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compensation for the provision of health care services or from 2 financial interests in entities engaged in the provision of 3 health care services or in producing or supplying drugs or 4 other articles for individuals and entities engaged in the 5 provision of such services, or from both such compensation 6 and such interests.

7 "(2) A center shall have organizational arrangements, 8 established in accordance with regulations prescribed by 9 the Secretary, for (A) an ongoing quality assurance program 10 (including utilization and peer review systems) respecting 11 the center's services, and (B) maintaining the confidentiality 12 of patient records.

13 "REQUIREMENTS RESPECTING SECTIONS 203 AND 204

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GRANTS

"SEC. 202. (a) No grant may be made under section 16 203 or 204 unless an application therefor has been sub17 mitted to, and approved by the Secretary. Such applica18 tion shall be submitted in such form and manner as the Sec19 retary shall prescribe and shall contain or be supported by 20 assurances satisfactory to the Secretary that

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"(1) the community mental health center for which

the application is submitted will provide, in accordance

with regulations of the Secretary, an effective procedure for developing, compiling, evaluating, and reporting to

the Secretary, statistics and other information (which

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the Secretary shall publish and disseminate on a periodic

basis and which the center shall disclose at least an

nually to the general public) relating to (A) the cost of the center's operation, (B) the patterns of utilization of its services, (C) the availability, accessibility, and acceptability of its services, (D) the impact of its services upon the mental health of the residents of its catchment area, and (E) such other matters as the Secretary may require;

"(2) such community mental health center will, in consultation with the residents of its catchment area, 12 review its program of services and the statistics and

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other information referred to in paragraph (1) to assure that its services are responsive to the needs of the resi

dents of its catchment area;

"(3) to the extent practicable, such community mental health center will enter into cooperative arrangements with health maintenance organizations serving residents of the center's catchment area for the provision through the center of mental health services for the members of such organizations;

"(4) such community mental health center will

develop a plan for, and use its best efforts to insure that, adequate financial support will be available

to such community mental health center from Federal

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sources (other than this part) and non-Federal sources so that the center will be able to continue to provide comprehensive mental health services when financial assistance provided under this part is reduced or terminated, as the case may be;.

"(5) such community mental health center will make available a reasonable volume of services to persons unable to pay therefor; and

"(6) such community mental health center will adopt and enforce a policy (A) under which fees for the provision of mental health services through the cen

ter will be paid to the center, and (B) which prohibits

13 health professionals who provide such services to patients

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through the center from providing such services to such

patients except through the center.

"(b) The Secretary may approve an application for a

17 grant under section 203 or 204 if the application is recom 18 mended for approval by the National Advisory Mental Health

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Council and the application meets the requirements of sub

20 section (a) and the Secretary

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"(1) determines that the facilities and equipment

of the applicant under the application meet such requirements as the Secretary may prescribe;

"(2) determines that the application contains or is supported by satisfactory assurances that

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"(A) the comprehensive mental health services (in the case of an application for a grant under

section 203) or the consultation and education serv

ices (in the case of an application for a grant under section 204) to be provided by the applicant will constitute an addition to, or a significant improvement in quality (as determined in accordance with criteria of the Secretary) of, services that would otherwise be provided in the catchment area of the applicant; and

"(B) Federal funds made available under section 203 or 204, as the case may be, will (i) be

used to supplement and, to the extent practical, increase the level of State, local, and other non-Federal funds, including third-party health insurance

payments, that would in the absence of such Federal funds be made available for the applicant's comprehensive mental health services or consultation and education services, as the case may be, and (ii)

in no event supplant such State, local, and other non-Federal funds;

"(3) determines that the applicant's comprehensive mental health services or consultation and education

services, as the case may be, are not inconsistent with the

mental health services portion of the State plan sub

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mitted under section 314 (d) of the Public Health Service Act by the State in which the applicant is located; "(4) in the case of an applicant which received a grant for the preceding fiscal year, determines that during such preceding fiscal year the applicant met the requirements of section 201 and complied with the assurances which were contained in or supported the applicant's application for its grant for the preceding fiscal year; and

"(5) in the case of an application for a grant the amount of which is to be determined under section 203

(c) (2) or 204 (b) (3) (B), determines that the application contains or is supported by assurances satis

factory to the Secretary that the services of the applicant will, to the extent feasible, be utilized by a significant number of persons residing in an area designated by the Secretary as urban or rural poverty area and requiring such services.

"(c) In each fiscal year for which a community mental 20 health center receives a grant under section 203 or 204, 21 such center shall obligate for a program of continuing 22 evaluation of the effectiveness of its programs in serving the 23 needs of the residents of its catchment area and for a review 24 of the quality of the services provided by the center not less. 25 than an amount equal to 2 per centum of the amount