SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Health Care Purchasing 
Cooperatives Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) Health care spending in the United States has reached 
        13 percent of the Gross Domestic Product of the United States, 
        yet 42,500,000 people, or 15.5 percent of the population, 
        remains uninsured.
            (2) After nearly a decade of manageable increases in 
        commercial insurance premiums, many employers are now faced 
        with consecutive years of double digit premium increases.
            (3) Purchasing cooperatives owned by participating 
        businesses are a proven method of achieving the bargaining 
        power necessary to manage the cost and quality of employer-
        sponsored health plans and other employee benefits.
            (4) The Employer Health Care Alliance Cooperative has 
        provided its members with health care purchasing power through 
        provider contracting, data collection, activities to enhance 
        quality improvements in the health care community, and 
        activities to promote employee health care consumerism.
            (5) According to the National Business Coalition on Health, 
        there are more than 90 employer-led coalitions across the 
        United States that collectively purchase health care, 
        proactively challenge high costs and the inefficient delivery 
        of health care, and share information on quality. These 
        coalitions represent over 7,000 employers and approximately 
        34,000,000 employees.
    (b) Purpose.--It is the purpose of this Act to build off of 
successful local employer-led health insurance initiatives by improving 
the value of their employees health care.

SEC. 3. GRANTS TO SELF INSURED BUSINESSES TO FORM HEALTH CARE 
              COOPERATIVES.

    (a) Authorization.--The Secretary of Health and Human Services (in 
this Act referred to as the ``Secretary''), acting through the Director 
of the Agency for Healthcare Research and Quality, is authorized to 
award grants to eligible groups who meet the criteria described in 
subsection (d), for the development of health care purchasing 
cooperatives. Such grants may be used to provide support for the 
professional staff of such cooperatives, and to obtain contracted 
services for planning, development, and implementation activities for 
establishing such health care purchasing cooperatives.
    (b) Eligible Group Defined.--
            (1) In general.--For purposes of this section the term 
        ``eligible group'' means a consortia of--
                    (A) two or more self-insured employers each of 
                which are responsible for their own health insurance 
                risk pool with respect to their employees; or
                    (B) two or more employers each of which--
                            (i) have 99 employees or less; and
                            (ii) are purchasers of health insurance 
                        (are not self-insured) for their employees.
            (2) No transfer of risk.--Individual employers who are 
        members of an eligible group may not transfer insurance risk to 
        such group.
    (c) Application.--An eligible entity desiring a grant under this 
section shall submit to the Secretary an application at such time, in 
such manner, and accompanied by such information as the Secretary may 
require.
    (d) Criteria.--
            (1) Feasibility study grants.--
                    (A) In general.--An eligible group may submit an 
                application under subsection (c) for a grant to conduct 
                a feasibility study concerning the establishment of a 
                health insurance purchasing cooperative. The Secretary 
                shall approve applications submitted under the 
                preceding sentence if the study will consider the 
                criteria described in paragraph (2).
                    (B) Report.--After completion of a feasibility 
                study under a grant under this section, an 
eligible group shall submit to the Secretary a report describing the 
results of such study.
            (2) Grant criteria.--The criteria described in this 
        paragraph include the following with respect to the eligible 
        group:
                    (A) The ability of the group to effectively pool 
                the health care purchasing power of employers.
                    (B) The ability of the group to provide data to 
                employers to enable such employers to make data-based 
                decisions regarding their health plans.
                    (C) The ability of the group to drive quality 
                improvement in the health care community.
                    (D) The ability of the group to promote health care 
                consumerism through employee education, self-care, and 
                comparative provider performance information.
                    (E) The ability of the group to meet any other 
                criteria determined appropriate by the Secretary.
    (e) Cooperative Grants.--After the submission of a report by an 
eligible group under subsection (d)(1)(B), the Secretary shall 
determine whether to award the group a grant for the establishment of a 
cooperative under subsection (a). In making a determination under the 
preceding sentence, the Secretary shall consider the criteria described 
in subsection (d)(2) with respect to the group.
    (f) Cooperatives.--
            (1) In general.--An eligible group awarded a grant under 
        subsection (a) shall establish or expand a health insurance 
        purchasing cooperative that shall--
                    (A) be a nonprofit organization;
                    (B) be wholly owned, and democratically governed by 
                its member-employers;
                    (C) exist solely to serve the membership base;
                    (D) be governed by a board of directors that is 
                democratically elected by the cooperative membership 
                using a 1-member, 1-vote standard; and
                    (E) accept any new member in accordance with 
                specific criteria, including a limitation on the number 
                of members, determined by the Secretary.
            (2) Authorized cooperative activities.--A cooperative 
        established under paragraph (1) shall--
                    (A) assist the members of the cooperative in 
                pooling their health care insurance purchasing power;
                    (B) provide data to improve the ability of the 
                members of the cooperative to make data-based decisions 
                regarding their health plans;
                    (C) conduct activities to enhance quality 
                improvement in the health care community;
                    (D) the ability of the group to promote health care 
                consumerism through employee education, self-care, and 
                comparative provider performance information; and
                    (E) conduct any other activities determined 
                appropriate by the Secretary.
    (g) Review.--
            (1) In general.--Not later than 1 year after the date on 
        which grants are awarded under this section, and every 2 years 
        thereafter, the Secretary shall study programs funded by grants 
        under this section and provide to the appropriate committees of 
        Congress a report on the progress of such programs in improving 
        the access of employees to quality, affordable health 
        insurance.
            (2) Sliding scale funding.--The Secretary shall use the 
        information included in the report under paragraph (1) to 
        establish a schedule for scaling back payments under this 
        section with the goal of ensuring that programs funded with 
        grants under this section are self sufficient within 10 years.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

    From the administrative funds provided to the Secretary of Health 
and Human Services, the Secretary may use not more than a total of 
$60,000,000 for fiscal years 2003 through 2012 to carry out this Act.
Promoting Health Care Purchasing Cooperatives Act - Authorizes the Secretary of Health and Human Services, acting through the Director of the Agency for Healthcare Research and Quality, to award grants for the development of health care purchasing cooperatives by two or more employers. Includes employers who self-insure as well as those with fewer than 100 employees who purchase insurance.Permits the use of funds for professional staff support and the conduct of a feasibility study.Requires the Secretary to determine a group's eligibility for a grant to establish or expand a cooperative based upon the report of the feasibility study. Requires cooperatives to: (1) be nonprofit; (2) be wholly owned and governed by its member-employees; (3) assist members in pooling their health care insurance purchasing power; and (4) provide data and activities to improve the quality of health care decision-making.
A bill to promote the development of health care cooperatives that will help businesses to pool the health care purchasing power of employers, and for other purposes.