---
kind: "section"
citation: "42 U.S.C. § 248b"
title: "42"
title_heading: "The Public Health and Welfare"
number: "248b"
heading: "Transfer or financial self-sufficiency of public health service hospitals and clinics"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/248b"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter II — General Powers and Duties"
  - "Part C — Hospitals, Medical Examinations, and Medical Care"
---

# §248b. Transfer or financial self-sufficiency of public health service hospitals and clinics

- (a) **Deadline for closure, transfer, or financial self-sufficiency—** The [Secretary](/usc/42/201.md?p=c) of Health and Human [Services](/usc/42/201.md?p=a) (hereinafter in this subtitle referred to as the “[Secretary](/usc/42/201.md?p=c)”) shall, in accordance with this section and notwithstanding [section 248a of this title](/usc/42/248a.md), provide for the closure, transfer, or financial self-sufficiency of all [hospitals](/usc/42/300s–3.md?p=1) and other stations of the Public Health [Service](/usc/42/201.md?p=a) (hereinafter in this subtitle referred to as the “[Service](/usc/42/201.md?p=a)”) not later than September 30, 1982.
- (b) **Proposals for transfer or financial self-sufficiency—** Not later than July 1, 1981, the [Secretary](/usc/42/201.md?p=c) shall notify each [Service](/usc/42/201.md?p=a) [hospital](/usc/42/300s–3.md?p=1) and other station, and the chief executive officer of each [State](/usc/42/201.md?p=f) and of each locality in which such a [hospital](/usc/42/300s–3.md?p=1) or other station is located, that the [Secretary](/usc/42/201.md?p=c) will accept proposals for the transfer of each such [hospital](/usc/42/300s–3.md?p=1) and station from the [Service](/usc/42/201.md?p=a) to a public (including Federal) or [nonprofit](/usc/42/300s–3.md?p=3) private entity or for the achievement of financial self-sufficiency of each such [hospital](/usc/42/300s–3.md?p=1) and station not later than September 30, 1982. No such proposal shall be considered by the [Secretary](/usc/42/201.md?p=c) if it is submitted later than September 1, 1981.
- (c) **Evaluation of proposals—** The [Secretary](/usc/42/201.md?p=c) shall evaluate promptly each proposal submitted under [subsection (b)](#b) with respect to a [hospital](/usc/42/300s–3.md?p=1) or other station and determine, not later than September 30, 1981, whether or not under such proposal the [hospital](/usc/42/300s–3.md?p=1) or station—
  - (1) will be maintained as a general health care facility providing a range of [services](/usc/42/201.md?p=a) to the population within its [service](/usc/42/201.md?p=a) area,
  - (2) will continue to make [services](/usc/42/201.md?p=a) available to existing patient populations, and
  - (3) has a reasonable expectation of financial viability and, in the case of a [hospital](/usc/42/300s–3.md?p=1) or station that is not proposed to be transferred, of financial self-sufficiency.

  [Paragraph (1)](#c-1) shall not apply in the case of a proposal for the transfer of a discrete, minor, freestanding part of a [hospital](/usc/42/300s–3.md?p=1) or station to a local public entity for the purpose of continuing the provision of [services](/usc/42/201.md?p=a) to refugees.

- (d) **Rejection or approval of proposal—**
  - (1) If the [Secretary](/usc/42/201.md?p=c) determines that a proposal for a [hospital](/usc/42/300s–3.md?p=1) or other station does not meet the standards of [subsection (c)](#c) or if there is no proposal submitted under [subsection (b)](#b) with respect to a [hospital](/usc/42/300s–3.md?p=1) or other station, the [Secretary](/usc/42/201.md?p=c) shall provide for the closure of the [hospital](/usc/42/300s–3.md?p=1) or station by not later than October 31, 1981.
  - (2) If the [Secretary](/usc/42/201.md?p=c) determines that a proposal for a [hospital](/usc/42/300s–3.md?p=1) or other station meets the standards of [subsection (c)](#c), the [Secretary](/usc/42/201.md?p=c) shall take such steps, within the amounts available through appropriations, as may be necessary and proper—
    - (A) to operate (or participate or assist in the operation of) the [hospital](/usc/42/300s–3.md?p=1) or station by the [Service](/usc/42/201.md?p=a) until the transfer is accomplished or financial self-sufficiency is achieved,
    - (B) to bring the [hospital](/usc/42/300s–3.md?p=1) or station into compliance with applicable licensure, accreditation, and local medical practice standards, and
    - (C) to provide for such other legal, administrative, personnel, and financial arrangements (including allowing payments made with respect to [services](/usc/42/201.md?p=a) provided by the [hospital](/usc/42/300s–3.md?p=1) or station to be made directly to that [hospital](/usc/42/300s–3.md?p=1) or station) as may be necessary to effect a timely and orderly transfer of such [hospital](/usc/42/300s–3.md?p=1) or station (including the land, building, and equipment thereof) from the [Service](/usc/42/201.md?p=a), or for the financial self-sufficiency of the [hospital](/usc/42/300s–3.md?p=1) or station, not later than September 30, 1982.
- (e) **Establishment of identifiable administrative unit—** There is established, within the Office of the Assistant [Secretary](/usc/42/201.md?p=c) for Health of the Department of Health and Human [Services](/usc/42/201.md?p=a), an identifiable administrative unit which shall have direct responsibility and authority for overseeing the activities under this section.
- (f) **Finding of financial self-sufficiency—** For purposes of this section, a [hospital](/usc/42/300s–3.md?p=1) or station cannot be found to be financially self-sufficient if the [hospital](/usc/42/300s–3.md?p=1) or station is relying, in whole or in part, on direct appropriated funds for its continued operations.

## Source credit

(Pub. L. 97–35, title IX, § 987, Aug. 13, 1981, 95 Stat. 603.)

## Notes

### Editorial Notes

### References in Text

This subtitle, referred to in subsec. (a), is subtitle J of title IX of Pub. L. 97–35, §§ 985 to 988, Aug. 13, 1981, 95 Stat. 602, which enacted this section, amended sections 201, 249, and 254e of this title, and enacted provisions set out as notes under this section and section 249 of this title. For complete classification of this subtitle to the Code, see Tables.

Section 248a of this title, referred to in subsec. (a), was in the original “section 818 of Public Law 93–155”, meaning section 818 of Pub. L. 93–155, title VIII, Nov. 16, 1973, 87 Stat. 622, which enacted section 248a of this title and repealed section 3 of Pub. L. 92–585, Oct. 27, 1972, 86 Stat. 1292.

### Codification

Section was enacted as part of the Omnibus Budget Reconciliation Act of 1981, and not as part of the Public Health Service Act which comprises this chapter.

### Statutory Notes and Related Subsidiaries

### Congressional Findings and Declaration of Purpose

Pub. L. 97–35, title IX, § 985, Aug. 13, 1981, 95 Stat. 602, provided that: Congress finds that— because of national budgetary considerations, it has become necessary to terminate Federal appropriations for Public Health Service hospitals and clinics, with proper planning and coordination, some of these hospitals and clinics could be transferred to State, local, or private control or become financially self-sufficient and continue to provide effective and efficient health care to individuals in the areas in which they are located, a precipitous closure of these hospitals and clinics will preclude the possibility of such orderly transfer to entities which are willing and able to take over operations at such facilities and will cause unnecessary and costly hardships on the patients and staffs at such facilities and on the communities in which the facilities are located, and it is in the national interest, consistent with sound budgetary considerations, to assist in the orderly and prompt transfer of such operations to State, local, or private operation or in the achievement of financial self-sufficiency where feasible. The purposes of this subtitle [enacting this section, amending sections 201, 249, and 254e of this title, and enacting provisions set out as notes under section 249 of this title] are— to provide for the prompt and orderly closure by October 31, 1981, of Public Health Service hospitals and clinics which cannot reasonably be transferred to State, local, or private operation or become financially self-sufficient and for the transfer or achievement of financial self-sufficiency by September 30, 1982, of those hospitals and clinics which can be so transferred or which can achieve such financial self-sufficiency, and to provide for transitional assistance for merchant seamen whose entitlement to receive free care through Public Health Service hospitals and clinics is repealed and who are hospitalized at the end of fiscal year 1981 and require continuing hospitalization.”