I 

112TH CONGRESS 

1ST SESSION H. R. 371 

To repeal title I of the Patient Protection and Affordable Care Act and 

to amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage offered in interstate commerce. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 20, 2011 

Mrs. BLACKBURN (for herself, Mr. UPTON, Mr. PITTS, Mr. BARTON of Texas, 

Mr. BURGESS, Mrs. MYRICK, Mr. SHIMKUS, Mr. ROGERS of Michigan, 

Mr. STEARNS, Mr. SULLIVAN, Mr. MURPHY of Pennsylvania, Mr. 

GINGREY of Georgia, Mr. SCALISE, Mrs. BONO MACK, Mr. BASS of New 

Hampshire, Mr. BILBRAY, Mr. LATTA, Mrs. MCMORRIS RODGERS, Mr. 

HARPER, Mr. LANCE, Mr. CASSIDY, Mr. GUTHRIE, Mr. OLSON, Mr. 

MCKINLEY, Mr. GARDNER, Mr. POMPEO, Mr. KINZINGER of Illinois, Mr. 

ROE of Tennessee, Mr. BROUN of Georgia, Mr. BOUSTANY, Mr. 

CONAWAY, Mr. FLEMING, Mr. ISSA, Mr. PRICE of Georgia, Mr. SESSIONS, Mr. AKIN, Mr. BARTLETT, Mr. BROOKS, Mr. BUCSHON, Mr. 

CHABOT, Mr. COLE, Mr. CRAWFORD, Mr. DESJARLAIS, Mr. 

FARENTHOLD, Mr. FLEISCHMANN, Mr. FLORES, Mr. FRANKS of Arizona, 

Mr. GOHMERT, Ms. GRANGER, Mr. GUINTA, Mr. HARRIS, Mrs. 

HARTZLER, Mr. KING of Iowa, Mr. LAMBORN, Mrs. LUMMIS, Mr. MACK, 

Mr. MARCHANT, Mr. MCCLINTOCK, Mr. NEUGEBAUER, Mr. NUGENT, 

Mr. PEARCE, Mr. PAUL, Mr. POSEY, Mr. QUAYLE, Mrs. SCHMIDT, Mr. 

SCHWEIKERT, Mr. SOUTHERLAND, Mr. STUTZMAN, Mr. WALBERG, Mr. 

WALSH of Illinois, and Mr. WILSON of South Carolina) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and Education and the Workforce, for a period to be subsequently determined by 

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To repeal title I of the Patient Protection and Affordable 


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Care Act and to amend the Public Health Service Act 

to provide for cooperative governing of individual health 

insurance coverage offered in interstate commerce. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as ‘‘Health Care Choice Act 

5 of 2011’’. 

6 SEC. 2. SPECIFICATION OF CONSTITUTIONAL AUTHORITY 

7 FOR ENACTMENT OF LAW. 

8 This Act is enacted pursuant to the power granted 

9 Congress under article I, section 8, clause 3, of the United 

10 States Constitution. 

11 SEC. 3. FINDINGS. 

12 Congress finds the following: 

13 (1) The application of numerous and significant 

14 variations in State law and the implementation of 

15 the Patient Protection and Affordable Care Act im16 pacts the ability of insurers to offer, and individuals 

17 to obtain, affordable individual health insurance cov18 erage, thereby impeding commerce in individual 

19 health insurance coverage. 

20 (2) Mandates for health care coverage estab21 lished by title I of the Patient Protection and Af22 fordable Care Act will significantly elevate health inVerDate Mar 15 2010 23:52 Jan 20, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H371.IH H371

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1 surance costs beyond State and Federal ability to 

2 pay. 

3 (3) Individual health insurance coverage is in4 creasingly offered through the Internet, other elec5 tronic means, and by mail, all of which are inher6 ently part of interstate commerce. 

7 (4) In response to these issues, it is appropriate 

8 to encourage increased efficiency in the offering of 

9 individual health insurance coverage through a col10 laborative approach by the States in regulating this 

11 coverage. 

12 (5) The establishment of risk-retention groups 

13 has provided a successful model for the sale of insur14 ance across State lines, as the acts establishing 

15 those groups allow insurance to be sold in multiple 

16 States but regulated by a single State. 

17 SEC. 4. REPEAL OF TITLE I OF PPACA. 

18 Effective as of the enactment of the Patient Protec19 tion and Affordable Care Act (Public Law 111–148), title 

20 I of such Act is repealed (and any amendments to such 

21 title, or to amendments made by such title, made by the 

22 Health Care and Education Reconciliation Act of 2010 

23 (Public Law 111–152) are repealed, and the provisions of 

24 law amended or repealed by such title (or amendments) 


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1 are restored or revived as if such title (and amendments) 

2 had not been enacted. 

3 SEC. 5. COOPERATIVE GOVERNING OF INDIVIDUAL 

4 HEALTH INSURANCE COVERAGE. 

5 (a) IN GENERAL.—Title XXVII of the Public Health 

6 Service Act (42 U.S.C. 300gg et seq.) is amended by add7 ing at the end the following new part: 

8 ‘‘PART D—COOPERATIVE GOVERNING OF 

9 INDIVIDUAL HEALTH INSURANCE COVERAGE 

10 ‘‘SEC. 2795. DEFINITIONS. 

11 ‘‘In this part: 

12 ‘‘(1) PRIMARY STATE.—The term ‘primary 

13 State’ means, with respect to individual health insur14 ance coverage offered by a health insurance issuer, 

15 the State designated by the issuer as the State 

16 whose covered laws shall govern the health insurance 

17 issuer in the sale of such coverage under this part. 

18 An issuer, with respect to a particular policy, may 

19 only designate one such State as its primary State 

20 with respect to all such coverage it offers. Such an 

21 issuer may not change the designated primary State 

22 with respect to individual health insurance coverage 

23 once the policy is issued, except that such a change 

24 may be made upon renewal of the policy. With reVerDate Mar 15 2010 23:52 Jan 20, 2011 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H371.IH H371

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1 spect to such designated State, the issuer is deemed 

2 to be doing business in that State. 

3 ‘‘(2) SECONDARY STATE.—The term ‘secondary 

4 State’ means, with respect to individual health insur5 ance coverage offered by a health insurance issuer, 

6 any State that is not the primary State. In the case 

7 of a health insurance issuer that is selling a policy 

8 in, or to a resident of, a secondary State, the issuer 

9 is deemed to be doing business in that secondary 

10 State. 

11 ‘‘(3) HEALTH INSURANCE ISSUER.—The term 

12 ‘health insurance issuer’ has the meaning given such 

13 term in section 2791(b)(2), except that such an 

14 issuer must be licensed in the primary State and be 

15 qualified to sell individual health insurance coverage 

16 in that State. 

17 ‘‘(4) INDIVIDUAL HEALTH INSURANCE COV18 ERAGE.—The term ‘individual health insurance cov19 erage’ means health insurance coverage offered in 

20 the individual market, as defined in section 

21 2791(e)(1). 

22 ‘‘(5) APPLICABLE STATE AUTHORITY.—The 

23 term ‘applicable State authority’ means, with respect 

24 to a health insurance issuer in a State, the State in25 surance commissioner or official or officials desVerDate Mar 15 2010 23:52 Jan 20, 2011 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H371.IH H371

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1 ignated by the State to enforce the requirements of 

2 this title for the State with respect to the issuer. 

3 ‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 

4 term ‘hazardous financial condition’ means that, 

5 based on its present or reasonably anticipated finan6 cial condition, a health insurance issuer is unlikely 

7 to be able— 

8 ‘‘(A) to meet obligations to policyholders 

9 with respect to known claims and reasonably 

10 anticipated claims; or 

11 ‘‘(B) to pay other obligations in the normal 

12 course of business. 

13 ‘‘(7) COVERED LAWS.— 

14 ‘‘(A) IN GENERAL.—The term ‘covered 

15 laws’ means the laws, rules, regulations, agree16 ments, and orders governing the insurance busi17 ness pertaining to— 

18 ‘‘(i) individual health insurance cov19 erage issued by a health insurance issuer; 

20 ‘‘(ii) the offer, sale, rating (including 

21 medical underwriting), renewal, and 

22 issuance of individual health insurance cov23 erage to an individual; 

24 ‘‘(iii) the provision to an individual in 

25 relation to individual health insurance covVerDate Mar 15 2010 23:52 Jan 20, 2011 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H371.IH H371

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1 erage of health care and insurance related 

2 services; 

3 ‘‘(iv) the provision to an individual in 

4 relation to individual health insurance cov5 erage of management, operations, and in6 vestment activities of a health insurance 

7 issuer; and 

8 ‘‘(v) the provision to an individual in 

9 relation to individual health insurance cov10 erage of loss control and claims adminis11 tration for a health insurance issuer with 

12 respect to liability for which the issuer pro13 vides insurance. 

14 ‘‘(B) EXCEPTION.—Such term does not in15 clude any law, rule, regulation, agreement, or 

16 order governing the use of care or cost manage17 ment techniques, including any requirement re18 lated to provider contracting, network access or 

19 adequacy, health care data collection, or quality 

20 assurance. 

21 ‘‘(8) STATE.—The term ‘State’ means the 50 

22 States and includes the District of Columbia, Puerto 

23 Rico, the Virgin Islands, Guam, American Samoa, 

24 and the Northern Mariana Islands. 


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1 ‘‘(9) UNFAIR CLAIMS SETTLEMENT PRAC2 TICES.—The term ‘unfair claims settlement prac3 tices’ means only the following practices: 

4 ‘‘(A) Knowingly misrepresenting to claim5 ants and insured individuals relevant facts or 

6 policy provisions relating to coverage at issue. 

7 ‘‘(B) Failing to acknowledge with reason8 able promptness pertinent communications with 

9 respect to claims arising under policies. 

10 ‘‘(C) Failing to adopt and implement rea11 sonable standards for the prompt investigation 

12 and settlement of claims arising under policies. 

13 ‘‘(D) Failing to effectuate prompt, fair, 

14 and equitable settlement of claims submitted in 

15 which liability has become reasonably clear. 

16 ‘‘(E) Refusing to pay claims without con17 ducting a reasonable investigation. 

18 ‘‘(F) Failing to affirm or deny coverage of 

19 claims within a reasonable period of time after 

20 having completed an investigation related to 

21 those claims. 

22 ‘‘(G) A pattern or practice of compelling 

23 insured individuals or their beneficiaries to in24 stitute suits to recover amounts due under its 

25 policies by offering substantially less than the 


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1 amounts ultimately recovered in suits brought 

2 by them. 

3 ‘‘(H) A pattern or practice of attempting 

4 to settle or settling claims for less than the 

5 amount that a reasonable person would believe 

6 the insured individual or his or her beneficiary 

7 was entitled by reference to written or printed 

8 advertising material accompanying or made 

9 part of an application. 

10 ‘‘(I) Attempting to settle or settling claims 

11 on the basis of an application that was materi12 ally altered without notice to, or knowledge or 

13 consent of, the insured. 

14 ‘‘(J) Failing to provide forms necessary to 

15 present claims within 15 calendar days of a re16 quests with reasonable explanations regarding 

17 their use. 

18 ‘‘(K) Attempting to cancel a policy in less 

19 time than that prescribed in the policy or by the 

20 law of the primary State. 

21 ‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 

22 and abuse’ means an act or omission committed by 

23 a person who, knowingly and with intent to defraud, 

24 commits, or conceals any material information con25 cerning, one or more of the following: 


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1 ‘‘(A) Presenting, causing to be presented 

2 or preparing with knowledge or belief that it 

3 will be presented to or by an insurer, a rein4 surer, broker or its agent, false information as 

5 part of, in support of or concerning a fact ma6 terial to one or more of the following: 

7 ‘‘(i) An application for the issuance or 

8 renewal of an insurance policy or reinsur9 ance contract. 

10 ‘‘(ii) The rating of an insurance policy 

11 or reinsurance contract. 

12 ‘‘(iii) A claim for payment or benefit 

13 pursuant to an insurance policy or reinsur14 ance contract. 

15 ‘‘(iv) Premiums paid on an insurance 

16 policy or reinsurance contract. 

17 ‘‘(v) Payments made in accordance 

18 with the terms of an insurance policy or 

19 reinsurance contract. 

20 ‘‘(vi) A document filed with the com21 missioner or the chief insurance regulatory 

22 official of another jurisdiction. 

23 ‘‘(vii) The financial condition of an in24 surer or reinsurer. 


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1 ‘‘(viii) The formation, acquisition, 

2 merger, reconsolidation, dissolution or 

3 withdrawal from one or more lines of in4 surance or reinsurance in all or part of a 

5 State by an insurer or reinsurer. 

6 ‘‘(ix) The issuance of written evidence 

7 of insurance. 

8 ‘‘(x) The reinstatement of an insur9 ance policy. 

10 ‘‘(B) Solicitation or acceptance of new or 

11 renewal insurance risks on behalf of an insurer 

12 reinsurer or other person engaged in the busi13 ness of insurance by a person who knows or 

14 should know that the insurer or other person 

15 responsible for the risk is insolvent at the time 

16 of the transaction. 

17 ‘‘(C) Transaction of the business of insur18 ance in violation of laws requiring a license, cer19 tificate of authority or other legal authority for 

20 the transaction of the business of insurance. 

21 ‘‘(D) Attempt to commit, aiding or abet22 ting in the commission of, or conspiracy to com23 mit the acts or omissions specified in this para24 graph. 


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1 ‘‘SEC. 2796. APPLICATION OF LAW. 

2 ‘‘(a) IN GENERAL.—The covered laws of the primary 

3 State shall apply to individual health insurance coverage 

4 offered by a health insurance issuer in the primary State 

5 and in any secondary State, but only if the coverage and 

6 issuer comply with the conditions of this section with re7 spect to the offering of coverage in any secondary State. 

8 ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC9 ONDARY STATE.—Except as provided in this section, a 

10 health insurance issuer with respect to its offer, sale, rat11 ing (including medical underwriting), renewal, and 

12 issuance of individual health insurance coverage in any 

13 secondary State is exempt from any covered laws of the 

14 secondary State (and any rules, regulations, agreements, 

15 or orders sought or issued by such State under or related 

16 to such covered laws) to the extent that such laws would— 

17 ‘‘(1) make unlawful, or regulate, directly or in18 directly, the operation of the health insurance issuer 

19 operating in the secondary State, except that any 

20 secondary State may require such an issuer— 

21 ‘‘(A) to pay, on a nondiscriminatory basis, 

22 applicable premium and other taxes (including 

23 high risk pool assessments) which are levied on 

24 insurers and surplus lines insurers, brokers, or 

25 policyholders under the laws of the State; 


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1 ‘‘(B) to register with and designate the 

2 State insurance commissioner as its agent solely 

3 for the purpose of receiving service of legal doc4 uments or process; 

5 ‘‘(C) to submit to an examination of its fi6 nancial condition by the State insurance com7 missioner in any State in which the issuer is 

8 doing business to determine the issuer’s finan9 cial condition, if— 

10 ‘‘(i) the State insurance commissioner 

11 of the primary State has not done an ex12 amination within the period recommended 

13 by the National Association of Insurance 

14 Commissioners; and 

15 ‘‘(ii) any such examination is con16 ducted in accordance with the examiners’ 

17 handbook of the National Association of 

18 Insurance Commissioners and is coordi19 nated to avoid unjustified duplication and 

20 unjustified repetition; 

21 ‘‘(D) to comply with a lawful order 

22 issued— 

23 ‘‘(i) in a delinquency proceeding com24 menced by the State insurance commis25 sioner if there has been a finding of finanVerDate Mar 15 2010 23:52 Jan 20, 2011 Jkt 099200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H371.IH H371

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1 cial impairment under subparagraph (C); 

2 or 

3 ‘‘(ii) in a voluntary dissolution pro4 ceeding; 

5 ‘‘(E) to comply with an injunction issued 

6 by a court of competent jurisdiction, upon a pe7 tition by the State insurance commissioner al8 leging that the issuer is in hazardous financial 

9 condition; 

10 ‘‘(F) to participate, on a nondiscriminatory 

11 basis, in any insurance insolvency guaranty as12 sociation or similar association to which a 

13 health insurance issuer in the State is required 

14 to belong; 

15 ‘‘(G) to comply with any State law regard16 ing fraud and abuse (as defined in section 

17 2795(10)), except that if the State seeks an in18 junction regarding the conduct described in this 

19 subparagraph, such injunction must be obtained 

20 from a court of competent jurisdiction; 

21 ‘‘(H) to comply with any State law regard22 ing unfair claims settlement practices (as de23 fined in section 2795(9)); or 

24 ‘‘(I) to comply with the applicable require25 ments for independent review under section 


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1 2798 with respect to coverage offered in the 

2 State; 

3 ‘‘(2) require any individual health insurance 

4 coverage issued by the issuer to be countersigned by 

5 an insurance agent or broker residing in that Sec6 ondary State; or 

7 ‘‘(3) otherwise discriminate against the issuer 

8 issuing insurance in both the primary State and in 

9 any secondary State. 

10 ‘‘(c) CLEAR AND CONSPICUOUS DISCLOSURE.—A 

11 health insurance issuer shall provide the following notice, 

12 in 12-point bold type, in any insurance coverage offered 

13 in a secondary State under this part by such a health in14 surance issuer and at renewal of the policy, with the 5 

15 blank spaces therein being appropriately filled with the 

16 name of the health insurance issuer, the name of primary 

17 State, the name of the secondary State, the name of the 

18 secondary State, and the name of the secondary State, re19 spectively, for the coverage concerned: 

20 ‘‘ ‘NOTICE

21 ‘‘ ‘This policy is issued by lllll and is gov22 erned by the laws and regulations of the State of 

23 lllll, and it has met all the laws of that State as 

24 determined by that State’s Department of Insurance. This 

25 policy may be less expensive than others because it is not 


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1 subject to all of the insurance laws and regulations of the 

2 State of lllll, including coverage of some services 

3 or benefits mandated by the law of the State of 

4 lllll. Additionally, this policy is not subject to all 

5 of the consumer protection laws or restrictions on rate 

6 changes of the State of lllll. As with all insurance 

7 products, before purchasing this policy, you should care8 fully review the policy and determine what health care 

9 services the policy covers and what benefits it provides, 

10 including any exclusions, limitations, or conditions for 

11 such services or benefits.’ ’’. 

12 ‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS

13 AND PREMIUM INCREASES.— 

14 ‘‘(1) IN GENERAL.—For purposes of this sec15 tion, a health insurance issuer that provides indi16 vidual health insurance coverage to an individual 

17 under this part in a primary or secondary State may 

18 not upon renewal— 

19 ‘‘(A) move or reclassify the individual in20 sured under the health insurance coverage from 

21 the class such individual is in at the time of 

22 issue of the contract based on the health-status 

23 related factors of the individual; or 

24 ‘‘(B) increase the premiums assessed the 

25 individual for such coverage based on a health 


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1 status-related factor or change of a health sta2 tus-related factor or the past or prospective 

3 claim experience of the insured individual. 

4 ‘‘(2) CONSTRUCTION.—Nothing in paragraph 

5 (1) shall be construed to prohibit a health insurance 

6 issuer— 

7 ‘‘(A) from terminating or discontinuing 

8 coverage or a class of coverage in accordance 

9 with subsections (b) and (c) of section 2742; 

10 ‘‘(B) from raising premium rates for all 

11 policy holders within a class based on claims ex12 perience; 

13 ‘‘(C) from changing premiums or offering 

14 discounted premiums to individuals who engage 

15 in wellness activities at intervals prescribed by 

16 the issuer, if such premium changes or incen17 tives— 

18 ‘‘(i) are disclosed to the consumer in 

19 the insurance contract; 

20 ‘‘(ii) are based on specific wellness ac21 tivities that are not applicable to all indi22 viduals; and 

23 ‘‘(iii) are not obtainable by all individ24 uals to whom coverage is offered; 

25 ‘‘(D) from reinstating lapsed coverage; or 


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1 ‘‘(E) from retroactively adjusting the rates 

2 charged an insured individual if the initial rates 

3 were set based on material misrepresentation by 

4 the individual at the time of issue. 

5 ‘‘(e) PRIOR OFFERING OF POLICY IN PRIMARY

6 STATE.—A health insurance issuer may not offer for sale 

7 individual health insurance coverage in a secondary State 

8 unless that coverage is currently offered for sale in the 

9 primary State. 

10 ‘‘(f) LICENSING OF AGENTS OR BROKERS FOR

11 HEALTH INSURANCE ISSUERS.—Any State may require 

12 that a person acting, or offering to act, as an agent or 

13 broker for a health insurance issuer with respect to the 

14 offering of individual health insurance coverage obtain a 

15 license from that State, with commissions or other com16 pensation subject to the provisions of the laws of that 

17 State, except that a State may not impose any qualifica18 tion or requirement which discriminates against a non19 resident agent or broker. 

20 ‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN21 SURANCE COMMISSIONER.—Each health insurance issuer 

22 issuing individual health insurance coverage in both pri23 mary and secondary States shall submit— 

24 ‘‘(1) to the insurance commissioner of each 

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1 fore it may offer individual health insurance cov2 erage in such State— 

3 ‘‘(A) a copy of the plan of operation or fea4 sibility study or any similar statement of the 

5 policy being offered and its coverage (which 

6 shall include the name of its primary State and 

7 its principal place of business); 

8 ‘‘(B) written notice of any change in its 

9 designation of its primary State; and 

10 ‘‘(C) written notice from the issuer of the 

11 issuer’s compliance with all the laws of the pri12 mary State; and 

13 ‘‘(2) to the insurance commissioner of each sec14 ondary State in which it offers individual health in15 surance coverage, a copy of the issuer’s quarterly fi16 nancial statement submitted to the primary State, 

17 which statement shall be certified by an independent 

18 public accountant and contain a statement of opin19 ion on loss and loss adjustment expense reserves 

20 made by— 

21 ‘‘(A) a member of the American Academy 

22 of Actuaries; or 

23 ‘‘(B) a qualified loss reserve specialist. 


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1 ‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 

2 Nothing in this section shall be construed to affect the 

3 authority of any Federal or State court to enjoin— 

4 ‘‘(1) the solicitation or sale of individual health 

5 insurance coverage by a health insurance issuer to 

6 any person or group who is not eligible for such in7 surance; or 

8 ‘‘(2) the solicitation or sale of individual health 

9 insurance coverage that violates the requirements of 

10 the law of a secondary State which are described in 

11 subparagraphs (A) through (H) of section 

12 2796(b)(1). 

13 ‘‘(i) POWER OF SECONDARY STATES TO TAKE AD14 MINISTRATIVE ACTION.—Nothing in this section shall be 

15 construed to affect the authority of any State to enjoin 

16 conduct in violation of that State’s laws described in sec17 tion 2796(b)(1). 

18 ‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 

19 ‘‘(1) IN GENERAL.—Subject to the provisions of 

20 subsection (b)(1)(G) (relating to injunctions) and 

21 paragraph (2), nothing in this section shall be con22 strued to affect the authority of any State to make 

23 use of any of its powers to enforce the laws of such 

24 State with respect to which a health insurance issuer 

25 is not exempt under subsection (b). 


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1 ‘‘(2) COURTS OF COMPETENT JURISDICTION.— 

2 If a State seeks an injunction regarding the conduct 

3 described in paragraphs (1) and (2) of subsection 

4 (h), such injunction must be obtained from a Fed5 eral or State court of competent jurisdiction. 

6 ‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 

7 section shall affect the authority of any State to bring ac8 tion in any Federal or State court. 

9 ‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 

10 this section shall be construed to affect the applicability 

11 of State laws generally applicable to persons or corpora12 tions. 

13 ‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO

14 HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 

15 health insurance issuer is offering coverage in a primary 

16 State that does not accommodate residents of secondary 

17 States or does not provide a working mechanism for resi18 dents of a secondary State, and the issuer is offering cov19 erage under this part in such secondary State which has 

20 not adopted a qualified high risk pool as its acceptable 

21 alternative mechanism (as defined in section 2744(c)(2)), 

22 the issuer shall, with respect to any individual health in23 surance coverage offered in a secondary State under this 

24 part, comply with the guaranteed availability requirements 

25 for eligible individuals in section 2741. 


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1 ‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 

2 BEFORE ISSUER MAY SELL INTO SECONDARY 

3 STATES. 

4 ‘‘A health insurance issuer may not offer, sell, or 

5 issue individual health insurance coverage in a secondary 

6 State if the State insurance commissioner does not use 

7 a risk-based capital formula for the determination of cap8 ital and surplus requirements for all health insurance 

9 issuers. 

10 ‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE11 DURES. 

12 ‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur13 ance issuer may not offer, sell, or issue individual health 

14 insurance coverage in a secondary State under the provi15 sions of this title unless— 

16 ‘‘(1) both the secondary State and the primary 

17 State have legislation or regulations in place estab18 lishing an independent review process for individuals 

19 who are covered by individual health insurance cov20 erage, or 

21 ‘‘(2) in any case in which the requirements of 

22 subparagraph (A) are not met with respect to the ei23 ther of such States, the issuer provides an inde24 pendent review mechanism substantially identical (as 

25 determined by the applicable State authority of such 

26 State) to that prescribed in the ‘Health Carrier ExVerDate Mar 15 2010 23:52 Jan 20, 2011 Jkt 099200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H371.IH H371

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1 ternal Review Model Act’ of the National Association 

2 of Insurance Commissioners for all individuals who 

3 purchase insurance coverage under the terms of this 

4 part, except that, under such mechanism, the review 

5 is conducted by an independent medical reviewer, or 

6 a panel of such reviewers, with respect to whom the 

7 requirements of subsection (b) are met. 

8 ‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL

9 REVIEWERS.—In the case of any independent review 

10 mechanism referred to in subsection (a)(2)— 

11 ‘‘(1) IN GENERAL.—In referring a denial of a 

12 claim to an independent medical reviewer, or to any 

13 panel of such reviewers, to conduct independent 

14 medical review, the issuer shall ensure that— 

15 ‘‘(A) each independent medical reviewer 

16 meets the qualifications described in paragraphs 

17 (2) and (3); 

18 ‘‘(B) with respect to each review, each re19 viewer meets the requirements of paragraph (4) 

20 and the reviewer, or at least 1 reviewer on the 

21 panel, meets the requirements described in 

22 paragraph (5); and 

23 ‘‘(C) compensation provided by the issuer 

24 to each reviewer is consistent with paragraph 

25 (6). 


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1 ‘‘(2) LICENSURE AND EXPERTISE.—Each inde2 pendent medical reviewer shall be a physician 

3 (allopathic or osteopathic) or health care profes4 sional who— 

5 ‘‘(A) is appropriately credentialed or li6 censed in 1 or more States to deliver health 

7 care services; and 

8 ‘‘(B) typically treats the condition, makes 

9 the diagnosis, or provides the type of treatment 

10 under review. 

11 ‘‘(3) INDEPENDENCE.— 

12 ‘‘(A) IN GENERAL.—Subject to subpara13 graph (B), each independent medical reviewer 

14 in a case shall— 

15 ‘‘(i) not be a related party (as defined 

16 in paragraph (7)); 

17 ‘‘(ii) not have a material familial, fi18 nancial, or professional relationship with 

19 such a party; and 

20 ‘‘(iii) not otherwise have a conflict of 

21 interest with such a party (as determined 

22 under regulations). 

23 ‘‘(B) EXCEPTION.—Nothing in subpara24 graph (A) shall be construed to— 


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1 ‘‘(i) prohibit an individual, solely on 

2 the basis of affiliation with the issuer, 

3 from serving as an independent medical re4 viewer if— 

5 ‘‘(I) a non-affiliated individual is 

6 not reasonably available; 

7 ‘‘(II) the affiliated individual is 

8 not involved in the provision of items 

9 or services in the case under review; 

10 ‘‘(III) the fact of such an affili11 ation is disclosed to the issuer and the 

12 enrollee (or authorized representative) 

13 and neither party objects; and 

14 ‘‘(IV) the affiliated individual is 

15 not an employee of the issuer and 

16 does not provide services exclusively or 

17 primarily to or on behalf of the issuer; 

18 ‘‘(ii) prohibit an individual who has 

19 staff privileges at the institution where the 

20 treatment involved takes place from serv21 ing as an independent medical reviewer 

22 merely on the basis of such affiliation if 

23 the affiliation is disclosed to the issuer and 

24 the enrollee (or authorized representative), 

25 and neither party objects; or 


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1 ‘‘(iii) prohibit receipt of compensation 

2 by an independent medical reviewer from 

3 an entity if the compensation is provided 

4 consistent with paragraph (6). 

5 ‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL

6 IN SAME FIELD.— 

7 ‘‘(A) IN GENERAL.—In a case involving 

8 treatment, or the provision of items or serv9 ices— 

10 ‘‘(i) by a physician, a reviewer shall be 

11 a practicing physician (allopathic or osteo12 pathic) of the same or similar specialty, as 

13 a physician who, acting within the appro14 priate scope of practice within the State in 

15 which the service is provided or rendered, 

16 typically treats the condition, makes the 

17 diagnosis, or provides the type of treat18 ment under review; or 

19 ‘‘(ii) by a non-physician health care 

20 professional, the reviewer, or at least 1 

21 member of the review panel, shall be a 

22 practicing non-physician health care pro23 fessional of the same or similar specialty 

24 as the non-physician health care profes25 sional who, acting within the appropriate 


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1 scope of practice within the State in which 

2 the service is provided or rendered, typi3 cally treats the condition, makes the diag4 nosis, or provides the type of treatment 

5 under review. 

6 ‘‘(B) PRACTICING DEFINED.—For pur7 poses of this paragraph, the term ‘practicing’ 

8 means, with respect to an individual who is a 

9 physician or other health care professional, that 

10 the individual provides health care services to 

11 individual patients on average at least 2 days 

12 per week. 

13 ‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 

14 external review relating to a child, a reviewer shall 

15 have expertise under paragraph (2) in pediatrics. 

16 ‘‘(6) LIMITATIONS ON REVIEWER COMPENSA17 TION.—Compensation provided by the issuer to an 

18 independent medical reviewer in connection with a 

19 review under this section shall— 

20 ‘‘(A) not exceed a reasonable level; and 

21 ‘‘(B) not be contingent on the decision ren22 dered by the reviewer. 

23 ‘‘(7) RELATED PARTY DEFINED.—For purposes 

24 of this section, the term ‘related party’ means, with 


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1 respect to a denial of a claim under a coverage relat2 ing to an enrollee, any of the following: 

3 ‘‘(A) The issuer involved, or any fiduciary, 

4 officer, director, or employee of the issuer. 

5 ‘‘(B) The enrollee (or authorized represent6 ative). 

7 ‘‘(C) The health care professional that pro8 vides the items or services involved in the de9 nial. 

10 ‘‘(D) The institution at which the items or 

11 services (or treatment) involved in the denial 

12 are provided. 

13 ‘‘(E) The manufacturer of any drug or 

14 other item that is included in the items or serv15 ices involved in the denial. 

16 ‘‘(F) Any other party determined under 

17 any regulations to have a substantial interest in 

18 the denial involved. 

19 ‘‘(8) DEFINITIONS.—For purposes of this sub20 section: 

21 ‘‘(A) ENROLLEE.—The term ‘enrollee’ 

22 means, with respect to health insurance cov23 erage offered by a health insurance issuer, an 

24 individual enrolled with the issuer to receive 

25 such coverage. 


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1 ‘‘(B) HEALTH CARE PROFESSIONAL.—The 

2 term ‘health care professional’ means an indi3 vidual who is licensed, accredited, or certified 

4 under State law to provide specified health care 

5 services and who is operating within the scope 

6 of such licensure, accreditation, or certification. 

7 ‘‘SEC. 2799. ENFORCEMENT. 

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

9 respect to specific individual health insurance coverage the 

10 primary State for such coverage has sole jurisdiction to 

11 enforce the primary State’s covered laws in the primary 

12 State and any secondary State. 

13 ‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 

14 subsection (a) shall be construed to affect the authority 

15 of a secondary State to enforce its laws as set forth in 

16 the exception specified in section 2796(b)(1). 

17 ‘‘(c) COURT INTERPRETATION.—In reviewing action 

18 initiated by the applicable secondary State authority, the 

19 court of competent jurisdiction shall apply the covered 

20 laws of the primary State. 

21 ‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 

22 of individual health insurance coverage offered in a sec23 ondary State that fails to comply with the covered laws 

24 of the primary State, the applicable State authority of the 


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1 secondary State may notify the applicable State authority 

2 of the primary State.’’. 

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

4 subsection (a) shall apply to individual health insurance 

5 coverage offered, issued, or sold after the date that is one 

6 year after the date of the enactment of this Act. 

7 (c) GAO ONGOING STUDY AND REPORTS.— 

8 (1) STUDY.—The Comptroller General of the 

9 United States shall conduct an ongoing study con10 cerning the effect of the amendment made by sub11 section (a) on— 

12 (A) the number of uninsured and under-in13 sured; 

14 (B) the availability and cost of health in15 surance policies for individuals with pre-existing 

16 medical conditions; 

17 (C) the availability and cost of health in18 surance policies generally; 

19 (D) the elimination or reduction of dif20 ferent types of benefits under health insurance 

21 policies offered in different States; and 

22 (E) cases of fraud or abuse relating to 

23 health insurance coverage offered under such 

24 amendment and the resolution of such cases. 


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1 (2) ANNUAL REPORTS.—The Comptroller Gen2 eral shall submit to Congress an annual report, after 

3 the end of each of the 5 years following the effective 

4 date of the amendment made by subsection (a), on 

5 the ongoing study conducted under paragraph (1). 

6 SEC. 6. SEVERABILITY. 

7 If any provision of the Act or the application of such 

8 provision to any person or circumstance is held to be un9 constitutional, the remainder of this Act and the applica10 tion of the provisions of such to any other person or cir11 cumstance shall not be affected. 

Æ 


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