106TH CONGRESS

1ST SESSION S. 1344

AN ACT

To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal

Revenue Code of 1986 to protect consumers in managed

care plans and other health coverage.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Patients’ Bill of Rights Plus Act’’.
2

S 1344 ES

1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—PATIENTS’ BILL OF RIGHTS

Subtitle A—Right to Advice and Care

Sec. 101. Patient right to medical advice and care.

‘‘SUBPART C—PATIENT RIGHT TO MEDICAL ADVICE AND CARE

‘‘Sec. 721. Patient access to emergency medical care.

‘‘Sec. 722. Offering of choice of coverage options.

‘‘Sec. 723. Patient access to obstetric and gynecological care.

‘‘Sec. 724. Patient access to pediatric care.

‘‘Sec. 725. Timely access to specialists.

‘‘Sec. 726. Continuity of care.

‘‘Sec. 727. Protection of patient-provider communications.

‘‘Sec. 728. Patient’s right to prescription drugs.

‘‘Sec. 729. Self-payment for behavioral health care services.

‘‘Sec. 730. Coverage for individuals participating in approved cancer clinical trials.

‘‘Sec. 730A. Prohibiting discrimination against providers.

‘‘Sec. 730B. Generally applicable provision.’’.

Sec. 102. Conforming amendment to the Internal Revenue Code of 1986.

‘‘SUBCHAPTER C—PATIENT RIGHT TO MEDICAL ADVICE AND CARE

‘‘Sec. 9821. Patient access to emergency medical care.

‘‘Sec. 9822. Offering of choice of coverage options.

‘‘Sec. 9823. Patient access to obstetric and gynecological care.

‘‘Sec. 9824. Patient access to pediatric care.

‘‘Sec. 9825. Timely access to specialists.

‘‘Sec. 9826. Continuity of care.

‘‘Sec. 9827. Protection of patient-provider communications.

‘‘Sec. 9828. Patient’s right to prescription drugs.

‘‘Sec. 9829. Self-payment for behavioral health care services.

‘‘Sec. 9830. Coverage for individuals participating in approved cancer clinical trials.

‘‘Sec. 9830A. Prohibiting discrimination against providers.

‘‘Sec. 9830B. Generally applicable provision.’’.

Sec. 103. Effective date and related rules.

Subtitle B—Right to Information About Plans and Providers

Sec. 111. Information about plans.

Sec. 112. Information about providers.

Subtitle C—Right to Hold Health Plans Accountable

Sec. 121. Amendment to Employee Retirement Income Security Act of 1974.

TITLE II—WOMEN’S HEALTH AND CANCER RIGHTS

Sec. 201. Women’s health and cancer rights.
3

S 1344 ES

TITLE III—GENETIC INFORMATION AND SERVICES

Sec. 301. Short title.

Sec. 302. Amendments to Employee Retirement Income Security Act of 1974.

Sec. 303. Amendments to the Public Health Service Act.

Sec. 304. Amendments to the Internal Revenue Code of 1986.

TITLE IV—HEALTHCARE RESEARCH AND QUALITY

Sec. 401. Short title.

Sec. 402. Amendment to the Public Health Service Act.

‘‘TITLE IX—AGENCY FOR HEALTHCARE RESEARCH AND QUALITY

‘‘PART A—ESTABLISHMENT AND GENERAL DUTIES

‘‘Sec. 901. Mission and duties.

‘‘Sec. 902. General authorities.

‘‘PART B—HEALTHCARE IMPROVEMENT RESEARCH

‘‘Sec. 911. Healthcare outcome improvement research.

‘‘Sec. 912. Private-public partnerships to improve organization and delivery.

‘‘Sec. 913. Information on quality and cost of care.

‘‘Sec. 914. Information systems for healthcare improvement.

‘‘Sec. 915. Research supporting primary care and access in underserved

areas.

‘‘Sec. 916. Clinical practice and technology innovation.

‘‘Sec. 917. Coordination of Federal government quality improvement efforts.

‘‘PART C—GENERAL PROVISIONS

‘‘Sec. 921. Advisory Council for Healthcare Research and Quality.

‘‘Sec. 922. Peer review with respect to grants and contracts.

‘‘Sec. 923. Certain provisions with respect to development, collection, and

dissemination of data.

‘‘Sec. 924. Dissemination of information.

‘‘Sec. 925. Additional provisions with respect to grants and contracts.

‘‘Sec. 926. Certain administrative authorities.

‘‘Sec. 927. Funding.

‘‘Sec. 928. Definitions.’’.

Sec. 403. References.

TITLE V—ENHANCED ACCESS TO HEALTH INSURANCE

COVERAGE

Sec. 501. Full deduction of health insurance costs for self-employed individuals.

Sec. 502. Full availability of medical savings accounts.

Sec. 503. Permitting contribution towards medical savings account through

Federal employees health benefits program (FEHBP).

Sec. 504. Carryover of unused benefits from cafeteria plans, flexible spending

arrangements, and health flexible spending accounts.

TITLE VI—PROVISIONS RELATING TO LONG-TERM CARE

INSURANCE
4

S 1344 ES

Sec. 601. Inclusion of qualified long-term care insurance contracts in cafeteria

plans, flexible spending arrangements, and health flexible

spending accounts.

Sec. 602. Deduction for premiums for long-term care insurance.

Sec. 603. Study of long-term care needs in the 21st century.

TITLE VII—INDIVIDUAL RETIREMENT PLANS

Sec. 701. Modification of income limits on contributions and rollovers to Roth

IRAs.

TITLE VIII—REVENUE PROVISIONS

Sec. 801. Modification to foreign tax credit carryback and carryover periods.

Sec. 802. Limitation on use of non-accrual experience method of accounting.

Sec. 803. Returns relating to cancellations of indebtedness by organizations

lending money.

Sec. 804. Extension of Internal Revenue Service user fees.

Sec. 805. Property subject to a liability treated in same manner as assumption

of liability.

Sec. 806. Charitable split-dollar life insurance, annuity, and endowment contracts.

Sec. 807. Transfer of excess defined benefit plan assets for retiree health benefits.

Sec. 808. Limitations on welfare benefit funds of 10 or more employer plans.

Sec. 809. Modification of installment method and repeal of installment method

for accrual method taxpayers.

Sec. 810. Inclusion of certain vaccines against streptococcus pneumoniae to list

of taxable vaccines.

TITLE IX—MISCELLANEOUS PROVISIONS

Sec. 901. Medicare competitive pricing demonstration project.

1 TITLE I—PATIENTS’ BILL OF

2 RIGHTS

3 Subtitle A—Right to Advice and

4 Care

5 SEC. 101. PATIENT RIGHT TO MEDICAL ADVICE AND CARE.

6 (a) IN GENERAL.—Part 7 of subtitle B of title I of

7 the Employee Retirement Income Security Act of 1974

8 (29 U.S.C. 1181 et seq.) is amended—

9 (1) by redesignating subpart C as subpart D;

10 and

11 (2) by inserting after subpart B the following:
5

S 1344 ES

1 ‘‘Subpart C—Patient Right to Medical Advice and

2 Care

3 ‘‘SEC. 721. PATIENT ACCESS TO EMERGENCY MEDICAL

4 CARE.

5 ‘‘(a) COVERAGE OF EMERGENCY CARE.—

6 ‘‘(1) IN GENERAL.—To the extent that the

7 group health plan (other than a fully insured group

8 health plan) provides coverage for benefits consisting

9 of emergency medical care (as defined in subsection

10 (c)) or emergency ambulance services, except for

11 items or services specifically excluded—

12 ‘‘(A) the plan shall provide coverage for

13 benefits, without requiring preauthorization, for

14 emergency medical screening examinations or

15 emergency ambulance services, to the extent

16 that a prudent layperson, who possesses an av17 erage knowledge of health and medicine, would

18 determine such examinations or emergency am19 bulance services to be necessary to determine

20 whether emergency medical care (as so defined)

21 is necessary; and

22 ‘‘(B) the plan shall provide coverage for

23 benefits, without requiring preauthorization, for

24 additional emergency medical care to stabilize

25 an emergency medical condition following an

26 emergency medical screening examination (if
6

S 1344 ES

1 determined necessary under subparagraph (A)),

2 pursuant to the definition of stabilize under sec3 tion 1867(e)(3) of the Social Security Act (42

4 U.S.C. 1395dd(e)(3)).

5 ‘‘(2) REIMBURSEMENT FOR CARE TO MAINTAIN

6 MEDICAL STABILITY.—

7 ‘‘(A) IN GENERAL.—In the case of services

8 provided to a participant or beneficiary by a

9 nonparticipating provider in order to maintain

10 the medical stability of the participant or bene11 ficiary, the group health plan involved shall pro12 vide for reimbursement with respect to such

13 services if—

14 ‘‘(i) coverage for services of the type

15 furnished is available under the group

16 health plan;

17 ‘‘(ii) the services were provided for

18 care related to an emergency medical con19 dition and in an emergency department in

20 order to maintain the medical stability of

21 the participant or beneficiary; and

22 ‘‘(iii) the nonparticipating provider

23 contacted the plan regarding approval for

24 such services.
7

S 1344 ES

1 ‘‘(B) FAILURE TO RESPOND.—If a group

2 health plan fails to respond within 1 hours of

3 being contacted in accordance with subpara4 graph (A)(iii), then the plan shall be liable for

5 the cost of services provided by the nonpartici6 pating provider in order to maintain the sta7 bility of the participant or beneficiary.

8 ‘‘(C) LIMITATION.—The liability of a

9 group health plan to provide reimbursement

10 under subparagraph (A) shall terminate when

11 the plan has contacted the nonparticipating

12 provider to arrange for discharge or transfer.

13 ‘‘(D) LIABILITY OF PARTICIPANT.—A par14 ticipant or beneficiary shall not be liable for the

15 costs of services to which subparagraph (A) in

16 an amount that exceeds the amount of liability

17 that would be incurred if the services were pro18 vided by a participating health care provider

19 with prior authorization by the plan.

20 ‘‘(b) IN-NETWORK UNIFORM COSTS-SHARING AND

21 OUT-OF-NETWORK CARE.—

22 ‘‘(1) IN-NETWORK UNIFORM COST-SHARING.—

23 Nothing in this section shall be construed as pre24 venting a group health plan (other than a fully in25 sured group health plan) from imposing any form of
8

S 1344 ES

1 cost-sharing applicable to any participant or bene2 ficiary (including coinsurance, copayments,

3 deductibles, and any other charges) in relation to

4 coverage for benefits described in subsection (a), if

5 such form of cost-sharing is uniformly applied under

6 such plan, with respect to similarly situated partici7 pants and beneficiaries, to all benefits consisting of

8 emergency medical care (as defined in subsection

9 (c)) provided to such similarly situated participants

10 and beneficiaries under the plan, and such cost-shar11 ing is disclosed in accordance with section 714.

12 ‘‘(2) OUT-OF-NETWORK CARE.—If a group

13 health plan (other than a fully insured group health

14 plan) provides any benefits with respect to emer15 gency medical care (as defined in subsection (c)), the

16 plan shall cover emergency medical care under the

17 plan in a manner so that, if such care is provided

18 to a participant or beneficiary by a nonparticipating

19 health care provider, the participant or beneficiary is

20 not liable for amounts that exceed any form of cost21 sharing (including co-insurance, co-payments,

22 deductibles, and any other charges) that would be

23 incurred if the services were provided by a partici24 pating provider.
9

S 1344 ES

1 ‘‘(c) DEFINITION OF EMERGENCY MEDICAL CARE.—

2 In this section:

3 ‘‘(1) IN GENERAL.—The term ‘emergency med4 ical care’ means, with respect to a participant or

5 beneficiary under a group health plan (other than a

6 fully insured group health plan), covered inpatient

7 and outpatient services that—

8 ‘‘(A) are furnished by any provider, includ9 ing a nonparticipating provider, that is qualified

10 to furnish such services; and

11 ‘‘(B) are needed to evaluate or stabilize (as

12 such term is defined in section 1867(e)(3) of

13 the Social Security Act (42 U.S.C.

14 1395dd)(e)(3)) an emergency medical condition

15 (as defined in paragraph (2)).

16 ‘‘(2) EMERGENCY MEDICAL CONDITION.—The

17 term ‘emergency medical condition’ means a medical

18 condition manifesting itself by acute symptoms of

19 sufficient severity (including severe pain) such that

20 a prudent layperson, who possesses an average

21 knowledge of health and medicine, could reasonably

22 expect the absence of immediate medical attention to

23 result in—

24 ‘‘(A) placing the health of the participant

25 or beneficiary (or, with respect to a pregnant
10

S 1344 ES

1 woman, the health of the woman or her unborn

2 child) in serious jeopardy,

3 ‘‘(B) serious impairment to bodily func4 tions, or

5 ‘‘(C) serious dysfunction of any bodily

6 organ or part.

7 ‘‘SEC. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.

8 ‘‘(a) REQUIREMENT.—

9 ‘‘(1) OFFERING OF POINT-OF-SERVICE COV10 ERAGE OPTION.—Except as provided in paragraph

11 (2), if a group health plan (other than a fully in12 sured group health plan) provides coverage for bene13 fits only through a defined set of participating

14 health care professionals, the plan shall offer the

15 participant the option to purchase point-of-service

16 coverage (as defined in subsection (b)) for all such

17 benefits for which coverage is otherwise so limited.

18 Such option shall be made available to the partici19 pant at the time of enrollment under the plan and

20 at such other times as the plan offers the participant

21 a choice of coverage options.

22 ‘‘(2) EXCEPTION IN CASE OF LACK OF AVAIL23 ABILITY.—Paragraph (1) shall not apply with re24 spect to a group health plan (other than a fully in25 sured group health plan) if care relating to the
11

S 1344 ES

1 point-of-service coverage would not be available and

2 accessible to the participant with reasonable prompt3 ness (consistent with section 1301(b)(4) of the Pub4 lic Health Service Act (42 U.S.C. 300e(b)(4))).

5 ‘‘(b) POINT-OF-SERVICE COVERAGE DEFINED.—In

6 this section, the term ‘point-of-service coverage’ means,

7 with respect to benefits covered under a group health plan

8 (other than a fully insured group health plan), coverage

9 of such benefits when provided by a nonparticipating

10 health care professional.

11 ‘‘(c) SMALL EMPLOYER EXEMPTION.—

12 ‘‘(1) IN GENERAL.—This section shall not apply

13 to any group health plan (other than a fully insured

14 group health plan) of a small employer.

15 ‘‘(2) SMALL EMPLOYER.—For purposes of

16 paragraph (1), the term ‘small employer’ means, in

17 connection with a group health plan (other than a

18 fully insured group health plan) with respect to a

19 calendar year and a plan year, an employer who em20 ployed an average of at least 2 but not more than

21 50 employees on business days during the preceding

22 calendar year and who employs at least 2 employees

23 on the first day of the plan year. For purposes of

24 this paragraph, the provisions of subparagraph (C)
12

S 1344 ES

1 of section 712(c)(1) shall apply in determining em2 ployer size.

3 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed—

5 ‘‘(1) as requiring coverage for benefits for a

6 particular type of health care professional;

7 ‘‘(2) as requiring an employer to pay any costs

8 as a result of this section or to make equal contribu9 tions with respect to different health coverage op10 tions;

11 ‘‘(3) as preventing a group health plan (other

12 than a fully insured group health plan) from impos13 ing higher premiums or cost-sharing on a partici14 pant for the exercise of a point-of-service coverage

15 option; or

16 ‘‘(4) to require that a group health plan (other

17 than a fully insured group health plan) include cov18 erage of health care professionals that the plan ex19 cludes because of fraud, quality of care, or other

20 similar reasons with respect to such professionals.

21 ‘‘SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECO22 LOGICAL CARE.

23 ‘‘(a) GENERAL RIGHTS.—

24 ‘‘(1) WAIVER OF PLAN REFERRAL REQUIRE25 MENT.—If a group health plan described in sub-
13

S 1344 ES

1 section (b) requires a referral to obtain coverage for

2 specialty care, the plan shall waive the referral re3 quirement in the case of a female participant or ben4 eficiary who seeks coverage for obstetrical care and

5 related follow-up obstetrical care or routine gyneco6 logical care (such as preventive gynecological care).

7 ‘‘(2) RELATED ROUTINE CARE.—With respect

8 to a participant or beneficiary described in para9 graph (1), a group health plan described in sub10 section (b) shall treat the ordering of other routine

11 care that is related to routine gynecologic care, by

12 a physician who specializes in obstetrics and gyne13 cology as the authorization of the primary care pro14 vider for such other care.

15 ‘‘(b) APPLICATION OF SECTION.—A group health

16 plan described in this subsection is a group health plan

17 (other than a fully insured group health plan), that—

18 ‘‘(1) provides coverage for obstetric care (such

19 as pregnancy-related services) or routine gynecologic

20 care (such as preventive women’s health examina21 tions); and

22 ‘‘(2) requires the designation by a participant

23 or beneficiary of a participating primary care pro24 vider who is not a physician who specializes in ob25 stetrics or gynecology.
14

S 1344 ES

1 ‘‘(c) RULES OF CONSTRUCTION.—Nothing in this

2 section shall be construed—

3 ‘‘(1) as waiving any coverage requirement relat4 ing to medical necessity or appropriateness with re5 spect to the coverage of obstetric or gynecologic care

6 described in subsection (a);

7 ‘‘(2) to preclude the plan from requiring that

8 the physician who specializes in obstetrics or gyne9 cology notify the designated primary care provider or

10 the plan of treatment decisions;

11 ‘‘(3) to preclude a group health plan from al12 lowing health care professionals other than physi13 cians to provide routine obstetric or routine

14 gynecologic care; or

15 ‘‘(4) to preclude a group health plan from per16 mitting a physician who specializes in obstetrics and

17 gynecology from being a primary care provider

18 under the plan.

19 ‘‘SEC. 724. PATIENT ACCESS TO PEDIATRIC CARE.

20 ‘‘(a) IN GENERAL.—In the case of a group health

21 plan (other than a fully insured group health plan) that

22 provides coverage for routine pediatric care and that re23 quires the designation by a participant or beneficiary of

24 a participating primary care provider, if the designated
15

S 1344 ES

1 primary care provider is not a physician who specializes

2 in pediatrics—

3 ‘‘(1) the plan may not require authorization or

4 referral by the primary care provider in order for a

5 participant or beneficiary to obtain coverage for rou6 tine pediatric care; and

7 ‘‘(2) the plan shall treat the ordering of other

8 routine care related to routine pediatric care by such

9 a specialist as having been authorized by the des10 ignated primary care provider.

11 ‘‘(b) RULES OF CONSTRUCTION.—Nothing in sub12 section (a) shall be construed—

13 ‘‘(1) as waiving any coverage requirement relat14 ing to medical necessity or appropriateness with re15 spect to the coverage of any pediatric care provided

16 to, or ordered for, a participant or beneficiary;

17 ‘‘(2) to preclude a group health plan from re18 quiring that a specialist described in subsection (a)

19 notify the designated primary care provider or the

20 plan of treatment decisions; or

21 ‘‘(3) to preclude a group health plan from al22 lowing health care professionals other than physi23 cians to provide routine pediatric care.

24 ‘‘SEC. 725. TIMELY ACCESS TO SPECIALISTS.

25 ‘‘(a) TIMELY ACCESS.—
16

S 1344 ES

1 ‘‘(1) IN GENERAL.—A group health plan (other

2 than a fully insured group health plan) shall ensure

3 that participants and beneficiaries have timely, in

4 accordance with the medical exigencies of the case,

5 access to primary and specialty health care profes6 sionals who are appropriate to the condition of the

7 participant or beneficiary, when such care is covered

8 under the plan. Such access may be provided

9 through contractual arrangements with specialized

10 providers outside of the network of the plan.

11 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in

12 paragraph (1) shall be construed—

13 ‘‘(A) to require the coverage under a group

14 health plan of particular benefits or services or

15 to prohibit a plan from including providers only

16 to the extent necessary to meet the needs of the

17 plan’s participants or beneficiaries or from es18 tablishing any measure designed to maintain

19 quality and control costs consistent with the re20 sponsibilities of the plan; or

21 ‘‘(B) to override any State licensure or

22 scope-of-practice law.

23 ‘‘(b) TREATMENT PLANS.—

24 ‘‘(1) IN GENERAL.—Nothing in this section

25 shall be construed to prohibit a group health plan
17

S 1344 ES

1 (other than a fully insured group health plan) from

2 requiring that specialty care be provided pursuant to

3 a treatment plan so long as the treatment plan is—

4 ‘‘(A) developed by the specialist, in con5 sultation with the case manager or primary

6 care provider, and the participant or bene7 ficiary;

8 ‘‘(B) approved by the plan in a timely

9 manner in accordance with the medical exigen10 cies of the case; and

11 ‘‘(C) in accordance with the applicable

12 quality assurance and utilization review stand13 ards of the plan.

14 ‘‘(2) NOTIFICATION.—Nothing in paragraph (1)

15 shall be construed as prohibiting a plan from requir16 ing the specialist to provide the case manager or pri17 mary care provider with regular updates on the spe18 cialty care provided, as well as all other necessary

19 medical information.

20 ‘‘(c) REFERRALS.—Nothing in this section shall be

21 construed to prohibit a plan from requiring an authoriza22 tion by the case manager or primary care provider of the

23 participant or beneficiary in order to obtain coverage for

24 specialty services so long as such authorization is for an

25 adequate number of referrals.
18

S 1344 ES

1 ‘‘(d) SPECIALTY CARE DEFINED.—For purposes of

2 this subsection, the term ‘specialty care’ means, with re3 spect to a condition, care and treatment provided by a

4 health care practitioner, facility, or center (such as a cen5 ter of excellence) that has adequate expertise (including

6 age-appropriate expertise) through appropriate training

7 and experience.

8 ‘‘SEC. 726. CONTINUITY OF CARE.

9 ‘‘(a) IN GENERAL.—

10 ‘‘(1) TERMINATION OF PROVIDER.—If a con11 tract between a group health plan (other than a fully

12 insured group health plan) and a health care pro13 vider is terminated (as defined in paragraph (2)), or

14 benefits or coverage provided by a health care pro15 vider are terminated because of a change in the

16 terms of provider participation in such group health

17 plan, and an individual who is a participant or bene18 ficiary in the plan is undergoing a course of treat19 ment from the provider at the time of such termi20 nation, the plan shall—

21 ‘‘(A) notify the individual on a timely basis

22 of such termination;

23 ‘‘(B) provide the individual with an oppor24 tunity to notify the plan of a need for transi25 tional care; and
19

S 1344 ES

1 ‘‘(C) in the case of termination described

2 in paragraph (2), (3), or (4) of subsection (b),

3 and subject to subsection (c), permit the indi4 vidual to continue or be covered with respect to

5 the course of treatment with the provider’s con6 sent during a transitional period (as provided

7 under subsection (b)).

8 ‘‘(2) TERMINATED.—In this section, the term

9 ‘terminated’ includes, with respect to a contract, the

10 expiration or nonrenewal of the contract by the

11 group health plan, but does not include a termi12 nation of the contract by the plan for failure to meet

13 applicable quality standards or for fraud.

14 ‘‘(3) CONTRACTS.—For purposes of this sec15 tion, the term ‘contract between a group health plan

16 (other than a fully insured group health plan) and

17 a health care provider’ shall include a contract be18 tween such a plan and an organized network of pro19 viders.

20 ‘‘(b) TRANSITIONAL PERIOD.—

21 ‘‘(1) GENERAL RULE.—Except as provided in

22 paragraph (3), the transitional period under this

23 subsection shall permit the participant or beneficiary

24 to extend the coverage involved for up to 90 days
20

S 1344 ES

1 from the date of the notice described in subsection

2 (a)(1)(A) of the provider’s termination.

3 ‘‘(2) INSTITUTIONAL CARE.—Subject to para4 graph (1), the transitional period under this sub5 section for institutional or inpatient care from a pro6 vider shall extend until the discharge or termination

7 of the period of institutionalization and also shall in8 clude institutional care provided within a reasonable

9 time of the date of termination of the provider sta10 tus if the care was scheduled before the date of the

11 announcement of the termination of the provider

12 status under subsection (a)(1)(A) or if the individual

13 on such date was on an established waiting list or

14 otherwise scheduled to have such care.

15 ‘‘(3) PREGNANCY.—Notwithstanding paragraph

16 (1), if—

17 ‘‘(A) a participant or beneficiary has en18 tered the second trimester of pregnancy at the

19 time of a provider’s termination of participa20 tion; and

21 ‘‘(B) the provider was treating the preg22 nancy before the date of the termination;

23 the transitional period under this subsection with re24 spect to provider’s treatment of the pregnancy shall
21

S 1344 ES

1 extend through the provision of post-partum care di2 rectly related to the delivery.

3 ‘‘(4) TERMINAL ILLNESS.—Notwithstanding

4 paragraph (1), if—

5 ‘‘(A) a participant or beneficiary was de6 termined to be terminally ill (as determined

7 under section 1861(dd)(3)(A) of the Social Se8 curity Act) prior to a provider’s termination of

9 participation; and

10 ‘‘(B) the provider was treating the ter11 minal illness before the date of termination;

12 the transitional period under this subsection shall be

13 for care directly related to the treatment of the ter14 minal illness and shall extend for the remainder of

15 the individual’s life for such care.

16 ‘‘(c) PERMISSIBLE TERMS AND CONDITIONS.—A

17 group health plan (other than a fully insured group health

18 plan) may condition coverage of continued treatment by

19 a provider under subsection (a)(1)(C) upon the provider

20 agreeing to the following terms and conditions:

21 ‘‘(1) The provider agrees to accept reimburse22 ment from the plan and individual involved (with re23 spect to cost-sharing) at the rates applicable prior to

24 the start of the transitional period as payment in

25 full (or at the rates applicable under the replacement
22

S 1344 ES

1 plan after the date of the termination of the contract

2 with the group health plan) and not to impose cost3 sharing with respect to the individual in an amount

4 that would exceed the cost-sharing that could have

5 been imposed if the contract referred to in sub6 section (a)(1) had not been terminated.

7 ‘‘(2) The provider agrees to adhere to the qual8 ity assurance standards of the plan responsible for

9 payment under paragraph (1) and to provide to such

10 plan necessary medical information related to the

11 care provided.

12 ‘‘(3) The provider agrees otherwise to adhere to

13 such plan’s policies and procedures, including proce14 dures regarding referrals and obtaining prior au15 thorization and providing services pursuant to a

16 treatment plan (if any) approved by the plan.

17 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec18 tion shall be construed to require the coverage of benefits

19 which would not have been covered if the provider involved

20 remained a participating provider.

21 ‘‘(e) DEFINITION.—In this section, the term ‘health

22 care provider’ or ‘provider’ means—

23 ‘‘(1) any individual who is engaged in the deliv24 ery of health care services in a State and who is re25 quired by State law or regulation to be licensed or
23

S 1344 ES

1 certified by the State to engage in the delivery of

2 such services in the State; and

3 ‘‘(2) any entity that is engaged in the delivery

4 of health care services in a State and that, if it is

5 required by State law or regulation to be licensed or

6 certified by the State to engage in the delivery of

7 such services in the State, is so licensed.

8 ‘‘(f) COMPREHENSIVE STUDY OF COST, QUALITY

9 AND COORDINATION OF COVERAGE FOR PATIENTS AT

10 THE END OF LIFE.—

11 ‘‘(1) STUDY BY THE MEDICARE PAYMENT ADVI12 SORY COMMISSION.—The Medicare Payment Advi13 sory Commission shall conduct a study of the costs

14 and patterns of care for persons with serious and

15 complex conditions and the possibilities of improving

16 upon that care to the degree it is triggered by the

17 current category of terminally ill as such term is

18 used for purposes of section 1861(dd) of the Social

19 Security Act (relating to hospice benefits) or of uti20 lizing care in other payment settings in Medicare.

21 ‘‘(2) AGENCY FOR HEALTH CARE POLICY AND

22 RESEARCH.—The Agency for Health Care Policy

23 and Research shall conduct studies of the possible

24 thresholds for major conditions causing serious and
24

S 1344 ES

1 complex illness, their administrative parameters and

2 feasibility, and their impact upon costs and quality.

3 ‘‘(3) HEALTH CARE FINANCING ADMINISTRA4 TION.—The Health Care Financing Administration

5 shall conduct studies of the merits of applying simi6 lar thresholds in Medicare+Choice programs, includ7 ing adapting risk adjustment methods to account for

8 this category.

9 ‘‘(4) INITIAL REPORT.—

10 ‘‘(A) IN GENERAL.—Not later than 12

11 months after the date of enactment of this sec12 tion, the Medicare Payment Advisory Commis13 sion and the Agency for Health Care Policy and

14 Research shall each prepare and submit to the

15 Committee on Health, Education, Labor and

16 Pensions of the Senate a report concerning the

17 results of the studies conducted under para18 graphs (1) and (2), respectively.

19 ‘‘(B) COPY TO SECRETARY.—Concurrent

20 with the submission of the reports under sub21 paragraph (A), the Medicare Payment Advisory

22 Commission and the Agency for health Care

23 Policy and Research shall transmit a copy of

24 the reports under such subparagraph to the

25 Secretary.
25

S 1344 ES

1 ‘‘(5) FINAL REPORT.—

2 ‘‘(A) CONTRACT WITH INSTITUTE OF MED3 ICINE.—Not later than 1 year after the submis4 sion of the reports under paragraph (4), the

5 Secretary of Health and Human Services shall

6 contract with the Institute of Medicine to con7 duct a study of the practices and their effects

8 arising from the utilization of the category ‘‘se9 rious and complex’’ illness.

10 ‘‘(B) REPORT.—Not later than 1 year

11 after the date of the execution of the contract

12 referred to in subparagraph (A), the Institute

13 of Medicine shall prepare and submit to the

14 Committee on Health, Education, Labor and

15 Pensions of the Senate a report concerning the

16 study conducted pursuant to such contract.

17 ‘‘(6) FUNDING.—From funds appropriated to

18 the Department of Health and Human Services, the

19 Secretary of Health and Human Services shall make

20 available such funds as the Secretary determines is

21 necessary to carry out this subsection.

22 ‘‘SEC. 727. PROTECTION OF PATIENT-PROVIDER COMMU23 NICATIONS.

24 ‘‘(a) IN GENERAL.—Subject to subsection (b), a

25 group health plan (other than a fully insured group health
26

S 1344 ES

1 plan and in relation to a participant or beneficiary) shall

2 not prohibit or otherwise restrict a health care professional

3 from advising such a participant or beneficiary who is a

4 patient of the professional about the health status of the

5 participant or beneficiary or medical care or treatment for

6 the condition or disease of the participant or beneficiary,

7 regardless of whether coverage for such care or treatment

8 are provided under the contract, if the professional is act9 ing within the lawful scope of practice.

10 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sec11 tion shall be construed as requiring a group health plan

12 (other than a fully insured group health plan) to provide

13 specific benefits under the terms of such plan.

14 ‘‘SEC. 728. PATIENT’S RIGHT TO PRESCRIPTION DRUGS.

15 ‘‘To the extent that a group health plan (other than

16 a fully insured group health plan) provides coverage for

17 benefits with respect to prescription drugs, and limits such

18 coverage to drugs included in a formulary, the plan shall—

19 ‘‘(1) ensure the participation of physicians and

20 pharmacists in developing and reviewing such for21 mulary; and

22 ‘‘(2) in accordance with the applicable quality

23 assurance and utilization review standards of the

24 plan, provide for exceptions from the formulary limi-
27

S 1344 ES

1 tation when a non-formulary alternative is medically

2 necessary and appropriate.

3 ‘‘SEC. 729. SELF-PAYMENT FOR BEHAVIORAL HEALTH CARE

4 SERVICES.

5 ‘‘(a) IN GENERAL.—A group health plan (other than

6 a fully insured group health plan) may not—

7 ‘‘(1) prohibit or otherwise discourage a partici8 pant or beneficiary from self-paying for behavioral

9 health care services once the plan has denied cov10 erage for such services; or

11 ‘‘(2) terminate a health care provider because

12 such provider permits participants or beneficiaries to

13 self-pay for behavioral health care services—

14 ‘‘(A) that are not otherwise covered under

15 the plan; or

16 ‘‘(B) for which the group health plan pro17 vides limited coverage, to the extent that the

18 group health plan denies coverage of the serv19 ices.

20 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in sub21 section (a)(2)(B) shall be construed as prohibiting a group

22 health plan from terminating a contract with a health care

23 provider for failure to meet applicable quality standards

24 or for fraud.
28

S 1344 ES

1 ‘‘SEC. 730. COVERAGE FOR INDIVIDUALS PARTICIPATING IN

2 APPROVED CANCER CLINICAL TRIALS.

3 ‘‘(a) COVERAGE.—

4 ‘‘(1) IN GENERAL.—If a group health plan

5 (other than a fully insured group health plan) pro6 vides coverage to a qualified individual (as defined in

7 subsection (b)), the plan—

8 ‘‘(A) may not deny the individual partici9 pation in the clinical trial referred to in sub10 section (b)(2);

11 ‘‘(B) subject to subsections (b), (c), and

12 (d) may not deny (or limit or impose additional

13 conditions on) the coverage of routine patient

14 costs for items and services furnished in con15 nection with participation in the trial; and

16 ‘‘(C) may not discriminate against the in17 dividual on the basis of the participant’s or

18 beneficiaries participation in such trial.

19 ‘‘(2) EXCLUSION OF CERTAIN COSTS.—For pur20 poses of paragraph (1)(B), routine patient costs do

21 not include the cost of the tests or measurements

22 conducted primarily for the purpose of the clinical

23 trial involved.

24 ‘‘(3) USE OF IN-NETWORK PROVIDERS.—If one

25 or more participating providers is participating in a

26 clinical trial, nothing in paragraph (1) shall be con-
29

S 1344 ES

1 strued as preventing a plan from requiring that a

2 qualified individual participate in the trial through

3 such a participating provider if the provider will ac4 cept the individual as a participant in the trial.

5 ‘‘(b) QUALIFIED INDIVIDUAL DEFINED.—For pur6 poses of subsection (a), the term ‘‘qualified individual’’

7 means an individual who is a participant or beneficiary

8 in a group health plan and who meets the following condi9 tions:

10 ‘‘(1)(A) The individual has been diagnosed with

11 cancer for which no standard treatment is effective.

12 ‘‘(B) The individual is eligible to participate in

13 an approved clinical trial according to the trial pro14 tocol with respect to treatment of such illness.

15 ‘‘(C) The individual’s participation in the trial

16 offers meaningful potential for significant clinical

17 benefit for the individual.

18 ‘‘(2) Either—

19 ‘‘(A) the referring physician is a partici20 pating health care professional and has con21 cluded that the individual’s participation in

22 such trial would be appropriate based upon the

23 individual meeting the conditions described in

24 paragraph (1); or
30

S 1344 ES

1 ‘‘(B) the participant or beneficiary pro2 vides medical and scientific information estab3 lishing that the individual’s participation in

4 such trial would be appropriate based upon the

5 individual meeting the conditions described in

6 paragraph (1).

7 ‘‘(c) PAYMENT.—

8 ‘‘(1) IN GENERAL.—Under this section a group

9 health plan (other than a fully insured group health

10 plan) shall provide for payment for routine patient

11 costs described in subsection (a)(2) but is not re12 quired to pay for costs of items and services that are

13 reasonably expected to be paid for by the sponsors

14 of an approved clinical trial.

15 ‘‘(2) STANDARDS FOR DETERMINING ROUTINE

16 PATIENT COSTS ASSOCIATED WITH CLINICAL TRIAL

17 PARTICIPATION.—

18 ‘‘(A) IN GENERAL.—The Secretary shall

19 establish, on an expedited basis and using a ne20 gotiated rulemaking process under subchapter

21 III of chapter 5 of title 5, United States Code,

22 standards relating to the coverage of routine

23 patient costs for individuals participating in

24 clinical trials that group health plans must

25 meet under this section.
31

S 1344 ES

1 ‘‘(B) FACTORS.—In establishing routine

2 patient cost standards under subparagraph (A),

3 the Secretary shall consult with interested par4 ties and take into account —

5 ‘‘(i) quality of patient care;

6 ‘‘(ii) routine patient care costs versus

7 costs associated with the conduct of clinical

8 trials, including unanticipated patient care

9 costs as a result of participation in clinical

10 trials; and

11 ‘‘(iii) previous and on-going studies

12 relating to patient care costs associated

13 with participation in clinical trials.

14 ‘‘(C) PUBLICATION OF NOTICE.—In car15 rying out the rulemaking process under this

16 paragraph, the Secretary, after consultation

17 with organizations representing cancer patients,

18 health care practitioners, medical researchers,

19 employers, group health plans, manufacturers

20 of drugs, biologics and medical devices, medical

21 economists, hospitals, and other interested par22 ties, shall publish notice provided for under sec23 tion 564(a) of title 5, United States Code, by

24 not later than 45 days after the date of the en25 actment of this section.
32

S 1344 ES

1 ‘‘(D) TARGET DATE FOR PUBLICATION OF

2 RULE.—As part of the notice under subpara3 graph (C), and for purposes of this paragraph,

4 the ‘target date for publication’ (referred to in

5 section 564(a)(5) of such title 5) shall be June

6 30, 2000.

7 ‘‘(E) ABBREVIATED PERIOD FOR SUBMIS8 SION OF COMMENTS.—In applying section

9 564(c) of such title 5 under this paragraph, ‘15

10 days’ shall be substituted for ‘30 days’.

11 ‘‘(F) APPOINTMENT OF NEGOTIATED

12 RULEMAKING COMMITTEE AND FACILITATOR.—

13 The Secretary shall provide for—

14 ‘‘(i) the appointment of a negotiated

15 rulemaking committee under section

16 565(a) of such title 5 by not later than 30

17 days after the end of the comment period

18 provided for under section 564(c) of such

19 title 5 (as shortened under subparagraph

20 (E)), and

21 ‘‘(ii) the nomination of a facilitator

22 under section 566(c) of such title 5 by not

23 later than 10 days after the date of ap24 pointment of the committee.
33

S 1344 ES

1 ‘‘(G) PRELIMINARY COMMITTEE RE2 PORT.—The negotiated rulemaking committee

3 appointed under subparagraph (F) shall report

4 to the Secretary, by not later than March 29,

5 2000, regarding the committee’s progress on

6 achieving a consensus with regard to the rule7 making proceeding and whether such consensus

8 is likely to occur before 1 month before the tar9 get date for publication of the rule. If the com10 mittee reports that the committee has failed to

11 make significant progress towards such con12 sensus or is unlikely to reach such consensus by

13 the target date, the Secretary may terminate

14 such process and provide for the publication of

15 a rule under this paragraph through such other

16 methods as the Secretary may provide.

17 ‘‘(H) FINAL COMMITTEE REPORT.—If the

18 committee is not terminated under subpara19 graph (G), the rulemaking committee shall sub20 mit a report containing a proposed rule by not

21 later than 1 month before the target date of

22 publication.

23 ‘‘(I) FINAL EFFECT.—The Secretary shall

24 publish a rule under this paragraph in the Fed-
34

S 1344 ES

1 eral Register by not later than the target date

2 of publication.

3 ‘‘(J) PUBLICATION OF RULE AFTER PUB4 LIC COMMENT.—The Secretary shall provide for

5 consideration of such comments and republica6 tion of such rule by not later than 1 year after

7 the target date of publication.

8 ‘‘(K) EFFECTIVE DATE.—The provisions of

9 this paragraph shall apply to group health

10 plans (other than a fully insured group health

11 plan) for plan years beginning on or after Jan12 uary 1, 2001.

13 ‘‘(3) PAYMENT RATE.—In the case of covered

14 items and services provided by—

15 ‘‘(A) a participating provider, the payment

16 rate shall be at the agreed upon rate, or

17 ‘‘(B) a nonparticipating provider, the pay18 ment rate shall be at the rate the plan would

19 normally pay for comparable services under

20 subparagraph (A).

21 ‘‘(d) APPROVED CLINICAL TRIAL DEFINED.—

22 ‘‘(1) IN GENERAL.—In this section, the term

23 ‘approved clinical trial’ means a cancer clinical re24 search study or cancer clinical investigation ap25 proved and funded (which may include funding
35

S 1344 ES

1 through in-kind contributions) by one or more of the

2 following:

3 ‘‘(A) The National Institutes of Health.

4 ‘‘(B) A cooperative group or center of the

5 National Institutes of Health.

6 ‘‘(C) Either of the following if the condi7 tions described in paragraph (2) are met:

8 ‘‘(i) The Department of Veterans Af9 fairs.

10 ‘‘(ii) The Department of Defense.

11 ‘‘(2) CONDITIONS FOR DEPARTMENTS.—The

12 conditions described in this paragraph, for a study

13 or investigation conducted by a Department, are

14 that the study or investigation has been reviewed

15 and approved through a system of peer review that

16 the Secretary determines—

17 ‘‘(A) to be comparable to the system of

18 peer review of studies and investigations used

19 by the National Institutes of Health, and

20 ‘‘(B) assures unbiased review of the high21 est scientific standards by qualified individuals

22 who have no interest in the outcome of the re23 view.
36

S 1344 ES

1 ‘‘(e) CONSTRUCTION.—Nothing in this section shall

2 be construed to limit a plan’s coverage with respect to clin3 ical trials.

4 ‘‘(f) PLAN SATISFACTION OF CERTAIN REQUIRE5 MENTS; RESPONSIBILITIES OF FIDUCIARIES.—

6 ‘‘(1) IN GENERAL.—For purposes of this sec7 tion, insofar as a group health plan provides benefits

8 in the form of health insurance coverage through a

9 health insurance issuer, the plan shall be treated as

10 meeting the requirements of this section with respect

11 to such benefits and not be considered as failing to

12 meet such requirements because of a failure of the

13 issuer to meet such requirements so long as the plan

14 sponsor or its representatives did not cause such

15 failure by the issuer.

16 ‘‘(2) CONSTRUCTION.—Nothing in this section

17 shall be construed to affect or modify the respon18 sibilities of the fiduciaries of a group health plan

19 under part 4 of subtitle B.

20 ‘‘(g) STUDY AND REPORT.—

21 ‘‘(1) STUDY.—The Secretary shall study the

22 impact on group health plans for covering routine

23 patient care costs for individuals who are entitled to

24 benefits under this section and who are enrolled in

25 an approved cancer clinical trial program.
37

S 1344 ES

1 ‘‘(2) REPORT TO CONGRESS.—Not later than

2 January 1, 2005, the Secretary shall submit a re3 port to Congress that contains an assessment of—

4 ‘‘(A) any incremental cost to group health

5 plans resulting from the provisions of this sec6 tion;

7 ‘‘(B) a projection of expenditures to such

8 plans resulting from this section; and

9 ‘‘(C) any impact on premiums resulting

10 from this section.

11 ‘‘SEC. 730A. PROHIBITING DISCRIMINATION AGAINST PRO12 VIDERS.

13 ‘‘(a) IN GENERAL.—A group health plan (other than

14 a fully insured group health plan) shall not discriminate

15 with respect to participation or indemnification as to any

16 provider who is acting within the scope of the provider’s

17 license or certification under applicable State law, solely

18 on the basis of such license or certification. This sub19 section shall not be construed as requiring the coverage

20 under a plan of particular benefits or services or to pro21 hibit a plan from including providers only to the extent

22 necessary to meet the needs of the plan’s participants and

23 beneficiaries or from establishing any measure designed

24 to maintain quality and control costs consistent with the

25 responsibilities of the plan.
38

S 1344 ES

1 ‘‘(b) NO REQUIREMENT FOR ANY WILLING PRO2 VIDER.—Nothing in this section shall be construed as re3 quiring a group health plan that offers network coverage

4 to include for participation every willing provider or health

5 professional who meets the terms and conditions of the

6 plan.

7 ‘‘SEC. 730B. GENERALLY APPLICABLE PROVISION.

8 ‘‘In the case of a group health plan that provides ben9 efits under 2 or more coverage options, the requirements

10 of this subpart shall apply separately with respect to each

11 coverage option.’’.

12 (b) RULE WITH RESPECT TO CERTAIN PLANS.—

13 (1) IN GENERAL.—Notwithstanding any other

14 provision of law, health insurance issuers may offer,

15 and eligible individuals may purchase, high deduct16 ible health plans described in section 220(c)(2)(A) of

17 the Internal Revenue Code of 1986. Effective for the

18 4-year period beginning on the date of the enact19 ment of this Act, such health plans shall not be re20 quired to provide payment for any health care items

21 or services that are exempt from the plan’s deduct22 ible.

23 (2) EXISTING STATE LAWS.—A State law relat24 ing to payment for health care items and services in

25 effect on the date of enactment of this Act that is
39

S 1344 ES

1 preempted under paragraph (1), shall not apply to

2 high deductible health plans after the expiration of

3 the 4-year period described in such paragraph unless

4 the State reenacts such law after such period.

5 (c) DEFINITION.—Section 733(a) of the Employee

6 Retirement Income Security Act of 1974 (42 U.S.C.

7 1191(a)) is amended by adding at the end the following:

8 ‘‘(3) FULLY INSURED GROUP HEALTH PLAN.—

9 The term ‘fully insured group health plan’ means a

10 group health plan where benefits under the plan are

11 provided pursuant to the terms of an arrangement

12 between a group health plan and a health insurance

13 issuer and are guaranteed by the health insurance

14 issuer under a contract or policy of insurance.’’.

15 (d) CONFORMING AMENDMENT.—The table of con16 tents in section 1 of such Act is amended—

17 (1) in the item relating to subpart C, by strik18 ing ‘‘Subpart C’’ and inserting ‘‘Subpart D’’; and

19 (2) by adding at the end of the items relating

20 to subpart B of part 7 of subtitle B of title I of such

21 Act the following new items:

‘‘SUBPART C—PATIENT RIGHT TO MEDICAL ADVICE AND CARE

‘‘Sec. 721. Patient access to emergency medical care.

‘‘Sec. 722. Offering of choice of coverage options.

‘‘Sec. 723. Patient access to obstetric and gynecological care.

‘‘Sec. 724. Patient access to pediatric care.

‘‘Sec. 725. Timely access to specialists.

‘‘Sec. 726. Continuity of care.

‘‘Sec. 727. Protection of patient-provider communications.
40

S 1344 ES

‘‘Sec. 728. Patient’s right to prescription drugs.

‘‘Sec. 729. Self-payment for behavioral health care services.

‘‘Sec. 730. Coverage for individuals participating in approved cancer clinical

trials.

‘‘Sec. 730A. Prohibiting discrimination against providers.

‘‘Sec. 730B. Generally applicable provision.’’.

1 SEC. 102. CONFORMING AMENDMENT TO THE INTERNAL

2 REVENUE CODE OF 1986.

3 (a) IN GENERAL.—Chapter 100 of the Internal Rev4 enue Code of 1986 is amended—

5 (1) by redesignating subchapter C as sub6 chapter D; and

7 (2) by inserting after subchapter B the fol8 lowing:

9 ‘‘Subchapter C—Patient Right to Medical

10 Advice and Care

‘‘Sec. 9821. Patient access to emergency medical care.

‘‘Sec. 9822. Offering of choice of coverage options.

‘‘Sec. 9823. Patient access to obstetric and gynecological care.

‘‘Sec. 9824. Patient access to pediatric care.

‘‘Sec. 9825. Timely access to specialists.

‘‘Sec. 9826. Continuity of care.

‘‘Sec. 9827. Protection of patient-provider communications.

‘‘Sec. 9828. Patient’s right to prescription drugs.

‘‘Sec. 9829. Self-payment for behavioral health care services.

‘‘Sec. 9830. Coverage for individuals participating in approved cancer clinical

trials.

‘‘Sec. 9830A. Prohibiting discrimination against providers.

‘‘Sec. 9830B. Generally applicable provision.

11 ‘‘SEC. 9821. PATIENT ACCESS TO EMERGENCY MEDICAL

12 CARE.

13 ‘‘(a) COVERAGE OF EMERGENCY CARE.—

14 ‘‘(1) IN GENERAL.—To the extent that the

15 group health plan (other than a fully insured group

16 health plan) provides coverage for benefits consisting
41

S 1344 ES

1 of emergency medical care (as defined in subsection

2 (c)) or emergency ambulance services, except for

3 items or services specifically excluded—

4 ‘‘(A) the plan shall provide coverage for

5 benefits, without requiring preauthorization, for

6 emergency medical screening examinations or

7 emergency ambulance services, to the extent

8 that a prudent layperson, who possesses an av9 erage knowledge of health and medicine, would

10 determine such examinations or emergency am11 bulance services to be necessary to determine

12 whether emergency medical care (as so defined)

13 is necessary; and

14 ‘‘(B) the plan shall provide coverage for

15 benefits, without requiring preauthorization, for

16 additional emergency medical care to stabilize

17 an emergency medical condition following an

18 emergency medical screening examination (if

19 determined necessary under subparagraph (A)),

20 pursuant to the definition of stabilize under sec21 tion 1867(e)(3) of the Social Security Act (42

22 U.S.C. 1395dd(e)(3)).

23 ‘‘(2) REIMBURSEMENT FOR CARE TO MAINTAIN

24 MEDICAL STABILITY.—
42

S 1344 ES

1 ‘‘(A) IN GENERAL.—In the case of services

2 provided to a participant or beneficiary by a

3 nonparticipating provider in order to maintain

4 the medical stability of the participant or bene5 ficiary, the group health plan involved shall pro6 vide for reimbursement with respect to such

7 services if—

8 ‘‘(i) coverage for services of the type

9 furnished is available under the group

10 health plan;

11 ‘‘(ii) the services were provided for

12 care related to an emergency medical con13 dition and in an emergency department in

14 order to maintain the medical stability of

15 the participant or beneficiary; and

16 ‘‘(iii) the nonparticipating provider

17 contacted the plan regarding approval for

18 such services.

19 ‘‘(B) FAILURE TO RESPOND.—If a group

20 health plan fails to respond within 1 hours of

21 being contacted in accordance with subpara22 graph (A)(iii), then the plan shall be liable for

23 the cost of services provided by the nonpartici24 pating provider in order to maintain the sta25 bility of the participant or beneficiary.
43

S 1344 ES

1 ‘‘(C) LIMITATION.—The liability of a

2 group health plan to provide reimbursement

3 under subparagraph (A) shall terminate when

4 the plan has contacted the nonparticipating

5 provider to arrange for discharge or transfer.

6 ‘‘(D) LIABILITY OF PARTICIPANT.—A par7 ticipant or beneficiary shall not be liable for the

8 costs of services to which subparagraph (A) in

9 an amount that exceeds the amount of liability

10 that would be incurred if the services were pro11 vided by a participating health care provider

12 with prior authorization by the plan.

13 ‘‘(b) IN-NETWORK UNIFORM COSTS-SHARING AND

14 OUT-OF-NETWORK CARE.—

15 ‘‘(1) IN-NETWORK UNIFORM COST-SHARING.—

16 Nothing in this section shall be construed as pre17 venting a group health plan (other than a fully in18 sured group health plan) from imposing any form of

19 cost-sharing applicable to any participant or bene20 ficiary (including coinsurance, copayments,

21 deductibles, and any other charges) in relation to

22 coverage for benefits described in subsection (a), if

23 such form of cost-sharing is uniformly applied under

24 such plan, with respect to similarly situated partici25 pants and beneficiaries, to all benefits consisting of
44

S 1344 ES

1 emergency medical care (as defined in subsection

2 (c)) provided to such similarly situated participants

3 and beneficiaries under the plan, and such cost-shar4 ing is disclosed in accordance with section 9814.

5 ‘‘(2) OUT-OF-NETWORK CARE.—If a group

6 health plan (other than a fully insured group health

7 plan) provides any benefits with respect to emer8 gency medical care (as defined in subsection (c)), the

9 plan shall cover emergency medical care under the

10 plan in a manner so that, if such care is provided

11 to a participant or beneficiary by a nonparticipating

12 health care provider, the participant or beneficiary is

13 not liable for amounts that exceed any form of cost14 sharing (including coinsurance, copayments,

15 deductibles, and any other charges) that would be

16 incurred if the services were provided by a partici17 pating provider.

18 ‘‘(c) DEFINITION OF EMERGENCY MEDICAL CARE.—

19 In this section:

20 ‘‘(1) IN GENERAL.—The term ‘emergency med21 ical care’ means, with respect to a participant or

22 beneficiary under a group health plan (other than a

23 fully insured group health plan), covered inpatient

24 and outpatient services that—
45

S 1344 ES

1 ‘‘(A) are furnished by any provider, includ2 ing a nonparticipating provider, that is qualified

3 to furnish such services; and

4 ‘‘(B) are needed to evaluate or stabilize (as

5 such term is defined in section 1867(e)(3) of

6 the Social Security Act (42 U.S.C.

7 1395dd)(e)(3)) an emergency medical condition

8 (as defined in paragraph (2)).

9 ‘‘(2) EMERGENCY MEDICAL CONDITION.—The

10 term ‘emergency medical condition’ means a medical

11 condition manifesting itself by acute symptoms of

12 sufficient severity (including severe pain) such that

13 a prudent layperson, who possesses an average

14 knowledge of health and medicine, could reasonably

15 expect the absence of immediate medical attention to

16 result in—

17 ‘‘(A) placing the health of the participant

18 or beneficiary (or, with respect to a pregnant

19 woman, the health of the woman or her unborn

20 child) in serious jeopardy,

21 ‘‘(B) serious impairment to bodily func22 tions, or

23 ‘‘(C) serious dysfunction of any bodily

24 organ or part.
46

S 1344 ES

1 ‘‘SEC. 9822. OFFERING OF CHOICE OF COVERAGE OPTIONS.

2 ‘‘(a) REQUIREMENT.—

3 ‘‘(1) OFFERING OF POINT-OF-SERVICE COV4 ERAGE OPTION.—Except as provided in paragraph

5 (2), if a group health plan (other than a fully in6 sured group health plan) provides coverage for bene7 fits only through a defined set of participating

8 health care professionals, the plan shall offer the

9 participant the option to purchase point-of-service

10 coverage (as defined in subsection (b)) for all such

11 benefits for which coverage is otherwise so limited.

12 Such option shall be made available to the partici13 pant at the time of enrollment under the plan and

14 at such other times as the plan offers the participant

15 a choice of coverage options.

16 ‘‘(2) EXCEPTION IN CASE OF LACK OF AVAIL17 ABILITY.—Paragraph (1) shall not apply with re18 spect to a group health plan (other than a fully in19 sured group health plan) if care relating to the

20 point-of-service coverage would not be available and

21 accessible to the participant with reasonable prompt22 ness (consistent with section 1301(b)(4) of the Pub23 lic Health Service Act (42 U.S.C. 300e(b)(4))).

24 ‘‘(b) POINT-OF-SERVICE COVERAGE DEFINED.—In

25 this section, the term ‘point-of-service coverage’ means,

26 with respect to benefits covered under a group health plan
47

S 1344 ES

1 (other than a fully insured group health plan), coverage

2 of such benefits when provided by a nonparticipating

3 health care professional.

4 ‘‘(c) SMALL EMPLOYER EXEMPTION.—

5 ‘‘(1) IN GENERAL.—This section shall not apply

6 to any group health plan (other than a fully insured

7 group health plan) of a small employer.

8 ‘‘(2) SMALL EMPLOYER.—For purposes of

9 paragraph (1), the term ‘small employer’ means, in

10 connection with a group health plan (other than a

11 fully insured group health plan) with respect to a

12 calendar year and a plan year, an employer who em13 ployed an average of at least 2 but not more than

14 50 employees on business days during the preceding

15 calendar year and who employs at least 2 employees

16 on the first day of the plan year. For purposes of

17 this paragraph, the provisions of subparagraph (C)

18 of section 4980D(d)(2) shall apply in determining

19 employer size.

20 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec21 tion shall be construed—

22 ‘‘(1) as requiring coverage for benefits for a

23 particular type of health care professional;

24 ‘‘(2) as requiring an employer to pay any costs

25 as a result of this section or to make equal contribu-
48

S 1344 ES

1 tions with respect to different health coverage op2 tions;

3 ‘‘(3) as preventing a group health plan (other

4 than a fully insured group health plan) from impos5 ing higher premiums or cost-sharing on a partici6 pant for the exercise of a point-of-service coverage

7 option; or

8 ‘‘(4) to require that a group health plan (other

9 than a fully insured group health plan) include cov10 erage of health care professionals that the plan ex11 cludes because of fraud, quality of care, or other

12 similar reasons with respect to such professionals.

13 ‘‘SEC. 9823. PATIENT ACCESS TO OBSTETRIC AND GYNECO14 LOGICAL CARE.

15 ‘‘(a) GENERAL RIGHTS.—

16 ‘‘(1) WAIVER OF PLAN REFERRAL REQUIRE17 MENT.—If a group health plan described in sub18 section (b) requires a referral to obtain coverage for

19 specialty care, the plan shall waive the referral re20 quirement in the case of a female participant or ben21 eficiary who seeks coverage for obstetrical care and

22 related follow-up obstetrical care or routine gyneco23 logical care (such as preventive gynecological care).

24 ‘‘(2) RELATED ROUTINE CARE.—With respect

25 to a participant or beneficiary described in para-
49

S 1344 ES

1 graph (1), a group health plan described in sub2 section (b) shall treat the ordering of other routine

3 care that is related to routine gynecologic care, by

4 a physician who specializes in obstetrics and gyne5 cology as the authorization of the primary care pro6 vider for such other care.

7 ‘‘(b) APPLICATION OF SECTION.—A group health

8 plan described in this subsection is a group health plan

9 (other than a fully insured group health plan), that—

10 ‘‘(1) provides coverage for obstetric care (such

11 as pregnancy-related services) or routine gynecologic

12 care (such as preventive women’s health examina13 tions); and

14 ‘‘(2) requires the designation by a participant

15 or beneficiary of a participating primary care pro16 vider who is not a physician who specializes in ob17 stetrics or gynecology.

18 ‘‘(c) RULES OF CONSTRUCTION.—Nothing in this

19 section shall be construed—

20 ‘‘(1) as waiving any coverage requirement relat21 ing to medical necessity or appropriateness with re22 spect to the coverage of obstetric or gynecologic care

23 described in subsection (a);

24 ‘‘(2) to preclude the plan from requiring that

25 the physician who specializes in obstetrics or gyne-
50

S 1344 ES

1 cology notify the designated primary care provider or

2 the plan of treatment decisions;

3 ‘‘(3) to preclude a group health plan from al4 lowing health care professionals other than physi5 cians to provide routine obstetric or routine

6 gynecologic care; or

7 ‘‘(4) to preclude a group health plan from per8 mitting a physician who specializes in obstetrics and

9 gynecology from being a primary care provider

10 under the plan.

11 ‘‘SEC. 9824. PATIENT ACCESS TO PEDIATRIC CARE.

12 ‘‘(a) IN GENERAL.—In the case of a group health

13 plan (other than a fully insured group health plan) that

14 provides coverage for routine pediatric care and that re15 quires the designation by a participant or beneficiary of

16 a participating primary care provider, if the designated

17 primary care provider is not a physician who specializes

18 in pediatrics—

19 ‘‘(1) the plan may not require authorization or

20 referral by the primary care provider in order for a

21 participant or beneficiary to obtain coverage for rou22 tine pediatric care; and

23 ‘‘(2) the plan shall treat the ordering of other

24 routine care related to routine pediatric care by such
51

S 1344 ES

1 a specialist as having been authorized by the des2 ignated primary care provider.

3 ‘‘(b) RULES OF CONSTRUCTION.—Nothing in sub4 section (a) shall be construed—

5 ‘‘(1) as waiving any coverage requirement relat6 ing to medical necessity or appropriateness with re7 spect to the coverage of any pediatric care provided

8 to, or ordered for, a participant or beneficiary;

9 ‘‘(2) to preclude a group health plan from re10 quiring that a specialist described in subsection (a)

11 notify the designated primary care provider or the

12 plan of treatment decisions; or

13 ‘‘(3) to preclude a group health plan from al14 lowing health care professionals other than physi15 cians to provide routine pediatric care.

16 ‘‘SEC. 9825. TIMELY ACCESS TO SPECIALISTS.

17 ‘‘(a) TIMELY ACCESS.—

18 ‘‘(1) IN GENERAL.—A group health plan (other

19 than a fully insured group health plan) shall ensure

20 that participants and beneficiaries have timely, in

21 accordance with the medical exigencies of the case,

22 access to primary and specialty health care profes23 sionals who are appropriate to the condition of the

24 participant or beneficiary, when such care is covered

25 under the plan. Such access may be provided
52

S 1344 ES

1 through contractual arrangements with specialized

2 providers outside of the network of the plan.

3 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in

4 paragraph (1) shall be construed—

5 ‘‘(A) to require the coverage under a group

6 health plan of particular benefits or services or

7 to prohibit a plan from including providers only

8 to the extent necessary to meet the needs of the

9 plan’s participants or beneficiaries or from es10 tablishing any measure designed to maintain

11 quality and control costs consistent with the re12 sponsibilities of the plan; or

13 ‘‘(B) to override any State licensure or

14 scope-of-practice law.

15 ‘‘(b) TREATMENT PLANS.—

16 ‘‘(1) IN GENERAL.—Nothing in this section

17 shall be construed to prohibit a group health plan

18 (other than a fully insured group health plan) from

19 requiring that specialty care be provided pursuant to

20 a treatment plan so long as the treatment plan is—

21 ‘‘(A) developed by the specialist, in con22 sultation with the case manager or primary

23 care provider, and the participant or bene24 ficiary;
53

S 1344 ES

1 ‘‘(B) approved by the plan in a timely

2 manner in accordance with the medical exigen3 cies of the case; and

4 ‘‘(C) in accordance with the applicable

5 quality assurance and utilization review stand6 ards of the plan.

7 ‘‘(2) NOTIFICATION.—Nothing in paragraph (1)

8 shall be construed as prohibiting a plan from requir9 ing the specialist to provide the case manager or pri10 mary care provider with regular updates on the spe11 cialty care provided, as well as all other necessary

12 medical information.

13 ‘‘(c) REFERRALS.—Nothing in this section shall be

14 construed to prohibit a plan from requiring an authoriza15 tion by the case manager or primary care provider of the

16 participant or beneficiary in order to obtain coverage for

17 specialty services so long as such authorization is for an

18 adequate number of referrals.

19 ‘‘(d) SPECIALTY CARE DEFINED.—For purposes of

20 this subsection, the term ‘specialty care’ means, with re21 spect to a condition, care and treatment provided by a

22 health care practitioner, facility, or center (such as a cen23 ter of excellence) that has adequate expertise (including

24 age-appropriate expertise) through appropriate training

25 and experience.
54

S 1344 ES

1 ‘‘SEC. 9826. CONTINUITY OF CARE.

2 ‘‘(a) IN GENERAL.—

3 ‘‘(1) TERMINATION OF PROVIDER.—If a con4 tract between a group health plan (other than a fully

5 insured group health plan) and a health care pro6 vider is terminated (as defined in paragraph (2)), or

7 benefits or coverage provided by a health care pro8 vider are terminated because of a change in the

9 terms of provider participation in such group health

10 plan, and an individual who is a participant or bene11 ficiary in the plan is undergoing a course of treat12 ment from the provider at the time of such termi13 nation, the plan shall—

14 ‘‘(A) notify the individual on a timely basis

15 of such termination;

16 ‘‘(B) provide the individual with an oppor17 tunity to notify the plan of a need for transi18 tional care; and

19 ‘‘(C) in the case of termination described

20 in paragraph (2), (3), or (4) of subsection (b),

21 and subject to subsection (c), permit the indi22 vidual to continue or be covered with respect to

23 the course of treatment with the provider’s con24 sent during a transitional period (as provided

25 under subsection (b)).
55

S 1344 ES

1 ‘‘(2) TERMINATED.—In this section, the term

2 ‘terminated’ includes, with respect to a contract, the

3 expiration or nonrenewal of the contract by the

4 group health plan, but does not include a termi5 nation of the contract by the plan for failure to meet

6 applicable quality standards or for fraud.

7 ‘‘(3) CONTRACTS.—For purposes of this sec8 tion, the term ‘contract between a group health plan

9 (other than a fully insured group health plan) and

10 a health care provider’ shall include a contract be11 tween such a plan and an organized network of pro12 viders.

13 ‘‘(b) TRANSITIONAL PERIOD.—

14 ‘‘(1) GENERAL RULE.—Except as provided in

15 paragraph (3), the transitional period under this

16 subsection shall permit the participant or beneficiary

17 to extend the coverage involved for up to 90 days

18 from the date of the notice described in subsection

19 (a)(1)(A) of the provider’s termination.

20 ‘‘(2) INSTITUTIONAL CARE.—Subject to para21 graph (1), the transitional period under this sub22 section for institutional or inpatient care from a pro23 vider shall extend until the discharge or termination

24 of the period of institutionalization and also shall in25 clude institutional care provided within a reasonable
56

S 1344 ES

1 time of the date of termination of the provider sta2 tus if the care was scheduled before the date of the

3 announcement of the termination of the provider

4 status under subsection (a)(1)(A) or if the individual

5 on such date was on an established waiting list or

6 otherwise scheduled to have such care.

7 ‘‘(3) PREGNANCY.—Notwithstanding paragraph

8 (1), if—

9 ‘‘(A) a participant or beneficiary has en10 tered the second trimester of pregnancy at the

11 time of a provider’s termination of participa12 tion; and

13 ‘‘(B) the provider was treating the preg14 nancy before the date of the termination;

15 the transitional period under this subsection with re16 spect to provider’s treatment of the pregnancy shall

17 extend through the provision of post-partum care di18 rectly related to the delivery.

19 ‘‘(4) TERMINAL ILLNESS.—Notwithstanding

20 paragraph (1), if—

21 ‘‘(A) a participant or beneficiary was de22 termined to be terminally ill (as determined

23 under section 1861(dd)(3)(A) of the Social Se24 curity Act) prior to a provider’s termination of

25 participation; and
57

S 1344 ES

1 ‘‘(B) the provider was treating the ter2 minal illness before the date of termination;

3 the transitional period under this subsection shall be

4 for care directly related to the treatment of the ter5 minal illness and shall extend for the remainder of

6 the individual’s life for such care.

7 ‘‘(c) PERMISSIBLE TERMS AND CONDITIONS.—A

8 group health plan (other than a fully insured group health

9 plan) may condition coverage of continued treatment by

10 a provider under subsection (a)(1)(C) upon the provider

11 agreeing to the following terms and conditions:

12 ‘‘(1) The provider agrees to accept reimburse13 ment from the plan and individual involved (with re14 spect to cost-sharing) at the rates applicable prior to

15 the start of the transitional period as payment in

16 full (or at the rates applicable under the replacement

17 plan after the date of the termination of the contract

18 with the group health plan) and not to impose cost19 sharing with respect to the individual in an amount

20 that would exceed the cost-sharing that could have

21 been imposed if the contract referred to in sub22 section (a)(1) had not been terminated.

23 ‘‘(2) The provider agrees to adhere to the qual24 ity assurance standards of the plan responsible for

25 payment under paragraph (1) and to provide to such
58

S 1344 ES

1 plan necessary medical information related to the

2 care provided.

3 ‘‘(3) The provider agrees otherwise to adhere to

4 such plan’s policies and procedures, including proce5 dures regarding referrals and obtaining prior au6 thorization and providing services pursuant to a

7 treatment plan (if any) approved by the plan.

8 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec9 tion shall be construed to require the coverage of benefits

10 which would not have been covered if the provider involved

11 remained a participating provider.

12 ‘‘(e) DEFINITION.—In this section, the term ‘health

13 care provider’ or ‘provider’ means—

14 ‘‘(1) any individual who is engaged in the deliv15 ery of health care services in a State and who is re16 quired by State law or regulation to be licensed or

17 certified by the State to engage in the delivery of

18 such services in the State; and

19 ‘‘(2) any entity that is engaged in the delivery

20 of health care services in a State and that, if it is

21 required by State law or regulation to be licensed or

22 certified by the State to engage in the delivery of

23 such services in the State, is so licensed.
59

S 1344 ES

1 ‘‘(f) COMPREHENSIVE STUDY OF COST, QUALITY

2 AND COORDINATION OF COVERAGE FOR PATIENTS AT

3 THE END OF LIFE.—

4 ‘‘(1) STUDY BY THE MEDICARE PAYMENT ADVI5 SORY COMMISSION.—The Medicare Payment Advi6 sory Commission shall conduct a study of the costs

7 and patterns of care for persons with serious and

8 complex conditions and the possibilities of improving

9 upon that care to the degree it is triggered by the

10 current category of terminally ill as such term is

11 used for purposes of section 1861(dd) of the Social

12 Security Act (relating to hospice benefits) or of uti13 lizing care in other payment settings in Medicare.

14 ‘‘(2) AGENCY FOR HEALTH CARE POLICY AND

15 RESEARCH.—The Agency for Health Care Policy

16 and Research shall conduct studies of the possible

17 thresholds for major conditions causing serious and

18 complex illness, their administrative parameters and

19 feasibility, and their impact upon costs and quality.

20 ‘‘(3) HEALTH CARE FINANCING ADMINISTRA21 TION.—The Health Care Financing Administration

22 shall conduct studies of the merits of applying simi23 lar thresholds in Medicare+Choice programs, includ24 ing adapting risk adjustment methods to account for

25 this category.
60

S 1344 ES

1 ‘‘(4) INITIAL REPORT.—

2 ‘‘(A) IN GENERAL.—Not later than 12

3 months after the date of enactment of this sec4 tion, the Medicare Payment Advisory Commis5 sion and the Agency for Health Care Policy and

6 Research shall each prepare and submit to the

7 Committee on Health, Education, Labor and

8 Pensions of the Senate a report concerning the

9 results of the studies conducted under para10 graphs (1) and (2), respectively.

11 ‘‘(B) COPY TO SECRETARY.—Concurrent

12 with the submission of the reports under sub13 paragraph (A), the Medicare Payment Advisory

14 Commission and the Agency for health Care

15 Policy and Research shall transmit a copy of

16 the reports under such subparagraph to the

17 Secretary.

18 ‘‘(5) FINAL REPORT.—

19 ‘‘(A) CONTRACT WITH INSTITUTE OF MED20 ICINE.—Not later than 1 year after the submis21 sion of the reports under paragraph (4), the

22 Secretary of Health and Human Services shall

23 contract with the Institute of Medicine to con24 duct a study of the practices and their effects
61

S 1344 ES

1 arising from the utilization of the category ‘‘se2 rious and complex’’ illness.

3 ‘‘(B) REPORT.—Not later than 1 year

4 after the date of the execution of the contract

5 referred to in subparagraph (A), the Institute

6 of Medicine shall prepare and submit to the

7 Committee on Health, Education, Labor and

8 Pensions of the Senate a report concerning the

9 study conducted pursuant to such contract.

10 ‘‘(6) FUNDING.—From funds appropriated to

11 the Department of Health and Human Services, the

12 Secretary of Health and Human Services shall make

13 available such funds as the Secretary determines is

14 necessary to carry out this subsection.

15 ‘‘SEC. 9827. PROTECTION OF PATIENT-PROVIDER COMMU16 NICATIONS.

17 ‘‘(a) IN GENERAL.—Subject to subsection (b), a

18 group health plan (other than a fully insured group health

19 plan and in relation to a participant or beneficiary) shall

20 not prohibit or otherwise restrict a health care professional

21 from advising such a participant or beneficiary who is a

22 patient of the professional about the health status of the

23 participant or beneficiary or medical care or treatment for

24 the condition or disease of the participant or beneficiary,

25 regardless of whether coverage for such care or treatment
62

S 1344 ES

1 are provided under the contract, if the professional is act2 ing within the lawful scope of practice.

3 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed as requiring a group health plan

5 (other than a fully insured group health plan) to provide

6 specific benefits under the terms of such plan.

7 ‘‘SEC. 9828. PATIENT’S RIGHT TO PRESCRIPTION DRUGS.

8 ‘‘To the extent that a group health plan (other than

9 a fully insured group health plan) provides coverage for

10 benefits with respect to prescription drugs, and limits such

11 coverage to drugs included in a formulary, the plan shall—

12 ‘‘(1) ensure the participation of physicians and

13 pharmacists in developing and reviewing such for14 mulary; and

15 ‘‘(2) in accordance with the applicable quality

16 assurance and utilization review standards of the

17 plan, provide for exceptions from the formulary limi18 tation when a non-formulary alternative is medically

19 necessary and appropriate.

20 ‘‘SEC. 9829. SELF-PAYMENT FOR BEHAVIORAL HEALTH

21 CARE SERVICES.

22 ‘‘(a) IN GENERAL.—A group health plan (other than

23 a fully insured group health plan) may not—

24 ‘‘(1) prohibit or otherwise discourage a partici25 pant or beneficiary from self-paying for behavioral
63

S 1344 ES

1 health care services once the plan has denied cov2 erage for such services; or

3 ‘‘(2) terminate a health care provider because

4 such provider permits participants or beneficiaries to

5 self-pay for behavioral health care services—

6 ‘‘(A) that are not otherwise covered under

7 the plan; or

8 ‘‘(B) for which the group health plan pro9 vides limited coverage, to the extent that the

10 group health plan denies coverage of the serv11 ices.

12 ‘‘(b) RULE OF CONSTRUCTION.—Nothing in sub13 section (a)(2)(B) shall be construed as prohibiting a group

14 health plan from terminating a contract with a health care

15 provider for failure to meet applicable quality standards

16 or for fraud.

17 ‘‘SEC. 9830. COVERAGE FOR INDIVIDUALS PARTICIPATING

18 IN APPROVED CANCER CLINICAL TRIALS.

19 ‘‘(a) COVERAGE.—

20 ‘‘(1) IN GENERAL.—If a group health plan

21 (other than a fully insured group health plan) pro22 vides coverage to a qualified individual (as defined in

23 subsection (b)), the plan—
64

S 1344 ES

1 ‘‘(A) may not deny the individual partici2 pation in the clinical trial referred to in sub3 section (b)(2);

4 ‘‘(B) subject to subsections (b), (c), and

5 (d) may not deny (or limit or impose additional

6 conditions on) the coverage of routine patient

7 costs for items and services furnished in con8 nection with participation in the trial; and

9 ‘‘(C) may not discriminate against the in10 dividual on the basis of the participant’s or

11 beneficiaries participation in such trial.

12 ‘‘(2) EXCLUSION OF CERTAIN COSTS.—For pur13 poses of paragraph (1)(B), routine patient costs do

14 not include the cost of the tests or measurements

15 conducted primarily for the purpose of the clinical

16 trial involved.

17 ‘‘(3) USE OF IN-NETWORK PROVIDERS.—If one

18 or more participating providers is participating in a

19 clinical trial, nothing in paragraph (1) shall be con20 strued as preventing a plan from requiring that a

21 qualified individual participate in the trial through

22 such a participating provider if the provider will ac23 cept the individual as a participant in the trial.

24 ‘‘(b) QUALIFIED INDIVIDUAL DEFINED.—For pur25 poses of subsection (a), the term ‘‘qualified individual’’
65

S 1344 ES

1 means an individual who is a participant or beneficiary

2 in a group health plan and who meets the following condi3 tions:

4 ‘‘(1)(A) The individual has been diagnosed with

5 cancer for which no standard treatment is effective.

6 ‘‘(B) The individual is eligible to participate in

7 an approved clinical trial according to the trial pro8 tocol with respect to treatment of such illness.

9 ‘‘(C) The individual’s participation in the trial

10 offers meaningful potential for significant clinical

11 benefit for the individual.

12 ‘‘(2) Either—

13 ‘‘(A) the referring physician is a partici14 pating health care professional and has con15 cluded that the individual’s participation in

16 such trial would be appropriate based upon the

17 individual meeting the conditions described in

18 paragraph (1); or

19 ‘‘(B) the participant or beneficiary pro20 vides medical and scientific information estab21 lishing that the individual’s participation in

22 such trial would be appropriate based upon the

23 individual meeting the conditions described in

24 paragraph (1).

25 ‘‘(c) PAYMENT.—
66

S 1344 ES

1 ‘‘(1) IN GENERAL.—Under this section a group

2 health plan (other than a fully insured group health

3 plan) shall provide for payment for routine patient

4 costs described in subsection (a)(2) but is not re5 quired to pay for costs of items and services that are

6 reasonably expected to be paid for by the sponsors

7 of an approved clinical trial.

8 ‘‘(2) STANDARDS FOR DETERMINING ROUTINE

9 PATIENT COSTS ASSOCIATED WITH CLINICAL TRIAL

10 PARTICIPATION.—

11 ‘‘(A) IN GENERAL.—The Secretary shall

12 establish, on an expedited basis and using a ne13 gotiated rulemaking process under subchapter

14 III of chapter 5 of title 5, United States Code,

15 standards relating to the coverage of routine

16 patient costs for individuals participating in

17 clinical trials that group health plans must

18 meet under this section.

19 ‘‘(B) FACTORS.—In establishing routine

20 patient cost standards under subparagraph (A),

21 the Secretary shall consult with interested par22 ties and take into account —

23 ‘‘(i) quality of patient care;

24 ‘‘(ii) routine patient care costs versus

25 costs associated with the conduct of clinical
67

S 1344 ES

1 trials, including unanticipated patient care

2 costs as a result of participation in clinical

3 trials; and

4 ‘‘(iii) previous and on-going studies

5 relating to patient care costs associated

6 with participation in clinical trials.

7 ‘‘(C) PUBLICATION OF NOTICE.—In car8 rying out the rulemaking process under this

9 paragraph, the Secretary, after consultation

10 with organizations representing cancer patients,

11 health care practitioners, medical researchers,

12 employers, group health plans, manufacturers

13 of drugs, biologics and medical devices, medical

14 economists, hospitals, and other interested par15 ties, shall publish notice provided for under sec16 tion 564(a) of title 5, United States Code, by

17 not later than 45 days after the date of the en18 actment of this section.

19 ‘‘(D) TARGET DATE FOR PUBLICATION OF

20 RULE.—As part of the notice under subpara21 graph (C), and for purposes of this paragraph,

22 the ‘target date for publication’ (referred to in

23 section 564(a)(5) of such title 5) shall be June

24 30, 2000.
68

S 1344 ES

1 ‘‘(E) ABBREVIATED PERIOD FOR SUBMIS2 SION OF COMMENTS.—In applying section

3 564(c) of such title 5 under this paragraph, ‘15

4 days’ shall be substituted for ‘30 days’.

5 ‘‘(F) APPOINTMENT OF NEGOTIATED

6 RULEMAKING COMMITTEE AND FACILITATOR.—

7 The Secretary shall provide for—

8 ‘‘(i) the appointment of a negotiated

9 rulemaking committee under section

10 565(a) of such title 5 by not later than 30

11 days after the end of the comment period

12 provided for under section 564(c) of such

13 title 5 (as shortened under subparagraph

14 (E)), and

15 ‘‘(ii) the nomination of a facilitator

16 under section 566(c) of such title 5 by not

17 later than 10 days after the date of ap18 pointment of the committee.

19 ‘‘(G) PRELIMINARY COMMITTEE RE20 PORT.—The negotiated rulemaking committee

21 appointed under subparagraph (F) shall report

22 to the Secretary, by not later than March 29,

23 2000, regarding the committee’s progress on

24 achieving a consensus with regard to the rule25 making proceeding and whether such consensus
69

S 1344 ES

1 is likely to occur before 1 month before the tar2 get date for publication of the rule. If the com3 mittee reports that the committee has failed to

4 make significant progress towards such con5 sensus or is unlikely to reach such consensus by

6 the target date, the Secretary may terminate

7 such process and provide for the publication of

8 a rule under this paragraph through such other

9 methods as the Secretary may provide.

10 ‘‘(H) FINAL COMMITTEE REPORT.—If the

11 committee is not terminated under subpara12 graph (G), the rulemaking committee shall sub13 mit a report containing a proposed rule by not

14 later than 1 month before the target date of

15 publication.

16 ‘‘(I) FINAL EFFECT.—The Secretary shall

17 publish a rule under this paragraph in the Fed18 eral Register by not later than the target date

19 of publication.

20 ‘‘(J) PUBLICATION OF RULE AFTER PUB21 LIC COMMENT.—The Secretary shall provide for

22 consideration of such comments and republica23 tion of such rule by not later than 1 year after

24 the target date of publication.
70

S 1344 ES

1 ‘‘(K) EFFECTIVE DATE.—The provisions of

2 this paragraph shall apply to group health

3 plans (other than a fully insured group health

4 plan) for plan years beginning on or after Jan5 uary 1, 2001.

6 ‘‘(3) PAYMENT RATE.—In the case of covered

7 items and services provided by—

8 ‘‘(A) a participating provider, the payment

9 rate shall be at the agreed upon rate, or

10 ‘‘(B) a nonparticipating provider, the pay11 ment rate shall be at the rate the plan would

12 normally pay for comparable services under

13 subparagraph (A).

14 ‘‘(d) APPROVED CLINICAL TRIAL DEFINED.—

15 ‘‘(1) IN GENERAL.—In this section, the term

16 ‘approved clinical trial’ means a cancer clinical re17 search study or cancer clinical investigation ap18 proved and funded (which may include funding

19 through in-kind contributions) by one or more of the

20 following:

21 ‘‘(A) The National Institutes of Health.

22 ‘‘(B) A cooperative group or center of the

23 National Institutes of Health.

24 ‘‘(C) Either of the following if the condi25 tions described in paragraph (2) are met:
71

S 1344 ES

1 ‘‘(i) The Department of Veterans Af2 fairs.

3 ‘‘(ii) The Department of Defense.

4 ‘‘(2) CONDITIONS FOR DEPARTMENTS.—The

5 conditions described in this paragraph, for a study

6 or investigation conducted by a Department, are

7 that the study or investigation has been reviewed

8 and approved through a system of peer review that

9 the Secretary determines—

10 ‘‘(A) to be comparable to the system of

11 peer review of studies and investigations used

12 by the National Institutes of Health, and

13 ‘‘(B) assures unbiased review of the high14 est scientific standards by qualified individuals

15 who have no interest in the outcome of the re16 view.

17 ‘‘(e) CONSTRUCTION.—Nothing in this section shall

18 be construed to limit a plan’s coverage with respect to clin19 ical trials.

20 ‘‘(f) PLAN SATISFACTION OF CERTAIN REQUIRE21 MENTS; RESPONSIBILITIES OF FIDUCIARIES.—

22 ‘‘(1) IN GENERAL.—For purposes of this sec23 tion, insofar as a group health plan provides benefits

24 in the form of health insurance coverage through a

25 health insurance issuer, the plan shall be treated as
72

S 1344 ES

1 meeting the requirements of this section with respect

2 to such benefits and not be considered as failing to

3 meet such requirements because of a failure of the

4 issuer to meet such requirements so long as the plan

5 sponsor or its representatives did not cause such

6 failure by the issuer.

7 ‘‘(2) CONSTRUCTION.—Nothing in this section

8 shall be construed to affect or modify the respon9 sibilities of the fiduciaries of a group health plan

10 under part 4 of subtitle B of title I of the Employee

11 Retirement Income Security Act of 1974.

12 ‘‘(g) STUDY AND REPORT.—

13 ‘‘(1) STUDY.—The Secretary shall study the

14 impact on group health plans for covering routine

15 patient care costs for individuals who are entitled to

16 benefits under this section and who are enrolled in

17 an approved cancer clinical trial program.

18 ‘‘(2) REPORT TO CONGRESS.—Not later than

19 January 1, 2005, the Secretary shall submit a re20 port to Congress that contains an assessment of—

21 ‘‘(A) any incremental cost to group health

22 plans resulting from the provisions of this sec23 tion;

24 ‘‘(B) a projection of expenditures to such

25 plans resulting from this section; and
73

S 1344 ES

1 ‘‘(C) any impact on premiums resulting

2 from this section.

3 ‘‘SEC. 9830A. PROHIBITING DISCRIMINATION AGAINST PRO4 VIDERS.

5 ‘‘(a) IN GENERAL.—A group health plan (other than

6 a fully insured group health plan) shall not discriminate

7 with respect to participation or indemnification as to any

8 provider who is acting within the scope of the provider’s

9 license or certification under applicable State law, solely

10 on the basis of such license or certification. This sub11 section shall not be construed as requiring the coverage

12 under a plan of particular benefits or services or to pro13 hibit a plan from including providers only to the extent

14 necessary to meet the needs of the plan’s participants and

15 beneficiaries or from establishing any measure designed

16 to maintain quality and control costs consistent with the

17 responsibilities of the plan.

18 ‘‘(b) NO REQUIREMENT FOR ANY WILLING PRO19 VIDER.—Nothing in this section shall be construed as re20 quiring a group health plan that offers network coverage

21 to include for participation every willing provider or health

22 professional who meets the terms and conditions of the

23 plan.
74

S 1344 ES

1 ‘‘SEC. 9830B. GENERALLY APPLICABLE PROVISION.

2 ‘‘In the case of a group health plan that provides ben3 efits under 2 or more coverage options, the requirements

4 of this subchapter shall apply separately with respect to

5 each coverage option.’’.

6 (b) DEFINITION.—Section 9832(b) of the Internal

7 Revenue Code of 1986 is amended by adding at the end

8 the following:

9 ‘‘(4) FULLY INSURED GROUP HEALTH PLAN.—

10 The term ‘fully insured group health plan’ means a

11 group health plan where benefits under the plan are

12 provided pursuant to the terms of an arrangement

13 between a group health plan and a health insurance

14 issuer and are guaranteed by the health insurance

15 issuer under a contract or policy of insurance.’’.

16 (c) CONFORMING AMENDMENT.—Chapter 98 of the

17 Internal Revenue Code of 1986 is amended in the table

18 of subchapters in the item relating to subchapter C, by

19 striking ‘‘Subchapter C’’ and inserting ‘‘Subchapter D’’.

20 SEC. 103. EFFECTIVE DATE AND RELATED RULES.

21 (a) IN GENERAL.—The amendments made by this

22 subtitle shall apply with respect to plan years beginning

23 on or after January 1 of the second calendar year fol24 lowing the date of the enactment of this Act. The Sec25 retary shall issue all regulations necessary to carry out
75

S 1344 ES

1 the amendments made by this section before the effective

2 date thereof.

3 (b) LIMITATION ON ENFORCEMENT ACTIONS.—No

4 enforcement action shall be taken, pursuant to the amend5 ments made by this subtitle, against a group health plan

6 with respect to a violation of a requirement imposed by

7 such amendments before the date of issuance of regula8 tions issued in connection with such requirement, if the

9 plan has sought to comply in good faith with such require10 ment.

11 Subtitle B—Right to Information

12 About Plans and Providers

13 SEC. 111. INFORMATION ABOUT PLANS.

14 (a) EMPLOYEE RETIREMENT INCOME SECURITY ACT

15 OF 1974.—

16 (1) IN GENERAL.—Subpart B of part 7 of sub17 title B of title I of the Employee Retirement Income

18 Security Act of 1974 (29 U.S.C. 1185 et seq.) is

19 amended by adding at the end the following:

20 ‘‘SEC. 714. HEALTH PLAN COMPARATIVE INFORMATION.

21 ‘‘(a) REQUIREMENT.—

22 ‘‘(1) IN GENERAL.—A group health plan, and a

23 health insurance issuer that provides coverage in

24 connection with group health insurance coverage,

25 shall, not later than 12 months after the date of en-
76

S 1344 ES

1 actment of this section, and at least annually there2 after, provide for the disclosure, in a clear and accu3 rate form to each participant and each beneficiary

4 who does not reside at the same address as the par5 ticipant, or upon request to an individual eligible for

6 coverage under the plan, of the information de7 scribed in subsection (b).

8 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in

9 this section shall be construed to prevent a plan or

10 issuer from entering into any agreement under

11 which the issuer agrees to assume responsibility for

12 compliance with the requirements of this section and

13 the plan is released from liability for such compli14 ance.

15 ‘‘(3) PROVISION OF INFORMATION.—Informa16 tion shall be provided to participants and bene17 ficiaries under this section at the address maintained

18 by the plan or issuer with respect to such partici19 pants or beneficiaries.

20 ‘‘(b) REQUIRED INFORMATION.—The informational

21 materials to be distributed under this section shall include

22 for each package option available under a group health

23 plan the following:

24 ‘‘(1) A description of the covered items and

25 services under each such plan and any in- and out-
77

S 1344 ES

1 of-network features of each such plan, including a

2 summary description of the specific exclusions from

3 coverage under the plan.

4 ‘‘(2) A description of any cost-sharing, includ5 ing premiums, deductibles, coinsurance, and copay6 ment amounts, for which the participant or bene7 ficiary will be responsible, including any annual or

8 lifetime limits on benefits, for each such plan.

9 ‘‘(3) A description of any optional supplemental

10 benefits offered by each such plan and the terms

11 and conditions (including premiums or cost-sharing)

12 for such supplemental coverage.

13 ‘‘(4) A description of any restrictions on pay14 ments for services furnished to a participant or ben15 eficiary by a health care professional that is not a

16 participating professional and the liability of the

17 participant or beneficiary for additional payments

18 for these services.

19 ‘‘(5) A description of the service area of each

20 such plan, including the provision of any out-of-area

21 coverage.

22 ‘‘(6) A description of the extent to which par23 ticipants and beneficiaries may select the primary

24 care provider of their choice, including providers

25 both within the network and outside the network of
78

S 1344 ES

1 each such plan (if the plan permits out-of-network

2 services).

3 ‘‘(7) A description of the procedures for ad4 vance directives and organ donation decisions if the

5 plan maintains such procedures.

6 ‘‘(8) A description of the requirements and pro7 cedures to be used to obtain preauthorization for

8 health services (including telephone numbers and

9 mailing addresses), including referrals for specialty

10 care.

11 ‘‘(9) A description of the definition of medical

12 necessity used in making coverage determinations by

13 each such plan.

14 ‘‘(10) A summary of the rules and methods for

15 appealing coverage decisions and filing grievances

16 (including telephone numbers and mailing address17 es), as well as other available remedies.

18 ‘‘(11) A summary description of any provisions

19 for obtaining off-formulary medications if the plan

20 utilizes a defined formulary for providing specific

21 prescription medications.

22 ‘‘(12) A summary of the rules for access to

23 emergency room care. Also, any available edu24 cational material regarding proper use of emergency

25 services.
79

S 1344 ES

1 ‘‘(13) A description of whether or not coverage

2 is provided for experimental treatments, investiga3 tional treatments, or clinical trials and the cir4 cumstances under which access to such treatments

5 or trials is made available.

6 ‘‘(14) A description of the specific preventative

7 services covered under the plan if such services are

8 covered.

9 ‘‘(15) A statement regarding—

10 ‘‘(A) the manner in which a participant or

11 beneficiary may access an obstetrician, gyne12 cologist, or pediatrician in accordance with sec13 tion 723 or 724; and

14 ‘‘(B) the manner in which a participant or

15 beneficiary obtains continuity of care as pro16 vided for in section 726.

17 ‘‘(16) A statement that the following informa18 tion, and instructions on obtaining such information

19 (including telephone numbers and, if available,

20 Internet websites), shall be made available upon re21 quest:

22 ‘‘(A) The names, addresses, telephone

23 numbers, and State licensure status of the

24 plan’s participating health care professionals

25 and participating health care facilities, and, if
80

S 1344 ES

1 available, the education, training, specialty

2 qualifications or certifications of such profes3 sionals.

4 ‘‘(B) A summary description of the meth5 ods used for compensating participating health

6 care professionals, such as capitation, fee-for7 service, salary, or a combination thereof. The

8 requirement of this subparagraph shall not be

9 construed as requiring plans to provide infor10 mation concerning proprietary payment meth11 odology.

12 ‘‘(C) A summary description of the meth13 ods used for compensating health care facilities,

14 including per diem, fee-for-service, capitation,

15 bundled payments, or a combination thereof.

16 The requirement of this subparagraph shall not

17 be construed as requiring plans to provide in18 formation concerning proprietary payment

19 methodology.

20 ‘‘(D) A summary description of the proce21 dures used for utilization review.

22 ‘‘(E) The list of the specific prescription

23 medications included in the formulary of the

24 plan, if the plan uses a defined formulary.
81

S 1344 ES

1 ‘‘(F) A description of the specific exclu2 sions from coverage under the plan.

3 ‘‘(G) Any available information related to

4 the availability of translation or interpretation

5 services for non-English speakers and people

6 with communication disabilities, including the

7 availability of audio tapes or information in

8 Braille.

9 ‘‘(H) Any information that is made public

10 by accrediting organizations in the process of

11 accreditation if the plan is accredited, or any

12 additional quality indicators that the plan

13 makes available.

14 ‘‘(c) MANNER OF DISTRIBUTION.—The information

15 described in this section shall be distributed in an acces16 sible format that is understandable to an average plan

17 participant or beneficiary.

18 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec19 tion may be construed to prohibit a group health plan,

20 or health insurance issuer in connection with group health

21 insurance coverage, from distributing any other additional

22 information determined by the plan or issuer to be impor23 tant or necessary in assisting participants and bene24 ficiaries or upon request potential participants and bene25 ficiaries in the selection of a health plan or from providing
82

S 1344 ES

1 information under subsection (b)(15) as part of the re2 quired information.

3 ‘‘(e) CONFORMING REGULATIONS.—The Secretary

4 shall issue regulations to coordinate the requirements on

5 group health plans and health insurance issuers under this

6 section with the requirements imposed under part 1, to

7 reduce duplication with respect to any information that

8 is required to be provided under any such requirements.

9 ‘‘(f) HEALTH CARE PROFESSIONAL.—In this section,

10 the term ‘health care professional’ means a physician (as

11 defined in section 1861(r) of the Social Security Act) or

12 other health care professional if coverage for the profes13 sional’s services is provided under the health plan involved

14 for the services of the professional. Such term includes a

15 podiatrist, optometrist, chiropractor, psychologist, dentist,

16 physician assistant, physical or occupational therapist and

17 therapy assistant, speech-language pathologist, audiol18 ogist, registered or licensed practical nurse (including

19 nurse practitioner, clinical nurse specialist, certified reg20 istered nurse anesthetist, and certified nurse-midwife), li21 censed certified social worker, registered respiratory thera22 pist, and certified respiratory therapy technician.’’.

23 (2) CONFORMING AMENDMENTS.—

24 (A) Section 732(a) of the Employee Retire25 ment Income Security Act of 1974 (29 U.S.C.
83

S 1344 ES

1 1191a(a)) is amended by striking ‘‘section 711,

2 and inserting ‘‘sections 711 and 714’’.

3 (B) The table of contents in section 1 of

4 the Employee Retirement Income Security Act

5 of 1974 (29 U.S.C. 1001) is amended by insert6 ing after the item relating to section 713, the

7 following:

‘‘Sec. 714. Health plan comparative information.’’.

8 (b) INTERNAL REVENUE CODE OF 1986.—Sub9 chapter B of chapter 100 of the Internal Revenue Code

10 of 1986 is amended—

11 (1) in the table of sections, by inserting after

12 the item relating to section 9812 the following new

13 item:

‘‘Sec. 9813. Health plan comparative information.’’;

14 and

15 (2) by inserting after section 9812 the fol16 lowing:

17 ‘‘SEC. 9813. HEALTH PLAN COMPARATIVE INFORMATION.

18 ‘‘(a) REQUIREMENT.—

19 ‘‘(1) IN GENERAL.—A group health plan shall,

20 not later than 12 months after the date of enact21 ment of this section, and at least annually there22 after, provide for the disclosure, in a clear and accu23 rate form to each participant and each beneficiary

24 who does not reside at the same address as the par-
84

S 1344 ES

1 ticipant, or upon request to an individual eligible for

2 coverage under the plan, of the information de3 scribed in subsection (b).

4 ‘‘(2) RULES OF CONSTRUCTION.—Nothing in

5 this section shall be construed to prevent a plan

6 from entering into any agreement under which a

7 health insurance issuer agrees to assume responsi8 bility for compliance with the requirements of this

9 section and the plan is released from liability for

10 such compliance.

11 ‘‘(3) PROVISION OF INFORMATION.—Informa12 tion shall be provided to participants and bene13 ficiaries under this section at the address maintained

14 by the plan with respect to such participants or

15 beneficiaries.

16 ‘‘(b) REQUIRED INFORMATION.—The informational

17 materials to be distributed under this section shall include

18 for each package option available under a group health

19 plan the following:

20 ‘‘(1) A description of the covered items and

21 services under each such plan and any in- and out22 of-network features of each such plan, including a

23 summary description of the specific exclusions from

24 coverage under the plan.
85

S 1344 ES

1 ‘‘(2) A description of any cost-sharing, includ2 ing premiums, deductibles, coinsurance, and copay3 ment amounts, for which the participant or bene4 ficiary will be responsible, including any annual or

5 lifetime limits on benefits, for each such plan.

6 ‘‘(3) A description of any optional supplemental

7 benefits offered by each such plan and the terms

8 and conditions (including premiums or cost-sharing)

9 for such supplemental coverage.

10 ‘‘(4) A description of any restrictions on pay11 ments for services furnished to a participant or ben12 eficiary by a health care professional that is not a

13 participating professional and the liability of the

14 participant or beneficiary for additional payments

15 for these services.

16 ‘‘(5) A description of the service area of each

17 such plan, including the provision of any out-of-area

18 coverage.

19 ‘‘(6) A description of the extent to which par20 ticipants and beneficiaries may select the primary

21 care provider of their choice, including providers

22 both within the network and outside the network of

23 each such plan (if the plan permits out-of-network

24 services).
86

S 1344 ES

1 ‘‘(7) A description of the procedures for ad2 vance directives and organ donation decisions if the

3 plan maintains such procedures.

4 ‘‘(8) A description of the requirements and pro5 cedures to be used to obtain preauthorization for

6 health services (including telephone numbers and

7 mailing addresses), including referrals for specialty

8 care.

9 ‘‘(9) A description of the definition of medical

10 necessity used in making coverage determinations by

11 each such plan.

12 ‘‘(10) A summary of the rules and methods for

13 appealing coverage decisions and filing grievances

14 (including telephone numbers and mailing address15 es), as well as other available remedies.

16 ‘‘(11) A summary description of any provisions

17 for obtaining off-formulary medications if the plan

18 utilizes a defined formulary for providing specific

19 prescription medications.

20 ‘‘(12) A summary of the rules for access to

21 emergency room care. Also, any available edu22 cational material regarding proper use of emergency

23 services.

24 ‘‘(13) A description of whether or not coverage

25 is provided for experimental treatments, investiga-
87

S 1344 ES

1 tional treatments, or clinical trials and the cir2 cumstances under which access to such treatments

3 or trials is made available.

4 ‘‘(14) A description of the specific preventative

5 services covered under the plan if such services are

6 covered.

7 ‘‘(15) A statement regarding—

8 ‘‘(A) the manner in which a participant or

9 beneficiary may access an obstetrician, gyne10 cologist, or pediatrician in accordance with sec11 tion 723 or 724; and

12 ‘‘(B) the manner in which a participant or

13 beneficiary obtains continuity of care as pro14 vided for in section 726.

15 ‘‘(16) A statement that the following informa16 tion, and instructions on obtaining such information

17 (including telephone numbers and, if available,

18 Internet websites), shall be made available upon re19 quest:

20 ‘‘(A) The names, addresses, telephone

21 numbers, and State licensure status of the

22 plan’s participating health care professionals

23 and participating health care facilities, and, if

24 available, the education, training, specialty
88

S 1344 ES

1 qualifications or certifications of such profes2 sionals.

3 ‘‘(B) A summary description of the meth4 ods used for compensating participating health

5 care professionals, such as capitation, fee-for6 service, salary, or a combination thereof. The

7 requirement of this subparagraph shall not be

8 construed as requiring plans to provide infor9 mation concerning proprietary payment meth10 odology.

11 ‘‘(C) A summary description of the meth12 ods used for compensating health care facilities,

13 including per diem, fee-for-service, capitation,

14 bundled payments, or a combination thereof.

15 The requirement of this subparagraph shall not

16 be construed as requiring plans to provide in17 formation concerning proprietary payment

18 methodology.

19 ‘‘(D) A summary description of the proce20 dures used for utilization review.

21 ‘‘(E) The list of the specific prescription

22 medications included in the formulary of the

23 plan, if the plan uses a defined formulary.

24 ‘‘(F) A description of the specific exclu25 sions from coverage under the plan.
89

S 1344 ES

1 ‘‘(G) Any available information related to

2 the availability of translation or interpretation

3 services for non-English speakers and people

4 with communication disabilities, including the

5 availability of audio tapes or information in

6 Braille.

7 ‘‘(H) Any information that is made public

8 by accrediting organizations in the process of

9 accreditation if the plan is accredited, or any

10 additional quality indicators that the plan

11 makes available.

12 ‘‘(c) MANNER OF DISTRIBUTION.—The information

13 described in this section shall be distributed in an acces14 sible format that is understandable to an average plan

15 participant or beneficiary.

16 ‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec17 tion may be construed to prohibit a group health plan

18 from distributing any other additional information deter19 mined by the plan to be important or necessary in assist20 ing participants and beneficiaries or upon request poten21 tial participants and beneficiaries in the selection of a

22 health plan or from providing information under sub23 section (b)(15) as part of the required information.

24 ‘‘(e) HEALTH CARE PROFESSIONAL.—In this section,

25 the term ‘health care professional’ means a physician (as
90

S 1344 ES

1 defined in section 1861(r) of the Social Security Act) or

2 other health care professional if coverage for the profes3 sional’s services is provided under the health plan involved

4 for the services of the professional. Such term includes a

5 podiatrist, optometrist, chiropractor, psychologist, dentist,

6 physician assistant, physical or occupational therapist and

7 therapy assistant, speech-language pathologist, audiol8 ogist, registered or licensed practical nurse (including

9 nurse practitioner, clinical nurse specialist, certified reg10 istered nurse anesthetist, and certified nurse-midwife), li11 censed certified social worker, registered respiratory thera12 pist, and certified respiratory therapy technician.’’.

13 SEC. 112. INFORMATION ABOUT PROVIDERS.

14 (a) STUDY.—The Secretary of Health and Human

15 Services shall enter into a contract with the Institute of

16 Medicine for the conduct of a study, and the submission

17 to the Secretary of a report, that includes—

18 (1) an analysis of information concerning health

19 care professionals that is currently available to pa20 tients, consumers, States, and professional societies,

21 nationally and on a State-by-State basis, including

22 patient preferences with respect to information

23 about such professionals and their competencies;
91

S 1344 ES

1 (2) an evaluation of the legal and other barriers

2 to the sharing of information concerning health care

3 professionals; and

4 (3) recommendations for the disclosure of infor5 mation on health care professionals, including the

6 competencies and professional qualifications of such

7 practitioners, to better facilitate patient choice, qual8 ity improvement, and market competition.

9 (b) REPORT.—Not later than 18 months after the

10 date of enactment of this Act, the Secretary of Health and

11 Human Services shall forward to the appropriate commit12 tees of Congress a copy of the report and study conducted

13 under subsection (a).

14 Subtitle C—Right to Hold Health

15 Plans Accountable

16 SEC. 121. AMENDMENT TO EMPLOYEE RETIREMENT IN17 COME SECURITY ACT OF 1974.

18 (a) IN GENERAL.—Section 503 of the Employee Re19 tirement Income Security Act of 1974 (29 U.S.C. 1133)

20 is amended to read as follows:

21 ‘‘SEC. 503. CLAIMS PROCEDURE, COVERAGE DETERMINA22 TION, GRIEVANCES AND APPEALS.

23 ‘‘(a) CLAIMS PROCEDURE.—In accordance with regu24 lations of the Secretary, every employee benefit plan

25 shall—
92

S 1344 ES

1 ‘‘(1) provide adequate notice in writing to any

2 participant or beneficiary whose claim for benefits

3 under the plan has been denied, setting forth the

4 specific reasons for such denial, written in a manner

5 calculated to be understood by the participant; and

6 ‘‘(2) afford a reasonable opportunity to any

7 participant whose claim for benefits has been denied

8 for a full and fair review by the appropriate named

9 fiduciary of the decision denying the claim.

10 ‘‘(b) COVERAGE DETERMINATIONS UNDER GROUP

11 HEALTH PLANS.—

12 ‘‘(1) PROCEDURES.—

13 ‘‘(A) IN GENERAL.—A group health plan

14 or health insurance issuer conducting utilization

15 review shall ensure that procedures are in place

16 for—

17 ‘‘(i) making determinations regarding

18 whether a participant or beneficiary is eli19 gible to receive a payment or coverage for

20 health services under the plan or coverage

21 involved and any cost-sharing amount that

22 the participant or beneficiary is required to

23 pay with respect to such service;

24 ‘‘(ii) notifying a covered participant or

25 beneficiary (or the authorized representa-
93

S 1344 ES

1 tive of such participant or beneficiary) and

2 the treating health care professionals in3 volved regarding determinations made

4 under the plan or issuer and any addi5 tional payments that the participant or

6 beneficiary may be required to make with

7 respect to such service; and

8 ‘‘(iii) responding to requests, either

9 written or oral, for coverage determina10 tions or for internal appeals from a partici11 pant or beneficiary (or the authorized rep12 resentative of such participant or bene13 ficiary) or the treating health care profes14 sional with the consent of the participant

15 or beneficiary.

16 ‘‘(B) ORAL REQUESTS.—With respect to

17 an oral request described in subparagraph

18 (A)(iii), a group health plan or health insurance

19 issuer may require that the requesting indi20 vidual provide written evidence of such request.

21 ‘‘(2) TIMELINE FOR MAKING DETERMINA22 TIONS.—

23 ‘‘(A) ROUTINE DETERMINATION.—A group

24 health plan or a health insurance issuer shall

25 maintain procedures to ensure that prior au-
94

S 1344 ES

1 thorization determinations concerning the provi2 sion of non-emergency items or services are

3 made within 30 days from the date on which

4 the request for a determination is submitted,

5 except that such period may be extended where

6 certain circumstances exist that are determined

7 by the Secretary to be beyond control of the

8 plan or issuer.

9 ‘‘(B) EXPEDITED DETERMINATION.—

10 ‘‘(i) IN GENERAL.—A prior authoriza11 tion determination under this subsection

12 shall be made within 72 hours, in accord13 ance with the medical exigencies of the

14 case, after a request is received by the plan

15 or issuer under clause (ii) or (iii).

16 ‘‘(ii) REQUEST BY PARTICIPANT OR

17 BENEFICIARY.—A plan or issuer shall

18 maintain procedures for expediting a prior

19 authorization determination under this

20 subsection upon the request of a partici21 pant or beneficiary if, based on such a re22 quest, the plan or issuer determines that

23 the normal time for making such a deter24 mination could seriously jeopardize the life

25 or health of the participant or beneficiary.
95

S 1344 ES

1 ‘‘(iii) DOCUMENTATION BY HEALTH

2 CARE PROFESSIONAL.—A plan or issuer

3 shall maintain procedures for expediting a

4 prior authorization determination under

5 this subsection if the request involved indi6 cates that the treating health care profes7 sional has reasonably documented, based

8 on the medical exigencies, that a deter9 mination under the procedures described in

10 subparagraph (A) could seriously jeop11 ardize the life or health of the participant

12 or beneficiary.

13 ‘‘(C) CONCURRENT DETERMINATIONS.—A

14 plan or issuer shall maintain procedures to cer15 tify or deny coverage of an extended stay or ad16 ditional services.

17 ‘‘(D) RETROSPECTIVE DETERMINATION.—

18 A plan or issuer shall maintain procedures to

19 ensure that, with respect to the retrospective re20 view of a determination made under paragraph

21 (1), the determination shall be made within 30

22 working days of the date on which the plan or

23 issuer receives necessary information.

24 ‘‘(3) NOTICE OF DETERMINATIONS.—
96

S 1344 ES

1 ‘‘(A) ROUTINE DETERMINATION.—With re2 spect to a coverage determination of a plan or

3 issuer under paragraph (2)(A), the plan or

4 issuer shall issue notice of such determination

5 to the participant or beneficiary (or the author6 ized representative of the participant or bene7 ficiary) and, consistent with the medical exigen8 cies of the case, to the treating health care pro9 fessional involved not later than 2 working days

10 after the date on which the determination is

11 made.

12 ‘‘(B) EXPEDITED DETERMINATION.—With

13 respect to a coverage determination of a plan or

14 issuer under paragraph (2)(B), the plan or

15 issuer shall issue notice of such determination

16 to the participant or beneficiary (or the author17 ized representative of the participant or bene18 ficiary), and consistent with the medical exigen19 cies of the case, to the treating health care pro20 fessional involved within the 72 hour period de21 scribed in paragraph (2)(B).

22 ‘‘(C) CONCURRENT REVIEWS.—With re23 spect to the determination under a plan or

24 issuer under paragraph (2)(C) to certify or

25 deny coverage of an extended stay or additional
97

S 1344 ES

1 services, the plan or issuer shall issue notice of

2 such determination to the treating health care

3 professional and to the participant or bene4 ficiary involved (or the authorized representa5 tive of the participant or beneficiary) within 1

6 working day of the determination.

7 ‘‘(D) RETROSPECTIVE REVIEWS.—With re8 spect to the retrospective review under a plan

9 or issuer of a determination made under para10 graph (2)(D), the plan or issuer shall issue

11 written notice of an approval or disapproval of

12 a determination under this subparagraph to the

13 participant or beneficiary (or the authorized

14 representative of the participant or beneficiary)

15 and health care provider involved within 5

16 working days of the date on which such deter17 mination is made.

18 ‘‘(E) REQUIREMENTS OF NOTICE OF AD19 VERSE COVERAGE DETERMINATIONS.—A writ20 ten notice of an adverse coverage determination

21 under this subsection, or of an expedited ad22 verse coverage determination under paragraph

23 (2)(B), shall be provided to the participant or

24 beneficiary (or the authorized representative of

25 the participant or beneficiary) and treating
98

S 1344 ES

1 health care professional (if any) involved and

2 shall include—

3 ‘‘(i) the reasons for the determination

4 (including the clinical or scientific-evidence

5 based rationale used in making the deter6 mination) written in a manner to be under7 standable to the average participant or

8 beneficiary;

9 ‘‘(ii) the procedures for obtaining ad10 ditional information concerning the deter11 mination; and

12 ‘‘(iii) notification of the right to ap13 peal the determination and instructions on

14 how to initiate an appeal in accordance

15 with subsection (d).

16 ‘‘(c) GRIEVANCES.—A group health plan or a health

17 insurance issuer shall have written procedures for address18 ing grievances between the plan or issuer offering health

19 insurance coverage in connection with a group health plan

20 and a participant or beneficiary. Determinations under

21 such procedures shall be non-appealable.

22 ‘‘(d) INTERNAL APPEAL OF COVERAGE DETERMINA23 TIONS.—

24 ‘‘(1) RIGHT TO APPEAL.—
99

S 1344 ES

1 ‘‘(A) IN GENERAL.—A participant or bene2 ficiary (or the authorized representative of the

3 participant or beneficiary) or the treating

4 health care professional with the consent of the

5 participant or beneficiary (or the authorized

6 representative of the participant or beneficiary),

7 may appeal any adverse coverage determination

8 under subsection (b) under the procedures de9 scribed in this subsection.

10 ‘‘(B) TIME FOR APPEAL.—A plan or issuer

11 shall ensure that a participant or beneficiary

12 has a period of not less than 180 days begin13 ning on the date of an adverse coverage deter14 mination under subsection (b) in which to ap15 peal such determination under this subsection.

16 ‘‘(C) FAILURE TO ACT.—The failure of a

17 plan or issuer to issue a determination under

18 subsection (b) within the applicable timeline es19 tablished for such a determination under such

20 subsection shall be treated as an adverse cov21 erage determination for purposes of proceeding

22 to internal review under this subsection.

23 ‘‘(2) RECORDS.—A group health plan and a

24 health insurance issuer shall maintain written

25 records, for at least 6 years, with respect to any ap-
100

S 1344 ES

1 peal under this subsection for purposes of internal

2 quality assurance and improvement. Nothing in the

3 preceding sentence shall be construed as preventing

4 a plan and issuer from entering into an agreement

5 under which the issuer agrees to assume responsi6 bility for compliance with the requirements of this

7 section and the plan is released from liability for

8 such compliance.

9 ‘‘(3) ROUTINE DETERMINATIONS.—A group

10 health plan or a health insurance issuer shall com11 plete the consideration of an appeal of an adverse

12 routine determination under this subsection not later

13 than 30 working days after the date on which a re14 quest for such appeal is received.

15 ‘‘(4) EXPEDITED DETERMINATION.—

16 ‘‘(A) IN GENERAL.—An expedited deter17 mination with respect to an appeal under this

18 subsection shall be made in accordance with the

19 medical exigencies of the case, but in no case

20 more than 72 hours after the request for such

21 appeal is received by the plan or issuer under

22 subparagraph (B) or (C).

23 ‘‘(B) REQUEST BY PARTICIPANT OR BENE24 FICIARY.—A plan or issuer shall maintain pro25 cedures for expediting a prior authorization de-
101

S 1344 ES

1 termination under this subsection upon the re2 quest of a participant or beneficiary if, based on

3 such a request, the plan or issuer determines

4 that the normal time for making such a deter5 mination could seriously jeopardize the life or

6 health of the participant or beneficiary.

7 ‘‘(C) DOCUMENTATION BY HEALTH CARE

8 PROFESSIONAL.—A plan or issuer shall main9 tain procedures for expediting a prior author10 ization determination under this subsection if

11 the request involved indicates that the treating

12 health care professional has reasonably docu13 mented, based on the medical exigencies of the

14 case that a determination under the procedures

15 described in paragraph (2) could seriously jeop16 ardize the life or health of the participant or

17 beneficiary.

18 ‘‘(5) CONDUCT OF REVIEW.—A review of an ad19 verse coverage determination under this subsection

20 shall be conducted by an individual with appropriate

21 expertise who was not directly involved in the initial

22 determination.

23 ‘‘(6) LACK OF MEDICAL NECESSITY.—A review

24 of an appeal under this subsection relating to a de25 termination to deny coverage based on a lack of
102

S 1344 ES

1 medical necessity and appropriateness, or based on

2 an experimental or investigational treatment, shall

3 be made only by a physician with appropriate exper4 tise, including age-appropriate expertise, who was

5 not involved in the initial determination.

6 ‘‘(7) NOTICE.—

7 ‘‘(A) IN GENERAL.—Written notice of a

8 determination made under an internal review

9 process shall be issued to the participant or

10 beneficiary (or the authorized representative of

11 the participant or beneficiary) and the treating

12 health care professional not later than 2 work13 ing days after the completion of the review (or

14 within the 72-hour period referred to in para15 graph (4) if applicable).

16 ‘‘(B) ADVERSE COVERAGE DETERMINA17 TIONS.—With respect to an adverse coverage

18 determination made under this subsection, the

19 notice described in subparagraph (A) shall

20 include—

21 ‘‘(i) the reasons for the determination

22 (including the clinical or scientific-evidence

23 based rationale used in making the deter24 mination) written in a manner to be under-
103

S 1344 ES

1 standable to the average participant or

2 beneficiary;

3 ‘‘(ii) the procedures for obtaining ad4 ditional information concerning the deter5 mination; and

6 ‘‘(iii) notification of the right to an

7 independent external review under sub8 section (e) and instructions on how to ini9 tiate such a review.

10 ‘‘(e) INDEPENDENT EXTERNAL REVIEW.—

11 ‘‘(1) ACCESS TO REVIEW.—

12 ‘‘(A) IN GENERAL.—A group health plan

13 or a health insurance issuer offering health in14 surance coverage in connection with a group

15 health plan shall have written procedures to

16 permit a participant or beneficiary (or the au17 thorized representative of the participant or

18 beneficiary) access to an independent external

19 review with respect to an adverse coverage de20 termination concerning a particular item or

21 service (including a circumstance treated as an

22 adverse coverage determination under subpara23 graph (B)) where—

24 ‘‘(i) the particular item or service

25 involved—
104

S 1344 ES

1 ‘‘(I)(aa) would be a covered ben2 efit, when medically necessary and ap3 propriate under the terms and condi4 tions of the plan, and the item or

5 service has been determined not to be

6 medically necessary and appropriate

7 under the internal appeals process re8 quired under subsection (d) or there

9 has been a failure to issue a coverage

10 determination as described in sub11 paragraph (B); and

12 ‘‘(bb)(AA) the amount of such

13 item or service involved exceeds a sig14 nificant financial threshold; or

15 ‘‘(BB) there is a significant risk

16 of placing the life or health of the

17 participant or beneficiary in jeopardy;

18 or

19 ‘‘(II) would be a covered benefit,

20 when not considered experimental or

21 investigational under the terms and

22 conditions of the plan, and the item or

23 service has been determined to be ex24 perimental or investigational under

25 the internal appeals process required
105

S 1344 ES

1 under subsection (d) or there has been

2 a failure to issue a coverage deter3 mination as described in subpara4 graph (B); and

5 ‘‘(ii) the participant or beneficiary has

6 completed the internal appeals process

7 under subsection (d) with respect to such

8 determination.

9 ‘‘(B) FAILURE TO ACT.—The failure of a

10 plan or issuer to issue a coverage determination

11 under subsection (d)(6) within the applicable

12 timeline established for such a determination

13 under such subsection shall be treated as an ad14 verse coverage determination for purposes of

15 proceeding to independent external review

16 under this subsection.

17 ‘‘(2) INITIATION OF THE INDEPENDENT EXTER18 NAL REVIEW PROCESS.—

19 ‘‘(A) FILING OF REQUEST.—A participant

20 or beneficiary (or the authorized representative

21 of the participant or beneficiary) who desires to

22 have an independent external review conducted

23 under this subsection shall file a written request

24 for such a review with the plan or issuer in25 volved not later than 30 working days after the
106

S 1344 ES

1 receipt of a final denial of a claim under sub2 section (d). Any such request shall include the

3 consent of the participant or beneficiary (or the

4 authorized representative of the participant or

5 beneficiary) for the release of medical informa6 tion and records to independent external review7 ers regarding the participant or beneficiary.

8 ‘‘(B) TIMEFRAME FOR SELECTION OF AP9 PEALS ENTITY.—Not later than 5 working days

10 after the receipt of a request under subpara11 graph (A), or earlier in accordance with the

12 medical exigencies of the case, the plan or

13 issuer involved shall—

14 ‘‘(i) select an external appeals entity

15 under paragraph (3)(A) that shall be re16 sponsible for designating an independent

17 external reviewer under paragraph (3)(B);

18 and

19 ‘‘(ii) provide notice of such selection

20 to the participant or beneficiary (which

21 shall include the name and address of the

22 entity).

23 ‘‘(C) PROVISION OF INFORMATION.—Not

24 later than 5 working days after the plan or

25 issuer provides the notice required under sub-
107

S 1344 ES

1 paragraph (B)(ii), or earlier in accordance with

2 the medical exigencies of the case, the plan,

3 issuer, participant, beneficiary or physician (of

4 the participant or beneficiary) involved shall

5 forward necessary information (including, only

6 in the case of a plan or issuer, medical records,

7 any relevant review criteria, the clinical ration8 ale consistent with the terms and conditions of

9 the contract between the plan or issuer and the

10 participant or beneficiary for the coverage de11 nial, and evidence of the coverage of the partici12 pant or beneficiary) to the qualified external

13 appeals entity designated under paragraph

14 (3)(A).

15 ‘‘(D) FOLLOW-UP WRITTEN NOTIFICA16 TION.—The plan or issuer involved shall send a

17 follow-up written notification, in a timely man18 ner, to the participant or beneficiary (or the au19 thorized representative of the participant or

20 beneficiary) and the plan administrator, indi21 cating that an independent external review has

22 been initiated.

23 ‘‘(3) CONDUCT OF INDEPENDENT EXTERNAL

24 REVIEW.—
108

S 1344 ES

1 ‘‘(A) DESIGNATION OF EXTERNAL AP2 PEALS ENTITY BY PLAN OR ISSUER.—

3 ‘‘(i) IN GENERAL.—A plan or issuer

4 that receives a request for an independent

5 external review under paragraph (2)(A)

6 shall designate a qualified entity described

7 in clause (ii), in a manner designed to en8 sure that the entity so designated will

9 make a decision in an unbiased manner, to

10 serve as the external appeals entity.

11 ‘‘(ii) QUALIFIED ENTITIES.—A quali12 fied entity shall be—

13 ‘‘(I) an independent external re14 view entity licensed or credentialed by

15 a State;

16 ‘‘(II) a State agency established

17 for the purpose of conducting inde18 pendent external reviews;

19 ‘‘(III) any entity under contract

20 with the Federal Government to pro21 vide independent external review serv22 ices;

23 ‘‘(IV) any entity accredited as an

24 independent external review entity by
109

S 1344 ES

1 an accrediting body recognized by the

2 Secretary for such purpose; or

3 ‘‘(V) any other entity meeting

4 criteria established by the Secretary

5 for purposes of this subparagraph.

6 ‘‘(B) DESIGNATION OF INDEPENDENT EX7 TERNAL REVIEWER BY EXTERNAL APPEALS EN8 TITY.—The external appeals entity designated

9 under subparagraph (A) shall, not later than 30

10 days after the date on which such entity is des11 ignated under subparagraph (A), or earlier in

12 accordance with the medical exigencies of the

13 case, designate one or more individuals to serve

14 as independent external reviewers with respect

15 to a request received under paragraph (2)(A).

16 Such reviewers shall be independent medical ex17 perts who shall—

18 ‘‘(i) be appropriately credentialed or

19 licensed in any State to deliver health care

20 services;

21 ‘‘(ii) not have any material, profes22 sional, familial, or financial affiliation with

23 the case under review, the participant or

24 beneficiary involved, the treating health

25 care professional, the institution where the
110

S 1344 ES

1 treatment would take place, or the manu2 facturer of any drug, device, procedure, or

3 other therapy proposed for the participant

4 or beneficiary whose treatment is under re5 view;

6 ‘‘(iii) have expertise (including age-ap7 propriate expertise) in the diagnosis or

8 treatment under review and be a physician

9 of the same specialty, when reasonably

10 available, as the physician treating the par11 ticipant or beneficiary or recommending or

12 prescribing the treatment in question;

13 ‘‘(iv) receive only reasonable and cus14 tomary compensation from the group

15 health plan or health insurance issuer in

16 connection with the independent external

17 review that is not contingent on the deci18 sion rendered by the reviewer; and

19 ‘‘(v) not be held liable for decisions re20 garding medical determinations (but may

21 be held liable for actions that are arbitrary

22 and capricious).

23 ‘‘(4) STANDARD OF REVIEW.—

24 ‘‘(A) IN GENERAL.—An independent exter25 nal reviewer shall—
111

S 1344 ES

1 ‘‘(i) make an independent determina2 tion based on the valid, relevant, scientific

3 and clinical evidence to determine the med4 ical necessity, appropriateness, experi5 mental or investigational nature of the pro6 posed treatment; and

7 ‘‘(ii) take into consideration appro8 priate and available information, including

9 any evidence-based decision making or clin10 ical practice guidelines used by the group

11 health plan or health insurance issuer;

12 timely evidence or information submitted

13 by the plan, issuer, patient or patient’s

14 physician; the patient’s medical record; ex15 pert consensus including both generally ac16 cepted medical practice and recognized

17 best practice; medical literature as defined

18 in section 556(5) of the Federal Food,

19 Drug, and Cosmetic Act; the following

20 standard reference compendia: The Amer21 ican Hospital Formulary Service-Drug In22 formation, the American Dental Associa23 tion Accepted Dental Therapeutics, and

24 the United States Pharmacopoeia-Drug In25 formation; and findings, studies, or re-
112

S 1344 ES

1 search conducted by or under the auspices

2 of Federal Government agencies and na3 tionally recognized Federal research insti4 tutes including the Agency for Healthcare

5 Research and Quality, National Institutes

6 of Health, National Academy of Sciences,

7 Health Care Financing Administration,

8 and any national board recognized by the

9 National Institutes of Health for the pur10 poses of evaluating the medical value of

11 health services.

12 ‘‘(B) NOTICE.—The plan or issuer involved

13 shall ensure that the participant or beneficiary

14 receives notice, within 30 days after the deter15 mination of the independent medical expert, re16 garding the actions of the plan or issuer with

17 respect to the determination of such expert

18 under the independent external review.

19 ‘‘(5) TIMEFRAME FOR REVIEW.—

20 ‘‘(A) IN GENERAL.—The independent ex21 ternal reviewer shall complete a review of an

22 adverse coverage determination in accordance

23 with the medical exigencies of the case.

24 ‘‘(B) EXPEDITED REVIEW.—Notwith25 standing subparagraph (A), a review described
113

S 1344 ES

1 in such subparagraph shall be completed not

2 later than 72 hours after the later of—

3 ‘‘(i) the date on which such reviewer

4 is designated; or

5 ‘‘(ii) the date on which all information

6 necessary to completing such review is re7 ceived;

8 if the completion of such review in a period of

9 time in excess of 72 hours would seriously jeop10 ardize the life or health of the participant or

11 beneficiary.

12 ‘‘(C) LIMITATION.—Notwithstanding sub13 paragraph (A), and except as provided in sub14 paragraph (B), a review described in subpara15 graph (A) shall be completed not later than 30

16 working days after the later of—

17 ‘‘(i) the date on which such reviewer

18 is designated; or

19 ‘‘(ii) the date on which all information

20 necessary to completing such review is re21 ceived.

22 ‘‘(6) BINDING DETERMINATION AND ACCESS TO

23 CARE.—

24 ‘‘(A) IN GENERAL.—The determination of

25 an independent external reviewer under this
114

S 1344 ES

1 subsection shall be binding upon the plan or

2 issuer if the provisions of this subsection or the

3 procedures implemented under such provisions

4 were complied with by the independent external

5 reviewer.

6 ‘‘(B) TIMETABLE FOR COMMENCEMENT OF

7 CARE.—Where an independent external reviewer

8 determines that the participant or beneficiary is

9 entitled to coverage of the items or services that

10 were the subject of the review, the reviewer

11 shall establish a timeframe, in accordance with

12 the medical exigencies of the case, during which

13 the plan or issuer shall comply with the decision

14 of the reviewer with respect to the coverage of

15 such items or services under the terms and con16 ditions of the plan.

17 ‘‘(C) FAILURE TO COMPLY.—If a plan or

18 issuer fails to comply with the timeframe estab19 lished under subparagraph (B) with respect to

20 a participant or beneficiary, where such failure

21 to comply is caused by the plan or issuer, the

22 participant or beneficiary may obtain the items

23 or services involved (in a manner consistent

24 with the determination of the independent ex25 ternal reviewer) from any provider regardless of
115

S 1344 ES

1 whether such provider is a participating pro2 vider under the plan or coverage.

3 ‘‘(D) REIMBURSEMENT.—

4 ‘‘(i) IN GENERAL.—Where a partici5 pant or beneficiary obtains items or serv6 ices in accordance with subparagraph (C),

7 the plan or issuer involved shall provide for

8 reimbursement of the costs of such items

9 of services. Such reimbursement shall be

10 made to the treating provider or to the

11 participant or beneficiary (in the case of a

12 participant or beneficiary who pays for the

13 costs of such items or services).

14 ‘‘(ii) AMOUNT.—The plan or issuer

15 shall fully reimburse a provider, partici16 pant or beneficiary under clause (i) for the

17 total costs of the items or services provided

18 (regardless of any plan limitations that

19 may apply to the coverage of such items of

20 services) so long as—

21 ‘‘(I) the items or services would

22 have been covered under the terms of

23 the plan or coverage if provided by the

24 plan or issuer; and
116

S 1344 ES

1 ‘‘(II) the items or services were

2 provided in a manner consistent with

3 the determination of the independent

4 external reviewer.

5 ‘‘(E) FAILURE TO REIMBURSE.—Where a

6 plan or issuer fails to provide reimbursement to

7 a provider, participant or beneficiary in accord8 ance with this paragraph, the provider, partici9 pant or beneficiary may commence a civil action

10 (or utilize other remedies available under law)

11 to recover only the amount of any such reim12 bursement that is unpaid and any necessary

13 legal costs or expenses (including attorneys’

14 fees) incurred in recovering such reimburse15 ment.

16 ‘‘(7) STUDY.—Not later than 2 years after the

17 date of enactment of this section, the General Ac18 counting Office shall conduct a study of a statis19 tically appropriate sample of completed independent

20 external reviews. Such study shall include an assess21 ment of the process involved during an independent

22 external review and the basis of decisionmaking by

23 the independent external reviewer. The results of

24 such study shall be submitted to the appropriate

25 committees of Congress.
117

S 1344 ES

1 ‘‘(8) EFFECT ON CERTAIN PROVISIONS.—Noth2 ing in this section shall be construed as affecting or

3 modifying section 514 of this Act with respect to a

4 group health plan.

5 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec6 tion shall be construed to prohibit a plan administrator

7 or plan fiduciary or health plan medical director from re8 questing an independent external review by an inde9 pendent external reviewer without first completing the in10 ternal review process.

11 ‘‘(g) DEFINITIONS.—In this section:

12 ‘‘(1) ADVERSE COVERAGE DETERMINATION.—

13 The term ‘adverse coverage determination’ means a

14 coverage determination under the plan which results

15 in a denial of coverage or reimbursement.

16 ‘‘(2) COVERAGE DETERMINATION.—The term

17 ‘coverage determination’ means with respect to items

18 and services for which coverage may be provided

19 under a health plan, a determination of whether or

20 not such items and services are covered or reimburs21 able under the coverage and terms of the contract.

22 ‘‘(3) GRIEVANCE.—The term ‘grievance’ means

23 any complaint made by a participant or beneficiary

24 that does not involve a coverage determination.
118

S 1344 ES

1 ‘‘(4) GROUP HEALTH PLAN.—The term ‘group

2 health plan’ shall have the meaning given such term

3 in section 733(a). In applying this paragraph, ex4 cepted benefits described in section 733(c) shall not

5 be treated as benefits consisting of medical care.

6 ‘‘(5) HEALTH INSURANCE COVERAGE.—The

7 term ‘health insurance coverage’ has the meaning

8 given such term in section 733(b)(1). In applying

9 this paragraph, excepted benefits described in sec10 tion 733(c) shall not be treated as benefits con11 sisting of medical care.

12 ‘‘(6) HEALTH INSURANCE ISSUER.—The term

13 ‘health insurance issuer’ has the meaning given such

14 term in section 733(b)(2).

15 ‘‘(7) PRIOR AUTHORIZATION DETERMINA16 TION.—The term ‘prior authorization determination’

17 means a coverage determination prior to the provi18 sion of the items and services as a condition of cov19 erage of the items and services under the coverage.

20 ‘‘(8) TREATING HEALTH CARE PROFES21 SIONAL.—The term ‘treating health care profes22 sional’ with respect to a group health plan, health

23 insurance issuer or provider sponsored organization

24 means a physician (medical doctor or doctor of oste25 opathy) or other health care practitioner who is act-
119

S 1344 ES

1 ing within the scope of his or her State licensure or

2 certification for the delivery of health care services

3 and who is primarily responsible for delivering those

4 services to the participant or beneficiary.

5 ‘‘(9) UTILIZATION REVIEW.—The term ‘utiliza6 tion review’ with respect to a group health plan or

7 health insurance coverage means a set of formal

8 techniques designed to monitor the use of, or evalu9 ate the clinical necessity, appropriateness, efficacy,

10 or efficiency of, health care services, procedures, or

11 settings. Techniques may include ambulatory review,

12 prospective review, second opinion, certification, con13 current review, case management, discharge plan14 ning or retrospective review.’’.

15 (b) ENFORCEMENT.—Section 502(c) of the Employee

16 Retirement Income Security Act of 1974 (29 U.S.C.

17 1132(c)) is amended by adding at the end the following:

18 ‘‘(8) The Secretary may assess a civil penalty against

19 any plan of up to $10,000 for the plan’s failure or refusal

20 to comply with any timeline applicable under section

21 503(e) or any determination under such section, except

22 that in any case in which treatment was not commenced

23 by the plan in accordance with the determination of an

24 independent external reviewer, the Secretary shall assess

25 a civil penalty of $10,000 against the plan and the plan
120

S 1344 ES

1 shall pay such penalty to the participant or beneficiary

2 involved.’’.

3 (c) CONFORMING AMENDMENT.—The table of con4 tents in section 1 of the Employee Retirement Income Se5 curity Act of 1974 is amended by striking the item relat6 ing to section 503 and inserting the following new item:

‘‘Sec. 503. Claims procedures, coverage determination, grievances and appeals.’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section shall apply with respect to plan years begin9 ning on or after 1 year after the date of enactment of

10 this Act. The Secretary shall issue all regulations nec11 essary to carry out the amendments made by this section

12 before the effective date thereof.

13 TITLE II—WOMEN’S HEALTH AND

14 CANCER RIGHTS

15 SEC. 201. WOMEN’S HEALTH AND CANCER RIGHTS.

16 (a) SHORT TITLE.—This section may be cited as the

17 ‘‘Women’s Health and Cancer Rights Act of 1999’’.

18 (b) FINDINGS.—Congress finds that—

19 (1) the offering and operation of health plans

20 affect commerce among the States;

21 (2) health care providers located in a State

22 serve patients who reside in the State and patients

23 who reside in other States; and

24 (3) in order to provide for uniform treatment of

25 health care providers and patients among the States,
121

S 1344 ES

1 it is necessary to cover health plans operating in 1

2 State as well as health plans operating among the

3 several States.

4 (c) AMENDMENTS TO ERISA.—

5 (1) IN GENERAL.—Subpart B of part 7 of sub6 title B of title I of the Employee Retirement Income

7 Security Act of 1974, as amended by section 111(a),

8 is further amended by adding at the end the fol9 lowing:

10 ‘‘SEC. 715. REQUIRED COVERAGE FOR MINIMUM HOSPITAL

11 STAY FOR MASTECTOMIES AND LYMPH NODE

12 DISSECTIONS FOR THE TREATMENT OF

13 BREAST CANCER AND COVERAGE FOR SEC14 ONDARY CONSULTATIONS.

15 ‘‘(a) INPATIENT CARE.—

16 ‘‘(1) IN GENERAL.—A group health plan, and a

17 health insurance issuer providing health insurance

18 coverage in connection with a group health plan,

19 that provides medical and surgical benefits shall en20 sure that inpatient coverage with respect to the

21 treatment of breast cancer is provided for a period

22 of time as is determined by the attending physician,

23 in consultation with the patient, to be medically nec24 essary and appropriate following—

25 ‘‘(A) a mastectomy;
122

S 1344 ES

1 ‘‘(B) a lumpectomy; or

2 ‘‘(C) a lymph node dissection for the treat3 ment of breast cancer.

4 ‘‘(2) EXCEPTION.—Nothing in this section shall

5 be construed as requiring the provision of inpatient

6 coverage if the attending physician and patient de7 termine that a shorter period of hospital stay is

8 medically appropriate.

9 ‘‘(b) PROHIBITION ON CERTAIN MODIFICATIONS.—

10 In implementing the requirements of this section, a group

11 health plan, and a health insurance issuer providing health

12 insurance coverage in connection with a group health plan,

13 may not modify the terms and conditions of coverage

14 based on the determination by a participant or beneficiary

15 to request less than the minimum coverage required under

16 subsection (a).

17 ‘‘(c) NOTICE.—A group health plan, and a health in18 surance issuer providing health insurance coverage in con19 nection with a group health plan shall provide notice to

20 each participant and beneficiary under such plan regard21 ing the coverage required by this section in accordance

22 with regulations promulgated by the Secretary. Such no23 tice shall be in writing and prominently positioned in any

24 literature or correspondence made available or distributed

25 by the plan or issuer and shall be transmitted—
123

S 1344 ES

1 ‘‘(1) in the next mailing made by the plan or

2 issuer to the participant or beneficiary;

3 ‘‘(2) as part of any yearly informational packet

4 sent to the participant or beneficiary; or

5 ‘‘(3) not later than January 1, 2000;

6 whichever is earlier.

7 ‘‘(d) SECONDARY CONSULTATIONS.—

8 ‘‘(1) IN GENERAL.—A group health plan, and a

9 health insurance issuer providing health insurance

10 coverage in connection with a group health plan,

11 that provides coverage with respect to medical and

12 surgical services provided in relation to the diagnosis

13 and treatment of cancer shall ensure that full cov14 erage is provided for secondary consultations by spe15 cialists in the appropriate medical fields (including

16 pathology, radiology, and oncology) to confirm or re17 fute such diagnosis. Such plan or issuer shall ensure

18 that full coverage is provided for such secondary

19 consultation whether such consultation is based on a

20 positive or negative initial diagnosis. In any case in

21 which the attending physician certifies in writing

22 that services necessary for such a secondary con23 sultation are not sufficiently available from special24 ists operating under the plan with respect to whose

25 services coverage is otherwise provided under such
124

S 1344 ES

1 plan or by such issuer, such plan or issuer shall en2 sure that coverage is provided with respect to the

3 services necessary for the secondary consultation

4 with any other specialist selected by the attending

5 physician for such purpose at no additional cost to

6 the individual beyond that which the individual

7 would have paid if the specialist was participating in

8 the network of the plan.

9 ‘‘(2) EXCEPTION.—Nothing in paragraph (1)

10 shall be construed as requiring the provision of sec11 ondary consultations where the patient determines

12 not to seek such a consultation.

13 ‘‘(e) PROHIBITION ON PENALTIES OR INCENTIVES.—

14 A group health plan, and a health insurance issuer pro15 viding health insurance coverage in connection with a

16 group health plan, may not—

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

18 reimbursement of a provider or specialist because

19 the provider or specialist provided care to a partici20 pant or beneficiary in accordance with this section;

21 ‘‘(2) provide financial or other incentives to a

22 physician or specialist to induce the physician or

23 specialist to keep the length of inpatient stays of pa24 tients following a mastectomy, lumpectomy, or a

25 lymph node dissection for the treatment of breast
125

S 1344 ES

1 cancer below certain limits or to limit referrals for

2 secondary consultations; or

3 ‘‘(3) provide financial or other incentives to a

4 physician or specialist to induce the physician or

5 specialist to refrain from referring a participant or

6 beneficiary for a secondary consultation that would

7 otherwise be covered by the plan or coverage in8 volved under subsection (d).’’.

9 (2) CLERICAL AMENDMENT.—The table of con10 tents in section 1 of the Employee Retirement In11 come Security Act of 1974 is amended by inserting

12 after the item relating to section 714 the following

13 new item:

‘‘Sec. 715. Required coverage for minimum hospital stay for mastectomies and

lymph node dissections for the treatment of breast cancer and

coverage for secondary consultations.’’.

14 (d) AMENDMENTS TO PHSA RELATING TO THE

15 GROUP MARKET.—Subpart 2 of part A of title XXVII of

16 the Public Health Service Act (42 U.S.C. 300gg-4 et seq.)

17 is amended by adding at the end the following new section:

18 ‘‘SEC. 2707. REQUIRED COVERAGE FOR MINIMUM HOSPITAL

19 STAY FOR MASTECTOMIES AND LYMPH NODE

20 DISSECTIONS FOR THE TREATMENT OF

21 BREAST CANCER AND COVERAGE FOR SEC22 ONDARY CONSULTATIONS.

23 ‘‘(a) INPATIENT CARE.—
126

S 1344 ES

1 ‘‘(1) IN GENERAL.—A group health plan, and a

2 health insurance issuer providing health insurance

3 coverage in connection with a group health plan,

4 that provides medical and surgical benefits shall en5 sure that inpatient coverage with respect to the

6 treatment of breast cancer is provided for a period

7 of time as is determined by the attending physician,

8 in consultation with the patient, to be medically nec9 essary and appropriate following—

10 ‘‘(A) a mastectomy;

11 ‘‘(B) a lumpectomy; or

12 ‘‘(C) a lymph node dissection for the treat13 ment of breast cancer.

14 ‘‘(2) EXCEPTION.—Nothing in this section shall

15 be construed as requiring the provision of inpatient

16 coverage if the attending physician and patient de17 termine that a shorter period of hospital stay is

18 medically appropriate.

19 ‘‘(b) PROHIBITION ON CERTAIN MODIFICATIONS.—

20 In implementing the requirements of this section, a group

21 health plan, and a health insurance issuer providing health

22 insurance coverage in connection with a group health plan,

23 may not modify the terms and conditions of coverage

24 based on the determination by a participant or beneficiary
127

S 1344 ES

1 to request less than the minimum coverage required under

2 subsection (a).

3 ‘‘(c) NOTICE.—A group health plan, and a health in4 surance issuer providing health insurance coverage in con5 nection with a group health plan shall provide notice to

6 each participant and beneficiary under such plan regard7 ing the coverage required by this section in accordance

8 with regulations promulgated by the Secretary. Such no9 tice shall be in writing and prominently positioned in any

10 literature or correspondence made available or distributed

11 by the plan or issuer and shall be transmitted—

12 ‘‘(1) in the next mailing made by the plan or

13 issuer to the participant or beneficiary;

14 ‘‘(2) as part of any yearly informational packet

15 sent to the participant or beneficiary; or

16 ‘‘(3) not later than January 1, 2000;

17 whichever is earlier.

18 ‘‘(d) SECONDARY CONSULTATIONS.—

19 ‘‘(1) IN GENERAL.—A group health plan, and a

20 health insurance issuer providing health insurance

21 coverage in connection with a group health plan that

22 provides coverage with respect to medical and sur23 gical services provided in relation to the diagnosis

24 and treatment of cancer shall ensure that full cov25 erage is provided for secondary consultations by spe-
128

S 1344 ES

1 cialists in the appropriate medical fields (including

2 pathology, radiology, and oncology) to confirm or re3 fute such diagnosis. Such plan or issuer shall ensure

4 that full coverage is provided for such secondary

5 consultation whether such consultation is based on a

6 positive or negative initial diagnosis. In any case in

7 which the attending physician certifies in writing

8 that services necessary for such a secondary con9 sultation are not sufficiently available from special10 ists operating under the plan with respect to whose

11 services coverage is otherwise provided under such

12 plan or by such issuer, such plan or issuer shall en13 sure that coverage is provided with respect to the

14 services necessary for the secondary consultation

15 with any other specialist selected by the attending

16 physician for such purpose at no additional cost to

17 the individual beyond that which the individual

18 would have paid if the specialist was participating in

19 the network of the plan.

20 ‘‘(2) EXCEPTION.—Nothing in paragraph (1)

21 shall be construed as requiring the provision of sec22 ondary consultations where the patient determines

23 not to seek such a consultation.

24 ‘‘(e) PROHIBITION ON PENALTIES OR INCENTIVES.—

25 A group health plan, and a health insurance issuer pro-
129

S 1344 ES

1 viding health insurance coverage in connection with a

2 group health plan, may not—

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

4 reimbursement of a provider or specialist because

5 the provider or specialist provided care to a partici6 pant or beneficiary in accordance with this section;

7 ‘‘(2) provide financial or other incentives to a

8 physician or specialist to induce the physician or

9 specialist to keep the length of inpatient stays of pa10 tients following a mastectomy, lumpectomy, or a

11 lymph node dissection for the treatment of breast

12 cancer below certain limits or to limit referrals for

13 secondary consultations; or

14 ‘‘(3) provide financial or other incentives to a

15 physician or specialist to induce the physician or

16 specialist to refrain from referring a participant or

17 beneficiary for a secondary consultation that would

18 otherwise be covered by the plan or coverage in19 volved under subsection (d).’’.

20 (e) AMENDMENTS TO PHSA RELATING TO THE IN21 DIVIDUAL MARKET.—The first subpart 3 of part B of title

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

23 300gg–51 et seq.) (relating to other requirements) (42

24 U.S.C. 300gg-51 et seq.) is amended—
130

S 1344 ES

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

2 and

3 (2) by adding at the end the following:

4 ‘‘SEC. 2753. REQUIRED COVERAGE FOR MINIMUM HOSPITAL

5 STAY FOR MASTECTOMIES AND LYMPH NODE

6 DISSECTIONS FOR THE TREATMENT OF

7 BREAST CANCER AND SECONDARY CON8 SULTATIONS.

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

10 insurance coverage offered by a health insurance issuer

11 in the individual market in the same manner as they apply

12 to health insurance coverage offered by a health insurance

13 issuer in connection with a group health plan in the small

14 or large group market.’’.

15 (f) AMENDMENTS TO THE IRC.—

16 (1) IN GENERAL.—Subchapter B of chapter

17 100 of the Internal Revenue Code of 1986, as

18 amended by section 111(b), is further amended by

19 inserting after section 9813 the following:

20 ‘‘SEC. 9814. REQUIRED COVERAGE FOR MINIMUM HOSPITAL

21 STAY FOR MASTECTOMIES AND LYMPH NODE

22 DISSECTIONS FOR THE TREATMENT OF

23 BREAST CANCER AND COVERAGE FOR SEC24 ONDARY CONSULTATIONS.

25 ‘‘(a) INPATIENT CARE.—
131

S 1344 ES

1 ‘‘(1) IN GENERAL.—A group health plan that

2 provides medical and surgical benefits shall ensure

3 that inpatient coverage with respect to the treatment

4 of breast cancer is provided for a period of time as

5 is determined by the attending physician, in con6 sultation with the patient, to be medically necessary

7 and appropriate following—

8 ‘‘(A) a mastectomy;

9 ‘‘(B) a lumpectomy; or

10 ‘‘(C) a lymph node dissection for the treat11 ment of breast cancer.

12 ‘‘(2) EXCEPTION.—Nothing in this section shall

13 be construed as requiring the provision of inpatient

14 coverage if the attending physician and patient de15 termine that a shorter period of hospital stay is

16 medically appropriate.

17 ‘‘(b) PROHIBITION ON CERTAIN MODIFICATIONS.—

18 In implementing the requirements of this section, a group

19 health plan may not modify the terms and conditions of

20 coverage based on the determination by a participant or

21 beneficiary to request less than the minimum coverage re22 quired under subsection (a).

23 ‘‘(c) NOTICE.—A group health plan shall provide no24 tice to each participant and beneficiary under such plan

25 regarding the coverage required by this section in accord-
132

S 1344 ES

1 ance with regulations promulgated by the Secretary. Such

2 notice shall be in writing and prominently positioned in

3 any literature or correspondence made available or distrib4 uted by the plan and shall be transmitted—

5 ‘‘(1) in the next mailing made by the plan to

6 the participant or beneficiary;

7 ‘‘(2) as part of any yearly informational packet

8 sent to the participant or beneficiary; or

9 ‘‘(3) not later than January 1, 2000;

10 whichever is earlier.

11 ‘‘(d) SECONDARY CONSULTATIONS.—

12 ‘‘(1) IN GENERAL.—A group health plan that

13 provides coverage with respect to medical and sur14 gical services provided in relation to the diagnosis

15 and treatment of cancer shall ensure that full cov16 erage is provided for secondary consultations by spe17 cialists in the appropriate medical fields (including

18 pathology, radiology, and oncology) to confirm or re19 fute such diagnosis. Such plan or issuer shall ensure

20 that full coverage is provided for such secondary

21 consultation whether such consultation is based on a

22 positive or negative initial diagnosis. In any case in

23 which the attending physician certifies in writing

24 that services necessary for such a secondary con25 sultation are not sufficiently available from special-
133

S 1344 ES

1 ists operating under the plan with respect to whose

2 services coverage is otherwise provided under such

3 plan or by such issuer, such plan or issuer shall en4 sure that coverage is provided with respect to the

5 services necessary for the secondary consultation

6 with any other specialist selected by the attending

7 physician for such purpose at no additional cost to

8 the individual beyond that which the individual

9 would have paid if the specialist was participating in

10 the network of the plan.

11 ‘‘(2) EXCEPTION.—Nothing in paragraph (1)

12 shall be construed as requiring the provision of sec13 ondary consultations where the patient determines

14 not to seek such a consultation.

15 ‘‘(e) PROHIBITION ON PENALTIES.—A group health

16 plan may not—

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

18 reimbursement of a provider or specialist because

19 the provider or specialist provided care to a partici20 pant or beneficiary in accordance with this section;

21 ‘‘(2) provide financial or other incentives to a

22 physician or specialist to induce the physician or

23 specialist to keep the length of inpatient stays of pa24 tients following a mastectomy, lumpectomy, or a

25 lymph node dissection for the treatment of breast
134

S 1344 ES

1 cancer below certain limits or to limit referrals for

2 secondary consultations; or

3 ‘‘(3) provide financial or other incentives to a

4 physician or specialist to induce the physician or

5 specialist to refrain from referring a participant or

6 beneficiary for a secondary consultation that would

7 otherwise be covered by the plan involved under sub8 section (d).’’.

9 (2) CLERICAL AMENDMENT.—The table of con10 tents for chapter 100 of such Code is amended by

11 inserting after the item relating to section 9813 the

12 following new item:

‘‘Sec. 9814. Required coverage for minimum hospital stay for mastectomies and

lymph node dissections for the treatment of breast cancer and

coverage for secondary consultations.’’.

13 TITLE III—GENETIC

14 INFORMATION AND SERVICES

15 SEC. 301. SHORT TITLE.

16 This title may be cited as the ‘‘Genetic Information

17 Nondiscrimination in Health Insurance Act of 1999’’.

18 SEC. 302. AMENDMENTS TO EMPLOYEE RETIREMENT IN19 COME SECURITY ACT OF 1974.

20 (a) PROHIBITION OF HEALTH DISCRIMINATION ON

21 THE BASIS OF GENETIC INFORMATION OR GENETIC

22 SERVICES.—

23 (1) NO ENROLLMENT RESTRICTION FOR GE24 NETIC SERVICES.—Section 702(a)(1)(F) of the Em-
135

S 1344 ES

1 ployee Retirement Income Security Act of 1974 (29

2 U.S.C. 1182(a)(1)(F)) is amended by inserting be3 fore the period the following: ‘‘(including informa4 tion about a request for or receipt of genetic serv5 ices)’’.

6 (2) NO DISCRIMINATION IN GROUP PREMIUMS

7 BASED ON PREDICTIVE GENETIC INFORMATION.—

8 Subpart B of part 7 of subtitle B of title I of the

9 Employee Retirement Income Security Act of 1974,

10 as amended by sections 111(a) and 201, is further

11 amended by adding at the end the following:

12 ‘‘SEC. 716. PROHIBITING PREMIUM DISCRIMINATION

13 AGAINST GROUPS ON THE BASIS OF PRE14 DICTIVE GENETIC INFORMATION.

15 ‘‘A group health plan, or a health insurance issuer

16 offering group health insurance coverage in connection

17 with a group health plan, shall not adjust premium or con18 tribution amounts for a group on the basis of predictive

19 genetic information concerning any individual (including

20 a dependent) or family member of the individual (includ21 ing information about a request for or receipt of genetic

22 services).’’.

23 (3) CONFORMING AMENDMENTS.—

24 (A) IN GENERAL.—Section 702(b) of the

25 Employee Retirement Income Security Act of
136

S 1344 ES

1 1974 (29 U.S.C. 1182(b)) is amended by add2 ing at the end the following:

3 ‘‘(3) REFERENCE TO RELATED PROVISION.—

4 For a provision prohibiting the adjustment of pre5 mium or contribution amounts for a group under a

6 group health plan on the basis of predictive genetic

7 information (including information about a request

8 for or receipt of genetic services), see section 716.’’.

9 (B) TABLE OF CONTENTS.—The table of

10 contents in section 1 of the Employee Retire11 ment Income Security Act of 1974, as amended

12 by sections 111(a) and 201, is further amended

13 by inserting after the item relating to section

14 715 the following new item:

‘‘Sec. 716. Prohibiting premium discrimination against groups on the basis of

predictive genetic information.’’.

15 (b) LIMITATION ON COLLECTION OF PREDICTIVE

16 GENETIC INFORMATION.—Section 702 of the Employee

17 Retirement Income Security Act of 1974 (29 U.S.C. 1182)

18 is amended by adding at the end the following:

19 ‘‘(c) COLLECTION OF PREDICTIVE GENETIC INFOR20 MATION.—

21 ‘‘(1) LIMITATION ON REQUESTING OR REQUIR22 ING PREDICTIVE GENETIC INFORMATION.—Except

23 as provided in paragraph (2), a group health plan,

24 or a health insurance issuer offering health insur-
137

S 1344 ES

1 ance coverage in connection with a group health

2 plan, shall not request or require predictive genetic

3 information concerning any individual (including a

4 dependent) or family member of the individual (in5 cluding information about a request for or receipt of

6 genetic services).

7 ‘‘(2) INFORMATION NEEDED FOR DIAGNOSIS,

8 TREATMENT, OR PAYMENT.—

9 ‘‘(A) IN GENERAL.—Notwithstanding para10 graph (1), a group health plan, or a health in11 surance issuer offering health insurance cov12 erage in connection with a group health plan,

13 that provides health care items and services to

14 an individual or dependent may request (but

15 may not require) that such individual or de16 pendent disclose, or authorize the collection or

17 disclosure of, predictive genetic information for

18 purposes of diagnosis, treatment, or payment

19 relating to the provision of health care items

20 and services to such individual or dependent.

21 ‘‘(B) NOTICE OF CONFIDENTIALITY PRAC22 TICES AND DESCRIPTION OF SAFEGUARDS.—As

23 a part of a request under subparagraph (A),

24 the group health plan, or a health insurance

25 issuer offering health insurance coverage in
138

S 1344 ES

1 connection with a group health plan, shall pro2 vide to the individual or dependent a descrip3 tion of the procedures in place to safeguard the

4 confidentiality, as described in subsection (d),

5 of such predictive genetic information.

6 ‘‘(d) CONFIDENTIALITY WITH RESPECT TO PRE7 DICTIVE GENETIC INFORMATION.—

8 ‘‘(1) NOTICE OF CONFIDENTIALITY PRAC9 TICES.—

10 ‘‘(A) PREPARATION OF WRITTEN NO11 TICE.—A group health plan, or a health insur12 ance issuer offering health insurance coverage

13 in connection with a group health plan, shall

14 post or provide, in writing and in a clear and

15 conspicuous manner, notice of the plan or

16 issuer’s confidentiality practices, that shall

17 include—

18 ‘‘(i) a description of an individual’s

19 rights with respect to predictive genetic in20 formation;

21 ‘‘(ii) the procedures established by the

22 plan or issuer for the exercise of the indi23 vidual’s rights; and
139

S 1344 ES

1 ‘‘(iii) the right to obtain a copy of the

2 notice of the confidentiality practices re3 quired under this subsection.

4 ‘‘(B) MODEL NOTICE.—The Secretary, in

5 consultation with the National Committee on

6 Vital and Health Statistics and the National

7 Association of Insurance Commissioners, and

8 after notice and opportunity for public com9 ment, shall develop and disseminate model no10 tices of confidentiality practices. Use of the

11 model notice shall serve as a defense against

12 claims of receiving inappropriate notice.

13 ‘‘(2) ESTABLISHMENT OF SAFEGUARDS.—A

14 group health plan, or a health insurance issuer offer15 ing health insurance coverage in connection with a

16 group health plan, shall establish and maintain ap17 propriate administrative, technical, and physical

18 safeguards to protect the confidentiality, security,

19 accuracy, and integrity of predictive genetic informa20 tion created, received, obtained, maintained, used,

21 transmitted, or disposed of by such plan or issuer.’’.

22 (c) DEFINITIONS.—Section 733(d) of the Employee

23 Retirement Income Security Act of 1974 (29 U.S.C.

24 1191b(d)) is amended by adding at the end the following:
140

S 1344 ES

1 ‘‘(5) FAMILY MEMBER.—The term ‘family

2 member’ means with respect to an individual—

3 ‘‘(A) the spouse of the individual;

4 ‘‘(B) a dependent child of the individual,

5 including a child who is born to or placed for

6 adoption with the individual; and

7 ‘‘(C) all other individuals related by blood

8 to the individual or the spouse or child de9 scribed in subparagraph (A) or (B).

10 ‘‘(6) GENETIC INFORMATION.—The term ‘ge11 netic information’ means information about genes,

12 gene products, or inherited characteristics that may

13 derive from an individual or a family member (in14 cluding information about a request for or receipt of

15 genetic services).

16 ‘‘(7) GENETIC SERVICES.—The term ‘genetic

17 services’ means health services provided to obtain,

18 assess, or interpret genetic information for diag19 nostic and therapeutic purposes, and for genetic

20 education and counseling.

21 ‘‘(8) PREDICTIVE GENETIC INFORMATION.—

22 ‘‘(A) IN GENERAL.—The term ‘predictive

23 genetic information’ means, in the absence of

24 symptoms, clinical signs, or a diagnosis of the

25 condition related to such information—
141

S 1344 ES

1 ‘‘(i) information about an individual’s

2 genetic tests;

3 ‘‘(ii) information about genetic tests

4 of family members of the individual; or

5 ‘‘(iii) information about the occur6 rence of a disease or disorder in family

7 members.

8 ‘‘(B) EXCEPTIONS.—The term ‘predictive

9 genetic information’ shall not include—

10 ‘‘(i) information about the sex or age

11 of the individual;

12 ‘‘(ii) information derived from phys13 ical tests, such as the chemical, blood, or

14 urine analyses of the individual including

15 cholesterol tests; and

16 ‘‘(iii) information about physical

17 exams of the individual.

18 ‘‘(9) GENETIC TEST.—The term ‘genetic test’

19 means the analysis of human DNA, RNA, chro20 mosomes, proteins, and certain metabolites, includ21 ing analysis of genotypes, mutations, phenotypes, or

22 karyotypes, for the purpose of predicting risk of dis23 ease in asymptomatic or undiagnosed individuals.

24 Such term does not include physical tests, such as

25 the chemical, blood, or urine analyses of the indi-
142

S 1344 ES

1 vidual including cholesterol tests, and physical exams

2 of the individual, in order to detect symptoms, clin3 ical signs, or a diagnosis of disease.’’.

4 (d) EFFECTIVE DATE.—Except as provided in this

5 section, this section and the amendments made by this

6 section shall apply with respect to group health plans for

7 plan years beginning 1 year after the date of the enact8 ment of this Act.

9 SEC. 303. AMENDMENTS TO THE PUBLIC HEALTH SERVICE

10 ACT.

11 (a) AMENDMENTS RELATING TO THE GROUP MAR12 KET.—

13 (1) PROHIBITION OF HEALTH DISCRIMINATION

14 ON THE BASIS OF GENETIC INFORMATION IN THE

15 GROUP MARKET.—

16 (A) NO ENROLLMENT RESTRICTION FOR

17 GENETIC SERVICES.—Section 2702(a)(1)(F) of

18 the Public Health Service Act (42 U.S.C.

19 300gg–1(a)(1)(F)) is amended by inserting be20 fore the period the following: ‘‘(including infor21 mation about a request for or receipt of genetic

22 services)’’.

23 (B) NO DISCRIMINATION IN PREMIUMS

24 BASED ON PREDICTIVE GENETIC INFORMA25 TION.—Subpart 2 of part A of title XXVII of
143

S 1344 ES

1 the Public Health Service Act, as amended by

2 section 201, is further amended by adding at

3 the end the following new section:

4 ‘‘SEC. 2708. PROHIBITING PREMIUM DISCRIMINATION

5 AGAINST GROUPS ON THE BASIS OF PRE6 DICTIVE GENETIC INFORMATION IN THE

7 GROUP MARKET.

8 ‘‘A group health plan, or a health insurance issuer

9 offering group health insurance coverage in connection

10 with a group health plan shall not adjust premium or con11 tribution amounts for a group on the basis of predictive

12 genetic information concerning any individual (including

13 a dependent) or family member of the individual (includ14 ing information about a request for or receipt of genetic

15 services).’’.

16 (C) CONFORMING AMENDMENT.—Section

17 2702(b) of the Public Health Service Act (42

18 U.S.C. 300gg–1(b)) is amended by adding at

19 the end the following:

20 ‘‘(3) REFERENCE TO RELATED PROVISION.—

21 For a provision prohibiting the adjustment of pre22 mium or contribution amounts for a group under a

23 group health plan on the basis of predictive genetic

24 information (including information about a request

25 for or receipt of genetic services), see section 2708.’’.
144

S 1344 ES

1 (D) LIMITATION ON COLLECTION AND DIS2 CLOSURE OF PREDICTIVE GENETIC INFORMA3 TION.—Section 2702 of the Public Health Serv4 ice Act (42 U.S.C. 300gg–1) is amended by

5 adding at the end the following:

6 ‘‘(c) COLLECTION OF PREDICTIVE GENETIC INFOR7 MATION.—

8 ‘‘(1) LIMITATION ON REQUESTING OR REQUIR9 ING PREDICTIVE GENETIC INFORMATION.—Except

10 as provided in paragraph (2), a group health plan,

11 or a health insurance issuer offering health insur12 ance coverage in connection with a group health

13 plan, shall not request or require predictive genetic

14 information concerning any individual (including a

15 dependent) or a family member of the individual (in16 cluding information about a request for or receipt of

17 genetic services).

18 ‘‘(2) INFORMATION NEEDED FOR DIAGNOSIS,

19 TREATMENT, OR PAYMENT.—

20 ‘‘(A) IN GENERAL.—Notwithstanding para21 graph (1), a group health plan, or a health in22 surance issuer offering health insurance cov23 erage in connection with a group health plan,

24 that provides health care items and services to

25 an individual or dependent may request (but
145

S 1344 ES

1 may not require) that such individual or de2 pendent disclose, or authorize the collection or

3 disclosure of, predictive genetic information for

4 purposes of diagnosis, treatment, or payment

5 relating to the provision of health care items

6 and services to such individual or dependent.

7 ‘‘(B) NOTICE OF CONFIDENTIALITY PRAC8 TICES AND DESCRIPTION OF SAFEGUARDS.—As

9 a part of a request under subparagraph (A),

10 the group health plan, or a health insurance

11 issuer offering health insurance coverage in

12 connection with a group health plan, shall pro13 vide to the individual or dependent a descrip14 tion of the procedures in place to safeguard the

15 confidentiality, as described in subsection (d),

16 of such predictive genetic information.

17 ‘‘(d) CONFIDENTIALITY WITH RESPECT TO PRE18 DICTIVE GENETIC INFORMATION.—

19 ‘‘(1) NOTICE OF CONFIDENTIALITY PRAC20 TICES.—

21 ‘‘(A) PREPARATION OF WRITTEN NO22 TICE.—A group health plan, or a health insur23 ance issuer offering health insurance coverage

24 in connection with a group health plan, shall

25 post or provide, in writing and in a clear and
146

S 1344 ES

1 conspicuous manner, notice of the plan or

2 issuer’s confidentiality practices, that shall

3 include—

4 ‘‘(i) a description of an individual’s

5 rights with respect to predictive genetic in6 formation;

7 ‘‘(ii) the procedures established by the

8 plan or issuer for the exercise of the indi9 vidual’s rights; and

10 ‘‘(iii) the right to obtain a copy of the

11 notice of the confidentiality practices re12 quired under this subsection.

13 ‘‘(B) MODEL NOTICE.—The Secretary, in

14 consultation with the National Committee on

15 Vital and Health Statistics and the National

16 Association of Insurance Commissioners, and

17 after notice and opportunity for public com18 ment, shall develop and disseminate model no19 tices of confidentiality practices. Use of the

20 model notice shall serve as a defense against

21 claims of receiving inappropriate notice.

22 ‘‘(2) ESTABLISHMENT OF SAFEGUARDS.—A

23 group health plan, or a health insurance issuer offer24 ing health insurance coverage in connection with a

25 group health plan, shall establish and maintain ap-
147

S 1344 ES

1 propriate administrative, technical, and physical

2 safeguards to protect the confidentiality, security,

3 accuracy, and integrity of predictive genetic informa4 tion created, received, obtained, maintained, used,

5 transmitted, or disposed of by such plan or issuer.’’.

6 (2) DEFINITIONS.—Section 2791(d) of the Pub7 lic Health Service Act (42 U.S.C. 300gg–91(d)) is

8 amended by adding at the end the following:

9 ‘‘(15) FAMILY MEMBER.—The term ‘family

10 member’ means, with respect to an individual—

11 ‘‘(A) the spouse of the individual;

12 ‘‘(B) a dependent child of the individual,

13 including a child who is born to or placed for

14 adoption with the individual; and

15 ‘‘(C) all other individuals related by blood

16 to the individual or the spouse or child de17 scribed in subparagraph (A) or (B).

18 ‘‘(16) GENETIC INFORMATION.—The term ‘ge19 netic information’ means information about genes,

20 gene products, or inherited characteristics that may

21 derive from an individual or a family member (in22 cluding information about a request for or receipt of

23 genetic services).

24 ‘‘(17) GENETIC SERVICES.—The term ‘genetic

25 services’ means health services provided to obtain,
148

S 1344 ES

1 assess, or interpret genetic information for diag2 nostic and therapeutic purposes, and for genetic

3 education and counseling.

4 ‘‘(18) PREDICTIVE GENETIC INFORMATION.—

5 ‘‘(A) IN GENERAL.—The term ‘predictive

6 genetic information’ means, in the absence of

7 symptoms, clinical signs, or a diagnosis of the

8 condition related to such information—

9 ‘‘(i) information about an individual’s

10 genetic tests;

11 ‘‘(ii) information about genetic tests

12 of family members of the individual; or

13 ‘‘(iii) information about the occur14 rence of a disease or disorder in family

15 members.

16 ‘‘(B) EXCEPTIONS.—The term ‘predictive

17 genetic information’ shall not include—

18 ‘‘(i) information about the sex or age

19 of the individual;

20 ‘‘(ii) information derived from phys21 ical tests, such as the chemical, blood, or

22 urine analyses of the individual including

23 cholesterol tests; and

24 ‘‘(iii) information about physical

25 exams of the individual.
149

S 1344 ES

1 ‘‘(19) GENETIC TEST.—The term ‘genetic test’

2 means the analysis of human DNA, RNA, chro3 mosomes, proteins, and certain metabolites, includ4 ing analysis of genotypes, mutations, phenotypes, or

5 karyotypes, for the purpose of predicting risk of dis6 ease in asymptomatic or undiagnosed individuals.

7 Such term does not include physical tests, such as

8 the chemical, blood, or urine analyses of the indi9 vidual including cholesterol tests, and physical exams

10 of the individual, in order to detect symptoms, clin11 ical signs, or a diagnosis of disease.’’.

12 (b) AMENDMENT RELATING TO THE INDIVIDUAL

13 MARKET.—Subpart 2 of part B of title XXVII of the Pub14 lic Health Service Act, as amended by section 201, is fur15 ther amended by adding at the end the following new sec16 tion:

17 ‘‘SEC. 2754. PROHIBITION OF HEALTH DISCRIMINATION ON

18 THE BASIS OF PREDICTIVE GENETIC INFOR19 MATION.

20 ‘‘(a) PROHIBITION ON PREDICTIVE GENETIC INFOR21 MATION AS A CONDITION OF ELIGIBILITY.—A health in22 surance issuer offering health insurance coverage in the

23 individual market may not use predictive genetic informa24 tion as a condition of eligibility of an individual to enroll
150

S 1344 ES

1 in individual health insurance coverage (including infor2 mation about a request for or receipt of genetic services).

3 ‘‘(b) PROHIBITION ON PREDICTIVE GENETIC INFOR4 MATION IN SETTING PREMIUM RATES.—A health insur5 ance issuer offering health insurance coverage in the indi6 vidual market shall not adjust premium rates for individ7 uals on the basis of predictive genetic information con8 cerning such an individual (including a dependent) or a

9 family member of the individual (including information

10 about a request for or receipt of genetic services).

11 ‘‘(c) COLLECTION OF PREDICTIVE GENETIC INFOR12 MATION.—

13 ‘‘(1) LIMITATION ON REQUESTING OR REQUIR14 ING PREDICTIVE GENETIC INFORMATION.—Except

15 as provided in paragraph (2), a health insurance

16 issuer offering health insurance coverage in the indi17 vidual market shall not request or require predictive

18 genetic information concerning any individual (in19 cluding a dependent) or a family member of the in20 dividual (including information about a request for

21 or receipt of genetic services).

22 ‘‘(2) INFORMATION NEEDED FOR DIAGNOSIS,

23 TREATMENT, OR PAYMENT.—

24 ‘‘(A) IN GENERAL.—Notwithstanding para25 graph (1), a health insurance issuer offering
151

S 1344 ES

1 health insurance coverage in the individual mar2 ket that provides health care items and services

3 to an individual or dependent may request (but

4 may not require) that such individual or de5 pendent disclose, or authorize the collection or

6 disclosure of, predictive genetic information for

7 purposes of diagnosis, treatment, or payment

8 relating to the provision of health care items

9 and services to such individual or dependent.

10 ‘‘(B) NOTICE OF CONFIDENTIALITY PRAC11 TICES AND DESCRIPTION OF SAFEGUARDS.—As

12 a part of a request under subparagraph (A),

13 the health insurance issuer offering health in14 surance coverage in the individual market shall

15 provide to the individual or dependent a de16 scription of the procedures in place to safe17 guard the confidentiality, as described in sub18 section (d), of such predictive genetic informa19 tion.

20 ‘‘(d) CONFIDENTIALITY WITH RESPECT TO PRE21 DICTIVE GENETIC INFORMATION.—

22 ‘‘(1) NOTICE OF CONFIDENTIALITY PRAC23 TICES.—

24 ‘‘(A) PREPARATION OF WRITTEN NO25 TICE.—A health insurance issuer offering
152

S 1344 ES

1 health insurance coverage in the individual mar2 ket shall post or provide, in writing and in a

3 clear and conspicuous manner, notice of the

4 issuer’s confidentiality practices, that shall

5 include—

6 ‘‘(i) a description of an individual’s

7 rights with respect to predictive genetic in8 formation;

9 ‘‘(ii) the procedures established by the

10 issuer for the exercise of the individual’s

11 rights; and

12 ‘‘(iii) the right to obtain a copy of the

13 notice of the confidentiality practices re14 quired under this subsection.

15 ‘‘(B) MODEL NOTICE.—The Secretary, in

16 consultation with the National Committee on

17 Vital and Health Statistics and the National

18 Association of Insurance Commissioners, and

19 after notice and opportunity for public com20 ment, shall develop and disseminate model no21 tices of confidentiality practices. Use of the

22 model notice shall serve as a defense against

23 claims of receiving inappropriate notice.

24 ‘‘(2) ESTABLISHMENT OF SAFEGUARDS.—A

25 health insurance issuer offering health insurance
153

S 1344 ES

1 coverage in the individual market shall establish and

2 maintain appropriate administrative, technical, and

3 physical safeguards to protect the confidentiality, se4 curity, accuracy, and integrity of predictive genetic

5 information created, received, obtained, maintained,

6 used, transmitted, or disposed of by such issuer.’’.

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

8 this section shall apply with respect to—

9 (1) group health plans, and health insurance

10 coverage offered in connection with group health

11 plans, for plan years beginning after 1 year after the

12 date of enactment of this Act; and

13 (2) health insurance coverage offered, sold,

14 issued, renewed, in effect, or operated in the indi15 vidual market after 1 year after the date of enact16 ment of this Act.

17 SEC. 304. AMENDMENTS TO THE INTERNAL REVENUE CODE

18 OF 1986.

19 (a) PROHIBITION OF HEALTH DISCRIMINATION ON

20 THE BASIS OF GENETIC INFORMATION OR GENETIC

21 SERVICES.—

22 (1) NO ENROLLMENT RESTRICTION FOR GE23 NETIC SERVICES.—Section 9802(a)(1)(F) of the In24 ternal Revenue Code of 1986 is amended by insert25 ing before the period the following: ‘‘(including in-
154

S 1344 ES

1 formation about a request for or receipt of genetic

2 services)’’.

3 (2) NO DISCRIMINATION IN GROUP PREMIUMS

4 BASED ON PREDICTIVE GENETIC INFORMATION.—

5 (A) IN GENERAL.—Subchapter B of chap6 ter 100 of the Internal Revenue Code of 1986,

7 as amended by sections 111(b) and 201, is fur8 ther amended by adding at the end the fol9 lowing:

10 ‘‘SEC. 9815. PROHIBITING PREMIUM DISCRIMINATION

11 AGAINST GROUPS ON THE BASIS OF PRE12 DICTIVE GENETIC INFORMATION.

13 ‘‘A group health plan shall not adjust premium or

14 contribution amounts for a group on the basis of predictive

15 genetic information concerning any individual (including

16 a dependent) or a family member of the individual (includ17 ing information about a request for or receipt of genetic

18 services).’’.

19 (B) CONFORMING AMENDMENT.—Section

20 9802(b) of the Internal Revenue Code of 1986

21 is amended by adding at the end the following:

22 ‘‘(3) REFERENCE TO RELATED PROVISION.—

23 For a provision prohibiting the adjustment of pre24 mium or contribution amounts for a group under a

25 group health plan on the basis of predictive genetic
155

S 1344 ES

1 information (including information about a request

2 for or the receipt of genetic services), see section

3 9815.’’.

4 (C) AMENDMENT TO TABLE OF SEC5 TIONS.—The table of sections for subchapter B

6 of chapter 100 of the Internal Revenue Code of

7 1986, as amended by sections 111(b) and 201,

8 is further amended by adding at the end the

9 following:

‘‘Sec. 9816. Prohibiting premium discrimination against groups on the basis of

predictive genetic information.’’.

10 (b) LIMITATION ON COLLECTION OF PREDICTIVE

11 GENETIC INFORMATION.—Section 9802 of the Internal

12 Revenue Code of 1986 is amended by adding at the end

13 the following:

14 ‘‘(d) COLLECTION OF PREDICTIVE GENETIC INFOR15 MATION.—

16 ‘‘(1) LIMITATION ON REQUESTING OR REQUIR17 ING PREDICTIVE GENETIC INFORMATION.—Except

18 as provided in paragraph (2), a group health plan

19 shall not request or require predictive genetic infor20 mation concerning any individual (including a de21 pendent) or a family member of the individual (in22 cluding information about a request for or receipt of

23 genetic services).
156

S 1344 ES

1 ‘‘(2) INFORMATION NEEDED FOR DIAGNOSIS,

2 TREATMENT, OR PAYMENT.—

3 ‘‘(A) IN GENERAL.—Notwithstanding para4 graph (1), a group health plan that provides

5 health care items and services to an individual

6 or dependent may request (but may not re7 quire) that such individual or dependent dis8 close, or authorize the collection or disclosure

9 of, predictive genetic information for purposes

10 of diagnosis, treatment, or payment relating to

11 the provision of health care items and services

12 to such individual or dependent.

13 ‘‘(B) NOTICE OF CONFIDENTIALITY PRAC14 TICES; DESCRIPTION OF SAFEGUARDS.—As a

15 part of a request under subparagraph (A), the

16 group health plan shall provide to the individual

17 or dependent a description of the procedures in

18 place to safeguard the confidentiality, as de19 scribed in subsection (e), of such predictive ge20 netic information.

21 ‘‘(e) CONFIDENTIALITY WITH RESPECT TO PRE22 DICTIVE GENETIC INFORMATION.—

23 ‘‘(1) NOTICE OF CONFIDENTIALITY PRAC24 TICES.—
157

S 1344 ES

1 ‘‘(A) PREPARATION OF WRITTEN NO2 TICE.—A group health plan shall post or pro3 vide, in writing and in a clear and conspicuous

4 manner, notice of the plan’s confidentiality

5 practices, that shall include—

6 ‘‘(i) a description of an individual’s

7 rights with respect to predictive genetic in8 formation;

9 ‘‘(ii) the procedures established by the

10 plan for the exercise of the individual’s

11 rights; and

12 ‘‘(iii) the right to obtain a copy of the

13 notice of the confidentiality practices re14 quired under this subsection.

15 ‘‘(B) MODEL NOTICE.—The Secretary, in

16 consultation with the National Committee on

17 Vital and Health Statistics and the National

18 Association of Insurance Commissioners, and

19 after notice and opportunity for public com20 ment, shall develop and disseminate model no21 tices of confidentiality practices. Use of the

22 model notice shall serve as a defense against

23 claims of receiving inappropriate notice.

24 ‘‘(2) ESTABLISHMENT OF SAFEGUARDS.—A

25 group health plan shall establish and maintain ap-
158

S 1344 ES

1 propriate administrative, technical, and physical

2 safeguards to protect the confidentiality, security,

3 accuracy, and integrity of predictive genetic informa4 tion created, received, obtained, maintained, used,

5 transmitted, or disposed of by such plan.’’.

6 (c) DEFINITIONS.—Section 9832(d) of the Internal

7 Revenue Code of 1986 is amended by adding at the end

8 the following:

9 ‘‘(6) FAMILY MEMBER.—The term ‘family

10 member’ means, with respect to an individual—

11 ‘‘(A) the spouse of the individual;

12 ‘‘(B) a dependent child of the individual,

13 including a child who is born to or placed for

14 adoption with the individual; and

15 ‘‘(C) all other individuals related by blood

16 to the individual or the spouse or child de17 scribed in subparagraph (A) or (B).

18 ‘‘(7) GENETIC INFORMATION.—The term ‘ge19 netic information’ means information about genes,

20 gene products, or inherited characteristics that may

21 derive from an individual or a family member (in22 cluding information about a request for or receipt of

23 genetic services).

24 ‘‘(8) GENETIC SERVICES.—The term ‘genetic

25 services’ means health services provided to obtain,
159

S 1344 ES

1 assess, or interpret genetic information for diag2 nostic and therapeutic purposes, and for genetic

3 education and counseling.

4 ‘‘(9) PREDICTIVE GENETIC INFORMATION.—

5 ‘‘(A) IN GENERAL.—The term ‘predictive

6 genetic information’ means, in the absence of

7 symptoms, clinical signs, or a diagnosis of the

8 condition related to such information—

9 ‘‘(i) information about an individual’s

10 genetic tests;

11 ‘‘(ii) information about genetic tests

12 of family members of the individual; or

13 ‘‘(iii) information about the occur14 rence of a disease or disorder in family

15 members.

16 ‘‘(B) EXCEPTIONS.—The term ‘predictive

17 genetic information’ shall not include—

18 ‘‘(i) information about the sex or age

19 of the individual;

20 ‘‘(ii) information derived from phys21 ical tests, such as the chemical, blood, or

22 urine analyses of the individual including

23 cholesterol tests; and

24 ‘‘(iii) information about physical

25 exams of the individual.
160

S 1344 ES

1 ‘‘(10) GENETIC TEST.—The term ‘genetic test’

2 means the analysis of human DNA, RNA, chro3 mosomes, proteins, and certain metabolites, includ4 ing analysis of genotypes, mutations, phenotypes, or

5 karyotypes, for the purpose of predicting risk of dis6 ease in asymptomatic or undiagnosed individuals.

7 Such term does not include physical tests, such as

8 the chemical, blood, or urine analyses of the indi9 vidual including cholesterol tests, and physical exams

10 of the individual, in order to detect symptoms, clin11 ical signs, or a diagnosis of disease.’’.

12 (d) EFFECTIVE DATE.—Except as provided in this

13 section, this section and the amendments made by this

14 section shall apply with respect to group health plans for

15 plan years beginning after 1 year after the date of the

16 enactment of this Act.

17 TITLE IV—HEALTHCARE

18 RESEARCH AND QUALITY

19 SEC. 401. SHORT TITLE.

20 This title may be cited as the ‘‘Healthcare Research

21 and Quality Act of 1999’’.

22 SEC. 402. AMENDMENT TO THE PUBLIC HEALTH SERVICE

23 ACT.

24 Title IX of the Public Health Service Act (42 U.S.C.

25 299 et seq.) is amended to read as follows:
161

S 1344 ES

1 ‘‘TITLE IX—AGENCY FOR

2 HEALTHCARE RESEARCH

3 AND QUALITY

4 ‘‘PART A—ESTABLISHMENT AND GENERAL

5 DUTIES

6 ‘‘SEC. 901. MISSION AND DUTIES.

7 ‘‘(a) IN GENERAL.—There is established within the

8 Public Health Service an agency to be known as the Agen9 cy for Healthcare Research and Quality. In carrying out

10 this subsection, the Secretary shall redesignate the Agency

11 for Health Care Policy and Research as the Agency for

12 Healthcare Research and Quality.

13 ‘‘(b) MISSION.—The purpose of the Agency is to en14 hance the quality, appropriateness, and effectiveness of

15 healthcare services, and access to such services, through

16 the establishment of a broad base of scientific research

17 and through the promotion of improvements in clinical

18 and health system practices, including the prevention of

19 diseases and other health conditions. The Agency shall

20 promote healthcare quality improvement by—

21 ‘‘(1) conducting and supporting research that

22 develops and presents scientific evidence regarding

23 all aspects of healthcare, including—

24 ‘‘(A) the development and assessment of

25 methods for enhancing patient participation in
162

S 1344 ES

1 their own care and for facilitating shared pa2 tient-physician decision-making;

3 ‘‘(B) the outcomes, effectiveness, and cost4 effectiveness of healthcare practices, including

5 preventive measures and long-term care;

6 ‘‘(C) existing and innovative technologies;

7 ‘‘(D) the costs and utilization of, and ac8 cess to healthcare;

9 ‘‘(E) the ways in which healthcare services

10 are organized, delivered, and financed and the

11 interaction and impact of these factors on the

12 quality of patient care;

13 ‘‘(F) methods for measuring quality and

14 strategies for improving quality; and

15 ‘‘(G) ways in which patients, consumers,

16 purchasers, and practitioners acquire new infor17 mation about best practices and health benefits,

18 the determinants and impact of their use of this

19 information;

20 ‘‘(2) synthesizing and disseminating available

21 scientific evidence for use by patients, consumers,

22 practitioners, providers, purchasers, policy makers,

23 and educators; and

24 ‘‘(3) advancing private and public efforts to im25 prove healthcare quality.
163

S 1344 ES

1 ‘‘(c) REQUIREMENTS WITH RESPECT TO RURAL

2 AREAS AND PRIORITY POPULATIONS.—In carrying out

3 subsection (b), the Director shall undertake and support

4 research, demonstration projects, and evaluations with re5 spect to the delivery of health services—

6 ‘‘(1) in rural areas (including frontier areas);

7 ‘‘(2) for low-income groups, and minority

8 groups;

9 ‘‘(3) for children;

10 ‘‘(4) for elderly; and

11 ‘‘(5) for people with special healthcare needs,

12 including disabilities, chronic care and end-of-life

13 healthcare.

14 ‘‘(d) APPOINTMENT OF DIRECTOR.—There shall be

15 at the head of the Agency an official to be known as the

16 Director for Healthcare Research and Quality. The Direc17 tor shall be appointed by the Secretary. The Secretary,

18 acting through the Director, shall carry out the authorities

19 and duties established in this title.

20 ‘‘SEC. 902. GENERAL AUTHORITIES.

21 ‘‘(a) IN GENERAL.—In carrying out section 901(b),

22 the Director shall support demonstration projects, conduct

23 and support research, evaluations, training, research net24 works, multi-disciplinary centers, technical assistance, and

25 the dissemination of information, on healthcare, and on
164

S 1344 ES

1 systems for the delivery of such care, including activities

2 with respect to—

3 ‘‘(1) the quality, effectiveness, efficiency, appro4 priateness and value of healthcare services;

5 ‘‘(2) quality measurement and improvement;

6 ‘‘(3) the outcomes, cost, cost-effectiveness, and

7 use of healthcare services and access to such serv8 ices;

9 ‘‘(4) clinical practice, including primary care

10 and practice-oriented research;

11 ‘‘(5) healthcare technologies, facilities, and

12 equipment;

13 ‘‘(6) healthcare costs, productivity, organiza14 tion, and market forces;

15 ‘‘(7) health promotion and disease prevention,

16 including clinical preventive services;

17 ‘‘(8) health statistics, surveys, database devel18 opment, and epidemiology; and

19 ‘‘(9) medical liability.

20 ‘‘(b) HEALTH SERVICES TRAINING GRANTS.—

21 ‘‘(1) IN GENERAL.—The Director may provide

22 training grants in the field of health services re23 search related to activities authorized under sub24 section (a), to include pre- and post-doctoral fellow25 ships and training programs, young investigator
165

S 1344 ES

1 awards, and other programs and activities as appro2 priate. In carrying out this subsection, the Director

3 shall make use of funds made available under sec4 tion 487 as well as other appropriated funds.

5 ‘‘(2) REQUIREMENTS.—In developing priorities

6 for the allocation of training funds under this sub7 section, the Director shall take into consideration

8 shortages in the number of trained researchers ad9 dressing the priority populations.

10 ‘‘(c) MULTIDISCIPLINARY CENTERS.—The Director

11 may provide financial assistance to assist in meeting the

12 costs of planning and establishing new centers, and oper13 ating existing and new centers, for multidisciplinary

14 health services research, demonstration projects, evalua15 tions, training, and policy analysis with respect to the mat16 ters referred to in subsection (a).

17 ‘‘(d) RELATION TO CERTAIN AUTHORITIES REGARD18 ING SOCIAL SECURITY.—Activities authorized in this sec19 tion shall be appropriately coordinated with experiments,

20 demonstration projects, and other related activities au21 thorized by the Social Security Act and the Social Security

22 Amendments of 1967. Activities under subsection (a)(2)

23 of this section that affect the programs under titles XVIII,

24 XIX and XXI of the Social Security Act shall be carried

25 out consistent with section 1142 of such Act.
166

S 1344 ES

1 ‘‘(e) DISCLAIMER.—The Agency shall not mandate

2 national standards of clinical practice or quality

3 healthcare standards. Recommendations resulting from

4 projects funded and published by the Agency shall include

5 a corresponding disclaimer.

6 ‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec7 tion shall be construed to imply that the Agency’s role is

8 to mandate a national standard or specific approach to

9 quality measurement and reporting. In research and qual10 ity improvement activities, the Agency shall consider a

11 wide range of choices, providers, healthcare delivery sys12 tems, and individual preferences.

13 ‘‘PART B—HEALTHCARE IMPROVEMENT

14 RESEARCH

15 ‘‘SEC. 911. HEALTHCARE OUTCOME IMPROVEMENT RE16 SEARCH.

17 ‘‘(a) EVIDENCE RATING SYSTEMS.—In collaboration

18 with experts from the public and private sector, the Agen19 cy shall identify and disseminate methods or systems that

20 it uses to assess healthcare research results, particularly

21 methods or systems that it uses to rate the strength of

22 the scientific evidence behind healthcare practice, rec23 ommendations in the research literature, and technology

24 assessments. The Agency shall make methods and systems

25 for evidence rating widely available. Agency publications
167

S 1344 ES

1 containing healthcare recommendations shall indicate the

2 level of substantiating evidence using such methods or sys3 tems.

4 ‘‘(b) HEALTHCARE IMPROVEMENT RESEARCH CEN5 TERS AND PROVIDER-BASED RESEARCH NETWORKS.—In

6 order to address the full continuum of care and outcomes

7 research, to link research to practice improvement, and

8 to speed the dissemination of research findings to commu9 nity practice settings, the Agency shall employ research

10 strategies and mechanisms that will link research directly

11 with clinical practice in geographically diverse locations

12 throughout the United States, including—

13 ‘‘(1) Healthcare Improvement Research Centers

14 that combine demonstrated multidisciplinary exper15 tise in outcomes or quality improvement research

16 with linkages to relevant sites of care;

17 ‘‘(2) Provider-based Research Networks, includ18 ing plan, facility, or delivery system sites of care (es19 pecially primary care), that can evaluate and pro20 mote quality improvement; and

21 ‘‘(3) other innovative mechanisms or strategies

22 to link research with clinical practice.
168

S 1344 ES

1 ‘‘SEC. 912. PRIVATE-PUBLIC PARTNERSHIPS TO IMPROVE

2 ORGANIZATION AND DELIVERY.

3 ‘‘(a) SUPPORT FOR EFFORTS TO DEVELOP INFOR4 MATION ON QUALITY.—

5 ‘‘(1) SCIENTIFIC AND TECHNICAL SUPPORT.—

6 In its role as the principal agency for healthcare re7 search and quality, the Agency may provide sci8 entific and technical support for private and public

9 efforts to improve healthcare quality, including the

10 activities of accrediting organizations.

11 ‘‘(2) ROLE OF THE AGENCY.—With respect to

12 paragraph (1), the role of the Agency shall include—

13 ‘‘(A) the identification and assessment of

14 methods for the evaluation of the health of—

15 ‘‘(i) enrollees in health plans by type

16 of plan, provider, and provider arrange17 ments; and

18 ‘‘(ii) other populations, including

19 those receiving long-term care services;

20 ‘‘(B) the ongoing development, testing, and

21 dissemination of quality measures, including

22 measures of health and functional outcomes;

23 ‘‘(C) the compilation and dissemination of

24 healthcare quality measures developed in the

25 private and public sector;
169

S 1344 ES

1 ‘‘(D) assistance in the development of im2 proved healthcare information systems;

3 ‘‘(E) the development of survey tools for

4 the purpose of measuring participant and bene5 ficiary assessments of their healthcare; and

6 ‘‘(F) identifying and disseminating infor7 mation on mechanisms for the integration of in8 formation on quality into purchaser and con9 sumer decision-making processes.

10 ‘‘(b) CENTERS FOR EDUCATION AND RESEARCH ON

11 THERAPEUTICS.—

12 ‘‘(1) IN GENERAL.—The Secretary, acting

13 through the Director and in consultation with the

14 Commissioner of Food and Drugs, shall establish a

15 program for the purpose of making one or more

16 grants for the establishment and operation of one or

17 more centers to carry out the activities specified in

18 paragraph (2).

19 ‘‘(2) REQUIRED ACTIVITIES.—The activities re20 ferred to in this paragraph are the following:

21 ‘‘(A) The conduct of state-of-the-art clin22 ical, laboratory, or health services research for

23 the following purposes:

24 ‘‘(i) To increase awareness of—
170

S 1344 ES

1 ‘‘(I) new uses of drugs, biological

2 products, and devices;

3 ‘‘(II) ways to improve the effec4 tive use of drugs, biological products,

5 and devices; and

6 ‘‘(III) risks of new uses and risks

7 of combinations of drugs and biologi8 cal products.

9 ‘‘(ii) To provide objective clinical in10 formation to the following individuals and

11 entities:

12 ‘‘(I) Healthcare practitioners and

13 other providers of healthcare goods or

14 services.

15 ‘‘(II) Pharmacists, pharmacy

16 benefit managers and purchasers.

17 ‘‘(III) Health maintenance orga18 nizations and other managed

19 healthcare organizations.

20 ‘‘(IV) Healthcare insurers and

21 governmental agencies.

22 ‘‘(V) Patients and consumers.

23 ‘‘(iii) To improve the quality of

24 healthcare while reducing the cost of

25 Healthcare through—
171

S 1344 ES

1 ‘‘(I) an increase in the appro2 priate use of drugs, biological prod3 ucts, or devices; and

4 ‘‘(II) the prevention of adverse

5 effects of drugs, biological products,

6 and devices and the consequences of

7 such effects, such as unnecessary hos8 pitalizations.

9 ‘‘(B) The conduct of research on the com10 parative effectiveness, cost-effectiveness, and

11 safety of drugs, biological products, and devices.

12 ‘‘(C) Such other activities as the Secretary

13 determines to be appropriate, except that grant

14 funds may not be used by the Secretary in con15 ducting regulatory review of new drugs.

16 ‘‘(c) REDUCING ERRORS IN MEDICINE.—The Direc17 tor shall conduct and support research and build private18 public partnerships to—

19 ‘‘(1) identify the causes of preventable

20 healthcare errors and patient injury in healthcare

21 delivery;

22 ‘‘(2) develop, demonstrate, and evaluate strate23 gies for reducing errors and improving patient safe24 ty; and
172

S 1344 ES

1 ‘‘(3) promote the implementation of effective

2 strategies throughout the healthcare industry.

3 ‘‘SEC. 913. INFORMATION ON QUALITY AND COST OF CARE.

4 ‘‘(a) IN GENERAL.—In carrying out 902(a), the Di5 rector shall—

6 ‘‘(1) conduct a survey to collect data on a na7 tionally representative sample of the population on

8 the cost, use and, for fiscal year 2001 and subse9 quent fiscal years, quality of healthcare, including

10 the types of healthcare services Americans use, their

11 access to healthcare services, frequency of use, how

12 much is paid for the services used, the source of

13 those payments, the types and costs of private

14 health insurance, access, satisfaction, and quality of

15 care for the general population including rural resi16 dents and for the populations identified in section

17 901(c); and

18 ‘‘(2) develop databases and tools that provide

19 information to States on the quality, access, and use

20 of healthcare services provided to their residents.

21 ‘‘(b) QUALITY AND OUTCOMES INFORMATION.—

22 ‘‘(1) IN GENERAL.—Beginning in fiscal year

23 2001, the Director shall ensure that the survey con24 ducted under subsection (a)(1) will—
173

S 1344 ES

1 ‘‘(A) identify determinants of health out2 comes and functional status, and their relation3 ships to healthcare access and use, determine

4 the ways and extent to which the priority popu5 lations enumerated in section 901(c) differ from

6 the general population with respect to such

7 variables, measure changes over time with re8 spect to such variable, and monitor the overall

9 national impact of changes in Federal and

10 State policy on healthcare;

11 ‘‘(B) provide information on the quality of

12 care and patient outcomes for frequently occur13 ring clinical conditions for a nationally rep14 resentative sample of the population including

15 rural residents; and

16 ‘‘(C) provide reliable national estimates for

17 children and persons with special healthcare

18 needs through the use of supplements or peri19 odic expansions of the survey.

20 In expanding the Medical Expenditure Panel Survey,

21 as in existence on the date of enactment of this title,

22 in fiscal year 2001 to collect information on the

23 quality of care, the Director shall take into account

24 any outcomes measurements generally collected by

25 private sector accreditation organizations.
174

S 1344 ES

1 ‘‘(2) ANNUAL REPORT.—Beginning in fiscal

2 year 2003, the Secretary, acting through the Direc3 tor, shall submit to Congress an annual report on

4 national trends in the quality of healthcare provided

5 to the American people.

6 ‘‘SEC. 914. INFORMATION SYSTEMS FOR HEALTHCARE IM7 PROVEMENT.

8 ‘‘(a) IN GENERAL.—In order to foster a range of in9 novative approaches to the management and communica10 tion of health information, the Agency shall support re11 search, evaluations and initiatives to advance—

12 ‘‘(1) the use of information systems for the

13 study of healthcare quality, including the generation

14 of both individual provider and plan-level compara15 tive performance data;

16 ‘‘(2) training for healthcare practitioners and

17 researchers in the use of information systems;

18 ‘‘(3) the creation of effective linkages between

19 various sources of health information, including the

20 development of information networks;

21 ‘‘(4) the delivery and coordination of evidence22 based healthcare services, including the use of real23 time healthcare decision-support programs;

24 ‘‘(5) the utility and comparability of health in25 formation data and medical vocabularies by address-
175

S 1344 ES

1 ing issues related to the content, structure, defini2 tions and coding of such information and data in

3 consultation with appropriate Federal, State and

4 private entities;

5 ‘‘(6) the use of computer-based health records

6 in all settings for the development of personal health

7 records for individual health assessment and mainte8 nance, and for monitoring public health and out9 comes of care within populations; and

10 ‘‘(7) the protection of individually identifiable

11 information in health services research and

12 healthcare quality improvement.

13 ‘‘(b) DEMONSTRATION.—The Agency shall support

14 demonstrations into the use of new information tools

15 aimed at improving shared decision-making between pa16 tients and their care-givers.

17 ‘‘SEC. 915. RESEARCH SUPPORTING PRIMARY CARE AND

18 ACCESS IN UNDERSERVED AREAS.

19 ‘‘(a) PREVENTIVE SERVICES TASK FORCE.—

20 ‘‘(1) ESTABLISHMENT AND PURPOSE.—The Di21 rector may periodically convene a Preventive Serv22 ices Task Force to be composed of individuals with

23 appropriate expertise. Such a task force shall review

24 the scientific evidence related to the effectiveness,

25 appropriateness, and cost-effectiveness of clinical
176

S 1344 ES

1 preventive services for the purpose of developing rec2 ommendations for the healthcare community, and

3 updating previous clinical preventive recommenda4 tions.

5 ‘‘(2) ROLE OF AGENCY.—The Agency shall pro6 vide ongoing administrative, research, and technical

7 support for the operations of the Preventive Services

8 Task Force, including coordinating and supporting

9 the dissemination of the recommendations of the

10 Task Force.

11 ‘‘(3) OPERATION.—In carrying out its respon12 sibilities under paragraph (1), the Task Force is not

13 subject to the provisions of Appendix 2 of title 5,

14 United States Code.

15 ‘‘(b) PRIMARY CARE RESEARCH.—

16 ‘‘(1) IN GENERAL.—There is established within

17 the Agency a Center for Primary Care Research (re18 ferred to in this subsection as the ‘Center’) that

19 shall serve as the principal source of funding for pri20 mary care practice research in the Department of

21 Health and Human Services. For purposes of this

22 paragraph, primary care research focuses on the

23 first contact when illness or health concerns arise,

24 the diagnosis, treatment or referral to specialty care,

25 preventive care, and the relationship between the cli-
177

S 1344 ES

1 nician and the patient in the context of the family

2 and community.

3 ‘‘(2) RESEARCH.—In carrying out this section,

4 the Center shall conduct and support research

5 concerning—

6 ‘‘(A) the nature and characteristics of pri7 mary care practice;

8 ‘‘(B) the management of commonly occur9 ring clinical problems;

10 ‘‘(C) the management of undifferentiated

11 clinical problems; and

12 ‘‘(D) the continuity and coordination of

13 health services.

14 ‘‘SEC. 916. CLINICAL PRACTICE AND TECHNOLOGY INNOVA15 TION.

16 ‘‘(a) IN GENERAL.—The Director shall promote inno17 vation in evidence-based clinical practice and healthcare

18 technologies by—

19 ‘‘(1) conducting and supporting research on the

20 development, diffusion, and use of healthcare tech21 nology;

22 ‘‘(2) developing, evaluating, and disseminating

23 methodologies for assessments of healthcare prac24 tices and healthcare technologies;
178

S 1344 ES

1 ‘‘(3) conducting intramural and supporting ex2 tramural assessments of existing and new healthcare

3 practices and technologies;

4 ‘‘(4) promoting education, training, and pro5 viding technical assistance in the use of healthcare

6 practice and healthcare technology assessment meth7 odologies and results; and

8 ‘‘(5) working with the National Library of Med9 icine and the public and private sector to develop an

10 electronic clearinghouse of currently available assess11 ments and those in progress.

12 ‘‘(b) SPECIFICATION OF PROCESS.—

13 ‘‘(1) IN GENERAL.—Not later than December

14 31, 2000, the Director shall develop and publish a

15 description of the methodology used by the Agency

16 and its contractors in conducting practice and tech17 nology assessment.

18 ‘‘(2) CONSULTATIONS.—In carrying out this

19 subsection, the Director shall cooperate and consult

20 with the Assistant Secretary for Health, the Admin21 istrator of the Health Care Financing Administra22 tion, the Director of the National Institutes of

23 Health, the Commissioner of Food and Drugs, and

24 the heads of any other interested Federal depart25 ment or agency, and shall seek input, where appro-
179

S 1344 ES

1 priate, from professional societies and other private

2 and public entities.

3 ‘‘(3) METHODOLOGY.—The Director, in devel4 oping assessment methodology, shall consider—

5 ‘‘(A) safety, efficacy, and effectiveness;

6 ‘‘(B) legal, social, and ethical implications;

7 ‘‘(C) costs, benefits, and cost-effectiveness;

8 ‘‘(D) comparisons to alternate technologies

9 and practices; and

10 ‘‘(E) requirements of Food and Drug Ad11 ministration approval to avoid duplication.

12 ‘‘(c) SPECIFIC ASSESSMENTS.—

13 ‘‘(1) IN GENERAL.—The Director shall conduct

14 or support specific assessments of healthcare tech15 nologies and practices.

16 ‘‘(2) REQUESTS FOR ASSESSMENTS.—The Di17 rector is authorized to conduct or support assess18 ments, on a reimbursable basis, for the Health Care

19 Financing Administration, the Department of De20 fense, the Department of Veterans Affairs, the Of21 fice of Personnel Management, and other public or

22 private entities.

23 ‘‘(3) GRANTS AND CONTRACTS.—In addition to

24 conducting assessments, the Director may make

25 grants to, or enter into cooperative agreements or
180

S 1344 ES

1 contracts with, entities described in paragraph (4)

2 for the purpose of conducting assessments of experi3 mental, emerging, existing, or potentially outmoded

4 healthcare technologies, and for related activities.

5 ‘‘(4) ELIGIBLE ENTITIES.—An entity described

6 in this paragraph is an entity that is determined to

7 be appropriate by the Director, including academic

8 medical centers, research institutions and organiza9 tions, professional organizations, third party payers,

10 governmental agencies, and consortia of appropriate

11 research entities established for the purpose of con12 ducting technology assessments.

13 ‘‘SEC. 917. COORDINATION OF FEDERAL GOVERNMENT

14 QUALITY IMPROVEMENT EFFORTS.

15 ‘‘(a) REQUIREMENT.—

16 ‘‘(1) IN GENERAL.—To avoid duplication and

17 ensure that Federal resources are used efficiently

18 and effectively, the Secretary, acting through the Di19 rector, shall coordinate all research, evaluations, and

20 demonstrations related to health services research,

21 quality measurement and quality improvement ac22 tivities undertaken and supported by the Federal

23 Government.

24 ‘‘(2) SPECIFIC ACTIVITIES.—The Director, in

25 collaboration with the appropriate Federal officials
181

S 1344 ES

1 representing all concerned executive agencies and de2 partments, shall develop and manage a process to—

3 ‘‘(A) improve interagency coordination, pri4 ority setting, and the use and sharing of re5 search findings and data pertaining to Federal

6 quality improvement programs, technology as7 sessment, and health services research;

8 ‘‘(B) strengthen the research information

9 infrastructure, including databases, pertaining

10 to Federal health services research and

11 healthcare quality improvement initiatives;

12 ‘‘(C) set specific goals for participating

13 agencies and departments to further health

14 services research and healthcare quality im15 provement; and

16 ‘‘(D) strengthen the management of Fed17 eral healthcare quality improvement programs.

18 ‘‘(b) STUDY BY THE INSTITUTE OF MEDICINE.—

19 ‘‘(1) IN GENERAL.—To provide Congress, the

20 Department of Health and Human Services, and

21 other relevant departments with an independent, ex22 ternal review of their quality oversight, quality im23 provement and quality research programs, the Sec24 retary shall enter into a contract with the Institute

25 of Medicine—
182

S 1344 ES

1 ‘‘(A) to describe and evaluate current qual2 ity improvement, quality research and quality

3 monitoring processes through—

4 ‘‘(i) an overview of pertinent health

5 services research activities and quality im6 provement efforts conducted by all Federal

7 programs, with particular attention paid to

8 those under titles XVIII, XIX, and XXI of

9 the Social Security Act; and

10 ‘‘(ii) a summary of the partnerships

11 that the Department of Health and

12 Human Services has pursued with private

13 accreditation, quality measurement and

14 improvement organizations; and

15 ‘‘(B) to identify options and make rec16 ommendations to improve the efficiency and ef17 fectiveness of quality improvement programs

18 through—

19 ‘‘(i) the improved coordination of ac20 tivities across the medicare, medicaid and

21 child health insurance programs under ti22 tles XVIII, XIX and XXI of the Social Se23 curity Act and health services research

24 programs;
183

S 1344 ES

1 ‘‘(ii) the strengthening of patient

2 choice and participation by incorporating

3 state-of-the-art quality monitoring tools

4 and making information on quality avail5 able; and

6 ‘‘(iii) the enhancement of the most ef7 fective programs, consolidation as appro8 priate, and elimination of duplicative ac9 tivities within various federal agencies.

10 ‘‘(2) REQUIREMENTS.—

11 ‘‘(A) IN GENERAL.—The Secretary shall

12 enter into a contract with the Institute of Medi13 cine for the preparation—

14 ‘‘(i) not later than 12 months after

15 the date of enactment of this title, of a re16 port providing an overview of the quality

17 improvement programs of the Department

18 of Health and Human Services for the

19 medicare, medicaid, and CHIP programs

20 under titles XVIII, XIX, and XXI of the

21 Social Security Act; and

22 ‘‘(ii) not later than 24 months after

23 the date of enactment of this title, of a

24 final report containing recommendations.
184

S 1344 ES

1 ‘‘(B) REPORTS.—The Secretary shall sub2 mit the reports described in subparagraph (A)

3 to the Committee on Finance and the Com4 mittee on Health, Education, Labor, and Pen5 sions of the Senate and the Committee on Ways

6 and Means and the Committee on Commerce of

7 the House of Representatives.

8 ‘‘PART C—GENERAL PROVISIONS

9 ‘‘SEC. 921. ADVISORY COUNCIL FOR HEALTHCARE RE10 SEARCH AND QUALITY.

11 ‘‘(a) ESTABLISHMENT.—There is established an advi12 sory council to be known as the Advisory Council for

13 Healthcare Research and Quality.

14 ‘‘(b) DUTIES.—

15 ‘‘(1) IN GENERAL.—The Advisory Council shall

16 advise the Secretary and the Director with respect

17 to activities proposed or undertaken to carry out the

18 purpose of the Agency under section 901(b).

19 ‘‘(2) CERTAIN RECOMMENDATIONS.—Activities

20 of the Advisory Council under paragraph (1) shall

21 include making recommendations to the Director

22 regarding—

23 ‘‘(A) priorities regarding healthcare re24 search, especially studies related to quality, out-
185

S 1344 ES

1 comes, cost and the utilization of, and access

2 to, healthcare services;

3 ‘‘(B) the field of healthcare research and

4 related disciplines, especially issues related to

5 training needs, and dissemination of informa6 tion pertaining to healthcare quality; and

7 ‘‘(C) the appropriate role of the Agency in

8 each of these areas in light of private sector ac9 tivity and identification of opportunities for

10 public-private sector partnerships.

11 ‘‘(c) MEMBERSHIP.—

12 ‘‘(1) IN GENERAL.—The Advisory Council shall,

13 in accordance with this subsection, be composed of

14 appointed members and ex officio members. All

15 members of the Advisory Council shall be voting

16 members other than the individuals designated

17 under paragraph (3)(B) as ex officio members.

18 ‘‘(2) APPOINTED MEMBERS.—The Secretary

19 shall appoint to the Advisory Council 21 appro20 priately qualified individuals. At least 17 members of

21 the Advisory Council shall be representatives of the

22 public who are not officers or employees of the

23 United States. The Secretary shall ensure that the

24 appointed members of the Council, as a group, are

25 representative of professions and entities concerned
186

S 1344 ES

1 with, or affected by, activities under this title and

2 under section 1142 of the Social Security Act. Of

3 such members—

4 ‘‘(A) 4 shall be individuals distinguished in

5 the conduct of research, demonstration projects,

6 and evaluations with respect to healthcare;

7 ‘‘(B) 4 shall be individuals distinguished in

8 the practice of medicine of which at least 1

9 shall be a primary care practitioner;

10 ‘‘(C) 3 shall be individuals distinguished in

11 the other health professions;

12 ‘‘(D) 4 shall be individuals either rep13 resenting the private healthcare sector, includ14 ing health plans, providers, and purchasers or

15 individuals distinguished as administrators of

16 healthcare delivery systems;

17 ‘‘(E) 4 shall be individuals distinguished in

18 the fields of healthcare quality improvement, ec19 onomics, information systems, law, ethics, busi20 ness, or public policy, including at least 1 indi21 vidual specializing in rural aspects in 1 or more

22 of these fields; and

23 ‘‘(F) 2 shall be individuals representing the

24 interests of patients and consumers of

25 healthcare.
187

S 1344 ES

1 ‘‘(3) EX OFFICIO MEMBERS.—The Secretary

2 shall designate as ex officio members of the Advisory

3 Council—

4 ‘‘(A) the Assistant Secretary for Health,

5 the Director of the National Institutes of

6 Health, the Director of the Centers for Disease

7 Control and Prevention, the Administrator of

8 the Health Care Financing Administration, the

9 Assistant Secretary of Defense (Health Af10 fairs), and the Under Secretary for Health of

11 the Department of Veterans Affairs; and

12 ‘‘(B) such other Federal officials as the

13 Secretary may consider appropriate.

14 ‘‘(d) TERMS.—Members of the Advisory Council ap15 pointed under subsection (c)(2) shall serve for a term of

16 3 years. A member of the Council appointed under such

17 subsection may continue to serve after the expiration of

18 the term of the members until a successor is appointed.

19 ‘‘(e) VACANCIES.—If a member of the Advisory

20 Council appointed under subsection (c)(2) does not serve

21 the full term applicable under subsection (d), the indi22 vidual appointed to fill the resulting vacancy shall be ap23 pointed for the remainder of the term of the predecessor

24 of the individual.
188

S 1344 ES

1 ‘‘(f) CHAIR.—The Director shall, from among the

2 members of the Advisory Council appointed under sub3 section (c)(2), designate an individual to serve as the chair

4 of the Advisory Council.

5 ‘‘(g) MEETINGS.—The Advisory Council shall meet

6 not less than once during each discrete 4-month period

7 and shall otherwise meet at the call of the Director or the

8 chair.

9 ‘‘(h) COMPENSATION AND REIMBURSEMENT OF EX10 PENSES.—

11 ‘‘(1) APPOINTED MEMBERS.—Members of the

12 Advisory Council appointed under subsection (c)(2)

13 shall receive compensation for each day (including

14 travel time) engaged in carrying out the duties of

15 the Advisory Council unless declined by the member.

16 Such compensation may not be in an amount in ex17 cess of the daily equivalent of the annual rate of

18 basic pay prescribed for level IV of the Executive

19 Schedule under section 5315 of title 5, United

20 States Code, for each day during which such mem21 ber is engaged in the performance of the duties of

22 the Advisory Council.

23 ‘‘(2) EX OFFICIO MEMBERS.—Officials des24 ignated under subsection (c)(3) as ex officio mem25 bers of the Advisory Council may not receive com-
189

S 1344 ES

1 pensation for service on the Advisory Council in ad2 dition to the compensation otherwise received for du3 ties carried out as officers of the United States.

4 ‘‘(i) STAFF.—The Director shall provide to the Advi5 sory Council such staff, information, and other assistance

6 as may be necessary to carry out the duties of the Council.

7 ‘‘SEC. 922. PEER REVIEW WITH RESPECT TO GRANTS AND

8 CONTRACTS.

9 ‘‘(a) REQUIREMENT OF REVIEW.—

10 ‘‘(1) IN GENERAL.—Appropriate technical and

11 scientific peer review shall be conducted with respect

12 to each application for a grant, cooperative agree13 ment, or contract under this title.

14 ‘‘(2) REPORTS TO DIRECTOR.—Each peer re15 view group to which an application is submitted pur16 suant to paragraph (1) shall report its finding and

17 recommendations respecting the application to the

18 Director in such form and in such manner as the

19 Director shall require.

20 ‘‘(b) APPROVAL AS PRECONDITION OF AWARDS.—

21 The Director may not approve an application described in

22 subsection (a)(1) unless the application is recommended

23 for approval by a peer review group established under sub24 section (c).

25 ‘‘(c) ESTABLISHMENT OF PEER REVIEW GROUPS.—
190

S 1344 ES

1 ‘‘(1) IN GENERAL.—The Director shall establish

2 such technical and scientific peer review groups as

3 may be necessary to carry out this section. Such

4 groups shall be established without regard to the

5 provisions of title 5, United States Code, that govern

6 appointments in the competitive service, and without

7 regard to the provisions of chapter 51, and sub8 chapter III of chapter 53, of such title that relate

9 to classification and pay rates under the General

10 Schedule.

11 ‘‘(2) MEMBERSHIP.—The members of any peer

12 review group established under this section shall be

13 appointed from among individuals who by virtue of

14 their training or experience are eminently qualified

15 to carry out the duties of such peer review group.

16 Officers and employees of the United States may not

17 constitute more than 25 percent of the membership

18 of any such group. Such officers and employees may

19 not receive compensation for service on such groups

20 in addition to the compensation otherwise received

21 for these duties carried out as such officers and em22 ployees.

23 ‘‘(3) DURATION.—Notwithstanding section

24 14(a) of the Federal Advisory Committee Act, peer

25 review groups established under this section may
191

S 1344 ES

1 continue in existence until otherwise provided by

2 law.

3 ‘‘(4) QUALIFICATIONS.—Members of any peer4 review group shall, at a minimum, meet the fol5 lowing requirements:

6 ‘‘(A) Such members shall agree in writing

7 to treat information received, pursuant to their

8 work for the group, as confidential information,

9 except that this subparagraph shall not apply to

10 public records and public information.

11 ‘‘(B) Such members shall agree in writing

12 to recuse themselves from participation in the

13 peer-review of specific applications which

14 present a potential personal conflict of interest

15 or appearance of such conflict, including em16 ployment in a directly affected organization,

17 stock ownership, or any financial or other ar18 rangement that might introduce bias in the

19 process of peer-review.

20 ‘‘(d) AUTHORITY FOR PROCEDURAL ADJUSTMENTS

21 IN CERTAIN CASES.—In the case of applications for finan22 cial assistance whose direct costs will not exceed $100,000,

23 the Director may make appropriate adjustments in the

24 procedures otherwise established by the Director for the

25 conduct of peer review under this section. Such adjust-
192

S 1344 ES

1 ments may be made for the purpose of encouraging the

2 entry of individuals into the field of research, for the pur3 pose of encouraging clinical practice-oriented or provider4 based research, and for such other purposes as the Direc5 tor may determine to be appropriate.

6 ‘‘(e) REGULATIONS.—The Director shall issue regula7 tions for the conduct of peer review under this section.

8 ‘‘SEC. 923. CERTAIN PROVISIONS WITH RESPECT TO DEVEL9 OPMENT, COLLECTION, AND DISSEMINATION

10 OF DATA.

11 ‘‘(a) STANDARDS WITH RESPECT TO UTILITY OF

12 DATA.—

13 ‘‘(1) IN GENERAL.—To ensure the utility, accu14 racy, and sufficiency of data collected by or for the

15 Agency for the purpose described in section 901(b),

16 the Director shall establish standard methods for de17 veloping and collecting such data, taking into

18 consideration—

19 ‘‘(A) other Federal health data collection

20 standards; and

21 ‘‘(B) the differences between types of

22 healthcare plans, delivery systems, healthcare

23 providers, and provider arrangements.

24 ‘‘(2) RELATIONSHIP WITH OTHER DEPARTMENT

25 PROGRAMS.—In any case where standards under
193

S 1344 ES

1 paragraph (1) may affect the administration of other

2 programs carried out by the Department of Health

3 and Human Services, including the programs under

4 title XVIII, XIX or XXI of the Social Security Act,

5 or may affect health information that is subject to

6 a standard developed under part C of title XI of the

7 Social Security Act, they shall be in the form of rec8 ommendations to the Secretary for such program.

9 ‘‘(b) STATISTICS AND ANALYSES.—The Director

10 shall—

11 ‘‘(1) take appropriate action to ensure that sta12 tistics and analyses developed under this title are of

13 high quality, timely, and duly comprehensive, and

14 that the statistics are specific, standardized, and

15 adequately analyzed and indexed; and

16 ‘‘(2) publish, make available, and disseminate

17 such statistics and analyses on as wide a basis as is

18 practicable.

19 ‘‘(c) AUTHORITY REGARDING CERTAIN REQUESTS.—

20 Upon request of a public or private entity, the Director

21 may conduct or support research or analyses otherwise au22 thorized by this title pursuant to arrangements under

23 which such entity will pay the cost of the services provided.

24 Amounts received by the Director under such arrange-
194

S 1344 ES

1 ments shall be available to the Director for obligation until

2 expended.

3 ‘‘SEC. 924. DISSEMINATION OF INFORMATION.

4 ‘‘(a) IN GENERAL.—The Director shall—

5 ‘‘(1) without regard to section 501 of title 44,

6 United States Code, promptly publish, make avail7 able, and otherwise disseminate, in a form under8 standable and on as broad a basis as practicable so

9 as to maximize its use, the results of research, dem10 onstration projects, and evaluations conducted or

11 supported under this title;

12 ‘‘(2) ensure that information disseminated by

13 the Agency is science-based and objective and under14 takes consultation as necessary to assess the appro15 priateness and usefulness of the presentation of in16 formation that is targeted to specific audiences;

17 ‘‘(3) promptly make available to the public data

18 developed in such research, demonstration projects,

19 and evaluations;

20 ‘‘(4) provide, in collaboration with the National

21 Library of Medicine where appropriate, indexing, ab22 stracting, translating, publishing, and other services

23 leading to a more effective and timely dissemination

24 of information on research, demonstration projects,

25 and evaluations with respect to healthcare to public
195

S 1344 ES

1 and private entities and individuals engaged in the

2 improvement of healthcare delivery and the general

3 public, and undertake programs to develop new or

4 improved methods for making such information

5 available; and

6 ‘‘(5) as appropriate, provide technical assistance

7 to State and local government and health agencies

8 and conduct liaison activities to such agencies to fos9 ter dissemination.

10 ‘‘(b) PROHIBITION AGAINST RESTRICTIONS.—Except

11 as provided in subsection (c), the Director may not restrict

12 the publication or dissemination of data from, or the re13 sults of, projects conducted or supported under this title.

14 ‘‘(c) LIMITATION ON USE OF CERTAIN INFORMA15 TION.—No information, if an establishment or person sup16 plying the information or described in it is identifiable,

17 obtained in the course of activities undertaken or sup18 ported under this title may be used for any purpose other

19 than the purpose for which it was supplied unless such

20 establishment or person has consented (as determined

21 under regulations of the Director) to its use for such other

22 purpose. Such information may not be published or re23 leased in other form if the person who supplied the infor24 mation or who is described in it is identifiable unless such
196

S 1344 ES

1 person has consented (as determined under regulations of

2 the Director) to its publication or release in other form.

3 ‘‘(d) PENALTY.—Any person who violates subsection

4 (c) shall be subject to a civil monetary penalty of not more

5 than $10,000 for each such violation involved. Such pen6 alty shall be imposed and collected in the same manner

7 as civil money penalties under subsection (a) of section

8 1128A of the Social Security Act are imposed and col9 lected.

10 ‘‘SEC. 925. ADDITIONAL PROVISIONS WITH RESPECT TO

11 GRANTS AND CONTRACTS.

12 ‘‘(a) FINANCIAL CONFLICTS OF INTEREST.—With

13 respect to projects for which awards of grants, cooperative

14 agreements, or contracts are authorized to be made under

15 this title, the Director shall by regulation define—

16 ‘‘(1) the specific circumstances that constitute

17 financial interests in such projects that will, or may

18 be reasonably expected to, create a bias in favor of

19 obtaining results in the projects that are consistent

20 with such interests; and

21 ‘‘(2) the actions that will be taken by the Direc22 tor in response to any such interests identified by

23 the Director.

24 ‘‘(b) REQUIREMENT OF APPLICATION.—The Director

25 may not, with respect to any program under this title au-
197

S 1344 ES

1 thorizing the provision of grants, cooperative agreements,

2 or contracts, provide any such financial assistance unless

3 an application for the assistance is submitted to the Sec4 retary and the application is in such form, is made in such

5 manner, and contains such agreements, assurances, and

6 information as the Director determines to be necessary to

7 carry out the program in involved.

8 ‘‘(c) PROVISION OF SUPPLIES AND SERVICES IN

9 LIEU OF FUNDS.—

10 ‘‘(1) IN GENERAL.—Upon the request of an en11 tity receiving a grant, cooperative agreement, or con12 tract under this title, the Secretary may, subject to

13 paragraph (2), provide supplies, equipment, and

14 services for the purpose of aiding the entity in car15 rying out the project involved and, for such purpose,

16 may detail to the entity any officer or employee of

17 the Department of Health and Human Services.

18 ‘‘(2) CORRESPONDING REDUCTION IN FUNDS.—

19 With respect to a request described in paragraph

20 (1), the Secretary shall reduce the amount of the fi21 nancial assistance involved by an amount equal to

22 the costs of detailing personnel and the fair market

23 value of any supplies, equipment, or services pro24 vided by the Director. The Secretary shall, for the
198

S 1344 ES

1 payment of expenses incurred in complying with

2 such request, expend the amounts withheld.

3 ‘‘(d) APPLICABILITY OF CERTAIN PROVISIONS WITH

4 RESPECT TO CONTRACTS.—Contracts may be entered into

5 under this part without regard to sections 3648 and 3709

6 of the Revised Statutes (31 U.S.C. 529; 41 U.S.C. 5).

7 ‘‘SEC. 926. CERTAIN ADMINISTRATIVE AUTHORITIES.

8 ‘‘(a) DEPUTY DIRECTOR AND OTHER OFFICERS AND

9 EMPLOYEES.—

10 ‘‘(1) DEPUTY DIRECTOR.—The Director may

11 appoint a deputy director for the Agency.

12 ‘‘(2) OTHER OFFICERS AND EMPLOYEES.—The

13 Director may appoint and fix the compensation of

14 such officers and employees as may be necessary to

15 carry out this title. Except as otherwise provided by

16 law, such officers and employees shall be appointed

17 in accordance with the civil service laws and their

18 compensation fixed in accordance with title 5,

19 United States Code.

20 ‘‘(b) FACILITIES.—The Secretary, in carrying out

21 this title—

22 ‘‘(1) may acquire, without regard to the Act of

23 March 3, 1877 (40 U.S.C. 34), by lease or otherwise

24 through the Director of General Services, buildings

25 or portions of buildings in the District of Columbia
199

S 1344 ES

1 or communities located adjacent to the District of

2 Columbia for use for a period not to exceed 10

3 years; and

4 ‘‘(2) may acquire, construct, improve, repair,

5 operate, and maintain laboratory, research, and

6 other necessary facilities and equipment, and such

7 other real or personal property (including patents)

8 as the Secretary deems necessary.

9 ‘‘(c) PROVISION OF FINANCIAL ASSISTANCE.—The

10 Director, in carrying out this title, may make grants to

11 public and nonprofit entities and individuals, and may

12 enter into cooperative agreements or contracts with public

13 and private entities and individuals.

14 ‘‘(d) UTILIZATION OF CERTAIN PERSONNEL AND RE15 SOURCES.—

16 ‘‘(1) DEPARTMENT OF HEALTH AND HUMAN

17 SERVICES.—The Director, in carrying out this title,

18 may utilize personnel and equipment, facilities, and

19 other physical resources of the Department of

20 Health and Human Services, permit appropriate (as

21 determined by the Secretary) entities and individuals

22 to utilize the physical resources of such Department,

23 and provide technical assistance and advice.

24 ‘‘(2) OTHER AGENCIES.—The Director, in car25 rying out this title, may use, with their consent, the
200

S 1344 ES

1 services, equipment, personnel, information, and fa2 cilities of other Federal, State, or local public agen3 cies, or of any foreign government, with or without

4 reimbursement of such agencies.

5 ‘‘(e) CONSULTANTS.—The Secretary, in carrying out

6 this title, may secure, from time to time and for such peri7 ods as the Director deems advisable but in accordance

8 with section 3109 of title 5, United States Code, the as9 sistance and advice of consultants from the United States

10 or abroad.

11 ‘‘(f) EXPERTS.—

12 ‘‘(1) IN GENERAL.—The Secretary may, in car13 rying out this title, obtain the services of not more

14 than 50 experts or consultants who have appropriate

15 scientific or professional qualifications. Such experts

16 or consultants shall be obtained in accordance with

17 section 3109 of title 5, United States Code, except

18 that the limitation in such section on the duration

19 of service shall not apply.

20 ‘‘(2) TRAVEL EXPENSES.—

21 ‘‘(A) IN GENERAL.—Experts and consult22 ants whose services are obtained under para23 graph (1) shall be paid or reimbursed for their

24 expenses associated with traveling to and from

25 their assignment location in accordance with
201

S 1344 ES

1 sections 5724, 5724a(a), 5724a(c), and

2 5726(C) of title 5, United States Code.

3 ‘‘(B) LIMITATION.—Expenses specified in

4 subparagraph (A) may not be allowed in con5 nection with the assignment of an expert or

6 consultant whose services are obtained under

7 paragraph (1) unless and until the expert

8 agrees in writing to complete the entire period

9 of assignment, or 1 year, whichever is shorter,

10 unless separated or reassigned for reasons that

11 are beyond the control of the expert or consult12 ant and that are acceptable to the Secretary. If

13 the expert or consultant violates the agreement,

14 the money spent by the United States for the

15 expenses specified in subparagraph (A) is recov16 erable from the expert or consultant as a statu17 tory obligation owed to the United States. The

18 Secretary may waive in whole or in part a right

19 of recovery under this subparagraph.

20 ‘‘(g) VOLUNTARY AND UNCOMPENSATED SERV21 ICES.—The Director, in carrying out this title, may accept

22 voluntary and uncompensated services.

23 ‘‘SEC. 927. FUNDING.

24 ‘‘(a) INTENT.—To ensure that the United States’s in25 vestment in biomedical research is rapidly translated into
202

S 1344 ES

1 improvements in the quality of patient care, there must

2 be a corresponding investment in research on the most ef3 fective clinical and organizational strategies for use of

4 these findings in daily practice. The authorization levels

5 in subsection (b) provide for a proportionate increase in

6 healthcare research as the United States investment in

7 biomedical research increases.

8 ‘‘(b) AUTHORIZATION OF APPROPRIATIONS.—For the

9 purpose of carrying out this title, there are authorized to

10 be appropriated $250,000,000 for fiscal year 2000, and

11 such sums as may be necessary for each of the fiscal years

12 2001 through 2006.

13 ‘‘(c) EVALUATIONS.—In addition to amounts avail14 able pursuant to subsection (b) for carrying out this title,

15 there shall be made available for such purpose, from the

16 amounts made available pursuant to section 241 (relating

17 to evaluations), an amount equal to 40 percent of the max18 imum amount authorized in such section 241 to be made

19 available for a fiscal year.

20 ‘‘SEC. 928. DEFINITIONS.

21 ‘‘In this title:

22 ‘‘(1) ADVISORY COUNCIL.—The term ‘Advisory

23 Council’ means the Advisory Council on Healthcare

24 Research and Quality established under section 921.
203

S 1344 ES

1 ‘‘(2) AGENCY.—The term ‘Agency’ means the

2 Agency for Healthcare Research and Quality.

3 ‘‘(3) DIRECTOR.—The term ‘Director’ means

4 the Director for the Agency for Healthcare Research

5 and Quality.’’.

6 SEC. 403. REFERENCES.

7 Effective upon the date of enactment of this Act, any

8 reference in law to the ‘‘Agency for Health Care Policy

9 and Research’’ shall be deemed to be a reference to the

10 ‘‘Agency for Healthcare Research and Quality’’.

11 TITLE V—ENHANCED ACCESS TO

12 HEALTH INSURANCE COVERAGE

13 SEC. 501. FULL DEDUCTION OF HEALTH INSURANCE COSTS

14 FOR SELF-EMPLOYED INDIVIDUALS.

15 (a) IN GENERAL.—Section 162(l)(1) of the Internal

16 Revenue Code of 1986 (relating to allowance of deduc17 tions) is amended to read as follows:

18 ‘‘(1) ALLOWANCE OF DEDUCTION.—In the case

19 of an individual who is an employee within the

20 meaning of section 401(c)(1), there shall be allowed

21 as a deduction under this section an amount equal

22 to the amount paid during the taxable year for in23 surance which constitutes medical care for the tax24 payer, his spouse, and his dependents.’’.
204

S 1344 ES

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

2 this section shall apply to taxable years beginning after

3 December 31, 1999.

4 SEC. 502. FULL AVAILABILITY OF MEDICAL SAVINGS AC5 COUNTS.

6 (a) AVAILABILITY NOT LIMITED TO ACCOUNTS FOR

7 EMPLOYEES OF SMALL EMPLOYERS AND SELF-EM8 PLOYED INDIVIDUALS.—

9 (1) IN GENERAL.—Section 220(c)(1)(A) of the

10 Internal Revenue Code of 1986 (relating to eligible

11 individual) is amended to read as follows:

12 ‘‘(A) IN GENERAL.—The term ‘eligible in13 dividual’ means, with respect to any month, any

14 individual if—

15 ‘‘(i) such individual is covered under a

16 high deductible health plan as of the 1st

17 day of such month, and

18 ‘‘(ii) such individual is not, while cov19 ered under a high deductible health plan,

20 covered under any health plan—

21 ‘‘(I) which is not a high deduct22 ible health plan, and

23 ‘‘(II) which provides coverage for

24 any benefit which is covered under the

25 high deductible health plan.’’.
205

S 1344 ES

1 (2) CONFORMING AMENDMENTS.—

2 (A) Section 220(c)(1) of such Code is

3 amended by striking subparagraphs (C) and

4 (D).

5 (B) Section 220(c) of such Code is amend6 ed by striking paragraph (4) (defining small

7 employer) and by redesignating paragraph (5)

8 as paragraph (4).

9 (C) Section 220(b) of such Code is amend10 ed by striking paragraph (4) (relating to deduc11 tion limited by compensation) and by redesig12 nating paragraphs (5), (6), and (7) as para13 graphs (4), (5), and (6), respectively.

14 (b) REMOVAL OF LIMITATION ON NUMBER OF TAX15 PAYERS HAVING MEDICAL SAVINGS ACCOUNTS.—

16 (1) IN GENERAL.—Section 220 of the Internal

17 Revenue Code of 1986 (relating to medical savings

18 accounts) is amended by striking subsections (i) and

19 (j).

20 (2) MEDICARE+CHOICE.—Section 138 of such

21 Code (relating to Medicare+Choice MSA) is amend22 ed by striking subsection (f).

23 (c) REDUCTION IN HIGH DEDUCTIBLE PLAN MIN24 IMUM ANNUAL DEDUCTIBLE.—
206

S 1344 ES

1 (1) IN GENERAL.—Subparagraph (A) of section

2 220(c)(2) of such Code (defining high deductible

3 health plan) is amended—

4 (A) by striking ‘‘$1,500’’ and inserting

5 ‘‘$1,000’’, and

6 (B) by striking ‘‘$3,000’’ in clause (ii) and

7 inserting ‘‘$2,000’’.

8 (2) CONFORMING AMENDMENT.—Subsection (g)

9 of section 220 of such Code is amended—

10 (A) by striking ‘‘1998’’ and inserting

11 ‘‘1999’’; and

12 (B) by striking ‘‘1997’’ and inserting

13 ‘‘1998’’.

14 (d) INCREASE IN CONTRIBUTION LIMIT TO 100 PER15 CENT OF ANNUAL DEDUCTIBLE.—

16 (1) IN GENERAL.—Section 220(b)(2) of the In17 ternal Revenue Code of 1986 (relating to monthly

18 limitation) is amended to read as follows:

19 ‘‘(2) MONTHLY LIMITATION.—The monthly limitation for any month is the amount equal to 1 20 ⁄12 of

21 the annual deductible of the high deductible health

22 plan of the individual.’’.

23 (2) CONFORMING AMENDMENT.—Section

24 220(d)(1)(A) of such Code is amended by striking

25 ‘‘75 percent of’’.
207

S 1344 ES

1 (e) LIMITATION ON ADDITIONAL TAX ON DISTRIBU2 TIONS NOT USED FOR QUALIFIED MEDICAL EX3 PENSES.—Section 220(f)(4) of the Internal Revenue Code

4 of 1986 (relating to additional tax on distributions not

5 used for qualified medical expenses) is amended by adding

6 at the end the following:

7 ‘‘(D) EXCEPTION IN CASE OF SUFFICIENT

8 ACCOUNT BALANCE.—Subparagraph (A) shall

9 not apply to any payment or distribution in any

10 taxable year, but only to the extent such pay11 ment or distribution does not reduce the fair

12 market value of the assets of the medical sav13 ings account to an amount less than the annual

14 deductible for the high deductible health plan of

15 the account holder (determined as of January 1

16 of the calendar year in which the taxable year

17 begins).’’.

18 (f) TREATMENT OF NETWORK-BASED MANAGED

19 CARE PLANS.—Section 220(c)(2)(B) of the Internal Rev20 enue Code of 1986 (relating to special rules for high de21 ductible health plans) is amended by adding at the end

22 the following:

23 ‘‘(iii) TREATMENT OF NETWORK24 BASED MANAGED CARE PLANS.—A plan

25 that provides health care services through
208

S 1344 ES

1 a network of contracted or affiliated health

2 care providers, if the benefits provided

3 when services are obtained through net4 work providers meet the requirements of

5 subparagraph (A), shall not fail to be

6 treated as a high deductible health plan by

7 reason of providing benefits for services

8 rendered by providers who are not mem9 bers of the network, so long as the annual

10 deductible and annual limit on out-of-pock11 et expenses applicable to services received

12 from non-network providers are not lower

13 than those applicable to services received

14 from the network providers.’’.

15 (g) EFFECTIVE DATE.—The amendments made by

16 this section shall apply to taxable years beginning after

17 December 31, 1999.

18 SEC. 503. PERMITTING CONTRIBUTION TOWARDS MEDICAL

19 SAVINGS ACCOUNT THROUGH FEDERAL EM20 PLOYEES HEALTH BENEFITS PROGRAM

21 (FEHBP).

22 (a) AUTHORITY TO CONTRACT FOR CATASTROPHIC

23 PLANS.—Section 8902 of title 5, United States Code, is

24 amended by adding at the end the following:
209

S 1344 ES

1 ‘‘(p)(1) The Office shall contract under this chapter

2 for a catastrophic plan with any qualified carrier that—

3 ‘‘(A) offers such a plan; and

4 ‘‘(B) as of the date of enactment of the Pa5 tients’ Bill of Rights Plus Act, offers a health bene6 fits plan under this chapter.

7 ‘‘(2) The Office may contract under this chapter for

8 a catastrophic plan with any qualified carrier that—

9 ‘‘(A) offers such a plan; but

10 ‘‘(B) does not satisfy the requirement under

11 paragraph (1)(B).’’.

12 (b) GOVERNMENT CONTRIBUTION TO MEDICAL SAV13 INGS ACCOUNT.—

14 (1) IN GENERAL.—Section 8906 of title 5,

15 United States Code, is amended by adding at the

16 end the following:

17 ‘‘(j)(1) In the case of an employee or annuitant who

18 is enrolled in a catastrophic plan described by section

19 8903(5), there shall be a Government contribution under

20 this subsection to a medical savings account established

21 or maintained for the benefit of the individual. The con22 tribution under this subsection shall be in addition to the

23 Government contribution under subsection (b).
210

S 1344 ES

1 ‘‘(2) The amount of the Government contribution

2 under this subsection with respect to an individual is equal

3 to the amount by which—

4 ‘‘(A) the maximum contribution allowed under

5 subsection (b)(1) with respect to any employee or

6 annuitant, exceeds

7 ‘‘(B) the amount of the Government contribu8 tion actually made with respect to the individual

9 under subsection (b) for coverage under the cata10 strophic plan.

11 ‘‘(3) The Government contributions under this sub12 section shall be paid into a medical savings account (des13 ignated by the individual involved) in a manner that is

14 specified by the Office and consistent with the timing of

15 contributions under subsection (b).

16 ‘‘(4) Subsections (f) and (g) shall apply to contribu17 tions under this section in the same manner as they apply

18 to contributions under subsection (b).

19 ‘‘(5) For the purpose of this subsection, the term

20 ‘medical savings account’ has the meaning given such term

21 by section 220(d) of the Internal Revenue Code of 1986.’’.

22 (2) ALLOWING PAYMENT OF FULL AMOUNT OF

23 CHARGE FOR CATASTROPHIC PLAN.—Section

24 8906(b)(2) of such title is amended by inserting ‘‘(or

25 100 percent of the subscription charge in the case
211

S 1344 ES

1 of a catastrophic plan)’’ after ‘‘75 percent of the

2 subscription charge’’.

3 (c) OFFERING OF CATASTROPHIC PLANS.—

4 (1) IN GENERAL.—Section 8903 of title 5,

5 United States Code, is amended by adding at the

6 end the following:

7 ‘‘(5) CATASTROPHIC PLANS.—(A) One or more

8 plans described in paragraph (1), (2), or (3), but

9 which provide benefits of the types referred to by

10 paragraph (5) of section 8904(a), instead of the

11 types referred to in paragraphs (1), (2), and (3) of

12 such section.

13 ‘‘(B) Nothing in this section shall be

14 considered—

15 ‘‘(i) to prevent a carrier from simulta16 neously offering a plan described by subpara17 graph (A) and a plan described by paragraph

18 (1) or (2);

19 ‘‘(ii) to require that a catastrophic plan

20 offer two levels of benefits; or

21 ‘‘(iii) to allow, in any contract year, for—

22 ‘‘(I) more than one plan to be offered

23 which satisfies both subparagraph (A) and

24 paragraph (1) (subject to clause (ii)); and
212

S 1344 ES

1 ‘‘(II) more than one plan which satis2 fies both subparagraph (A) and paragraph

3 (2) (subject to clause (ii)).’’.

4 (2) TYPES OF BENEFITS.—Section 8904(a) of

5 such title is amended by inserting after paragraph

6 (4) the following new paragraph:

7 ‘‘(5) CATASTROPHIC PLANS.—Benefits of the

8 types named under paragraph (1) or (2) of this sub9 section or both, except that the plan shall meet the

10 annual deductible and annual out-of-pocket expenses

11 requirements under section 220(c)(2) of the Internal

12 Revenue Code of 1986.’’.

13 (3) DETERMINING LEVEL OF GOVERNMENT

14 CONTRIBUTIONS.—Section 8906(b) of such title is

15 amended by adding at the end the following: ‘‘Sub16 scription charges for medical savings accounts shall

17 be deemed to be the amount of Government con18 tributions made under subsection (j)(2).’’.

19 (d) CONFORMING AMENDMENTS.—

20 (1) ADDITIONAL HEALTH BENEFITS PLANS.—

21 Section 8903a of title 5, United States Code, is

22 amended by redesignating subsection (d) as sub23 section (e) and by inserting after subsection (c) the

24 following:
213

S 1344 ES

1 ‘‘(d) The plans under this section may include one

2 or more plans, otherwise allowable under this section, that

3 satisfy the requirements of clauses (i) and (ii) of section

4 8903(5)(A).’’.

5 (2) REFERENCE.—Section 8909(d) of title 5,

6 United States Code, is amended by striking

7 ‘‘8903a(d)’’ and inserting ‘‘8903a(e)’’.

8 (e) REFERENCES.—Section 8903 of title 5, United

9 States Code, is amended by adding at the end (as a flush

10 left sentence) the following:

11 ‘‘The Office shall prescribe regulations under which the

12 requirements of section 8902(c), 8902(n), 8909(e), and

13 any other provision of this chapter that applies with re14 spect to a plan described by paragraph (1), (2), (3), or

15 (4) of this section shall apply with respect to the cor16 responding plan under paragraph (5) of this section. Simi17 lar regulations shall be prescribed with respect to any plan

18 under section 8903a(d).’’.

19 (f) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to contract terms beginning on or

21 after January 1, 2000.
214

S 1344 ES

1 SEC. 504. CARRYOVER OF UNUSED BENEFITS FROM CAFE2 TERIA PLANS, FLEXIBLE SPENDING AR3 RANGEMENTS, AND HEALTH FLEXIBLE

4 SPENDING ACCOUNTS.

5 (a) IN GENERAL.—Section 125 of the Internal Rev6 enue Code of 1986 (relating to cafeteria plans) is amended

7 by redesignating subsections (h) and (i) as subsections (i)

8 and (j) and by inserting after subsection (g) the following

9 new subsection:

10 ‘‘(h) ALLOWANCE OF CARRYOVERS OF UNUSED BEN11 EFITS TO LATER TAXABLE YEARS.—

12 ‘‘(1) IN GENERAL.—For purposes of this title—

13 ‘‘(A) notwithstanding subsection (d)(2), a

14 plan or other arrangement shall not fail to be

15 treated as a cafeteria plan or flexible spending

16 or similar arrangement, and

17 ‘‘(B) no amount shall be required to be in18 cluded in gross income by reason of this section

19 or any other provision of this chapter,

20 solely because under such plan or other arrangement

21 any nontaxable benefit which is unused as of the

22 close of a taxable year may be carried forward to 1

23 or more succeeding taxable years.

24 ‘‘(2) LIMITATION.—Paragraph (1) shall not

25 apply to amounts carried from a plan to the extent

26 such amounts exceed $500 (applied on an annual
215

S 1344 ES

1 basis). For purposes of this paragraph, all plans and

2 arrangements maintained by an employer or any re3 lated person shall be treated as 1 plan.

4 ‘‘(3) ALLOWANCE OF ROLLOVER.—

5 ‘‘(A) IN GENERAL.—In the case of any un6 used benefit described in paragraph (1) which

7 consists of amounts in a health flexible spend8 ing account or dependent care flexible spending

9 account, the plan or arrangement shall provide

10 that a participant may elect, in lieu of such car11 ryover, to have such amounts distributed to the

12 participant.

13 ‘‘(B) AMOUNTS NOT INCLUDED IN IN14 COME.—Any distribution under subparagraph

15 (A) shall not be included in gross income to the

16 extent that such amount is transferred in a

17 trustee-to-trustee transfer, or is contributed

18 within 60 days of the date of the distribution,

19 to—

20 ‘‘(i) a qualified cash or deferred ar21 rangement described in section 401(k),

22 ‘‘(ii) a plan under which amounts are

23 contributed by an individual’s employer for

24 an annuity contract described in section

25 403(b),
216

S 1344 ES

1 ‘‘(iii) an eligible deferred compensa2 tion plan described in section 457, or

3 ‘‘(iv) a medical savings account (with4 in the meaning of section 220).

5 Any amount rolled over under this subpara6 graph shall be treated as a rollover contribution

7 for the taxable year from which the unused

8 amount would otherwise be carried.

9 ‘‘(C) TREATMENT OF ROLLOVER.—Any

10 amount rolled over under subparagraph (B)

11 shall be treated as an eligible rollover under

12 section 220, 401(k), 403(b), or 457, whichever

13 is applicable, and shall be taken into account in

14 applying any limitation (or participation re15 quirement) on employer or employee contribu16 tions under such section or any other provision

17 of this chapter for the taxable year of the roll18 over.

19 ‘‘(4) COST-OF-LIVING ADJUSTMENT.—In the

20 case of any taxable year beginning in a calendar

21 year after 1999, the $500 amount under paragraph

22 (2) shall be adjusted at the same time and in the

23 same manner as under section 415(d)(2), except

24 that the base period taken into account shall be the

25 calendar quarter beginning October 1, 1998, and
217

S 1344 ES

1 any increase which is not a multiple of $50 shall be

2 rounded to the next lowest multiple of $50.

3 ‘‘(5) APPLICABILITY.—This subsection shall

4 apply to taxable years beginning after December 31,

5 1999.’’.

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

7 this section shall apply to taxable years beginning after

8 December 31, 1999.

9 TITLE VI—PROVISIONS RELAT10 ING TO LONG-TERM CARE IN11 SURANCE

12 SEC. 601. INCLUSION OF QUALIFIED LONG-TERM CARE IN13 SURANCE CONTRACTS IN CAFETERIA PLANS,

14 FLEXIBLE SPENDING ARRANGEMENTS, AND

15 HEALTH FLEXIBLE SPENDING ACCOUNTS.

16 (a) IN GENERAL.—Section 125(f) of the Internal

17 Revenue Code of 1986 (defining qualified benefits) is

18 amended by striking the last sentence and inserting the

19 following: ‘‘Such term includes any qualified long-term

20 care insurance contract.’’.

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

22 this section shall apply to taxable years beginning after

23 December 31, 1999.
218

S 1344 ES

1 SEC. 602. DEDUCTION FOR PREMIUMS FOR LONG-TERM

2 CARE INSURANCE.

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to

5 additional itemized deductions) is amended by redesig6 nating section 222 as section 223 and by inserting after

7 section 221 the following:

8 ‘‘SEC. 222. PREMIUMS FOR LONG-TERM CARE INSURANCE.

9 ‘‘(a) IN GENERAL.—In the case of an eligible indi10 vidual, there shall be allowed as a deduction an amount

11 equal to 100 percent of the amount paid during the tax12 able year for any coverage for qualified long-term care

13 services (as defined in section 7702B(c)) or any qualified

14 long-term care insurance contract (as defined in section

15 7702B(b)) which constitutes medical care for the tax16 payer, his spouse, and dependents.

17 ‘‘(b) LIMITATIONS.—

18 ‘‘(1) DEDUCTION NOT AVAILABLE TO INDIVID19 UALS ELIGIBLE FOR EMPLOYER-SUBSIDIZED COV20 ERAGE.—

21 ‘‘(A) IN GENERAL.—Except as provided in

22 subparagraph (B), subsection (a) shall not

23 apply to any taxpayer for any calendar month

24 for which the taxpayer is eligible to participate

25 in any plan which includes coverage for quali26 fied long-term care services (as so defined) or
219

S 1344 ES

1 is a qualified long-term care insurance contract

2 (as so defined) maintained by any employer (or

3 former employer) of the taxpayer or of the

4 spouse of the taxpayer.

5 ‘‘(B) CONTINUATION COVERAGE.—Cov6 erage shall not be treated as subsidized for pur7 poses of this paragraph if—

8 ‘‘(i) such coverage is continuation cov9 erage (within the meaning of section

10 4980B(f)) required to be provided by the

11 employer, and

12 ‘‘(ii) the taxpayer or the taxpayer’s

13 spouse is required to pay a premium for

14 such coverage in an amount not less than

15 100 percent of the applicable premium

16 (within the meaning of section

17 4980B(f)(4)) for the period of such cov18 erage.

19 ‘‘(2) LIMITATION ON LONG-TERM CARE PRE20 MIUMS.—In the case of a qualified long-term care

21 insurance contract (as so defined), only eligible long22 term care premiums (as defined in section

23 213(d)(10)) shall be taken into account under sub24 section (a)(2).
220

S 1344 ES

1 ‘‘(c) SPECIAL RULES.—For purposes of this

2 section—

3 ‘‘(1) COORDINATION WITH MEDICAL DEDUC4 TION, ETC.—Any amount paid by a taxpayer for in5 surance to which subsection (a) applies shall not be

6 taken into account in computing the amount allow7 able to the taxpayer as a deduction under section

8 213(a).

9 ‘‘(2) DEDUCTION NOT ALLOWED FOR SELF-EM10 PLOYMENT TAX PURPOSES.—The deduction allow11 able by reason of this section shall not be taken into

12 account in determining an individual’s net earnings

13 from self-employment (within the meaning of section

14 1402(a)) for purposes of chapter 2.’’.

15 (b) CONFORMING AMENDMENTS.—

16 (1) Subsection (a) of section 62 of the Internal

17 Revenue Code of 1986 is amended by inserting after

18 paragraph (17) the following:

19 ‘‘(18) LONG-TERM CARE INSURANCE COSTS OF

20 CERTAIN INDIVIDUALS.—The deduction allowed by

21 section 222.’’.

22 (2) The table of sections for part VII of sub23 chapter B of chapter 1 of such Code is amended by

24 striking the last item and inserting the following:

‘‘Sec. 222. Premiums for long-term care insurance.

‘‘Sec. 223. Cross reference.’’.
221

S 1344 ES

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

2 this section shall apply to taxable years beginning after

3 December 31, 1999.

4 SEC. 603. STUDY OF LONG-TERM CARE NEEDS IN THE 21ST

5 CENTURY.

6 (a) IN GENERAL.—The Secretary of Health and

7 Human Services (referred to in this section as the ‘‘Sec8 retary’’) shall provide, in accordance with this section, for

9 a study in order to determine—

10 (1) future demand for long-term health care

11 services (including institutional and home and com12 munity-based services) in the United States in order

13 to meet the needs in the 21st century; and

14 (2) long-term options to finance the provision of

15 such services.

16 (b) DETAILS.—The study conducted under sub17 section (a) shall include the following:

18 (1) An identification of the relevant demo19 graphic characteristics affecting demand for long20 term health care services, at least through the year

21 2030.

22 (2) The viability and capacity of community23 based and other long-term health care services under

24 different federal programs, including through the
222

S 1344 ES

1 medicare and medicaid programs, grants to States,

2 housing services, and changes in tax policy.

3 (3) How to improve the quality of long-term

4 health care services.

5 (4) The integration of long-term health care

6 services for individuals between different classes of

7 health care providers (such as hospitals, nursing fa8 cilities, and home care agencies) and different Fed9 eral programs (such as the medicare and medicaid

10 programs).

11 (5) The possibility of expanding private sector

12 initiatives, including long-term care insurance, to

13 meet the need to finance such services.

14 (6) An examination of the effect of enactment

15 of the Health Insurance Portability and Account16 ability Act of 1996 on the provision and financing

17 of long-term health care services, including on port18 ability and affordability of private long-term care in19 surance, the impact of insurance options on low-in20 come older Americans, and the options for eligibility

21 to improve access to such insurance.

22 (7) The financial impact of the provision of

23 long-term health care services on caregivers and

24 other family members.

25 (c) REPORT AND RECOMMENDATIONS.—
223

S 1344 ES

1 (1) IN GENERAL.—Not later than 1 year after

2 the date of the enactment of this Act, the Secretary

3 shall provide for a report on the study under this

4 section.

5 (2) RECOMMENDATIONS.—The report under

6 paragraph (1) shall include findings and rec7 ommendations regarding each of the following:

8 (A) The most effective and efficient man9 ner that the Federal government may use its

10 resources to educate the public on planning for

11 needs for long-term health care services.

12 (B) The public, private, and joint public13 private strategies for meeting identified needs

14 for long-term health care services.

15 (C) The role of States and local commu16 nities in the financing of long-term health care

17 services.

18 (3) INCLUSION OF COST ESTIMATES.—The re19 port under paragraph (1) shall include cost esti20 mates of the various options for which recommenda21 tions are made.

22 (d) CONDUCT OF STUDY.—

23 (1) USE OF INSTITUTE OF MEDICINE.—The

24 Secretary of Health and Human Services shall seek

25 to enter into an appropriate arrangement with the
224

S 1344 ES

1 Institute of Medicine of the National Academy of

2 Sciences to conduct the study under this section. If

3 such an arrangement cannot be made, the Secretary

4 may provide for the conduct of the study by any

5 other qualified non-governmental entity.

6 (2) CONSULTATION.—The study should be con7 ducted under this section in consultation with ex8 perts from a wide-range of groups from the public

9 and private sectors.

10 TITLE VII—INDIVIDUAL

11 RETIREMENT PLANS

12 SEC. 701. MODIFICATION OF INCOME LIMITS ON CON13 TRIBUTIONS AND ROLLOVERS TO ROTH IRAS.

14 (a) INCREASE IN AGI LIMIT FOR ROLLOVER CON15 TRIBUTIONS.—Clause (i) of section 408A(c)(3)(A) of the

16 Internal Revenue Code of 1986 (relating to rollover from

17 IRA), as redesignated by subsection (a), is amended by

18 striking ‘‘$100,000’’ and inserting ‘‘$1,000,000’’.

19 (b) CONFORMING AMENDMENTS.—

20 (1)(A) Subparagraph (B) of section 408A(c)(3)

21 of the Internal Revenue Code of 1986, as redesig22 nated by subsection (a), is amended to read as fol23 lows:
225

S 1344 ES

1 ‘‘(B) DEFINITION OF ADJUSTED GROSS IN2 COME.—For purposes of subparagraph (A), ad3 justed gross income shall be determined—

4 ‘‘(i) after application of sections 86

5 and 469, and

6 ‘‘(ii) without regard to sections 135,

7 137, 221, and 911, the deduction allowable

8 under section 219, or any amount included

9 in gross income under subsection (d)(3).’’.

10 (B) EFFECTIVE DATE.—The amendment made

11 by this paragraph shall apply to taxable years begin12 ning after December 31, 1999.

13 (2)(A) Subparagraph (B) of section 408A(c)(3)

14 of such Code, as amended by paragraph (1), is

15 amended to read as follows:

16 ‘‘(B) DEFINITION OF ADJUSTED GROSS IN17 COME.—For purposes of subparagraph (A), ad18 justed gross income shall be determined—

19 ‘‘(i) after application of sections 86

20 and 469, and

21 ‘‘(ii) without regard to sections 135,

22 137, 221, and 911, the deduction allowable

23 under section 219, or any amount included

24 in gross income under subsection (d)(3) or
226

S 1344 ES

1 by reason of a required distribution under

2 a provision described in paragraph (5).’’.

3 (B) EFFECTIVE DATE.—The amendment made

4 by this paragraph shall apply to taxable years begin5 ning after December 31, 2004.

6 (c) EFFECTIVE DATE.—Except as otherwise provided

7 in this section, the amendments made by this section shall

8 apply to taxable years beginning after December 31, 1999.

9 TITLE VIII—REVENUE

10 PROVISIONS

11 SEC. 801. MODIFICATION TO FOREIGN TAX CREDIT

12 CARRYBACK AND CARRYOVER PERIODS.

13 (a) IN GENERAL.—Section 904(c) of the Internal

14 Revenue Code of 1986 (relating to limitation on credit)

15 is amended—

16 (1) by striking ‘‘in the second preceding taxable

17 year,’’, and

18 (2) by striking ‘‘or fifth’’ and inserting ‘‘fifth,

19 sixth, or seventh’’.

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

21 subsection (a) shall apply to credits arising in taxable

22 years beginning after December 31, 2001.
227

S 1344 ES

1 SEC. 802. LIMITATION ON USE OF NON-ACCRUAL EXPERI2 ENCE METHOD OF ACCOUNTING.

3 (a) IN GENERAL.—Section 448(d)(5) of the Internal

4 Revenue Code of 1986 (relating to special rule for serv5 ices) is amended—

6 (1) by inserting ‘‘in fields described in para7 graph (2)(A)’’ after ‘‘services by such person’’, and

8 (2) by inserting ‘‘CERTAIN PERSONAL’’ before

9 ‘‘SERVICES’’ in the heading.

10 (b) EFFECTIVE DATE.—

11 (1) IN GENERAL.—The amendments made by

12 this section shall apply to taxable years ending after

13 the date of the enactment of this Act.

14 (2) CHANGE IN METHOD OF ACCOUNTING.—In

15 the case of any taxpayer required by the amend16 ments made by this section to change its method of

17 accounting for its first taxable year ending after the

18 date of the enactment of this Act—

19 (A) such change shall be treated as initi20 ated by the taxpayer,

21 (B) such change shall be treated as made

22 with the consent of the Secretary of the Treas23 ury, and

24 (C) the net amount of the adjustments re25 quired to be taken into account by the taxpayer

26 under section 481 of the Internal Revenue Code
228

S 1344 ES

1 of 1986 shall be taken into account over a pe2 riod (not greater than 4 taxable years) begin3 ning with such first taxable year.

4 SEC. 803. RETURNS RELATING TO CANCELLATIONS OF IN5 DEBTEDNESS BY ORGANIZATIONS LENDING

6 MONEY.

7 (a) IN GENERAL.—Paragraph (2) of section

8 6050P(c) of the Internal Revenue Code of 1986 (relating

9 to definitions and special rules) is amended by striking

10 ‘‘and’’ at the end of subparagraph (B), by striking the

11 period at the end of subparagraph (C) and inserting ‘‘,

12 and’’, and by inserting after subparagraph (C) the fol13 lowing new subparagraph:

14 ‘‘(D) any organization a significant trade

15 or business of which is the lending of money.’’.

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

17 subsection (a) shall apply to discharges of indebtedness

18 after December 31, 1999.

19 SEC. 804. EXTENSION OF INTERNAL REVENUE SERVICE

20 USER FEES.

21 (a) IN GENERAL.—Chapter 77 of the Internal Rev22 enue Code of 1986 (relating to miscellaneous provisions)

23 is amended by adding at the end the following new section:
229

S 1344 ES

1 ‘‘SEC. 7527. INTERNAL REVENUE SERVICE USER FEES.

2 ‘‘(a) GENERAL RULE.—The Secretary shall establish

3 a program requiring the payment of user fees for—

4 ‘‘(1) requests to the Internal Revenue Service

5 for ruling letters, opinion letters, and determination

6 letters, and

7 ‘‘(2) other similar requests.

8 ‘‘(b) PROGRAM CRITERIA.—

9 ‘‘(1) IN GENERAL.—The fees charged under the

10 program required by subsection (a)—

11 ‘‘(A) shall vary according to categories (or

12 subcategories) established by the Secretary,

13 ‘‘(B) shall be determined after taking into

14 account the average time for (and difficulty of)

15 complying with requests in each category (and

16 subcategory), and

17 ‘‘(C) shall be payable in advance.

18 ‘‘(2) EXEMPTIONS, ETC.—The Secretary shall

19 provide for such exemptions (and reduced fees)

20 under such program as the Secretary determines to

21 be appropriate.

22 ‘‘(3) AVERAGE FEE REQUIREMENT.—The aver23 age fee charged under the program required by sub24 section (a) shall not be less than the amount deter25 mined under the following table:
230

S 1344 ES

‘‘Category Average Fee

Employee plan ruling and opinion ........................................... $250

Exempt organization ruling ..................................................... $350

Employee plan determination .................................................. $300

Exempt organization determination ........................................ $275

Chief counsel ruling ................................................................. $200.

1 ‘‘(c) TERMINATION.—No fee shall be imposed under

2 this section with respect to requests made after September

3 30, 2009.’’.

4 (b) CONFORMING AMENDMENTS.—

5 (1) The table of sections for chapter 77 of the

6 Internal Revenue Code of 1986 is amended by add7 ing at the end the following new item:

‘‘Sec. 7527. Internal Revenue Service user fees.’’.

8 (2) Section 10511 of the Revenue Act of 1987

9 is repealed.

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

11 this section shall apply to requests made after the date

12 of the enactment of this Act.

13 SEC. 805. PROPERTY SUBJECT TO A LIABILITY TREATED IN

14 SAME MANNER AS ASSUMPTION OF LIABIL15 ITY.

16 (a) REPEAL OF PROPERTY SUBJECT TO A LIABILITY

17 TEST.—

18 (1) SECTION 357.—Section 357(a)(2) of the In19 ternal Revenue Code of 1986 (relating to assump20 tion of liability) is amended by striking ‘‘, or ac-
231

S 1344 ES

1 quires from the taxpayer property subject to a liabil2 ity’’.

3 (2) SECTION 358.—Section 358(d)(1) of such

4 Code (relating to assumption of liability) is amended

5 by striking ‘‘or acquired from the taxpayer property

6 subject to a liability’’.

7 (3) SECTION 368.—

8 (A) Section 368(a)(1)(C) of such Code is

9 amended by striking ‘‘, or the fact that prop10 erty acquired is subject to a liability,’’.

11 (B) The last sentence of section

12 368(a)(2)(B) of such Code is amended by strik13 ing ‘‘, and the amount of any liability to which

14 any property acquired from the acquiring cor15 poration is subject,’’.

16 (b) CLARIFICATION OF ASSUMPTION OF LIABIL17 ITY.—

18 (1) IN GENERAL.—Section 357 of the Internal

19 Revenue Code of 1986 is amended by adding at the

20 end the following new subsection:

21 ‘‘(d) DETERMINATION OF AMOUNT OF LIABILITY AS22 SUMED.—

23 ‘‘(1) IN GENERAL.—For purposes of this sec24 tion, section 358(d), section 362(d), section
232

S 1344 ES

1 368(a)(1)(C), and section 368(a)(2)(B), except as

2 provided in regulations—

3 ‘‘(A) a recourse liability (or portion there4 of) shall be treated as having been assumed if,

5 as determined on the basis of all facts and cir6 cumstances, the transferee has agreed to, and is

7 expected to, satisfy such liability (or portion),

8 whether or not the transferor has been relieved

9 of such liability, and

10 ‘‘(B) except to the extent provided in para11 graph (2), a nonrecourse liability shall be treat12 ed as having been assumed by the transferee of

13 any asset subject to such liability.

14 ‘‘(2) EXCEPTION FOR NONRECOURSE LIABIL15 ITY.—The amount of the nonrecourse liability treat16 ed as described in paragraph (1)(B) shall be reduced

17 by the lesser of—

18 ‘‘(A) the amount of such liability which an

19 owner of other assets not transferred to the

20 transferee and also subject to such liability has

21 agreed with the transferee to, and is expected

22 to, satisfy, or

23 ‘‘(B) the fair market value of such other

24 assets (determined without regard to section

25 7701(g)).
233

S 1344 ES

1 ‘‘(3) REGULATIONS.—The Secretary shall pre2 scribe such regulations as may be necessary to carry

3 out the purposes of this subsection and section

4 362(d). The Secretary may also prescribe regula5 tions which provide that the manner in which a li6 ability is treated as assumed under this subsection

7 is applied, where appropriate, elsewhere in this

8 title.’’.

9 (2) LIMITATION ON BASIS INCREASE ATTRIB10 UTABLE TO ASSUMPTION OF LIABILITY.—Section

11 362 of such Code is amended by adding at the end

12 the following new subsection:

13 ‘‘(d) LIMITATION ON BASIS INCREASE ATTRIB14 UTABLE TO ASSUMPTION OF LIABILITY.—

15 ‘‘(1) IN GENERAL.—In no event shall the basis

16 of any property be increased under subsection (a) or

17 (b) above the fair market value of such property (de18 termined without regard to section 7701(g)) by rea19 son of any gain recognized to the transferor as a re20 sult of the assumption of a liability.

21 ‘‘(2) TREATMENT OF GAIN NOT SUBJECT TO

22 TAX.—Except as provided in regulations, if—

23 ‘‘(A) gain is recognized to the transferor as

24 a result of an assumption of a nonrecourse li-
234

S 1344 ES

1 ability by a transferee which is also secured by

2 assets not transferred to such transferee, and

3 ‘‘(B) no person is subject to tax under this

4 title on such gain,

5 then, for purposes of determining basis under sub6 sections (a) and (b), the amount of gain recognized

7 by the transferor as a result of the assumption of

8 the liability shall be determined as if the liability as9 sumed by the transferee equaled such transferee’s

10 ratable portion of such liability determined on the

11 basis of the relative fair market values (determined

12 without regard to section 7701(g)) of all of the as13 sets subject to such liability.’’.

14 (c) APPLICATION TO PROVISIONS OTHER THAN SUB15 CHAPTER C.—

16 (1) SECTION 584.—Section 584(h)(3) of the In17 ternal Revenue Code of 1986 is amended—

18 (A) by striking ‘‘, and the fact that any

19 property transferred by the common trust fund

20 is subject to a liability,’’ in subparagraph (A),

21 and

22 (B) by striking clause (ii) of subparagraph

23 (B) and inserting:

24 ‘‘(ii) ASSUMED LIABILITIES.—For

25 purposes of clause (i), the term ‘assumed
235

S 1344 ES

1 liabilities’ means any liability of the com2 mon trust fund assumed by any regulated

3 investment company in connection with the

4 transfer referred to in paragraph (1)(A).

5 ‘‘(C) ASSUMPTION.—For purposes of this

6 paragraph, in determining the amount of any li7 ability assumed, the rules of section 357(d)

8 shall apply.’’.

9 (2) SECTION 1031.—The last sentence of section

10 1031(d) of such Code is amended—

11 (A) by striking ‘‘assumed a liability of the

12 taxpayer or acquired from the taxpayer prop13 erty subject to a liability’’ and inserting ‘‘as14 sumed (as determined under section 357(d)) a

15 liability of the taxpayer’’, and

16 (B) by striking ‘‘or acquisition (in the

17 amount of the liability)’’.

18 (d) CONFORMING AMENDMENTS.—

19 (1) Section 351(h)(1) of the Internal Revenue

20 Code of 1986 is amended by striking ‘‘, or acquires

21 property subject to a liability,’’.

22 (2) Section 357 of such Code is amended by

23 striking ‘‘or acquisition’’ each place it appears in

24 subsection (a) or (b).
236

S 1344 ES

1 (3) Section 357(b)(1) of such Code is amended

2 by striking ‘‘or acquired’’.

3 (4) Section 357(c)(1) of such Code is amended

4 by striking ‘‘, plus the amount of the liabilities to

5 which the property is subject,’’.

6 (5) Section 357(c)(3) of such Code is amended

7 by striking ‘‘or to which the property transferred is

8 subject’’.

9 (6) Section 358(d)(1) of such Code is amended

10 by striking ‘‘or acquisition (in the amount of the li11 ability)’’.

12 (e) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to transfers after October 19,

14 1998.

15 SEC. 806. CHARITABLE SPLIT-DOLLAR LIFE INSURANCE,

16 ANNUITY, AND ENDOWMENT CONTRACTS.

17 (a) IN GENERAL.—Subsection (f) of section 170 of

18 the Internal Revenue Code of 1986 (relating to disallow19 ance of deduction in certain cases and special rules) is

20 amended by adding at the end the following new para21 graph:

22 ‘‘(10) SPLIT-DOLLAR LIFE INSURANCE, ANNU23 ITY, AND ENDOWMENT CONTRACTS.—

24 ‘‘(A) IN GENERAL.—Nothing in this sec25 tion or in section 545(b)(2), 556(b)(2), 642(c),
237

S 1344 ES

1 2055, 2106(a)(2), or 2522 shall be construed to

2 allow a deduction, and no deduction shall be al3 lowed, for any transfer to or for the use of an

4 organization described in subsection (c) if in

5 connection with such transfer—

6 ‘‘(i) the organization directly or indi7 rectly pays, or has previously paid, any

8 premium on any personal benefit contract

9 with respect to the transferor, or

10 ‘‘(ii) there is an understanding or ex11 pectation that any person will directly or

12 indirectly pay any premium on any per13 sonal benefit contract with respect to the

14 transferor.

15 ‘‘(B) PERSONAL BENEFIT CONTRACT.—

16 For purposes of subparagraph (A), the term

17 ‘personal benefit contract’ means, with respect

18 to the transferor, any life insurance, annuity, or

19 endowment contract if any direct or indirect

20 beneficiary under such contract is the trans21 feror, any member of the transferor’s family, or

22 any other person (other than an organization

23 described in subsection (c)) designated by the

24 transferor.
238

S 1344 ES

1 ‘‘(C) APPLICATION TO CHARITABLE RE2 MAINDER TRUSTS.—In the case of a transfer to

3 a trust referred to in subparagraph (E), ref4 erences in subparagraphs (A) and (F) to an or5 ganization described in subsection (c) shall be

6 treated as a reference to such trust.

7 ‘‘(D) EXCEPTION FOR CERTAIN ANNUITY

8 CONTRACTS.—If, in connection with a transfer

9 to or for the use of an organization described

10 in subsection (c), such organization incurs an

11 obligation to pay a charitable gift annuity (as

12 defined in section 501(m)) and such organiza13 tion purchases any annuity contract to fund

14 such obligation, persons receiving payments

15 under the charitable gift annuity shall not be

16 treated for purposes of subparagraph (B) as in17 direct beneficiaries under such contract if—

18 ‘‘(i) such organization possesses all of

19 the incidents of ownership under such con20 tract,

21 ‘‘(ii) such organization is entitled to

22 all the payments under such contract, and

23 ‘‘(iii) the timing and amount of pay24 ments under such contract are substan25 tially the same as the timing and amount
239

S 1344 ES

1 of payments to each such person under

2 such obligation (as such obligation is in ef3 fect at the time of such transfer).

4 ‘‘(E) EXCEPTION FOR CERTAIN CON5 TRACTS HELD BY CHARITABLE REMAINDER

6 TRUSTS.—A person shall not be treated for pur7 poses of subparagraph (B) as an indirect bene8 ficiary under any life insurance, annuity, or en9 dowment contract held by a charitable remain10 der annuity trust or a charitable remainder

11 unitrust (as defined in section 664(d)) solely by

12 reason of being entitled to any payment re13 ferred to in paragraph (1)(A) or (2)(A) of sec14 tion 664(d) if—

15 ‘‘(i) such trust possesses all of the in16 cidents of ownership under such contract,

17 and

18 ‘‘(ii) such trust is entitled to all the

19 payments under such contract.

20 ‘‘(F) EXCISE TAX ON PREMIUMS PAID.—

21 ‘‘(i) IN GENERAL.—There is hereby

22 imposed on any organization described in

23 subsection (c) an excise tax equal to the

24 premiums paid by such organization on

25 any life insurance, annuity, or endowment
240

S 1344 ES

1 contract if the payment of premiums on

2 such contract is in connection with a trans3 fer for which a deduction is not allowable

4 under subparagraph (A), determined with5 out regard to when such transfer is made.

6 ‘‘(ii) PAYMENTS BY OTHER PER7 SONS.—For purposes of clause (i), pay8 ments made by any other person pursuant

9 to an understanding or expectation re10 ferred to in subparagraph (A) shall be

11 treated as made by the organization.

12 ‘‘(iii) REPORTING.—Any organization

13 on which tax is imposed by clause (i) with

14 respect to any premium shall file an an15 nual return which includes—

16 ‘‘(I) the amount of such pre17 miums paid during the year and the

18 name and TIN of each beneficiary

19 under the contract to which the pre20 mium relates, and

21 ‘‘(II) such other information as

22 the Secretary may require.

23 The penalties applicable to returns re24 quired under section 6033 shall apply to

25 returns required under this clause. Returns
241

S 1344 ES

1 required under this clause shall be fur2 nished at such time and in such manner as

3 the Secretary shall by forms or regulations

4 require.

5 ‘‘(iv) CERTAIN RULES TO APPLY.—

6 The tax imposed by this subparagraph

7 shall be treated as imposed by chapter 42

8 for purposes of this title other than sub9 chapter B of chapter 42.

10 ‘‘(G) SPECIAL RULE WHERE STATE RE11 QUIRES SPECIFICATION OF CHARITABLE GIFT

12 ANNUITANT IN CONTRACT.—In the case of an

13 obligation to pay a charitable gift annuity re14 ferred to in subparagraph (D) which is entered

15 into under the laws of a State which requires,

16 in order for the charitable gift annuity to be ex17 empt from insurance regulation by such State,

18 that each beneficiary under the charitable gift

19 annuity be named as a beneficiary under an an20 nuity contract issued by an insurance company

21 authorized to transact business in such State,

22 the requirements of clauses (i) and (ii) of sub23 paragraph (D) shall be treated as met if—

24 ‘‘(i) such State law requirement was

25 in effect on February 8, 1999,
242

S 1344 ES

1 ‘‘(ii) each such beneficiary under the

2 charitable gift annuity is a bona fide resi3 dent of such State at the time the obliga4 tion to pay a charitable gift annuity is en5 tered into, and

6 ‘‘(iii) the only persons entitled to pay7 ments under such contract are persons en8 titled to payments as beneficiaries under

9 such obligation on the date such obligation

10 is entered into.

11 ‘‘(H) REGULATIONS.—The Secretary shall

12 prescribe such regulations as may be necessary

13 or appropriate to carry out the purposes of this

14 paragraph, including regulations to prevent the

15 avoidance of such purposes.’’.

16 (b) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as otherwise pro18 vided in this section, the amendment made by this

19 section shall apply to transfers made after February

20 8, 1999.

21 (2) EXCISE TAX.—Except as provided in para22 graph (3) of this subsection, section 170(f)(10)(F)

23 of the Internal Revenue Code of 1986 (as added by

24 this section) shall apply to premiums paid after the

25 date of the enactment of this Act.
243

S 1344 ES

1 (3) REPORTING.—Clause (iii) of such section

2 170(f)(10)(F) shall apply to premiums paid after

3 February 8, 1999 (determined as if the tax imposed

4 by such section applies to premiums paid after such

5 date).

6 SEC. 807. TRANSFER OF EXCESS DEFINED BENEFIT PLAN

7 ASSETS FOR RETIREE HEALTH BENEFITS.

8 (a) EXTENSION.—

9 (1) IN GENERAL.—Section 420(b)(5) of the In10 ternal Revenue Code of 1986 (relating to expiration)

11 is amended by striking ‘‘in any taxable year begin12 ning after December 31, 2000’’ and inserting ‘‘made

13 after September 30, 2009’’.

14 (2) CONFORMING AMENDMENTS.—

15 (A) Section 101(e)(3) of the Employee Re16 tirement Income Security Act of 1974 (29

17 U.S.C. 1021(e)(3)) is amended by striking

18 ‘‘1995’’ and inserting ‘‘2001’’.

19 (B) Section 403(c)(1) of such Act (29 U.S.C.

20 1103(c)(1)) is amended by striking ‘‘1995’’ and in21 serting ‘‘2001’’.

22 (C) Paragraph (13) of section 408(b) of such

23 Act (29 U.S.C. 1108(b)(13)) is amended—
244

S 1344 ES

1 (i) by striking ‘‘in a taxable year beginning

2 before January 1, 2001’’ and inserting ‘‘made

3 before October 1, 2009’’, and

4 (ii) by striking ‘‘1995’’ and inserting

5 ‘‘2001’’.

6 (b) APPLICATION OF MINIMUM COST REQUIRE7 MENTS.—

8 (1) IN GENERAL.—Section 420(c)(3) of the In9 ternal Revenue Code of 1986 is amended to read as

10 follows:

11 ‘‘(3) MINIMUM COST REQUIREMENTS.—

12 ‘‘(A) IN GENERAL.—The requirements of

13 this paragraph are met if each group health

14 plan or arrangement under which applicable

15 health benefits are provided provides that the

16 applicable employer cost for each taxable year

17 during the cost maintenance period shall not be

18 less than the higher of the applicable employer

19 costs for each of the 2 taxable years imme20 diately preceding the taxable year of the quali21 fied transfer.

22 ‘‘(B) APPLICABLE EMPLOYER COST.—For

23 purposes of this paragraph, the term ‘applicable

24 employer cost’ means, with respect to any tax25 able year, the amount determined by dividing—
245

S 1344 ES

1 ‘‘(i) the qualified current retiree

2 health liabilities of the employer for such

3 taxable year determined—

4 ‘‘(I) without regard to any reduc5 tion under subsection (e)(1)(B), and

6 ‘‘(II) in the case of a taxable

7 year in which there was no qualified

8 transfer, in the same manner as if

9 there had been such a transfer at the

10 end of the taxable year, by

11 ‘‘(ii) the number of individuals to

12 whom coverage for applicable health bene13 fits was provided during such taxable year.

14 ‘‘(C) ELECTION TO COMPUTE COST SEPA15 RATELY.—An employer may elect to have this

16 paragraph applied separately with respect to in17 dividuals eligible for benefits under title XVIII

18 of the Social Security Act at any time during

19 the taxable year and with respect to individuals

20 not so eligible.

21 ‘‘(D) COST MAINTENANCE PERIOD.—For

22 purposes of this paragraph, the term ‘cost

23 maintenance period’ means the period of 5 tax24 able years beginning with the taxable year in

25 which the qualified transfer occurs. If a taxable
246

S 1344 ES

1 year is in 2 or more overlapping cost mainte2 nance periods, this paragraph shall be applied

3 by taking into account the highest applicable

4 employer cost required to be provided under

5 subparagraph (A) for such taxable year.’’.

6 (2) CONFORMING AMENDMENTS.—

7 (A) Section 420(b)(1)(C)(iii) of such Code

8 is amended by striking ‘‘benefits’’ and inserting

9 ‘‘cost’’.

10 (B) Section 420(e)(1)(D) of such Code is

11 amended by striking ‘‘and shall not be subject

12 to the minimum benefit requirements of sub13 section (c)(3)’’ and inserting ‘‘or in calculating

14 applicable employer cost under subsection

15 (c)(3)(B)’’.

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

17 this section shall apply to qualified transfers occurring

18 after December 31, 2000, and before October 1, 2009.

19 SEC. 808. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10

20 OR MORE EMPLOYER PLANS.

21 (a) BENEFITS TO WHICH EXCEPTION APPLIES.—

22 Section 419A(f)(6)(A) of the Internal Revenue Code of

23 1986 (relating to exception for 10 or more employer plans)

24 is amended to read as follows:
247

S 1344 ES

1 ‘‘(A) IN GENERAL.—This subpart shall not

2 apply to a welfare benefit fund which is part of

3 a 10 or more employer plan if the only benefits

4 provided through the fund are 1 or more of the

5 following:

6 ‘‘(i) Medical benefits.

7 ‘‘(ii) Disability benefits.

8 ‘‘(iii) Group term life insurance bene9 fits which do not provide for any cash sur10 render value or other money that can be

11 paid, assigned, borrowed, or pledged for

12 collateral for a loan.

13 The preceding sentence shall not apply to any

14 plan which maintains experience-rating arrange15 ments with respect to individual employers.’’.

16 (b) LIMITATION ON USE OF AMOUNTS FOR OTHER

17 PURPOSES.—Section 4976(b) of the Internal Revenue

18 Code of 1986 (defining disqualified benefit) is amended

19 by adding at the end the following new paragraph:

20 ‘‘(5) SPECIAL RULE FOR 10 OR MORE EM21 PLOYER PLANS EXEMPTED FROM PREFUNDING LIM22 ITS.—For purposes of paragraph (1)(C), if—

23 ‘‘(A) subpart D of part I of subchapter D

24 of chapter 1 does not apply by reason of section

25 419A(f)(6) to contributions to provide 1 or
248

S 1344 ES

1 more welfare benefits through a welfare benefit

2 fund under a 10 or more employer plan, and

3 ‘‘(B) any portion of the welfare benefit

4 fund attributable to such contributions is used

5 for a purpose other than that for which the con6 tributions were made,

7 then such portion shall be treated as reverting to the

8 benefit of the employers maintaining the fund.’’.

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

10 this section shall apply to contributions paid or accrued

11 after the date of the enactment of this Act, in taxable

12 years ending after such date.

13 SEC. 809. MODIFICATION OF INSTALLMENT METHOD AND

14 REPEAL OF INSTALLMENT METHOD FOR AC15 CRUAL METHOD TAXPAYERS.

16 (a) REPEAL OF INSTALLMENT METHOD FOR AC17 CRUAL BASIS TAXPAYERS.—

18 (1) IN GENERAL.—Subsection (a) of section

19 453 of the Internal Revenue Code of 1986 (relating

20 to installment method) is amended to read as fol21 lows:

22 ‘‘(a) USE OF INSTALLMENT METHOD.—

23 ‘‘(1) IN GENERAL.—Except as otherwise pro24 vided in this section, income from an installment
249

S 1344 ES

1 sale shall be taken into account for purposes of this

2 title under the installment method.

3 ‘‘(2) ACCRUAL METHOD TAXPAYER.—The in4 stallment method shall not apply to income from an

5 installment sale if such income would be reported

6 under an accrual method of accounting without re7 gard to this section. The preceding sentence shall

8 not apply to a disposition described in subparagraph

9 (A) or (B) of subsection (l)(2).’’.

10 (2) CONFORMING AMENDMENTS.—Sections

11 453(d)(1), 453(i)(1), and 453(k) of such Code are

12 each amended by striking ‘‘(a)’’ each place it ap13 pears and inserting ‘‘(a)(1)’’.

14 (b) MODIFICATION OF PLEDGE RULES.—Paragraph

15 (4) of section 453A(d) of the Internal Revenue Code of

16 1986 (relating to pledges, etc., of installment obligations)

17 is amended by adding at the end the following: ‘‘A pay18 ment shall be treated as directly secured by an interest

19 in an installment obligation to the extent an arrangement

20 allows the taxpayer to satisfy all or a portion of the indebt21 edness with the installment obligation.’’.

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

23 this section shall apply to sales or other dispositions occur24 ring on or after the date of the enactment of this Act.
250

S 1344 ES

1 SEC. 810. INCLUSION OF CERTAIN VACCINES AGAINST

2 STREPTOCOCCUS PNEUMONIAE TO LIST OF

3 TAXABLE VACCINES.

4 (a) IN GENERAL.—Section 4132(a)(1) of the Internal

5 Revenue Code of 1986 (defining taxable vaccine) is

6 amended by adding at the end the following new subpara7 graph:

8 ‘‘(L) Any conjugate vaccine against strep9 tococcus pneumoniae.’’.

10 (b) EFFECTIVE DATE.—

11 (1) SALES.—The amendment made by this sec12 tion shall apply to vaccine sales beginning on the

13 day after the date on which the Centers for Disease

14 Control makes a final recommendation for routine

15 administration to children of any conjugate vaccine

16 against streptococcus pneumoniae.

17 (2) DELIVERIES.—For purposes of paragraph

18 (1), in the case of sales on or before the date de19 scribed in such paragraph for which delivery is made

20 after such date, the delivery date shall be considered

21 the sale date.
251

S 1344 ES

1 TITLE IX—MISCELLANEOUS

2 PROVISIONS

3 SEC. 901. MEDICARE COMPETITIVE PRICING DEMONSTRA4 TION PROJECT.

5 (a) FINDING.—The Senate finds that implementing

6 competitive pricing in the medicare program under title

7 XVIII of the Social Security Act is an important goal.

8 (b) PROHIBITION ON IMPLEMENTATION OF PROJECT

9 IN CERTAIN AREAS.—Notwithstanding subsection (b) of

10 section 4011 of the Balanced Budget Act of 1997 (Public

11 Law 105–33)), the Secretary of Health and Human Serv12 ices may not implement the Medicare Competitive Pricing

13 Demonstration Project (operated by the Secretary of

14 Health and Human Services pursuant to such section) in

15 Kansas City, Missouri or Kansas City, Kansas, or in any

16 area in Arizona.

17 (c) MORATORIUM ON IMPLEMENTATION OF PROJECT

18 IN ANY AREA UNTIL JANUARY, 1, 2001.—Notwith19 standing any provision of section 4011 of the Balanced

20 Budget Act of 1997 (Public Law 105–33)), the Secretary

21 of Health and Human Services may not implement the

22 Medicare Competitive Pricing Demonstration Project in

23 any area before January 1, 2001.

24 (d) STUDY AND REPORT TO CONGRESS.—
252

S 1344 ES

1 (1) STUDY.—The Secretary of Health and

2 Human Services, in conjunction with the Competi3 tive Pricing Advisory Committee, shall conduct a

4 study on the different approaches of implementing

5 the Medicare Competitive Pricing Demonstration

6 Project on a voluntary basis.

7 (2) REPORT.—Not later than June 30, 2000,

8 the Secretary of Health and Human Services shall

9 submit a report to Congress which shall contain a

10 detailed description of the study conducted under

11 paragraph (1), together with the recommendations

12 of the Secretary and the Competitive Pricing Advi13 sory Committee regarding the implementation of the

14 Medicare Competitive Pricing Demonstration

15 Project.

Passed the Senate July 15, 1999.

Attest:

Secretary.
106TH CONGRESS

1ST SESSION S. 1344

AN ACT

To amend the Public Health Service Act, the Emhealth coverage. tect consumers in managed care plans and other and the Internal Revenue Code of 1986 to pro- ployee Retirement Income Security Act of 1974,