Health Security Act

Health Security Act - Title I: Health and Security Benefit - Makes every resident of the United States, and every nonresident citizen when in the United States, eligible for covered services. Authorizes the Health Security Board to enter into reciprocal agreements for coverage of: (1) nonresident aliens when in the United States; and (2) U.S. citizens residing abroad.

Entitles every eligible person to have payment made by the Health Security Board for any covered service provided within the United States by a participating provider, if such service is necessary or appropriate for the maintenance of health or for the diagnosis or treatment of, or rehabilitation following, injury, disability, or disease.

Extends coverage to: (1) professional physician services, wherever furnished, including primary and specialized services, and psychiatric services to outpatients under specified conditions; (2) dental services, including preventive, diagnostic, and therapeutic services (exclusive of most orthodontic services), for children under age 15, with the covered age group increasing annually by two years until all persons under age 25 are covered; (3) institutional services, including inpatient and outpatient hospital services, skilled nursing home services, home health services, and other necessary services, including pathology and radiology services, with specified limitations; and (4) pharmaceutical benefits, including two categories of drug use: (A) prescribed medicines administered to inpatients or outpatients within participating hospitals, or to enrollees of comprehensive health service organizations; and (B) drugs necessary for the treatment of certain chronic illnesses or conditions requiring long or expensive drug therapy.

Directs the Board to establish, disseminate, and review annually: (1) a list of drugs for use in participating institutions, organizations, and associations; (2) a list of diseases and drugs for use outside such organizational settings, which shall include drug therapy for chronic conditions; and (3) lists of therapeutic devices, appliances, and equipment (including eyeglasses, hearing aids, and prosthetic appliances), and the conditions under which such items are covered benefits. Requires drugs to be listed by their established names as defined in the Food, Drug, and Cosmetic Act, and also, to the extent the Board deems appropriate, by trade names.

Extends coverage to other professional and supporting services, including: (1) the professional services of optometrists and podiatrists; (2) diagnostic and therapeutic services of independent pathology laboratories and radiology services; (3) mental health day care services under specified conditions; (4) alcoholism and drug abuse treatment in free-standing ambulatory centers; (5) family planning and rehabilitation services in certain free-standing centers; (6) emergency and nonemergency transportation services which are essential to overcome problems of access to covered services; and (7) other supporting services, such as psychological, physiotherapy, nutrition, social work, or health education services, which are furnished on behalf of certain approved organizations.

Excludes from coverage: (1) health services furnished or paid for under Federal or State workmen's compensation laws; (2) primary or secondary school health services to the extent specified by regulation; (3) cosmetic surgery; (4) the furnishing of unapproved drugs and appliances; (5) certain medical or surgical procedures which the Board finds are experimental or too costly or scarce to provide on a nationwide basis; (6) certain services which are already furnished or available from another provider; and (7) services of a professional practitioner which are furnished in a nonparticipating hospital.

Makes professional practitioners who are licensed on the effective date of enactment of this title eligible providers, but requires practitioners after such date to meet national standards established by the Board in addition to existing State standards.

Specifies general eligibility requirements for participating providers, including the filing with the Board of an agreement: (1) not to discriminate in providing services to eligible persons; (2) not to make unauthorized charges; and (3) to comply with reporting requirements.

Sets forth specific eligibility requirements for various types of participating providers, including: (1) general and psychiatric hospitals; (2) skilled nursing homes; (3) home health service agencies; (4) group practice organizations; (5) individual practice associations; and (6) other health service organizations and providers, including independent pathology laboratories and radiological services, ambulance services, and providers of drugs, devices, appliances, and equipment.

Sets forth criteria for the utilization review of hospitals and skilled nursing homes. Requires such homes to have in effect an agreement with at least one participating hospital for the transfer of patients and medical and other information as appropriate.

Limits the eligibility of providers operating newly constructed or enlarged facilities which are unnecessary for the furnishing of adequate services.

Prohibits damages in malpractice judgments to be awarded for the cost of remedial services which the injured party is entitled to receive under this Act.

Excludes institutions and employees of the Department of Defense, Veterans Administration, and institutions and employees of the Department of Health and Human Services serving merchant seamen, Indians, or Alaskan Natives, from serving as participating providers, but allows reimbursement for services furnished by such institutions to eligible persons who are not part of their normal clientele.

Permits a physician, dentist, optometrist, or podiatrist licensed in one State, and meeting the national standards, to furnish Health Security benefits in any other State. Grants similar authority to other professional and nonprofessional health personnel.

Establishes the Health Security Trust Fund, to receive the net assets of existing (Medicare) funds taken over by the Health Security program, the yield of the Health Security taxes, and the Government's contribution from general revenues amounting to 100 percent of the yield from these taxes.

Directs the Board to fix for each fiscal year the maximum amount which may be obligated for expenditure from the trust fund, subject to a ceiling determined by specified formulas.

Establishes in the Trust Fund a health services account, a health resources development account, an administration account, and a residual general account. Provides for the allocation of the health services account among the regions of the country, based on the aggregate expenditures for covered services in each region during the most recent 12-month period, and: (1) adjusted to reflect changes in the consumer price index and the expected numbers of eligible beneficiaries and participating providers; and (2) modified by the Board to reduce inequalities in per capita expenditures, to the extent that the quality of services are unimpaired.

Directs the Board to divide for each fiscal year the allocation to each region into available funds to pay: (1) institutional services, (2) physician services, (3) dental services, (4) the furnishing of drugs, (5) the furnishing of devices, appliances, and equipment, and (6) other professional and miscellaneous services. Directs the Board to allot such funds among the health service areas established in each region under this title.

Provides that payments for covered services furnished by eligible persons by participating providers shall be made from the health services account in the Trust Fund.

Sets forth specific payment requirements for the various types of participating providers. Entitles every independent professional practitioner to elect to be paid by the fee-for-service method. Entitles every independent practitioner in the general practice of medicine, and every dentist furnishing covered dental services, to elect to be paid by the capitation method upon the filing of an agreement with the Board. Authorizes the Board to pay independent practitioners full-time or part-time stipends instead of, or in addition to, these methods of compensation. Allows the Board to experiment with other methods of reimbursement which do not increase service costs or encourage the overutilization or underutilization of services.

Provides that hospitals, skilled nursing homes, and home health service agencies shall be paid approved operating costs as set forth in an annual budget approved by the Board.

Provides that group practice organizations and individual practice associations shall be paid for covered services by the capitation method.

Directs the Board to determine from time to time a maximum price for the cost of a drug to a provider. States that payments for a drug furnished by an independent pharmacy shall consist of its cost to the pharmacy, not to exceed the maximum price, plus a dispensing fee, which shall be established by the Board after consultation with representatives of the pharmaceutical profession.

Provides for the reduction of payments to providers for unnecessary capital expenditures.

Authorizes the Board to: (1) assist in the establishment, expansion, and operation of group practice organizations, other public or nonprofit health service agencies, and nonprofit organizations furnishing comprehensive dental services; and (2) provide for the recruitment, education, and training of needed health personnel, including practitioners who will agree to practice in urban or rural areas of acute shortage.

Authorizes special improvement grants: (1) to any public or other nonprofit health agency or institution to establish improved coordination and linkages with other providers of services; and (2) to organizations providing comprehensive ambulatory care, to improve their utilization review, budget, statistical, or records and information retrieval systems, to acquire equipment needed for those purposes, or to acquire equipment useful for mass screening or for other diagnostic or therapeutic purposes.

Sets the terms and conditions for construction and improvement loans made by the Board.

Authorizes grants for the development of programs of personal care services.

Authorizes appropriations for the purposes of the health services development fund.

Creates an administrative structure within the Department of Health and Human Services with exclusive responsibility for the administration of the Health Security Program. Establishes a five-member, full-time Health Security Board serving under the Secretary of Health and Human Services. Sets forth the responsibilities and duties of the Board and the Secretary.

Provides that this title shall be administered by the Board through the regions of the Department and, within each region, through health service areas, which shall be the same as those areas established by the Secretary under the Public Health Service Act.

Establishes a National Health Security Advisory Council.

Authorizes the Advisory Council to appoint professional or technical committees to assist in its functions.

Directs the Advisory Council to advise the Board on matters of general policy in the administration of the program, the formulation of regulations and the allocation of funds for services.

Directs the Board to appoint regional and local advisory councils for each region and each health service area, as well as professional and technical advisory committees. Provides for the participation of appropriate State agencies in the administration of the Health Security program.

Specifies responsibilities of the Board, including: (1) informing the public and providers about the administration and operation of the Health Security program; (2) making a continuing study and evaluation of the program, including the adequacy, quality, and costs of services; (3) making detailed statistical and other studies on a national, regional, or local basis of any aspect of this title; (4) developing and testing records and information retrieval systems; (5) developing, in collaboration with the pharmaceutical profession, improved administrative practices for the reimbursement of independent pharmacies; and (6) developing and testing incentive systems for improving the quality of care, and methods of peer review of drug utilization and of other service performances.

Directs the Board to make evaluations and issue guidelines with respect to health manpower education and training.

Requires the Board, in accordance with regulations, to make determinations of: (1) entitlement to benefits; (2) participating providers; (3) covered services; and (4) payments to providers. Entitles a provider or other aggrieved person to an administrative appeal from such determinations, and authorizes judicial review of a final decision. Sets forth procedures for the suspension or termination of participating providers.

Authorizes the Board, with the advice and assistance of the Commission on the Quality of Health Care, to issue and review regulations assuring the quality of care furnished under this Act. Provides for monitoring of such services by a Professional Standards Review Organization.

Directs the Board to establish continuing education requirements for physicians, dentists, optometrists, and podiatrists.

Sets forth conditions under which major surgery and other specialized services designated in regulations are covered under this program.

Establishes the positions of a Deputy Secretary of Health and Human Services and an Under Secretary for Health and Science.

Authorizes appropriations for the purposes of this title.

Declares that no provision of this Act shall alter any contractual obligation of an employer to provide health services to his employees and their dependents.

Title II: Health Security Taxes - Amends the Internal Revenue Code to convert the existing Medicare hospital insurance payroll taxes into Health Security taxes, and raises the rates to one percent on employees and 3.5 percent on employers.

Excludes from the gross income of employees, for income tax purposes, payment by their employers of part of the Health Security taxes on employees.

Converts the existing Medicare self-employment tax into a Health Security self-employment tax, raising the rate to 2.5 percent.

Adds a new 2.5 percent tax on health security unearned income (unless such income is less than $400 a year), subject to the same maximum on taxable income as is applicable to the employee and self-employment taxes.

Denies tax deductions for services covered by this Act.

Title III: Commission on the Quality of Health Care - Amends the Public Health Service Act to establish in the Department of Health and Human Services a Commission on the Quality of Health Care, with the primary responsibilities of: (1) initiating and continuing development of methods of assessing the quality of health care furnished under this Act; and (2) submitting to the Secretary and the Health Security Board appropriate findings and recommendations. Directs the Commission to give special consideration to care furnished for those illnesses and conditions which have a relatively high incidence in the population and which are relatively amenable to medical or other care.

Title IV: Repeal or Amendment of Other Acts - Makes conforming and technical amendments to specified Acts. Repeals the Medicare program. Provides that after the effective date of benefits received under this Act no State shall be required to furnish any service covered under Health Security as a part of its State plan for participation under Medicaid.

Title V: Studies Related to Health Security - Directs the Secretary in consultation with the Secretary of State and the Secretary of the Treasury to study the practicability of extending the coverage of health services for U.S. residents in other countries.

Directs the Secretary to study the means of coordinating the Federal health benefit programs for merchant seamen and Indians and Alaskan Natives, veterans, and members of the Armed Forces with the Health Security benefit program.