sultation to such attending physician) that further skilled nursing facility services are not medically necessary.

"States and United States

"(h) The terms 'State' and 'United States' shall have the same meaning as when used in title II.

“USE OF STATE AGENCIES AND OTHER ORGANIZATIONS TO DEVELOP CONDITIONS OF PARTICIPA= TION FOR PROVIDERS OF SERVICE

"SEC. 1707. In carrying out his functions, relating to determination of conditions of participation by providers of services, under section 1706 a 7, section 1706(b) (8), or section 1706 c (6), the Secretary shall consult with the Health Insurance Benefits Advisory Council established by section 1712, appropriate State agencies, and recognized national listing or accrediting bodies. Such conditions prescribed under any of such sections may be varied for different areas or different classes of institutions or agencies and may, at the request of a State, provide (subject to the limitation provided in section 1706(a)(7)) higher requirements for such State than for other States.

**USE OF STATE AGENCIES AND OTHER ORGANIZATIONS TO DETERMINE COMPLIANCE BY PROVIDERS OF SERVICES WITH CONDITIONS OF PARTICIPATION

a

"SEC. 1708. (a) The Secretary may, pursuant to agreement, utilize the services of State health agencies or other appropriate State agencies for the purposes of (1) determining whether an stitution is a hospital or skilled nursing facility, or whether an agency is a home health agency, or (2) providing consultative services to institutions or agencies to assist them (A) to qualify as hospitals, skilled nursing facilities, or home health agencies, (B) to establish and maintain fiscal records necessary for purposes of this title, and (C) to provide information which may be necessary to permit determination under this title as to whether payments are due and the amounts thereof. To the extent that the Secretary finds it appropriate, an institution which or agency such State agency certifies is a hospital, skilled nursing facility, or home health agency may be treated as such by the Secretary. The Secretary shall pay any such State agency, in advance or by way of reimbursement, as may be provided in the agreement with it (and may make adjustments in such payments on account of overpayments or underpayments previously made), for the reasonable cost of performing the functions specified in the first sentence of this subsection, and for the fair share of the costs attributable to the planning and other efforts directed toward coordination of activities in carrying out its agreement and other activities related to the provision of services similar to those for which payment may be made under this title, or related to the facilities and personnel required for the provision of such services, or related to improving the quality of such services.

"(b) (1) An institution shall be deemed to meet the conditions of participation

under section 1706(a) (except paragraph (5) thereof) if such institution is accredited as a hospital by the Joint Commission on the Accreditation of Hospitals. If such Commission hereafter required a utilization review plan, or imposes another requirement which serves substantially the same purpose, as a condition for accreditation of a hospital, the Secretary is authorized to find that all institutions so accredited by the Commission comply also with section 1706(a)(5).

2) If the Secretary finds that accreditation of an institution by a national accreditation body, other than the Joint Commission on the Accreditation of Hospitals, provides reasonable assurance that any or all of the conditions of section 1706(a), (b), or (c), as the case may be, are met, he may, to the extent he deems it appropriate, treat such institution as meeting the condition or conditions with respect to which he made such finding.

"CONDITIONS OF AND LIMITATIONS ON PAYMENT FOR SERVICES

"Requirement of Requests and Certifications "SEC. 1709. (a) Except as provided in subsection (f), payment for services furnished an individual may be made only to eligible providers of services and only

(1) written request, signed by such individual except in cases in which the Secretary finds it impractical for the individual to do so, is filed for such payment in such form, in such manner, within such time, and by such person or persons as the Secretary may by regulation prescribe;

"(2) a physician certifies (and recertifies, where such services are furnished over a period of time, in such cases and with such frequency, appropriate to the case involved, as may be provided in regulations) that—

"(A) in the case of inpatient hospital services, such services are or were required for such individual's medical treatment, or such services are or were required for inpatient diagnostic study:

"(B) in the case of outpatient hospital diagnostic services, such services are or were required for diagnostic study;

"(C) in the case of skilled nursing facility services, such services are or were required because the individual needed skilled nursing care on a continuing basis for any of the conditions with respect to which he was receiving inpatient hospital services prior to transfer to the skilled nursing facility or for a condition requiring such care which arose after such transfer and while he was still in the facility for treatment of the condition or conditions for which he was receiving such inpatient hospital services:

"(D) in the case of home health services, such services are or were required because the individual needed skilled nursing care on an intermittent basis or because he

needed physical or speech therapy; a plan for furnishing such services to such individual has been established and is periodically reviewed by a physician; and such services are or were furnished while the individual was under the care of physcian:

"(3) with respect to inpatient hospital services or skilled nursing facility services furnished such individual after the twenty-first day of a continuous period of such services, there was not in effect at the time of adminsion of such individual to the hospital, a decision under section 1710(e) (based on a finding that timely utilization review of long-stay cases is not being made in such hospital or facility);

**(4) with respect to inpatient hospital services or skilled nursing facility services furnished such individual during a continuous period, a finding has not been made (by the physician members of the committee or group) pursuant to the system of utilization review that further inpatient hospital services or further skilled nursing facility services as the case may be, are not medically necessary; except that, if such a finding has been made, payment may be made for such services furnished in such period before the fourth day after the day on which the hospital or skilled nursing facility, as the case may be, received notice of such finding.

"Determination of Costs of Services

"(b) The amount paid to any provider of services with respect to services for which payment may be made under this title shall be the reasonable cost of such services, as determined in accordance with regulations establishing the method or methods to be used in determining such costs for various types or classes of institutions, services, and agencies. In prescribing such regulations, the Secretary shall consider, among other things. the principles generally applied by national organizations (which have developed such principles) in computing the amount of payment, to be made by persons other than the recipients of services. to providers of services on account of services furnished to such recipients by such providers. Such regulations may provide for payment on a per diem, per unit, per capita, or other basis, may provide for using different methods in different circumstances, and may provide for the use of estimates of costs of particular items or services.

"Amount of Payment for More Expensive Services

"(c) (1) In case the bed and board furnished as part of inpatient hospital services or skilled nursing facility services is in accommodations more expensive than two-, three-, or four-bed accommodations and the use of such more expensive accommodations rather than such two-, three-, or four-bed accommodations was not at the request of the patient, payment with respect to such services may not exceed an amount

equal to the reasonable cost of such services may not exceed an amount equal to the reasonable cost of such services if furnished in such two-, three-, or four-bed accommodations unless the more expensive accommodations were required for medical reasons.

"(2) Where a provider of services with which an agreement under this title is in effect furnishes to an individual, at his request, items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this title, the Secretary shall pay to such provider of services only the equivalent of the reasonable cost of the items or services with respect to which payment under this title may be made.

"Amount of Payment Where Less

Expensive Services Furnished

"(d) In case the bed and board furnished as part of inpatient hospital services or skilled nursing facility services in accommodations other than, but not more expensive than, two-, three-, or four-bed accommodations and the use of such other accommodations rather than two-, three-, or four-bed accommodations was neither at the request of the patient nor for a reason which the Secretary determines is consistent with the purposes of this title, the amount of the payment with respect to such services under this title shall be the reasonable cost of such services minus the difference between the charge customarily made by the hospital or skilled nursing facility for such services in two-, three-, or four-bed accommodations and the charge customarily made by it for such services in the accommodations furnished.

"No Payments to Federal Providers of
Services

"(e) No payment may be made under this title (except under subsection (f) of this section) to any Federal provider of services, except a provider of services which the Secretary determines, in accordance with regulations, is providing services to the public generally as a community institution or agency; and no such payment may be made to any provider of services for any item or service which such provider is obligated by a law of, or a contract with, the United States to render at public expense. "Payment for Emergency Inpatient Hospital Services

"(f) Payments shall also be made to any hospital for inpatient hospital services or outpatient hospital diagnostic. services furnished, by the hospital or under arrangements (as defined in section 1703 (e)) with it, to an individual entitled to health insurance benefits under this title even though such hospital does not have an agreement in effect under this title if (A) such services were emergency services and (B) the Secretary would be required to make such payment if the hospital had such an agreement in effect and otherwise met the conditions of payment hereunder. Such payment shall be made only in amounts determined as provided in subsection (b)

and then only if such hospital agrees to comply, with respect to the emergency services provided, with the provisions of section 1710(a).

"Payment for Services Prior to Notification of Noneligibility

"(g) Notwithstanding that an individual is not entitled to have payment made under this title for inpatient hospital services, skilled nursing facility services, home health services, or outpatient hospital diagnostic services furnished by any provider of services, payment shall be made to such provider of services (unless such provider elects not to receive such payment or, if payment has already been made, refunds such payment within the time specified by the Secretary) for such services which are furnished to the individual prior to notification from the Secretary of his lack of entitlement if such payments are not otherwise precluded under this title and if such provider complies with the rules established hereunder with respect to such payments, has acted in good faith and without knowledge of such lack of entitlement, and has acted reasonably in assuming entitlement existed.

"AGREEMENTS WITH PROVIDERS OF SERVICES

"SEC. 1710. (a) Any provider of services shall be eligible for payments under this title if it files with the Secretary an agreement not to charge any individual or any other person for items or services for which such individual is entitled to have payment made under this title (or for which he would be so entitled if such provider had complied with the procedural and other requirements under or pursuant to this title or for which such provider is paid pursuant to the provisions of section 1709(g)), and to make adequate provision for return (or other disposition, in accordance with regulations) of any moneys incorrectly collected from such individual or other person, except that such provider of services may charge such individual or other person the amount of any deduction imposed pursuant to section 1704(a) with respect to such services (not in excess of the amount customarily charged for such services by such provider) and, where the provider of services has furnished, at the request of such individual, items or services which are in excess of or more expensive than the items or services with respect to which payment may be made under this title, such provider may also charge such individual or other person for such more expensive items or services but not more than the difference between the amount customarily charged by it for the items or services furnished at such request and the amount customarily charged by it for the items or services with respect to which payment may be made under this title.

"(b) An agreement with the Secretary under this section may be terminated

"(1) by the provider of services at such time and upon such notice to the Secretary and the public as may be provided in regulations, except that the time such agreement is thereby

required by the Secretary to continue in effect after such notice may not exceed six months after such notice,

or

"(2) by the Secretary at such time and upon such notice to the provider of services and the public as may be specified in regulations, but only after the Secretary has determined, and has given such provider notification thereof, (A) that such provider of services is not complying substantially with the provisions of such agreement, or with the provisions of this title and regulations thereunder, or (B) that such provider no longer substantially meets the applicable provisions of section 1706, or (C) that such provider of services as failed to provide such information as the Secretary finds necessary to determine whether payments are or were due under this title and the amounts thereof, or has refused to permit such examination of its fiscal and other records by or on behalf of the Secretary as may be necessary to verify such information.

Any termination shall be applicable

"(3) in the case of inpatient hospital services or skilled nursing facility services, with respect to such services furnished to any individual who is admitted to the hospital or skilled nursing facility furnishing such services on or after the effective date of such termination,

"(4) (A) with respect to home health services furnished to an individual under a plan therefor established on or after the effective date of such termination, or (B) if such plan is established before such effective date, with respect to such services furnished to such individual after the calendar year in which such termination is effective, and

"(5) with respect to outpatient hospital diagnostic services furnished on or after the effective date of such termination.

"(c) Nothing in this title shall preclude any provider of services or any group or groups of such providers from being represented by an individual, association, or organization authorized by such provider or providers of services to act on their behalf in negotiating with respect to their participation under this title and the terms, methods, and amounts of payments for services to be provided thereunder.

"(d) Where an agreement filed under this title by a provider of services has been terminated by the Secretary, such provider may not file another agreement under this title unless the Secretary finds that the reason for the termination has been removed and there is reasonable assurance that it will not recur.

"(e) If the Secretary finds that timely review in accordance with section 1706 (e) of long-stay cases in a hospital or skilled nursing facility is not being made with reasonable regularity, he may, in lieu of terminating his agreement with such hospital or facility, decide that, with respect to any individual admitted to such hospital or skilled nursing facil

ity after a date specified by him, no payment shall be made for inpatient hospital services or skilled nursing facility services after the twenty-first day of a continuous period of such services. Such decision may be made only after such notice to the hospital, or (in the case of a skilled nursing facility) to the hospital and the facility, and to the public as may be prescribed by regulations, and its effectiveness shall be rescinded when the Secretary finds that the reason therefor has been removed and there is reasonable assurance that it will not recur.

"PATMENT TO PROVIDERS OF SERVICES "SEC. 1711. The Secretary shall periodically determine the amount which should be paid to each provider of services under this title with respect to the services furnished by it, and the provider shall be paid, at such time or times as the Secretary believes appropriate and prior to audit or settlement by the General Accounting Office, from the Federal Health Insurance Trust Fund the amounts so determined; except that such amounts may be reduced or increased, as the case may be, by any sum by which the Secretary finds that the amount paid to such provider of services for any prior period was greater or less than the amount which it should have been paid to it for such period.

"HEALTH INSURANCE BENEFITS ADVISORY

COUNCIL

"SEC. 1712. For the purpose of advising the Secretary on matters of general policy in the administration of this title and in the formulation of regulations under this title, there is hereby created a Health Insurance Benefits Advisory Council which shall consist of fourteen persons, not otherwise in the employ of the United States, appointed by the Secretary without regard to the civil service laws. The Secretary shall from time to time appoint one of the members to serve as Chairman. Not less than four of the appointed members shall be persons who are outstanding in the fields pertaining to hospitals and health activities. Each appointed member

shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and except that the terms of office of the members first taking office shall expire, as designated by the Secretary at the time of appointment, three at the end of the first year, four at the end of the second year, three at the end of the third year, and four at the end of the fourth year after the date of appointment. An appointed member shall not be eligible to serve continuously for more than two terms. The Secretary may, at the request of the Council, appoint such special advisory or technical committees as may be useful in carrying out its functions. Appointed members of the Advisory Council and members of its advisory or technical committees, while attending meetings or conferences thereof or otherwise serving

Appointed

on business of the Advisory Council or of such a committee, or committees. shall receive compensation at rates fixed by the Secretary, but not exceeding $100 per day, and while so serving away from their homes or regular places of business they may be allowed travel expenses. including per diem in lieu of subsistence. as authorized by section 5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b-2) for persons in the Government service employed intermittently The Advisory Council shall meet as frequently as the Secretary deems necessary. Upon request of four or more members, it shall be the duty of the Secretary to call a meeting of the Advisory Council.

"REVIEW OF DETERMINATIONS

"SEC. 1713. Any individual dissatisfied with any determination made by the Secretary that he is not entitled to health insurance benefits under this title or that he is not entitled to have payment made under this title with respect to any class of services furnished him. shall be entitled to a hearing thereon by the Secretary to the same extent as is provided in section 205(b) with respect to decisions of the Secretary, and to judicial review of the Secretary's final decision after such hearing as is provided in section 205(g).

"OVERPAYMENT: TO INDIVIDUALS

"SEC. 1714. (a) Any payment under this title to any provider of services with respect to inpatient hospital services, skilled nursing facility services, home health services, or outpatient hospital diagnostic services, furnished any individual shall be regarded as a payment to such individual.

"(b) Where

"(1) more than the correct amount is paid under this title to a provider of services for services furnished an individual, and the Secretary determines that, within such period as he may specify, the excess over the correct amount cannot be recouped from such provider of services, or

“(2) any payment has been made under section 1709(g) to a provider of services for services furnished an individual,

proper adjustments shall be made, under regulations prescribed by the Secretary, by decreasing subsequent payments—

(3) to which such individual is entitled under title II, or

"(4) if such individual dies before such adjustment has been completed. to which any other individual is entitled under title II with respect to the wages and self-employment income which were the basis of benefits of such deceased individual under such title. "(c) There shall be no adjustment as provided in subsection (b) (nor shall there be recovery) in any case where the incorrect payment has been made (including payments under section 1709(g)) for services furnished to an individual who is without fault and where such adjustment (or recovery) would defeat the purposes of title II or would be against purposes of title II or would be against equity and good conscience.

d. No certifying or disbursing officer shall be held liable for any amount certified or paid by him to any provider of services where the adjustment or recovery of such amount is waived under rubsection (e' or where adjustment under subsection 'b' is not completed prior to the death of all persons against whose benefits such adjustment is authorized.

TUNE AT PRIVATE ORGANIZATIONS TO FACILITATE PAYMENT TO PROVIDERS OF SERVICE

SEC 1715. a The Secretary is authorized to enter into an agreement with any organization, which has been designated by any group of providers of servics, or by an association of such providers on behalf of its members, to receive payments under section 1711 on behalf of such providers, providing for the determination by such organization (subject to such review by the Secretary as may be provided for in the agreement of the amount of payments required pursuant to this title to be made to such providers, and for making such payments. The Secretary shall not enter into an agreement with any organization under this section unless he finds it consistent with effective and efficient administration: of this title.

"(b) To the extent that the Secretary finds that performance of any of the following functions by an organization with which he has entered into an agreement under subsection (a) will be advantageous and will promote the efficient administration of this title, he may also include in the agreement provision that the organization shall with respect to providers of services which are to receive payments through the organizaLions'

"1 serve as a center for, and communicate to providers, any information or instructions furnished to it by the Secretary, and serve as a channel of communication from providers to the Secretary:

"(2 make such audits of the records of provider as may be necessary to insure that proper payments are made under this title:

"(3) assist in the application of safeguards against unnecessary utilization of services furnished by providers to individuals entitled to have payment made under section 1711:

"(4) perform such other duties as are necesary to carry out the functions specified in subsection (a) and this subsection.

"(c) An agreement with any organization under this section may contain such terms and conditions as the Secretary finds necessary or appropriate. and may provide for advances of funds to the organization for the making of payments by it under subsection (a) and shall provide for payment of the reasonable cost of administration of the organization as determined by the Secretary to be necessary and proper for carrying out the functions covered by the agreement.

"(d) If the designation of an organization as provided in this section is made by an association of providers of services,

it shall not be binding on members of the association which notify the Secretary of their election to that effect. Any provider may, upon such notice as may be specified in the agreement with an organization, withdraw his designation to receive payments through such organization and any provider who has not designated an organization may elect to receive payments from an organization which has entered into agreement with the Secretary under this section, if the Secretary and the organization agree to it.

"(e) An agreement with the Secretary under this section may be terminated

"(1) by the organization entering into such agreement at such time and upon such notice to the Secretary to the public, and to the providers as may be provided in regulations, or

"(2) by the Secretary at such time and upon such notice to the organization, and to the providers which have designated it for purposes of this section, as may be provided in regulations, but only if he finds, after reasonable notice and opportunity for hearing to the organization, that (A) the organization has failed substantially to carry out the agreement, or (B) the continuation of some or all of the functions provided for in the agreement with the organization is disadvantageous or is inconsistent with efficient administration of this title. "(f) An agreement with an organiza-tion under this subsection may require any of its officers or employees certifying payments or disbursing funds pursuant to the agreement, or otherwise participating in carrying out the agreement, to give surety bond to the United States in such amount as the Secretary may deem appropriate, and may provide for the payment of the charges for such bond from the Federal Health Insurance Trust Fund.

"(g) (1) No individual designated pursuant to an agreement under this section as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payments certified by him under this section.

"(2) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this section if it was based upon a voucher signed by a certifying officer designated as provided in paragraph (1) of this subsection.

"OPTION TO BENEFICIARIES TO CONTINUE PRIVATE HEALTH INSURANCE PROTECTION

"SEC. 1716. (a) In lieu of payments to a provider of services under an agreement under this title, payments may be made to an eligible carrier under an approved plan with respect to services, for which payment would otherwise be made under the preceding provisions of this title (hereinafter in this section referred to as 'reimbursable health services'), which are furnished by such provider of services to any individual entitled to health insurance benefits under this title if such individual elects to have payment for such services made to such carrier.

(b) (1) An individual may make an election under subsection (a) with respect to the approved plan of an eligible carrier only if he was covered by an approved plan of such carrier (or an affiliate thereof) continuously during whichever of the following periods is applicable

"(A) if the month in which such individual becomes entitled to health insurance benefits under this title is any month in 1964 or January, February, or March of 1965, the 90-day period ending with the close of the month before such month, or

"(B) if the month in which he becomes so entitled is April 1965 or a subsequent month, the period beginning January 1, 1965 and ending with the close of the month before the month in which he becomes so entitled or, if shorter (i) in the case of a plan meeting the requirements of clause (A), (B), (C), or (D) of subsection (c) (5), the one-year period ending with such close of such month, or (ii) in the case of a plan meeting the requirements of clause (E) of such subsection, the 2-year period ending with such close of such month.

"(2) An individual may make an election under subsection (a) in such manner and within such period as the Secretary may prescribe, but in no event more than 3 months after the month in which such individual becomes entitled to health insurance benefits under this title; and an individual shall be permitted only one such election. An election so made may be revoked at such time or times and in such manner as may be so prescribed, and shall be effective at the end of the 90-day period following such revocation or, if later, the end of the benefit period (as defined in section 1704 (c)), if any, of the individual during which such revocation is made or, if a benefit period begins during such 90-day period, the end of such benefit period.

"(c) To be approved for purposes of this section with respect to an individual, a plan must

"(1) be an insurance policy or contract, medical or hospital service agreement, membership or subscription contract, or similar arrangement provided by a carrier for the purpose of providing or paying for some medical or other type of remedial care;

"(2) with respect to the period before an individual becomes entitled to health insurance benefits under this title, include provision of, or payment for the cost of

"(A) inpatient hospital services, with no greater deductible and limitations than are applicable in the case of inpatient hospital services which constitute reimbursable health services, or

"(B) in the case of a plan meeting the requirements of clause (A), (B), (C), or (D) of paragraph (5), inpatient hospital services to the extent provided in subparagraph (A), but without application of the deductible under section 1704 (a) (1) and with a limitation of forty-five days on the duration of such services;

"(3) with respect to the period during which an individual is entitled to health insurance benefits under the title, include provision of, or payment to providers of services for the cost of

"(A) all reimbursable health services, or

"(B) in the case of a plan meeting the requirements of clause (A), (B), (C), or (D) of paragraph (5), such reimbursable health services, but without application of the deductible under section 1704(a) (1) and with a limitation of forty-five days on the duration of inpatient hospital services;

"(4) include provision of, or payment for part or all of the cost of, some additional medical or other type of remedial care not included as reimbursable health services; and

"(5) (A) be a group plan, or a continuation of a group plan which is available to individuals on conversion of a group plan after their separation from the group, or (B) be issued by a corporation, association, or other organization which is exempt from income tax under section 501(c) of the Internal Revenue Code of 1954, or (C) be a prepayment group practice plan, or (D) be a plan which the Secretary determines, on the basis of available data, is likely to result in a ratio of acquisition costs to payments with respect to the cost of medical or any other type of remedial care which is not greater than the ratio of such costs to such payments in the case of most of the group plans approved under this section, or (E) in the case of a plan which does not come within clause (A), (B), (C), or (D), be issued by a corporation, association, or other organization which (i) is licensed in the 50 States and the District of Columbia to issue insurance covering all or any part of the cost of medical or any other type of remedial care and, in the most recent year for which data are available, has made payments with respect to the cost of such care aggregating at least 1 percent of all such payments in the 50 States and the District of Columbia, or (ii) is determined by the Secretary to be national in scope, or (iii) is licensed to issue insurance covering part or all of the cost of such care in the State with respect to which it requests eligibility hereunder and, in the most recent year for which data are available, has made payments with respect to the cost of such care aggregating at least 5 percent of such payments in such State. "For purposes of paragraph (5)—

"(6) a 'group plan' issued in any State is a plan which meets the requirements established by the law of such State for such plans or, in the case of a plan in a State in which there is no State law establishing requirements for such plans, which

"(A) is issued to employers for their employees, or to unions for their members, or to other associations for their members who are bound together by a single, mutual interest other than insurance, and

"(B) covers at least 10 persons in the group:

"(7) the 'acquisition costs' of a plan are costs directly related to the sale of coverage under such plan to individuals, including costs such as costs of advertising, commissions and salaries of agents, and salaries and other expenses of field staff directly involved in the sale of coverage under the plan. "(d) A carrier shall be eligible for purposes of this section if it

"(1) is a corporation or other nongovernmental organization which is lawfully engaged in issuing plans described in subsection (c)(1) in the State with respect to which it requests eligibility under this section;

"(2) agrees that any information provided in connection with any approved plan will be accurate and complete:

"(3) agrees, in the case of any individual who has made an election under this section with respect to an approved plan and who revokes such election (including termination of such coverage by such individual or the carrier, to continue to make payments under such plan with respect to him until his revocation is effective (or would be effective if such termination were considered a revocation) as provided in subsection (b)(2);

"(4) agrees to provide the Secretary, on request, such reports as may reasonably be necessary to enable him to determine the amounts due, under any plan with respect to which an election has been made under this section, on account of reimbursable health services and the administrative expenses of the carrier in connection therewith, and agrees to permit the Secretary to determine the accuracy of such reports;

"(5) agrees to make payments for reimbursable health services to providers of services, or to provide reimbursable health services, with respect to individuals who have made an election under this section in the same amounts, under the same conditions, and subject to the same limitations as are applicable in the case of such services for which payments are made under the preceding sections of this title; and

"(6) agrees not to impose any fees, premiums, or other charges with respect to reimbursable health services for individuals entitled to health insurance benefits under this title.

"(e) If a plan ceases to be approved under this section or a carrier ceases to be an eligible carrier or ceases to do business, any individual who has made an election under this section and is covered by such plan or by a plan of such carrier shall be deemed to have revoked his election under this section and such revocation shall, notwithstanding subsection (b)(2), be effective immediately upon such cessation; except that the limitations applicable under such plan shall apply with respect to the benefit period (as defined in section 1704(c)), if any, of such individual existing at the time of such cessation.

(f) (1) An eligible carrier shall be paid from time to time amounts equal to the payments made or the cost of services provided by it for reimbursable health services under approved plans with respect to individuals who have made an election under this section, and in addition, such amounts as the Secretary finds to be the administrative costs of such carrier which are reasonably necessary to the provision of or payment for the cost of reimbursable health services for such individuals under an approved plan, except that such additional amounts for any year may not be more than 50 percent greater than the comparable part of the cost of administration of this title.

"(2) In the case of a plan to which subparagraph (B) of subsection (c) (3) is applicable, the limitations and conditions of payment for reimbursable health services under the preceding sections of this title shall be modified in accordance with such subparagraph; and for such purposes the maximum units of reimbursable health services (within the meaning of section 1704(b)) for which payment will be made under this title shall be 105 units.

"REGULATIONS

"SEC. 1717. When used in this title, the term 'regulations' means, unless the context otherwise requires, regulations prescribed by the Secretary.

“APPLICATION OF CERTAIN PROVISIONS OF TITLE 11

"SEC. 1718. The provisions of sections 206, 208, and 216(j), and of subsections (a), (d), (e), (f), and (h) of section 205 shall also apply with respect to this title to the same extent as they are applicable with respect to title II. "DESIGNATION OF ORGANIZATION OR PUBLICATION BY NAME

"SEC. 1719. Designation in this title, by name, of any nongovernmental organization or publication shall not be affected by change of name of such organization or publication, and shall apply to any successor organization or publication which the Secretary finds serves the purpose for which such designation is made."

FEDERAL HEALTH INSURANCE TRUST FUND SEC. 202. (a) Section 201 of the Social Security Act is amended by redesignating subsections (c), (d), (e), (f), (g), and (h) as subsections (d), (e), (f), (g), (h), and (1), respectively, and by adding after subsection (b) the following new subsection:

"(c) There is hereby created on the books of the Treasury of the United States a trust fund to be known as the 'Federal Health Insurance Trust Fund'. The Federal Health Insurance Trust Fund shall consist of such amounts as may be appropriated to, or deposited in, such fund as provided in this section. There is hereby appropriated to the Federal Health Insurance Trust Fund for the fiscal year ending June 30, 1963, and for each fiscal year thereafter, out of any moneys in the Treasury not otherwise appropriated, amounts equivalent to 100 per centum of

"(1) (A) 0.18 of 1 per centum of the wages as defined in section 3121 of the Internal Revenue Code of 1954) paid after December 31, 1962, and before January 1, 1964, and reported to the Secretary of the Treasury or his delegate pursuant to subtitle P of the Internal Revenue Code of 1954, which waves shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of wages established and maintained by such Secretary in accordance with such reports; and

"(B) 0.68 of 1 per centum of the wages (as defined in section 3121 of the Internal Revenue Code of 1954) paid after December 31, 1963, and reported to the Secretary of the Treasury or his delegate pursuant to subtitle F of the Internal Revenue Code of 1954, which wages shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of wages established and maintained by such Secretary in accordance with such reports; and

"(2)(A) 0.135 of 1 per centum of the defined in section 1402 of the Internal amount of self-employment income (as Revenue Code of 1954) reported to the Secretary of the Treasury or his delegate on tax returns under subtitle F of the Internal Revenue Code of 1954 for any taxable year beginning after December 31, 1962, and before January 1, 1964, which self-employment income shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of self-employment income established and maintained by the Secretary of Health, Education, and Welfare in accordance with such returns; and

(B) 0.51 of 1 per centum of the amount of self-employment income (as defined in section 1402 of the Internal Revenue Code of 1954) reported to the Secretary of the Treasury or his delegate on tax returns under subtitle F of the Internal Revenue Code of 1954 for any taxable year beginning after December 31, 1963, which selfemployment income shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of self-employment income established and maintained by the Secretary of Health, Education, and Welfare in accordance with such returns."

(b) The first sentence of the subsection of such section 201 herein redesignated as subsection (d) is amended by striking out “and the Federal Disability Insurance Trust Fund” and inserting in lieu there of ". the Federal Disability Insurance Trust Fund, and the Federal Health Insurance Trust Fund".

(c) Paragraph (1) of the subsection of such section 201 herein redesignated as subsection (h) is amended by striking out "titles II and VIII" and "this title" wherever they appear and inserting in lieu thereof "this title and title XVII”.

(d) The last sentence of paragraph (2) of such subsection is amended by striking out "and clause (1) of subsection (b)" and inserting in lieu thereof