II 

109TH CONGRESS 

2D SESSION S. 2551 

To provide for prompt payment and interest on late payments of health 

care claims. 

IN THE SENATE OF THE UNITED STATES 

APRIL 5, 2006 

Mr. MENENDEZ (for himself and Mr. LAUTENBERG) introduced the following 

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

A BILL 

To provide for prompt payment and interest on late 

payments of health care claims. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prompt Payment of 

5 Health Benefits Claims Act of 2006’’. 

6 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN7 COME SECURITY ACT OF 1974. 

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

9 B of title I of the Employee Retirement Income Security 


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1 Act of 1974 (29 U.S.C. 1185 et seq.) is amended by add2 ing at the end the following: 

3 ‘‘SEC. 714. PROMPT PAYMENT OF HEALTH BENEFITS 

4 CLAIMS. 

5 ‘‘(a) TIMEFRAME FOR PAYMENT OF CLEAN CLAIM.— 

6 A group health plan, and a health insurance issuer offer7 ing group health insurance coverage in connection with a 

8 group health plan, shall pay all clean claims and 

9 uncontested claims— 

10 ‘‘(1) in the case of a claim that is submitted 

11 electronically, within 14 days of the date on which 

12 the claim is submitted; or 

13 ‘‘(2) in the case of a claim that is not submitted 

14 electronically, within 30 days of the date on which 

15 the claim is submitted. 

16 ‘‘(b) PROCEDURES INVOLVING SUBMITTED

17 CLAIMS.— 

18 ‘‘(1) IN GENERAL.—Not later than 10 days 

19 after the date on which a clean claim is submitted, 

20 a group health plan, and a health insurance issuer 

21 offering group health insurance coverage in connec22 tion with a group health plan, shall provide the 

23 claimant with a notice that acknowledges receipt of 

24 the claim by the plan or issuer. Such notice shall be 

25 considered to have been provided on the date on 


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1 which the notice is mailed or electronically trans2 ferred. 

3 ‘‘(2) CLAIM DEEMED TO BE CLEAN.—A claim is 

4 deemed to be a clean claim under this section if the 

5 group health plan or health insurance issuer involved 

6 does not provide notice to the claimant of any defi7 ciency in the claim within 10 days of the date on 

8 which the claim is submitted. 

9 ‘‘(3) CLAIM DETERMINED TO NOT BE A CLEAN

10 CLAIM.— 

11 ‘‘(A) IN GENERAL.—If a group health plan 

12 or health insurance issuer determines that a 

13 claim for health care expenses is not a clean 

14 claim, the plan or issuer shall, not later than 

15 the end of the period described in paragraph 

16 (2), notify the claimant of such determination. 

17 Such notification shall specify all deficiencies in 

18 the claim and shall list with specificity all addi19 tional information or documents necessary for 

20 the proper processing and payment of the 

21 claim. 

22 ‘‘(B) DETERMINATION AFTER SUBMISSION

23 OF ADDITIONAL INFORMATION.—A claim is 

24 deemed to be a clean claim under this para25 graph if the group health plan or health insurVerDate Aug 31 2005 08:41 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2551.IS S2551

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1 ance issuer involved does not provide notice to 

2 the claimant of any deficiency in the claim with3 in 10 days of the date on which additional in4 formation is received pursuant to subparagraph 

5 (A). 

6 ‘‘(C) PAYMENT OF UNCONTESTED POR7 TION OF A CLAIM.—A group health plan or 

8 health insurance issuer shall pay any 

9 uncontested portion of a claim in accordance 

10 with subsection (a). 

11 ‘‘(4) OBLIGATION TO PAY.—A claim for health 

12 care expenses that is not paid or contested by a 

13 group health plan or health insurance issuer within 

14 the timeframes set forth in this subsection shall be 

15 deemed to be a clean claim and paid by the plan or 

16 issuer in accordance with subsection (a). 

17 ‘‘(c) DATE OF PAYMENT OF CLAIM.—Payment of a 

18 clean claim under this section is considered to have been 

19 made on the date on which full payment is received by 

20 the health care provider. 

21 ‘‘(d) INTEREST SCHEDULE.— 

22 ‘‘(1) IN GENERAL.—With respect to a clean 

23 claim, a group health plan or health insurance issuer 

24 that fails to comply with subsection (a) shall pay the 

25 claimant interest on the amount of such claim, from 


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1 the date on which such payment was due as provided 

2 in this section, at the following rates: 

‘‘(A) 11 3 ⁄2 percent per month from the 1st 

4 day of nonpayment after payment is due 

5 through the 15th day of such nonpayment. 

6 ‘‘(B) 2 percent per month from the 16th 

7 day of such nonpayment through the 45th day 

8 of such nonpayment. 

‘‘(C) 21 9 ⁄2 percent per month after the 46th 

10 day of such nonpayment. 

11 ‘‘(2) CONTESTED CLAIMS.—With respect to 

12 claims for health care expenses that are contested by 

13 the plan or issuer, once such claim is deemed clean 

14 under subsection (b), the interest rate applicable for 

15 noncompliance under this subsection shall apply con16 sistent with paragraph (1). 

17 ‘‘(e) PRIVATE RIGHT OF ACTION.—Nothing in this 

18 section shall be construed to prohibit or limit a claim or 

19 action not covered by the subject matter of this section 

20 that any claimant has against a group health plan, or a 

21 health insurance issuer. 

22 ‘‘(f) ANTI-RETALIATION.—Consistent with applicable 

23 Federal or State law, a group health plan or health insur24 ance issuer shall not retaliate against a claimant for exer25 cising a right of action under this section. 


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1 ‘‘(g) FINES AND PENALTIES.— 

2 ‘‘(1) FINES.— 

3 ‘‘(A) IN GENERAL.—If a group health 

4 plan, or health insurance issuer offering group 

5 health insurance coverage, willfully and know6 ingly violates this section or has a pattern of re7 peated violations of this section, the Secretary 

8 shall impose a fine not to exceed $1,000 per 

9 claim for each day a response is delinquent be10 yond the date on which such response is re11 quired under this section. 

12 ‘‘(B) REPEATED VIOLATIONS.—If 3 sepa13 rate fines under subparagraph (A) are levied 

14 within a 5-year period, the Secretary is author15 ized to impose a penalty in an amount not to 

16 exceed $10,000 per claim. 

17 ‘‘(2) REMEDIAL ACTION PLAN.—Where it is es18 tablished that the group health plan or health insur19 ance issuer willfully and knowingly violated this sec20 tion or has a pattern of repeated violations, the Sec21 retary shall require the group health plan or health 

22 insurance issuer to— 

23 ‘‘(A) submit a remedial action plan to the 

24 Secretary; and 


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1 ‘‘(B) contact claimants regarding the 

2 delays in the processing of claims and inform 

3 claimants of steps being taken to improve such 

4 delays. 

5 ‘‘(h) DEFINITIONS.—In this section: 

6 ‘‘(1) CLAIMANT.—The term ‘claimant’ means a 

7 participant, beneficiary, pharmacy, or health care 

8 provider submitting a claim for payment of health 

9 care expenses. 

10 ‘‘(2) CLEAN CLAIM.—The term ‘clean claim’ 

11 means a claim— 

12 ‘‘(A) with respect to health care expenses 

13 for an individual who is covered under a group 

14 health plan on the date such expenses are in15 curred; 

16 ‘‘(B) for such expenses that are covered 

17 under such plan at such time; and 

18 ‘‘(C) that is submitted with all of the infor19 mation requested by a group health plan or 

20 health insurance issuer offering group health 

21 insurance coverage in connection with a group 

22 health plan on the claim form or other instruc23 tions provided to the health care provider prior 

24 to submission of the claim. 


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1 ‘‘(3) CONTESTED CLAIM.—The term ‘contested 

2 claim’ means a claim for health care expenses that 

3 is denied by a group health plan or health insurance 

4 issuer during or after the benefit determination 

5 process. 

6 ‘‘(4) HEALTH CARE PROVIDER.—The term 

7 ‘health care provider’ includes a physician or other 

8 individual who is licensed, accredited, or certified 

9 under State law to provide specified health care 

10 services and who is operating within the scope of 

11 such licensure, accreditation, or certification, as well 

12 as an institution or other facility or agency that pro13 vides health care services and is licensed, accredited, 

14 or certified to provide health care items and services 

15 under applicable State law.’’. 

16 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE 

17 ACT. 

18 (a) GROUP MARKET.—Subpart 2 of part A of title 

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

20 300gg–4 et seq.) is amended by adding at the end the 

21 following: 

22 ‘‘SEC. 2707. PROMPT PAYMENT OF HEALTH BENEFITS 

23 CLAIMS. 

24 ‘‘(a) TIMEFRAME FOR PAYMENT OF CLEAN CLAIM.— 

25 A group health plan, and a health insurance issuer offerVerDate Aug 31 2005 08:41 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2551.IS S2551

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1 ing group health insurance coverage in connection with a 

2 group health plan, shall pay all clean claims and 

3 uncontested claims— 

4 ‘‘(1) in the case of a claim that is submitted 

5 electronically, within 14 days of the date on which 

6 the claim is submitted; or 

7 ‘‘(2) in the case of a claim that is not submitted 

8 electronically, within 30 days of the date on which 

9 the claim is submitted. 

10 ‘‘(b) PROCEDURES INVOLVING SUBMITTED

11 CLAIMS.— 

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

13 after the date on which a clean claim is submitted, 

14 a group health plan, and a health insurance issuer 

15 offering group health insurance coverage in connec16 tion with a group health plan, shall provide the 

17 claimant with a notice that acknowledges receipt of 

18 the claim by the plan or issuer. Such notice shall be 

19 considered to have been provided on the date on 

20 which the notice is mailed or electronically trans21 ferred. 

22 ‘‘(2) CLAIM DEEMED TO BE A CLEAN CLAIM.— 

23 A claim is deemed to be a clean claim under this 

24 section if the group health plan or health insurance 

25 issuer involved does not provide notice to the claimVerDate Aug 31 2005 08:41 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2551.IS S2551

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1 ant of any deficiency in the claim within 10 days of 

2 the date on which the claim is submitted. 

3 ‘‘(3) CLAIM DETERMINED TO NOT BE A CLEAN

4 CLAIM.— 

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

6 or health insurance issuer determines that a 

7 claim for health care expenses is not clean, the 

8 plan or issuer shall, not later than the end of 

9 the period described in paragraph (2), notify 

10 the claimant of such determination. Such notifi11 cation shall specify all deficiencies in the claim 

12 and shall list with specificity all additional in13 formation or documents necessary for the prop14 er processing and payment of the claim. 

15 ‘‘(B) DETERMINATION AFTER SUBMISSION

16 OF ADDITIONAL INFORMATION.—A claim is 

17 deemed to be a clean claim under this para18 graph if the group health plan or health insur19 ance issuer involved does not provide notice to 

20 the claimant of any deficiency in the claim with21 in 10 days of the date on which the additional 

22 information is received pursuant to subpara23 graph (A). 

24 ‘‘(C) PAYMENT OF UNCONTESTED POR25 TION OF A CLAIM.—A group health plan or 


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1 health insurance issuer shall pay any 

2 uncontested portion of a claim in accordance 

3 with subsection (a). 

4 ‘‘(4) OBLIGATION TO PAY.—A claim for health 

5 care expenses that is not paid or contested by a 

6 group health plan or health insurance issuer within 

7 the timeframes set forth in this subsection shall be 

8 deemed to be a clean claim and paid by the plan or 

9 issuer in accordance with subsection (a). 

10 ‘‘(c) DATE OF PAYMENT OF CLAIM.—Payment of a 

11 clean claim under this section is considered to have been 

12 made on the date on which full payment is received by 

13 the health care provider. 

14 ‘‘(d) INTEREST SCHEDULE.— 

15 ‘‘(1) IN GENERAL.—With respect to a clean 

16 claim, a group health plan or health insurance issuer 

17 that fails to comply with subsection (a) shall pay the 

18 claimant interest on the amount of such claim, from 

19 the date on which such payment was due as provided 

20 in this section, at the following rates: 

‘‘(A) 11 21 ⁄2 percent per month from the 1st 

22 day of nonpayment after payment is due 

23 through the 15th day of such nonpayment. 


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1 ‘‘(B) 2 percent per month from the 16th 

2 day of such nonpayment through the 45th day 

3 of such nonpayment. 

‘‘(C) 21 4 ⁄2 percent per month after the 46th 

5 day of such nonpayment. 

6 ‘‘(2) CONTESTED CLAIMS.—With respect to 

7 claims for health care expenses that are contested by 

8 the plan or issuer, once such claim is deemed clean 

9 under subsection (b), the interest rate applicable for 

10 noncompliance under this subsection shall apply con11 sistent with paragraph (1). 

12 ‘‘(e) PRIVATE RIGHT OF ACTION.—Nothing in this 

13 section shall be construed to prohibit or limit a claim or 

14 action not covered by the subject matter of this section 

15 that any claimant has against a group health plan, or a 

16 health insurance issuer. 

17 ‘‘(f) ANTI-RETALIATION.—Consistent with applicable 

18 Federal or State law, a group health plan or health insur19 ance issuer shall not retaliate against a claimant for exer20 cising a right of action under this section. 

21 ‘‘(g) FINES AND PENALTIES.— 

22 ‘‘(1) FINES.— 

23 ‘‘(A) IN GENERAL.—If a group health 

24 plan, or health insurance issuer offering group 

25 health insurance coverage, willfully and knowVerDate Aug 31 2005 08:41 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2551.IS S2551

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1 ingly violates this section or has a pattern of re2 peated violations of this section, the Secretary 

3 shall impose a fine not to exceed $1,000 per 

4 claim for each day a response is delinquent be5 yond the date on which such response is re6 quired under this section. 

7 ‘‘(B) REPEATED VIOLATIONS.—If 3 sepa8 rate fines under subparagraph (A) are levied 

9 within a 5-year period, the Secretary is author10 ized to impose a penalty in an amount not to 

11 exceed $10,000 per claim. 

12 ‘‘(2) REMEDIAL ACTION PLAN.—Where it is es13 tablished that the group health plan or health insur14 ance issuer willfully and knowingly violated this sec15 tion or has a pattern of repeated violations, the Sec16 retary shall require the health plan or health insur17 ance issuer to— 

18 ‘‘(A) submit a remedial action plan to the 

19 Secretary; and 

20 ‘‘(B) contact claimants regarding the 

21 delays in the processing of claims and inform 

22 claimants of steps being taken to improve such 

23 delays. 

24 ‘‘(h) DEFINITIONS.—In this section: 


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1 ‘‘(1) CLAIMANT.—The term ‘claimant’ means a 

2 participant, beneficiary, pharmacy, or health care 

3 provider submitting a claim for payment of health 

4 care expenses. 

5 ‘‘(2) CLEAN CLAIM.—The term ‘clean claim’ 

6 means a claim— 

7 ‘‘(A) with respect to health care expenses 

8 for an individual who is covered under a group 

9 health plan on the date such expenses are in10 curred; 

11 ‘‘(B) for such expenses that are covered 

12 under such plan at such time; and 

13 ‘‘(C) that is submitted with all of the infor14 mation requested by a group health plan or 

15 health insurance issuer offering group health 

16 insurance coverage in connection with a group 

17 health plan on the claim form or other instruc18 tions provided to the health care provider prior 

19 to submission of the claim. 

20 ‘‘(3) CONTESTED CLAIM.—The term ‘contested 

21 claim’ means a claim for health care expenses that 

22 is denied by a group health plan or health insurance 

23 issuer during or after the benefit determination 

24 process. 


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1 ‘‘(4) HEALTH CARE PROVIDER.—The term 

2 ‘health care provider’ includes a physician or other 

3 individual who is licensed, accredited, or certified 

4 under State law to provide specified health care 

5 services and who is operating within the scope of 

6 such licensure, accreditation, or certification, as well 

7 as an institution or other facility or agency that pro8 vides health care services and is licensed, accredited, 

9 or certified to provide health care items and services 

10 under applicable State law.’’. 

11 (b) INDIVIDUAL MARKET.—Part B of title XXVII of 

12 the Public Health Service Act (42 U.S.C. 300gg–41 et 

13 seq.) is amended— 

14 (1) by redesignating the first subpart 3 (relat15 ing to other requirements) as subpart 2; and 

16 (2) by adding at the end of subpart 2 the fol17 lowing: 

18 ‘‘SEC. 2753. STANDARDS RELATING TO PROMPT PAYMENT 

19 OF HEALTH BENEFITS CLAIMS. 

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

21 insurance coverage offered by a health insurance issuer 

22 in the individual market in the same manner as they apply 

23 to health insurance coverage offered by a health insurance 

24 issuer in connection with a group health plan in the small 

25 or large group market.’’. 


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1 SEC. 4. AMENDMENTS TO THE SOCIAL SECURITY ACT. 

2 (a) PROMPT PAYMENT BY PRESCRIPTION DRUG

3 PLANS.—Section 1860D–12(b) of the Social Security Act 

4 (42 U.S.C. 1395w–112(b)) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(4) PROMPT PAYMENT OF CLEAN CLAIMS.— 

7 ‘‘(A) PROMPT PAYMENT.— 

8 ‘‘(i) IN GENERAL.—Each contract en9 tered into with a PDP sponsor under this 

10 section with respect to a prescription drug 

11 plan offered by such sponsor shall provide 

12 that payment shall be issued, mailed, or 

13 otherwise transmitted with respect to all 

14 clean claims submitted under this part 

15 within the applicable number of calendar 

16 days after the date on which the claim is 

17 received. 

18 ‘‘(ii) CLEAN CLAIM DEFINED.—In this 

19 paragraph, the term ‘clean claim’ means a 

20 claim— 

21 ‘‘(I) with respect to health care 

22 expenses for an individual who is cov23 ered under a group health plan on the 

24 date such expenses are incurred; 


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1 ‘‘(II) for such expenses that are 

2 covered under such plan at such time; 

3 and 

4 ‘‘(III) that is submitted with all 

5 of the information requested by a 

6 group health plan or health insurance 

7 issuer offering group health insurance 

8 coverage in connection with a group 

9 health plan on the claim form or other 

10 instructions provided to the health 

11 care provider prior to submission of 

12 the claim. 

13 ‘‘(B) APPLICABLE NUMBER OF CALENDAR

14 DAYS DEFINED.—In this paragraph, the term 

15 ‘applicable number of calendar days’ means— 

16 ‘‘(i) with respect to claims submitted 

17 electronically, 14 days; and 

18 ‘‘(ii) with respect to claims submitted 

19 otherwise, 30 days. 

20 ‘‘(C) INTEREST SCHEDULE.— 

21 ‘‘(i) IN GENERAL.—With respect to a 

22 clean claim, a PDP sponsor that fails to 

23 comply with subparagraph (A) shall pay 

24 the claimant interest on the amount of 

25 such claim, from the date on which such 


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1 payment was due as provided in this para2 graph, at the following rates: 

‘‘(I) 11 3 ⁄2 percent per month from 

4 the 1st day of nonpayment after pay5 ment is due through the 15th day of 

6 such nonpayment. 

7 ‘‘(II) 2 percent per month from 

8 the 16th day of such nonpayment 

9 through the 45th day of such non10 payment. 

‘‘(III) 21 11 ⁄2 percent per month 

12 after the 46th day of such non13 payment. 

14 ‘‘(D) PROCEDURES INVOLVING CLAIMS.— 

15 ‘‘(i) IN GENERAL.—A contract entered 

16 into with a PDP sponsor under this sec17 tion with respect to a prescription drug 

18 plan offered by such sponsor shall provide 

19 that, not later than 10 days after the date 

20 on which a clean claim is submitted, the 

21 PDP sponsor shall provide the claimant 

22 with a notice that acknowledges receipt of 

23 the claim by such sponsor. Such notice 

24 shall be considered to have been provided 


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1 on the date on which the notice is mailed 

2 or electronically transferred. 

3 ‘‘(ii) CLAIM DEEMED TO BE A CLEAN

4 CLAIM.—A claim is deemed to be a clean 

5 claim if the PDP sponsor involved does not 

6 provide notice to the claimant of any defi7 ciency in the claim within 10 days of the 

8 date on which the claim is submitted. 

9 ‘‘(iii) CLAIM DETERMINED TO NOT BE

10 A CLEAN CLAIM.— 

11 ‘‘(I) IN GENERAL.—If a PDP 

12 sponsor determines that a submitted 

13 claim is not a clean claim, the PDP 

14 sponsor shall, not later than the end 

15 of the period described in clause (ii), 

16 notify the claimant of such determina17 tion. Such notification shall specify all 

18 defects or improprieties in the claim 

19 and shall list with specificity all addi20 tional information or documents nec21 essary for the proper processing and 

22 payment of the claim. 

23 ‘‘(II) DETERMINATION AFTER

24 SUBMISSION OF ADDITIONAL INFOR25 MATION.—A claim is deemed to be a 


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1 clean claim under this paragraph if 

2 the PDP sponsor involved does not 

3 provide notice to the claimant of any 

4 defect or impropriety in the claim 

5 within 10 days of the date on which 

6 additional information is received 

7 under subclause (I). 

8 ‘‘(III) PAYMENT OF CLEAN POR9 TION OF A CLAIM.—A PDP sponsor 

10 shall, as appropriate, pay any portion 

11 of a claim that would be a clean claim 

12 but for a defect or impropriety in a 

13 separate portion of the claim in ac14 cordance with subparagraph (A). 

15 ‘‘(iv) OBLIGATION TO PAY.—A claim 

16 submitted to a PDP sponsor that is not 

17 paid or contested by the provider within 

18 the applicable number of days (as defined 

19 in subparagraph (B)) shall be deemed to 

20 be a clean claim and shall be paid by the 

21 PDP sponsor in accordance with subpara22 graph (A). 

23 ‘‘(v) DATE OF PAYMENT OF CLAIM.— 

24 Payment of a clean claim under such sub25 paragraph is considered to have been made 


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1 on the date on which full payment is re2 ceived by the provider. 

3 ‘‘(E) PRIVATE RIGHT OF ACTION.— 

4 ‘‘(i) IN GENERAL.—Nothing in this 

5 paragraph shall be construed to prohibit or 

6 limit a claim or action not covered by the 

7 subject matter of this section that any in8 dividual or organization has against a pro9 vider or a PDP sponsor. 

10 ‘‘(ii) ANTI-RETALIATION.—Consistent 

11 with applicable Federal or State law, a 

12 PDP sponsor shall not retaliate against an 

13 individual or provider for exercising a right 

14 of action under this subparagraph. 

15 ‘‘(F) FINES AND PENALTIES.— 

16 ‘‘(i) FINES.— 

17 ‘‘(I) IN GENERAL.—If a PDP 

18 sponsor willfully and knowingly vio19 lates this section or has a pattern of 

20 repeated violations of this section, the 

21 Secretary shall impose a fine not to 

22 exceed $1,000 per claim for each day 

23 a response is delinquent beyond the 

24 date on which such response is re25 quired under this paragraph. 


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1 ‘‘(II) REPEATED VIOLATIONS.— 

2 If 3 separate fines under subclause (I) 

3 are levied within a 5-year period, the 

4 Secretary is authorized to impose a 

5 penalty in an amount not to exceed 

6 $10,000 per claim. 

7 ‘‘(ii) REMEDIAL ACTION PLAN.— 

8 Where it is established that the PDP spon9 sor willfully and knowingly violated this 

10 section or has a pattern of repeated viola11 tions, the Secretary shall require the PDP 

12 sponsor to— 

13 ‘‘(I) submit a remedial action 

14 plan to the Secretary; and 

15 ‘‘(II) contact claimants regarding 

16 the delays in the processing of claims 

17 and inform claimants of steps being 

18 taken to improve such delays.’’. 

19 (b) PROMPT PAYMENT BY MA-PD PLANS.—Section 

20 1857(f) of the Social Security Act (42 U.S.C. 1395w–27) 

21 is amended by adding at the end the following new para22 graph: 

23 ‘‘(3) INCORPORATION OF CERTAIN PRESCRIP24 TION DRUG PLAN CONTRACT REQUIREMENTS.—The 

25 provisions of section 1860D–12(b)(4) shall apply to 


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1 contracts with a Medicare Advantage organization in 

2 the same manner as they apply to contracts with a 

3 PDP sponsor offering a prescription drug plan 

4 under part D.’’. 

5 (c) MEDICAID.—Section 1932(f) of the Social Secu6 rity Act (42 U.S.C. 1396u–2(f)) is amended by striking 

7 ‘‘the claims payment procedures described in section 

8 1902(a)(37)(A), unless the health care provider and the 

9 organization agree to an alternate payment schedule’’ and 

10 inserting ‘‘section 1860D–12(b)(4), in the same manner 

11 as the provisions of such section apply to a PDP sponsor 

12 offering a prescription drug plan under part D’’. 

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

14 this section shall apply to contracts entered into or re15 newed on or after December 31, 2006. 

16 SEC. 5. PREEMPTION. 

17 The provisions of this Act shall not supersede any 

18 contrary provision of State law if the provision of State 

19 law imposes requirements, standards, or implementation 

20 specifications that are equal to or more stringent than the 

21 requirements, standards, or implementation specifications 

22 imposed under this Act, and any such requirements, 

23 standards, or implementation specifications under State 

24 law that are equal to or more stringent than the require25 ments, standards, or implementation specifications under 


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1 this Act shall apply to group health plans and health in2 surance issuers as provided for under State law. 

3 SEC. 6. EFFECTIVE DATE. 

4 (a) IN GENERAL.—Except as provided in section 4 

5 and subsection (b), the amendments made by this Act 

6 shall apply with respect to group health plans and health 

7 insurance issuers for plan years beginning after December 

8 31, 2006. 

9 (b) SPECIAL RULE FOR COLLECTIVE BARGAINING

10 AGREEMENTS.—In the case of a group health plan main11 tained pursuant to one or more collective bargaining 

12 agreements between employee representatives and one or 

13 more employers ratified before the date of the enactment 

14 of this Act, the amendments made by this Act shall not 

15 apply to plan years beginning before the later of— 

16 (1) the date on which the last of the collective 

17 bargaining agreements relating to the plan termi18 nates (determined without regard to any extension 

19 thereof agreed to after the date of the enactment of 

20 this Act), or 

21 (2) January 1, 2007. 

22 For purposes of paragraph (1), any plan amendment made 

23 pursuant to a collective bargaining agreement relating to 

24 the plan which amends the plan solely to conform to any 

25 requirement of the amendments made by this section shall 


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1 not be treated as a termination of such collective bar2 gaining agreement. 

3 SEC. 7. SEVERABILITY. 

4 If any provision of this Act, or an amendment made 

5 by this Act, is held by a court to be invalid, such invalidity 

6 shall not affect the remaining provisions of this Act, or 

7 amendments made by this Act. 

Æ 


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