
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC300e-1]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
             SUBCHAPTER XI--HEALTH MAINTENANCE ORGANIZATIONS
 
Sec. 300e-1. Definitions

    For purposes of this subchapter:
    (1) The term ``basic health services'' means--
        (A) physician services (including consultant and referral 
    services by a physician);
        (B) inpatient and outpatient hospital services;
        (C) medically necessary emergency health services;
        (D) short-term (not to exceed twenty visits), outpatient 
    evaluative and crisis intervention mental health services;
        (E) medical treatment and referral services (including referral 
    services to appropriate ancillary services) for the abuse of or 
    addiction to alcohol and drugs;
        (F) diagnostic laboratory and diagnostic and therapeutic 
    radiologic services;
        (G) home health services; and
        (H) preventive health services (including (i) immunizations, 
    (ii) well-child care from birth, (iii) periodic health evaluations 
    for adults, (iv) voluntary family planning services, (v) infertility 
    services, and (vi) children's eye and ear examinations conducted to 
    determine the need for vision and hearing correction).

Such term does not include a health service which the Secretary, upon 
application of a health maintenance organization, determines is unusual 
and infrequently provided and not necessary for the protection of 
individual health. The Secretary shall publish in the Federal Register 
each determination made by him under the preceding sentence. If a 
service of a physician described in the preceding sentence may also be 
provided under applicable State law by a dentist, optometrist, 
podiatrist, psychologist, or other health care personnel, a health 
maintenance organization may provide such service through a dentist, 
optometrist, podiatrist, psychologist, or other health care personnel 
(as the case may be) licensed to provide such service. Such term 
includes a health service directly associated with an organ transplant 
only if such organ transplant was required to be included in basic 
health services on April 15, 1985. For purposes of this paragraph, the 
term ``home health services'' means health services provided at a 
member's home by health care personnel, as prescribed or directed by the 
responsible physician or other authority designated by the health 
maintenance organization.
    (2) The term ``supplemental health services'' means any health 
service which is not included as a basic health service under paragraph 
(1) of this section. If a health service provided by a physician may 
also be provided under applicable State law by a dentist, optometrist, 
podiatrist, psychologist, or other health care personnel, a health 
maintenance organization may provide such service through an 
optometrist, dentist, podiatrist, psychologist, or other health care 
personnel (as the case may be) licensed to provide such service.
    (3) The term ``member'' when used in connection with a health 
maintenance organization means an individual who has entered into a 
contractual arrangement, or on whose behalf a contractual arrangement 
has been entered into, with the organization under which the 
organization assumes the responsibility for the provision to such 
individual of basic health services and of such supplemental health 
services as may be contracted for.
    (4) The term ``medical group'' means a partnership, association, or 
other group--
        (A) which is composed of health professionals licensed to 
    practice medicine or osteopathy and of such other licensed health 
    professionals (including dentists, optometrists, podiatrists, and 
    psychologists) as are necessary for the provision of health services 
    for which the group is responsible;
        (B) a majority of the members of which are licensed to practice 
    medicine or osteopathy; and
        (C) the members of which (i) as their principal professional 
    activity engage in the coordinated practice of their profession and 
    as a group responsibility have substantial responsibility for the 
    delivery of health services to members of a health maintenance 
    organization, except that this clause does not apply before the end 
    of the forty-eight month period beginning after the month in which 
    the health maintenance oranization \1\ becomes a qualified health 
    maintenance organization as defined in section 300e-9(d) \2\ of this 
    title, or as authorized by the Secretary in accordance with 
    regulations that take into consideration the unusual circumstances 
    of the group; (ii) pool their income from practice as members of the 
    group and distribute it among themselves according to a prearranged 
    salary or drawing account or other similar plan unrelated to the 
    provision of specific health services; (iii) share medical and other 
    records and substantial portions of major equipment and of 
    professional, technical, and administrative staff; (iv) arrange for 
    and encourage continuing education in the field of clinical medicine 
    and related areas for the members of the group; and (v) establish an 
    arrangement whereby a member's enrollment status is not known to the 
    health professional who provides health services to the member.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``organization''.
    \2\ See References in Text note below.

    (5) The term ``individual practice association'' means a 
partnership, corporation, association, or other legal entity which has 
entered into a services arrangement (or arrangements) with persons who 
are licensed to practice medicine, osteopathy, dentistry, podiatry, 
optometry, psychology, or other health profession in a State and a 
majority of whom are licensed to practice medicine or osteopathy. Such 
an arrangement shall provide--
        (A) that such persons shall provide their professional services 
    in accordance with a compensation arrangement established by the 
    entity; and
        (B) to the extent feasible, for the sharing by such persons of 
    medical and other records, equipment, and professional, technical, 
    and administrative staff.

    (6) The term ``health systems agency'' means an entity which is 
designated in accordance with section 300l-4 of this title.
    (7) 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. Such 
a designation may be made by the Secretary only after consideration of 
the comments (if any) of (A) each State health planning and development 
agency which covers (in whole or in part) such urban or rural area or 
the area in which such population group resides, and (B) each health 
systems agency designated for a health service area which covers (in 
whole or in part) such urban or rural area or the area in which such 
population group resides.
    (8)(A) The term ``community rating system'' means the systems, 
described in subparagraphs (B) and (C), of fixing rates of payments for 
health services. A health maintenance organization may fix its rates of 
payments under the system described in subparagraph (B) or (C) or under 
both such systems, but a health maintenance organization may use only 
one such system for fixing its rates of payments for any one group.
    (B) A system of fixing rates of payment for health services may 
provide that the rates shall be fixed on a per-person or per-family 
basis and may authorize the rates to vary with the number of persons in 
a family, but, except as authorized in subparagraph (D), such rates must 
be equivalent for all individuals and for all families of similar 
composition.
    (C) A system of fixing rates of payment for health services may 
provide that the rates shall be fixed for individuals and families by 
groups. Except as authorized in subparagraph (D), such rates must be 
equivalent for all individuals in the same group and for all families of 
similar composition in the same group. If a health maintenance 
organization is to fix rates of payment for individuals and families by 
groups, it shall--
        (i)(I) classify all of the members of the organization into 
    classes based on factors which the health maintenance organization 
    determines predict the differences in the use of health services by 
    the individuals or families in each class and which have not been 
    disapproved by the Secretary,
        (II) determine its revenue requirements for providing services 
    to the members of each class established under subclause (I), and
        (III) fix the rates of payments for the individuals and families 
    of a group on the basis of a composite of the organization's revenue 
    requirements determined under subclause (II) for providing services 
    to them as members of the classes established under subclause (I), 
    or
        (ii) fix the rates of payments for the individuals and families 
    of a group on the basis of the organization's revenue requirements 
    for providing services to the group, except that the rates of 
    payments for the individuals and families of a group of less than 
    100 persons may not be fixed at rates greater than 110 percent of 
    the rate that would be fixed for such individuals and families under 
    subparagraph (B) or clause (i) of this subparagraph.

The Secretary shall review the factors used by each health maintenance 
organization to establish classes under clause (i). If the Secretary 
determines that any such factor may not reasonably be used to predict 
the use of the health services by individuals and families, the 
Secretary shall disapprove such factor for such purpose. If a health 
maintenance organization is to fix rates of payment for a group under 
clause (ii), it shall, upon request of the entity with which it 
contracts to provide services to such group, disclose to that entity the 
method and data used in calculating the rates of payment.
    (D) The following differentials in rates of payments may be 
established under the systems described in subparagraphs (B) and (C):
        (i) Nominal differentials in such rates may be established to 
    reflect differences in marketing costs and the different 
    administrative costs of collecting payments from the following 
    categories of members:
            (I) Individual members (including their families).
            (II) Small groups of members (as determined under 
        regulations of the Secretary).
            (III) Large groups of members (as determined under 
        regulations of the Secretary).

        (ii) Nominal differentials in such rates may be established to 
    reflect the compositing of the rates of payment in a systematic 
    manner to accommodate group purchasing practices of the various 
    employers.
        (iii) Differentials in such rates may be established for members 
    enrolled in a health maintenance organization pursuant to a contract 
    with a governmental authority under section 1079 or 1086 of title 10 
    or under any other governmental program (other than the health 
    benefits program authorized by chapter 89 of title 5) or any health 
    benefits program for employees of States, political subdivision of 
    States, and other public entities.

    (9) The term ``non-metropolitan area'' means an area no part of 
which is within an area designated as a standard metropolitan 
statistical area by the Office of Management and Budget and which does 
not contain a city whose population exceeds fifty thousand individuals.

(July 1, 1944, ch. 373, title XIII, Sec. 1302, as added Pub. L. 93-222, 
Sec. 2, Dec. 29, 1973, 87 Stat. 917; amended Pub. L. 94-460, title I, 
Secs. 102(b), 104, 105(b), (c), 106, 117(b)(1), (2), Oct. 8, 1976, 90 
Stat. 1946-1948, 1955; Pub. L. 95-559, Sec. 11(e), Nov. 1, 1978, 92 
Stat. 2139; Pub. L. 97-35, title IX, Sec. 942(f)-(j), Aug. 13, 1981, 95 
Stat. 574, 575; Pub. L. 97-414, Sec. 9(c), Jan. 4, 1983, 96 Stat. 2064; 
Pub. L. 99-660, title VIII, Secs. 812(a), 814, Nov. 14, 1986, 100 Stat. 
3801, 3802; Pub. L. 100-517, Sec. 6(b), Oct. 24, 1988, 102 Stat. 2579.)

                       References in Text

    Section 300e-9(d) of this title, referred to in par. (4)(C), was 
redesignated section 300e-9(c) of this title by Pub. L. 100-517, 
Sec. 7(b), Oct. 24, 1988, 102 Stat. 2580.


                               Amendments

    1988--Par. (8)(C). Pub. L. 100-517, Sec. 6(b)(1), amended third 
sentence generally. Prior to amendment, third sentence read as follows: 
``If a health maintenance organization is to fix rates of payment for 
individuals and families by groups, it shall--
        ``(i) classify all of the members of the organization into 
    classes based on factors which the health maintenance organization 
    determines predict the differences in the use of health services by 
    the individuals or families in each class and which have not been 
    disapproved by the Secretary,
        ``(ii) determine its revenue requirements for providing services 
    to the members of each class established under clause (i), and
        ``(iii) fix the rates of payment for the individuals and 
    families of a group on the basis of a composite of the 
    organization's revenue requirements determined under clause (ii) for 
    providing services to them as members of the classes established 
    under clause (i).''
    Pub. L. 100-517, Sec. 6(b)(2), inserted at end ``If a health 
maintenance organization is to fix rates of payment for a group under 
clause (ii), it shall, upon request of the entity with which it 
contracts to provide services to such group, disclose to that entity the 
method and data used in calculating the rates of payment.''
    1986--Par. (1). Pub. L. 99-660, Sec. 814(a), inserted 
``psychologist,'' in two places in fourth sentence.
    Pub. L. 99-660, Sec. 812(a), (b)(1), temporarily inserted ``Such 
term includes a health service directly associated with an organ 
transplant only if such organ transplant was required to be included in 
basic health services on April 15, 1985.'' in closing provisions. See 
Effective and Termination Dates of 1986 Amendment note below.
    Par. (2). Pub. L. 99-660, Sec. 814(a), inserted ``psychologist,'' in 
two places.
    Par. (4)(A). Pub. L. 99-660, Sec. 814(b), substituted ``podiatrists, 
and psychologists'' for ``and podiatrists''.
    Par. (5). Pub. L. 99-660, Sec. 814(c), inserted ``psychology,''.
    1983--Par. (5)(B). Pub. L. 97-414 amended directory language of Pub. 
L. 97-35, Sec. 942(i), to correct a typographical error, and did not 
involve any change in text. See 1981 Amendment note below.
    1981--Par. (1). Pub. L. 97-35, Sec. 942(f), struck out provisions 
authorizing health maintenance organizations to maintain, etc., drug use 
profiles of members.
    Par. (2). Pub. L. 97-35, Sec. 942(g), substituted provisions to 
include services not included under par. (1), for provisions enumerating 
specific services, substituted ``health service provided by a 
physician'' for ``service of a physician described in the preceding 
sentence'', and struck out provisions authorizing health maintenance 
organizations to maintain, etc., drug use profiles of members.
    Par. (4)(C)(i). Pub. L. 97-35, Sec. 942(h), inserted provisions 
relating to applicability to qualified organizations.
    Par. (5)(B). Pub. L. 97-35, Sec. 942(i), as amended by Pub. L. 97-
414, Sec. 9(c), struck out ``(i)'' after ``feasible'', and struck out 
cl. (ii) which related to continuing education.
    Par. (8). Pub. L. 97-35, Sec. 942(j), reorganized and restructured 
provisions and, among many changes, provided for determinations based 
upon subpars. (B) and (C), and set out determinations respecting 
differentials contained in former subpars. (B) and (C) as subpar. (D).
    1978--Par. (1). Pub. L. 95-559 inserted provisions to exclude a 
health service which the Secretary, upon application of a health 
maintenance organization, determines is unusual and infrequently 
provided and not necessary for protection of individual health and that 
the Secretary publish in Federal Register each determination made by him 
under preceding sentence.
    1976--Par. (1). Pub. L. 94-460, Sec. 104(a), substituted reference 
to immunization, well-child care from birth, periodic health evaluations 
for adults, and children's ear examinations conducted to determine need 
for hearing correction for reference to preventive dental care for 
children in (H) and, in the provisions following subpar. (H), inserted 
reference to ``other health care personnel''.
    Par. (2). Pub. L. 94-460, Sec. 104(b), substituted ``basic health 
service'' for ``basic health service under paragraph (1)(A) or (1)(H)'' 
in subpars. (B) and (C), added subpar. (G), and inserted reference to 
``other health care personnel'' in provisions following subpar. (G).
    Par. (4)(C). Pub. L. 94-460, Secs. 102(b)(1), 106, substituted ``as 
their principal professional activity engage in the coordinated practice 
of their profession and as a group responsibility have substantial 
responsibility for the delivery of health services to members of a 
health maintenance organization'' for ``as their principal professional 
activity and as a group responsibility engage in the coordinated 
practice of their profession for a health maintenance organization'' in 
cl. (i), substituted ``similar plan unrelated to the provision of 
specific health services'' for ``plan'' in cl. (ii), struck out former 
cl. (iv) which covered the utilization of additional professional 
personnel, allied health professions personnel, and other health 
personnel as are available and appropriate for the effective and 
efficient delivery of the services of the members of the group, 
redesignated former cl. (v) as (iv), and added cl. (v).
    Par. (5)(B). Pub. L. 94-460, Sec. 102(b)(2), struck out former cl. 
(i) which covered the utilization of additional professional personnel, 
allied health professions personnel, and other personnel as are 
available and appropriate for the effective and efficient delivery of 
the services of the persons who are parties to the arrangement, and 
redesignated former cls. (ii) and (iii) as (i) and (ii), respectively.
    Par. (6). Pub. L. 94-460, Sec. 117(b)(1), substituted provisions 
defining ``health systems agency'' for provisions defining ``section 
314(a) State health planning agency'' and ``section 314(b) areawide 
health planning agency''.
    Par. (7). Pub. L. 94-460, Sec. 117(b)(2), substituted ``State health 
planning and development agency which'' for ``section 314(a) State 
health planning agency whose section 314(a) plan'' and ``health systems 
agency designated for a health service area which'' for ``section 314(b) 
areawide health planning agency whose section 314(b) plan''.
    Par. (8). Pub. L. 94-460, Sec. 105(b), (c), substituted ``to reflect 
differences in marketing costs and the different administrative costs'' 
for ``to reflect the different administrative costs'' in subpar. (A) 
preceding cl. (i), added subpar. (B), and redesignated former subpar. 
(B) as (C).


            Effective and Termination Dates of 1986 Amendment

    Section 812(b)(1) of Pub. L. 99-660, which provided that amendment 
by subsection (a), amending this section, was to take effect on Oct. 1, 
1985, and was to cease to be in effect on Apr. 1, 1988, was repealed by 
Pub. L. 100-517, Sec. 6(a), Oct. 24, 1988, 102 Stat. 2579.
    Section 815 of title VIII of Pub. L. 99-660 provided that:
    ``(a) Except as provided in subsection (b) and section 812(b) 
[enacting provisions set out as notes above and below], this title and 
the amendments made by this title [amending this section and sections 
300e-4, 300e-5 to 300e-10, 300e-16, and 300e-17 of this title, repealing 
sections 300e-2, 300e-3, and 300e-4a of this title, and enacting 
provisions set out as notes under this section and sections 201, 300e, 
300e-4, and 300e-5 of this title] shall take effect on October 1, 1985.
    ``(b) Section 813 [enacting provisions set out as a note under 
section 300e of this title] shall take effect on the date of enactment 
of this Act [Nov. 14, 1986].''


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-460 effective Oct. 8, 1976, except that 
amendment of pars. (1) and (2) of this section by section 104 of Pub. L. 
94-460 and the amendment of pars. (4)(C) and (5)(B) of this section by 
sections 102 and 106 of Pub. L. 94-460 applicable with respect to 
grants, contracts, loans, and loan guarantees made under sections 300e-
2, 300e-3, and 300e-4 of this title for fiscal years beginning after 
Sept. 30, 1976, applicable with respect to health benefit plans offered 
under section 300e-9 of this title after Sept. 30, 1976, and effective 
for purposes of section 300e-11 of this title on Oct. 1, 1976, see 
section 118 of Pub. L. 94-460, set out as a note under section 300e of 
this title.


                              Construction

    Section 816 of title VIII of Pub. L. 99-660 provided that: ``The 
provisions of this title and of the amendments made by this title 
[amending this section and sections 300e-4, 300e-5 to 300e-10, 300e-16, 
and 300e-17 of this title, repealing sections 300e-2, 300e-3, and 300e-
4a of this title, and enacting provisions set out as notes under this 
section and sections 201, 300e, 300e-4, and 300e-5 of this title] do not 
authorize the appropriation of any funds for fiscal year 1986.''


 Basic Health Service Status of Certain Organ Transplant Services After 
                              April 1, 1988

    Section 812(b)(2) of Pub. L. 99-660, which provided that after Apr. 
1, 1988, for purposes of this subchapter, no health service directly 
associated with an organ transplant was to be considered to be a basic 
health service if such service would otherwise have been added as a 
basic health service between Apr. 15, 1985, and Apr. 1, 1988, was 
repealed by Pub. L. 100-517, Sec. 6(a), Oct. 24, 1988, 102 Stat. 2579.


Reports Respecting Medically Underserved Areas and Population Groups and 
                         Non-Metropolitan Areas

    Section 5 of Pub. L. 93-222 directed Secretary of Health, Education, 
and Welfare to report to Congress the criteria used in the designation 
of medically underserved areas and population groups for purposes of 
par. (7) of this section by Dec. 29, 1973, and report to Congress the 
areas and population groups designated under par. (7) of this section, 
the comments of State and areawide health planning agencies, and areas 
which meet the definitional standards of par. (9) of this section for 
non-metropolitan areas by Dec. 29, 1974, and that the Office of 
Management and Budget may review such reports before their submission to 
Congress.

                  Section Referred to in Other Sections

    This section is referred to in sections 300e, 1395w-24, 1395x, 
1395mm of this title.
