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(5) provide that the State board will make such reports, in such form and containing such information, as the Commissioner may from time to time reasonably require to carry out his functions under this title, and comply with such provisions as he may from time to time find necessary to assure

the correctness and verification of such reports. (b) The Commissioner shall approve any plan which he finds fulfills the conditions specified in subsection (a) of this section.

(c) Whenever the Commissioner, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan approved under this section, finds that,

(1) the State plan has been so changed that it no longer complies with the requirements of subsection (a) of this section; or

(2) in the administration of the plan there is a failure to comply substan

tially with any such provision; the Commissioner shall notify such State agency that no further payments will be made to the State from its allotments under section 302 (or, in his discretion, that further payments will not be made to the State for projects under or parts of the State plan affected by such failure), until he is satisfied that there will no longer be any such failure. Until he is so satisfied the Commissioner shall make no further payments to such State from its allotments under section 302 (or shall limit payments to projects under or parts of the State plan in which there is no such failure).

(d) (1) If any State is dissatisfied with the Commissioner's action under subsection (c) of this section, such State may appeal to the United States court of appeals for the circuit in which such State is located. The summons and notice of appeal may be served at any place in the United States.

(2) The findings of fact by the Commissioner, unless substantially contrary to the weight of the evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Commissioner to take further evidence, and the Commissioner may there upon make new or modified findings of fact and may modify his previ action. Such new r modified findings of fact shall likewise be conclusive unless substantially contrary to the weight of the evidence.

(3) The court shall have jurisdiction to affirm the action of the Commissioner or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in title 28, United States Code, section 1254.


Sec. 304. The method of computing and paying amounts pursuant to section 302 shall be as follows:

(a) The Commissioner shall, prior to the beginning of each calendar quarter or other period prescribed by him, estimate the amount to be paid to each State under the provisions of such section for such period, such estimate to be based on such records of the State and information furnished by it, and such other investigation, as the Commissioner may find necessary.

(b) The Commissioner shall pay to the State, from the allotment available therefor, the amount so estimated by him for such period, reduced or increased, as the case may be, by any sum (not previously adjusted under this paragraph) by which he finds that his estimate of the amount to be paid the State for any prior period under such section was greater or less than the amount which should have been paid to the State for such prior period under such_section. Such payments shall be made through the disbursing facilities of the Treasury Department, in such installments as the Commissioner may determine.


SEC. 305. (a) In carrying out his duties under this title, the Commissioner shall

(1) make studies, investigations, and reports with respect to matters relating to practical nurse training;

(2) cooperate with and render technical assistance to States in matters relating to practical nurse training; and

(3) disseminate information as to the studies, investigations, and reports referred to in paragraph (1) and other matters relating to practical nurse

training. (b) The Commissioner is authorized to make rules and regulations governing the administration of this title and to delegate to any officer or employee of the Office of Education such of his powers and duties, except the making of rules and regulations, as he finds necessary in carrying out the purposes of this title.


Sec. 306. Nothing in this title shall in any way affect the availability of amounts paid the States under the Act of February 23, 1917 (39 Stat. 929), as amended and extended, or the Vocational Education Act of 1946 (60 Stat. 775), as amennded and extended, for practical nurse training.


SEC. 307. The Commissioner shall include in his annual report a full report of the administration of this title.


SEC. 308. There are hereby authorized to be included for each fiscal year in the appropriations for the Department of Health, Education, and Welfare such sums as are necessary to administer the provisions of this title.


Sec. 309. For purposes of this title-
(a) The term “Commissioner” means the Commissioner of Education.

(b) The term “practical nurse training” means training of less than college grade which is given in schools or classes (including field or laboratory work incidental thereto) under public supervision and control and is conducted as part of a program designed to fit individuals, engaged in or preparing to engage in employment as practical nurses, for such employment. The term includes also vocational guidance in connection with any such program and the in-service training of teachers, teacher-trainers, supervisors, and directors for any such program, but does not include courses which have only incidental relationship to the specialized training needed by an individual for useful employment as a practical nurse.

(c) The term "practical nurse” means a person who is trained to care for subacute, convalescent, and chronic patients under the direction of a licensed physician or under the supervision of a registered nurse, or to assist a registered nurse in the care of acute illness.

(d) The term “local educational agency” means a board of education or other legally constituted local school authority having administrative control and direction of public secondary schools in a county, township, independent, or other school district, or having such control and direction over vocational education in such schools.

(e) The term “State” includes Alaska, Hawaii, the Virgin Islands, Puerto Rico, and the District of Columbia.

(f) The population of the several States shall be determined on the basis of the latest figures furnished by the Department of Commerce.

(g) The term "State board” means the State board of vocational education, or the State board primarily responsible for the supervision of public elementary and secondary schools, as designated in the State plan.

(h) The cost of administration of a State plan for practical nurse training, and the cost of any project for extension or improvement of such training, may not include any portion of the cost of the purchase, preservation, erection, or repair of any building or buildings or the purchase or rental of any land.


Sec. 310. This title may be cited as the “Practical Nurse Training Act of 1955".

MARCH 24, 1955. Hon. LISTER HILL, Chairman, Committee on Labor and Public Welfare,

United States Senate. DEAR MR. CHAIRMAN : This is in response to your request of February 2 for a report on S. 886, a bill to improve the health of the people by encouraing the extension of voluntary prepayment health services plans, facilitating the financing of construction of needed health facilities, assisting in increasing the number of adequately trained nurses and other health personnel, improving and expanding programs of mental health and public health, and for other purposes.

S. 886 embodies the Department's proposals for measures to carry out the President's recommendations for a reinsurance program to encourage the expansion of voluntary health insurance, Federal mortgage insurance to facilitate private credit for the construction of private health facilities, training programs to reduce shortages of health personnel, and for revisions to strengthen the present public health and mental health programs. These proposals were transmitted for consideration by the Senate on February 1, 1955, with a covering letter of explanation to the President of the Senate and summaries of each of the six titles of the proposed Health Improvement Act of 1955. A copy of my February 1 letter to the President of the Senate is enclosed for the convenience of the committee. There is also enclosed a list of typographical errors in the printed bill.

For the reasons indicated in the enclosed letter, this Department believes that enactment of the provisions of S. 886 would contribute materially to improvement of the Nation's health, and we urge its favorable consideration by your committee.

The Bureau of the Budget advises that enactment of this proposed legislation would be in accord with the program of the President. Sincerely yours,



H. R. 3720, AND S. 886 1. On page 16, line 8, strike out “4.” and insert “(4)”. (This error was in the draft version of the bill.)

2. On page 29, line 16, strike out the first comma.

3. On page 41, lines 6 and 7, strike out the words "with respect to such plans in order to obtain their advice and recommendations”.

4. On page 66, line 19, insert a parenthesis before the word "including”.

5. On page 73, line 13, after the word “option”, strike out“; and”. (This error is sense-distorting.)

6. On page 81, line 10, insert a hyphen after the word "working".

7. It would seem preferable that the word "fund” on page 97, line 5, and wherever else used in title II of the bill, be spelled with a capital “F”.

Corrections could be made either by a star print or by Committee amendments.


Washington, February 1, 1955. Hon. RICHARD M. Nixon,

The President of the Senate. Dear Mr. PRESIDENT: I am enclosing for your consideration a draft of a bill to carry out the President's recommendations, made in his January 31, 1955, special message on health, with respect to a reinsurance service to give incentive to the expansion and improvement of voluntary health-insurance plans, a mortgage insurance program to facilitate the private financing of health facility construction, measures to cut down critical shortages of health personnel, unification and revision of public health grants, and positive steps to strengthen mental health programs.

Draft legislative proposals to carry out others of the recommendations contained in the President's health message, such as improved financing of medical care for public assistance recipients, proposed revisions in grant structure for the Children's Bureau programs, and proposals for the revision and extension of the Water Pollution Control Act, are being separately submitted. The enclosed draft bill comprises six titles as follows:

Title I. Reinsurance of Health Service Prepayment Plans.
Title II. Mortgage Insurance for Construction of Health Facilities and

Related Provisions.
Title III. Practical Nurse Training.
Title IV. Graduate Training of Professional Nurses and of Professional

Public Health Personnel.
Title V. Public Health Services.

Title VI. Mental Health. A separate summary of the provisions of each of the six titles of the draft bill is enclosed. Only the major purposes and provisions of each title are referred to here.


Title I of the draft bill contains a proposed Health Services Prepayment Plan Reinsurance Act. It would establish within the Department of Health, Education, and Welfare a program of reinsurance to improve the public health by encouraging more extensive use of the voluntary prepayment method in the provision of personal health services.

The proposed reinsurance program would provide an attack on the problem of making needed health services and facilities available to the maximum number of people on a prepayment basis. The program is designed to encourage expansion and otherwise to stimulate private initiative in this field by making a forin of reinsurance available for voluntary health services prepayment plans where. needed to stimulate the provision of (a) better protection against exceptionally high costs of medical and hospital care; (b) coverage for a broader segment of the rural population; and (c) the development of health-insurance plans designed primarily to provide coverage for individuals and families with average or lower incomes. In addition to authorizing reinsurance of such plans, the proposal also would authorize reinsurance of other experimental plans aimed at improving benefits or extending coverage. The proposal also provides for tech nical advisory and informational services without charge to the sponsors of health services prepayment plans.

There are at present serious gaps in coverage by voluntary health insurance. Although important progress has been made in the extension of the voluntary prepayment method to a large segment of the American population, there remain important gaps in the number of individuals and families who are covered, and there is also need for broader benefits under many health-insurance policies currently in force. The program proposed would continue to emphasize that voluntary health insurance is the soundest way for the American people to meet the unpredictable costs of medical, dental, and hospital care. It would preserve and strengthen the voluntary system, would protect the rights of the States to regulate insurance, and would provide greater opportunity for the American people to have better protection against the unpredictable costs of sickness.

The program is designed to be self-supporting over a period of years. It would permit carriers to experiment in broadening the benefits of the healthinsurance plans that they offer. Although authorization for a $100 million Treasury advance to the reinsurance fund is proposed, it is expected that premium income from carriers reinsured under the program would in time be adequate to retire the advances from the Treasury.

To be reinsured, a carrier must be operating according to law and the Secretary must make a finding that there is no reason to believe that the carrier is financially unsound or that its financial or other policies and manner of operation are unsafe or otherwise inconsistent with the purposes of the program. Reinsurance provides protection to the carriers only against costs in excess of those which can reasonably be anticipated; and protection of the fund is provided by the requirement of coinsurance by the carrier even with respect to these unanticipated costs. The proposal also includes other safeguards against unsound or unsafe practices on the part of the reinsured carrier.

Carriers could not be reinsured unless, in the Secretary's judgment, reinsurance on terms and conditions, and at premium rates, comparable to those offered under the proposal is not available from private sources to an extent adequate to promote the purposes of the program.

Administrative costs for operating the reinsurance program would be chargeable to the reinsurance fund. However, the proposal for studies, advisory and other technical informational services would be supported by general appropriations. An initial appropriation will be needed for fiscal year 1956 to establish the reinsurance fund and to provide for studies and informational services.

MORTGAGE INSURANCE FOR HEALTH FACILITIES Title II of the draft bill contains the proposed Health Facilities Mortgage Insurance Act. It would establish within the Department of Health, Education, and Welfare a program of mortgage insurance to assist in financing the construction of privately owned and operated health facilities.

The proposed program is designed to complement the recently expanded hospital survey and construction program by facilitating, on a self-sustaining basis, an ailequate and continuing flow of private credit for construction, expansion, and modernization of health facilities. In addition to authorizing a mortgage

insurance program, the proposed act would, with respect to the federally insured mortgages, remove some of the existing investment restrictions on certain federally regulated lending institutions. The existence of the program would also encourage the removal of similar restrictions imposed on such loans under State law.

The hospital survey and construction program, although broadened by the 1954 amendments to include additional assistance for the construction of hospitals for the chronically ill and to include assistance for the construction of nursing and convalescent homes, diagnostic or treatment centers for ambulatory patients, and rehabilitation facilities, does not reach all types of facilities. Funds appropriated annually are necessarily limited and required to be allotted among the States on the basis of population and relative per capita income. The use of this program as a source of funds is further limited by its requirements as to ownership of the facility and by the priorities it places on unmet need.

For example: Special clinics for ambulatory patients are not eligible for assistance under that program unless the sponsor is a State or other public agency or is a corporation or association which owns and operates a nonprofit hospital; facilities owned and operated by cooperative groups and restricted as to use to a certain membership group, are not within the scope of that program; and modernization required to replace obsolescence in long-established hospitals must wait to take its turn until after new construction in less well-provided-for areas of the State has been financed. The size of the required loan, the length of the term required to finance the construction of this type of facility, and the proportion of capital which must be raised by a loan, now limit the availability of private or commercial credit in situations like these I have mentioned.

To encourage and assist private groups throughout the Nation to construct, expand, repair, remodel and reconvert hospitals, licensed nursing homes, diagnostic or treatment centers, and rehabilitation facilities, the program now proposed would insure, for a small premium, mortgage loans made by private lending institutions for these purposes. Compliance with applicable State laws and a finding of economic soundness would be required as conditions of Federal insurance. Questions of economic soundness in the case of hospital projects would be considered in the light of existing facilities and population-bed ratios, bed utilization rates in the area, programed hospital construction, and other factors which would affect utilization of the proposed facility. The principle of coinsurance would be applied to preserve the responsibility-and the economic stake-of the mortgagor and mortgagee. Insurance would not be issued for the full amount of the mortgage, nor could the mortgage itself cover the full value of the property. The bill also provides safeguards against windfall profits.

The proposed mortgage insurance would provide stimulus and encouragement for a broader range of needed health facilities without Federal subsidy. It would permit the inclusion of types of sponsorship not wholly appropriate for a grant program.

A health facilities mortgage insurance fund would be maintained on a selfsupporting basis from premiums charged for insurance, earnings from investments, fees, and other receipts. Insurance contracts would be entered into by the Secretary on behalf of the United States, but the fund, which is required to be operated in accordance with actuarial principles in order to assure that it will be self-sustaining over the years, would be primarily liable under the mortgage insurance contract.

A $10 million initial appropriation would be authorized to provide initial working capital, with authorization for any necessary subsequent appropriations to provide additional working capital. Advances would be repaid from the insurance fund to the working capital account with interest but, in order to permit the accumulation of an adequate reserve from premiums and from earnings of the fund, no capital would have to be repaid before July 1, 1965. In addition to this capitalization provision, the bill would authorize the Secretary (through issuance of notes purchased by the Secretary of the Treasury) to borrow up to $25 million or, if greater, up to 75 percent of the outstanding contingent insurance liability, to meet liabilities incurred under insurance contracts. Sums SO borrowed would be repayable to the Treasury with interest. A program ceiling would be established, however, by a limit of $200 million on the authorized contingent insurance liability outstanding at any one time. This ceiling could be raised by action of the President by an aggregate increase of $150 million if he determined that such increases were in the public interest.

It is not expected that the enactment of the proposed health facilities mortgage insurance program will entail any increased cost to the Government over

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