
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC254b]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
                SUBCHAPTER II--GENERAL POWERS AND DUTIES
 
                       Part D--Primary Health Care
 
                        subpart i--health centers
 
Sec. 254b. Health centers


(a) ``Health center'' defined

                           (1) In general

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

    for all residents of the area served by the center (hereafter 
    referred to in this section as the ``catchment area'').

                           (2) Limitation

        The requirement in paragraph (1) to provide services for all 
    residents within a catchment area shall not apply in the case of a 
    health center receiving a grant only under subsection (g), (h), or 
    (i) of this section.

(b) Definitions

    For purposes of this section:

                (1) Required primary health services

        (A) In general

            The term ``required primary health services'' means--
                (i) basic health services which, for purposes of this 
            section, shall consist of--
                    (I) health services related to family medicine, 
                internal medicine, pediatrics, obstetrics, or gynecology 
                that are furnished by physicians and where appropriate, 
                physician assistants, nurse practitioners, and nurse 
                midwives;
                    (II) diagnostic laboratory and radiologic services;
                    (III) preventive health services, including--
                        (aa) prenatal and perinatal services;
                        (bb) screening for breast and cervical cancer;
                        (cc) well-child services;
                        (dd) immunizations against vaccine-preventable 
                    diseases;
                        (ee) screenings for elevated blood lead levels, 
                    communicable diseases, and cholesterol;
                        (ff) pediatric eye, ear, and dental screenings 
                    to determine the need for vision and hearing 
                    correction and dental care;
                        (gg) voluntary family planning services; and
                        (hh) preventive dental services;

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

                (ii) referrals to providers of medical services and 
            other health-related services (including substance abuse and 
            mental health services);
                (iii) patient case management services (including 
            counseling, referral, and follow-up services) and other 
            services designed to assist health center patients in 
            establishing eligibility for and gaining access to Federal, 
            State, and local programs that provide or financially 
            support the provision of medical, social, educational, or 
            other related services;
                (iv) services that enable individuals to use the 
            services of the health center (including outreach and 
            transportation services and, if a substantial number of the 
            individuals in the population served by a center are of 
            limited English-speaking ability, the services of 
            appropriate personnel fluent in the language spoken by a 
            predominant number of such individuals); and
                (v) education of patients and the general population 
            served by the health center regarding the availability and 
            proper use of health services.

        (B) Exception

            With respect to a health center that receives a grant only 
        under subsection (g) of this section, the Secretary, upon a 
        showing of good cause, shall--
                (i) waive the requirement that the center provide all 
            required primary health services under this paragraph; and
                (ii) approve, as appropriate, the provision of certain 
            required primary health services only during certain periods 
            of the year.

                   (2) Additional health services

        The term ``additional health services'' means services that are 
    not included as required primary health services and that are 
    appropriate to meet the health needs of the population served by the 
    health center involved. Such term may include--
            (A) environmental health services, including--
                (i) the detection and alleviation of unhealthful 
            conditions associated with water supply;
                (ii) sewage treatment;
                (iii) solid waste disposal;
                (iv) rodent and parasitic infestation;
                (v) field sanitation;
                (vi) housing; and
                (vii) other environmental factors related to health; and

            (B) in the case of health centers receiving grants under 
        subsection (g) of this section, special occupation-related 
        health services for migratory and seasonal agricultural workers, 
        including--
                (i) screening for and control of infectious diseases, 
            including parasitic diseases; and
                (ii) injury prevention programs, including prevention of 
            exposure to unsafe levels of agricultural chemicals 
            including pesticides.

                (3) Medically underserved populations

        (A) In general

            The term ``medically underserved population'' means the 
        population of an urban or rural area designated by the Secretary 
        as an area with a shortage of personal health services or a 
        population group designated by the Secretary as having a 
        shortage of such services.

        (B) Criteria

            In carrying out subparagraph (A), the Secretary shall 
        prescribe criteria for determining the specific shortages of 
        personal health services of an area or population group. Such 
        criteria shall--
                (i) take into account comments received by the Secretary 
            from the chief executive officer of a State and local 
            officials in a State; and
                (ii) include factors indicative of the health status of 
            a population group or residents of an area, the ability of 
            the residents of an area or of a population group to pay for 
            health services and their accessibility to them, and the 
            availability of health professionals to residents of an area 
            or to a population group.

        (C) Limitation

            The Secretary may not designate a medically underserved 
        population in a State or terminate the designation of such a 
        population unless, prior to such designation or termination, the 
        Secretary provides reasonable notice and opportunity for comment 
        and consults with--
                (i) the chief executive officer of such State;
                (ii) local officials in such State; and
                (iii) the organization, if any, which represents a 
            majority of health centers in such State.

        (D) Permissible designation

            The Secretary may designate a medically underserved 
        population that does not meet the criteria established under 
        subparagraph (B) if the chief executive officer of the State in 
        which such population is located and local officials of such 
        State recommend the designation of such population based on 
        unusual local conditions which are a barrier to access to or the 
        availability of personal health services.

(c) Planning grants

                           (1) In general

        (A) Centers

            The Secretary may make grants to public and nonprofit 
        private entities for projects to plan and develop health centers 
        which will serve medically underserved populations. A project 
        for which a grant may be made under this subsection may include 
        the cost of the acquisition and lease of buildings and equipment 
        (including the costs of amortizing the principal of, and paying 
        the interest on, loans) and shall include--
                (i) an assessment of the need that the population 
            proposed to be served by the health center for which the 
            project is undertaken has for required primary health 
            services and additional health services;
                (ii) the design of a health center program for such 
            population based on such assessment;
                (iii) efforts to secure, within the proposed catchment 
            area of such center, financial and professional assistance 
            and support for the project;
                (iv) initiation and encouragement of continuing 
            community involvement in the development and operation of 
            the project; and
                (v) proposed linkages between the center and other 
            appropriate provider entities, such as health departments, 
            local hospitals, and rural health clinics, to provide better 
            coordinated, higher quality, and more cost-effective health 
            care services.

        (B) Comprehensive service delivery networks and plans

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

        Any such grant may include the acquisition and lease of 
        buildings and equipment which may include data and information 
        systems (including the costs of amortizing the principal of, and 
        paying the interest on, loans), and providing training and 
        technical assistance related to the provision of health services 
        on a prepaid basis or under another managed care arrangement, 
        and for other purposes that promote the development of managed 
        care networks and plans.

                           (2) Limitation

        Not more than two grants may be made under this subsection for 
    the same project, except that upon a showing of good cause, the 
    Secretary may make additional grant awards.

(d) Managed care loan guarantee program

                          (1) Establishment

        (A) In general

            The Secretary shall establish a program under which the 
        Secretary may, in accordance with this subsection and to the 
        extent that appropriations are provided in advance for such 
        program, guarantee the principal and interest on loans made by 
        non-Federal lenders to health centers funded under this section 
        for the costs of developing and operating managed care networks 
        or plans.

        (B) Use of funds

            Loan funds guaranteed under this subsection may be used--
                (i) to establish reserves for the furnishing of services 
            on a pre-paid basis; or
                (ii) for costs incurred by the center or centers, 
            otherwise permitted under this section, as the Secretary 
            determines are necessary to enable a center or centers to 
            develop, operate, and own the network or plan.

        (C) Publication of guidance

            Prior to considering an application submitted under this 
        subsection, the Secretary shall publish guidelines to provide 
        guidance on the implementation of this section. The Secretary 
        shall make such guidelines available to the universe of parties 
        affected under this subsection, distribute such guidelines to 
        such parties upon the request of such parties, and provide a 
        copy of such guidelines to the appropriate committees of 
        Congress.

                (2) Protection of financial interests

        (A) In general

            The Secretary may not approve a loan guarantee for a project 
        under this subsection unless the Secretary determines that--
                (i) the terms, conditions, security (if any), and 
            schedule and amount of repayments with respect to the loan 
            are sufficient to protect the financial interests of the 
            United States and are otherwise reasonable, including a 
            determination that the rate of interest does not exceed such 
            percent per annum on the principal obligation outstanding as 
            the Secretary determines to be reasonable, taking into 
            account the range of interest rates prevailing in the 
            private market for similar loans and the risks assumed by 
            the United States, except that the Secretary may not require 
            as security any center asset that is, or may be, needed by 
            the center or centers involved to provide health services;
                (ii) the loan would not be available on reasonable terms 
            and conditions without the guarantee under this subsection; 
            and
                (iii) amounts appropriated for the program under this 
            subsection are sufficient to provide loan guarantees under 
            this subsection.

        (B) Recovery of payments

            (i) In general

                The United States shall be entitled to recover from the 
            applicant for a loan guarantee under this subsection the 
            amount of any payment made pursuant to such guarantee, 
            unless the Secretary for good cause waives such right of 
            recovery (subject to appropriations remaining available to 
            permit such a waiver) and, upon making any such payment, the 
            United States shall be subrogated to all of the rights of 
            the recipient of the payments with respect to which the 
            guarantee was made. Amounts recovered under this clause 
            shall be credited as reimbursements to the financing account 
            of the program.
            (ii) Modification of terms and conditions

                To the extent permitted by clause (iii) and subject to 
            the requirements of section 504(e) of the Credit Reform Act 
            of 1990 (2 U.S.C. 661c(e)), any terms and conditions 
            applicable to a loan guarantee under this subsection 
            (including terms and conditions imposed under clause (iv)) 
            may be modified or waived by the Secretary to the extent the 
            Secretary determines it to be consistent with the financial 
            interest of the United States.
            (iii) Incontestability

                Any loan guarantee made by the Secretary under this 
            subsection shall be incontestable--
                    (I) in the hands of an applicant on whose behalf 
                such guarantee is made unless the applicant engaged in 
                fraud or misrepresentation in securing such guarantee; 
                and
                    (II) as to any person (or successor in interest) who 
                makes or contracts to make a loan to such applicant in 
                reliance thereon unless such person (or successor in 
                interest) engaged in fraud or misrepresentation in 
                making or contracting to make such loan.
            (iv) Further terms and conditions

                Guarantees of loans under this subsection shall be 
            subject to such further terms and conditions as the 
            Secretary determines to be necessary to assure that the 
            purposes of this section will be achieved.

                      (3) Loan origination fees

        (A) In general

            The Secretary shall collect a loan origination fee with 
        respect to loans to be guaranteed under this subsection, except 
        as provided in subparagraph (C).

        (B) Amount

            The amount of a loan origination fee collected by the 
        Secretary under subparagraph (A) shall be equal to the estimated 
        long term cost of the loan guarantees involved to the Federal 
        Government (excluding administrative costs), calculated on a net 
        present value basis, after taking into account any 
        appropriations that may be made for the purpose of offsetting 
        such costs, and in accordance with the criteria used to award 
        loan guarantees under this subsection.

        (C) Waiver

            The Secretary may waive the loan origination fee for a 
        health center applicant who demonstrates to the Secretary that 
        the applicant will be unable to meet the conditions of the loan 
        if the applicant incurs the additional cost of the fee.

                            (4) Defaults

        (A) In general

            Subject to the requirements of the Credit Reform Act of 1990 
        (2 U.S.C. 661 et seq.), the Secretary may take such action as 
        may be necessary to prevent a default on a loan guaranteed under 
        this subsection, including the waiver of regulatory conditions, 
        deferral of loan payments, renegotiation of loans, and the 
        expenditure of funds for technical and consultative assistance, 
        for the temporary payment of the interest and principal on such 
        a loan, and for other purposes. Any such expenditure made under 
        the preceding sentence on behalf of a health center or centers 
        shall be made under such terms and conditions as the Secretary 
        shall prescribe, including the implementation of such 
        organizational, operational, and financial reforms as the 
        Secretary determines are appropriate and the disclosure of such 
        financial or other information as the Secretary may require to 
        determine the extent of the implementation of such reforms.

        (B) Foreclosure

            The Secretary may take such action, consistent with State 
        law respecting foreclosure procedures and, with respect to 
        reserves required for furnishing services on a prepaid basis, 
        subject to the consent of the affected States, as the Secretary 
        determines appropriate to protect the interest of the United 
        States in the event of a default on a loan guaranteed under this 
        subsection, except that the Secretary may only foreclose on 
        assets offered as security (if any) in accordance with paragraph 
        (2)(A)(i).

                           (5) Limitation

        Not more than one loan guarantee may be made under this 
    subsection for the same network or plan, except that upon a showing 
    of good cause the Secretary may make additional loan guarantees.

                          (6) Annual report

        Not later than April 1, 1998, and each April 1 thereafter, the 
    Secretary shall prepare and submit to the appropriate committees of 
    Congress a report concerning loan guarantees provided under this 
    subsection. Such report shall include--
            (A) a description of the number, amount, and use of funds 
        received under each loan guarantee provided under this 
        subsection;
            (B) a description of any defaults with respect to such loans 
        and an analysis of the reasons for such defaults, if any; and
            (C) a description of the steps that may have been taken by 
        the Secretary to assist an entity in avoiding such a default.

                       (7) Program evaluation

        Not later than June 30, 1999, the Secretary shall prepare and 
    submit to the appropriate committees of Congress a report containing 
    an evaluation of the program authorized under this subsection. Such 
    evaluation shall include a recommendation with respect to whether or 
    not the loan guarantee program under this subsection should be 
    continued and, if so, any modifications that should be made to such 
    program.

                 (8) Authorization of appropriations

        There are authorized to be appropriated to carry out this 
    subsection such sums as may be necessary.

(e) Operating grants

                            (1) Authority

        (A) In general

            The Secretary may make grants for the costs of the operation 
        of public and nonprofit private health centers that provide 
        health services to medically underserved populations.

        (B) Entities that fail to meet certain requirements

            The Secretary may make grants, for a period of not to exceed 
        2 years, for the costs of the operation of public and nonprofit 
        private entities which provide health services to medically 
        underserved populations but with respect to which the Secretary 
        is unable to make each of the determinations required by 
        subsection (j)(3) of this section.

                          (2) Use of funds

        The costs for which a grant may be made under subparagraph (A) 
    or (B) of paragraph (1) may include the costs of acquiring and 
    leasing buildings and equipment (including the costs of amortizing 
    the principal of, and paying interest on, loans), and the costs of 
    providing training related to the provision of required primary 
    health services and additional health services and to the management 
    of health center programs.

                          (3) Construction

        The Secretary may award grants which may be used to pay the 
    costs associated with expanding and modernizing existing buildings 
    or constructing new buildings (including the costs of amortizing the 
    principal of, and paying the interest on, loans) for projects 
    approved prior to October 1, 1996.

                           (4) Limitation

        Not more than two grants may be made under subparagraph (B) of 
    paragraph (1) for the same entity.

                             (5) Amount

        (A) In general

            The amount of any grant made in any fiscal year under 
        paragraph (1) to a health center shall be determined by the 
        Secretary, but may not exceed the amount by which the costs of 
        operation of the center in such fiscal year exceed the total 
        of--
                (i) State, local, and other operational funding provided 
            to the center; and
                (ii) the fees, premiums, and third-party reimbursements, 
            which the center may reasonably be expected to receive for 
            its operations in such fiscal year.

        (B) Payments

            Payments under grants under subparagraph (A) or (B) of 
        paragraph (1) shall be made in advance or by way of 
        reimbursement and in such installments as the Secretary finds 
        necessary and adjustments may be made for overpayments or 
        underpayments.

        (C) Use of nongrant funds

            Nongrant funds described in clauses (i) and (ii) of 
        subparagraph (A), including any such funds in excess of those 
        originally expected, shall be used as permitted under this 
        section, and may be used for such other purposes as are not 
        specifically prohibited under this section if such use furthers 
        the objectives of the project.

(f) Infant mortality grants

                           (1) In general

        The Secretary may make grants to health centers for the purpose 
    of assisting such centers in--
            (A) providing comprehensive health care and support services 
        for the reduction of--
                (i) the incidence of infant mortality; and
                (ii) morbidity among children who are less than 3 years 
            of age; and

            (B) developing and coordinating service and referral 
        arrangements between health centers and other entities for the 
        health management of pregnant women and children described in 
        subparagraph (A).

                            (2) Priority

        In making grants under this subsection the Secretary shall give 
    priority to health centers providing services to any medically 
    underserved population among which there is a substantial incidence 
    of infant mortality or among which there is a significant increase 
    in the incidence of infant mortality.

                          (3) Requirements

        The Secretary may make a grant under this subsection only if the 
    health center involved agrees that--
            (A) the center will coordinate the provision of services 
        under the grant to each of the recipients of the services;
            (B) such services will be continuous for each such 
        recipient;
            (C) the center will provide follow-up services for 
        individuals who are referred by the center for services 
        described in paragraph (1);
            (D) the grant will be expended to supplement, and not 
        supplant, the expenditures of the center for primary health 
        services (including prenatal care) with respect to the purpose 
        described in this subsection; and
            (E) the center will coordinate the provision of services 
        with other maternal and child health providers operating in the 
        catchment area.

(g) Migratory and seasonal agricultural workers

                           (1) In general

        The Secretary may award grants for the purposes described in 
    subsections (c), (e), and (f) of this section for the planning and 
    delivery of services to a special medically underserved population 
    comprised of--
            (A) migratory agricultural workers, seasonal agricultural 
        workers, and members of the families of such migratory and 
        seasonal agricultural workers who are within a designated 
        catchment area; and
            (B) individuals who have previously been migratory 
        agricultural workers but who no longer meet the requirements of 
        subparagraph (A) of paragraph (3) because of age or disability 
        and members of the families of such individuals who are within 
        such catchment area.

                     (2) Environmental concerns

        The Secretary may enter into grants or contracts under this 
    subsection with public and private entities to--
            (A) assist the States in the implementation and enforcement 
        of acceptable environmental health standards, including 
        enforcement of standards for sanitation in migratory 
        agricultural worker labor camps, and applicable Federal and 
        State pesticide control standards; and
            (B) conduct projects and studies to assist the several 
        States and entities which have received grants or contracts 
        under this section in the assessment of problems related to camp 
        and field sanitation, exposure to unsafe levels of agricultural 
        chemicals including pesticides, and other environmental health 
        hazards to which migratory agricultural workers and members of 
        their families are exposed.

                           (3) Definitions

        For purposes of this subsection:

        (A) Migratory agricultural worker

            The term ``migratory agricultural worker'' means an 
        individual whose principal employment is in agriculture on a 
        seasonal basis, who has been so employed within the last 24 
        months, and who establishes for the purposes of such employment 
        a temporary abode.

        (B) Seasonal agricultural worker

            The term ``seasonal agricultural worker'' means an 
        individual whose principal employment is in agriculture on a 
        seasonal basis and who is not a migratory agricultural worker.

        (C) Agriculture

            The term ``agriculture'' means farming in all its branches, 
        including--
                (i) cultivation and tillage of the soil;
                (ii) the production, cultivation, growing, and 
            harvesting of any commodity grown on, in, or as an adjunct 
            to or part of a commodity grown in or on, the land; and
                (iii) any practice (including preparation and processing 
            for market and delivery to storage or to market or to 
            carriers for transportation to market) performed by a farmer 
            or on a farm incident to or in conjunction with an activity 
            described in clause (ii).

(h) Homeless population

                           (1) In general

        The Secretary may award grants for the purposes described in 
    subsections (c), (e), and (f) of this section for the planning and 
    delivery of services to a special medically underserved population 
    comprised of homeless individuals, including grants for innovative 
    programs that provide outreach and comprehensive primary health 
    services to homeless children and children at risk of homelessness.

                        (2) Required services

        In addition to required primary health services (as defined in 
    subsection (b)(1) of this section), an entity that receives a grant 
    under this subsection shall be required to provide substance abuse 
    services as a condition of such grant.

               (3) Supplement not supplant requirement

        A grant awarded under this subsection shall be expended to 
    supplement, and not supplant, the expenditures of the health center 
    and the value of in kind contributions for the delivery of services 
    to the population described in paragraph (1).

                           (4) Definitions

        For purposes of this section:

        (A) Homeless individual

            The term ``homeless individual'' means an individual who 
        lacks housing (without regard to whether the individual is a 
        member of a family), including an individual whose primary 
        residence during the night is a supervised public or private 
        facility that provides temporary living accommodations and an 
        individual who is a resident in transitional housing.

        (B) Substance abuse

            The term ``substance abuse'' has the same meaning given such 
        term in section 290cc-34(4) of this title.

        (C) Substance abuse services

            The term ``substance abuse services'' includes 
        detoxification and residential treatment for substance abuse 
        provided in settings other than hospitals.

(i) Residents of public housing

                           (1) In general

        The Secretary may award grants for the purposes described in 
    subsections (c), (e), and (f) of this section for the planning and 
    delivery of services to a special medically underserved population 
    comprised of residents of public housing (such term, for purposes of 
    this subsection, shall have the same meaning given such term in 
    section 1437a(b)(1) of this title) and individuals living in areas 
    immediately accessible to such public housing.

                     (2) Supplement not supplant

        A grant awarded under this subsection shall be expended to 
    supplement, and not supplant, the expenditures of the health center 
    and the value of in kind contributions for the delivery of services 
    to the population described in paragraph (1).

                   (3) Consultation with residents

        The Secretary may not make a grant under paragraph (1) unless, 
    with respect to the residents of the public housing involved, the 
    applicant for the grant--
            (A) has consulted with the residents in the preparation of 
        the application for the grant; and
            (B) agrees to provide for ongoing consultation with the 
        residents regarding the planning and administration of the 
        program carried out with the grant.

(j) Applications

                           (1) Submission

        No grant may be made under this section unless an application 
    therefore is submitted to, and approved by, the Secretary. Such an 
    application shall be submitted in such form and manner and shall 
    contain such information as the Secretary shall prescribe.

                       (2) Description of need

        An application for a grant under subparagraph (A) or (B) of 
    subsection (e)(1) of this section for a health center shall 
    include--
            (A) a description of the need for health services in the 
        catchment area of the center;
            (B) a demonstration by the applicant that the area or the 
        population group to be served by the applicant has a shortage of 
        personal health services; and
            (C) a demonstration that the center will be located so that 
        it will provide services to the greatest number of individuals 
        residing in the catchment area or included in such population 
        group.

    Such a demonstration shall be made on the basis of the criteria 
    prescribed by the Secretary under subsection (b)(3) of this section 
    or on any other criteria which the Secretary may prescribe to 
    determine if the area or population group to be served by the 
    applicant has a shortage of personal health services. In considering 
    an application for a grant under subparagraph (A) or (B) of 
    subsection (e)(1) of this section, the Secretary may require as a 
    condition to the approval of such application an assurance that the 
    applicant will provide any health service defined under paragraphs 
    (1) and (2) of subsection (b) of this section that the Secretary 
    finds is needed to meet specific health needs of the area to be 
    served by the applicant. Such a finding shall be made in writing and 
    a copy shall be provided to the applicant.

                          (3) Requirements

        Except as provided in subsection (e)(1)(B) of this section, the 
    Secretary may not approve an application for a grant under 
    subparagraph (A) or (B) of subsection (e)(1) of this section unless 
    the Secretary determines that the entity for which the application 
    is submitted is a health center (within the meaning of subsection 
    (a) of this section) and that--
            (A) the required primary health services of the center will 
        be available and accessible in the catchment area of the center 
        promptly, as appropriate, and in a manner which assures 
        continuity;
            (B) the center has made and will continue to make every 
        reasonable effort to establish and maintain collaborative 
        relationships with other health care providers in the catchment 
        area of the center;
            (C) the center will have an ongoing quality improvement 
        system that includes clinical services and management, and that 
        maintains the confidentiality of patient records;
            (D) the center will demonstrate its financial responsibility 
        by the use of such accounting procedures and other requirements 
        as may be prescribed by the Secretary;
            (E) the center--
                (i) has or will have a contractual or other arrangement 
            with the agency of the State, in which it provides services, 
            which administers or supervises the administration of a 
            State plan approved under title XIX of the Social Security 
            Act [42 U.S.C. 1396 et seq.] for the payment of all or a 
            part of the center's costs in providing health services to 
            persons who are eligible for medical assistance under such a 
            State plan; or
                (ii) has made or will make every reasonable effort to 
            enter into such an arrangement;

            (F) the center has made or will make and will continue to 
        make every reasonable effort to collect appropriate 
        reimbursement for its costs in providing health services to 
        persons who are entitled to insurance benefits under title XVIII 
        of the Social Security Act [42 U.S.C. 1395 et seq.], to medical 
        assistance under a State plan approved under title XIX of such 
        Act [42 U.S.C. 1396 et seq.], or to assistance for medical 
        expenses under any other public assistance program or private 
        health insurance program;
            (G) the center--
                (i) has prepared a schedule of fees or payments for the 
            provision of its services consistent with locally prevailing 
            rates or charges and designed to cover its reasonable costs 
            of operation and has prepared a corresponding schedule of 
            discounts to be applied to the payment of such fees or 
            payments, which discounts are adjusted on the basis of the 
            patient's ability to pay;
                (ii) has made and will continue to make every reasonable 
            effort--
                    (I) to secure from patients payment for services in 
                accordance with such schedules; and
                    (II) to collect reimbursement for health services to 
                persons described in subparagraph (F) on the basis of 
                the full amount of fees and payments for such services 
                without application of any discount; and

                (iii) has submitted to the Secretary such reports as the 
            Secretary may require to determine compliance with this 
            subparagraph;

            (H) the center has established a governing board which 
        except in the case of an entity operated by an Indian tribe or 
        tribal or Indian organization under the Indian Self-
        Determination Act [25 U.S.C. 450f et seq.] or an urban Indian 
        organization under the Indian Health Care Improvement Act (25 
        U.S.C. 1651 et seq.)--
                (i) is composed of individuals, a majority of whom are 
            being served by the center and who, as a group, represent 
            the individuals being served by the center;
                (ii) meets at least once a month, selects the services 
            to be provided by the center, schedules the hours during 
            which such services will be provided, approves the center's 
            annual budget, approves the selection of a director for the 
            center, and, except in the case of a governing board of a 
            public center (as defined in the second sentence of this 
            paragraph), establishes general policies for the center; and
                (iii) in the case of an application for a second or 
            subsequent grant for a public center, has approved the 
            application or if the governing body has not approved the 
            application, the failure of the governing body to approve 
            the application was unreasonable;

        except that, upon a showing of good cause the Secretary shall 
        waive, for the length of the project period, all or part of the 
        requirements of this subparagraph in the case of a health center 
        that receives a grant pursuant to subsection (g), (h), (i), or 
        (p) of this section;
            (I) the center has developed--
                (i) an overall plan and budget that meets the 
            requirements of the Secretary; and
                (ii) an effective procedure for compiling and reporting 
            to the Secretary such statistics and other information as 
            the Secretary may require relating to--
                    (I) the costs of its operations;
                    (II) the patterns of use of its services;
                    (III) the availability, accessibility, and 
                acceptability of its services; and
                    (IV) such other matters relating to operations of 
                the applicant as the Secretary may require;

            (J) the center will review periodically its catchment area 
        to--
                (i) ensure that the size of such area is such that the 
            services to be provided through the center (including any 
            satellite) are available and accessible to the residents of 
            the area promptly and as appropriate;
                (ii) ensure that the boundaries of such area conform, to 
            the extent practicable, to relevant boundaries of political 
            subdivisions, school districts, and Federal and State health 
            and social service programs; and
                (iii) ensure that the boundaries of such area eliminate, 
            to the extent possible, barriers to access to the services 
            of the center, including barriers resulting from the area's 
            physical characteristics, its residential patterns, its 
            economic and social grouping, and available transportation;

            (K) in the case of a center which serves a population 
        including a substantial proportion of individuals of limited 
        English-speaking ability, the center has--
                (i) developed a plan and made arrangements responsive to 
            the needs of such population for providing services to the 
            extent practicable in the language and cultural context most 
            appropriate to such individuals; and
                (ii) identified an individual on its staff who is fluent 
            in both that language and in English and whose 
            responsibilities shall include providing guidance to such 
            individuals and to appropriate staff members with respect to 
            cultural sensitivities and bridging linguistic and cultural 
            differences; and

            (L) the center, has developed an ongoing referral 
        relationship with one or more hospitals.

    For purposes of subparagraph (H), the term ``public center'' means a 
    health center funded (or to be funded) through a grant under this 
    section to a public agency.

        (4) Approval of new or expanded service applications

        The Secretary shall approve applications for grants under 
    subparagraph (A) or (B) of subsection (e)(1) of this section for 
    health centers which--
            (A) have not received a previous grant under such 
        subsection; or
            (B) have applied for such a grant to expand their services;

    in such a manner that the ratio of the medically underserved 
    populations in rural areas which may be expected to use the services 
    provided by such centers to the medically underserved populations in 
    urban areas which may be expected to use the services provided by 
    such centers is not less than two to three or greater than three to 
    two.

(k) Technical and other assistance

    The Secretary may provide (either through the Department of Health 
and Human Services or by grant or contract) all necessary technical and 
other nonfinancial assistance (including fiscal and program management 
assistance and training in such management) to any public or private 
nonprofit entity to assist entities in developing plans for, or 
operating as, health centers, and in meeting the requirements of 
subsection (j)(2) of this section.

(l) Authorization of appropriations

                           (1) In general

        For the purpose of carrying out this section, in addition to the 
    amounts authorized to be appropriated under subsection (d) of this 
    section, there are authorized to be appropriated $802,124,000 for 
    fiscal year 1997, and such sums as may be necessary for each of the 
    fiscal years 1998 through 2001.

                       (2) Special provisions

        (A) Public centers

            The Secretary may not expend in any fiscal year, for grants 
        under this section to public centers (as defined in the second 
        sentence of subsection (j)(3) of this section) the governing 
        boards of which (as described in subsection (j)(3)(G)(ii) \1\ of 
        this section) do not establish general policies for such 
        centers, an amount which exceeds 5 percent of the amounts 
        appropriated under this section for that fiscal year. For 
        purposes of applying the preceding sentence, the term ``public 
        centers'' shall not include health centers that receive grants 
        pursuant to subsection (h) or (i) of this section.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be subsection ``(j)(3)(H)(ii)''.
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        (B) Distribution of grants

            (i) Fiscal year 1997

                For fiscal year 1997, the Secretary, in awarding grants 
            under this section shall ensure that the amounts made 
            available under each of subsections (g), (h), and (i) of 
            this section in such fiscal year bears the same relationship 
            to the total amount appropriated for such fiscal year under 
            paragraph (1) as the amounts appropriated for fiscal year 
            1996 under each of sections 254b, 256, and 256a of this 
            title (as such sections existed one day prior to October 11, 
            1996) bears to the total amount appropriated under sections 
            256b, 256c, 256, and 256a of this title (as such sections 
            existed one day prior to October 11, 1996) for such fiscal 
            year.
            (ii) Fiscal years 1998 and 1999

                For each of the fiscal years 1998 and 1999, the 
            Secretary, in awarding grants under this section shall 
            ensure that the proportion of the amounts made available 
            under each of subsections (g), (h), and (i) of this section 
            is equal to the proportion of amounts made available under 
            each such subsection for the previous fiscal year, as such 
            amounts relate to the total amounts appropriated for the 
            previous fiscal year involved, increased or decreased by not 
            more than 10 percent.

                         (3) Funding report

        The Secretary shall annually prepare and submit to the 
    appropriate committees of Congress a report concerning the 
    distribution of funds under this section that are provided to meet 
    the health care needs of medically underserved populations, 
    including the homeless, residents of public housing, and migratory 
    and seasonal agricultural workers, and the appropriateness of the 
    delivery systems involved in responding to the needs of the 
    particular populations. Such report shall include an assessment of 
    the relative health care access needs of the targeted populations 
    and the rationale for any substantial changes in the distribution of 
    funds.

(m) Memorandum of agreement

    In carrying out this section, the Secretary may enter into a 
memorandum of agreement with a State. Such memorandum may include, where 
appropriate, provisions permitting such State to--
        (1) analyze the need for primary health services for medically 
    underserved populations within such State;
        (2) assist in the planning and development of new health 
    centers;
        (3) review and comment upon annual program plans and budgets of 
    health centers, including comments upon allocations of health care 
    resources in the State;
        (4) assist health centers in the development of clinical 
    practices and fiscal and administrative systems through a technical 
    assistance plan which is responsive to the requests of health 
    centers; and
        (5) share information and data relevant to the operation of new 
    and existing health centers.

(n) Records

                           (1) In general

        Each entity which receives a grant under subsection (e) of this 
    section shall establish and maintain such records as the Secretary 
    shall require.

                          (2) Availability

        Each entity which is required to establish and maintain records 
    under this subsection shall make such books, documents, papers, and 
    records available to the Secretary or the Comptroller General of the 
    United States, or any of their duly authorized representatives, for 
    examination, copying or mechanical reproduction on or off the 
    premises of such entity upon a reasonable request therefore. The 
    Secretary and the Comptroller General of the United States, or any 
    of their duly authorized representatives, shall have the authority 
    to conduct such examination, copying, and reproduction.

(o) Delegation of authority

    The Secretary may delegate the authority to administer the programs 
authorized by this section to any office, except that the authority to 
enter into, modify, or issue approvals with respect to grants or 
contracts may be delegated only within the central office of the Health 
Resources and Services Administration.

(p) Special consideration

    In making grants under this section, the Secretary shall give 
special consideration to the unique needs of sparsely populated rural 
areas, including giving priority in the awarding of grants for new 
health centers under subsections (c) and (e) of this section, and the 
granting of waivers as appropriate and permitted under subsections 
(b)(1)(B)(i) and (j)(3)(G) \2\ of this section.
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    \2\ So in original. Probably should be a reference to subsection 
(j)(3)(H).
---------------------------------------------------------------------------

(q) Audits

                           (1) In general

        Each entity which receives a grant under this section shall 
    provide for an independent annual financial audit of any books, 
    accounts, financial records, files, and other papers and property 
    which relate to the disposition or use of the funds received under 
    such grant and such other funds received by or allocated to the 
    project for which such grant was made. For purposes of assuring 
    accurate, current, and complete disclosure of the disposition or use 
    of the funds received, each such audit shall be conducted in 
    accordance with generally accepted accounting principles. Each audit 
    shall evaluate--
            (A) the entity's implementation of the guidelines 
        established by the Secretary respecting cost accounting,
            (B) the processes used by the entity to meet the financial 
        and program reporting requirements of the Secretary, and
            (C) the billing and collection procedures of the entity and 
        the relation of the procedures to its fee schedule and schedule 
        of discounts and to the availability of health insurance and 
        public programs to pay for the health services it provides.

    A report of each such audit shall be filed with the Secretary at 
    such time and in such manner as the Secretary may require.

                             (2) Records

        Each entity which receives a grant under this section shall 
    establish and maintain such records as the Secretary shall by 
    regulation require to facilitate the audit required by paragraph 
    (1). The Secretary may specify by regulation the form and manner in 
    which such records shall be established and maintained.

                     (3) Availability of records

        Each entity which is required to establish and maintain records 
    or to provide for and \3\ audit under this subsection shall make 
    such books, documents, papers, and records available to the 
    Secretary or the Comptroller General of the United States, or any of 
    their duly authorized representatives, for examination, copying or 
    mechanical reproduction on or off the premises of such entity upon a 
    reasonable request therefore. The Secretary and the Comptroller 
    General of the United States, or any of their duly authorized 
    representatives, shall have the authority to conduct such 
    examination, copying, and reproduction.
---------------------------------------------------------------------------
    \3\ So in original. Probably should be ``an''.
---------------------------------------------------------------------------

                             (4) Waiver

        The Secretary may, under appropriate circumstances, waive the 
    application of all or part of the requirements of this subsection 
    with respect to an entity.

(July 1, 1944, ch. 373, title III, Sec. 330, as added Pub. L. 104-299, 
Sec. 2, Oct. 11, 1996, 110 Stat. 3626.)

                       References in Text

    The Credit Reform Act of 1990, referred to in subsec. (d)(4)(A), 
probably means the Federal Credit Reform Act of 1990, title V of Pub. L. 
93-344, as added by Pub. L. 101-508, title XIII, Sec. 13201(a), Nov. 5, 
1990, 104 Stat. 1388-609, which is classified generally to subchapter 
III (Sec. 661 et seq.) of chapter 17A of Title 2, The Congress. For 
complete classification of this Act to the Code, see Short Title note 
set out under section 621 of Title 2 and Tables.
    The Social Security Act, referred to in subsec. (j)(3)(E)(i), (F), 
is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Titles XVIII 
and XIX of the Act are classified generally to subchapters XVIII 
(Sec. 1395 et seq.) and XIX (Sec. 1396 et seq.) of chapter 7 of this 
title, respectively. For complete classification of this Act to the 
Code, see section 1305 of this title and Tables.
    The Indian Self-Determination Act, referred to in subsec. (j)(3)(H), 
is title I of Pub. L. 93-638, Jan. 4, 1975, 88 Stat. 2206, as amended, 
which is classified principally to part A (Sec. 450f et seq.) of 
subchapter II of chapter 14 of Title 25, Indians. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 450 of Title 25 and Tables.
    The Indian Health Care Improvement Act, referred to in subsec. 
(j)(3)(H), is Pub. L. 94-437, Sept. 30, 1976, 90 Stat. 1400, as amended, 
which is classified principally to chapter 18 (Sec. 1601 et seq.) of 
Title 25. For complete classification of this Act to the Code, see Short 
Title note set out under section 1601 of Title 25 and Tables.
    Sections 254b and 254c of this title, referred to in subsec. 
(l)(2)(B)(i), were in the original references to sections 329 and 330, 
meaning sections 329 and 330 of act July 1, 1944, which were omitted in 
the general amendment of this subpart by Pub. L. 104-299, Sec. 2, Oct. 
11, 1996, 110 Stat. 3626. Sections 2 and 3(a) of Pub. L. 104-299 enacted 
new sections 330 and 330A of act July 1, 1944, which are classified, 
respectively, to this section and section 254c of this title.
    Sections 256 and 256a of this title, referred to in subsec. 
(l)(2)(B)(i), were repealed by Pub. L. 104-299, Sec. 4(a)(3), Oct. 11, 
1996, 110 Stat. 3645.

                          Codification

    October 11, 1996, referred to in subsec. (l)(2)(B)(i), was in the 
original ``the date of enactment of this section'', which was translated 
as meaning the date of enactment of Pub. L. 104-299, which amended this 
subpart generally.


                            Prior Provisions

    A prior section 254a-1, act July 1, 1944, ch. 373, title III, 
Sec. 328, as added Nov. 10, 1978, Pub. L. 95-626, title I, Sec. 114, 92 
Stat. 3563; amended Pub. L. 96-88, title V, Sec. 509(b), Oct. 17, 1979, 
93 Stat. 695, related to hospital-affiliated primary care centers, prior 
to repeal by Pub. L. 99-117, Sec. 12(c), Oct. 7, 1985, 99 Stat. 495.
    A prior section 254b, act July 1, 1944, ch. 373, title III, 
Sec. 329, formerly Sec. 310, as added Sept. 25, 1962, Pub. L. 87-692, 76 
Stat. 592; amended Aug. 5, 1965, Pub. L. 89-109, Sec. 3, 79 Stat. 436; 
Oct. 15, 1968, Pub. L. 90-574, title II, Sec. 201, 82 Stat. 1006; Mar. 
12, 1970, Pub. L. 91-209, 84 Stat. 52; June 18, 1973, Pub. L. 93-45, 
title I, Sec. 105, 87 Stat. 91; renumbered Sec. 319, July 23, 1974, Pub. 
L. 93-353, title I, Sec. 102(d), 88 Stat. 362; amended July 29, 1975, 
Pub. L. 94-63, title IV, Sec. 401(a), title VII, Sec. 701(c), 89 Stat. 
334, 352; Apr. 22, 1976, Pub. L. 94-278, title VIII, Sec. 801(a), 90 
Stat. 414; Aug. 1, 1977, Pub. L. 95-83, title III, Sec. 303, 91 Stat. 
388; renumbered Sec. 329 and amended Nov. 10, 1978, Pub. L. 95-626, 
title I, Secs. 102(a), 103(a)-(g)(1)(B), (2), (h), (i), 92 Stat. 3551-
3555; July 10, 1979, Pub. L. 96-32, Sec. 6(a), 93 Stat. 83; Oct. 17, 
1979, Pub. L. 96-88, title V, Sec. 509(b), 93 Stat. 695; Aug. 13, 1981, 
Pub. L. 97-35, title IX, Sec. 930, 95 Stat. 569; Dec. 21, 1982, Pub. L. 
97-375, title I, Sec. 107(b), 96 Stat. 1820; Apr. 24, 1986, Pub. L. 99-
280, Secs. 6, 7, 100 Stat. 400, 401; Aug. 10, 1988, Pub. L. 100-386, 
Sec. 2, 102 Stat. 919; Nov. 6, 1990, Pub. L. 101-527, Sec. 9(b), 104 
Stat. 2333; Oct. 27, 1992, Pub. L. 102-531, title III, Sec. 309(a), 106 
Stat. 3499, related to migrant health centers, prior to the general 
amendment of this subpart by Pub. L. 104-299, Sec. 2.
    Another prior section 254b, act July 1, 1944, ch. 373, title III, 
Sec. 329, as added Dec. 31, 1970, Pub. L. 91-623, Sec. 2, 84 Stat. 1868; 
amended Nov. 18, 1971, Pub. L. 92-157, title II, Sec. 203, 85 Stat. 462; 
Oct. 27, 1972, Pub. L. 92-585, Sec. 2, 86 Stat. 1290; July 29, 1975, 
Pub. L. 94-63, title VIII, Secs. 801-803, 89 Stat. 353, 354; Oct. 12, 
1976, Pub. L. 94-484, title I, Sec. 101(b), 90 Stat. 2244, related to 
establishment of National Health Service Corps, assignment of personnel 
and statement of purpose, prior to repeal by Pub. L. 94-484, title IV, 
Sec. 407(b)(1), Oct. 12, 1976, 90 Stat. 2268. See section 254d et seq. 
of this title.
    A prior section 330 of act July 1, 1944, was classified to section 
254c of this title prior to the general amendment of this subpart by 
Pub. L. 104-299.


                             Effective Date

    Section effective Oct. 1, 1996, see section 5 of Pub. L. 104-299, as 
amended, set out as an Effective Date of 1996 Amendment note under 
section 233 of this title.


    Savings Provision for Current Grants, Contracts, and Cooperative 
                               Agreements

    Section 3(b) of Pub. L. 104-299 provided that: ``The Secretary of 
Health and Human Services shall ensure the continued funding of grants 
made, or contracts or cooperative agreements entered into, under subpart 
I of part D of title III of the Public Health Service Act (42 U.S.C. 
254b et seq.) (as such subpart existed on the day prior to the date of 
enactment of this Act [Oct. 11, 1996]), until the expiration of the 
grant period or the term of the contract or cooperative agreement. Such 
funding shall be continued under the same terms and conditions as were 
in effect on the date on which the grant, contract or cooperative 
agreement was awarded, subject to the availability of appropriations.''


  Reference to Community, Migrant, Public Housing, or Homeless Health 
              Center Considered Reference to Health Center

    Section 4(c) of Pub. L. 104-299 provided that: ``Whenever any 
reference is made in any provision of law, regulation, rule, record, or 
document to a community health center, migrant health center, public 
housing health center, or homeless health center, such reference shall 
be considered a reference to a health center.''


     Legislative Proposal for Changes Conforming to Pub. L. 104-299

    Section 4(e) of Pub. L. 104-299 provided that: ``After consultation 
with the appropriate committees of the Congress, the Secretary of Health 
and Human Services shall prepare and submit to the Congress a 
legislative proposal in the form of an implementing bill containing 
technical and conforming amendments to reflect the changes made by this 
Act [see Short Title of 1996 Amendments note set out under section 201 
of this title].''

                  Section Referred to in Other Sections

    This section is referred to in sections 256c, 297q, 1396d, 1397ee of 
this title; title 29 section 774.
