" and inserting in lieu thereof "under subsection (f)". (2) Subsection (f) of such section is amended— (A) by striking out the parenthetical phrase in paragraph (1); (B) by striking out paragraphs (2) and (3); (C) by redesignating paragraph (4) as paragraph (2) and amending it to read as follows: "(2) Where the Secretary finds that the review of particular health care services is cost-effective or yields other significant benefits, the Secretary may require Professional Standards Review Organizations (either generally or under such conditions and circumstances as the Secretary may specify) to review such services under this part."; and (D) by striking out the parenthetical phrase in paragraph (5) . J' and redesignating such paragraph as paragraph (3). OPTIONAL USE OF PSRO'S UNDER STATE MEDICAID PLANS

42 USC 1320c.

42 USC 1320C-1. 42 USC 1320C-3. 42 USC 1320C-4.

42 USC 1320C-7.

SEC. 2113. (a) Section 1151 of the Social Security Act is amended— (1) by striking out "under this Act" and inserting in lieu thereof "under title XVIII of this Act"; and (2) by striking out "the Social Security Act" and inserting in lieu thereof "title XVIII of this Act". (b) Section 1152(e) of such Act is amended by inserting "title XVIII o f before "this Act" each place it appears. (c) Section 1152 of such Act is amended by striking out subsection (h), and section 1154 of such Act is amended by striking out subsection (e). (d)(1) Section 1155(a) of such Act is amended by inserting "title XVIII o f before "this Act" each place it appears in paragraphs (1) and (2). (2) Section 1155(a)(l) of such Act is amended by adding after and below subparagraph (C) the following new sentence: "Each agreement with an Organization under this part shall require the Organization, if requested by a State with a plan approved under title XIX, to enter into a contract with the State, for the performance of review functions in the case of health care services and items provided under such State plan under terms and conditions similar to those contained in the agreement between the Organization and the Secretary under this part.". (3) Section 1155(a) of such Act is amended by striking out paragraph (7). (4) Section 1155(e)(l) of such Act is amended by striking out ", or intermediate care facility, as defined in section 1905(c) and "or intermediate care facility. (e)(1) Section 1158(a) of such Act is amended by striking out "under any title of this Act (other than title V)" and inserting in lieu thereof "under title XVIII" and by striking out "or any program established pursuant thereto". (2) Section 1158(c) of such Act is amended— (A) by striking out "(subject to sections 1159, 1171(a)(l), and 1171(d)(3)) for purposes of payment under this Act" and inserting in lieu thereof "(subject to section 1159) for purposes of payment under title XVIII"; and (B) by striking out ", or single State agencies" and all that follows through "under title XIX".

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Page:United States Statutes at Large Volume 95.djvu/821

 PUBLIC LAW 97-35—AUG. 13, 1981 (3) Section 1158(d) of such Act is amended by striking out "or section 1902(h)". (0 Section 1159(a) of such Act is amended by striking out "under this Act (other than title V)" and inserting in lieu thereof "under title XVIII". (g)(1) Section 116(KaXl) of such Act is amended by striking out "under this Act" the first place it appears and inserting in lieu thereof "under title XVIII (or under a State plan approved under title XIX, where the services furnished by the person are subject to review under a contract between the State and an Organization under section 1155(a))", and by striking out "under this Act" the second place it appears and inserting in lieu thereof "under such title (or such State plan)". (2) Section 1160(b)(l) of such Act is amended by striking out "under this Act" and inserting in lieu thereof "under title XVIIF. (h) Section 1162(e)(l) of such Act is amended by striking out "any program established by or pursuant to this Act" and inserting in lieu thereof "title XVIII". (i) Section 1164 of such Act is repealed. (j) Section 1168 of such Act is amended— (1) by inserting "and" at the end of paragraph (a); (2) by striking out "and" at the end of paragraph (b); (3) by striking out paragraph (c) and redesignating paragraphs (a) and (b) as paragraphs (1) and (2), respectively(4) by striking out subsections (a), (b), and (c)' and inserting in lieu thereof "paragraphs (1) and (2)"; (5) by amending the second sentence to read as follows: "The Secretary shall make such transfers of moneys between such funds as may be appropriate to settle accounts between them."; and (6) by striking out the second parenthetical phrase in the third sentence. (k) Section 1171 of such Act is repealed. (1) Section 1172(4) of such Act is amended by striking out "V, XI, XVIII, and XIX" and inserting in lieu thereof "XI and XVIII". (m) Section 1902 of such Act is amended by inserting after subsection (c) the following new subsection: "(d) If a State contracts with a Professional Standards Review Organization designated, conditionally or otherwise, under part B of title XI for the performance of medical or utilization review functions required under this title of a State plan with respect to specific services or providers (or services or providers in a geographic area of the State), such requirements shall be deemed to be met for those services or providers (or services or providers in that area) by delegation to such Organization (or Organizations) under the contract of the State's authority to conduct such review activities if the contract provides for the performance of activities not inconsistent with part B of title XI and provides for such assurances of satisfactory performance by such Organization (or Organizations) as the Secretary may prescribe.". (n) Section 1903(a)(3) of such Act is amended— (1) by striking out "plus" at the end of subparagraph (B) and inserting in lieu thereof "and", and (2) by adding after subparagraph (B) the following new subparagraph: "(C) 75 per centum of the sums expended with respect to costs incurred during such quarter (as found necessary by the Secretary for the proper and efficient administration of

95 STAT. 795 42 USC i320c-7. 42 USC i320c-8. 42 USC i320c-9.

42 USC

1320C-11. Repeal.

42 USC

1320C-13.

42 USC 1320C-17.

Repeal.

42 USC 1320C-20.

42 USC 1320C-21. 42 USC 1396a. 42 USC 1320c.

42 USC I396b.

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Page:United States Statutes at Large Volume 95.djvu/822

 95 STAT. 796

Ante, p. 795. Effective date. 42 USC 1320c note.

PUBLIC LAW 97-35—AUG. 13, 1981 the State plan) as are attributable to the performance of medical and utilization review by a Professional Standards Review Organization under a contract entered into under section 1902(d); plus" (o) The amendments made by this section apply to agreements with Professional Standards Review Organizations entered into on or after October 1, 1981. SECRETARIAL DETERMINATION IN UEU OF PSRO CERTIFICATION

42 USC 1395X.

SEC. 2114. Section 1861(v)(l)(G)(i) of the Social Security Act is amended by striking out "an organization or agency with review responsibility as is otherwise provided for under part A of title XI" and inserting in lieu thereof "the Secretary or such agent as the Secretary may designate".

Subtitle B—Provisions Relating to Medicare CHAPTER 1—CHANGES IN SERVICES AND BENEFITS ELIMINATION OF PART A COVERAGE OF ALCOHOL DETOXIFICATION FACILITY SERVICES 42 USC 1395d.

42 USC 1395f.

42 USC 1395X.

42 USC 1320C-3. 42 USC 1320C-4. 42 USC 1320C-7.

42 USC 1395// note. Effective date. 42 USC 1320C-3 note.

SEC. 2121. (a) Section 1812(a) of the Social Security Act is amended— (1) by inserting "and" at the end of paragraph (2), (2) by striking out "; and" at the end of paragraph (3) and inserting in lieu thereof a period, and (3) by striking out paragraph (4). (b) Section 1814(a)(2) of such Act is amended— (1) by inserting "or" at the end of subparagraph (D), (2) by striking out "or" at the end of subparagraph (E), and (3) by striking out subparagraph (F). (c) Section 1861(u) of such Act is amended by striking out "detoxification facility,". (d) Subsection (bb) of section 1861 of such Act is repealed. (e) The first sentence of section 1154(b) of such Act is amended by striking out "and to review of alcohol detoxification facility services'. (f) Section 1155 of such Act is amended by striking out subsection (i). (g) Section 1158 of such Act is amended— (1) by striking out "subsections (d) and (e)" in subsection (a) and inserting in lieu thereof "subsection (d)", and (2) by striking out subsection (e). (h) Section 931 of the Medicare and Medicaid Amendments of 1980 (P.L. 96-499; 94 Stat. 2634) is amended by striking out subsection (f) (relating to a study of medicare coverage of certain additional detoxification-related services). (i) The amendments made by this section (other than by subsection (h)) shall apply to services furnished in detoxification facilities for inpatient stays beginning on or after the tenth day after the date of the enactment of this Act. EUMINATION OF OCCUPATIONAL THERAPY AS A BASIS FOR INITIAL ENTITLEMENT TO HOME HEALTH SERVICES

42 USC 1395f, 1395n.

SEC. 2122. (a)(1) Sections 1814(a)(2)(D) and 1835(a)(2)(A) of the Social Security Act are each amended by striking out "needed skilled

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Page:United States Statutes at Large Volume 95.djvu/823

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 797

nursing care on an intermittent basis, or physical, occupational, or speech therapy" and inserting in lieu thereof "needs or needed skilled nursing care on an intermittent basis or physical or speech therapy or, in the case of an individual who has been furnished home health services based on such a need and who no longer has such a need for such care or therapy, continues or continued to need occupational therapy". (b) The amendments made by this section shall apply to services furnished pursuant to plans of treatment implemented after the third month beginning after the date of the enactment of this Act.

Effective date. 42 USC 1395f note.

CHAPTER 2—CHANGES IN COINSURANCE, DEDUCTIBLES, AND COPAYMENTS MAKING PART A COINSURANCE CURRENT WITH THE YEAR IN WHICH SERVICES FURNISHED

SEC. 2131. (a) The first sentence of section 1813(b)(2) of the Social Security Act is amended by striking out "any spell of illness begin- 42 USC I395e. ning" and inserting in lieu thereof "any inpatient hospital services or post-hospital extended care services furnished". (b) The amendment made by subsection (a) is effective for inpatient Effective date. hospital services or post-hospital extended care services furnished on 42 USC 1395e note. or after January 1, 1982. MAKING PART A COINSURANCE AND DEDUCTIBLE MORE CURRENT

SEC. 2132. (a) Section 1813(b)(2) of the Social Security Act is amended by striking out "$40" and inserting in lieu thereof "$45". (b) The amendment made by subsection (a) shall apply to inpatient hospital services and post-hospital extended care services furnished in calendar years beginning with calendar year 1982.

42 USC 1395e note.

EUMINATION OF CARRYOVER FROM PREVIOUS YEAR OF INCURRED EXPENSES FOR MEETING THE PART B DEDUCTIBLE

SEC. 2133. (a) The first sentence of section 1833(b) of the Social Security Act is amended by striking out "the amount of the deduct- 42 USC 1395/. ible for such calendar year" and all that follows through "(2)", and by redesignating clauses (3) and (4) as clauses (2) and (3), respectively. (b) The amendments made by subsection (a) first apply to the Effective date. deductible for calendar year 1982 with respect to expenses incurred 42 USC 13%l note. on or after October 1, 1981. INCREASE IN PART B DEDUCTIBLE

SEC. 2134. (a) Section 1833(b) of the Social Security Act is amended by striking out "$60" and inserting in lieu thereof "$75". (b) The amendment made by subsection (a) shall take effect on January 1, 1982, and shall apply to the deductible for calendar years beginning with 1982.

Effective date. 42 USC 1395/ note.

CHAPTER 3—REIMBURSEMENT CHANGES LIMITATION ON ROUTINE NURSING DIFFERENTIAL

SEC. 2141. (a) Section 1861(v)(l) of the Social Security Act is 42 USC I395x. amended by adding at the end thereof the following new subparagraph:

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Page:United States Statutes at Large Volume 95.djvu/824

 95 STAT. 798

Study.

42 USC 1395.

Effective date. 42 USC 1395x note.

PUBLIC LAW 97-35—AUG. 13, 1981 "(J) Such regulations shall provide that an inpatient routine nursing salary cost differential shall be allowable as a reimbursable cost of hospitals, at a rate not to exceed 5 percent, to be applied under the same methodology used for the nursing salary cost differential for the month of April 1981.". (b) The Comptroller General shall conduct a study to determine the extent (if any) to which the average cost of efficiently providing routine inpatient nursing care to individuals entitled to benefits under title XVIII of the Social Security Act exceeds the average cost of providing such care to other patients. The Comptroller General shall submit a final report with respect to the results of such study to the Congress within six months after the date of the enactment of this Act. (c)(1) Subject to paragraph (2), the amendment made by subsection (a) shall apply to cost reporting periods ending after September 30, 1981. (2) In the case of a cost reporting period beginning before October 1, 1981, any reduction in payments resulting from the amendment made by subsection (a) shall be imposed only in proportion to the part of the period that occurs after September 30, 1981. LIMITATION ON REASONABLE COST AND REASONABLE CHARGE FOR OUTPATIENT SERVICES

Regulations. 42 USC I395x.

42 USC I395u.

SEC. 2142. (a) Section 1861(v)(l) of the Social Security Act is further amended by adding after subparagraph (J) (added by section 2141 of this subtitle) the following new subparagraph: "(K) The Secretary shall issue regulations that provide, to the extent feasible, for the establishment of limitations on the amount of any costs or charges that shall be considered reasonable with respect to services provided on an outpatient basis by hospitals (other than bona fide emergency services provided in an emergency room) or clinics (other than rural health clinics), which are reimbursed on a cost basis or on the basis of cost related charges, and by physicians utilizing such outpatient facilities. Such limitations shall be reasonably related to the charges in the same area for similar services provided in physicians' offices. Such regulations shall provide for exceptions to such limitations in cases where similar services are not generally available in physicians' offices in the area to individuals entitled to benefits under this title.". (b) Section 1842(b)(3) of such Act is amended by adding at the end thereof the following new sentence: "The amount of any charges for outpatient services which shall be considered reasonable shall be subject to the limitations established by regulations issued by the Secretary pursuant to section 1861(v)(l)(K).". LIMITS ON REIMBURSEMENT TO HOSPITALS

Supra.

SEC. 2143. (a) Section 1861(v)(l) of the Social Security Act is further amended by adding after subparagraph (K) (added by section 2142 of this subtitle) the following new subparagraph: "(L) The Secretary, in determining the amount of the payments that may be made under this title with respect to routine operating costs for the provision of general inpatient hospital services, may not recognize as reasonable (in the efficient delivery of health services) routine operating costs for the provision of general inpatient hospital services by a hospital to the extent these costs exceed 108 percent of the mean of such routine operating costs per diem for hospitals, or, in

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Page:United States Statutes at Large Volume 95.djvu/825

 PUBLIC LAW 97-35—AUG. 13, 1981 the judgment of the Secretary, such lower percentage or such comparable or lower limit as the Secretary may determine. The Secretary may provide for such exemptions and exceptions to such limitation as he deems appropriate.". (b)(1) Subject to paragraph (2), the amendment made by subsection (a) shall apply to costs reporting periods ending after September 80, 1981. (2) In the case of a cost reporting period beginning before October 1, 1981, any reduction in payments resulting from the amendment made by subsection (a) shall be imposed only in proportion to the part of the period that occurs after September 80, 1981.

95 STAT. 799

Effective date. 42 USC 1395x note.

LIMITS ON REIMBURSEMENT TO HOME HEALTH AGENCIES

SEC. 2144. (a) Subparagraph (L) of section 1861(v)(l) of the Social 42 USC I395x Security Act (added by section 2143 of this subtitle) is amended by inserting "(i)" after "(L)" and by adding at the end the following new clause: "(ii) The Secretary, in determining the amount of the payments that may be made under this title with respect to services furnished by home health agencies, may not recognize as reasonable (in the efficient delivery of such services) costs for the provision of such services by an agency to the extent these costs exceed (on the aggregate for the agency) the 75th percentile of such costs per visit for home health agencies, or, in the judgment of the Secretary, such lower percentile or such comparable or lower limit (based on or related to the mean of the costs of such agencies or otherwise) as the Secretary may determine. The Secretary may provide for such exemptions and exceptions to such limitation as he deems appropriate.". (b)(1) Subject to paragraph (2), the amendment made by subsection Effective date. (a) shall apply to cost reporting periods ending after September 30, 42 USC 1395x note. 1981. (2) In the case of a cost reporting period beginning before October 1, 1981, any reduction in payments resulting from the amendment made by subsection (a) shall be imposed only in proportion to the part of the period that occurs after September 30, 1981. INCENTIVE REIMBURSEMENT RATE FOR RENAL DIALYSIS SERVICES

SEC. 2145. (a) Section 1881(b) of the Social Security Act is 42 USC I395rr. amended— (1) by inserting "and consistent with any regulations promulgated under paragraph (7)" in paragraph (2)(B) after "section 1861(v))"; (2) by striking out the second sentence of paragraph (2)(B); (3) by inserting "(which effectively encourages the efficient delivery of dialysis services and provides incentives for the increased use of home dialysis)" in paragraph (3)(B) after "or other basis"; (4) by inserting "or on the basis of a method established under paragraph (7)" before the period at the end of paragraph (4); (5) by inserting "(except as may be provided in regulations under paragraph (7))" in the second sentence of paragraph (6) after "in no event" and by striking out "70 percent" in such sentence and inserting in lieu thereof "75 percent";

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Page:United States Statutes at Large Volume 95.djvu/826

 95 STAT. 800

Effective date. 42 USC I395rr ^ Supra.

PUBLIC LAW 97-35—AUG. 13, 1981 (6) by inserting "(including methods established under paragraph (7))" in the fifth sentence of paragraph (6) after "any other procedure"; (7) by redesignating paragraphs (7) through (9) as paragraphs (8) through (10), respectively; and (8) by inserting after paragraph (6) the following new paragraph: "(7) The Secretary shall provide by regulation for a method (or methods) for determining prospectively the amounts of payments to be made for dialysis services furnished by providers of services and renal dialysis facilities to individuals in a facility and to such individuals at home. Such method (or methods) shall provide for the prospective determination of a rate (or rates) for each mode of care based on a single composite weighted formula (which takes into account the mix of patients who receive dialysis services at a facility or at home and the relative costs of providing such services in such settings) for hospital-based facilities and such a single composite weighted formula for other renal dialysis facilities, or based on such other method or combination of methods which differentiate between hospital-based facilities and other renal dialysis facilities and which the Secretary determines, after detailed analysis, will more effectively encourage the more efficient delivery of dialysis services and will provide greater incentives for increased use of home dialysis than through the single composite weighted formulas. The Secretary shall provide for such exceptions to such niethods as may be warranted by unusual circumstances (including the special circumstances of sole facilities located in isolated, rural areas). The Secretary may provide that such method will serve in lieu of any target reimbursement rate that would otherwise be established under paragraph (6).". (b) The amendments made by subsection (a) apply to services furnished on or after October 1, 1981, and the Secretary of Health and Human Services shall first promulgate regulations to carry out section 1881(b)(7) of the Social Security Act not later than October 1, 1981. MEDICARE PAYMENTS SECONDARY IN CASES OF END STAGE RENAL DISEASE SERVICES COVERED UNDER CERTAIN GROUP HEALTH POLICIES

42 USC I395y.

Post, p. 801.

SEC. 2146. (a) Section 1862(b) of the Social Security Act is amended by inserting "(1)" after "(b)" and by adding at the end thereof the following new paragraph: "(2)(A) In the case of an individual who is entitled to benefits under part A or is eligible to enroll under part B solely by reason of section 226A, payment under this title may not be made, except as provided in subparagraph (B), with respect to any item or service furnished during the period described in subparagraph (C) to the extent that payment with respect to expenses for such item or service (i) has been made under any group health plan (as defined in section 162(h)(2) of the Internal Revenue Code of 1954) or (ii) the Secretary determines will be made under such a plan as promptly as would otherwise be the case if payment were made by the Secretary under this title. "(B) Any payment under this title with respect to any item or service to an individual described in subparagraph (A) during the period described in subparagraph (C) shall be conditioned on reimbursement to the appropriate Trust Fund established by this title when notice or other information is received that payment for such item or service has been made under a plan described in subparagraph (A). The Secretary may waive the provisions of this subpara-

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Page:United States Statutes at Large Volume 95.djvu/827

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 801

graph in the case of an individual claim if he determines that the probability of recovery or amount involved in such claim does not warrant the pursuing of the claim. "(C) The provisions of subparagraphs (A) and (B) shall apply to an individual only during the 12-month period which begins with the earlier of— "(i) the month in which a regular course of renal dialysis is initiated, or "(ii) in the case of an individual who receives a kidney transplant, the first month in which he would be eligible for benefits under this title (if he had filed an application for such benefits) under the provisions of section 226A(b)(l)(B). "(D) Where payment for an item or service under such plan is less than the amount of the charge for such item or service, payment may be made under this title (without regard to deductibles and coinsurance under this title) for the remainder of such charge, but— "(i) such payment under this title may not exceed an amount which would be payable under this title for such item or service in the absence of such group health plan; and "(ii) such payment under this title, when combined with the amount payable under such plan, may not exceed the combined amount which would have been payable under this title and such plan if this paragraph were not in effect.", (b) Section 162 of the Internal Revenue Code of 1954 (relating to 26 USC 162. trade or business expenses) is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: "(h) GROUP HEALTH PLANS.— "(1) GENERAL RULE.—The

expenses paid or incurred by an employer for a group health plan shall not be allowed as a deduction under this section if the plan differentiates in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner. "(2) GROUP HEALTH PLAN.—For purposes of this subsection the term 'group health plan' means any plan of, or contributed to by, an employer to provide medical care (as defined in section 213(e)) to his employees, former employees, or the families of such employees or former employees, directly or through insurance, reimbursement, or otherwise.". (c)(1) The amendments made by subsection (a) shall become effec- Effective date. tive on October 1, 1981. 42 USC I395y (2) The amendments made by subsection (b) shall be effective with gg use 162 note respect to taxable years beginning on or after January 1, 1982. CHAPTER 4—MISCELLANEOUS CHANGES EUMINATION OF UNUMITED OPEN ENROLLMENT

SEC. 2151. (a)(1) Section 1837(e) of the Social Security Act is 42 USC I395p. amended to read as follows: "(e) There shall be a general enrollment period during the period beginning on January 1 and ending on March 31 of each year.". (2) Section 1837(g)(3) of such Act is amended by striking out "the month in which the individual files an application establishing such entitlement" and inserting in lieu thereof "the earlier of the then

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Page:United States Statutes at Large Volume 95.djvu/828

 95 STAT. 802

42 USC 1395q. 42 USC 1395r.

Effective date. 42 USC 1395p note.

PUBLIC LAW 97-35—AUG. 13, 1981 current or immediately succeeding general enrollment period (as defined in subsection (e) of this section)". (3) Section 1838(a)(2)(E) of such Act is amended by striking out "the first day of the third month" and inserting in lieu thereof "the July 1". (4) The second sentence of section 1839(d) of such Act is amended by striking out "the month after the month in which he reenrolled" and inserting in lieu thereof "the close of the enrollment period in which he reenrolled". (b) The amendments made by this section shall not apply to enrollments pursuant to written requests for enrollment filed before October 1, 1981. UTILIZATION GUIDELINES FOR PROVISION OP HOME HEALTH SERVICES

42 USC 1395y.

42 USC 1395y note.

SEC. 2152. (a) Section 1862 of the Social Security Act is amended by adding at the end the following new subsection: "(f) The Secretary shall establish utilization guidelines for the determination of whether or not payment may be made, consistent with paragraph (1) of subsection (a), under part A or part B for expenses incurred with respect to the provision of home health services, and shall provide for the implementation of such guidelines through a process of selective postpayment coverage review by intermediaries or otherwise.". (b) The Secretary of Health and Human Services shall establish, and provide for the implementation of, the guidelines described in section 1862(f) of the Social Security Act not later than October 1, 1981. REPEAL OF STATUTORY TIME LIMITATION ON AGREEMENT WITH SKILLED NURSING FACILITIES

42 USC 1395CC.

SEC. 2153. Section 1866(a)(1) of the Social Security Act is amended by striking out the second sentence. REMOVAL OF LIMITATION ON NUMBER OF MEDICARE DEMONSTRATION PROJECTS

42 USC 1395b-l note.

SEC. 2154. Section 903 of the Medicare and Medicaid Amendments of 1980 (P.L. 96-499; 94 Stat. 2615) is amended by striking out subsection (c). REPEAL OF TEMPORARY DELAY IN PERIODIC INTERIM PAYMENTS (PIP)

42 USC 1395g note.

SEC. 2155. Section 959 of the Medicare and Medicaid Amendments of 1980 (P.L. 96-499; 94 Stat. 2650) is repealed. STATUTORY DEADLINES FOR IMPLEMENTING AFDC HOME HEALTH AIDE DEMONSTRATION PROJECTS

42 USC 632a.

SEC. 2156. Section 966 of the Medicare and Medicaid Amendments of 1980 (P.L. 96-499; 94 Stat. 2652) is amended— (1) by adding at the end of subsection (c)(2) the following new sentence: "The Secretary shall, not later than October 1, 1981, establish such guidelines and establish such regulations as may be necessary to assure that agreements are entered into under this section by not later than January 1, 1982.", and (2) by striking out "The Secretary" in subsection (h) and inserting in lieu thereof "The Secretary shall, during January

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Page:United States Statutes at Large Volume 95.djvu/829

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 803

1982, submit to the Congress a report on steps taken by January 1, 1982, to enter into agreements under this section, including a general description of each of such agreements entered into by such date and the timetable under which he anticipates other such agreements will be entered into. Thereafter, the Secretary".

Subtitle C—Provisions Relating to Medicaid CHAPTER 1 —CHANGES IN PAYMENTS TO STATES REDUCTION IN MEDICAID PAYMENTS TO STATES AND OFFSET FOR MEETING FEDERAL MEDICAID EXPENDITURE TARGETS

SEC. 2161. (a) Section 1903 of the Social Security Act is amended by 42 USC I396b. adding at the end the following new subsection: "(s)(l)(A) Notwithstanding any other provision of this section (except as otherwise provided in this subsection), the amount of payments which a State is otherwise entitled to receive under this title for any quarter in— "(i) fiscal year 1982, shall be reduced by 3 percent, "(ii) fiscal year 1983, shall be reduced by 4 percent, and "(iii) fiscal year 1984, shall be reduced by 4.5 percent, of the amount to which the State is otherwise entitled (without regard to payments under subsection (t) and without regard to payments for claims relating to expenditures made before fiscal year 1981). "(B) No reduction may be made under subparagraph (A) for a quarter unless, as of the first day of the quarter, the Secretary has promulgated and has in effect final regulations (on an interim or other basis) implementing paragraphs (lOXC) and (13XA) of section 1902(a) (as amended by the Medicare and Medicaid Amendments of 1981). "(C) For purposes of this paragraph, the term 'State' only includes the fifty States and the District of Columbia and does not include any State which did not have a plan approved under this title as of July 1, 1981. "(2) The percentage reduction imposed by paragraph (1) for a State for a quarter shall be reduced— "(A) by one percentage point if the State has a qualified hospital cost review program (described in paragraph (3)) for the quarter, "(B) by one percentage point if the State has a high unemployment rate (as determined under paragraph (4)) for the quarter, and "(C) by one percentage point if the total amount of the State's third party and fraud and abuse recoveries (as defined in paragraph (5)(A)) for the previous quarter is equal to or exceeds one percent of the amount of Federal payments that the Secretary estimates are due the State under this title for that previous quarter (without regard to payments under subsection (t)). "(3) For purposes of paragraph (2)(A), a State has a qualified hospital cost review program for a calendar quarter if such program meets the following requirements: "(A) The progremi must have been established by statute and in effect on July 1, 1981, and at the be^nning of the quarter. "(B) The program must be operated directly by the State and must apply (i) to substantially all nonfederal acute care hospitals (as defined by the Secretary) in the State and (ii) to review of

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Page:United States Statutes at Large Volume 95.djvu/830

 95 STAT. 804 42 USC 1395.

"United States. Definition.

42 USC 1396b.

PUBLIC LAW 97-35—AUG. 13, 1981 either all revenues or expenses for inpatient hospital services (other than revenues under title XVIII of this Act, unless approved by the Secretary) or at least 75 percent of all revenues or expenses for inpatient hospital services (including revenues under title XVIII of this Act). "(C) The State must provide the Secretary with satisfactory assurances as to the equitable treatment under the program of all entities (including Federal and State programs) that pay hospitals for inpatient hospital services, of hospital employees, and of hospital patients. "(D) The Secretary determines that the annual rate of increase in aggregate hospital inpatient costs per capita or per admission (as defined by the Secretary) in the State during the most recent calendar year ending at least nine months before such quarter (or, at the State's option, during the 2 or 3 calendar-year period ending with that calendar year) is at least two percentage points less than the annual rate of increase during that calendar year (or that period, as the case may be) in such costs per capita or per admission for hospitals located in the United States (excluding from such computation, with respect to any calendar year in any period, any State which had in existence a qualified hospital cost review program (or, in the case of periods before January 1, 1982, had a hospital cost review program which the Secretary determines met for such periods the provisions of subparagraphs (A), (B), and (C) of this paragraph) during that entire calendar year). "(4)(A) For purposes of paragraph (2)(B), a State has a high unemployment rate with respect to a quarter if the average of the monthly unemployment rates (as determined by the Bureau of Labor Statistics) for the State for the three months immediately before such quarter is equal to or greater than 150 percent of the average of such rates for the United States for such months. "(B) For purposes of subparagraph (A), the term 'United States' only includes the fifty States and the District of Columbia. "(5)(A) For purposes of paragraph (2)(C), the term 'third party and fraud and abuse recoveries' means, for a State for a previous quarter— "(i) the total amount that State demonstrates to the Secretary that it has recovered or diverted in the quarter on the basis of (I) third-party payments (described in section 1902(a)(25)), (II) the operation of its State medicaid fraud control unit (defined in subsection (q)), and (III) other fraud or abuse control activities, plus "(ii) any amount carried forward from the previous quarter under subparagraph (B). Subclause (I) of clause (i) shall only apply to quarters during fiscal year 1982. "(B) If the total amount of the State's third party and fraud and abuse recoveries (defined in subparagraph (A)) for a quarter (beginning on or after October 1, 1981) exceeds one percent of the amount of Federal payments that the Secretary estimates are due the State under this title for that quarter (without regard to subsection (t)), the amount of such excess shall be carried forward to the following quarter for purposes of clause (ii) of subparagraph (A).". 0^) Section 1902 of such Act is further amended by adding after subsection (s) (added by subsection (a) of this section) the following new subsection: "(t)(l) The Secretary shall determine for each State (as defined in subsection (s)(l)(C)) for each of fiscal years 1982, 1983, and 1984, a

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Page:United States Statutes at Large Volume 95.djvu/831

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 805

target amount of Federal medicaid expenditures. Such target amount for a State for fiscal year— "(A) 1982, is equal to 109 percent of the estimate (based upon the last such estimate for such State received by the Secretary before April 1, 1981) of the Federal share of expenditures under this title (other than interest paid under subsection (d)(5), without taking into account reductions in payment under subsection (s) or additional payments under this subsection, and without regard to payments for claims relating to expenditures made prior to October 1, 1980) in fiscal year 1981 for such State; "(B) 1983, is equal to the target amount determined under subparagraph (A) for the State increased or decreased by a percentage equal to the percentage increase or decrease (as the case may be) in the index of the medical care expenditure category of the consumer price index for all urban consumers (published by the Bureau of Labor Statistics) between September 1982 and September 1983; and "(C) 1984, is equal to the target amount determined under subparagraph (A) for the State increased or decreased by a percentage equal to the percentage increase or decrease (as the case may be) in the index of the medical care expenditure category of the consumer price index for all urban consumers (published by the Bureau of Labor Statistics) between September 1982 and September 1984. "(2) Notwithstanding any other provision of this section (except as otherwise provided in this subsection), the amount of payments which a State (with a State plan approved under this title) is otherwise entitled to receive for the first quarter of any fiscal year (beginning with fiscal year 1983 and ending with fiscal year 1985) shall be supplemented by an amount equal to the lesser of— "(A) the amount by which the Secretary determines or estimates (subject to appropriate subsequent adjustments) the Federal share of expenditures under this title (other than interest paid under subsection (d)(5), without taking into account reductions in payment under subsection (s) or payments under this subsection, without regard to payments for claims relating to expenditures made prior to October 1, 1980, and subject to paragraph (3) of this subsection) under the State's plan for the previous fiscal year was less than the target amount of Federal medicaid expenditures for that State for that fiscal year determined under paragraph (1), or "(B) the amount of the reductions imposed with respect to the State under subsection (s) for the quarters in the previous fiscal year. "(3) Only for the purpose of computing under this subsection the Federal share of expenditures for a State for fiscal year 1984 (in the case of the payment which may be made for the first quarter of fiscal year 1985), the Federal medical assistance percentage for fiscal year 1984 shall be the Federal medical assistance percentage for States in effect for fiscal year 1983, disregarding any change in such percentage between fiscal year 1983 and fiscal year 1984.". (c)(1) Effective for calendar quarters beginning on or after October 1, 1984, subsection (s) of section 1902 of the Social Security Act Ante, p. 803. (added by subsection (a) of this section) is repealed. (2) Effective after payments for the first quarter of fiscal year 1985, subsection (t) of section 1902 of the Social Security Act (added by Ante, p. 804. subsection (b) of this section) is repealed.

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Page:United States Statutes at Large Volume 95.djvu/832

 95 STAT. 806

PUBLIC LAW 97-35—AUG. 13, 1981 PAYMENTS TO TERRITORIES

42 USC 1301.

42 USC 1396d.

42 USC 1308. 42 USC 1396.

Effective date. 42 USC 1308 note.

SEC. 2162. (a)(1) Section llOl(a)(l) of the Social Security Act is amended (1) by striking out "American Samoa and" in the third sentence and inserting in lieu thereof "American Samoa, the Northern Mariana Islands, and", and (2) by inserting after the third sentence the following new sentence: "Such term when used in title XIX also includes the Northern Mariana Islands.". (2) Clause (2) of section 1905(b) of such Act is amended by striking out "and Guam" and inserting in lieu thereof "Guam, and the Northern Mariana Islands". (b)(l) Subsection (c) of section 1108 of such Act is amended to read as follows: "(c) The total amount certified by the Secretary under title XIX with respect to a fiscal year for payment to— "(1) Puerto Rico shall not exceed $45,000,000, "(2) the Virgin Islands shall not exceed $1,500,000, "(3) Guam shall not exceed $1,400,000, and "(4) the Northern Mariana Islands shall not exceed $350,000.". (2) The amendment made by paragraph (1) shall apply to fiscal years beginning with fiscal year 1982. ELIMINATING TIME PERIOD UMFfATION ON PAYMENT OF INTEREST ON DISPUTED CLAIMS

42 USC 1396b.

SEC. 2163. Section 1903(d)(5) of the Social Security Act is amended by striking out "Obut not to exceed a period of twelve months" and all that follows through "disallowances made thereafter)". EUMINATING FEDERAL MATCHING FOR CERTAIN LABORATORY TESTS

Effective date. 42 USC 1396b note.

SEC. 2164. (a) Section 1903(i) of the Social Security Act, as amended by section 2103 of this subtitle, is further amended by striking out the period at the end of paragraph (5) and inserting in lieu thereof "; or" and by adding at the end the following new paragraph: "(6) with respect to any amount expended for inpatient hospital tests (other than in emergency situations) not specifically ordered by the attending physician or other responsible practitioner.". Oo) The amendments made by subsection (a) shall apply to tests occurring on or after October 1, 1981. STUDY OF FEDERAL MEDICAL ASSISTANCE PERCENTAGE FORMULA AND OF ADJUSTMENTS OF TARGET AMOUNTS FOR FEDERAL MEDICAID EXPENDITURES

42 USC 1396d note.

42 USC 1396d.

Ante, p. 804.

SEC. 2165. (a) The Comptroller General, in consultation with the Advisory Committee for Intergovermental Relations, shall conduct a study of— (1) the formula, under section 1905(b) of the Social Security Act, defining the Federal medical assistance percentage, as it applies to distribution of Federal funds to States (as defined for purposes of title XIX of such Act) under that Act, and (2) the validity and equity of any adjustment to the target amount of Federal medical expenditures (under section 1903(t) of the Social Security Act, added by section 2161 of this subtitle) for all States or any particular State which ought to be made for fiscal year 1983 or fiscal year 1984 (including methodology for calculating and implementing such adjustments) to reflect eco-

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Page:United States Statutes at Large Volume 95.djvu/833

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 807

nomic and demographic factors affecting such State which are out of the ordinary sphere of control of such State. Specifically, pursuant to paragraph (1) the Comptroller General shall examine the feasibility and consequences of revising the medicaid matching formula so as to take into account the relative economic positions and needs of the different States, the different amounts of support and income payments made by different States under the Social Security Act, the relative cost of living and the unemployment 42 USC 1305. rates in the different States, the relative taxable wealth and amount of taxes raised per capita by the different States, and other relevant factors bearing on an equitable distribution of Federal funds to States under that Act. (b) The Comptroller General shall report to the Congress on the study required under this section not later than October 1, 1982. CHAPTER 2—INCREASED FLEXIBILITY FOR STATES COVERAGE OF, A N D SERVICES FOR, THE MEDICALLY NEEDY

SEC. 2171. (a) Section 1902(a)(10) of the Social Security Act is 42 USC 1396a. amended— (1) by amending subparagraph (A) to read as follows: "(A) for making medical assistance available, including at least the care and services listed in paragraphs (1) through (5) and (17) of section 1905(a), to all individuals receiving aid or assistance 42 USC I396d. under any plan of the State approved under title I, X, XIV, or XVI, or part A or part E of title IV (including pregnant women 42 USC 301, deemed by the State to be receiving such aid as authorized in 1201, 1351, 1381, section 406(g) and individuals considered by the State to be 601; 94 Stat. 501. 42 USC 670. receiving such aid as authorized under section 414(g)), or with respect to whom supplemental security income benefits are being paid under title XVI;"; (2) by striking out "clause" each place it appears in subparagraph (B) and inserting in lieu thereof "subparagraph" and by striking out "and" at the end of subparagraph (B); and (3) by striking out paragraph (C) and by inserting in lieu thereof the following: "(C) that if medical assistance is included for any group of individuals described in section 1905(a) who are not described in subparagraph (A), then— "(i) the plan must include a description of (I) the criteria for determining eligibility of individuals in the group for such medical assistance and (II) the amount, duration, and scope of medical assistance made available to individuals in the group; "(ii) the plan must make available medical assistance— "(I) to individuals described in section 1905(a)(i), and "(II) to pregnant women, during the course of their pregnancy, who (but for income and resources) would be eligible for medical assistance as an individual described in subparagraph (A); "(iii) such medical assistance must include (I) with respect to children under 18 and individuals entitled to institutional services, ambulatory services, and (II) with respect to pregnant women, prenatal care and delivery services; and

-194 O—82

53:QL3

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Page:United States Statutes at Large Volume 95.djvu/834

 95 STAT. 808

42 USC 1396a. Effective date. 42 USC 1396a note.

PUBLIC LAW 97-35—AUG. 13, 1981 "(iv) if such medical assistance includes services in institutions for mental diseases or intermediate care facility services for the mentally retarded (or both) for any such group, it also must include for all groups covered at least the care and services listed in paragraphs (1) through (5) and (17) of section 1905(a) or the care and services listed in any 7 of the paragraphs numbered (1) through (17) of such section; and "(D) for the inclusion of home health services for any individual who, under the State plan, is entitled to skilled nursing facility services;". (b) Section 1902(a)(13) of such Act is amended by striking out subparagraphs (A), (B), and (C). (c) The amendments made by this section shall become effective on the date of the enactment of this Act. FLEXIBILITY IN COVERAGE OF INDIVIDUALS AGED 18-20

42 USC I396d.

Effective date. 42 USC 1396a note.

SEC. 2172. (a) Paragraph (2) of section 19020)) of the Social Security Act is amended to read as follows: "(2) any age requirement which excludes any individual who has not attained the age of 19 and is a dependent child under part A of title IV;". (b)(1) Clause (i) of section 1905(a) of such Act is amended to read as follows: "(i) under the age of 21, or, at the option of the State, under the age of 20, 19, or 18 as the State may choose, or any reasonable category of such individuals,". (2) Section 1905(a)(ii) of such Act is amended by striking out ", except for section 406(a)(2),". (c) The amendments made by this section shall become effective on the date of the enactment of this Act. REIMBURSEMENT OF HOSPITALS

42 USC 1396a.

42 USC I395x.

SEC. 2173. (a)(1) Section 1902(a)(13) of the Social Security Act is amended— (A) by striking out subparagraph (D); (B) in subparagraph (E)— (i) by striking out "skilled nursing facility and intermediate care facility" and inserting in lieu thereof "hospital, skilled nursing facility, and intermediate care facility"; (ii) by inserting "and which, in the case of hospitals, take into account the situation of hospitals which serve a disproportionate number of low income patients with special needs and provide, in the case of hospital patients receiving services at an inappropriate level of care (under conditions similar to those described in section 1861(v)(l)(G)), for lower reimbursement rates reflecting the level of care actuallv received (in a manner consistent with section 1861(v)(l)(G))' after "determined in accordance with methods and standards developed by the State"; (iii) by inserting before the first semicolon the following: "and to assure that individuals eligible for medical assistance have reasonable access (taking into account geographic location and reasonable travel time) to inpatient hospital services of adequate quality"; and

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Page:United States Statutes at Large Volume 95.djvu/835

 PUBLIC LAW 97-35—AUG. 13, 1981 (iv) by striking out "each skilled nursing or intermediate care facility" and inserting in lieu thereof "each hospital, skilled nursing facility, and intermediate care facility"; and (C) by redesignating subparagraphs (E) and (F) as subparagraphs (A) and (B), respectively. (2) Section 1902(a)(20) of such Act is amended— (A) by inserting "and" at the end of subparagraph (B); (B) by striking out "and" at the end of subparagraph (C); and (C) by striking out subparagraph (D). (b)(1) Subsection (h) of section 1902 of such Act is repealed. (2) The amendment made by paragraph (1) shall not apply with respect to services furnished before the date the Secretary of Health and Human Services first promulgates and has in effect final regulations (on an interim or other basis) to carry out section 1902(a)(13)(A) of the Social Security Act (as amended by this subtitle). (c) Part A of title XI of such Act is amended by adding after section 1134 the following new section:

95 STAT. 809

42 USC 1396a.

42 USC 1396a note.

DEVELOPMENT OF MODEL PROSPECTIVE RATE METHODOLOGY

"SEC. 1135. (a) The Secretary shall develop a model svstem or 42 USC i320b-5. systems for the payment of hospitals for inpatient hospital services on a prospective basis which may be applied for reimbursement of hospitals under title XVIII or under a State plan approved under title 42 USC 1395, XIX. "(b) The Secretary shall report to the Congress on the development 1396. of such system or systems not later than July 31, 1982.". REMOVAL OF MEDICAID REASONABLE CHARGE LIMITATION

SEC. 2174. (a) Section 1902(a)(30) of the Social Security Act is amended by striking out "(including payments" and all that follows through "reasonable charges" and inserting in lieu thereof "are". (b) Section 1903(i) of such Act is amended by striking out paragraph (1). (c) The amendments made by this section shall apply to services furnished on or after October 1, 1981.

42 USC I396a. 42 USC 1396b. Effective date. 42 USC 1396a note.

INAPPLICABILITY AND WAIVER OF FREEDOM-OF-CHOICE AND OTHER STATE PLAN REQUIREMENTS

SEC. 2175. (a) Paragraph (23) of section 1902(a) of the Social Security Act is amended— (1) by inserting "except as provided in section 1915 and" after "(23)", and (2) by striking out all that follows the first semicolon. (b) Title XIX of the Social Security Act is amended by adding at the end the following new section: PROVISIONS RESPECTING INAPPLICABILITY AND WAIVER OF CERTAIN REQUIREMENTS OF THIS TITLE

" S E C 1915. (a) A State shall not be deemed to be out of compliance 42 USC I396n. with the requirements of paragraphs (1), (10), or (23) of section 1902(a) solely by reason of the fact that the State (or any political subdivision thereof)— "(1) has entered into— "(A) a contract with an organization which has agreed to provide care and services in addition to those offered under

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Page:United States Statutes at Large Volume 95.djvu/836

 95 STAT. 810

42 USC 1396d.

42 USC 1395x.

42 USC 1395c, 1895J.

42 USC 1396a, 1396b.

PUBLIC LAW 97-35—AUG. 13, 1981 the State plan to individuals eligible for medical assistance who reside in the geographic area served by such organization and who elect to obtain such care and services from such organization, or by reason of the fact that the plan provides for payment for rural health clinic services only if those services are provided by a rural health clinic; or "(B) arrangements tnrough a competitive bidding process or otherwise for the purchase of laboratory services referred to in section 1905(a)(3) or medical devices if the Secretary has found that— "(i) adequate services or devices will be available under such arrangements, and "(ii) any such laboratory services will be provided only through laboratories— "(I) which meet the applicable requirements of section 1861(e)(9) or paragraphs (11) and (12) of section 1861(s), and such additional requirements as the Secretary may require, and "(II) no more than 75 percent of whose charges for such services are for services provided to individuals who are entitled to benefits under this title or under part A or part B of title XVIII; or "(2) restricts— "(A) for a reasonable period of time the provider or providers from which an individual (eligible for medical assistance for items or services under the State plan) can receive such items or services, if the State has found, after notice and opportunity for a hearing (in accordance with procedures established by the State), that the individual has utilized such items or services at a frequency or amount not medically necessary (as determined in accordance with utilization guidelines established by the State), or "(B) (through suspension or otherwise) for a reasonable period of time the participation of a provider of items or services under the State plan, if the State has found, after notice and opportunity for a hearing (in accordance with procedures established by the State), that the provider has (in a significant number or proportion of cases) provided such items or services either (i) at a frequency or amount not medically necessary (as determined in accordance with utilization guidelines established by the State), or (ii) of a quality which does not meet professionally recognized standards of health care, if, under such restriction, individuals eligible for medical assistance for such services have reasonable access (taking into account geographic location and reasonable travel time) to such services of adequate quality. "(b) The Secretary, to the extent he finds it to be cost-effective and efficient and not inconsistent with the purposes of this title, may waive such requirements of section 1902 and section 1903(m) as may be necessary for a State— "(1) to implement a case-management system or a specialty physician services arrangement which restricts the provider from (or through) whom an individual (eligible for medical assistance under this title) can obtain primary care services (other than in emergency circumstances), if such restriction does not substantially impair access to such services of adequate quality where medically necessary,

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Page:United States Statutes at Large Volume 95.djvu/837

 PUBLIC LAW 97-35—AUG. 13, 1981 "(2) to allow a locality to act as a central broker in assisting individuals (eligible for medical assistance under this title) in selecting among competing health care plans, if such restriction does not substantially impair access to services of adequate quality where medically necessary, "(3) to share (through provision of additional services) with recipients of medical assistance under the State plan cost savings resulting from use by the recipient of more cost-effective medical care, and "(4) to restrict the provider from (or through) whom an individual (eligible for medical assistance under this title) can obtain services (other than in emergency circumstances) to providers or practitioners who undertake to provide such services and who meet, accept, and comply with the reimbursement, quality, and utilization standards under the State plan, which standards are consistent with access, quality, and efficient and economic provision of covered care and services, if such restriction does not discriminate among classes of providers on grounds unrelated to their demonstrated effectiveness and efficiency in providing those services. "(c) No waiver under this section may extend over a period of longer than two years unless the State requests continuation of such waiver, and such request shall be deemed granted unless the Secretary denies such request in writing within 90 days after the date of its submission to the Secretary. "(d)(1) The Secretary shall monitor the implementation of waivers granted under this section to assure that the requirements for such waiver are being met and shall, after notice and opportunity for a hearing, terminate any such waiver where he finds noncompliance has occurred. "(2) The Secretary shall report, not later than September 30, 1984, to Congress on waivers granted under this section.". (d)(1) Section 1902(a)(9) of such Act is amended— (A) by striking out "and" at the end of subparagraph (A), (B) by striking out the semicolon at the end of subparagraph (B) and inserting in lieu thereof ", and", and (C) by adding after subparagraph (B) the following new subparagraph: "(C) that any laboratory services paid for under such plan must be provided by a laboratory which meets the applicable requirements of section 1861(e)(9) or paragraphs (11) and (12) of section 1861(s), or, in the case of a laboratory which is in a rural health clinic, of section 1861(aa)(2)(G);". (2)(A) The amendments made by paragraph (1) shall (except as provided under subparagraph (B)) be effective with respect to payments under title XIX of the Social Security Act for calendar quarters beginning on or after October 1, 1981. (B) In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation in order for the plan to meet the additional requirement imposed by the amendment made by paragraph (1)(C), the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar year beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act.

95 STAT. 811

Report to Congress. 42 USC 1396a.

42 USC 1395x.

Effective date. 42 USC 1396a note. 42 USC 1396.

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Page:United States Statutes at Large Volume 95.djvu/838

 95 STAT. 812

PUBLIC LAW 97-35—AUG. 13, 1981 WAIVER TO PROVIDE HOME AND COMMUNITY-BASED SERVICES FOR CERTAIN INDIVIDUALS

Ante, p. 809.

42 USC 1396a.

SEC. 2176. Section 1915 of the Social Security Act (added by section 2175 of this subtitle) is amended— (1) by inserting "(other than a waiver under subsection (c))" in subsection (c) after "No waiver under this section", and (2) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively, and by inserting after subsection (b) the following new subsection: "(c)(1) The Secretary may by waiver provide that a State plan approved under this part may include as 'medical assistance' under such plan home or community-based services (other than room and board) approved by the Secretary which are provided pursuant to a written plan of care to individuals with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a skilled nursing facility or intermediate care facility the cost of which could be reimbursed under the State plan. "(2) A waiver shall not be granted under this subsection unless the State provides assurances satisfactory to the Secretary that— "(A) necessary safeguards (including adequate standards for provider participation) have been taken to protect the health and welfare of individuals provided services under the waiver and to assure financial accountability for funds expended with respect to such services; "(B) the State will provide, with respect to individuals who are entitled to medical assistance for skilled nursing facility or intermediate care facility services under the State plan and who may require such services, for an evaluation of the need for such services; "(C) such individuals who are determined to be likely to require the level of care provided in a skilled nursing facility or intermediate care facility are informed of the feasible alternatives, if available under the waiver, at the choice of such individuals, to the provision of skilled nursing facility or intermediate care facility services; "(D) under such waiver the average per capita expenditure estimated by the State in any fiscal year for medical assistance provided with respect to such individuals does not exceed the average per capita expenditure that the State reasonably estimates would have been made in that fiscal year for expenditures under the State plan for such individuals if the waiver had not been granted; and "(E) the State will provide to the Secretary annually, consistent with a data collection plan designed by the Secretary, information on the impact of the waiver granted under this subsection on the type and amount of medical assistance provided under the State plan and on the health and welfare of recipients. "(3) A waiver granted under this subsection may include a waiver of the requirements of subsection (a)(1) (relating to statewideness) and subsection (a)(10) of section 1902. A waiver under this subsection shall be for an initial term of three years and, upon the request of a State, shall be extended for additional three-year periods unless the Secretary determines that for the previous three-year period the assurances provided under paragraph (2) have not been met.

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Page:United States Statutes at Large Volume 95.djvu/839

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 813

"(4) A waiver granted under this section may, consistent with paragraph (2)— "(A) limit the individuals provided benefits under such waiver to individuals with respect to whom the State has determined that there is a reasonable expectation that the amount of medical assistance provided with respect to the individual under such waiver will not exceed the amount of such medical assistance provided for such individual if the waiver did not apply, and "(B) provide medical assistance to individuals (to the extent consistent with written plans of care, which are subject to the approval of the State) for case management services, homemaker/home health aide services and personal care services, adult day health services, habilitation services, respite care, and such other services requested by the State as the Secretary may approve.". TIME LIMITATION FOR ACTION ON REQUESTS FOR PLAN AMENDMENTS AND WAIVERS

SEC. 2177. (a) Section 1915 of the Social Security Act (added by Ante, p. 812. section 2175 of this subtitle) is further amended by adding at the end thereof the following new subsection: "(f) A request to the Secretary from a State for a proposed State plan or plan amendment or a waiver of a requirement of this title submitted by the State pursuant to a provision of this title shall be deemed granted unless the Secretary, within 90 days after the date of its submission to the Secretary, either denies such request in writing or informs the State agency in writing with respect to any additional information which is needed in order to make a final determination with respect to the request. After the date the Secretary receives such additional information, the request shall be deemed granted unless the Secretary, within 90 days of such date, denies such request.". (b) The amendment made by this section shall become effective 90 Effective date. 42 USC 1396n days after the date of the enactment of this Act. note.

FLEXIBILITY IN HMO AND PREPAID PROVIDER PARTICIPATION IN STATE PLANS

SEC. 2178. (a)(1) Paragraph (I)(A) of section 1903(m) of the Social Security Act is amended by striking out "means" and all that follows 42 USC I396b. through the end thereof and inserting in lieu thereof the following: "means a public or private organization, organized under the laws of any State, which is a qualified health maintenance organization (as defined in section 1310(d) of the Public Health Service Act) or 42USe300e-9. which— "(i) makes services it provides to individuals eligible for benefits under this title accessible to such individuals, within the area served by the organization, to the same extent as such services are made accessible to individuals (eligible for medical assistance under the State plan) not enrolled with the organization, and "(ii) has made adequate provision against the risk of insolvency, which provision is satisfactory to the State and which assures that individuals eligible for benefits under this title are in no case held liable for debts of the organization in case of the organization's insolvency.". (2) Paragraph (2)(A) of section 1903(m) of such Act is amended— 42 USC I396b. (A) by striking out "and" at the end of clause (i).

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Page:United States Statutes at Large Volume 95.djvu/840

 95 STAT. 814

42 USC 1395. 42 USC 1396a.

42 USC 300e. 42 USC 1396b.

PUBLIC LAW 97-35—AUG. 13, 1981 (B) by striking out "one-half of the membership of the entity" in clause (ii) and inserting in lieu thereof "75 percent of the membership of the entity which is enrolled on a prepaid basis"; (C) by striking out the period at the end of clause (ii) and inserting in lieu thereof a semicolon, and (D) by adding at the end the following new clauses: "(iii) such services are provided for the benefit of individuals eligible for benefits under this title in accordance with a contract between the State and the entity under which prepaid payments to the entity are made on an actuarially sound basis; "(iv) such contract provides that the Secretary and the State (or any person or organization designated by either) shall have the right to audit and inspect any books and records of the entity (and of any subcontractor) that pertain (I) to the ability of the entity to bear the risk of potential financial losses, and (II) to services performed or determinations of amounts payable under the contract; "(v) such contract provides that in the entity's enrollment, reenrollment, or disenrollment of individuals who are eligible for benefits under this title and eligible to enroll, reenroll, or disenroU with the entity pursuant to the contract, the entity will not discriminate among such individuals on the basis of their health status or requirements for health care services; "(vi) such contract (I) permits individuals who have elected under the plan to enroll with the entity for provision of such benefits to terminate such enrollment without cause as of the beginning of the first calendar month following a full calendar month after the request is made for such termination, and (II) provides for notification of each such individual, at the time of the individual's enrollment, of such right to terminate such enrollment; and "(vii) such contract provides that, in the case of medically necessary services which were provided (I) to an individual enrolled with the entity under the contract and entitled to benefits with respect to such services under the State's plan and (II) other than through the organization because the services were immediately required due to an unforseen illness, injury, or condition, either the entity or the State provides for reimbursement with respect to those services.". (3) Paragraph (2) of such section is further amended by adding after subparagraph (C) the following new subparagraph: "(D) In the case of a health maintenance organization that is a public entity, the Secretary may modify or waive the requirement described in subparagraph (A)(ii) but only if the Secretary determines that (i) special circumstances warrant such modification or waiver, and (ii) the organization has taken and is taking reasonable efforts to enroll individuals who are not entitled to benefits under the State plan approved under this title or under title XVIII.". (b) Section 1902(e) of such Act is amended by inserting "(1)" after "(e)" and by adding at the end the following new paragraph: "(2)(A) In the case of an individual who is enrolled with a qualified health maintenance organization (as defined in title XIII of the Public Health Service Act) under a contract described in section 1903(m)(2)(A) and who would (but for this paragraph) lose eligibility for benefits under this title before the end of the minimum enrollment period (defined in subparagraph (B)), the State plan may provide, notwithstanding any other provision of this title, that the individual shall be deemed to continue to be eligible for such benefits

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Page:United States Statutes at Large Volume 95.djvu/841

 PUBLIC LAW 97-35—AUG. 13, 1981 until the end of such minimum period, but only with respect to such benefits provided to the individual as an enrollee of such organization. '(B) For purposes of subparagraph (A), the term 'minimum enrollment period' means, with respect to an individual's enrollment with a health maintenance organization under a State plan, a period, established by the State, of not more than six months beginning on the date the individual's enrollment with the organization becomes effective.". (c) The amendments made by this section shall apply with respect to services furnished, under a State plan approved under title XIX of the Social Security Act, on or after October 1, 1981; except that such amendments shall not apply with respect to services furnished by a health maintenance organization under a contract with a State entered into under such title before October 1, 1981 unless the organization requests that such amendments apply and the Secretary of Health and Human Services and the single State agency (administering or supervising the administration of the State plan under such title) agree to such request. (d) The Secretary of Health and Human Services shall conduct a study evaluating the extent of, and reasons for, the termination by medicaid beneficiaries of their memberships in health maintenance organizations. In conducting such study, the Secretary shall place special emphasis on the quantity and quality of medical care provided in health maintenance organizations and the quality of such care when provided on a fee-for-service basis. The Secretary shall submit an interim report to the Congress, within two years after the date of the enactment of this Act, and a final report within five years from such date containing, respectively, the interim and final findings and conclusions made as a result of such study.

95 STAT. 815

"Minimum enrollment period."

42 USC 1396a note. 42 USC 1396.

42 USC 1396a note.

Report to Congress.

CHAPTER 3—MISCELLANEOUS CHANGES REPEAL OF EPSDT PENALTY

SEC. 2181. (a)(1) Subsection (g) of section 403 of the Social Security 42 USC 603. Act is repealed. (2) Section 1902(a) of such Act is amended— 42 USC 1396a. (A) by striking out "and" at the end of paragraph (42), (B) by striking out the period at the end of paragraph (43) and inserting in lieu thereof "; and", and (C) by inserting after paragraph (43) the following new paragraph: "(44) provide for— ' (A) informing all persons in the State who are under the age of 21 and who have been determined to be eligible for medical assistance including services described in section 1905(a)(4)(B), of the availability of early and periodic screen- 42 USC I396d ing, diagnostic, and treatment services as described in section 1905(a)(4)(B), "(B) providing or arranging for the provision of such screening services in all cases where they are requested, and "(C) arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective treatment the need for which is disclosed by such child health screening services.", (b) The amendment made by subsection (a)(1) shall apply to reduc- Effective date. tions for calendar quarters beginning on or after June 30, 1974, and 42 USC 603 note.

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Page:United States Statutes at Large Volume 95.djvu/842

 95 STAT. 816

PUBLIC LAW 97-35—AUG. 13, 1981 the amendments made by subsection (a)(2) shall take effect on October 1, 1981. FLEXIBILITY IN REQUIRING COLLECTION OF THIRD-PARTY PAYMENTS

42 USC 1396a.

SEC. 2182. Section 1902(a)(25)(C) of the Social Security Act is amended by inserting "and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery" after "of the individual". PERMITTING PHYSICIAN ASSISTANTS AND NURSE PRACTITIONERS TO PROVIDE CERTAIN RECERTIFICATIONS

42 USC 1396b.

Effective date. 42 USC 1396b "°*^-

SEC. 2183. (a) Section 1903(g)(1)(A) of the Social Security Act is amended— (1) by striking out "(and recertifies" and inserting in lieu thereof "(and the physician, or a physician assistant or nurse practitioner under the supervision of a physician, recertifies", and (2) by inserting "(or, in the case of services that are intermediate care facility services described in section 1905(d), every year)" after "every 60 days". (b) The amendments made by subsection (a) shall apply to payments made to States for calendar quarters beginning on or after October 1, 1981. REPEAL OF OBSOLETE AUTHORITY FOR MEDICAL ASSISTANCE

42 USC 301.

42 USC 302.

SEC. 2184. (a)(1) The heading of title I of the Social Security Act is amended by striking out "AND MEDICAL ASSISTANCE". (2) Section 1 of such Act is amended— (A) by striking out "(a)" the first place it appears in the first sentence, (B) by striking out ", (b) of enabling" and all that follows through "for self-care" in the first sentence, and (C) by striking out ", or for medical assistance for the aged, or for old-age assistance and medical assistance for the aged" in the second sentence. (3) Section 2 of such Act is amended— (A) by striking out "AND MEDICAL ASSISTANCE" in the heading;

42 USC 303.

(B) by striking out ", or for medical assistance for the aged, or for old-age assistance and medical assistance for the aged" in subsection (a) before paragraph (1); (C) by striking out "; and" at the end of subsection (a)(10) and inserting in lieu thereof a period; and (D) by striking out paragraphs (11), (12), and (13) of subsection (a). (4) Section 3 of such Act is amended— (A) by striking out paragraphs (1) and (3) of subsection (a); (B) by amending paragraph (2) of subsection (a) to read as follows: "(2) in the case of Puerto Rico, the Virgin Islands, and Guam, an amount equal to one-half of the total of the sums expended during such quarter as old-age assistance under the State plan, not counting so much of any expenditure with respect to any month as exceeds $37.50 multiplied by the total number of recipients of old-age assistance for such month; plus"; and (C) by striking out subsection (d).

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Page:United States Statutes at Large Volume 95.djvu/843

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 817

(5) Section 6 of such Act is amended by striking out subsections Qo) ^2 USC 306. and (c). (b)(1) Section 403 of such Act is amended— 42 USC 603. (A) by striking out "(including expenditures for premiums" and all that follows through "the cost thereof)" in subsection (a)(1) in the matter before subparagraph (A); (B) by striking out "plus (ii)" and all that follows through "clause (i) or (ii)" in subsection (a)(l)(A) and inserting in lieu thereof "plus (ii) the number of individuals, not counted under clause (i); and (C) by striking out "(including expenditures" and all that follows through '^he cost thereof) in subsection (a)(2). (2) Section 406 of such Act is amended— 42 USC 606. (A) by striking out ", or (if provided" and all that follows through "under State law in behalf of," and "or medical care or any type of remedial care recc^nized under State law" in subsection (b) in the matter preceding subparagraph (A), and (B) by inserting "(for which such individual is not entitled to medical assistance under the State plan under title XIX)" in subsection (e)(l)(A) after "recognized under State law". (c)(1) Sections 1001 and 1401 of such Act are each amended by 42 USC 1201, striking out "and of encouraging each State" and all that follows ^^^^ through "self-care". (2) Sections 1003(a) and 1403(a) of such Act are each amended— 42 USC 1203, (A) by striking out paragraph (1), and ^^^^• (B) by striking out "(including expenditures for" and all that follows through "the cost thereof)" in paragraph (2). (3) Sections 1006 and 1405 of such Act are each amended by striking 42 USC 1206, out ", or (if provided" and all that follows through "under State law i^^^ in behalf of, in the matter before paragraph (1). (d)(1) The amendments made by this subsection are to the title XVI of the Social Security Act which only applies in the case of Puerto 42 USC 1381. Rico, Guam, and the Virgin Islands under section 303(b) of the Social Security Amendments of 1972 (Public Law 92-603). 42 USC 30i note. (2) The heading of such title is amended by striking out "AND MEDICAL ASSISTANCE". (3) Section 1601 of such title is amended— 42 USC 1381 (A) by striking out "(a)" the first place it appears in the first ^°^^sentence, (B) by striking out ", (b) of enabling" and all that follows through "or self-care" in the first sentence, and (C) by striking out ", or for aid to the aged, blind, or disabled and medical assistance for the aged" in the second sentence. (4) Section 1602 of such title is amended— 42 USC 1382 (A) by striking out", OR FOR SUCH AID AND MEDICAL ASSISTANCE ^°^FOR THE AGED" in the heading; (B) by striking out ", or for aid to the aged, blind, or disabled and medical assistance for the aged" in subsection (a) in the matter before paragraph (1); (C) by inserting and" at the end of paragraph (13) of subsection (a); (D) by striking out the semicolon at the end of paragraph (14) of subsection (a) and inserting in lieu thereof a period; (E) by striking out paragraphs (15), (16), and (17) of subsection (a); (F) by striking out "(or for aid to the aged, blind, or disabled and medical assistance for the aged)" in the second sentence of subsection (a);

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Page:United States Statutes at Large Volume 95.djvu/844

 95 STAT. 818

42 USC 1383 note.

42 USC 1385 note.

PUBLIC LAW 97-35—AUG. 13, 1981 (G) by striking out "(A) in the case of ^plicants for aid to the aged, blind, or disabled" in subsection (b)(^; (H) by striking out "and (B)" and all that follows through "who resides in the State" in subsection (b)(2); and (I) by striking out "(or for aid to the aged, blind, or disabled and medical assistance for the aged)" each place it appears in the third sentence of subsection (b). (5) Section 1603 of such title is amended— (A) by striking out paragraphs (1) and (3) of subsection (a): (B) by striking out (including expenditures for premiums and all that follows through "cost thereof)" in paragraph (2)(A); (C) by striking out "the larger of the following amounts: (i)", "(I)", and ", or (II)" and all that follows before the semicolon, in paragraph (2)(B); and (D) by striking out subsection (d). (6) Section 1605 ofsuch title is amended— (A) by striking out ", or (if provided" and all that follows through "under State law in behalf of," in subsection (a) in the matter before paragraph (1), and (B) by striking out subsection (b).

Maternal and

Subtitle D—Matcmal and Child Health Services Block

ehild Health Services Block Grant Act.

^, Urailt SHORT TITLE OF SUBTITLE

42 USC 1305 note.

SEC. 2191. This subtitle may be cited as the "Maternal and Child Health Services Block Grant Act". MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT

SEC. 2192. (a) Title V of the Social Security Act is amended to read as follows: "TITLE V—MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT "AUTHORIZATION OP APPROPRIATIONS

42 USC 701.

42 USC 1381.

"SEC. 501. (a) For the purpose of enabling each State— "(1) to assure mothers and children (in particular those with low income or with limited availability of health services) access to quality maternal and child health services, (2) to reduce infant mortality and the incidence of preventable diseases and handicapping conditions among children, to reduce the need for inpatient and long-term care services, to increase the number of children (especially preschool children) appropriately immunized against disease and the number of low income children receiving health assessments and follow-up diagnostic and treatment services, and otherwise to promote the health of mothers and children (especially by providing preventive and primary ceire services for low income children, and prenatal, delivery, and postpartum care for low income mothers), "(3) to provide rehabilitation services for blind and disabled individuals under the age of 16 receiving benefits under title XVI of this Act, and "(4) to provide services for locating, and for medical, surgical, corrective, and other services, and care for, and facilities for

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Page:United States Statutes at Large Volume 95.djvu/845

 PUBLIC LAW 97-35—AUG. 13, 1981 diagnosis, hospitalization, and aftercare for, children who are crippled or who are suffering from conditions leading to crippling; and for the purpose of enabling the Secretary to provide for special projects of regional and national significance, research, and training with respect to maternal and child health and crippled children, for genetic disease testing, counseling, and information development and dissemination programs, and for grants relating to hemophilia (without regard to age), there are authorized to be appropriated $373,000,000 for fiscal year 1982 and for each fiscal year thereafter. "(b) For purposes of this title: "(1) The term 'consolidated health programs' means the programs administered under the provisions of— "(A) this title (relating to maternal and child health and crippled children'services), 'XB) section 1615(c) of this Act (relating to supplemental security income for disabled children), "(C) sections 316 (relating to lead-based paint poisoning prevention programs), 1101 (relating to genetic disease programs), 1121 (relating to sudden infant death syndrome programs) and 1131 (relating to hemophilia treatment centers) of the Public Health Service Act, and "(D) title IV of the Health Services and Centers Amendments of 1978 (Public Law 95-626; relating to adolescent pregnancy grants), as such provisions were in effect before the date of the enactment of the Maternal and Child Health Services Block Grant Act. "(2) The term 'low income' means, with respect to an individual or family, such an individual or family with an income determined to be below the nonfarm income official poverty line defined by the Office of Management and Budget and revised annually in accordance with section 624 of the Economic Opportunity Act of 1964.

95 STAT. 819

42 USC I382d. 42 USC 247a, 1301, 1320a, 1320b-l.

42 USC 247b-i.

"Low income."

42 USC 2971d.

ALLOTMENTS TO STATES AND FEDERAL SET-ASIDE

"SEC. 502. (a)(1) Of the amount appropriated under section 501(a), 42 USC 702. the Secretary shall retain an amount equal to 15 percent thereof in the case of fiscal year 1982, and an amount equal to not less than 10, nor more than 15, percent thereof in the case of each fiscal year thereafter, for the purpose of carrying out (through grants, contracts, or otherwise) special projects of regional and national significance, training, and research and for the funding of genetic disease testing, counseling, and information development and dissemination programs and of comprehensive hemophilia diagnostic and treatment centers. The authority of the Secretary to enter into any contracts under this title is effective for any fiscal year only to such extent or in such amounts as are provided in appropriations Acts. "(2) For purposes of paragraph (1)— "(A) amounts retained by the Secretary for training shall be used to make grants to public or nonprofit private institutions of higher learning for training personnel for health care and related services for mothers and children; Lnd "(B) amounts retained by the Secretary for research shall be used to make grants to, contracts with, or jointly financed cooperative agreements with, public or nonprofit institutions of higher learning and public or nonprofit private agencies and organizations engaged in research or in maternal and child

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Page:United States Statutes at Large Volume 95.djvu/846

 95 STAT. 820

PUBLIC LAW 97-35—AUG. 13, 1981 health or crippled children's programs for research projects relating to maternal and child health services or crippled children'services which show promise of substantial contribution to the advancement thereof. "(3) No funds may be made available by the Secretary under this subsection unless an application therefor has been submitted to, and approved by, the Secretary. Such application shall be in such form, be submitted in such manner, and contain and be accompanied by such information as the Secretary may specify. No such application may be approved unless it contains assurances that the applicant will use the funds provided only for the purposes specified in the approved application and will establish such fiscal control and fund accounting procedures as may be necessary to assure proper disbursement and accounting of Federal funds paid to the applicant under this title. "(b) From the remaining amounts appropriated under section 501(a) for any fiscal year, the Secretary shall allot to each State which has transmitted a description of intended activities and statement of assurances for the fiscal year under section 505, an amount determined as follows: "(1) The Secretary shall determine, for each State— "(A)(i) the amount provided or allotted by the Secretary to the State and to entities in the State under the provisions of the consolidated health programs (as defined in section 501(b)(1)), other than for any of the projects or programs described in subsection (a), from appropriations for fiscal year 1981, "(ii) the proportion that such amount for that State bears to the total of such amounts for all the States, and "(B)(i) the number of low income children in the State, and "(ii) the proportion that such number of children for that State bears to the total of such numbers of children for all the States. "(2)(A) For each of fiscal years 1982 and 1983, each such State shall be allotted for that fiscal year an amount equal to the State's proportion (determined under paragraph (l)(A)(ii)) of the amounts available for allotment to all the States under this subsection for that fiscal year. "(B) For fiscal years beginning with fiscal year 1984, if the amount available for allotment under this subsection for that fiscal year— "(i) does not exceed the amount available under this subsection for allotment for fiscal year 1983, each such State shall be allotted for that fiscal year an amount equal to the State's proportion (determined under paragraph (l)(A)(ii)) of the amounts available for allotment to all the States under this subsection for that fiscal year, or "(ii) exceeds the amounts available under this subsection for allotment for fiscal year 1983, each such State shall be allotted for that fiscal year an amount equal to the sum of^ "(I) the amount of the allotment to the State under this subsection in fiscal year 1983 (without regard to paragraph (3) of this subsection), and "(II) the State's proportion (determined under paragraph (l)(B)(ii)) of the amount by which the allotment available under this subsection for all the States for that fiscal year exceeds the amount that was available under this subsection for allotment for all the States for fiscal year 1983.

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Page:United States Statutes at Large Volume 95.djvu/847

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 821

"(3)(A) To the extent that all the funds appropriated under this title for a fiscal year are not otherwise allotted to States either because all the States have not qualified for such allotments under section 505 for the fiscal year or because some States have indicated in their descriptions of activities under section 505 that they do not intend to use the full amount of such allotments, such excess shall be allotted among the remaining States in proportion to the amount otherwise allotted to such States for the fiscal year without regard to this subparagraph. "(B) To the extent that all the funds appropriated under this title for a fiscal year are not otherwise allotted to States because some State allotments are offset under section 506(b)(2), such excess shall be allotted among the remaining States in proportion to the amount otherwise allotted to such States for the fiscal year without regard to this subparagraph. "PAYMENTS TO STATES

"SEC. 503. (a) From the sums appropriated therefor and the allot- 42 USC 703. ments available under section 502(b), the Secretary shall make pa5mients as provided by section 203 of the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4213) to each State provided such an allotment under section 5O20i)), for each quarter, of an amount equal to four-sevenths of the total of the sums expended by the State during such quarter in carrying out the provisions of this title. "(b) Any amount payable to a State under this title from allotments for a fiscal year which remains unobligated at the end of such year shall remain available to such State for obligation during the next fiscal year. No payment may be made to a State under this title from allotments for a fisc^ year for expenditures made after the following fiscal year. "(c) The Secretary, at the request of a State, may reduce the amount of payments under subsection (a) by— "(1) the fair market value of any supplies or equipment furnished the State, and "(2) the amount of the pay, allowances, and travel expenses of any officer or employee of the Government when detailed to the State and the amount of any other costs incurred in connection with the detail of such officer or employee, when the furnishing of supplies or equipment or the detail of an officer or employee is for the convenience of and at the request of the State and for the purpose of conducting activities described in section 505 on a temporary basis. The amount by which any payment is so reduced shall be available for payment by the Secretary of the costs incurred in furnishing the supplies or equipment or in detailing the personnel, on which the reduction of the payment is based, and the amount shall be deemed to be part of the payment and shall be deemed to have been paid to the State. "USE OF ALLOTMENT FUNDS

"SEC. 504. (a) Except as otherwise provided under this section, a 42 USC 704. State may use amounts paid to it under section 503 for the provision of health services and related activities (including planning, administration, education, and evaluation) consistent with its description of intended expenditures and statement of assurances transmitted under section 505. "(b) Amounts described in subsection (a) may not be used for—

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Page:United States Statutes at Large Volume 95.djvu/848

 95 STAT. 822

PUBLIC LAW 97-35—AUG. 13, 1981 "(1) inpatient services, other than inpatient services provided to crippled children or to high-risk pregnant women and infants and such other inpatient services as the Secretary may approve; "(2) cash payments to intended recipients of health services; "(3) the purchase or improvement of land, the purchase, construction, or permanent improvement (other than minor remodeling) of any building or other facility, or the purchase of maior medical equipment; (4) satisfying any requirement for the expenditure of nonFederal funds as a condition for the receipt of Federal funds; or "(5) providing funds for research or training to any entity other than a public or nonprofit private entity. The Secretary may waive the limitation contained in paragraph (3) upon the request of a State if the Secretary finds that there are extraordinary circumstances to justify the waiver and that granting the waiver will assist in carrying out this title. "(c) A State may use a portion of the amounts described in subsection (a) for the purpose of purchasing technical assistance from public or private entities if the State determines that such assistance is required in developing, implementing, and administering programs funded under this title. "DESCRIPTION OF INTENDED EXPENDITURES AND STATEMENT OF ASSURANCES

42 USC 705.

"SEC. 505. In order to be entitled to payments for allotments under section 502 for a fiscal year, a State must prepare and transmit to the Secretary— "(1) a report describing the intended use of payments the State is to receive under this title for the fiscal year, including (A) a description of those populations, areas, and localities in the State which the State has identified as needing maternal and child health services, (B) a statement of goals and objectives for meeting those needs, (C) information on the types of services to be provided and the categories or characteristics of individuals to be served, and (D) data the State intends to collect respecting activities conducted with such payments; and "(2) a statement of assurances that represents to the Secretary that— "(A) the State will provide a fair method (as determined by the State) for allocating funds allotted to the State under this title among such individuals, areeis, and localities identified under paragraph (I)(A) as needing maternal and child health services, and the State will identify and apply guidelines for the appropriate frequency and content of, and appropriate referral and followup with respect to, health care assessments and services financially assisted by the State under this title and methods for assuring quality assessments and services; "(B) funds allotted to the State under this title will only be used, consistent with section 508, to carry out the purposes of this title or to continue activities previously conducted under the consolidated health programs (described in section 502(b)(l)); "(C) the State will use— "(i) a substantial proportion of the sums expended by the State for carrying out this title for the provision of health services to mothers and children, with special

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