[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 15 Introduced in House (IH)]
1st Session
H. R. 15
To provide a program of national health insurance, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 4, 2007
Mr. Dingell introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committee on
Ways and Means, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide a program of national health insurance, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``National Health
Insurance Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and declaration of purpose.
Sec. 3. Policies of Act.
TITLE I--BENEFITS AND ELIGIBILITY
Sec. 101. Classes of personal health services.
Sec. 102. Availability of benefits.
Sec. 103. How benefits obtained: free choice by patient.
Sec. 104. Eligibility for benefits.
Sec. 105. Provision of benefits for noninsured needy and other
individuals.
TITLE II--PARTICIPATION OF PHYSICIANS, DENTISTS, NURSES, HOSPITALS, AND
OTHERS
Sec. 201. Physicians and dentists; specialists.
Sec. 202. Nurses.
Sec. 203. Hospitals.
Sec. 204. Auxiliary services.
Sec. 205. Agreements with individual practitioners, hospitals, and
others.
Sec. 206. Agreements with voluntary health insurance and other
organizations.
Sec. 207. Provisions common to all agreements.
Sec. 208. Methods of payments for services.
Sec. 209. Amount of payments for services.
Sec. 210. Professional rights and responsibilities.
TITLE III--LOCAL ADMINISTRATION
Sec. 301. Decentralization of administration.
Sec. 302. Local administrative committee or officer.
Sec. 303. Local area committees.
Sec. 304. Local professional committees.
Sec. 305. Methods of administration.
TITLE IV--STATE ADMINISTRATION
Sec. 401. Declaration of policy.
Sec. 402. State plan of operations.
TITLE V--NATIONAL HEALTH INSURANCE BOARD; NATIONAL ADVISORY MEDICAL
POLICY COUNCIL; GENERAL ADMINISTRATIVE PROVISIONS
Sec. 501. National Health Insurance Board.
Sec. 502. Advisory Council.
Sec. 503. Studies, recommendations, and reports.
Sec. 504. Nondisclosure of information.
Sec. 505. Prohibition against discrimination.
TITLE VI--ELIGIBILITY DETERMINATIONS, COMPLAINTS, HEARINGS, AND
JUDICIAL REVIEW
Sec. 601. Determinations as to eligibility for benefits.
Sec. 602. Complaints of eligible individuals and of persons furnishing
benefits.
TITLE VII--APPLICATION OF ACT TO INDIVIDUALS COVERED UNDER MEDICARE
PROGRAM
Sec. 701. Eligibility; benefits available.
Sec. 702. Study and report.
TITLE VIII--FISCAL PROVISIONS
Sec. 801. Use of Trust Fund.
Sec. 802. Allotment of funds.
Sec. 803. Grants-in-aid for training and education.
TITLE IX--MISCELLANEOUS PROVISIONS
Sec. 901. Definitions.
Sec. 902. Effective date.
TITLE X--VALUE ADDED TAX AND NATIONAL HEALTH CARE TRUST FUND
Sec. 1001. Imposition of value added tax.
Sec. 1002. Revenue from value added tax to fund National Health Care
Trust Fund.
TITLE XI--STUDY AND DEVELOPMENT OF COST CONTROL MECHANISMS
Sec. 1101. Development of cost control mechanisms.
SEC. 2. FINDINGS AND DECLARATION OF PURPOSE.
(a) Findings.--The Congress finds that--
(1) the health of the Nation's people is the foundation of
our Nation's strength, productivity, and wealth;
(2) the assurance of adequate medical care to all of our
people is essential to the general welfare and to the Nation's
security;
(3) since the tremendous advances in medical science in
recent years have necessarily meant great advances in the cost
of health services, our archaic system of paying for medical
care--based on public and private charity for the poor, on
unpredictable and often unbearable costs to the otherwise self-
supporting, and on disproportionate charges for the well-to-
do--has resulted in the following conditions:
(A) the inability of the vast majority of our
people to meet the shattering cost of serious or
chronic illness;
(B) the inability of most of our people to benefit
from modern preventive medicine; and
(C) wholly inadequate provision for the health
needs of our farm families and agricultural workers;
(4) the conditions described in the preceding paragraph
cannot effectively be remedied under the present system of
payment for medical care, or under any voluntary insurance
system; and
(5) a medical dole as an answer to this problem is
repugnant to the American people and would certainly result in
a system of state medicine, paid for from tax funds and
rendered by regimented doctors.
(b) Purposes.--The Congress declares the purposes of this Act to be
to provide a sound economic foundation for our free system of medicine
and to correct the maldistribution of health personnel and facilities
by establishing a system of prepaid personal health insurance on the
principle of social insurance.
SEC. 3. POLICIES OF ACT.
(a) In General.--In establishing a system of national health
insurance, it is the policy of this Act that--
(1) those persons and their dependents who are insured
under the provisions of the Act shall be assured full freedom
to choose their physicians and to change their choice as they
may desire;
(2) physicians and other professions furnishing services in
accordance with the provisions of this Act shall be assured
full freedom in the practice of their professions, including
the right to accept or reject patients except as this right may
be restricted by their own professional ethics or by the laws
of the several States; and
(3) the administration of this Act shall be based upon the
American principle of decentralization.
(b) Administrative Responsibilities.--In carrying out these
policies, it is the intention of Congress that the major administrative
responsibilities be placed in the hands of local bodies representing
both those who pay for and receive services and those who render
services, and operating within the framework of plans made by the
several States, and approved by the Federal agency; that the National
Health Care Trust Fund created by this Act shall be allotted equitably
among the several States and by the States to their local areas; that
voluntary as well as governmental organizations shall be recognized and
utilized; and that all eligible individuals and their dependents as
specified in this Act shall be entitled to its benefits without
discrimination because of race, color, or creed.
TITLE I--BENEFITS AND ELIGIBILITY
SEC. 101. CLASSES OF PERSONAL HEALTH SERVICES.
(a) Personal Health Services.--
(1) In general.--The personal health services to be made
available as benefits to eligible individuals as provided in
this title are the following:
(A) Medical services.
(B) Dental services.
(C) Podiatric services.
(D) Home-nursing services.
(E) Hospital services.
(F) Auxiliary services.
(2) Provision of services.--Each class of services shall be
provided by persons (including individuals, partnerships,
corporations, associations, consumer cooperatives, and other
organizations) who are authorized by applicable State law, and
who are qualified under title II, to do so.
(b) Medical Services.--Medical services consist of--
(1) general medical services such as can be rendered by a
physician engaged in the general or family practice of
medicine, including preventive, diagnostic, and therapeutic
care and periodic medical examinations; and
(2) specialist services rendered by a physician who is a
specialist in the class of services rendered, as defined in
section 201.
Such medical services may be rendered at the office, home, hospital, or
elsewhere, as necessary.
(c) Dental Services.--Dental services consist of--
(1) general dental services rendered by a dentist engaged
in the general practice of dentistry, including preventive,
diagnostic, and therapeutic care, and periodic dental
examinations; and
(2) specialist services rendered by a dentist who is a
specialist in the class of services rendered, as defined in
section 201.
Such dental services may be rendered at the office, home, hospital, or
elsewhere, as necessary.
(d) Podiatric Services.--Podiatric services consist of those
professional services of a podiatrist who is legally authorized to
perform such services in the State in which the podiatrist practices.
(e) Home-Nursing Services.--Home-nursing services consist of
nursing care of the sick rendered in the home by a registered
professional nurse or a qualified practical nurse.
(f) Hospital Services.--
(1) In general.--Hospital services consist of
hospitalization, including necessary nursing services, and such
physician, laboratory, ambulance, and other services in
connection with hospitalization as the National Health
Insurance Board (in this Act referred to as the ``Board''),
after consultation with the National Advisory Medical Policy
Council (in this Act referred to as the ``Advisory Council''),
by regulation designates as essential to good hospital care,
for a maximum of 60 days in any benefit year.
(2) Exclusion.--Hospital services shall not include
hospitalization in a mental disease hospital or institution, or
hospitalization for any day more than 30 days following the
diagnosis of a psychosis.
(3) Increase in maximum number of days.--Whenever the
Board, after consultation with the Advisory Council, finds that
moneys in the National Health Care Trust Fund are adequate and
that facilities are available, it may by regulation increase
the maximum days of hospitalization in any benefit year.
(g) Auxiliary Services.--Auxiliary services consist of such--
(1) chemical, bacteriological, pathological, diagnostic X-
ray and related laboratory services;
(2) X-ray, radium, and related therapy;
(3) physiotherapy;
(4) services of optometrists;
(5) prescribed drugs which are unusually expensive;
(6) special appliances; and
(7) eyeglasses;
as the Board, after consultation with the Advisory Council, by
regulation designates as auxiliary services on the basis of its finding
that their provision under this Act is practicable and is essential to
good health care.
SEC. 102. AVAILABILITY OF BENEFITS.
(a) General Availability.--
(1) In general.--Medical services, hospital services, and,
except as otherwise provided in subsection (b), all other
personal health services specified in section 101 shall be made
available (subject to section 701) as benefits to eligible
individuals in all health-service areas within the United
States as rapidly and as completely as possible having regard
for the availability of the professional and technical
personnel and the hospital and other facilities needed to
provide such services.
(2) Surveys of resources and needs.--To this end the
resources and needs of each State shall be surveyed and a
program developed in each State to assure the maximum
participation and use of health personnel and facilities in the
provision of benefits, and to encourage improvement in the
number and distribution of such personnel and facilities
throughout the State. Additional surveys shall be undertaken as
required, and the program in the State from time to time
modified on the basis thereof.
(b) Limitation on Availability.--If the Board, after consultation
with the Advisory Council, finds that the personnel or facilities or
funds that are or can be made available are inadequate to insure the
provision of all services included as dental, home-nursing, or
auxiliary services under section 101, it may by regulation limit for a
specified period the services which may be provided as benefits, or
modify the extent to which, or the circumstances under which, they will
be provided to eligible individuals. Any such restriction or limitation
shall be reduced or withdrawn as rapidly as may be practicable. In the
case of dental services, priority in the reduction or withdrawal of any
such restriction or limitation shall be given to children.
(c) Recommendations.--The Board shall have the duty of--
(1) studying and making recommendations as to needed
services and facilities for the care of the chronic sick
afflicted with physical ailments, and for the care of
individuals afflicted with mental or nervous diseases, and as
to needed provisions for the prevention of chronic physical
diseases and of mental or nervous diseases; and
(2) making reports from time to time, with recommendations
as to legislation, but the first such report shall be made not
later than two years after benefits under this Act first become
available.
SEC. 103. HOW BENEFITS OBTAINED: FREE CHOICE BY PATIENT.
(a) In General.--Every individual eligible for personal health
services available under this Act may freely select the physician,
dentist, podiatrist, nurse, medical group, hospital, or other person of
the individual's choice to render such services, and may change such
selection if the practitioner, medical group, hospital, or other person
has agreed under title II to furnish the class of services required and
consents to furnish such services to the individual.
(b) Practitioner Services.--General medical, dental, and podiatric
services may be obtained by request made by the individual directly to
the practitioner of the individual's choice.
(c) Specialty Services.--Specialist, home-nursing, hospital, and
auxiliary services shall be obtained from the specialist, nurse,
hospital, or other person of the individual's choice, whenever the
practitioner from whom the individual is receiving medical or dental
services as benefits under this Act refers the individual for
specialist, home-nursing, hospital, or auxiliary services upon
determining that such services are required in the proper care of the
individual's particular case; or whenever, upon request of the
individual, an administrative medical officer, upon a like
determination, refers the individual for such services.
(d) Waiver of Referral.--The Board, by regulation, shall dispense
with the necessity of referral in cases of emergency, and may dispense
with the necessity of referral under specified circumstances or as
respects specified classes of services, or both, if it finds, after
consultation with the Advisory Council, that such action will be
conducive to the provision of a more adequate amount and quality of
health care and will not unreasonably increase the expenditures from
the National Health Care Trust Fund for such services.
SEC. 104. ELIGIBILITY FOR BENEFITS.
(a) In General.--Subject to section 701, every individual shall be
eligible for benefits under this Act throughout any benefit year if the
individual--
(1) has received (or, in the case of income from self-
employment, has accrued)--
(A) not less than $2,000 in wages during the first
four of the last six calendar quarters preceding the
beginning of the benefit year; or
(B) not less than $1,500 in wages in each of six
calendar quarters during the first twelve of the last
fourteen calendar quarters preceding the beginning of
the benefit year (not counting as one of such fourteen
calendar quarters any quarter in any part of which the
individual was under a total disability which continued
for six months or more);
(2) is entitled, for the first month in the benefit year,
to a benefit under title II of the Social Security Act or to an
annuity under subchapter III (relating to civil service
retirement) of chapter 83 of title 5, United States Code; or
(3) the individual is on the first day of the benefit year
a dependent of an individual who is eligible under paragraph
(1) or paragraph (2).
(b) Additional Eligibility.--Subject to section 701, every
individual, not eligible therefor under subsection (a), shall be
eligible for benefits under this Act during the remainder of a benefit
year, beginning with--
(1) the first day of any calendar quarter in such benefit
year, if the individual has received (or, in the case of income
from self-employment, has accrued) not less than $150 in wages
during the first four of the last six calendar quarters
preceding the beginning of such calendar quarter;
(2) the first day of the first month in such benefit year
for which the individual is entitled to a benefit or annuity
referred to in subsection (a)(2); or
(3) the first day in such benefit year on which the is or
becomes a dependent of an individual who is eligible for
benefits under subsection (a) (1) or (2) under paragraph (1) or
(2).
(c) Coverage Under Workers' Compensation.--
(1) No coverage.--No individual shall be deemed eligible
for any personal health services as a benefit under this Act
which are required by reason of any injury, disease, or
disability on account of which any medical, dental, home-
nursing, hospital, or auxiliary service is being received, or
upon application therefor would be received, under a workmen's
compensation law of the United States or of any State, unless
equitable reimbursements to the National Health Care Trust Fund
for the provision of such services as benefits have been made
or assured under section 105.
(2) Subrogation.--In any case in which an individual
receives any personal health service as a benefit under this
Act with respect to any such injury, disease, or disability,
for which no reimbursement to the National Health Care Trust
Fund has been made or assured, the United States shall to the
extent permitted by State law be subrogated to all rights of
such individual, or of the person who furnished such service,
to be paid or reimbursed, pursuant to such workmen's
compensation law, for the cost of furnishing such service.
SEC. 105. PROVISION OF BENEFITS FOR NONINSURED NEEDY AND OTHER
INDIVIDUALS.
(a) In General.--Subject to section 701, any or all benefits
provided under this Act to individuals eligible for such benefits may
be furnished to individuals (including the needy) not otherwise
eligible therefor, for any period for which equitable reimbursements to
the National Health Care Trust Fund on behalf of such needy or other
individuals have been made, or for which reasonable assurance of such
reimbursements have been given, by public agencies of the United
States, the several States, or any of them or of their political
subdivisions, such reimbursements to be in accordance with agreements
and working arrangements negotiated with such public agencies. Services
furnished to such needy or other individuals as benefits shall be of
the same quality, be furnished by the same methods, and be paid for
through the same arrangements, as services furnished to individuals
eligible for benefits under this Act.
(b) Availability of Federal Funds.--Federal grants to States under
title XIX, and part A of title IV, of the Social Security Act, and
Federal grants to States for aid or assistance under other provisions
of such Act, shall be available to the States for provision of
personal-health services for noninsured needy individuals in accordance
with the provisions of subsection (a).
TITLE II--PARTICIPATION OF PHYSICIANS, DENTISTS, NURSES, HOSPITALS, AND
OTHERS
SEC. 201. PHYSICIANS AND DENTISTS; SPECIALISTS.
(a) Qualifications.--Any individual who is a physician, dentist, or
podiatrist legally authorized in a State to render any services
included as general medical, dental, or podiatric services shall be
deemed qualified to render such services in that State as benefits
under this Act.
(b) Specialists.--
(1) In general.--Any such individual who is found to
possess skill and experience of a degree and kind sufficient to
meet standards established for a class of specialist services
shall be deemed qualified to receive compensation for
specialist services of such class as benefits under this Act.
(2) Standards.--The Board, after consultation with the
Advisory Council, shall establish standards as to the special
skills and experience required to qualify an individual to
render each such class of specialist services as benefits under
this Act, and to receive compensation for such specialist
services. In establishing such standards and in determining
whether individuals qualify thereunder, standards and
certifications developed by professional agencies shall be
utilized as far as is consistent with the purposes of this Act,
and regard shall be had for the varying needs and the available
resources in professional personnel of the States and of local
health-service areas.
SEC. 202. NURSES.
Any individual shall be deemed qualified to render home-nursing
services in a State as benefits under this title if such individual
is--
(1) a professional nurse registered in such State; or
(2) a practical nurse--
(A) who is qualified as such under State standards
or requirements, or, in the absence of State standards
or requirements, is found to be qualified under
standards established by the Board after consultation
with the Advisory Council and with nursing agencies;
and
(B) who furnishes nursing care under the direction
or supervision of the State health agency, the health
agency of a political subdivision of the State, or an
organization supplying and supervising the services of
registered professional nurses in the State.
SEC. 203. HOSPITALS.
Any hospital or other institution shall be deemed qualified to
furnish all or particular classes of hospital services as benefits
under this Act if--
(1) it is qualified to furnish such services under State
standards or requirements for the maintenance and operation of
hospitals which apply to the class or classes of services to be
furnished; or
(2) in the absence of such State standards or requirements,
it is found to afford professional services, personnel, and
equipment adequate to promote the health and safety of
individuals requiring the class or classes of hospital services
to be furnished, according to standards which the Board shall
establish after consultation with the Advisory Council.
SEC. 204. AUXILIARY SERVICES.
Any person (as defined in section 901(1)) who--
(1) is qualified under State standards or requirements to
furnish a class of services included as auxiliary services; or
(2) in the absence of State standards or requirements, is
found to be qualified to furnish a class of such services under
standards established for such class by the Board after
consultation with the Advisory Council,
shall be deemed qualified to furnish such class of auxiliary services
in that State as benefits under this Act.
SEC. 205. AGREEMENTS WITH INDIVIDUAL PRACTITIONERS, HOSPITALS, AND
OTHERS.
Any individual (or, in the case of hospital or auxiliary services,
any person) qualified under this title to furnish any class or classes
of personal health services as benefits may enter into an agreement
with the State agency which in accordance with title IV has assumed
responsibility for the administration in the State of benefits under
this Act (in this Act referred to as the ``State agency''), to furnish
such class or classes of services as benefits to individuals eligible
therefor under this Act.
SEC. 206. AGREEMENTS WITH VOLUNTARY HEALTH INSURANCE AND OTHER
ORGANIZATIONS.
(a) In General.--In the provision of personal health services, it
shall be the policy to utilize individuals or organizations qualified
under this title to render such services, including--
(1) any organized group of individuals;
(2) any partnership, association, or consumer cooperative;
(3) any hospital or any hospital and its staff; or
(4) any organization operating a voluntary health-service
insurance plan or other voluntary health-service plan.
(b) Authorization.--The State agency is authorized to enter into an
agreement with any organization referred to in subsection (a) for the
provision of personal health services under this Act. Any such
organization, whether or not it enters into an agreement with the State
agency on its own behalf, shall be permitted to act as agent for
individuals or other persons in negotiating or in carrying out
agreements with the State agency for rendering personal health services
under this Act.
(c) Qualification of Providers.--Any agreement under this section
shall provide that each class of personal health services will be
furnished only by individuals (or, in the case of hospital or auxiliary
benefits, by persons, as defined in section 901(1)) who are qualified
under this title to render such class of services and each of whom has
agreed or has authorized an agreement to be made on the individual's
behalf with the State agency that the individual will furnish such
services in accordance with this Act and with regulations prescribed
thereunder. Each such individual or person shall be responsible, both
to the State agency and (in accordance with applicable State law) to
individuals eligible for personal health services as benefits, for
carrying out such agreement made by the individual or person or on
behalf of the individual or person.
SEC. 207. PROVISIONS COMMON TO ALL AGREEMENTS.
(a) In General.--Each agreement made under this title shall--
(1) specify the class or classes of services to be
furnished or provided pursuant to its terms;
(2) contain an undertaking to comply with this Act and with
regulations prescribed thereunder;
(3) be made upon terms and conditions consistent with the
efficient and economical administration of this Act; and
(4) continue in force for such period and be terminable
upon such notice as may be agreed upon.
(b) Term.--No agreement under section 206, and no designation of an
agent, shall for more than one year preclude any individual or person
qualified to furnish personal health services from exercising such
rights as the individual or person would otherwise have under this
title--
(1) to negotiate and enter into an agreement directly with
the State agency;
(2) to designate another agent for such negotiation; or
(3) to participate in another agreement under section 206.
(c) Non Exclusive Agreements.--No agreement made under this title
shall confer upon any individual or other person, or any group or other
organization, the right of furnishing or providing personal health
services as benefits, to the exclusion in whole or in part of other
individuals, persons, groups, or organizations qualified to furnish or
provide such services.
(d) Disqualification.--
(1) In general.--If the State agency after investigation
finds that an individual or other person under agreement to
furnish or provide personal health services as benefits is no
longer qualified to furnish or provide such services, or has
committed a substantial breach of the agreement, it shall
notify such person of its findings, together with the reasons
therefor, and in the absence of a request for a hearing by such
person under title VI, or in the event of a final decision
sustaining its findings after any hearing and further review
provided under title VI, may terminate the agreement and
withdraw the person's name from the list published pursuant to
title III.
(2) Limitation on subsequent agreements.--After an
agreement has been so terminated, no new agreement shall be
entered into with such person under this Act unless and until
such person gives reasonable assurances to the State agency of
the person's ability and willingness to discharge all
obligations and responsibilities under a new agreement
satisfactorily in accordance with its provisions.
SEC. 208. METHODS OF PAYMENTS FOR SERVICES.
(a) Professional Services.--Agreements for the furnishing of
medical, dental, or podiatric services (other than specialist services)
as benefits under this Act shall provide for payment--
(1) on the basis of fees for services rendered as benefits,
according to a fee schedule;
(2) on a per capita basis, the amount being according to
the number of individuals eligible for benefits who are on the
practitioner's list;
(3) on a salary basis, whole time or part time; or
(4) on such combinations or modifications of these bases,
including separate provision for travel and related expenses,
as may be approved by the State agency;
according in each health-service area as the majority of the medical
practitioners or of the dental practitioners, respectively, under
agreement to furnish such services shall elect. Provision shall be made
for another method or methods of payment (from among the methods listed
in this subsection) to those medical practitioners or to those dental
practitioners who do not elect the method of such majority, when it is
found that such alternative method of making payments contributes to
carrying out the provisions of section 305 or otherwise promotes the
efficient and economical provision of medical or dental services in the
area.
(b) Specialist Services.--Agreements for the furnishing of
specialist services as benefits under this Act may provide for payments
on the basis of fee for service, per case, per session, per capita, on
salary (whole time or part time), or other basis, or combination
thereof.
(c) Treatment of Groups.--Any of the methods of making payments
from among the methods listed in subsection (a) or subsection (b) may
be used in making payments to groups or practitioners or organizations
or other agencies which undertake to provide specialist services as
well as general medical or general dental services.
(d) Hospital Services.--
(1) Use of reasonable costs.--Agreements for the furnishing
of hospital services as benefits under this Act shall provide
for payment on the basis of the reasonable costs of
hospitalization furnished as benefits.
(2) Maximum rates.--The Board, after consultation with the
Advisory Council and with representatives of interested
hospital organizations, may by regulation prescribe maximum
rates for hospitalization furnished as benefits under this Act,
and such maximum rates may be varied according to classes of
localities or types of service.
(3) Payment basis.--Payments to hospitals shall be based on
the least expensive multiple-bed accommodations available in
the hospital unless the patient's condition makes the use of
private accommodations essential for the patient's proper
medical care.
(4) Additional charges.--An agreement made for furnishing
such services shall not affect the right of the hospital or
other person with whom the agreement is made to require
payments from patients with respect to the additional cost of
more expensive facilities occupied at the request of the
patient, or with respect to services not included as benefits
under this Act.
(e) Home-Nursing Services and Auxiliary Services.--Agreements for
the furnishing of home-nursing services or auxiliary services as
benefits under this Act shall provide for payment in accordance with
such methods as the State agency may approve from among those set forth
in regulations prescribed pursuant to this Act.
(f) Pro-Rating Certain Per Capita Payments.--In any health-service
area where agreements for the furnishing of general medical or general
dental services provide for payment only on a per capita basis, the per
capita payments with respect to those individuals residing in the area
who have failed to select a practitioner or other person to furnish
such services to them shall be made on a pro rata basis among the
practitioners and other persons under agreement to furnish such
services in the area.
SEC. 209. AMOUNT OF PAYMENTS FOR SERVICES.
(a) Consideration of Local Conditions.--
(1) In general.--Rates or amounts of payment for particular
services or classes of services furnished as benefits under
this Act shall be adapted to take account of relevant regional,
State, or local conditions and practices.
(2) Professional services.--In arriving at the payments to
be made for services of general medical and dental
practitioners, specialists, professional and practical nurses,
or other practitioners, regard shall be had for the annual
income or its equivalent which the payments will provide, and
consideration shall be given to degree of specialization, and
to the skill, experience, and responsibility involved in
rendering the services.
(3) Adequacy.--Such payments, together with the other terms
and conditions of the agreements made under this title, shall
be adequate to provide professional and financial incentives to
practitioners to advance in their professions and to practice
in localities where their services are most needed, to
encourage high standards in the quality of services furnished,
to give assistance in their use of opportunities for
postgraduate study, and to allow for adequate vacation.
(b) Equivalence in Choice of Payment Methods.--The rates and
amounts of payments fixed under the different methods of payments
specified in subsections (a), (b), (c), and (e) of section 208, and the
methods of making payments, shall assure reasonably equivalent awards
for practitioners selecting different methods of payment, in
consideration of the value of the services they render.
(c) Limitations on Maximum Number of Patients.--Maximum limits upon
the number of eligible individuals with respect to whom any person may
undertake to render services in any local health-service area may be
fixed by the local administrative committee or local administrative
officer of that health-service area only on the basis of a
recommendation of the professional committee in that area that such
limitation is necessary to maintain high standards in the quality of
medical, dental, or other services furnished as benefits. Any such
limits shall take account of professional needs and practices and shall
provide suitable exceptions for emergency and temporary situations.
(d) Treatment of Groups.--The making of an agreement under section
206 with a group or other organization shall not operate to increase
the payments to be made pursuant to any such agreement over the amounts
which, in the absence of such group or organization would be payable
for the same services pursuant to agreements made under section 205
directly with the person or persons who furnish the services.
SEC. 210. PROFESSIONAL RIGHTS AND RESPONSIBILITIES.
(a) Termination Arrangements.--Any person who enters into an
agreement under this title may terminate such agreement after
reasonable notice and after suitable arrangements are made to fulfill
professional obligations to eligible individuals.
(b) Freedom of Practice.--Every physician, dentist, or nurse
agreeing to render services as benefits under this Act shall be free to
practice such professional's profession in the locality of the
professional's own choosing, consistent with the requirements of the
laws of the States.
(c) Freedom in Acceptance of Patients.--Every physician, dentist,
nurse, hospital, or other person entering into an agreement under this
title shall be free to the extent consistent with applicable State law
and customary professional ethics to accept or reject as a patient any
individual requesting the professional's services.
(d) Freedom From Supervision or Control.--No supervision or control
over the details of administration or operation, or over the selection,
tenure, or compensation of personnel, shall be exercised under the
authority of this Act over any hospital which has agreed to furnish
personal health services as benefits.
TITLE III--LOCAL ADMINISTRATION
SEC. 301. DECENTRALIZATION OF ADMINISTRATION.
(a) In General.--In order that personal health-service benefits may
be made available promptly and in a manner best adapted to local
practices, conditions, and needs, responsibility for administration of
the benefits provided under this Act in the several local health-
service areas shall be decentralized as fully as practicable to local
administrative committees or local administrative officers, acting with
the advice and assistance, as provided in this title, of local
professional committees and, in the case of local administrative
officers, the advice and assistance of local area committees.
(b) Designation of Health-Service Areas.--The health-service areas
of a State shall be those so designated in the State plan of
operations.
SEC. 302. LOCAL ADMINISTRATIVE COMMITTEE OR OFFICER.
(a) In General.--The local administrative agency for each local
health-service area may, as determined by the State, be either--
(1) a local administrative committee established in
accordance with section 303, which shall act through a local
executive officer; or
(2) a local administrative officer, who shall act with the
advice and assistance of a local advisory committee established
in accordance with section 303.
(b) Arrangements for Services.--The local administrative committee
or officer, with the advice and assistance of such local professional
committees as may from time to time be established, shall arrange for
the furnishing of personal health-service benefits to eligible
individuals in the area and to that end shall--
(1) publish, and make readily available to eligible
individuals in the area, lists of the names of all persons who
have agreed to furnish personal health services in the area,
together with the class or classes of services which each has
undertaken to furnish;
(2) disseminate pertinent information concerning the rights
and privileges under this Act of eligible individuals and of
persons qualified to furnish personal health services as
benefits;
(3) maintain effective relationships with physicians,
dentists, nurses, hospitals, and other persons who have entered
into agreements to furnish personal health services in the
area, in order to facilitate the furnishing of such services in
accordance with such agreements, to assure full and prompt
payment to such persons for services so furnished, and to
enlist their full cooperation in the administration of benefits
under this Act in the area;
(4) receive and, to the extent possible in the local area,
adjust any complaints which may be made concerning the
administration of benefits under this Act in the area;
(5) perform such other duties (including the making of
payments to persons furnishing personal health services in the
area) as may be assigned by the State agency; and
(6) take or initiate such other administrative action as
the committee or officer finds will best carry out, within the
area, the provisions of this Act, and best effectuate its
purposes.
SEC. 303. LOCAL AREA COMMITTEES.
(a) Establishment.--
(1) In general.--A local area committee shall be
established in each health-service area.
(2) Functions.--If designated by the State as a local
administrative committee, the local area committee shall
perform the functions specified in section 302 and shall
formulate policies for the administration of benefits under
this Act in the area. If designated as an advisory committee,
it shall advise and assist in the performance of such functions
and the formulation of such policies. The committee, whether
administrative or advisory, shall--
(A) participate in the solution of problems
affecting the administration of such benefits;
(B) promote impartiality and freedom from political
influence in such administration;
(C) perform related functions to the end that
administration in the area may be responsive to the
wishes and needs of persons furnishing and receiving
benefits in the area, be adapted to local practices and
resources; and
(D) provide adequate and high quality personal
health services to all eligible individuals.
(b) Composition.--Each local area committee shall consist of not
less than 8 nor more than 16 members. The members shall be so selected
that--
(1) a majority of the committee shall be representative of
the interests of individuals in the area who are eligible for
benefits; and
(2) the remaining members shall be chosen from the several
professions, hospitals, and other organizations in the area by
whom such benefits will be provided.
(c) Meetings.--
(1) In general.--The local area committee shall meet--
(A) as often as may be necessary, and whenever one-
third or more of the members request a meeting; and
(B) in the case of a local administrative
committee, not less frequently than once each month,
and, in the case of a local advisory committee, not
less frequently than once in each quarter of the year.
(2) Annual public meeting.--At least one meeting of the
committee each year shall be open to the public, notice of
which shall be published and at which any person in the area
may participate.
(3) Annual statewide meetings.--
(A) Administrative officers.--At least once each
year there shall be a statewide meeting of local
administrative officers and representatives of local
administrative committees.
(B) Local advisory committees.--At least once in
each year there shall be a statewide meeting of
representatives of all local advisory committees in the
State, and any reports or recommendations made at such
meeting shall on the request of such meeting be
transmitted through the State agency to the Board.
SEC. 304. LOCAL PROFESSIONAL COMMITTEES.
(a) Establishment.--Local committees representative of the persons
furnishing personal health services in the area shall be established in
each health-service area.
(b) Functions.--Each local professional committee shall assist the
local administrative committee and its executive officer, or the local
administrative officer and the local advisory committee, as the case
may be, in--
(1) the preservation of the customary freedom and
responsibility (under applicable State law) of practitioners in
the exercise of professional judgment as to the care of
patients; and
(2) in the solution of technical problems concerning the
participation of professional personnel, hospitals, and other
qualified persons in the provision of personal health services
as benefits, and to advise the local administrative or
executive officer and the local area committee regarding
matters of professional practice or conduct arising in
connection with the performance of agreements for the provision
of such services.
(c) Meetings.--Such local committees shall meet on call of the
local administrative committee or officer, as the case may be, or upon
their own motion. The members of any such local professional committee
may be professional members of the local area committee or other
professional persons or both.
SEC. 305. METHODS OF ADMINISTRATION.
(a) In General.--In each health-service area the methods of
administration shall be such as to--
(1) insure the prompt and efficient care of individuals
entitled to personal health services as benefits;
(2) promote personal relationships between physician and
patients;
(3) promote coordination among and between general
practitioners, specialists, those who furnish auxiliary
services, nurses, and hospitals, in the furnishing of services
under this Act, between them and public-health centers and
agencies, and educational service, research, and other related
agencies or institutions, and between preventive, diagnostic,
and curative services, public and private;
(4) aid in the prevention of disease, disability, and
premature death;
(5) encourage improvement in the number and distribution of
professional personnel and facilities; and
(6) insure the provision of adequate service with the
greatest economy consistent with high standards of quality.
(b) Appointment.--Local administrative officers shall be appointed
by the State agency or the head thereof, in accordance with the merit
system provided for in the State plan of operations. Local
administrative committees shall be appointed by such agency or the head
thereof, from individuals residing in the respective health-service
areas, and the executive officers of such committees shall be appointed
by the committees in accordance with the merit system. The local
health-service areas shall be those so designated in such plan. Members
of local advisory committees and of local professional committees shall
be selected in accordance with methods set forth in such plan.
(c) Compliance With Provisions.--In exercising their functions and
discharging their responsibilities under this Act, local administrative
officers and communities, local advisory committees, and local
professional committees shall observe the provisions of this Act, and
of regulations prescribed thereunder, and of any regulations,
standards, and procedures prescribed by the State agency.
TITLE IV--STATE ADMINISTRATION
SEC. 401. DECLARATION OF POLICY.
It is the intent of Congress that the benefits provided under this
Act be administered wherever possible by the several States, in
accordance with plans of operations submitted and approved as provided
in this title, and in each State insofar as feasible by the same State
agency which administers, or supervises the administration of, the
State's general public health and maternal and child health programs.
SEC. 402. STATE PLAN OF OPERATIONS.
(a) In General.--Any State desiring to assume responsibility for
the administration in the State of the personal health-service benefits
provided under this Act to all individuals in the State who are
eligible for such benefits, may do so for the period beginning October
1, 2008 (when benefits first become available under this Act), or for
the period beginning October 1 of any succeeding year, if it has
undertaken, through its legislature, to administer such benefits in
accordance with the provisions of this Act and with the provisions of
regulations and standards prescribed thereunder, and, at least 12
months in advance, has submitted and had approved a State plan of
operations which provides for the following:
(1) The plan must designate as the sole agency for the
statewide administration of benefits under this Act a single
State agency duly authorized under the law of the State to
administer such benefits within the State in accordance with
the provisions of this Act, the provisions of regulations and
standards prescribed thereunder, and the provisions of the
State plan.
(2) The plan must provide for the designation of a State
advisory committee which shall include members who are familiar
with the needs for personal health services in urban and rural
areas, and who are representative of the interests of
individuals in the State who are eligible for benefits, such
members to constitute a majority, and members chosen from the
several professions, hospitals, and other organizations in the
State by whom such benefits will be provided, to advise the
State agency in carrying out the administration of such
benefits in the State.
(3) The plan must provide for the decentralized
administration of this Act in the State in accordance with
title III for the designation of local health-service areas,
and for such methods of selecting the members of local advisory
committees and of local professional committees as are
calculated to insure representation of the nature set forth in
sections 303 and 304, respectively.
(4) The plan must provide for such methods of
administration, including methods relating to the establishment
and maintenance of personnel standards on a merit basis (except
that the Board shall exercise no authority with respect to the
selection, tenure of office, or compensation of any individual
employed in accordance with such methods), as are found by the
Board to be necessary for the proper and efficient
administration of such benefits in the State.
(5) The plan must provide for the making of surveys of the
resources and needs of the State, in accordance with section
102(a), and sets forth a program for the administration of such
benefits in the State which gives reasonable assurance (A) that
maximum use will be made of all available health personnel and
facilities desiring to participate in the provision of benefits
to eligible individuals, (B) that funds allotted to the State
for the several classes of benefits will be allocated in such
manner as to give reasonable assurance of the availability of
services in all health-service areas in the State, and (C) that
any maldistribution or other inadequacies in the health
personnel or facilities available for such purpose, or in the
quality of the services rendered, will be progressively
improved as rapidly as may be practicable.
(6) The plan must provide that the State agency will make
such reports in such form and containing such information as
the Board may from time to time reasonably require, and give
the Board, upon demand, access to the records upon which such
information is based.
(7) The plan must provide that all Federal funds paid to
the State agency for purposes of carrying out this Act in the
State shall be properly safeguarded and expended solely for the
purposes for which paid, and must provide for the repayment by
the State to the United States of any such funds lost by the
State agency or diverted from the purposes for which paid.
(8) The plan must provide for cooperation, including where
necessary entering into working agreements (with any
appropriate transfer of funds), with other public agencies of
the State or of its political subdivisions concerned with
programs related to the purposes of this Act, and with
appropriate agencies of other States or of the United States
administering this Act, or benefits under this Act, in other
States.
(b) Approval.--The Board shall approve any State plan and any
modification thereof submitted by the State which it finds complies
with the provisions of subsection (a). No change in a State plan shall
be required within one year after initial approval thereof, or within
one year after any change thereafter required therein, by reason of any
change in the regulations or standards prescribed pursuant to this Act,
except with the consent of the State or in accordance with further
action by Congress.
(c) Notice of Disapproval.--In the event of its disapproval of any
plan or any modification therein submitted by a State pursuant to this
title, the Board shall notify the State of such disapproval and shall,
upon request of the State, afford it reasonable notice and opportunity
for a hearing on such disapproval.
(d) Fallback Administration.--
(1) Notice to governor.--If a State has not prior to
October 1, 2008, submitted and had approved a plan of
operations, the Board shall notify the Governor of the State
that the Board will be required to administer this Act in the
State, commencing October 1, 2008.
(2) Publication of notice.--The Board shall provide for the
publication of such notice in at least two newspapers of
general circulation in the State.
(3) Continued administration.--If within 60 days after such
notification to the Governor the State has not submitted an
approvable plan, the Board shall continue such administration
until one year after the submission and approval of a plan of
operations in accordance with this section.
(4) Waiver.--The Board may waive the requirement that a
State plan must be submitted and approved one year prior to
commencement of State administration if it is satisfied in a
particular case that the substitution of a shorter preparatory
period will not prejudice the interests of eligible individuals
in the State.
(e) Noncompliance.--
(1) Notice.--Whenever the Board, after reasonable notice
and opportunity for hearing to the State, finds that the State,
having submitted and had approved a plan of operations under
this title--
(A) is not complying substantially with the
provisions of such plan, or with the provisions of this
Act or any regulations or standards prescribed
thereunder, or
(B) has withdrawn its plan or failed to change it
when and as required by a change in this Act or in
regulations prescribed thereunder,
the Board shall notify the Governor of the State of such
findings, together with its reasons therefor and a statement
concerning the effect of such findings under this Act, and
shall provide for the publication of such notice in at least
two newspapers of general circulation in the State.
(2) Board assumption of responsibility.--If within 60 days
following such a notice the State has not taken appropriate
action to bring its plan or its administration thereof into
conformity with this Act and regulations and standards
thereunder, the Board shall immediately assume responsibility
for the administration of this Act in the State and shall
administer the same in such State for so long thereafter as the
State fails to give reasonable assurances of substantial
compliance or fails to submit an approvable plan, as the case
may be.
(f) Board Authority.--In any State in which the Board has assumed
responsibility for the administration of benefits under this Act as
provided in subsections (d) and (e), the Board shall have and discharge
all authority and duties, in accordance with the provisions of this
Act, which it finds necessary for that purpose, and the term ``State
agency'' wherever used in title II or title III shall be deemed to
refer to the Board.
(g) Additional State-Funded Services.--Nothing in this Act shall
preclude any State or any political subdivision thereof, whether or not
the State has assumed responsibility for the administration of benefits
under this Act, from furnishing, with funds available from sources
other than the National Health Care Trust Fund, any additional health
services to individuals who are eligible for benefits under this Act or
any or all health services to individuals who are not so eligible.
TITLE V--NATIONAL HEALTH INSURANCE BOARD; NATIONAL ADVISORY MEDICAL
POLICY COUNCIL; GENERAL ADMINISTRATIVE PROVISIONS
SEC. 501. NATIONAL HEALTH INSURANCE BOARD.
(a) Establishment.--
(1) In general.--There is hereby established in the
Department of Health and Human Services a National Health
Insurance Board.
(2) Composition.--The Board shall be composed of 5 members,
three of whom shall be appointed by the President by and with
the advice and consent of the Senate, and the other two of whom
shall be the Surgeon General of the Public Health Service and
the Administrator of Social Security. At least one of the
appointed members shall be a doctor of medicine licensed to
practice medicine or surgery in one of the States.
(3) No other employment.--During an appointment member's
term of membership on the Board, the member shall not shall
engage in any other business, vocation, or employment.
(4) Compensation.--Each appointed member shall receive a
salary at an annual rate of basic pay, established by the
President, which is not less than the annual rate of basic pay
for positions at level V of the Executive Schedule and which is
not greater than the annual rate of basic pay for positions at
level IV of the Executive Schedule.
(5) Term.--Each appointed member shall hold office for a
term of six years, except that--
(A) any member appointed to fill a vacancy
occurring prior to the expiration of the term for which
the member's predecessor was appointed shall be
appointed for the remainder of such term; and
(B) the terms of office of the members first taking
office after the date of the enactment of this Act
shall expire, as designated by the President at the
time of appointment, one at the end of two years, one
at the end of four years, and one at the end of six
years, after the date of the enactment of this Act.
(6) Designation of chairman.--The President shall designate
one of the appointed members as the Chairman of the Board.
(b) Functions.--
(1) Supervision.--All functions of the Board shall be
administered by the Board under the direction and supervision
of the Secretary of Health and Human Services. The board shall
perform such functions as it finds necessary to carry out the
provisions of this Act, and shall make all regulations and
standards specifically authorized to be made in this Act and
such other regulations not inconsistent with this Act as may be
necessary.
(2) Delegation.--The Board may delegate to any of its
members, officers, or employees, or with the approval of the
Secretary to any other officer or employee of the Department of
Health and Human Services, such of its powers or duties, except
that of making regulations, as it may consider necessary and
proper to carry out the provisions of this Act.
(3) Contract authority.--The Board may also enter into
agreements for the furnishing or provision of personal health
services under this Act without regard to the provisions of
title 5, United States Code, pertaining to the appointment,
status, or compensation of Federal employees, or pertaining to
contracts for personal services, and without regard to section
3709 of the Revised Statutes (41 U.S.C. 5), and any person
rendering services pursuant to an agreement so made shall not
by reason thereof be deemed to be an employee of the United
States.
(c) Use of Executive Agencies.--In administering the provisions of
this Act, the Board is authorized to utilize the services and
facilities of any executive department or other agency of the United
States in accordance with an agreement with the head thereof. Payment
for such services and facilities shall be made in advance or by way of
reimbursement, as may be agreed upon with the head of the executive
department or other agency furnishing them.
(d) Personnel.--
(1) In general.--Personnel of the Board shall be appointed
by the Secretary upon recommendation of the Board.
(2) Detailing of employees to board.--The Secretary is
authorized to detail to the Board, upon its request, any
officer or employee of the Department of Health and Human
Services, and in the Secretary's discretion to reimburse, from
funds available for the administration of this Act, the
appropriation from which the salary or, in the case of
commissioned officers of the Public Health Service, the pay and
allowances of such officer or employee are paid.
(e) Detailing of Board Employees.--Upon the request of any State
agency administering a State plan of operations pursuant to title IV,
or upon the request of any State desiring to prepare and submit a plan
of operations, any officer or employee of the Board (including any
officer or employee detailed to the Board pursuant to subsection (d))
may be detailed by the Board to assist in the administration, or in the
preparation, of such State plan of operations. The funds available for
the Federal administration of this Act may, in the discretion of the
Secretary, be reimbursed from funds allotted to the State pursuant to
section 802 and available for State administration, for the salary (or
for the pay and allowances) of any officer or employee so detailed.
SEC. 502. ADVISORY COUNCIL.
(a) Establishment.--
(1) In general.--There is hereby established a National
Advisory Medical Policy Council.
(2) Composition.--The Council shall consist of the Chairman
of the Board, who shall serve as Chairman of the Advisory
Council ex officio, and 16 members appointed by the Secretary
of Health and Human Services. At least 8 of the 16 appointed
members shall be individuals who are familiar with the need for
personal health services in urban or rural areas and who are
representative of the interests of individuals eligible for
benefits under this Act, and at least 6 of the members shall be
individuals who are outstanding in the medical or other
professions concerned with the provision of services provided
as benefits under this Act and who are representative of the
individuals, organizations, and other persons by whom personal
health services will be provided.
(3) Term.--Each appointed member shall hold office for a
term of 4 years, except that any member appointed to fill a
vacancy occurring prior to the expiration of the term for which
the member's predecessor was appointed shall be appointed for
the remainder of that term, and the terms of the members first
taking office shall expire, as designated by the Secretary at
the time of appointment, four at the end of the first year,
four at the end of the second year, four at the end of the
third year, and four at the end of the fourth year after the
date of appointment.
(4) Technical and professional advisory committees.--The
Advisory Council is authorized to appoint such special advisory
technical or professional committees as may be useful in
carrying out its functions, and the members of such committees
may be members of the Advisory Council, or other persons, or
both.
(5) Compensation.--Appointed Advisory Council members and
members of technical or professional committees, while serving
on business of the Council (inclusive of traveltime), shall
receive compensation at rates fixed by the Secretary, but not
exceeding $200 per day, and shall be entitled to receive actual
and necessary traveling expenses and per diem in lieu of
subsistence while so serving away from their places of
residence.
(6) Support services.--The Advisory Council, its appointed
members, and its committees, shall be provided with such
secretarial, clerical, or other assistance as may be provided
by the Congress for carrying out their respective functions.
(7) Meetings.--The Advisory Council shall meet as
frequently as the Board deems necessary, but not less than
twice each year. Upon request by six or more members, it shall
be the duty of the Chairman to call a meeting of the Council.
(b) Functions.--The Advisory Council shall advise the Board with
reference to matters of general policy and administration arising in
connection with the making of regulations, the establishment of
professional standards, and the performance of its other duties under
this Act.
(c) Indefinite Duration.--Section 14 of the Federal Advisory
Committee Act shall not apply to the Advisory Council.
SEC. 503. STUDIES, RECOMMENDATIONS, AND REPORTS.
(a) In General.--The Board shall have the duty of studying and
making recommendations as to the most effective methods of providing
health services, and as to legislation and matters of administrative
policy concerning health and related subjects.
(b) Annual Reports.--At the beginning of each regular session of
Congress, it shall make a full report to Congress of the administration
of this Act, including a report with regard to the adequacy of its
financial provisions contained in this Act and of appropriations made
pursuant thereto, the methods of allotment of funds among the States,
and related matters. Such report shall include a record of
consultations with the Advisory Council, recommendations of the
Advisory Council, and comments thereon.
SEC. 504. NONDISCLOSURE OF INFORMATION.
(a) Confidentiality.--Information concerning an individual,
obtained from the individual or from any physician, dentist, nurse, or
hospital, or from any other person pursuant to or as a result of the
administration of this Act, shall be held confidential (except for
statistical purposes) and shall not be disclosed or be open to public
inspection in any manner revealing the identity of the individual or
other person from whom the information was obtained or to whom the
information pertains, except as may be necessary for the proper
administration of this Act or of other laws, State or Federal.
(b) Penalty.--Any person who shall violate any provision of
subsection (a) shall be deemed guilty of a misdemeanor and, upon
conviction thereof, shall be punished by a fine not exceeding $50,000
or by imprisonment not exceeding one year, or both.
SEC. 505. PROHIBITION AGAINST DISCRIMINATION.
In carrying out the provisions of this Act there shall be no
discrimination on account of race, creed, or color. Personal health
services shall be made available as benefits to all eligible
individuals, and all persons qualified under title II to enter into
agreements to furnish or provide such services shall be permitted to do
so.
TITLE VI--ELIGIBILITY DETERMINATIONS, COMPLAINTS, HEARINGS, AND
JUDICIAL REVIEW
SEC. 601. DETERMINATIONS AS TO ELIGIBILITY FOR BENEFITS.
(a) In General.--The Secretary of Health and Human Services through
such units of the Department of Health and Human Services as the
Secretary may determine, shall upon the Secretary's own initiative or
upon application of any individual make determinations as to the
eligibility of individuals for benefits under this Act. Whenever
requested by any individual determined by the Secretary not to be
eligible for benefits for any period, or by a dependent of any such
individual, the Secretary shall give such individual or such dependent
reasonable notice and opportunity for a hearing with respect to such
determination and on the basis of the evidence adduced at the hearing
shall affirm, modify, or reverse the Secretary's determination.
(b) Authority.--
(1) In general.--In carrying out the Secretary's
responsibility under this section, the Secretary shall have all
the powers and duties conferred upon the Secretary under
sections 205 and 206 of the Social Security Act. Such powers
and duties shall be subject to the same limitations and rights
of judicial review as are contained in section 205 of such Act.
(2) Civil service eligibility determinations.--Eligibility
for benefits under this title based on entitlement to an
annuity under subchapter III (relating to civil service
retirement) of chapter 83 of title 5, United States Code, shall
be determined on the basis of certification by the Office of
Personnel Management.
(c) Role of States.--Nothing in title IV shall be deemed to require
or authorize any assumption by the State agency, designated in
accordance with an approved State plan of operations approved under
such title, of any of the Secretary's responsibilities under this
section, but the Secretary may utilize existing facilities and services
of any such agency on the basis of mutual agreements with such agency.
SEC. 602. COMPLAINTS OF ELIGIBLE INDIVIDUALS AND OF PERSONS FURNISHING
BENEFITS.
(a) In General.--
(1) Filing.--Any eligible individual aggrieved by reason of
the individual's failure to receive any personal health-service
benefits to which the believes entitled, or dissatisfied with
any service rendered the individual as a personal health-
service benefit, and any person who has entered into an
agreement to furnish services as personal health-service
benefits and who is aggrieved by the failure or alleged failure
of a local or other administrative officer or a local
administrative committee to carry out the agreement in
accordance with its terms, may make a complaint to the local
administrative officer or local executive officer in the area
in which the action or inaction complained of occurred, or to
such other officer as may be provided in regulations.
(2) Response.--If the officer to whom such complaint is
made finds, after investigation, that the complaint is well
founded, the officer shall promptly--
(A) take such steps as may be necessary and
appropriate to correct the action or inaction
complained of; and
(B) notify the individual or other person making
the complaint of the officer's disposition thereof.
(3) Hearing.--Any such individual or other person
dissatisfied with the action taken may in writing request a
hearing thereon and shall be afforded opportunity for the same
pursuant to subsection (b).
(b) Hearings.--
(1) In general.--Provision shall be made for the
establishment of necessary and sufficient impartial tribunals
to afford hearings to individuals and other persons entitled
thereto under subsection (a), or section 207(d), and for
further review of the findings, conclusions, and
recommendations of such tribunals, in accordance with
regulations made by the Board, after consultation with the
Advisory Council.
(2) Specific subjects.--With respect to any complaint
involving--
(A) matters or questions of professional practice
or conduct, the hearing body shall contain competent
and disinterested professional representation; and
(B) only matters or questions of professional
practice or conduct, the hearing body shall consist
exclusively of such professional persons.
(c) Powers of Board.--In administering this section in any State
which has not assumed responsibility for the administration of benefits
under this Act as provided in title IV, the Board (subject to the
provisions of section 501(b)) shall, insofar as they are applicable to
its functions under this Act, have all the powers and duties conferred
upon the Secretary by sections 205 and 206 of the Social Security Act.
Such powers and duties shall be subject to the limitations and rights
of judicial review contained in section 205 of such Act.
(d) Judicial Review.--In any State which has assumed responsibility
for the administration of benefits under this Act as provided in title
IV the powers and duties of the State agency shall be subject to such
rights of judicial review in the courts of the State as the law of the
State may provide; subject, however, to review by the Supreme Court of
the United States in such cases and in such manner as is provided in
section 1257 of title 28 of the United States Code.
TITLE VII--APPLICATION OF ACT TO INDIVIDUALS COVERED UNDER MEDICARE
PROGRAM
SEC. 701. ELIGIBILITY; BENEFITS AVAILABLE.
(a) Limitation to Supplementary Benefits.--
(1) In general.--In the case of any individual who is
entitled to hospital insurance benefits under part A of title
XVIII of the Social Security Act, or to supplementary medical
insurance benefits under the insurance program established by
part B of such title, during any benefit year or part thereof
in which the individual is otherwise eligible for benefits
under this Act in accordance with section 104 or would
otherwise be furnished such benefits in accordance with section
105, the personal health services (specified in section 101)
which may be made available to the individual as benefits under
this Act shall be limited to those services (otherwise
available to the individual in accordance with section 102) for
which the individual is ineligible under part A or B of such
title XVIII.
(2) Treatment.--For purposes of paragraph (1), an
individual shall be considered ineligible under part A or B of
such title XVIII if no payment is or can be made to the
individual or on the individual's behalf thereunder with
respect to the item or service involved, whether because the
individual is not entitled to benefits under whichever such
part is applicable, because no payment is provided under either
such part for the item or service involved, or because the
individual has exhausted entitlement to have payment made
thereunder for items or services of the type involved. An
individual shall also be considered ineligible under part A or
B of such title XVIII with respect to any item or service (for
which the individual is otherwise entitled to have payment made
thereunder) to the extent that payment is not made with respect
to such item or service because of the application of the
deductible and coinsurance provisions of sections 1813 and 1833
of the Social Security Act.
(b) Regulations.--The Board, after consultation with the Advisory
Council, shall prescribe such regulations as may be necessary or
appropriate to insure, in the case of individuals whose benefits under
this Act are limited under subsection (a), that the combination of
benefits under this Act and title XVIII of the Social Security Act will
effectively carry out (without duplication of benefits) the purpose of
this Act.
(c) No Impact on Dependents.--The limitation under subsection (a)
of an individual's benefits under this Act shall not be construed as
affecting the eligibility of the individual's dependents for such
benefits in accordance with subsection (a)(3) or (b)(3) of section 104.
SEC. 702. STUDY AND REPORT.
(a) Study.--As soon as practicable after the date of the enactment
of this Act, the Secretary of Health and Human Services shall undertake
and carry out a full and complete study of the interrelationship of the
program of national health insurance under this Act and the program of
health insurance under title XVIII of the Social Security Act, in order
to determine the way in which the latter program may be most
effectively and equitably transferred to and incorporated in the
program under this Act.
(b) Considerations.--In conducting such study, the Secretary shall
give particular attention to the transitional problems which would
result from such a transfer, and shall consider in detail (with respect
to each such program)--
(1) the benefits provided;
(2) the standards of eligibility therefor;
(3) the standards and qualifications for participation by
providers of services of various types;
(4) the methods of administration;
(5) the costs and methods of financing; and
(6) any other matters which might assist in making such
determination and in insuring that all desirable features of
the program under title XVIII of the Social Security Act will
to the maximum extent feasible be preserved with respect to the
individuals covered by that program (and, in appropriate cases,
included in the program under this Act for all individuals who
are eligible thereunder, without regard to any transfer).
(c) Report.--The Secretary shall submit to the President and the
Congress, no later than one year after the date of the enactment of
this Act, a complete report of the study conducted under this section
together with the Secretary's findings as to the most effective and
equitable way in which the transfer under consideration could be
effected and detailed recommendations for legislative, administrative,
and other actions to accomplish it.
TITLE VIII--FISCAL PROVISIONS
SEC. 801. USE OF TRUST FUND.
(a) Availability of Funds.--Funds in the National Health Care Trust
Fund shall be available for all expenditures necessary or appropriate
to carry out this Act; except that (subject to the provisions of
section 802(g)) only so much of such funds shall be available for
salaries or other administrative expenses of any department or agency
of the United States as may be authorized in annual or other
appropriation Acts.
(b) Deposit of Reimbursements.--Sums received as reimbursements to
the National Health Care Trust Fund pursuant to section 104(c) or
section 105, or by virtue of subrogation pursuant to section 104(c),
shall be deposited in the National Health Care Trust Fund and shall be
available in accordance with the provisions of subsection (a).
SEC. 802. ALLOTMENT OF FUNDS.
(a) For Classes of Services.--
(1) In general.--The Board, after consultation with the
Advisory Council, shall determine, as far in advance of the
beginning of each fiscal year as is possible, the sums which
shall be available from the Trust Fund for provision during the
fiscal year of all classes, and of each of the five classes, of
personal health-service benefits specified in section 101(a).
(2) Considerations.--Such sums shall be determined, after
taking into consideration the estimated amount which will be in
the Trust Fund at the beginning of the fiscal year and the
anticipated income of the National Health Care Trust Fund
thereafter, with a view--
(A) to maintaining as nearly as practicable a
uniform rate of expenditure for personal health-service
benefits in successive fiscal years, except for
appropriated allowance on account of anticipated
increase in the personnel and facilities available to
furnish personal health-service benefits and on account
of reduction or withdrawal of restrictions or
limitations pursuant to section 102(b); and
(B) to establishing and maintaining a reserve in
the Trust Fund adequate to meet emergency demands in
accordance with subsection (d) and adequate to maintain
the rate of expenditure or to permit its gradual
reduction if the income of the Trust Fund should fall
below the income which had been anticipated.
(b) Initial State Allotments.--
(1) In general.--In accordance with regulations prescribed
after consultation with the State agencies, the Board, prior to
the beginning of each fiscal year shall allot to the several
States, for the fiscal years 2008, 2009, and 2010, 90 percent,
and for each fiscal year thereafter 95 percent of each sum
determined pursuant to subsection (a).
(2) Basis of allotments.--Such regulations shall provide
for allotments on the basis of--
(A) the population in the several States eligible
for benefits under this Act;
(B) professional and other personnel, hospitals,
and other facilities, and supplies and commodities, to
be available in the several States in the provision of
such benefits; and
(C) the cost of reasonable and equitable
compensation to such personnel and facilities and for
such supplies and commodities.
(3) Operation of allotments.--Such allotments shall
operate, to the maximum extent possible, both to assure
provision to eligible individuals of adequate personal health-
service benefits in all States and all local health-service
areas, and also to increase the adequacy of services where
personnel and facilities are below the national average.
(c) Allotment of Remainder to States.--
(1) In general.--From time to time during each fiscal year,
the Board shall allot to the several States the remaining 10
percent or the remaining 5 percent, as the case may be, of each
sum determined pursuant to subsection (a).
(2) Considerations.--In making allotments under this
subsection, the Board shall take into consideration the factors
specified in subsection (b), but shall, in addition, give
special consideration to the extent of which allotments under
subsection (b) have proved to be insufficient to permit
provision of reasonably adequate benefits under this Act.
(d) Emergency Allotments.--In addition to the sums determined
pursuant to subsection (a) to be available for the provision of
personal health-service benefits, the Board, after consultation with
the Advisory Council, is authorized to make emergency allotments from
the National Health Care Trust Fund if it finds that a disaster,
epidemic, or other cause has substantially increased the volume of
personal health-service benefits required in any part of the United
States over the volume anticipated when the determinations pursuant to
subsection (a) were made. Allotments pursuant to this subsection shall
be made to such State or States, for such class or classes of personal
health-service benefits, and in such amounts, as the Board may find
necessary to meet the emergency.
(e) Payment From Allotments.--The Board shall from time to time
determine the amounts to be paid to each State from its allotments
under this section, and shall certify to the Secretary of the Treasury
the amounts so determined. The Secretary shall thereupon, and prior to
audit or settlement by the General Accounting Office, pay to the State
the amounts so certified.
(f) Use of Funds.--
(1) In general.--Funds paid to a State for any class of
personal health-service benefits shall be used exclusively for
the provision of benefits of that class, except that the
administrative costs of the State in administering personal
health-service benefits under this Act may be met from the
allotments to the State.
(2) Limitation on administrative costs.--Such
administrative costs, which in any fiscal year shall not exceed
5 percent of the aggregate allotments to the State for such
fiscal year, shall be apportioned as between the several
allotments in accordance with the costs of administering the
respective classes of benefits. Such apportionment may be made
in such manner, and by such sampling, statistical, or other
methods, as may be agreed upon between the Board and the State
agency.
(g) Board Assumption of Responsibility.--In any case in which the
Board has assumed responsibility for the administration in a State of
benefits under this Act in accordance with section 402 (d) or (e), all
allotments or balances of allotments to such State shall be available
for expenditure by the Board for the provision of personal health-
service benefits in that State, and (until the Congress shall make
funds available therefor pursuant to section 801(a)) for the costs of
administration of such benefits in such State. Expenditures authorized
pursuant to section 801(a) for such costs of administration shall be
charged against allotments to such State.
SEC. 803. GRANTS-IN-AID FOR TRAINING AND EDUCATION.
(a) Authority.--For the purpose of increasing the availability of
training and education for professional and technical personnel engaged
or undertaking to engage in the provision or administration of personal
health services as benefits under this Act, and to carry out the
policies of section 209(a), the Board is authorized to make grants--
(1) to public or nonprofit institutions or agencies
engaging in undergraduate or postgraduate professional,
technical, or administration education or training, for the
cost (in whole or in part) of courses or projects which the
Board finds, after consultation with the Advisory Council and
appropriate Federal departments and agencies, (A) cannot be
carried out without financial assistance under this section,
and (B) show promise of making valuable contributions to the
education, training, or retraining of professional or technical
personnel engaged or undertaking to engage in the provision or
administration of benefits, or
(2) to individuals who are professional or technical
persons engaged or who undertake to engage in the provision of
personal health-service benefits, or who are engaged or
undertake to engage in the administration of such benefits, for
maintenance (in whole or in part) while in attendance at
courses or projects assisted under paragraph (1) or approved by
the Board for similar training or education, and for costs of
necessary travel.
(b) Payment Under Grants.--Such grants, in such amounts and for
payment at such times as are approved by the Board, shall be certified
for payment to the Secretary of the Treasury, who shall pay them from
the National Health Care Trust Fund to the designated individuals,
institutions, or agencies.
(c) Availability of Funds.--For the purposes of this section there
shall be available for the fiscal year 2008 the sum of $5,000,000, for
the fiscal year 2009 the sum of $5,000,000, and for each fiscal year
thereafter an amount not to exceed one-half of 1 percent of the amount
expended for benefits under this Act in the last preceding calendar
year.
TITLE IX--MISCELLANEOUS PROVISIONS
SEC. 901. DEFINITIONS.
As used in this Act:
(1) Wages.--The term ``wages'' means the sum of the
following items, excluding any amount in excess of the
applicable contribution and benefit base (as determined under
section 230 of the Social Security Act with respect to the
hospital insurance tax) which is received (or, in the case of
income from self-employment, accrued) by any individual during
any calendar year--
(A) all remuneration for employment, including the
cash value of all remuneration paid in any medium other
than cash; except that such term does not include--
(i) the amount of any payment made to, or
on behalf of, an employee under a plan or
system established by an employer which makes
provision for the employer's employees
generally or for a class or classes of the
employer's employees (including any amount paid
by an employer for insurance or annuities, or
into a fund to provide for any such payment),
on account of retirement, or sickness or
accident disability, or medical and
hospitalization expenses in connection with
sickness or accident disability, or death;
provided, in the case of a death benefit, that
the employee (I) has not the option to receive,
instead of provision for such death benefit,
any part of such payment or, if such death
benefit is insured, any part of the premiums
(or contributions to premiums) paid by the
employee's employer, and (II) has not the
right, under the provisions of the plan or
system or policy of insurance providing for
such death benefit, to assign such benefit, or
to receive a cash consideration in lieu of such
benefit either upon the employee's withdrawal
from the plan or system providing for such
benefit or upon termination of such plan or
system or policy of insurance or of the
employee's employment with such employer;
(ii) the payment by an employer (without
deductions from the remuneration of the
employee) of any social-insurance taxes or
contributions imposed upon an employee; or
(iii) the value of services exchanged for
other services for which there is no payment
other than the exchange; and
(B) all net income from farm, business,
professional, or other self-employment.
(2) Employment.--The term ``employment'' means any service
of whatever nature performed by an employee for the person
employing the employee, irrespective of the citizenship or
residence of either, within United States, or on or in
connection with an American vessel or an American civil
aircraft under a contract of service which is entered into
within the United States or during the performance of which the
vessel or aircraft touches at a port or airport in the United
States, if the employee is employed on and in connection with
such vessel or aircraft when outside the United States,
except--
(A) service on active duty in the Armed Forces of
the United States;
(B) service performed in the employ of a State or
any political subdivision thereof, or any
instrumentality of any one or more of the foregoing
which is wholly owned by one or more States or
political subdivisions;
(C) casual labor not in the course of the
employer's trade or business;
(D) service performed by an employee on or in
connection with a vessel not an American vessel, or an
aircraft not an American aircraft, if the employee is
employed on and in connection with such vessel or
aircraft when outside the United States;
(E) service performed by a duly ordained or duly
commissioned or licensed minister of any church in the
regular exercise of the minister's ministry and service
performed by a regular member of a religious order in
the exercise of duties required by such order;
(F) service performed by an individual as an
employee or employee representative as defined in
section 1 of the Railroad Retirement Act of 1937 or
section 1 of the Railroad Retirement Act of 1974;
(G) service performance in any calendar quarter in
the employ of any organization exempt from income tax
under section 501 of the Internal Revenue Code of 1986
if--
(i) the remuneration for such services does
not exceed $150; or
(ii) such service is in connection with the
collection of dues or premiums for a fraternal
beneficiary society, order, or association, and
is performed away from the home office or is
ritualistic service in connection with any such
society, order, or association; or
(iii) such service is performed by a
student who is enrolled and is regularly
attending classes at a school, college, or
university;
(H) service performed in the employ of a foreign
government (including service as a consular or other
officer or employee or a nondiplomatic representative);
(I) service performed in the employ of an
instrumentality wholly owned by a foreign government,
if--
(i) the service is of a character similar
to that performed in foreign countries by
employees of the United States Government or of
an instrumentality thereof; and
(ii) the Secretary of State shall certify
to the Secretary of Health and Human Services
that the foreign government, with respect to
whose instrumentality and employees thereof
exemption is claimed, grants an equivalent
exemption with respect to similar service
performed in the foreign country by employees
of the United States Government and of
instrumentalities thereof; and
(J) service performed in the employ of an
international organization entitled to enjoy
privileges, exemptions, and immunities as an
international organization under the International
Organizations Immunities Act.
(3) In any case in which an individual has received wages
equal to the applicable contribution and benefit base (as
determined under section 230 of the Social Security Act), in a
calendar year, not less than $500 of such wages shall be
deemed, for the purpose of section 104(a), to have been
received by the individual in the quarter during which the
first of such wages were in fact received by the individual and
in each quarter of such calendar year thereafter.
(4) Benefit year.--The term ``benefit year'' means a period
commencing on July 1 of any year and ending on June 30 of the
succeeding year.
(5) Quarter.--The term ``quarter'' and the term ``calendar
quarter'' mean a period of three calendar months ending on
March 31, June 30, September 30, or December 31.
(6) Employee.--The term ``employee'' includes (in addition
to any individual who is a servant under the law of master and
servant) any individual who performs service, of whatever
nature, for a person, unless the service is performed by the
individual in pursuit of the individual's own independently
established business. The term ``employee'' also includes an
officer of a corporation.
(7) American vessel.--The term ``American vessel'' means
any vessel documented or numbered under the laws of the United
States; and includes any vessel which is neither documented nor
numbered under the laws of any foreign country, if its crew is
employed solely by one or more citizens or residents of the
United States or corporations organized under the laws of the
United States or of any State.
(8) American aircraft.--The term ``American aircraft''
means an aircraft registered under the laws of the United
States.
(9) State.--The term ``State'' includes the District of
Columbia.
(10) United states.--The term ``United States'', when used
in a geographic sense, means the several States, as defined in
paragraph (9).
(11) Dependent.--The term ``dependent'' means--
(A) an unmarried child (including a stepchild,
adopted, or foster child) of an individual, who is
under the age of 18, or who is under a total disability
which has continued for a period of not less than six
consecutive calendar months and is living with such
individual or receiving regular support from the
individual;
(B) a wife of an individual living with such
individual or receiving regular support from the
individual;
(C) a husband who is under a total disability which
has continued for a period of not less than six
consecutive calendar months, and is living with or
receiving regular and substantial support from such
individual; and
(D) a parent who is living with or receiving
regular and substantial support from such individual.
(12) Person.--The term ``person'' means an individual, a
trust or estate, a partnership, a corporation, an association,
a consumer cooperative, or other organization.
SEC. 902. EFFECTIVE DATE.
The effective date of this Act shall be the date of its enactment,
but personal health services shall first become available as benefits
in accordance with this Act on October 1, 2008.
TITLE X--VALUE ADDED TAX AND NATIONAL HEALTH CARE TRUST FUND
SEC. 1001. IMPOSITION OF VALUE ADDED TAX.
(a) In General.--Subtitle D of the Internal Revenue Code of 1986
(relating to miscellaneous excise taxes) is amended by inserting before
chapter 31 the following new chapter:
``CHAPTER 30--VALUE ADDED TAX
``subchapter a. imposition of tax
``subchapter b. taxable transaction
``subchapter c. taxable amount; rate of tax for certain transactions;
credit against tax
``subchapter d. administration
``subchapter e. definitions and special rules; treatment of certain
transactions
``Subchapter A--Imposition of Tax
``Sec. 3901. Imposition of tax.
``SEC. 3901. IMPOSITION OF TAX.
``(a) General Rule.--A tax is hereby imposed on each taxable
transaction.
``(b) Amount of Tax.--Except as otherwise provided in this chapter,
the amount of the tax shall be 5 percent of the taxable amount.
``Subchapter B--Taxable Transaction
``Sec. 3903. Taxable transaction.
``Sec. 3904. Commercial-type transaction.
``Sec. 3905. Taxable person.
``Sec. 3906. Transactions in the United States.
``Sec. 3907. Rules relating to other terms used in section 3903.
``SEC. 3903. TAXABLE TRANSACTION.
``For purposes of this chapter, the term `taxable transaction'
means--
``(1) the sale of property in the United States,
``(2) the performance of services in the United States, and
``(3) the importing of property into the United States,
by a taxable person in a commercial-type transaction.
``SEC. 3904. COMMERCIAL-TYPE TRANSACTION.
``(a) General Rule.--For purposes of this chapter, the term
`commercial-type transaction' means a transaction engaged in by--
``(1) a corporation, or
``(2) any person (other than a corporation) in connection
with a business.
``(b) Sales and Leases of Real Property; Imports.--For purposes of
this chapter--
``(1) In general.--The term `commercial-type transaction'
includes--
``(A) any sale or leasing of real property, and
``(B) any importing of property,
whether or not such transaction is described in subsection (a).
``(2) Certain imported articles.--Notwithstanding paragraph
(1)(B), the importing of an article which is free of duty under
part 2 of schedule 8 of the Tariff Schedules of the United
States shall not be treated as a commercial-type transaction
unless such transaction is described in subsection (a).
``SEC. 3905. TAXABLE PERSON.
``(a) General Rule.--Except as otherwise provided in this chapter,
for purposes of this chapter, the term `taxable person' means a person
who engages in a business or in a commercial-type transaction.
``(b) Treatment of Employees, etc.--For purposes of this chapter,
an employee shall not be treated as a taxable person with respect to
activities engaged in as an employee.
``SEC. 3906. TRANSACTIONS IN THE UNITED STATES.
``(a) Sales of Property.--For purposes of this chapter--
``(1) In general.--Except as provided in paragraph (2), the
sale of property shall be treated as occurring where delivery
takes place.
``(2) Real property.--The sale of real property shall be
treated as occurring where the real property is located.
``(b) Performance of Service.--For purposes of this chapter--
``(1) In general.--Except as otherwise provided in this
subsection, a service shall be treated as occurring where it is
performed.
``(2) Services performed inside and outside the united
states.--If a service is performed both inside and outside the
United States, such service shall be treated as performed--
``(A) inside the United States, if 50 percent or
more of such service is performed inside the United
States, and
``(B) outside the United States, if less than 50
percent of such service is performed inside the United
States.
``SEC. 3907. RULES RELATING TO OTHER TERMS USED IN SECTION 3903.
``(a) Exchanges Treated as Sales.--For purposes of this chapter--
``(1) an exchange of property for property or services
shall be treated as a sale of property, and
``(2) an exchange of services for property or services
shall be treated as the performance of services.
``(b) Certain Transfers to Employees Treated as Sales.--For
purposes of this chapter, the transfer of property to an employee as
compensation (other than a transfer of a type for which no amount is
includible in the gross income of employees for purposes of chapter 1)
shall be treated as the sale of property.
``(c) Performance of Services.--For purposes of this chapter--
``(1) Certain activities treated as performance of
services.--Activities treated as included in the performance of
services shall include (but shall not be limited to)--
``(A) permitting the use of property,
``(B) the granting of a right to the performance of
services or to reimbursement (including the granting of
warranties, insurance, and similar items), and
``(C) the making of a covenant not to compete (or
similar agreement to refrain from doing something).
``(2) Employers and employees.--
``(A) Services for employer.--An employee's
services for the employee's employer shall not be
treated as the performance of services.
``(B) Services for employee.--An employer's
services for the employer's employee shall not be
treated as the performance of services unless such
services are of a type which constitute gross income to
the employee for purposes of chapter 1.
``(3) Performance of services treated as sale of
services.--The performance of services shall be treated as the
sale of services.
``Subchapter C--Taxable Amount; Rate of Tax for Certain Transactions;
Credit Against Tax
``Sec. 3911. Taxable amount.
``Sec. 3912. Zero rating for food, housing, and medical care.
``Sec. 3913. Zero rating for exports and interest.
``Sec. 3914. Governmental entities.
``Sec. 3915. Exempt organizations.
``Sec. 3916. Credit against tax.
``SEC. 3911. TAXABLE AMOUNT.
``(a) Amount Charged Customer.--For purposes of this chapter, the
taxable amount for any transaction for which money is the only
consideration shall be the price charged the purchaser of the property
or services by the seller thereof--
``(1) including all invoiced charges for transportation,
and other items payable to the seller with respect to this
transaction, but
``(2) excluding the tax imposed by section 3901 with
respect to this transaction and excluding any State and local
sales and use taxes with respect to this transaction.
``(b) Exchanges.--For purposes of this chapter, the taxable amount
in any exchange of property or services shall be the fair market value
of the property or services transferred by the person liable for the
tax (determined as if such person had sold the property or services to
the other party to the exchange).
``(c) Imports.--For purposes of this chapter, the taxable amount in
the case of any import shall be--
``(1) the customs value plus customs duties and any other
duties which may be imposed, or
``(2) if there is no such customs value, the fair market
value (determined as if the importer had sold the property).
``(d) Special Rule in the Case of Sales of Certain Used Consumer
Goods.--For purposes of this chapter, if--
``(1) a taxable person acquires any tangible personal
property in a transaction which was not a taxable transaction,
and
``(2) such property had been used by an ultimate consumer
before such acquisition,
the taxable amount in the case of any sale of such property by such
taxable person (determined without regard to this subsection) shall be
reduced by the amount paid for such property by such taxable person.
``SEC. 3912. ZERO RATING FOR FOOD, HOUSING, AND MEDICAL CARE.
``(a) Zero Rating for Food, Housing, and Medical Care.--The rate of
the tax imposed by section 3901 shall be zero with respect to the
following:
``(1) Food.--The retail sale of food and nonalcoholic
beverages for human consumption (other than consumption on the
premises).
``(2) Housing.--The sale and renting of residential real
property for use by the purchaser or tenant as a principal
residence.
``(3) Medical care.--Medical care.
``(b) Definitions.--For purposes of subsection (a)--
``(1) Nonalcoholic beverages.--The term `nonalcoholic
beverages' does not include any article which is taxable under
chapter 51.
``(2) Medical care.--The term `medical care' means the
performance of any service, and the retail sale of any
property, payment for which by the purchaser would constitute
medical care within the meaning of section 213.
``(3) Mobile homes, etc., treated as real property.--A
mobile or floating home shall be treated as real property.
``(c) Advance Zero Rating.--The Secretary shall prescribe
regulations under which any item which becomes clearly identifiable as
an item to which subsection (a) will apply when it reaches the retail
stage shall be zero rated for all transactions after it becomes so
clearly identifiable.
``SEC. 3913. ZERO RATING FOR EXPORTS AND INTEREST.
``The rate of the tax imposed by section 3901 shall be zero with
respect to the following:
``(1) Exports.--Exports of property.
``(2) Interest.--Interest.
``SEC. 3914. GOVERNMENTAL ENTITIES.
``(a) Zero Rating for Sales to Governmental Entities and
Educational Activities of Governmental Entities.--The rate of the tax
imposed by section 3901 shall be zero with respect to the following:
``(1) Sales to governmental entities.--Any sale of property
or services to a governmental entity.
``(2) Educational activities.--The providing by a
governmental entity of property and services in connection with
the education of students.
``(b) Sales, etc., by Governmental Entities Taxable Only Where
Separate Charge Is Made.--For purposes of this chapter, the sale of
property and the performance of services by a governmental entity shall
be a taxable transaction if (and only if) a separate charge of fee is
made therefor.
``(c) Governmental Entity Defined.--For purposes of this chapter,
the term `governmental entity' means the United States, any State or
political subdivision thereof, the District of Columbia, a Commonwealth
or possession of the United States, or any agency or instrumentality of
any of the foregoing.
``SEC. 3915. EXEMPT ORGANIZATIONS.
``(a) Zero Rating for Section 501(c)(3) Organizations; Credit
Allowed for All Purchases.--
``(1) Zero rating.--The rate of the tax imposed by section
3901 shall be zero with respect to any taxable transaction
engaged in by a section 501(c)(3) organization other than as
part of an unrelated business.
``(2) Credit allowed for all purchases.--For purposes of
this chapter, a section 501(c)(3) organization shall be treated
as engaged in a business with respect to all of its activities.
``(b) Taxable Transactions in Case of Other Exempt Organizations.--
For purposes of this chapter, the sale of property and the performance
of services by any exempt organization other than a section 501(c)(3)
organization shall be a taxable transaction if (and only if) a charge
or fee is made for such services.
``(c) Definitions.--For purposes of this chapter--
``(1) Section 501(c)(3) organizations.--The term `section
501(c)(3) organization' means an organization described in
section 501(c)(3) which is exempt from tax under section
501(a).
``(2) Other exempt organization.--The term `other exempt
organization' means any organization (other than a section
501(c)(3) organization) which is exempt from tax under chapter
1.
``SEC. 3916. CREDIT AGAINST TAX.
``(a) General Rule.--There shall be allowed as a credit against the
tax imposed by section 3901 the aggregate amount of tax imposed by
section 3901 which has been paid by sellers to the taxpayer of property
and services which the taxpayer uses in the business to which the
transaction relates.
``(b) Exempt Transactions, etc.--If--
``(1) property or services are used partly in the business
and partly for other purposes, or
``(2) property or services are used partly for taxable
transactions and partly for other transactions,
the credit shall be allowable only with respect to the property and
services used for taxable transactions in the business. No credit shall
be allowable for any transaction occurring when the taxpayer was a
nontaxable person.
``(c) Excess Credit Treated as Overpayment.--
``(1) In general.--If for any taxable period the aggregate
amount of the credits allowable by subsection (a) exceeds the
aggregate amount of the tax imposed by section 3901 for such
period, such excess shall be treated as an overpayment of the
tax imposed by section 3901.
``(2) Time when overpayment arises.--Any overpayment under
paragraph (1) for any taxable period shall be treated as
arising on the later of--
``(A) the due date for the return for such period,
or
``(B) the date on which the return is filed.
``Subchapter D--Administration
``Sec. 3921. Seller liable for tax.
``Sec. 3922. Tax invoices.
``Sec. 3923. De minimis exemption.
``Sec. 3924. Time for filing return and claiming credit; deposits of
tax.
``Sec. 3925. Treatment of related businesses, etc.
``Sec. 3926. Secretary to be notified of certain events.
``Sec. 3927. Regulations.
``SEC. 3921. SELLER LIABLE FOR TAX.
``The person selling the property or services shall be liable for
the tax imposed by section 3901.
``SEC. 3922. TAX INVOICES.
``(a) Seller Must Give Purchaser Tax Invoice.--Any taxable person
engaging in a taxable transaction shall give the purchaser a tax
invoice with respect to such transaction if the seller has reason to
believe that the purchaser is a taxable person.
``(b) Content of Invoice.--The tax invoice required by subsection
(a) with respect to any transaction shall set forth--
``(1) the name and identification number of the seller,
``(2) the name of the purchaser,
``(3) the amount of the tax imposed by section 3901, and
``(4) such other information as may be prescribed by
regulations.
``(c) No Credit Without Invoice.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), a purchaser may claim a credit with respect to a
transaction only if the purchaser--
``(A) has received from the seller and has in the
purchaser's possession a tax invoice which meets the
requirements of subsection (b), and
``(B) is named as the purchaser in such invoice.
``(2) Employees or other agents named in invoices.--To the
extent provided in regulations, the naming of an employee or
other agent of the purchaser shall be treated as the naming of
the purchaser.
``(3) Waiver of invoice requirement in certain cases.--To
the extent provided in regulations, paragraph (1) shall not
apply--
``(A) where the purchaser without fault on the
purchaser's part fails to receive or fails to have in
the purchaser's possession a tax invoice,
``(B) to a taxable transaction (or category of
transactions) where--
``(i) the amount involved is de minimis, or
``(ii) the information required by
subsection (b) can be reliably established by
sampling or by another method and can be
adequately documented.
``(d) Time for Furnishing Invoice.--Any invoice required to be
furnished by subsection (a) with respect to any transaction shall be
furnished not later than 15 business days after the tax point for such
transaction.
``SEC. 3923. DE MINIMIS EXEMPTION.
``(a) In General.--Under regulations, a person--
``(1) whose aggregate taxable transactions for the calendar
year do not exceed $20,000, and
``(2) whose aggregate taxable transactions for the next
calendar year can reasonably be expected not to exceed $20,000,
may elect to be treated as a person who is not a taxable person for the
next calendar year.
``(b) Exceptions.--Subsection (a) shall not apply--
``(1) to any sale or leasing of real property, and
``(2) to any importing of property.
``(c) Termination of Election.--Any election under subsection (a)
for a calendar year shall terminate if the aggregate taxable
transactions--
``(1) for the first calendar quarter in such year exceed
$7,000,
``(2) for the first 2 calendar quarters in such year exceed
$12,000, or
``(3) for the first 3 calendar quarters in such year exceed
$17,000.
Such termination shall take effect on the first day of the second month
following the close of the first period in which the requirements of
paragraph (1), (2), or (3) are met.
``(d) Taxable Amount Treated as Zero for Zero-Rated Transactions.--
For purposes of this section, the taxable amount of any zero-rated
transaction shall be treated as zero.
``(e) Condition of Election.--In the case of a person who is a
taxable person for any period, an election under subsection (a) may be
made for succeeding periods only with the consent of the Secretary.
Such consent shall be conditioned on placing such person, for all
succeeding periods, in the same position with respect to the tax
imposed by section 3901 (and the credit allowed by section 3916) he
would have been in if all property and services he holds at the time he
becomes a nontaxable person had been acquired as a nontaxable person.
``(f) Casual Sales and Leases of Real Property Excluded.--For
purposes of this section, the term `taxable transaction' does not
include a transaction which is treated as a commercial-type transaction
solely by reason of section 3904(b)(1)(A).
``SEC. 3924. TIME FOR FILING RETURN AND CLAIMING CREDIT; DEPOSITS OF
TAX.
``(a) Filing Return.--Before the first day of the second calendar
month beginning after the close of each taxable period, each taxable
person shall file a return of the tax imposed by section 3901 on
taxable transactions having a tax point within such taxable period.
``(b) Credit Allowed for Taxable Period in Which Purchaser Receives
Invoice.--
``(1) In general.--Except as provided in paragraph (2), a
credit allowable by section 3916 with respect to a transaction
may be allowed only for the first taxable period by the close
of which the taxpayer--
``(A) has paid or accrued amounts properly
allocable to the tax imposed by section 3901 with
respect to such transaction, and
``(B) has a tax invoice (or equivalent) with
respect to such transaction.
``(2) Use for later period.--Under regulations, a credit
allowable by section 3916 may be allowed for a period after the
period set forth in paragraph (1).
``(c) Taxable Period.--For purposes of this chapter--
``(1) In general.--The term `taxable period' means a
calendar quarter.
``(2) Exception.--
``(A) Election of 1-month period.--If the taxpayer
so elects, the term `taxable period' means a calendar
month.
``(B) Other periods.--To the extent provided in
regulations, the term `taxable period' includes a
period, other than a calendar quarter or month,
selected by the taxpayer.
``(d) Tax Point.--For purposes of this chapter--
``(1) Chapter 1 rules with respect to seller govern.--
Except as provided in paragraph (2), the tax point for any sale
of property or services is the earlier of--
``(A) the time (or times) when any income from the
sale should be treated by the seller as received or
accrued (or any loss should be taken into account by
the seller) for purposes of chapter 1, or
``(B) the time (or times) when the seller receives
payment for the sale.
``(2) Imports.--In the case of the importing of property,
the tax point is when the property is entered, or withdrawn
from warehouse, for consumption in the United States.
``(e) Monthly Deposits Required.--To the extent provided in
regulations, monthly deposits may be required of the estimated
liability for any taxable period for the tax imposed by section 3901.
``SEC. 3925. TREATMENT OF RELATED BUSINESSES, ETC.
``(a) General Rule.--For purposes of this chapter (other than
section 3923), to the extent provided in regulations, the taxpayer may
elect--
``(1) to treat as 1 taxable person 2 or more businesses
which may be treated under section 52(b) as 1 employer, and
``(2) to treat as separate taxable persons separate
divisions of the same business.
``(b) De Minimis Exemption.--For purposes of section 3923, all
businesses which are under common control (within the meaning of
section 52(b)) shall be treated as 1 business.
``SEC. 3926. SECRETARY TO BE NOTIFIED OF CERTAIN EVENTS.
``To the extent provided in regulations, each person engaged in a
business shall notify the Secretary (at such time or times as may be
prescribed by such regulations) of any change in the form in which a
business is conducted or any other change which might affect the
liability for the tax imposed by section 3901 or the amount of such tax
or any credit against such tax, or otherwise affect the administration
of such tax in the case of such person.
``SEC. 3927. REGULATIONS.
``The Secretary shall prescribe such regulations as may be
necessary to carry out the purposes of this chapter.
``Subchapter E--Definitions and Special Rules; Treatment of Certain
Transactions
``Sec. 3931. Definitions.
``Sec. 3932. Special rules.
``Sec. 3933. Personal use by owner of business property or services.
``Sec. 3934. Gift of business property or services.
``Sec. 3935. Special rules for dispositions of nonbusiness real
property.
``Sec. 3936. Special rule for insurance contracts.
``SEC. 3931. DEFINITIONS.
``(a) Property.--For purposes of this chapter, the term `property'
means any tangible property.
``(b) Business.--For purposes of this chapter, the term `business'
includes--
``(1) a trade, and
``(2) an activity regularly carried on for profit.
``(c) Employee.--For purposes of this chapter, the term `employee'
has the meaning such term has for purposes of chapter 24 (relating to
withholding).
``(d) Person.--For purposes of this chapter, the term `person'
includes any governmental entity.
``(e) Business Day.--For purposes of this chapter, the term
`business day' means any day other than Saturday and Sunday and other
than a legal holiday (within the meaning of section 7503).
``(f) United States.--For purposes of this chapter, the term
`United States', when used in a geographical sense, includes a
Commonwealth and any possession of the United States.
``SEC. 3932. SPECIAL RULES.
``(a) Coordination With Subtitle A.--For purposes of subtitle A--
``(1) Treatment of credit.--Any credit allowable to a
taxpayer under section 3916 which is attributable to any
property or services shall be treated as a reduction in the
amount paid or incurred by the taxpayer for such property or
services.
``(2) Amount of deduction for tax.--The amount allowable as
a deduction for the tax imposed by section 3901 shall be
determined without regard to any credit allowable under section
3916.
``(3) Computation of percentage depletion.--For purposes of
sections 613 and 613A--
``(A) gross income shall be reduced by the amount
of the tax imposed by section 3901, and
``(B) taxable income shall be determined without
regard to any deduction allowed for such tax.
``(b) Special Rule Sale of Property Includes Incidental Performance
of Services.--For purposes of this chapter, if in connection with the
sale of any property there is an incidental performance of services,
such performance of services shall be treated as part of the sale of
such property.
``(c) Special Rule Where Performance of Services Includes
Incidental Transfer of Property.--For purposes of this chapter, if in
connection with the performance of any services there is an incidental
transfer of property, such transfer shall be treated as part of the
performance of such services.
``(d) Authority to Zero Rate De Minimis Transactions, etc.--The
Secretary may prescribe regulations providing that the rate of tax
shall be zero for a taxable transaction (or category of such
transactions) where--
``(1) the amount involved is de minimis, or
``(2) the revenue raised by taxing the transaction is not
sufficient to justify the administrative and other costs
involved in the payment and collection of the tax.
``(e) Importing Treated as Sale and Purchase.--For purposes of this
chapter, the importing of any property into the United States shall be
treated as both a sale and purchase of such property by the person
importing such property.
``(f) Subchapter S Corporation Treated as Not a Corporation.--For
purposes of this chapter, an S corporation (as defined in section
1361(a)) shall be treated as a person which is not a corporation.
``(g) Use Includes Held for Use.--For purposes of this chapter,
property and services held for use by any person shall be treated as
used by the person.
``SEC. 3933. PERSONAL USE BY OWNER OF BUSINESS PROPERTY OR SERVICES.
``(a) General Rule.--If any business property or services are used
by an owner of the taxpayer for personal purposes, for purposes of this
chapter such use shall be treated as a taxable transaction.
``(b) Taxable Amount.--In the case of a use described in subsection
(a), for purposes of this chapter, the taxable amount shall be--
``(1) except as provided in paragraph (2), the fair market
value of the property or the services, or
``(2) if such use is only the temporary use of property,
the fair rental value of such use.
``(c) Definitions.--For purposes of this section--
``(1) Business property or services.--The term `business
property or services' means any property or services if a sale
of such property, or the performance of such services, by the
taxpayer would be a taxable transaction.
``(2) Owner.--The term `owner' means--
``(A) in the case of a sole proprietorship, the
proprietor,
``(B) in the case of any other business enterprise,
any holder of a beneficial interest in the corporation,
partnership, or other entity, and
``(C) any member of the family (within the meaning
of section 267(c)(4)) of an individual described in
subparagraph (A) or (B).
``SEC. 3934. GIFT OF BUSINESS PROPERTY OR SERVICES.
``(a) General Rule.--In the case of any gift of business property
or services, for purposes of this chapter--
``(1) such gift shall be treated as a taxable transaction,
and
``(2) the taxable amount shall be the amount determined
under section 3933(b).
``(b) Gifts Related to Business Promotion Activities.--For purposes
of subsection (a), the term `gift' includes any gift of property or
services transferred in connection with business promotion activities.
``SEC. 3935. SPECIAL RULES FOR DISPOSITIONS OF NONBUSINESS REAL
PROPERTY.
``(a) In General.--In the case of any sale of real property which
is treated as a commercial-type transaction solely by reason of section
3904(b)(1)(A), for purposes of this chapter, the taxable amount shall
be the excess (if any) of--
``(1) the amount realized on such sale, over
``(2) the adjusted cost to the taxpayer of such real
property.
``(b) Adjusted Cost.--For purposes of subsection (a)--
``(1) In general.--Except as provided in paragraph (2), the
term `adjusted cost' means, with respect to any property, the
basis of such property increased by expenditures properly
chargeable to capital account (other than taxes or other
carrying charges described in section 266) for periods during
the holding period for such property.
``(2) Transitional rule.--The adjusted cost of any property
shall include only amounts incurred during periods after
December 31, 2007.
``(c) Value Added Tax Not Taken Into Account.--For purposes of this
section, the amount realized on any sale of real property shall not
include any amount attributable to the tax imposed by this chapter.
``SEC. 3936. SPECIAL RULE FOR INSURANCE CONTRACTS.
``In the case of any contract of insurance, for purposes of this
chapter, the taxable amount is the excess of--
``(1) the portion of the premium attributable to insurance
coverage, over
``(2) the actuarial cost to the insurer of providing such
insurance coverage.''
(b) Clerical Amendment.--The table of chapters for subtitle D of
the Internal Revenue Code of 1986 is amended by inserting before the
item relating to chapter 31 the following:
``Chapter 30. Value added tax''
(c) Effective Date.--The amendments made by this section shall
apply to transactions occurring after December 31, 2007.
SEC. 1002. REVENUE FROM VALUE ADDED TAX TO FUND NATIONAL HEALTH CARE
TRUST FUND.
(a) In General.--Subchapter A of chapter 98 of the Internal Revenue
Code of 1986 (relating to trust fund code) is amended by adding at the
end the following new section:
``SEC. 9511. NATIONAL HEALTH CARE TRUST FUND.
``(a) Creation of Trust Fund.--There is established in the Treasury
of the United States a trust fund to be known as the `National Health
Care Trust Fund', consisting of such amounts as may be appropriated or
credited to the Trust Fund as provided in this section or section
9602(b).
``(b) Transfers to Trust Fund.--There are hereby appropriated to
the National Health Care Trust Fund amounts equivalent to amounts
received in the Treasury from the tax imposed under section 3901
(relating to the value added tax).
``(c) Expenditures From Trust Fund.--Amounts in the National Health
Care Trust Fund shall be available only for purposes of making
expenditures to carry out the program of health benefits under the
National Health Insurance Act.''.
(b) Clerical Amendment.--The table of sections for such subchapter
A is amended by adding at the end the following new item:
``Sec. 9511. National Health Care Trust Fund.''.
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 2007.
TITLE XI--STUDY AND DEVELOPMENT OF COST CONTROL MECHANISMS
SEC. 1101. DEVELOPMENT OF COST CONTROL MECHANISMS.
(a) Study.--The Secretary of Health and Human Services shall
conduct a study analyzing various methods to control the costs of
providing personal health benefits under this Act, and shall include in
such study an analysis of the effects on such costs of medical
malpractice claims and the purchase of medical malpractice liability
insurance by providers of the benefits.
(b) Reports to Congress.--Not later than October 1, 2009, the
Secretary shall submit a report to Congress describing the study
conducted under subsection (a), and shall include in the report
recommendations on methods to control costs under this Act, including
recommendations on the development of a system under which medical
malpractice claims brought against providers of benefits under this Act
may be resolved in an equitable and cost-effective manner. Not later
than April 1, 2010, the Secretary shall promulgate regulations to
implement the recommendations made in the report.
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