II

106TH CONGRESS

1ST SESSION S. 1142

To protect the right of a member of a health maintenance organization

to receive continuing care at a facility selected by that member, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 27, 1999

Ms. MIKULSKI (for herself, Mr. DODD, Mr. HOLLINGS, Mr. JEFFORDS, Mr.

KENNEDY, Mrs. MURRAY, and Mr. WELLSTONE) introduced the following

bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To protect the right of a member of a health maintenance

organization to receive continuing care at a facility selected by that member, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Seniors’ Access to Con5 tinuing Care Act of 1999’’.
2

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1 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN2 COME SECURITY ACT OF 1974.

3 (a) IN GENERAL.—Subpart B of part 7 of subtitle

4 B of title I of the Employee Retirement Income Security

5 Act of 1974 (29 U.S.C. 1185 et seq.) is amended by add6 ing at the end the following new section:

7 ‘‘SEC. 714. ENSURING CHOICE FOR CONTINUING CARE.

8 ‘‘(a) IN GENERAL.—With respect to health insurance

9 coverage provided to participants or beneficiaries through

10 a managed care organization under a group health plan,

11 or through a health insurance issuer providing health in12 surance coverage in connection with a group health plan,

13 such plan or issuer may not deny coverage for services

14 provided to such participant or beneficiary by a continuing

15 care retirement community, skilled nursing facility, or

16 other qualified facility in which the participant or bene17 ficiary resided prior to a hospitalization, regardless of

18 whether such organization is under contract with such

19 community or facility if the requirements described in sub20 section (b) are met.

21 ‘‘(b) REQUIREMENTS.—The requirements of this sub22 section are that—

23 ‘‘(1) the service involved is a service for which

24 the managed care organization involved would be re25 quired to provide or pay for under its contract with

26 the participant or beneficiary if the continuing care
3

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1 retirement community, skilled nursing facility, or

2 other qualified facility were under contract with the

3 organization;

4 ‘‘(2) the participant or beneficiary involved—

5 ‘‘(A) resided in the continuing care retire6 ment community, skilled nursing facility, or

7 other qualified facility prior to being hospital8 ized;

9 ‘‘(B) had a contractual or other right to

10 return to the facility after hospitalization; and

11 ‘‘(C) elects to return to the facility after

12 hospitalization, whether or not the residence of

13 the participant or beneficiary after returning

14 from the hospital is the same part of the facility

15 in which the beneficiary resided prior to hos16 pitalization;

17 ‘‘(3) the continuing care retirement community,

18 skilled nursing facility, or other qualified facility has

19 the capacity to provide the services the participant

20 or beneficiary needs;

21 ‘‘(4) the continuing care retirement community,

22 skilled nursing facility, or other qualified facility is

23 willing to accept substantially similar payment under

24 the same terms and conditions that apply to simi-
4

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1 larly situated health care facility providers under

2 contract with the organization involved.

3 ‘‘(c) SERVICES TO PREVENT HOSPITALIZATION.—A

4 group health plan or health insurance issuer to which this

5 section applies may not deny payment for a skilled nursing

6 service provided to a participant or beneficiary by a con7 tinuing care retirement community, skilled nursing facil8 ity, or other qualified facility in which the participant or

9 beneficiary resides, without a preceding hospital stay, re10 gardless of whether the organization is under contract

11 with such community or facility, if—

12 ‘‘(1) the plan or issuer has determined that the

13 service is necessary to prevent the hospitalization of

14 the participant or beneficiary; and

15 ‘‘(2) the service to prevent hospitalization is

16 provided as an additional benefit as described in sec17 tion 417.594 of title 42, Code of Federal Regula18 tions, and would otherwise be covered as provided

19 for in subsection (b)(1).

20 ‘‘(d) RIGHTS OF SPOUSES.—A group health plan or

21 health insurance issuer to which this section applies shall

22 not deny payment for services provided by a skilled nurs23 ing facility for the care of a participant or beneficiary, re24 gardless of whether the plan or issuer is under contract

25 with such facility, if the spouse of the participant or bene-
5

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1 ficiary is already a resident of such facility and the re2 quirements described in subsection (b) are met.

3 ‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply—

4 ‘‘(1) where the attending acute care provider

5 and the participant or beneficiary (or a designated

6 representative of the participant or beneficiary where

7 the participant or beneficiary is physically or men8 tally incapable of making an election under this

9 paragraph) do not elect to pursue a course of treat10 ment necessitating continuing care; or

11 ‘‘(2) unless the community or facility involved—

12 ‘‘(A) meets all applicable licensing and cer13 tification requirements of the State in which it

14 is located; and

15 ‘‘(B) agrees to reimbursement for the care

16 of the participant or beneficiary at a rate simi17 lar to the rate negotiated by the managed care

18 organization with similar providers of care for

19 similar services.

20 ‘‘(f) PROHIBITIONS.—A group health plan and a

21 health insurance issuer providing health insurance cov22 erage in connection with a group health plan may not—

23 ‘‘(1) deny to an individual eligibility, or contin24 ued eligibility, to enroll or to renew coverage with a

25 managed care organization under the plan, solely for
6

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1 the purpose of avoiding the requirements of this sec2 tion;

3 ‘‘(2) provide monetary payments or rebates to

4 enrollees to encourage such enrollees to accept less

5 than the minimum protections available under this

6 section;

7 ‘‘(3) penalize or otherwise reduce or limit the

8 reimbursement of an attending physician because

9 such physician provided care to a participant or ben10 eficiary in accordance with this section; or

11 ‘‘(4) provide incentives (monetary or otherwise)

12 to an attending physician to induce such physician

13 to provide care to a participant or beneficiary in a

14 manner inconsistent with this section.

15 ‘‘(g) RULES OF CONSTRUCTION.—

16 ‘‘(1) HMO NOT OFFERING BENEFITS.—This

17 section shall not apply with respect to any managed

18 care organization under a group health plan, or

19 through a health insurance issuer providing health

20 insurance coverage in connection with a group health

21 plan, that does not provide benefits for stays in a

22 continuing care retirement community, skilled nurs23 ing facility, or other qualified facility.

24 ‘‘(2) COST-SHARING.—Nothing in this section

25 shall be construed as preventing a managed care or-
7

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1 ganization under a group health plan, or through a

2 health insurance issuer providing health insurance

3 coverage in connection with a group health plan,

4 from imposing deductibles, coinsurance, or other

5 cost-sharing in relation to benefits for care in a con6 tinuing care facility.

7 ‘‘(h) PREEMPTION; EXCEPTION FOR HEALTH INSUR8 ANCE COVERAGE IN CERTAIN STATES.—

9 ‘‘(1) IN GENERAL.—The requirements of this

10 section shall not apply with respect to health insur11 ance coverage to the extent that a State law (as de12 fined in section 2723(d)(1) of the Public Health

13 Service Act) applies to such coverage and is de14 scribed in any of the following subparagraphs:

15 ‘‘(A) Such State law requires such cov16 erage to provide for referral to a continuing

17 care retirement community, skilled nursing fa18 cility, or other qualified facility in a manner

19 that is more protective of participants or bene20 ficiaries than the provisions of this section.

21 ‘‘(B) Such State law expands the range of

22 services or facilities covered under this section

23 and is otherwise more protective of the rights of

24 participants or beneficiaries than the provisions

25 of this section.
8

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1 ‘‘(2) CONSTRUCTION.—Section 731(a)(1) shall

2 not be construed to provide that any requirement of

3 this section applies with respect to health insurance

4 coverage, to the extent that a State law described in

5 paragraph (1) applies to such coverage.

6 ‘‘(i) PENALTIES.—A participant or beneficiary may

7 enforce the provisions of this section in an appropriate

8 Federal district court. An action for injunctive relief or

9 damages may be commenced on behalf of the participant

10 or beneficiary by the participant’s or beneficiary’s legal

11 representative. The court may award reasonable attorneys’

12 fees to the prevailing party. If a beneficiary dies before

13 conclusion of an action under this section, the action may

14 be maintained by a representative of the participant’s or

15 beneficiary’s estate.

16 ‘‘(j) DEFINITIONS.—In this section:

17 ‘‘(1) ATTENDING ACUTE CARE PROVIDER.—The

18 term ‘attending acute care provider’ means anyone

19 licensed or certified under State law to provide

20 health care services who is operating within the

21 scope of such license and who is primarily respon22 sible for the care of the enrollee.

23 ‘‘(2) CONTINUING CARE RETIREMENT COMMU24 NITY.—The term ‘continuing care retirement com25 munity’ means an organization that provides or ar-
9

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1 ranges for the provision of housing and health-re2 lated services to an older person under an agreement

3 effective for the life of the person or for a specified

4 period greater than 1 year.

5 ‘‘(3) MANAGED CARE ORGANIZATION.—The

6 term ‘managed care organization’ means an organi7 zation that provides comprehensive health services to

8 participants or beneficiaries, directly or under con9 tract or other agreement, on a prepayment basis to

10 such individuals. For purposes of this section, the

11 following shall be considered as managed care orga12 nizations:

13 ‘‘(A) A Medicare+Choice plan authorized

14 under section 1851(a) of the Social Security

15 Act (42 U.S.C. 1395w–21(a)).

16 ‘‘(B) Any other entity that manages the

17 cost, utilization, and delivery of health care

18 through the use of predetermined periodic pay19 ments to health care providers employed by or

20 under contract or other agreement, directly or

21 indirectly, with the entity.

22 ‘‘(4) OTHER QUALIFIED FACILITY.—The term

23 ‘other qualified facility’ means any facility that can

24 provide the services required by the participant or

25 beneficiary consistent with State and Federal law.
10

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1 ‘‘(5) SKILLED NURSING FACILITY.—The term

2 ‘skilled nursing facility’ means a facility that meets

3 the requirements of section 1819 of the Social Secu4 rity Act (42 U.S.C. 1395i–3).’’.

5 (b) CLERICAL AMENDMENT.—The table of contents

6 in section 1 of the Employee Retirement Income Security

7 Act of 1974 is amended by inserting after the items relat8 ing to subpart B of part 7 of subtitle B of title I the fol9 lowing new item:

‘‘Sec. 714. Ensuring choice for continuing care.’’.

10 (c) EFFECTIVE DATE.—The amendments made by

11 this section shall apply with respect to plan years begin12 ning on or after January 1, 2000.

13 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE

14 ACT RELATING TO THE GROUP MARKET.

15 (a) IN GENERAL.—Subpart 2 of part A of title

16 XXVII of the Public Health Service Act (42 U.S.C.

17 300gg–4 et seq.) is amended by adding at the end the

18 following new section:

19 ‘‘SEC. 2707. ENSURING CHOICE FOR CONTINUING CARE.

20 ‘‘(a) IN GENERAL.—With respect to health insurance

21 coverage provided to enrollees through a managed care or22 ganization under a group health plan, or through a health

23 insurance issuer providing health insurance coverage in

24 connection with a group health plan, such plan or issuer

25 may not deny coverage for services provided to such en-
11

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1 rollee by a continuing care retirement community, skilled

2 nursing facility, or other qualified facility in which the en3 rollee resided prior to a hospitalization, regardless of

4 whether such organization is under contract with such

5 community or facility if the requirements described in sub6 section (b) are met.

7 ‘‘(b) REQUIREMENTS.—The requirements of this sub8 section are that—

9 ‘‘(1) the service involved is a service for which

10 the managed care organization involved would be re11 quired to provide or pay for under its contract with

12 the enrollee if the continuing care retirement com13 munity, skilled nursing facility, or other qualified fa14 cility were under contract with the organization;

15 ‘‘(2) the enrollee involved—

16 ‘‘(A) resided in the continuing care retire17 ment community, skilled nursing facility, or

18 other qualified facility prior to being hospital19 ized;

20 ‘‘(B) had a contractual or other right to

21 return to the facility after hospitalization; and

22 ‘‘(C) elects to return to the facility after

23 hospitalization, whether or not the residence of

24 the enrollee after returning from the hospital is
12

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1 the same part of the facility in which the bene2 ficiary resided prior to hospitalization;

3 ‘‘(3) the continuing care retirement community,

4 skilled nursing facility, or other qualified facility has

5 the capacity to provide the services the enrollee

6 needs;

7 ‘‘(4) the continuing care retirement community,

8 skilled nursing facility, or other qualified facility is

9 willing to accept substantially similar payment under

10 the same terms and conditions that apply to simi11 larly situated health care facility providers under

12 contract with the organization involved.

13 ‘‘(c) SERVICES TO PREVENT HOSPITALIZATION.—A

14 group health plan or health insurance issuer to which this

15 section applies may not deny payment for a skilled nursing

16 service provided to a enrollee by a continuing care retire17 ment community, skilled nursing facility, or other quali18 fied facility in which the enrollee resides, without a pre19 ceding hospital stay, regardless of whether the plan or

20 issuer is under contract with such community or facility,

21 if—

22 ‘‘(1) the plan or issuer has determined that the

23 service is necessary to prevent the hospitalization of

24 the enrollee; and
13

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1 ‘‘(2) the service to prevent hospitalization is

2 provided as an additional benefit as described in sec3 tion 417.594 of title 42, Code of Federal Regula4 tions, and would be covered as provided for in sub5 section (b)(1).

6 ‘‘(d) RIGHTS OF SPOUSES.—A group health plan or

7 health insurance issuer to which this section applies shall

8 not deny payment for services provided by a skilled nurs9 ing facility for the care of an enrollee, regardless of wheth10 er the plan or issuer is under contract with such facility,

11 if the spouse of the enrollee is already a resident of such

12 facility and the requirements described in subsection (b)

13 are met.

14 ‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply—

15 ‘‘(1) where the attending acute care provider

16 and the enrollee (or a designated representative of

17 the enrollee where the enrollee is physically or men18 tally incapable of making an election under this

19 paragraph) do not elect to pursue a course of treat20 ment necessitating continuing care; or

21 ‘‘(2) unless the community or facility involved—

22 ‘‘(A) meets all applicable licensing and cer23 tification requirements of the State in which it

24 is located; and
14

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1 ‘‘(B) agrees to reimbursement for the care

2 of the enrollee at a rate similar to the rate ne3 gotiated by the managed care organization with

4 similar providers of care for similar services.

5 ‘‘(f) PROHIBITIONS.—A group health plan and a

6 health insurance issuer providing health insurance cov7 erage in connection with a group health plan may not—

8 ‘‘(1) deny to an individual eligibility, or contin9 ued eligibility, to enroll or to renew coverage with a

10 managed care organization under the plan, solely for

11 the purpose of avoiding the requirements of this sec12 tion;

13 ‘‘(2) provide monetary payments or rebates to

14 enrollees to encourage such enrollees to accept less

15 than the minimum protections available under this

16 section;

17 ‘‘(3) penalize or otherwise reduce or limit the

18 reimbursement of an attending physician because

19 such physician provided care to a enrollee in accord20 ance with this section; or

21 ‘‘(4) provide incentives (monetary or otherwise)

22 to an attending physician to induce such physician

23 to provide care to an enrollee in a manner incon24 sistent with this section.

25 ‘‘(g) RULES OF CONSTRUCTION.—
15

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1 ‘‘(1) HMO NOT OFFERING BENEFITS.—This

2 section shall not apply with respect to any managed

3 care organization under a group health plan, or

4 through a health insurance issuer providing health

5 insurance coverage in connection with a group health

6 plan, that does not provide benefits for stays in a

7 continuing care retirement community, skilled nurs8 ing facility, or other qualified facility.

9 ‘‘(2) COST-SHARING.—Nothing in this section

10 shall be construed as preventing a managed care or11 ganization under a group health plan, or through a

12 health insurance issuer providing health insurance

13 coverage in connection with a group health plan,

14 from imposing deductibles, coinsurance, or other

15 cost-sharing in relation to benefits for care in a con16 tinuing care facility.

17 ‘‘(h) PREEMPTION; EXCEPTION FOR HEALTH INSUR18 ANCE COVERAGE IN CERTAIN STATES.—

19 ‘‘(1) IN GENERAL.—The requirements of this

20 section shall not apply with respect to health insur21 ance coverage to the extent that a State law (as de22 fined in section 2723(d)(1)) applies to such coverage

23 and is described in any of the following subpara24 graphs:
16

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1 ‘‘(A) Such State law requires such cov2 erage to provide for referral to a continuing

3 care retirement community, skilled nursing fa4 cility, or other qualified facility in a manner

5 that is more protective of the enrollee than the

6 provisions of this section.

7 ‘‘(B) Such State law expands the range of

8 services or facilities covered under this section

9 and is otherwise more protective of enrollee

10 rights than the provisions of this section.

11 ‘‘(2) CONSTRUCTION.—Section 2723(a)(1) shall

12 not be construed to provide that any requirement of

13 this section applies with respect to health insurance

14 coverage, to the extent that a State law described in

15 paragraph (1) applies to such coverage.

16 ‘‘(i) PENALTIES.—An enrollee may enforce the provi17 sions of this section in an appropriate Federal district

18 court. An action for injunctive relief or damages may be

19 commenced on behalf of the enrollee by the enrollee’s legal

20 representative. The court may award reasonable attorneys’

21 fees to the prevailing party. If a beneficiary dies before

22 conclusion of an action under this section, the action may

23 be maintained by a representative of the enrollee’s estate.

24 ‘‘(j) DEFINITIONS.—In this section:
17

•S 1142 IS

1 ‘‘(1) ATTENDING ACUTE CARE PROVIDER.—The

2 term ‘attending acute care provider’ means anyone

3 licensed or certified under State law to provide

4 health care services who is operating within the

5 scope of such license and who is primarily respon6 sible for the care of the enrollee.

7 ‘‘(2) CONTINUING CARE RETIREMENT COMMU8 NITY.—The term ‘continuing care retirement com9 munity’ means an organization that provides or ar10 ranges for the provision of housing and health-re11 lated services to an older person under an agreement

12 effective for the life of the person or for a specified

13 period greater than 1 year.

14 ‘‘(3) MANAGED CARE ORGANIZATION.—The

15 term ‘managed care organization’ means an organi16 zation that provides comprehensive health services to

17 enrollees, directly or under contract or other agree18 ment, on a prepayment basis to such individuals.

19 For purposes of this section, the following shall be

20 considered as managed care organizations:

21 ‘‘(A) A Medicare+Choice plan authorized

22 under section 1851(a) of the Social Security

23 Act (42 U.S.C. 1395w–21(a)).

24 ‘‘(B) Any other entity that manages the

25 cost, utilization, and delivery of health care
18

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1 through the use of predetermined periodic pay2 ments to health care providers employed by or

3 under contract or other agreement, directly or

4 indirectly, with the entity.

5 ‘‘(4) OTHER QUALIFIED FACILITY.—The term

6 ‘other qualified facility’ means any facility that can

7 provide the services required by the enrollee con8 sistent with State and Federal law.

9 ‘‘(5) SKILLED NURSING FACILITY.—The term

10 ‘skilled nursing facility’ means a facility that meets

11 the requirements of section 1819 of the Social Secu12 rity Act (42 U.S.C. 1395i–3).’’.

13 (b) EFFECTIVE DATE.—The amendments made by

14 this section shall apply with respect to group health plans

15 for plan years beginning on or after January 1, 2000.

16 SEC. 4. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT

17 RELATING TO THE INDIVIDUAL MARKET.

18 (a) IN GENERAL.—The first subpart 3 of part B of

19 title XXVII of the Public Health Service Act (42 U.S.C.

20 300gg–51 et seq.) (relating to other requirements) is

21 amended—

22 (1) by redesignating such subpart as subpart 2;

23 and

24 (2) by adding at the end the following new sec25 tion:
19

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1 ‘‘SEC. 2753. ENSURING CHOICE FOR CONTINUING CARE.

2 ‘‘The provisions of section 2707 shall apply to health

3 maintenance organization coverage offered by a health in4 surance issuer in the individual market in the same man5 ner as they apply to such coverage offered by a health

6 insurance issuer in connection with a group health plan

7 in the small or large group market.’’.

8 (b) EFFECTIVE DATE.—The amendment made by

9 this section shall apply with respect to health insurance

10 coverage offered, sold, issued, renewed, in effect, or oper11 ated in the individual market on or after January 1, 2000.

Æ