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health maintenance organizations and the number

and type of outpatient (including primary care) and other medical facilities and equipment needed for

public health services and outpatient care and the extent to which such outpatient and other medical facilities and equipment are in need of modernization and conversion to new uses and the extent to which new such health maintenance organizations outpatient and other medical facilities and equipment need to be constructed or acquired.".

(e) Section 1524 (c) (2) is amended by adding at the 12 end thereof the following new subparagraph:

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"(D) If a State health plan as required by this subsection is not in effect for the State, the Secretary

may not make any grant to the State health planning and development agency pursuant to section 1525.".

SEC. 119. (a) The second sentence of section 1513 (b)

18 (2) is amended by inserting "in the process of annually re19 viewing an HSP, and before amending an IISP" after "Before establishing an HSP,".

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(b) Section 1513 (b) (3) is amended by adding at the end thereof the following new sentence: "The AIP shall be established, annually reviewed, and amended in accordance.

with the procedures set forth in the last two sentences of 25 paragraph (2).”.

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SEC. 120. Section 1513 (c) (2) is amended by (1)

2 striking "may" and inserting in lieu thereof "shall" and (2)

3 inserting “in obtaining and filling out the necessary forms" 4 after "technical assistance".

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SEC. 121. (a) The fourth sentence of section 1513 (c) 6 (3) is amended by inserting "except that if such grant or 7 contract is renewed, funds may be carried forward to the sub8 sequent grant or contract period without being deducted from 9 the amount of the subsequent grant or contract" before the 10 period at the end thereof.

11 (b) The second sentence of section 1516 (a) is 12 amended by striking "renewed (as the case may be)" and 13 inserting in lieu thereof "in the event that the grant is re14 newed, may be carried forward to the subsequent grant pe15 riod without being deducted from the subsequent grant 16 award".

17 (c) The second sentence of section 1525 (a) is amended 18 by striking "renewed" and inserting in lieu thereof "in the 19 event that the grant is renewed, may be carried forward to 20 the subsequent grant period without being deducted from the 21 subsequent grant award".

22 (d) Section 1526(c) (1) is amended by inserting “ex23 cept that if such a grant is renewed, funds may be carried 24 forward to the subsequent grant period without being de

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ducted from the subsequent grant award" after "such grant

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was made".

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SEC. 122. (a) Section 1513 (d) is amended by (1) 4 redesignating paragraph "(4)" as paragraph “(5)”, (2)

5 striking "and" in paragraph (3), and (3) adding after

6 paragraph (3) the following new paragraph:

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"(4) any entity of the State in which the agency

is located which reviews the rates and budgets of health care facilities located in the agency's health service area, and".

(b) Section 1522 (b) (7) (A) is amended by inserting 12 "and for the coordination by the State Agency in the con13 duct of its activities with any entity of the State which 14 reviews the rates and budgets of health care facilities in the 15 State" after "health care,".

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SEC. 123. Section 1513 (g) is amended by adding at

17 the end thereof the following new paragraph:

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“(3) In making the appropriateness review required by paragraph (1), each health systems agency shall address at a minimum issues of need, accessibility,

financial viability, costs and charges to the public, and quality of service provided.".

SEC. 124. Section 1513 (g) (1) is amended by (1)

24 striking "all" and inserting in lieu thereof "at least those"

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1 and (2) inserting "identified in the State health plan pre

2 pared pursuant to section 1524 (c) (2)" before “offered".

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SEC. 125. Section 1514 is amended by striking "may"

4 and inserting in lieu thereof "shall".

5 SEC. 126. (a) The last sentence of section 1515 (b) is 6 deleted.

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(b) The last sentence of section 1515 (c) (2) is deleted.

SEC. 127. (a) The second sentence of section 1515 (c) 9 (1) is amended by striking "twelve months" and inserting 10 in lieu thereof "three years".

11 (b) Section 1515 (c) (3) is amended by (1) inserting 12"(A)" after "(3)"; (2) striking "twelve months" and 13 inserting in lieu thereof "three years"; (3) inserting "dur14 ing the period of the agreement to be renewed" after "sec15 tion 1513"; and (4) by adding at the end thereof the 16 following paragraph:

17 "(B) If upon review (as provided in section 1535) of 18 the agency's operation and performance of its functions, the 19 Secretary determines that it has not fulfilled, in a satisfactory 20 manner, the functions of a health systems agency prescribed 21 by section 1513 during the period of the agreement to be 22 renewed or does not continue to meet the requirements of 23 section 1512 (b), he may terminate such agreement or re24 turn such agency to a conditionally designated status under 25 subsection (b) for a period not to exceed twelve months.

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1 At the end of such period, the Secretary shall either termi2 nate its agreement with such agency or enter into an agree3 ment with such agency under paragraph (1).".

4 SEC. 128. Section 1515 (d) is amended by (1) insert5 ing "agreement" after "If a designation" and (2) inserting 6 "or is not renewed" after "prescribed for its expiration". SEC. 129. (a) Section 1516 (b) (1) (A) is amended

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"(A) if the population of the health service area

for which the agency is designated

"(i) is not over one million, the product of $0.70 and the population of such area,

"(ii) is over one million but not over two million, the sum of $700,000 and the product of $0.50 and the population of such area which is

over one million, or

"(iii) is over two million, the sum of $1,200,000 and the product of $0.30 and the population of such area which is over two million, or". (b) Section 1516 (b) (2) (A) (i) is amended to read 21 as follows:

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"(i) the greater of (I) the amount determined

under paragraph (1) without regard to this paragraph or paragraph (3), or (II) the amount determined under paragraph (3), and".

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