ed-value system in which the first factor listed below is assigned the greatest weight and the second, and third factors are assigned lesser weights in descending order:

(1) The need of the health manpower shortage area as determined by criteria established under section 332(b) of the Act.

(2) The willingness of individuals, government agencies, or health entities within the health manpower shortage area to cooperate with the National Health Service Corps in providing effective health services.

(3) The comments of health professional societies serving the health manpower shortage area.

[45 FR 12790, Feb. 27, 1980, as amended at 51 FR 31948, Sept. 8, 1986]

§ 23.7 What must an entity agree to do before the assignment is made?

(a) Requirements. To carry out the purposes of section 334 of the Act, each National Health Service Corps site must enter into an agreement with the Secretary under which the site agrees

to:

(1) Be responsible for charging for health services provided by assigned National Health Service Corps personnel;

(2) Take reasonable action for the collection of the charges for those health services;

(3) Reimburse the United States the sums required under section 334 of the Act; and

(4) Prepare and submit an annual report. The agreement will set forth the period of assignment (not to exceed 4 years), the number and type of Corps personnel to be assigned to the site, and other requirements which the Secretary determines necessary to carry out the purposes of the Act.

(b) Termination. An agreement entered into under this section may be terminated by either party on 30-days written notice or modified by mutual consent consistent with section 333 of the Act.

[45 FR 12790, Feb. 27, 1980, as amended at 51 FR 31948, Sept. 8, 1986]

$23.8 What operational requireme apply to an entity to which h tional Health Service Corps perse nel are assigned?

Each National Health Service C site must:

(a) Operate a health care deliver system within a planned or existir community structure to assure:

(1) The provision of high quality com prehensive health care;

(2) To the extent feasible, full profes sional health care coverage for the health manpower shortage area;

(3) Continuum of care, and

(4) The availability and accessibility of secondary and tertiary health care (the two more sophisticated levels d health care beyond primary care);

(b) Establish and maintain a patient record system;

(c) Implement a system for maintain ing the confidentiality of patien: records;

(d) Meet the requirements of applica ble fire and safety codes;

(e) Develop, to the extent feasible, linkages with other health care facilities for the provision of services which supplement or complement the services furnished by the assigned Corps personnel;

(f) Operate a quality assurance system which meets the requirements of 42 CFR 51c.303(c) for the establishment and operation of a quality assurance system in a community health center. and

(g) Establish basic data, cost accounting, and management information and reporting systems as prescribed by the Secretary.

§ 23.9 What must an entity to which National Health Service Corps per sonnel are assigned (i.e., a National Health Service Corps site) charge for the provision of health services by assigned personnel?

(a) Except as provided in paragraph (b) of this section, individuals receiving services from assigned National Health Service Corps personnel must be charged on a fee-for-service or other basis at a rate which is computed to permit recovery of the value of the services and is approved by the Secretary.

(b) In determining whether to approve fees to be charged for health

perservices, the Secretary will consider:

le costs to the National Health ServSee Corps of providing the health servDed es; the costs to the health manpower Bortage area for providing the serves; and the charges for similar servbases by other practitioners or facilities

or nearby the health manpower portage area. However, if assigned Naional Health Service Corps personnel providing services within the 2 re framework of an established health services delivery system, the Secretary nay approve the fees charged under chat system without regard to the forefoing factors.

(c)(1) No charge or a nominal charge will be made for health services provided by assigned National Health Service Corps personnel to individuals within the health manpower shortage area with annual incomes at or below the "CSA Income Poverty Guidelines" (45 CFR 1060.2). However, no individual will be denied health services based upon inability to pay for the services. Any individual who has an annual in1 come above the "CSA Income Poverty *Guidelines," but whose income does 2 not exceed 200 percent of the CSA levCels, will receive health services at a nominal charge. However, charges will be made for services to the extent that payment will be made by a third party which is authorized or under legal obligation to pay the charges.

(2) The provisions of this paragraph also apply with respect to services provided by an individual who is fulfilling an NHSC scholarship obligation under section 753 or who received a special grant under section 755.

$23.10 Under what circumstances may

a National Health Service Corps site's reimbursement obligation to the Federal Government be waived? (a) The Secretary may waive in whole or in part the reimbursement requirements of section 334(a)(3) of the Act if he determines that:

(1) The National Health Service Corps site is financially unable to meet the reimbursement requirements or that compliance with those requirements will unreasonably limit the ability of the site to adequately support the provision of services by assigned Corps personnel. In making these de

terminations, the Secretary will consider

(i) The costs necessary to adequately support the health services provided by the assigned National Health Service Corps personnel and the income and financial resources available to meet the costs;

(ii) The ability of the applicant to obtain credit from suppliers, lending institutions, private organizations and individuals;

(iii) The need of the health manpower shortage area for health services; and

(iv) The extent to which the National Health Service Corps site utilizes health professions personnel.

(2) A significant percentage of the individuals who are located in the health manpower shortage area and are receiving the health services of the assigned National Health Service Corps personnel are elderly, living in poverty, or have other characteristics which indicate an inability to pay. For purposes of this section, "elderly" means persons 65 years or older and the "CSA Income Poverty Guidelines" will be used as the standard for determining whether individuals are living in poverty. Other characteristics indicating inability to pay include, but are not to be limited to, the ratio of unemployment in the health manpower shortage area and the area's cost-of-living index.

(b) The Secretary may waive in whole or in part the reimbursement requirements of section 334(f)(1) of the Act if he or she determines that the National Health Service Corps site is a small health center (as defined by section 334(f)(5) of the Act) that needs all or part of the amount otherwise payable to

(1) Expand or improve its provision of health services;

(2) Increase the number of individuals served;

(3) Renovate or modernize facilit for its provision of health services (4) Improve the administration health service programs; or

(5) Establish a financial reserv sure its ability to co health services;

(c) Where the S that a National E site is eligible for graph (a)(1) or (2)

Secretary may waive the application of the reimbursement requirements of section 334(a)(3) of the Act and apply the reimbursement requirements of section 334(f)(1) of the Act. The Secretary may waive in whole or in part the reimbursement requirements of section 334(f)(1) for such a site if he or she determines that the National Health Service Corps site meets the requirements of paragraph (a)(1) of this section. Funds retained by a National Health Service Corps site as a result of such waiver must be used for the purposes set forth in paragraphs (b)(1) through (5) of this section.

(d) Requests for a prospective or retrospective waiver must be made at the time and in the manner and contain the documentation prescribed by the Secretary.

[45 FR 12790, Feb. 27, 1980, as amended at 51 FR 31948, Sept. 8, 1986]

§ 23.11 Under what circumstances may the Secretary sell equipment or other property of the United States used by the National Health Service Corps site?

(a) Upon expiration of the assignment of all Corps personnel to a health manpower shortage area, the Secretary may sell equipment and other property of the United States used by the assigned personnel. The equipment may be sold at the fair market value or less than the fair market value to any entity providing health services in or to a health manpower shortage area if the Secretary determines that an entity is unable to pay the fair market value. In determining whether an entity is financially unable to purchase equipment or property at fair market value, the Secretary will consider (1) the present financial resources of the entity available to purchase the equipment or property based upon its current liabilities, and (2) the entity's ability to obtain the funds necessary to purchase the equipment or property. However, the Secretary will not sell the equipment or property for less than fair market value to a profitmaking organization unless the organization gives reasonable assurance that it will use the equipment or property to provide health services in or to the health manpower shortage area.

(b) The Secretary will give pric to sales to an entity providing reas able assurance that it will use to equipment or property for the purp of retaining within the health power shortage area National Ha Service Corps personnel who have co pleted their assignments.

§ 23.12 Who will supervise and contr the assigned personnel?

Assigned National Health Servic Corps personnel will at all times main under the direct supervision a control of the Secretary. Observance c institutional rules and regulations t the assigned personnel is a mere inc dent of the performance of their Federal functions and does not alter the direct professional and administrative responsibility to the Secretary.

§ 23.13 What nondiscrimination quirements apply to National Health Service Corps sites?

National Health Service Corps sites are advised that in addition to comply ing with the terms and conditions of this regulation, the following laws and regulations are applicable

(a) Title VI of the Civil Rights Act of 1964 (43 U.S.C. 2000d et seq.) and its im plementing regulations, 45 CFR part 8 (prohibiting discrimination in federally assisted programs on the grounds of race, color, or national origin); and

(b) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and its implementing regulations, 45 CFR part 84 (prohibiting discrimination in federally assisted programs on the basis of handicap).

(c) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) and its implementing regulations, 45 CFR part 91 (prohibiting nondiscrimination on the basis of age in HHS programs or activities receiving Federal financial assistance).

[45 FR 12790, Feb. 27, 1980, as amended at 49 FR 38109, Sept. 27, 1984]

Subpart B-Private Practice Special Loans for Former Corps Members

SOURCE: 51 FR 31948, Sept. 8, 1986, unless otherwise noted.

As used in this subpart, terms have he same meanings as those given to Them in subpart A, §23.2. In addition: 2 National Health Service Corps scholar=hip recipient means an individual rezeiving a scholarship under the Public Health and National Health Service Corps Scholarship Training Program uthorized by section 225 of the Act as en effect on September 30, 1977, and reDealed on October 1, 1977, or a scholarship under the NHSC Scholarship Program authorized by section 338A of the Act, formerly section 751 of the Act.

Private full-time clinical practice means the provision of ambulatory clinical services for a minimum of 40 hours per week for at least 45 weeks a year, including the provision of hospital coverage services appropriate to meet the needs of patients treated and to assure continuity of care. The 40 hours per week must be performed in no less than 4 days per week with no more than 12 hours of work being performed in any 24-hour period.

§23.22 What is the purpose of a private practice loan?

The purpose of the private practice loan is to assist NHSC scholarship recipients in establishing private fulltime clinical practices in designated health manpower shortage areas.

1 § 23.23 Who is eligible to receive a private practice option loan?

(a) Eligibility for loans is limited to NHSC scholarship recipients who have completed at least 2 years of their service obligations at a NHSC site. NHSC scholarship recipients remain eligible for loans under this subpart for 1 year after they have completed their service obligations at a NHSC site.

(b) Scholarship recipients who are in arrears 31 days or more on a Health Professions Student Loan (42 U.S.C. 294m et seq.), Health Education Assistance Loan (42 U.S.C. 294, et seq.), Nursing Student Loan (42 U.S.C. 297a et seq.), or any other Federally guaranteed or direct student loan are ineligible for this loan program.

(c) NHSC scholarship recipients who have received loans under either this subpart or subpart C of this part are ineligible for loans under this subpart.

§23.24 In what amounts are loans made?

The Secretary may make loans either in the amount of $12,500, if the recipient agrees to practice in accordance with the loan agreement for a period of at least 1 year but less than 2 years, or $25,000, if the recipient agrees to practice in accordance with the loan agreement for a period of at least 2 years.

§ 23.25 How will interest rates for loans be determined?

Interest will be charged at the Treasury Current Value of Funds (CVF) rate in effect on April 1 immediately preceding the date on which the loan is approved and will accrue from the date the loan funds are disbursed to the borrower.

§ 23.26 How is the loan repaid?

Payments shall be made at monthly intervals, beginning 1 month from the date of the loan disbursement, in accordance with the repayment schedule established by the Secretary and set forth in the loan agreement. Only interest payments are required during the first 2 years. The repayment schedule may be extended in accordance with §23.31(a).

§ 23.27 What happens if scheduled payments are late?

(a) Failure to make full payment of principal and/or interest when due will subject the borrower to the assessment of administrative costs and penalty charges, in addition to the regular interest charge, in accordance with 45 CFR part 30.

(b) Failure to make full payment of principal and/or interest when due may result in the Secretary placing the borrower in default of the loan. See § 23.28(a).

§ 23.28 What events constitute default? The following events will constitute defaults of the loan agreement:

(a) Failure to make full payment of principal and/or interest when due, and continuance of that failure for a period of sixty (60) days, or a lesser period of time if the Secretary determines that more immediate action is necessary in

order to protect the interests of the Government.

(b) Failure to perform or observe any of the terms and conditions of the loan agreement and continuance of that failure for a period of sixty (60) days.

(c) The institution of bankruptcy proceedings, either voluntary or involuntary, under any State or Federal statute, which may adversely affect the borrower's ability to comply with the terms and conditions of the agreement or the promissory note.

§ 23.29 What happens in the case of a default?

(a) In the event of default, the Secretary may declare the entire amount owed (including principal, accrued interest and any applicable charges) immediately due and payable. Collection of the amount owed will be made in accordance with 45 CFR part 30.

(b) The borrower is not entitled to written notice of any default and the failure to deliver written notice of default in no way affects the Secretary's right to declare the loan in default and take any appropriate action under the loan agreement or the promissory note.

(c) The failure of the Secretary to exercise any remedy available under law or regulation shall in no event be construed as a waiver of his or her right to exercise that remedy if any subsequent or continued default or breach occurs.

§ 23.30 May the loan be prepaid?

The borrower shall have the option to prepay the balance of any part of the loan, together with accrued interest, at any time without prepayment penalty.

§ 23.31 May loan payments be postponed or waived?

(a) Whenever health, economic, or other personal problems affect the borrower's ability to make scheduled payments on the loan, the Secretary may allow the borrower an extension of time or allow the borrower to make smaller payments than were previously scheduled; however, interest will continue to accrue at the rate specified in the promissory note until the loan is repaid in full. The loan must be fully repaid within 10 years after it was made.

(b) No waiver, full or partial, d payment of the loan will be gran except that the obligation of a rower to repay a loan shall be cance upon the death or total and permane disability of the borrower, as dez mined by the Secretary.

(c) In order to make a determination under paragraph (a) or (b) of this s tion, the Secretary may require porting medical, financial, or o documentation.

§ 23.32 What conditions are impos on the use of the loan funds? (a) The borrower must use the to amount of the loan to purchase lease, or both, equipment and supplie to hire authorized personnel to assis in providing health services and/or t renovate facilities for use in providing health services in his or her privat practice. Equipment and supplies p chased and/or leased, personnel hirst and facilities renovated shall be lim ited to the items requested in the lo application and approved by the Se retary.

(b) The borrower must expend the loan funds within 6 months from the date of the loan or within such other time as the Secretary may approve Documentation of the expenditure d funds must be furnished to the Secretary upon request.

§ 23.33 What security must be given for these loans?

The Secretary may require the bor rower to pledge to the Secretary a se curity interest in specified collateral.

§ 23.34 What other conditions are in posed?

(a) The borrower must sign a loan agreement describing the loan and practice conditions, and a promissory note agreeing to repay the loan plus interest.

(b) The borrower must agree to enter into private full-time clinical practice in a HMSA for the time period specified in the loan agreement.

(c) The borrower must accept assignment, for the time period specified in the loan agreement, under section 1842(b)(3)(B)(ii) of the Social Security Act as full payment for all services for