Medicare Patient Choice Act of 1995

Summary: Medicare Patient Choice Act of 1995 - Amends title XVIII (Medicare) of the Social Security Act to require health maintenance organizations and competitive medical plans, among other things, to: (1) have a minimum 85 percent loss-ratio of benefits-to-premiums; (2) assure Medicare enrollees timely access to in-network primary and specialty health care providers and out-of-network providers as well; (3) establish a cost-sharing schedule for out-of-network services; (4) establish a grievance process with board of appeals hearings within 30 days of the filing of a complaint; and (5) provide each enrollee with an explanation of the enrollee's rights and a copy of the most recent consumer report card for the organization.  Prohibits provider incentive plans that fail to meet specified criteria. 
Applies the same requirements to Medicare select policies.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Patient Choice Act of 
1995''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) There should be no unreasonable barriers or impediments 
        to the ability of individuals enrolled in health care plans to 
        obtain appropriate specialized medical services.
            (2) The patient's first point of contact in a health care 
        plan must be encouraged to make all appropriate medical 
        referrals and should not be constrained financially from making 
        such referrals.
            (3) Some health care plans may impede timely access to 
        specialty care.
            (4) At any time, patients must be able to access out-of-
        network items, treatment, and services at an additional cost to 
        the patient which is not so prohibitive that they are deterred 
        from seeing the health care provider of their own choice.
            (5) Specialty care must be available for the full duration 
        of the patient's medical needs and not limited by time or 
        number of visits.
            (6) Direct access to specialty care is essential for 
        patients in emergency and nonemergency situations and for 
        patients with chronic and temporary conditions.

SEC. 3. PROTECTION FOR MEDICARE HMO ENROLLEES.

    (a) In General.--Section 1876 of the Social Security Act (42 U.S.C. 
1395mm) is amended--
            (1) in subsection (c)(1), by striking ``subsection (e)'' 
        and inserting ``subsections (e) and (k)'', and
            (2) by adding at the end the following new subsection:
    ``(k) Beneficiary Protection.--
            ``(1) Minimum loss ratio.--
                    ``(A) In general.--Each eligible organization shall 
                have a loss-ratio that is not less than 85 percent for 
                each contract year.
                    ``(B) Loss ratio defined.--In subparagraph (A), the 
                term `loss-ratio' means, with respect to an 
                organization for a contract year, the ratio of (i) the 
                anticipated aggregate benefits provided under this 
                section to enrollees for the year, to (ii) the 
                aggregate amount of the premiums collected (including 
                payments to the organization under subsection (a) for 
                the year, as estimated on the basis of incurred claims 
                experience and earned premium for the year.
            ``(2) Assuring adequate in-network access.--
                    ``(A) Timely access.--An eligible organization that 
                restricts the providers from whom benefits may be 
                obtained must guarantee to enrollees under this section 
                timely access to primary and specialty health care 
                providers who are appropriate to the enrollee's 
                condition.
                    ``(B) Access to specialized care.--Enrollees must 
                have access to specialized treatment when the treating 
                provider deems necessary. This access may be satisfied 
                through contractual arrangements with specialized 
                providers outside of the network.
                    ``(C) Continuity of care.--An eligible 
                organization's use of case management may not create an 
                undue burden for enrollees under this section. An 
                organization must ensure direct access to specialists 
                for ongoing care as so determined by the case manager 
                in consultation with the specialty care provider. This 
                continuity of care may be satisfied for enrollees with 
                chronic conditions through the use of a specialist 
                serving as case manager.
            ``(3) Assuring out-of-network access.--
                    ``(A) In general.--An eligible organization that 
                contracts with a specific network of providers must 
                offer its enrollees or their treating provider with the 
                patient's authorization under this section, the ability 
                at any time, to seek items, services, and treatment 
                from out-of-network providers for all covered benefits.
                    ``(B) Reimbursement for out-of-network services.--
                An eligible organization under this section shall 
                provide for reimbursement for the enrollee, consistent 
                with the cost-sharing schedule established under 
                subparagraph (C), with respect to out-of-network 
                services which are described in subparagraph (A), so 
                long as the services were medically appropriate, and 
                were covered benefits in-network.
                    ``(C) Establishment of cost-sharing schedule.--In 
                consultation with the National Association of Insurance 
                Commissioners, the Secretary shall establish (by not 
                later than one year after enactment of this Act) a 
                cost-sharing schedule which applies to payment required 
                under subparagraph (B) for out-of-network services.
            ``(4) Appropriate range of services.--A health plan shall 
        not deny any health care professionals, based solely on the 
        license or certification as applicable under State law, the 
        ability to participate in providing covered health care 
        services, or be reimbursed or indemnified or by a network plan 
        for providing such services. Organizations must ensure a 
        sufficient number, mix, and distribution of health care 
        professionals within a network plan to ensure enrollees access 
        to appropriate medical services.
            ``(5) Grievance and appeals processes.--
                    ``(A) Grievance process.--The organization must 
                provide meaningful procedures for hearing and resolving 
                grievances between the organization (including any 
                entity or individual through which the organization 
                provides health care services) and members enrolled 
                with the organization under this section.
                    ``(B) Board of appeals.--
                            ``(i) In general.--Each eligible 
                        organization shall establish a board of appeals 
                        to hear and make determinations on complaints 
                        by enrollees concerning denials of coverage or 
                        payment for services (whether in-network or 
                        out-of-network) and the medical necessity and 
                        appropriateness of covered items and services.
                            ``(ii) Composition.--A board of appeals of 
                        an eligible organization shall consist of--
                                    ``(I) representatives of the 
                                organization, including physicians, 
                                nonphysicians, administrators, and 
                                enrollees;
                                    ``(II) consumers who are not 
                                enrollees and those who have 
                                disenrolled; and
                                    ``(III) providers with expertise in 
                                the field of medicine which 
                                necessitates treatment.
                            ``(iii) Deadline for decision.--A board of 
                        appeals shall hear and resolve complaints 
                        within 30 days after the date the complaint is 
                        filed with the board.
                    ``(C) Appeal to secretary.--A member enrolled in an 
                eligible organization under this section who is 
                dissatisfied with a determination of a board of appeals 
                of the organization under subparagraph (B) is entitled, 
                if the amount in controversy is $100 or more, to a 
                hearing before the Secretary to the same extent as is 
                provided in section 205(b), and in any such hearing the 
                Secretary shall make the eligible organization a party. 
                If the amount in controversy is $1,000 or more, the 
                individual or eligible organization shall, upon 
                notifying the other party, be entitled to judicial 
                review of the Secretary's final decision as provided in 
                section 205(g), and both the individual and the 
                eligible organization shall be entitled to be parties 
                to that judicial review. In applying sections 205(b) 
                and 205(g) as provided in this subparagraph, and in 
                applying section 205(l) thereto, any reference therein 
                to the Commissioner of Social Security or the Social 
                Security Administration shall be considered a reference 
                to the Secretary or the Department of Health and Human 
                Services, respectively.
            ``(6) Notice of enrollee rights and consumer report card.--
                    ``(A) In general.--Each eligible organization shall 
                provide each enrollee, at the time of enrollment and 
                not less frequently than annually thereafter, an 
                explanation of the enrollee's rights under this section 
                and a copy of the most recent consumer report card for 
                the organization (as described in subparagraph (C)).
                    ``(B) Rights described.--The explanation of rights 
                under subparagraph (A) shall include an explanation 
                of--
                            ``(i) the enrollee's rights to benefits 
                        from the organization;
                            ``(ii) the restrictions on payments under 
                        this title for services furnished other than by 
                        or through the organization;
                            ``(iii) out-of-area coverage provided by 
                        the organization;
                            ``(iv) the organization's coverage of 
                        emergency services and urgently needed care;
                            ``(v) the organization's coverage of out-
                        of-network services, including services that 
                        are additional to the items and services 
                        covered under parts A and B; and
                            ``(vi) appeal rights of enrollees.
                    ``(C) Consumer report card.--For purposes of 
                subparagraph (A), the term `consumer report card' 
                means, with respect to an eligible organization for a 
                year, a report issued by the organization which 
                contains indicators of the quality of the services 
                under this section provided by the organization during 
                the year. Information must be provided in a manner that 
                permits consumers to compare organizations with respect 
                to the following:
                            ``(i) For each plan, on--
                                    ``(I) the premium for the plan,
                                    ``(II) identity, location, 
                                qualifications, and availability of 
                                providers in any provider networks of 
                                the plan,
                                    ``(III) the number of individuals 
                                enrolling and disenrolling from the 
                                plan,
                                    ``(IV) procedures used by the plan 
                                to control utilization of services and 
                                expenditures,
                                    ``(V) procedures used by the plan 
                                to assure quality of care,
                                    ``(VI) the plan's loss ratio, and
                                    ``(VII) rights and responsibilities 
                                of enrollees.
                            ``(ii) In addition, for each managed care 
                        plan, on--
                                    ``(I) restrictions on payment for 
                                services provided outside the plan's 
                                provider network,
                                    ``(II) the process by which 
                                services may be obtained through the 
                                plan's provider network,
                                    ``(III) coverage for out-of-area 
                                services, and
                                    ``(IV) any exclusions in the types 
                                of providers participating in the 
                                plan's provider network.
            ``(7) Restrictions on provider incentive plans.--
                    ``(A) In general.--Each contract with an eligible 
                organization under this section shall provide that the 
                organization may not operate any provider incentive 
                plan (as defined in subparagraph (B)) unless the 
                following requirements are met:
                            ``(i) No specific payment is made directly 
                        or indirectly under the plan to a provider or 
                        provider group as an inducement to reduce or 
                        limit medically necessary services provided 
                        with respect to a specific individual enrolled 
                        with the organization.
                            ``(ii) If the plan places a provider or 
                        provider group at substantial financial risk 
                        (as determined by the Secretary) for services 
                        not provided by the provider or provider group, 
                        the organization--
                                    ``(I) provides stop-loss protection 
                                for the provider or group that is 
                                adequate and appropriate, based on
                                 standards developed by the Secretary 
that take into account the number (and type) of providers placed at 
such substantial financial risk in the group or under the plan and the 
number of individuals enrolled with the organization who receive 
services from the provider or the group, and
                                    ``(II) conducts periodic surveys of 
                                both individuals enrolled and 
                                individuals previously enrolled with 
                                the organization to determine the 
                                degree of access of such individuals to 
                                services provided by the organization 
                                and satisfaction with the quality of 
                                such services.
                            ``(iii) The organization provides the 
                        Secretary with descriptive information 
                        regarding the plan, sufficient to permit the 
                        Secretary to determine whether the plan is in 
                        compliance with the requirements of this 
                        subparagraph.
                    ``(B) Provider incentive plan defined.--In this 
                paragraph, the term `provider incentive plan' means any 
                compensation arrangement between an eligible 
                organization and a provider or provider group that may 
                directly or indirectly have the effect of reducing or 
                limiting services provided with respect to individuals 
                enrolled with the organization.
            ``(8) Additional definitions.--
                    ``(A) In-network.--The term `in-network' means 
                services provided by health care providers who have 
                entered into a contract or agreement with the 
                organization under which such providers are obligated 
                to provide items, treatment, and services under this 
                section to individuals enrolled with the organization 
                under this section.
                    ``(B) Network.--The term `network' means, with 
                respect to an eligible organization, the health care 
                providers who have entered into a contract or agreement 
                with the organization under which such providers are 
                obligated to provide items, treatment, and services 
                under this section to individuals enrolled with the 
                organization under this section.
                    ``(C) Out-of-network.--The term `out-of-network' 
                means services provided by health care providers who 
                have not entered into a contract agreement with the 
                organization under which such providers are obligated 
                to provide items, treatment, and services under this 
                section to individuals enrolled with the organization 
                under this section.''.
    (b) Conforming Amendments.--Section 1876 of such Act is further 
amended--
            (1) by striking subparagraph (E) of subsection (c)(3);
            (2) by striking paragraphs (4) and (5) of subsection (c); 
        and
            (3) by striking paragraph (8) of subsection (i).
    (c) Effective Date.--The amendments made by this section shall 
apply to contract years beginning at least 60 days after the date the 
Secretary establishes the cost-sharing schedule for out-of-network 
services under section 1876(k)(2)(C) of the Social Security Act (as 
added by subsection (a)(2)).

SEC. 4. APPLICATION OF PROTECTIONS TO MEDICARE SELECT POLICIES.

    (a) In General.--Section 1882(t)(1) of the Social Security Act (42 
U.S.C. 1395ss(t)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting a semicolon; and
            (3) by adding at the end the following new subparagraph:
                    ``(G) notwithstanding any other provision of this 
                section to the contrary, if the issuer of the policy--
                            ``(i) meets the requirements of section 
                        1876(k) with respect to individuals enrolled 
                        under the policy in the same manner such 
                        requirements apply with respect to an eligible 
                        organization under such section with respect to 
                        individuals enrolled with the organization 
                        under such section, and
                            ``(ii) discloses (in a form and manner 
                        specified by the Secretary) the loss ratio 
                        described in subsection (r)(1) most recently 
                        calculated for purposes of such subsection.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to policies issued or renewed on or after the effective date 
described in section 3(c).