§254g. Cost sharing

(a) Charges for services; collection of payments; payment to United States; calculation of payments; annual report

The Secretary shall require, as a condition to the approval of an application under section 254f of this title for the assignment of a member of the Corps, that the entity which submitted the application enter into an agreement for a specific assignment period (not to exceed 4 years) with the Secretary under which-

(1) the entity shall be responsible for charging, in accordance with subsection (d) of this section, for health services provided by Corps members assigned to the entity;

(2) the entity shall take such action as may be reasonable for the collection of payments for such health services, including, if a Federal agency, an agency of a State or local government, or other third party would be responsible for all or part of the cost of such health services if it had not been provided by Corps members under this subpart, the collection, on a fee-for-service or other basis, from such agency or third party, the portion of such cost for which it would be so responsible (and in determining the amount of such cost which such agency or third party would be responsible, the health services provided by Corps members shall be considered as being provided by private practitioners);

(3) the entity, if not a small health center, shall pay to the United States, as prescribed by the Secretary in each calendar quarter (or other period as may be specified in the agreement) during which any Corps member is assigned to such entity, the sum of-

(A) an amount calculated by the Secretary to reflect the average salary (including amounts paid in accordance with section 254d(d) of this title) and allowances of comparable Corps members for a calendar quarter (or other period);

(B) that portion of an amount calculated by the Secretary to reflect the average amount paid under the Scholarship Program or the Loan Repayment Program to or on behalf of comparable Corps members that bears the same ratio to the calculated amount as the number of days of service provided by the member during that quarter (or other period) bears to the number of days in his period of obligated service under the Scholarship Program or the Loan Repayment Program; and

(C) if such entity received a loan under section 254h(c) of this title or a grant under section 254f(d)(2) ¹ of this title, an amount which bears the same ratio to the amount of such loan or grant as the number of days in such quarter (or other period) during which any Corps members were assigned to the entity bears to the number of days in the assignment period after such entity received such loan or grant;

(4) the entity, if a small health center, shall pay to the United States, in each calendar quarter (or other period as may be specified in the agreement) during which any Corps member is assigned to such entity, an amount determined by the Secretary in accordance with subsection (f) of this section; and

(5) the entity shall prepare and submit to the Secretary an annual report, in such form and manner, as the Secretary may require.

(b) Waiver of payment; use of funds

(1) The Secretary may waive in whole or in part, on a prospective or retrospective basis, the application of the requirement of subsection (a)(3) of this section for an entity which is not a small health center if he determines that the entity is financially unable to meet such requirement or if he determines that compliance with such requirement would unreasonably limit the ability of the entity to provide for the adequate support of the provision of health services by Corps members.

(2) The Secretary may waive in whole or in part, on a prospective or retrospective basis, the application of the requirement of subsection (a)(3) of this section for any entity which is not a small health center and which is located in a health professional shortage area in which a significant percentage of the individuals are elderly, living in poverty, or have other characteristics which indicate an inability to repay, in whole or in part, the amounts required in subsection (a)(3) of this section.

(3) In the event that the Secretary grants a waiver under paragraph (1) or (2), and does not, pursuant to paragraph (5), require payment by the entity in the amount described in subsection (f)(1) of this section, the entity shall be required to use the total amount of funds collected by such entity in accordance with subsection (a)(2) of this section for the improvement of the capability of such entity to deliver health services to the individuals in, or served by, the health professional shortage area.

(4) In determining whether to grant a waiver under paragraph (1) or (2), the Secretary shall not discriminate against a public entity.

(5)(A) If the Secretary determines that an entity which is not a small health center is eligible for a waiver under paragraph (1) or (2), the Secretary may waive the application of subsection (a)(3) of this section for such entity and require such entity to make payment in an amount equal to the amount described in subsection (f)(1) of this section that would be payable by such entity if such entity were a small health center.

(B) The Secretary may waive in whole or in part, on a prospective or retrospective basis, the application of the requirement of subparagraph (A) for any entity if the Secretary determines that the entity is financially unable to meet such requirement or that compliance with such requirement would unreasonably limit the ability of the entity to provide for the adequate support of the provision of health services by Corps members. Funds which would be paid to the United States but for a waiver under this subparagraph shall be used by an entity to-

(i) expand or improve its provision of health services;

(ii) increase the number of individuals served;

(iii) renovate or modernize facilities for its provision of health services;

(iv) improve the administration of its health service programs; or

(v) to establish a financial reserve to assure its ability to continue providing health services.

(c) Excess funds

The excess (if any) of the amount of funds collected by an entity which is not a small health center in accordance with subsection (a)(2) of this section over the amount paid to the United States in accordance with subsection (a)(3) of this section or subsection (b)(5)(A) of this section shall be used by the entity to expand and improve the provision of health services to the individuals in the health professional shortage area for which the entity submitted an application or to recruit and retain health manpower to provide health services for such individuals.

(d) Charge for services; reduced rate; no charge

Any person who receives health services provided by a Corps member under this subpart shall be charged for such services on a fee-for-service or other basis, at a rate approved by the Secretary, pursuant to regulations. Such rate shall be computed in such a way as to permit the recovery of the value of such services, except that if such person is determined under regulations of the Secretary to be unable to pay such charge, the Secretary shall provide for the furnishing of such services at a reduced rate or without charge.

(e) Deposit of funds in Treasury as miscellaneous receipts; appropriations unaffected

Funds received by the Secretary under an agreement entered into under this section shall be deposited in the Treasury as miscellaneous receipts and shall be disregarded in determining the amounts of appropriations to be requested and the amounts to be made available from appropriations made under section 254k of this title to carry out sections 254d through 254h and section 254j of this title.

(f) Small health centers

(1) An entity which is a small health center shall pay to the United States, as prescribed by the Secretary in each calendar quarter (or other period as may be specified in the agreement) during which any Corps member is assigned to such entity, an amount equal to the amount (prorated for a calendar quarter or other period) by which the revenues that the center may reasonably expect to receive during an annual period for the provision of health services exceeds the costs that the center may reasonably expect to incur in the provision of such services, except that the amount that an entity shall pay to the United States under this paragraph shall not exceed the amount such entity would pay to the United States under paragraph (3) of subsection (a) of this section if such paragraph applied to such entity.

(2)(A) To determine for purposes of paragraph (1) the revenues and costs which an entity that is a small health center may reasonably be expected to receive and incur in an annual period for the provision of health services, the entity shall submit to the Secretary before the beginning of such period a proposed budget which-

(i) describes the primary and supplemental health services (as defined in section 254c ² of this title) which are needed by the area the entity serves in such period; and

(ii) states the revenues and costs which the entity expects to receive and incur in providing such health services in such period.

(B) From the submission under subparagraph (A) and other information available to the Secretary, the Secretary shall determine-

(i) the primary and supplemental health services (as defined in section 254c ² of this title) needed in the area the entity serves;

(ii) the fees, premiums, third party reimbursements, and other revenues the entity making the submission may reasonably expect to receive from the provision of such services; and

(iii) the costs which the entity may reasonably expect to incur in providing such services.

The revenues and costs determined by the Secretary shall be the revenues and costs used in making the determination under paragraph (1).

(C)(i) A determination under subparagraph (B) regarding the revenues and costs of an entity in an annual period shall be made by the Secretary utilizing criteria specific to the entity and shall be made without regard to whether the entity is making progress toward collecting sufficient revenues to provide an adequate level of primary health services without the assignment of Corps members.

(ii) In making a determination referred to in clause (i)-

(I) the Secretary may consider whether the proposed budget submitted under subparagraph (A) provides a reasonable estimate regarding the revenues and costs of the entity; and

(II) may not consider the reasonableness of the amount of revenues collected, or the amount of costs incurred by the entity, except to the extent necessary to ensure that the entity is operating in good faith and is operating efficiently with respect to fiscal matters within the control of the entity.

(iii) A determination of whether an entity is eligible for a waiver under paragraph (3) shall be made by the Secretary without regard to the revenues and costs determined by the Secretary under subparagraph (B).

(iv) A determination of whether an entity is a small health center shall be made by the Secretary without regard to the revenues and costs determined by the Secretary under subparagraph (B).

(3) The Secretary may waive in whole or in part, on a prospective or retrospective basis, the application of paragraph (1) for an entity which is a small health center if the Secretary determines that the entity needs all or part of the amounts otherwise payable under such paragraph to-

(A) expand or improve its provision of health services;

(B) increase the number of individuals served;

(C) renovate or modernize facilities for its provision of health services;

(D) improve the administration of its health service programs; or

(E) establish a financial reserve to assure its ability to continue providing health services.

(4) The excess (if any) of the amount of funds collected by an entity which is a small health center in accordance with subsection (a)(2) of this section over the amount paid to the United States in accordance with paragraph (1) of this subsection shall be used by the center for the purposes set out in subparagraphs (A) through (E) of paragraph (3) of this subsection or to recruit and retain health manpower to provide health services to the individuals in the health professional shortage area for which the entity submitted an application.

(5) For purposes of this section, the term "small health center" means an entity other than-

(A) a hospital (or part of a hospital);

(B) a public entity; or

(C) an entity that is receiving a grant under section 254b ² of this title or section 254c ² of this title, except that such term includes an entity whose grant is less than the total of the amounts, calculated on an annual basis, specified in subparagraphs (A) and (B) of subsection (a)(3) of this section.

(July 1, 1944, ch. 373, title III, §334, as added Pub. L. 94–484, title IV, §407(b)(3), Oct. 12, 1976, 90 Stat. 2274 ; amended Pub. L. 97–35, title XXVII, §2704, Aug. 13, 1981, 95 Stat. 906 ; Pub. L. 98–194, §3, Dec. 1, 1983, 97 Stat. 1345 ; Pub. L. 100–177, title II, §202(c), Dec. 1, 1987, 101 Stat. 996 ; Pub. L. 101–597, title I, §105, title IV, §401(b)[(a)], Nov. 16, 1990, 104 Stat. 3018 , 3035.)

References in Text

Section 254f(d) of this title, referred to in subsec. (a)(3)(C), was redesignated section 254f(b) of this title by Pub. L. 101–597, title I, §103(b)(2), Nov. 16, 1990, 104 Stat. 3015 .

Sections 254b and 254c of this title, referred to in subsec. (f)(2)(A)(i), (B)(i), (5)(C), were in the original references to sections 329 and 330, meaning sections 329 and 330 of act July 1, 1944, which were omitted in the general amendment of subpart I (§254b et seq.) of this part by Pub. L. 104–299, §2, Oct. 11, 1996, 110 Stat. 3626 . Sections 2 and 3(a) of Pub. L. 104–299 enacted new sections 330 and 330A of act July 1, 1944, which are classified, respectively, to sections 254b and 254c of this title.

Amendments

1990-Subsecs. (b)(2), (3), (c). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area.

Subsec. (f)(2)(C). Pub. L. 101–597, §105, added subpar. (C).

Subsec. (f)(4). Pub. L. 101–597, §401(b)[(a)], substituted reference to health professional shortage area for reference to health manpower shortage area.

1987-Subsec. (a)(3)(B). Pub. L. 100–177 inserted "or the Loan Repayment Program" after "amount paid under the Scholarship Program" and substituted "service under the Scholarship Program or the Loan Repayment Program" for "service under the Program".

1983-Subsec. (a)(3). Pub. L. 98–194, §3(a)(1)(A), inserted ", if not a small health center," after "the entity" in provisions preceding subpar. (A).

Subsec. (a)(4), (5). Pub. L. 98–194, §3(a)(1), (C), (D), added par. (4) and redesignated former par. (4) as (5).

Subsec. (b)(1). Pub. L. 98–194, §3(b)(1), (2), inserted ", on a prospective or retrospective basis," after "in whole or in part", and "which is not a small health center" after "for an entity".

Subsec. (b)(2). Pub. L. 98–194, §3(b)(3), (4), inserted ", on a prospective or retrospective basis," after "in whole or in part", and "is not a small health center and which" after "for any entity which".

Subsec. (b)(3). Pub. L. 98–194, §3(b)(5), inserted "and does not, pursuant to paragraph (5), require payment by the entity in the amount described in subsection (f)(1) of this section," after "paragraph (1) or (2),".

Subsec. (b)(5). Pub. L. 98–194, §3(b)(6), added par. (5).

Subsec. (c). Pub. L. 98–194, §3(c), inserted "which is not a small health center" after "an entity", and "or subsection (b)(5)(A) of this section" before "shall be used by the entity".

Subsec. (f). Pub. L. 98–194, §3(d), added subsec. (f).

1981-Subsec. (a). Pub. L. 97–35, §2704(a)(1)–(3), in introductory provisions inserted reference to assignment of member of Corps, and in par. (3) revised method and criteria for calculation of sums.

Subsec. (b)(4). Pub. L. 97–35, §2704(a)(4), added par. (4).

Subsec. (e). Pub. L. 97–35, §2704(b), substituted reference to sections 254d to 254h, and 254j of this title, for reference to this subpart.

Effective Date of 1983 Amendment

Section 4 of Pub. L. 98–194 provided that: "The amendments made by section 3 [amending this section] shall apply with respect to agreements entered into under section 334 of the Public Health Service Act [this section] after the date of the enactment of this Act [Dec. 1, 1983], but, to the extent feasible, the Secretary of Health and Human Services shall revise agreements entered into under such section 334 before such date to reflect the amendments made by section 3."

Congressional Findings

Section 2 of Pub. L. 98–194 provided that: "Congress finds and declares that-

"(1) rural health clinics are an important part of America's health care delivery system;

"(2) National Health Service Corps personnel assigned to rural health clinics located in health manpower shortage areas have provided valuable and needed staffing help for such clinics;

"(3) rural health clinics receiving assistance from National Health Service Corps personnel should be expected to reimburse the Federal Government for a reasonable share of the costs of such personnel; and

"(4) the criteria which should be applied to reimbursement by such clinics for use of such personnel should be a fair and equitable one which reflects the needs of such clinics and the populations served by such clinics, as well as the value of the services rendered by such personnel."

Section Referred to in Other Sections

This section is referred to in sections 254f, 254i, 254k, 254l, 254l–1, 254m, 11709 of this title.

¹ See References in Text note below.

² See References in Text note below.