II 

109TH CONGRESS 

1ST SESSION S. 1012 

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. 

IN THE SENATE OF THE UNITED STATES 

MAY 12, 2005 

Mr. KENNEDY (for himself, Mr. HARKIN, Ms. MIKULSKI, Mrs. MURRAY, Mr. 

REED, Mr. LEVIN, Mr. LAUTENBERG, Mrs. BOXER, Mr. DORGAN, Mr. 

SCHUMER, Ms. CANTWELL, Mr. CORZINE, Mr. DAYTON, and Ms. 

STABENOW) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

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 Act of 2005’’. 

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

7 this Act is as follows: 
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•S 1012 IS

Sec. 1. Short title; table of contents. 

TITLE I—IMPROVING MANAGED CARE 

SUBTITLE A—UTILIZATION REVIEW; CLAIMS; AND INTERNAL AND EXTERNAL

APPEALS

Sec. 101. Utilization review activities. 

Sec. 102. Procedures for initial claims for benefits and prior authorization determinations. 

Sec. 103. Internal appeals of claims denials. 

Sec. 104. Independent external appeals procedures. 

Sec. 105. Health Care Consumer Assistance Fund. 

SUBTITLE B—ACCESS TO CARE

Sec. 111. Consumer choice option. 

Sec. 112. Choice of health care professional. 

Sec. 113. Access to emergency care. 

Sec. 114. Timely access to specialists. 

Sec. 115. Patient access to obstetrical and gynecological care. 

Sec. 116. Access to pediatric care. 

Sec. 117. Continuity of care. 

Sec. 118. Access to needed prescription drugs. 

Sec. 119. Coverage for individuals participating in approved clinical trials. 

Sec. 120. Required coverage for minimum hospital stay for mastectomies and 

lymph node dissections for the treatment of breast cancer and 

coverage for secondary consultations. 

SUBTITLE C—ACCESS TO INFORMATION

Sec. 121. Patient access to information. 

SUBTITLE D—PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

Sec. 131. Prohibition of interference with certain medical communications. 

Sec. 132. Prohibition of discrimination against providers based on licensure. 

Sec. 133. Prohibition against improper incentive arrangements. 

Sec. 134. Payment of claims. 

Sec. 135. Protection for patient advocacy. 

SUBTITLE E—DEFINITIONS

Sec. 151. Definitions. 

Sec. 152. Preemption; State flexibility; construction. 

Sec. 153. Exclusions. 

Sec. 154. Treatment of excepted benefits. 

Sec. 155. Regulations. 

Sec. 156. Incorporation into plan or coverage documents. 

Sec. 157. Preservation of protections. 

TITLE II—APPLICATION OF QUALITY CARE STANDARDS TO 

GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE 

UNDER THE PUBLIC HEALTH SERVICE ACT 

Sec. 201. Application to group health plans and group health insurance coverage. 

Sec. 202. Application to individual health insurance coverage. 
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•S 1012 IS

Sec. 203. Cooperation between Federal and State authorities. 

TITLE III—APPLICATION OF PATIENT PROTECTION STANDARDS 

TO FEDERAL HEALTH INSURANCE PROGRAMS 

Sec. 301. Application of patient protection standards to Federal health insurance programs. 

TITLE IV—AMENDMENTS TO THE EMPLOYEE RETIREMENT 

INCOME SECURITY ACT OF 1974 

Sec. 401. Application of patient protection standards to group health plans and 

group health insurance coverage under the Employee Retirement Income Security Act of 1974. 

Sec. 402. Availability of civil remedies. 

Sec. 403. Cooperation between Federal and State authorities. 

TITLE V—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 

1986 

SUBTITLE A—APPLICATION OF PATIENT PROTECTION PROVISIONS

Sec. 501. Application to group health plans under the Internal Revenue Code 

of 1986. 

Sec. 502. Conforming enforcement for women’s health and cancer rights. 

SUBTITLE B—HEALTH CARE COVERAGE ACCESS TAX INCENTIVES

Sec. 511. Credit for health insurance expenses of small businesses. 

Sec. 512. Certain grants by private foundations to qualified health benefit purchasing coalitions. 

Sec. 513. State grant program for market innovation. 

Sec. 514. Grant program to facilitate health benefits information for small employers. 

Sec. 515. State grant program for market innovation. 

TITLE VI—EFFECTIVE DATES; COORDINATION IN 

IMPLEMENTATION 

Sec. 601. Effective dates. 

Sec. 602. Coordination in implementation. 

Sec. 603. Severability. 

TITLE VII—MISCELLANEOUS PROVISIONS 

Sec. 701. No impact on Social Security Trust Fund. 
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•S 1012 IS

1 TITLE I—IMPROVING MANAGED 

2 CARE 

3 Subtitle A—Utilization Review; 

4 Claims; and Internal and Exter5 nal Appeals 

6 SEC. 101. UTILIZATION REVIEW ACTIVITIES. 

7 (a) COMPLIANCE WITH REQUIREMENTS.— 

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

9 health insurance issuer that provides health insur10 ance coverage, shall conduct utilization review activi11 ties in connection with the provision of benefits 

12 under such plan or coverage only in accordance with 

13 a utilization review program that meets the require14 ments of this section and section 102. 

15 (2) USE OF OUTSIDE AGENTS.—Nothing in this 

16 section shall be construed as preventing a group 

17 health plan or health insurance issuer from arrang18 ing through a contract or otherwise for persons or 

19 entities to conduct utilization review activities on be20 half of the plan or issuer, so long as such activities 

21 are conducted in accordance with a utilization review 

22 program that meets the requirements of this section. 

23 (3) UTILIZATION REVIEW DEFINED.—For pur24 poses of this section, the terms ‘‘utilization review’’ 

25 and ‘‘utilization review activities’’ mean procedures 
5 

•S 1012 IS

1 used to monitor or evaluate the use or coverage, 

2 clinical necessity, appropriateness, efficacy, or effi3 ciency of health care services, procedures or settings, 

4 and includes prospective review, concurrent review, 

5 second opinions, case management, discharge plan6 ning, or retrospective review. 

7 (b) WRITTEN POLICIES AND CRITERIA.— 

8 (1) WRITTEN POLICIES.—A utilization review 

9 program shall be conducted consistent with written 

10 policies and procedures that govern all aspects of the 

11 program. 

12 (2) USE OF WRITTEN CRITERIA.— 

13 (A) IN GENERAL.—Such a program shall 

14 utilize written clinical review criteria developed 

15 with input from a range of appropriate actively 

16 practicing health care professionals, as deter17 mined by the plan, pursuant to the program. 

18 Such criteria shall include written clinical re19 view criteria that are based on valid clinical evi20 dence where available and that are directed spe21 cifically at meeting the needs of at-risk popu22 lations and covered individuals with chronic 

23 conditions or severe illnesses, including gender24 specific criteria and pediatric-specific criteria 

25 where available and appropriate. 
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•S 1012 IS

1 (B) CONTINUING USE OF STANDARDS IN

2 RETROSPECTIVE REVIEW.—If a health care 

3 service has been specifically pre-authorized or 

4 approved for a participant, beneficiary, or en5 rollee under such a program, the program shall 

6 not, pursuant to retrospective review, revise or 

7 modify the specific standards, criteria, or proce8 dures used for the utilization review for proce9 dures, treatment, and services delivered to the 

10 enrollee during the same course of treatment. 

11 (C) REVIEW OF SAMPLE OF CLAIMS DENI12 ALS.—Such a program shall provide for a peri13 odic evaluation of the clinical appropriateness of 

14 at least a sample of denials of claims for bene15 fits. 

16 (c) CONDUCT OF PROGRAM ACTIVITIES.— 

17 (1) ADMINISTRATION BY HEALTH CARE PRO18 FESSIONALS.—A utilization review program shall be 

19 administered by qualified health care professionals 

20 who shall oversee review decisions. 

21 (2) USE OF QUALIFIED, INDEPENDENT PER22 SONNEL.— 

23 (A) IN GENERAL.—A utilization review 

24 program shall provide for the conduct of utiliza25 tion review activities only through personnel 
7 

•S 1012 IS

1 who are qualified and have received appropriate 

2 training in the conduct of such activities under 

3 the program. 

4 (B) PROHIBITION OF CONTINGENT COM5 PENSATION ARRANGEMENTS.—Such a program 

6 shall not, with respect to utilization review ac7 tivities, permit or provide compensation or any8 thing of value to its employees, agents, or con9 tractors in a manner that encourages denials of 

10 claims for benefits. 

11 (C) PROHIBITION OF CONFLICTS.—Such a 

12 program shall not permit a health care profes13 sional who is providing health care services to 

14 an individual to perform utilization review ac15 tivities in connection with the health care serv16 ices being provided to the individual. 

17 (3) ACCESSIBILITY OF REVIEW.—Such a pro18 gram shall provide that appropriate personnel per19 forming utilization review activities under the pro20 gram, including the utilization review administrator, 

21 are reasonably accessible by toll-free telephone dur22 ing normal business hours to discuss patient care 

23 and allow response to telephone requests, and that 

24 appropriate provision is made to receive and respond 

25 promptly to calls received during other hours. 
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•S 1012 IS

1 (4) LIMITS ON FREQUENCY.—Such a program 

2 shall not provide for the performance of utilization 

3 review activities with respect to a class of services 

4 furnished to an individual more frequently than is 

5 reasonably required to assess whether the services 

6 under review are medically necessary and appro7 priate. 

8 SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENE9 FITS AND PRIOR AUTHORIZATION DETER10 MINATIONS. 

11 (a) PROCEDURES OF INITIAL CLAIMS FOR BENE12 FITS.— 

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

14 health insurance issuer offering health insurance 

15 coverage, shall— 

16 (A) make a determination on an initial 

17 claim for benefits by a participant, beneficiary, 

18 or enrollee (or authorized representative) re19 garding payment or coverage for items or serv20 ices under the terms and conditions of the plan 

21 or coverage involved, including any cost-sharing 

22 amount that the participant, beneficiary, or en23 rollee is required to pay with respect to such 

24 claim for benefits; and 
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•S 1012 IS

1 (B) notify a participant, beneficiary, or en2 rollee (or authorized representative) and the 

3 treating health care professional involved re4 garding a determination on an initial claim for 

5 benefits made under the terms and conditions 

6 of the plan or coverage, including any cost-shar7 ing amounts that the participant, beneficiary, 

8 or enrollee may be required to make with re9 spect to such claim for benefits, and of the 

10 right of the participant, beneficiary, or enrollee 

11 to an internal appeal under section 103. 

12 (2) ACCESS TO INFORMATION.— 

13 (A) TIMELY PROVISION OF NECESSARY IN14 FORMATION.—With respect to an initial claim 

15 for benefits, the participant, beneficiary, or en16 rollee (or authorized representative) and the 

17 treating health care professional (if any) shall 

18 provide the plan or issuer with access to infor19 mation requested by the plan or issuer that is 

20 necessary to make a determination relating to 

21 the claim. Such access shall be provided not 

22 later than 5 days after the date on which the 

23 request for information is received, or, in a case 

24 described in subparagraph (B) or (C) of sub25 section (b)(1), by such earlier time as may be 
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•S 1012 IS

1 necessary to comply with the applicable timeline 

2 under such subparagraph. 

3 (B) LIMITED EFFECT OF FAILURE ON

4 PLAN OR ISSUER’S OBLIGATIONS.—Failure of 

5 the participant, beneficiary, or enrollee to com6 ply with the requirements of subparagraph (A) 

7 shall not remove the obligation of the plan or 

8 issuer to make a decision in accordance with 

9 the medical exigencies of the case and as soon 

10 as possible, based on the available information, 

11 and failure to comply with the time limit estab12 lished by this paragraph shall not remove the 

13 obligation of the plan or issuer to comply with 

14 the requirements of this section. 

15 (3) ORAL REQUESTS.—In the case of a claim 

16 for benefits involving an expedited or concurrent de17 termination, a participant, beneficiary, or enrollee 

18 (or authorized representative) may make an initial 

19 claim for benefits orally, but a group health plan, or 

20 health insurance issuer offering health insurance 

21 coverage, may require that the participant, bene22 ficiary, or enrollee (or authorized representative) 

23 provide written confirmation of such request in a 

24 timely manner on a form provided by the plan or 

25 issuer. In the case of such an oral request for bene-
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•S 1012 IS

1 fits, the making of the request (and the timing of 

2 such request) shall be treated as the making at that 

3 time of a claim for such benefits without regard to 

4 whether and when a written confirmation of such re5 quest is made. 

6 (b) TIMELINE FOR MAKING DETERMINATIONS.— 

7 (1) PRIOR AUTHORIZATION DETERMINATION.— 

8 (A) IN GENERAL.—A group health plan, 

9 and a health insurance issuer offering health in10 surance coverage, shall make a prior authoriza11 tion determination on a claim for benefits 

12 (whether oral or written) in accordance with the 

13 medical exigencies of the case and as soon as 

14 possible, but in no case later than 14 days from 

15 the date on which the plan or issuer receives in16 formation that is reasonably necessary to enable 

17 the plan or issuer to make a determination on 

18 the request for prior authorization and in no 

19 case later than 28 days after the date of the 

20 claim for benefits is received. 

21 (B) EXPEDITED DETERMINATION.—Not22 withstanding subparagraph (A), a group health 

23 plan, and a health insurance issuer offering 

24 health insurance coverage, shall expedite a prior 

25 authorization determination on a claim for ben-
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•S 1012 IS

1 efits described in such subparagraph when a re2 quest for such an expedited determination is 

3 made by a participant, beneficiary, or enrollee 

4 (or authorized representative) at any time dur5 ing the process for making a determination and 

6 a health care professional certifies, with the re7 quest, that a determination under the proce8 dures described in subparagraph (A) would seri9 ously jeopardize the life or health of the partici10 pant, beneficiary, or enrollee or the ability of 

11 the participant, beneficiary, or enrollee to main12 tain or regain maximum function. Such deter13 mination shall be made in accordance with the 

14 medical exigencies of the case and as soon as 

15 possible, but in no case later than 72 hours 

16 after the time the request is received by the 

17 plan or issuer under this subparagraph. 

18 (C) ONGOING CARE.— 

19 (i) CONCURRENT REVIEW.— 

20 (I) IN GENERAL.—Subject to 

21 clause (ii), in the case of a concurrent 

22 review of ongoing care (including hos23 pitalization), which results in a termi24 nation or reduction of such care, the 

25 plan or issuer must provide by tele-
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•S 1012 IS

1 phone and in printed form notice of 

2 the concurrent review determination 

3 to the individual or the individual’s 

4 designee and the individual’s health 

5 care provider in accordance with the 

6 medical exigencies of the case and as 

7 soon as possible, with sufficient time 

8 prior to the termination or reduction 

9 to allow for an appeal under section 

10 103(b)(3) to be completed before the 

11 termination or reduction takes effect. 

12 (II) CONTENTS OF NOTICE.— 

13 Such notice shall include, with respect 

14 to ongoing health care items and serv15 ices, the number of ongoing services 

16 approved, the new total of approved 

17 services, the date of onset of services, 

18 and the next review date, if any, as 

19 well as a statement of the individual’s 

20 rights to further appeal. 

21 (ii) RULE OF CONSTRUCTION.—Clause 

22 (i) shall not be construed as requiring 

23 plans or issuers to provide coverage of care 

24 that would exceed the coverage limitations 

25 for such care. 
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•S 1012 IS

1 (2) RETROSPECTIVE DETERMINATION.—A 

2 group health plan, and a health insurance issuer of3 fering health insurance coverage, shall make a retro4 spective determination on a claim for benefits in ac5 cordance with the medical exigencies of the case and 

6 as soon as possible, but not later than 30 days after 

7 the date on which the plan or issuer receives infor8 mation that is reasonably necessary to enable the 

9 plan or issuer to make a determination on the claim, 

10 or, if earlier, 60 days after the date of receipt of the 

11 claim for benefits. 

12 (c) NOTICE OF A DENIAL OF A CLAIM FOR BENE13 FITS.—Written notice of a denial made under an initial 

14 claim for benefits shall be issued to the participant, bene15 ficiary, or enrollee (or authorized representative) and the 

16 treating health care professional in accordance with the 

17 medical exigencies of the case and as soon as possible, but 

18 in no case later than 2 days after the date of the deter19 mination (or, in the case described in subparagraph (B) 

20 or (C) of subsection (b)(1), within the 72-hour or applica21 ble period referred to in such subparagraph). 

22 (d) REQUIREMENTS OF NOTICE OF DETERMINA23 TIONS.—The written notice of a denial of a claim for bene24 fits determination under subsection (c) shall be provided 

25 in printed form and written in a manner calculated to be 
15 

•S 1012 IS

1 understood by the participant, beneficiary, or enrollee and 

2 shall include— 

3 (1) the specific reasons for the determination 

4 (including a summary of the clinical or scientific evi5 dence used in making the determination); 

6 (2) the procedures for obtaining additional in7 formation concerning the determination; and 

8 (3) notification of the right to appeal the deter9 mination and instructions on how to initiate an ap10 peal in accordance with section 103. 

11 (e) DEFINITIONS.—For purposes of this part: 

12 (1) AUTHORIZED REPRESENTATIVE.—The term 

13 ‘‘authorized representative’’ means, with respect to 

14 an individual who is a participant, beneficiary, or en15 rollee, any health care professional or other person 

16 acting on behalf of the individual with the individ17 ual’s consent or without such consent if the indi18 vidual is medically unable to provide such consent. 

19 (2) CLAIM FOR BENEFITS.—The term ‘‘claim 

20 for benefits’’ means any request for coverage (in21 cluding authorization of coverage), for eligibility, or 

22 for payment in whole or in part, for an item or serv23 ice under a group health plan or health insurance 

24 coverage. 
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•S 1012 IS

1 (3) DENIAL OF CLAIM FOR BENEFITS.—The 

2 term ‘‘denial’’ means, with respect to a claim for 

3 benefits, a denial (in whole or in part) of, or a fail4 ure to act on a timely basis upon, the claim for ben5 efits and includes a failure to provide benefits (in6 cluding items and services) required to be provided 

7 under this title. 

8 (4) TREATING HEALTH CARE PROFESSIONAL.— 

9 The term ‘‘treating health care professional’’ means, 

10 with respect to services to be provided to a partici11 pant, beneficiary, or enrollee, a health care profes12 sional who is primarily responsible for delivering 

13 those services to the participant, beneficiary, or en14 rollee. 

15 SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS. 

16 (a) RIGHT TO INTERNAL APPEAL.— 

17 (1) IN GENERAL.—A participant, beneficiary, or 

18 enrollee (or authorized representative) may appeal 

19 any denial of a claim for benefits under section 102 

20 under the procedures described in this section. 

21 (2) TIME FOR APPEAL.— 

22 (A) IN GENERAL.—A group health plan, 

23 and a health insurance issuer offering health in24 surance coverage, shall ensure that a partici25 pant, beneficiary, or enrollee (or authorized rep-
17 

•S 1012 IS

1 resentative) has a period of not less than 180 

2 days beginning on the date of a denial of a 

3 claim for benefits under section 102 in which to 

4 appeal such denial under this section. 

5 (B) DATE OF DENIAL.—For purposes of 

6 subparagraph (A), the date of the denial shall 

7 be deemed to be the date as of which the partic8 ipant, beneficiary, or enrollee knew of the denial 

9 of the claim for benefits. 

10 (3) FAILURE TO ACT.—The failure of a plan or 

11 issuer to issue a determination on a claim for bene12 fits under section 102 within the applicable timeline 

13 established for such a determination under such sec14 tion is a denial of a claim for benefits for purposes 

15 this subtitle as of the date of the applicable deadline. 

16 (4) PLAN WAIVER OF INTERNAL REVIEW.—A 

17 group health plan, or health insurance issuer offer18 ing health insurance coverage, may waive the inter19 nal review process under this section. In such case 

20 the plan or issuer shall provide notice to the partici21 pant, beneficiary, or enrollee (or authorized rep22 resentative) involved, the participant, beneficiary, or 

23 enrollee (or authorized representative) involved shall 

24 be relieved of any obligation to complete the internal 

25 review involved, and may, at the option of such par-
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•S 1012 IS

1 ticipant, beneficiary, enrollee, or representative pro2 ceed directly to seek further appeal through external 

3 review under section 104 or otherwise. 

4 (b) TIMELINES FOR MAKING DETERMINATIONS.— 

5 (1) ORAL REQUESTS.—In the case of an appeal 

6 of a denial of a claim for benefits under this section 

7 that involves an expedited or concurrent determina8 tion, a participant, beneficiary, or enrollee (or au9 thorized representative) may request such appeal 

10 orally. A group health plan, or health insurance 

11 issuer offering health insurance coverage, may re12 quire that the participant, beneficiary, or enrollee 

13 (or authorized representative) provide written con14 firmation of such request in a timely manner on a 

15 form provided by the plan or issuer. In the case of 

16 such an oral request for an appeal of a denial, the 

17 making of the request (and the timing of such re18 quest) shall be treated as the making at that time 

19 of a request for an appeal without regard to whether 

20 and when a written confirmation of such request is 

21 made. 

22 (2) ACCESS TO INFORMATION.— 

23 (A) TIMELY PROVISION OF NECESSARY IN24 FORMATION.—With respect to an appeal of a 

25 denial of a claim for benefits, the participant, 
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•S 1012 IS

1 beneficiary, or enrollee (or authorized represent2 ative) and the treating health care professional 

3 (if any) shall provide the plan or issuer with ac4 cess to information requested by the plan or 

5 issuer that is necessary to make a determina6 tion relating to the appeal. Such access shall be 

7 provided not later than 5 days after the date on 

8 which the request for information is received, 

9 or, in a case described in subparagraph (B) or 

10 (C) of paragraph (3), by such earlier time as 

11 may be necessary to comply with the applicable 

12 timeline under such subparagraph. 

13 (B) LIMITED EFFECT OF FAILURE ON

14 PLAN OR ISSUER’S OBLIGATIONS.—Failure of 

15 the participant, beneficiary, or enrollee to com16 ply with the requirements of subparagraph (A) 

17 shall not remove the obligation of the plan or 

18 issuer to make a decision in accordance with 

19 the medical exigencies of the case and as soon 

20 as possible, based on the available information, 

21 and failure to comply with the time limit estab22 lished by this paragraph shall not remove the 

23 obligation of the plan or issuer to comply with 

24 the requirements of this section. 
20 

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1 (3) PRIOR AUTHORIZATION DETERMINA2 TIONS.— 

3 (A) IN GENERAL.—Except as provided in 

4 this paragraph or paragraph (4), a group 

5 health plan, and a health insurance issuer offer6 ing health insurance coverage, shall make a de7 termination on an appeal of a denial of a claim 

8 for benefits under this subsection in accordance 

9 with the medical exigencies of the case and as 

10 soon as possible, but in no case later than 14 

11 days from the date on which the plan or issuer 

12 receives information that is reasonably nec13 essary to enable the plan or issuer to make a 

14 determination on the appeal and in no case 

15 later than 28 days after the date the request 

16 for the appeal is received. 

17 (B) EXPEDITED DETERMINATION.—Not18 withstanding subparagraph (A), a group health 

19 plan, and a health insurance issuer offering 

20 health insurance coverage, shall expedite a prior 

21 authorization determination on an appeal of a 

22 denial of a claim for benefits described in sub23 paragraph (A), when a request for such an ex24 pedited determination is made by a participant, 

25 beneficiary, or enrollee (or authorized represent-
21 

•S 1012 IS

1 ative) at any time during the process for mak2 ing a determination and a health care profes3 sional certifies, with the request, that a deter4 mination under the procedures described in sub5 paragraph (A) would seriously jeopardize the 

6 life or health of the participant, beneficiary, or 

7 enrollee or the ability of the participant, bene8 ficiary, or enrollee to maintain or regain max9 imum function. Such determination shall be 

10 made in accordance with the medical exigencies 

11 of the case and as soon as possible, but in no 

12 case later than 72 hours after the time the re13 quest for such appeal is received by the plan or 

14 issuer under this subparagraph. 

15 (C) ONGOING CARE DETERMINATIONS.— 

16 (i) IN GENERAL.—Subject to clause 

17 (ii), in the case of a concurrent review de18 termination described in section 

19 102(b)(1)(C)(i)(I), which results in a ter20 mination or reduction of such care, the 

21 plan or issuer must provide notice of the 

22 determination on the appeal under this 

23 section by telephone and in printed form to 

24 the individual or the individual’s designee 

25 and the individual’s health care provider in 
22 

•S 1012 IS

1 accordance with the medical exigencies of 

2 the case and as soon as possible, with suf3 ficient time prior to the termination or re4 duction to allow for an external appeal 

5 under section 104 to be completed before 

6 the termination or reduction takes effect. 

7 (ii) RULE OF CONSTRUCTION.—Clause 

8 (i) shall not be construed as requiring 

9 plans or issuers to provide coverage of care 

10 that would exceed the coverage limitations 

11 for such care. 

12 (4) RETROSPECTIVE DETERMINATION.—A 

13 group health plan, and a health insurance issuer of14 fering health insurance coverage, shall make a retro15 spective determination on an appeal of a denial of a 

16 claim for benefits in no case later than 30 days after 

17 the date on which the plan or issuer receives nec18 essary information that is reasonably necessary to 

19 enable the plan or issuer to make a determination on 

20 the appeal and in no case later than 60 days after 

21 the date the request for the appeal is received. 

22 (c) CONDUCT OF REVIEW.— 

23 (1) IN GENERAL.—A review of a denial of a 

24 claim for benefits under this section shall be con-
23 

•S 1012 IS

1 ducted by an individual with appropriate expertise 

2 who was not involved in the initial determination. 

3 (2) PEER REVIEW OF MEDICAL DECISIONS BY

4 HEALTH CARE PROFESSIONALS.—A review of an ap5 peal of a denial of a claim for benefits that is based 

6 on a lack of medical necessity and appropriateness, 

7 or based on an experimental or investigational treat8 ment, or requires an evaluation of medical facts— 

9 (A) shall be made by a physician 

10 (allopathic or osteopathic); or 

11 (B) in a claim for benefits provided by a 

12 non-physician health professional, shall be made 

13 by reviewer (or reviewers) including at least one 

14 practicing non-physician health professional of 

15 the same or similar specialty; 

16 with appropriate expertise (including, in the case of 

17 a child, appropriate pediatric expertise) and acting 

18 within the appropriate scope of practice within the 

19 State in which the service is provided or rendered, 

20 who was not involved in the initial determination. 

21 (d) NOTICE OF DETERMINATION.— 

22 (1) IN GENERAL.—Written notice of a deter23 mination made under an internal appeal of a denial 

24 of a claim for benefits shall be issued to the partici25 pant, beneficiary, or enrollee (or authorized rep-
24 

•S 1012 IS

1 resentative) and the treating health care professional 

2 in accordance with the medical exigencies of the case 

3 and as soon as possible, but in no case later than 

4 2 days after the date of completion of the review (or, 

5 in the case described in subparagraph (B) or (C) of 

6 subsection (b)(3), within the 72-hour or applicable 

7 period referred to in such subparagraph). 

8 (2) FINAL DETERMINATION.—The decision by a 

9 plan or issuer under this section shall be treated as 

10 the final determination of the plan or issuer on a de11 nial of a claim for benefits. The failure of a plan or 

12 issuer to issue a determination on an appeal of a de13 nial of a claim for benefits under this section within 

14 the applicable timeline established for such a deter15 mination shall be treated as a final determination on 

16 an appeal of a denial of a claim for benefits for pur17 poses of proceeding to external review under section 

18 104. 

19 (3) REQUIREMENTS OF NOTICE.—With respect 

20 to a determination made under this section, the no21 tice described in paragraph (1) shall be provided in 

22 printed form and written in a manner calculated to 

23 be understood by the participant, beneficiary, or en24 rollee and shall include— 
25 

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1 (A) the specific reasons for the determina2 tion (including a summary of the clinical or sci3 entific evidence used in making the determina4 tion); 

5 (B) the procedures for obtaining additional 

6 information concerning the determination; and 

7 (C) notification of the right to an inde8 pendent external review under section 104 and 

9 instructions on how to initiate such a review. 

10 SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCE11 DURES. 

12 (a) RIGHT TO EXTERNAL APPEAL.—A group health 

13 plan, and a health insurance issuer offering health insur14 ance coverage, shall provide in accordance with this sec15 tion participants, beneficiaries, and enrollees (or author16 ized representatives) with access to an independent exter17 nal review for any denial of a claim for benefits. 

18 (b) INITIATION OF THE INDEPENDENT EXTERNAL

19 REVIEW PROCESS.— 

20 (1) TIME TO FILE.—A request for an inde21 pendent external review under this section shall be 

22 filed with the plan or issuer not later than 180 days 

23 after the date on which the participant, beneficiary, 

24 or enrollee receives notice of the denial under section 

25 103(d) or notice of waiver of internal review under 
26 

•S 1012 IS

1 section 103(a)(4) or the date on which the plan or 

2 issuer has failed to make a timely decision under 

3 section 103(d)(2) and notifies the participant or 

4 beneficiary that it has failed to make a timely deci5 sion and that the beneficiary must file an appeal 

6 with an external review entity within 180 days if the 

7 participant or beneficiary desires to file such an ap8 peal. 

9 (2) FILING OF REQUEST.— 

10 (A) IN GENERAL.—Subject to the suc11 ceeding provisions of this subsection, a group 

12 health plan, or health insurance issuer offering 

13 health insurance coverage, may— 

14 (i) except as provided in subparagraph 

15 (B)(i), require that a request for review be 

16 in writing; 

17 (ii) limit the filing of such a request 

18 to the participant, beneficiary, or enrollee 

19 involved (or an authorized representative); 

20 (iii) except if waived by the plan or 

21 issuer under section 103(a)(4), condition 

22 access to an independent external review 

23 under this section upon a final determina24 tion of a denial of a claim for benefits 
27 

•S 1012 IS

1 under the internal review procedure under 

2 section 103; 

3 (iv) except as provided in subpara4 graph (B)(ii), require payment of a filing 

5 fee to the plan or issuer of a sum that does 

6 not exceed $25; and 

7 (v) require that a request for review 

8 include the consent of the participant, ben9 eficiary, or enrollee (or authorized rep10 resentative) for the release of necessary 

11 medical information or records of the par12 ticipant, beneficiary, or enrollee to the 

13 qualified external review entity only for 

14 purposes of conducting external review ac15 tivities. 

16 (B) REQUIREMENTS AND EXCEPTION RE17 LATING TO GENERAL RULE.— 

18 (i) ORAL REQUESTS PERMITTED IN

19 EXPEDITED OR CONCURRENT CASES.—In 

20 the case of an expedited or concurrent ex21 ternal review as provided for under sub22 section (e), the request for such review 

23 may be made orally. A group health plan, 

24 or health insurance issuer offering health 

25 insurance coverage, may require that the 
28 

•S 1012 IS

1 participant, beneficiary, or enrollee (or au2 thorized representative) provide written 

3 confirmation of such request in a timely 

4 manner on a form provided by the plan or 

5 issuer. Such written confirmation shall be 

6 treated as a consent for purposes of sub7 paragraph (A)(v). In the case of such an 

8 oral request for such a review, the making 

9 of the request (and the timing of such re10 quest) shall be treated as the making at 

11 that time of a request for such a review 

12 without regard to whether and when a 

13 written confirmation of such request is 

14 made. 

15 (ii) EXCEPTION TO FILING FEE RE16 QUIREMENT.— 

17 (I) INDIGENCY.—Payment of a 

18 filing fee shall not be required under 

19 subparagraph (A)(iv) where there is a 

20 certification (in a form and manner 

21 specified in guidelines established by 

22 the appropriate Secretary) that the 

23 participant, beneficiary, or enrollee is 

24 indigent (as defined in such guide25 lines). 
29 

•S 1012 IS

1 (II) FEE NOT REQUIRED.—Pay2 ment of a filing fee shall not be re3 quired under subparagraph (A)(iv) if 

4 the plan or issuer waives the internal 

5 appeals process under section 

6 103(a)(4). 

7 (III) REFUNDING OF FEE.—The 

8 filing fee paid under subparagraph 

9 (A)(iv) shall be refunded if the deter10 mination under the independent exter11 nal review is to reverse or modify the 

12 denial which is the subject of the re13 view. 

14 (IV) COLLECTION OF FILING

15 FEE.—The failure to pay such a filing 

16 fee shall not prevent the consideration 

17 of a request for review but, subject to 

18 the preceding provisions of this clause, 

19 shall constitute a legal liability to pay. 

20 (c) REFERRAL TO QUALIFIED EXTERNAL REVIEW

21 ENTITY UPON REQUEST.— 

22 (1) IN GENERAL.—Upon the filing of a request 

23 for independent external review with the group 

24 health plan, or health insurance issuer offering 

25 health insurance coverage, the plan or issuer shall 
30 

•S 1012 IS

1 immediately refer such request, and forward the 

2 plan or issuer’s initial decision (including the infor3 mation described in section 103(d)(3)(A)), to a 

4 qualified external review entity selected in accord5 ance with this section. 

6 (2) ACCESS TO PLAN OR ISSUER AND HEALTH

7 PROFESSIONAL INFORMATION.—With respect to an 

8 independent external review conducted under this 

9 section, the participant, beneficiary, or enrollee (or 

10 authorized representative), the plan or issuer, and 

11 the treating health care professional (if any) shall 

12 provide the external review entity with information 

13 that is necessary to conduct a review under this sec14 tion, as determined and requested by the entity. 

15 Such information shall be provided not later than 5 

16 days after the date on which the request for infor17 mation is received, or, in a case described in clause 

18 (ii) or (iii) of subsection (e)(1)(A), by such earlier 

19 time as may be necessary to comply with the appli20 cable timeline under such clause. 

21 (3) SCREENING OF REQUESTS BY QUALIFIED

22 EXTERNAL REVIEW ENTITIES.— 

23 (A) IN GENERAL.—With respect to a re24 quest referred to a qualified external review en25 tity under paragraph (1) relating to a denial of 
31 

•S 1012 IS

1 a claim for benefits, the entity shall refer such 

2 request for the conduct of an independent med3 ical review unless the entity determines that— 

4 (i) any of the conditions described in 

5 clauses (ii) or (iii) of subsection (b)(2)(A) 

6 have not been met; 

7 (ii) the denial of the claim for benefits 

8 does not involve a medically reviewable de9 cision under subsection (d)(2); 

10 (iii) the denial of the claim for bene11 fits relates to a decision regarding whether 

12 an individual is a participant, beneficiary, 

13 or enrollee who is enrolled under the terms 

14 and conditions of the plan or coverage (in15 cluding the applicability of any waiting pe16 riod under the plan or coverage); or 

17 (iv) the denial of the claim for bene18 fits is a decision as to the application of 

19 cost-sharing requirements or the applica20 tion of a specific exclusion or express limi21 tation on the amount, duration, or scope of 

22 coverage of items or services under the 

23 terms and conditions of the plan or cov24 erage unless the decision is a denial de25 scribed in subsection (d)(2). 
32 

•S 1012 IS

1 Upon making a determination that any of 

2 clauses (i) through (iv) applies with respect to 

3 the request, the entity shall determine that the 

4 denial of a claim for benefits involved is not eli5 gible for independent medical review under sub6 section (d), and shall provide notice in accord7 ance with subparagraph (C). 

8 (B) PROCESS FOR MAKING DETERMINA9 TIONS.— 

10 (i) NO DEFERENCE TO PRIOR DETER11 MINATIONS.—In making determinations 

12 under subparagraph (A), there shall be no 

13 deference given to determinations made by 

14 the plan or issuer or the recommendation 

15 of a treating health care professional (if 

16 any). 

17 (ii) USE OF APPROPRIATE PER18 SONNEL.—A qualified external review enti19 ty shall use appropriately qualified per20 sonnel to make determinations under this 

21 section. 

22 (C) NOTICES AND GENERAL TIMELINES

23 FOR DETERMINATION.— 

24 (i) NOTICE IN CASE OF DENIAL OF

25 REFERRAL.—If the entity under this para-
33 

•S 1012 IS

1 graph does not make a referral to an inde2 pendent medical reviewer, the entity shall 

3 provide notice to the plan or issuer, the 

4 participant, beneficiary, or enrollee (or au5 thorized representative) filing the request, 

6 and the treating health care professional 

7 (if any) that the denial is not subject to 

8 independent medical review. Such notice— 

9 (I) shall be written (and, in addi10 tion, may be provided orally) in a 

11 manner calculated to be understood 

12 by a participant or enrollee; 

13 (II) shall include the reasons for 

14 the determination; 

15 (III) include any relevant terms 

16 and conditions of the plan or cov17 erage; and 

18 (IV) include a description of any 

19 further recourse available to the indi20 vidual. 

21 (ii) GENERAL TIMELINE FOR DETER22 MINATIONS.—Upon receipt of information 

23 under paragraph (2), the qualified external 

24 review entity, and if required the inde25 pendent medical reviewer, shall make a de-
34 

•S 1012 IS

1 termination within the overall timeline that 

2 is applicable to the case under review as 

3 described in subsection (e), except that if 

4 the entity determines that a referral to an 

5 independent medical reviewer is not re6 quired, the entity shall provide notice of 

7 such determination to the participant, ben8 eficiary, or enrollee (or authorized rep9 resentative) within such timeline and with10 in 2 days of the date of such determina11 tion. 

12 (d) INDEPENDENT MEDICAL REVIEW.— 

13 (1) IN GENERAL.—If a qualified external review 

14 entity determines under subsection (c) that a denial 

15 of a claim for benefits is eligible for independent 

16 medical review, the entity shall refer the denial in17 volved to an independent medical reviewer for the 

18 conduct of an independent medical review under this 

19 subsection. 

20 (2) MEDICALLY REVIEWABLE DECISIONS.—A 

21 denial of a claim for benefits is eligible for inde22 pendent medical review if the benefit for the item or 

23 service for which the claim is made would be a cov24 ered benefit under the terms and conditions of the 
35 

•S 1012 IS

1 plan or coverage but for one (or more) of the fol2 lowing determinations: 

3 (A) DENIALS BASED ON MEDICAL NECES4 SITY AND APPROPRIATENESS.—A determination 

5 that the item or service is not covered because 

6 it is not medically necessary and appropriate or 

7 based on the application of substantially equiva8 lent terms. 

9 (B) DENIALS BASED ON EXPERIMENTAL

10 OR INVESTIGATIONAL TREATMENT.—A deter11 mination that the item or service is not covered 

12 because it is experimental or investigational or 

13 based on the application of substantially equiva14 lent terms. 

15 (C) DENIALS OTHERWISE BASED ON AN

16 EVALUATION OF MEDICAL FACTS.—A deter17 mination that the item or service or condition 

18 is not covered based on grounds that require an 

19 evaluation of the medical facts by a health care 

20 professional in the specific case involved to de21 termine the coverage and extent of coverage of 

22 the item or service or condition. 

23 (3) INDEPENDENT MEDICAL REVIEW DETER24 MINATION.— 
36 

•S 1012 IS

1 (A) IN GENERAL.—An independent med2 ical reviewer under this section shall make a 

3 new independent determination with respect to 

4 whether or not the denial of a claim for a ben5 efit that is the subject of the review should be 

6 upheld, reversed, or modified. 

7 (B) STANDARD FOR DETERMINATION.— 

8 The independent medical reviewer’s determina9 tion relating to the medical necessity and ap10 propriateness, or the experimental or investiga11 tional nature, or the evaluation of the medical 

12 facts, of the item, service, or condition involved 

13 shall be based on the medical condition of the 

14 participant, beneficiary, or enrollee (including 

15 the medical records of the participant, bene16 ficiary, or enrollee) and valid, relevant scientific 

17 evidence and clinical evidence, including peer-re18 viewed medical literature or findings and in19 cluding expert opinion. 

20 (C) NO COVERAGE FOR EXCLUDED BENE21 FITS.—Nothing in this subsection shall be con22 strued to permit an independent medical re23 viewer to require that a group health plan, or 

24 health insurance issuer offering health insur25 ance coverage, provide coverage for items or 
37 

•S 1012 IS

1 services for which benefits are specifically ex2 cluded or expressly limited under the plan or 

3 coverage in the plain language of the plan docu4 ment (and which are disclosed under section 

5 121(b)(1)(C)). Notwithstanding any other pro6 vision of this Act, any exclusion of an exact 

7 medical procedure, any exact time limit on the 

8 duration or frequency of coverage, and any 

9 exact dollar limit on the amount of coverage 

10 that is specifically enumerated and defined (in 

11 the plain language of the plan or coverage docu12 ments) under the plan or coverage offered by a 

13 group health plan or health insurance issuer of14 fering health insurance coverage and that is 

15 disclosed under section 121(b)(1) shall be con16 sidered to govern the scope of the benefits that 

17 may be required: Provided, That the terms and 

18 conditions of the plan or coverage relating to 

19 such an exclusion or limit are in compliance 

20 with the requirements of law. 

21 (D) EVIDENCE AND INFORMATION TO BE

22 USED IN MEDICAL REVIEWS.—In making a de23 termination under this subsection, the inde24 pendent medical reviewer shall also consider ap-
38 

•S 1012 IS

1 propriate and available evidence and informa2 tion, including the following: 

3 (i) The determination made by the 

4 plan or issuer with respect to the claim 

5 upon internal review and the evidence, 

6 guidelines, or rationale used by the plan or 

7 issuer in reaching such determination. 

8 (ii) The recommendation of the treat9 ing health care professional and the evi10 dence, guidelines, and rationale used by 

11 the treating health care professional in 

12 reaching such recommendation. 

13 (iii) Additional relevant evidence or 

14 information obtained by the reviewer or 

15 submitted by the plan, issuer, participant, 

16 beneficiary, or enrollee (or an authorized 

17 representative), or treating health care 

18 professional. 

19 (iv) The plan or coverage document. 

20 (E) INDEPENDENT DETERMINATION.—In 

21 making determinations under this section, a 

22 qualified external review entity and an inde23 pendent medical reviewer shall— 

24 (i) consider the claim under review 

25 without deference to the determinations 
39 

•S 1012 IS

1 made by the plan or issuer or the rec2 ommendation of the treating health care 

3 professional (if any); and 

4 (ii) consider, but not be bound by, the 

5 definition used by the plan or issuer of 

6 ‘‘medically necessary and appropriate’’, or 

7 ‘‘experimental or investigational’’, or other 

8 substantially equivalent terms that are 

9 used by the plan or issuer to describe med10 ical necessity and appropriateness or ex11 perimental or investigational nature of the 

12 treatment. 

13 (F) DETERMINATION OF INDEPENDENT

14 MEDICAL REVIEWER.—An independent medical 

15 reviewer shall, in accordance with the deadlines 

16 described in subsection (e), prepare a written 

17 determination to uphold, reverse, or modify the 

18 denial under review. Such written determination 

19 shall include— 

20 (i) the determination of the reviewer; 

21 (ii) the specific reasons of the re22 viewer for such determination, including a 

23 summary of the clinical or scientific evi24 dence used in making the determination; 

25 and 
40 

•S 1012 IS

1 (iii) with respect to a determination to 

2 reverse or modify the denial under review, 

3 a timeframe within which the plan or 

4 issuer must comply with such determina5 tion. 

6 (G) NONBINDING NATURE OF ADDITIONAL

7 RECOMMENDATIONS.—In addition to the deter8 mination under subparagraph (F), the reviewer 

9 may provide the plan or issuer and the treating 

10 health care professional with additional rec11 ommendations in connection with such a deter12 mination, but any such recommendations shall 

13 not affect (or be treated as part of) the deter14 mination and shall not be binding on the plan 

15 or issuer. 

16 (e) TIMELINES AND NOTIFICATIONS.— 

17 (1) TIMELINES FOR INDEPENDENT MEDICAL

18 REVIEW.— 

19 (A) PRIOR AUTHORIZATION DETERMINA20 TION.— 

21 (i) IN GENERAL.—The independent 

22 medical reviewer (or reviewers) shall make 

23 a determination on a denial of a claim for 

24 benefits that is referred to the reviewer 

25 under subsection (c)(3) in accordance with 
41 

•S 1012 IS

1 the medical exigencies of the case and as 

2 soon as possible, but in no case later than 

3 14 days after the date of receipt of infor4 mation under subsection (c)(2) if the re5 view involves a prior authorization of items 

6 or services and in no case later than 21 

7 days after the date the request for external 

8 review is received. 

9 (ii) EXPEDITED DETERMINATION.— 

10 Notwithstanding clause (i) and subject to 

11 clause (iii), the independent medical re12 viewer (or reviewers) shall make an expe13 dited determination on a denial of a claim 

14 for benefits described in clause (i), when a 

15 request for such an expedited determina16 tion is made by a participant, beneficiary, 

17 or enrollee (or authorized representative) 

18 at any time during the process for making 

19 a determination, and a health care profes20 sional certifies, with the request, that a de21 termination under the timeline described in 

22 clause (i) would seriously jeopardize the 

23 life or health of the participant, bene24 ficiary, or enrollee or the ability of the par25 ticipant, beneficiary, or enrollee to main-
42 

•S 1012 IS

1 tain or regain maximum function. Such de2 termination shall be made in accordance 

3 with the medical exigencies of the case and 

4 as soon as possible, but in no case later 

5 than 72 hours after the time the request 

6 for external review is received by the quali7 fied external review entity. 

8 (iii) ONGOING CARE DETERMINA9 TION.—Notwithstanding clause (i), in the 

10 case of a review described in such clause 

11 that involves a termination or reduction of 

12 care, the notice of the determination shall 

13 be completed not later than 24 hours after 

14 the time the request for external review is 

15 received by the qualified external review 

16 entity and before the end of the approved 

17 period of care. 

18 (B) RETROSPECTIVE DETERMINATION.— 

19 The independent medical reviewer (or review20 ers) shall complete a review in the case of a ret21 rospective determination on an appeal of a de22 nial of a claim for benefits that is referred to 

23 the reviewer under subsection (c)(3) in no case 

24 later than 30 days after the date of receipt of 

25 information under subsection (c)(2) and in no 
43 

•S 1012 IS

1 case later than 60 days after the date the re2 quest for external review is received by the 

3 qualified external review entity. 

4 (2) NOTIFICATION OF DETERMINATION.—The 

5 external review entity shall ensure that the plan or 

6 issuer, the participant, beneficiary, or enrollee (or 

7 authorized representative) and the treating health 

8 care professional (if any) receives a copy of the writ9 ten determination of the independent medical re10 viewer prepared under subsection (d)(3)(F). Nothing 

11 in this paragraph shall be construed as preventing 

12 an entity or reviewer from providing an initial oral 

13 notice of the reviewer’s determination. 

14 (3) FORM OF NOTICES.—Determinations and 

15 notices under this subsection shall be written in a 

16 manner calculated to be understood by a participant. 

17 (f) COMPLIANCE.— 

18 (1) APPLICATION OF DETERMINATIONS.— 

19 (A) EXTERNAL REVIEW DETERMINATIONS

20 BINDING ON PLAN.—The determinations of an 

21 external review entity and an independent med22 ical reviewer under this section shall be binding 

23 upon the plan or issuer involved. 

24 (B) COMPLIANCE WITH DETERMINA25 TION.—If the determination of an independent 
44 

•S 1012 IS

1 medical reviewer is to reverse or modify the de2 nial, the plan or issuer, upon the receipt of such 

3 determination, shall authorize coverage to com4 ply with the medical reviewer’s determination in 

5 accordance with the timeframe established by 

6 the medical reviewer. 

7 (2) FAILURE TO COMPLY.— 

8 (A) IN GENERAL.—If a plan or issuer fails 

9 to comply with the timeframe established under 

10 paragraph (1)(B) with respect to a participant, 

11 beneficiary, or enrollee, where such failure to 

12 comply is caused by the plan or issuer, the par13 ticipant, beneficiary, or enrollee may obtain the 

14 items or services involved (in a manner con15 sistent with the determination of the inde16 pendent external reviewer) from any provider 

17 regardless of whether such provider is a partici18 pating provider under the plan or coverage. 

19 (B) REIMBURSEMENT.— 

20 (i) IN GENERAL.—Where a partici21 pant, beneficiary, or enrollee obtains items 

22 or services in accordance with subpara23 graph (A), the plan or issuer involved shall 

24 provide for reimbursement of the costs of 

25 such items or services. Such reimburse-
45 

•S 1012 IS

1 ment shall be made to the treating health 

2 care professional or to the participant, ben3 eficiary, or enrollee (in the case of a partic4 ipant, beneficiary, or enrollee who pays for 

5 the costs of such items or services). 

6 (ii) AMOUNT.—The plan or issuer 

7 shall fully reimburse a professional, partici8 pant, beneficiary, or enrollee under clause 

9 (i) for the total costs of the items or serv10 ices provided (regardless of any plan limi11 tations that may apply to the coverage of 

12 such items or services) so long as the items 

13 or services were provided in a manner con14 sistent with the determination of the inde15 pendent medical reviewer. 

16 (C) FAILURE TO REIMBURSE.—Where a 

17 plan or issuer fails to provide reimbursement to 

18 a professional, participant, beneficiary, or en19 rollee in accordance with this paragraph, the 

20 professional, participant, beneficiary, or enrollee 

21 may commence a civil action (or utilize other 

22 remedies available under law) to recover only 

23 the amount of any such reimbursement that is 

24 owed by the plan or issuer and any necessary 

25 legal costs or expenses (including attorney’s 
46 

•S 1012 IS

1 fees) incurred in recovering such reimburse2 ment. 

3 (D) AVAILABLE REMEDIES.—The remedies 

4 provided under this paragraph are in addition 

5 to any other available remedies. 

6 (3) PENALTIES AGAINST AUTHORIZED OFFI7 CIALS FOR REFUSING TO AUTHORIZE THE DETER8 MINATION OF AN EXTERNAL REVIEW ENTITY.— 

9 (A) MONETARY PENALTIES.— 

10 (i) IN GENERAL.—In any case in 

11 which the determination of an external re12 view entity is not followed by a group 

13 health plan, or by a health insurance issuer 

14 offering health insurance coverage, any 

15 person who, acting in the capacity of au16 thorizing the benefit, causes such refusal 

17 may, in the discretion of a court of com18 petent jurisdiction, be liable to an ag19 grieved participant, beneficiary, or enrollee 

20 for a civil penalty in an amount of up to 

21 $1,000 a day from the date on which the 

22 determination was transmitted to the plan 

23 or issuer by the external review entity until 

24 the date the refusal to provide the benefit 

25 is corrected. 
47 

•S 1012 IS

1 (ii) ADDITIONAL PENALTY FOR FAIL2 ING TO FOLLOW TIMELINE.—In any case 

3 in which treatment was not commenced by 

4 the plan in accordance with the determina5 tion of an independent external reviewer, 

6 the Secretary shall assess a civil penalty of 

7 $10,000 against the plan and the plan 

8 shall pay such penalty to the participant, 

9 beneficiary, or enrollee involved. 

10 (B) CEASE AND DESIST ORDER AND

11 ORDER OF ATTORNEY’S FEES.—In any action 

12 described in subparagraph (A) brought by a 

13 participant, beneficiary, or enrollee with respect 

14 to a group health plan, or a health insurance 

15 issuer offering health insurance coverage, in 

16 which a plaintiff alleges that a person referred 

17 to in such subparagraph has taken an action re18 sulting in a refusal of a benefit determined by 

19 an external appeal entity to be covered, or has 

20 failed to take an action for which such person 

21 is responsible under the terms and conditions of 

22 the plan or coverage and which is necessary 

23 under the plan or coverage for authorizing a 

24 benefit, the court shall cause to be served on 
48 

•S 1012 IS

1 the defendant an order requiring the defend2 ant— 

3 (i) to cease and desist from the al4 leged action or failure to act; and 

5 (ii) to pay to the plaintiff a reasonable 

6 attorney’s fee and other reasonable costs 

7 relating to the prosecution of the action on 

8 the charges on which the plaintiff prevails. 

9 (C) ADDITIONAL CIVIL PENALTIES.— 

10 (i) IN GENERAL.—In addition to any 

11 penalty imposed under subparagraph (A) 

12 or (B), the appropriate Secretary may as13 sess a civil penalty against a person acting 

14 in the capacity of authorizing a benefit de15 termined by an external review entity for 

16 one or more group health plans, or health 

17 insurance issuers offering health insurance 

18 coverage, for— 

19 (I) any pattern or practice of re20 peated refusal to authorize a benefit 

21 determined by an external appeal enti22 ty to be covered; or 

23 (II) any pattern or practice of re24 peated violations of the requirements 
49 

•S 1012 IS

1 of this section with respect to such 

2 plan or coverage. 

3 (ii) STANDARD OF PROOF AND

4 AMOUNT OF PENALTY.—Such penalty shall 

5 be payable only upon proof by clear and 

6 convincing evidence of such pattern or 

7 practice and shall be in an amount not to 

8 exceed the lesser of— 

9 (I) 25 percent of the aggregate 

10 value of benefits shown by the appro11 priate Secretary to have not been pro12 vided, or unlawfully delayed, in viola13 tion of this section under such pattern 

14 or practice; or 

15 (II) $500,000. 

16 (D) REMOVAL AND DISQUALIFICATION.— 

17 Any person acting in the capacity of author18 izing benefits who has engaged in any such pat19 tern or practice described in subparagraph 

20 (C)(i) with respect to a plan or coverage, upon 

21 the petition of the appropriate Secretary, may 

22 be removed by the court from such position, 

23 and from any other involvement, with respect to 

24 such a plan or coverage, and may be precluded 
50 

•S 1012 IS

1 from returning to any such position or involve2 ment for a period determined by the court. 

3 (4) PROTECTION OF LEGAL RIGHTS.—Nothing 

4 in this subsection or subtitle shall be construed as 

5 altering or eliminating any cause of action or legal 

6 rights or remedies of participants, beneficiaries, en7 rollees, and others under State or Federal law (in8 cluding sections 502 and 503 of the Employee Re9 tirement Income Security Act of 1974), including 

10 the right to file judicial actions to enforce rights. 

11 (g) QUALIFICATIONS OF INDEPENDENT MEDICAL

12 REVIEWERS.— 

13 (1) IN GENERAL.—In referring a denial to 1 or 

14 more individuals to conduct independent medical re15 view under subsection (c), the qualified external re16 view entity shall ensure that— 

17 (A) each independent medical reviewer 

18 meets the qualifications described in paragraphs 

19 (2) and (3); 

20 (B) with respect to each review at least 1 

21 such reviewer meets the requirements described 

22 in paragraphs (4) and (5); and 

23 (C) compensation provided by the entity to 

24 the reviewer is consistent with paragraph (6). 
51 

•S 1012 IS

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— 
52 

•S 1012 IS

1 (i) prohibit an individual, solely on the 

2 basis of affiliation with the plan or 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 plan or issuer 

12 and the participant, beneficiary, or 

13 enrollee (or authorized representative) 

14 and neither party objects; and 

15 (IV) the affiliated individual is 

16 not an employee of the plan or issuer 

17 and does not provide services exclu18 sively or primarily to or on behalf of 

19 the plan or issuer; 

20 (ii) prohibit an individual who has 

21 staff privileges at the institution where the 

22 treatment involved takes place from serv23 ing as an independent medical reviewer 

24 merely on the basis of such affiliation if 

25 the affiliation is disclosed to the plan or 
53 

•S 1012 IS

1 issuer and the participant, beneficiary, or 

2 enrollee (or authorized representative), and 

3 neither party objects; or 

4 (iii) prohibit receipt of compensation 

5 by an independent medical reviewer from 

6 an entity if the compensation is provided 

7 consistent with paragraph (6). 

8 (4) PRACTICING HEALTH CARE PROFESSIONAL

9 IN SAME FIELD.— 

10 (A) IN GENERAL.—In a case involving 

11 treatment, or the provision of items or serv12 ices— 

13 (i) by a physician, a reviewer shall be 

14 a practicing physician (allopathic or osteo15 pathic) of the same or similar specialty, as 

16 a physician who, acting within the appro17 priate scope of practice within the State in 

18 which the service is provided or rendered, 

19 typically treats the condition, makes the 

20 diagnosis, or provides the type of treat21 ment under review; or 

22 (ii) by a non-physician health care 

23 professional, a reviewer (or reviewers) shall 

24 include at least one practicing non-physi25 cian health care professional of the same 
54 

•S 1012 IS

1 or similar specialty as the non-physician 

2 health care professional who, acting within 

3 the appropriate scope of practice within 

4 the State in which the service is provided 

5 or rendered, typically treats the condition, 

6 makes the diagnosis, or provides the type 

7 of treatment under review. 

8 (B) PRACTICING DEFINED.—For purposes 

9 of this paragraph, the term ‘‘practicing’’ means, 

10 with respect to an individual who is a physician 

11 or other health care professional that the indi12 vidual provides health care services to individual 

13 patients on average at least 2 days per week. 

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

15 external review relating to a child, a reviewer shall 

16 have expertise under paragraph (2) in pediatrics. 

17 (6) LIMITATIONS ON REVIEWER COMPENSA18 TION.—Compensation provided by a qualified exter19 nal review entity to an independent medical reviewer 

20 in connection with a review under this section 

21 shall— 

22 (A) not exceed a reasonable level; and 

23 (B) not be contingent on the decision ren24 dered by the reviewer. 
55 

•S 1012 IS

1 (7) RELATED PARTY DEFINED.—For purposes 

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

3 respect to a denial of a claim under a plan or cov4 erage relating to a participant, beneficiary, or en5 rollee, any of the following: 

6 (A) The plan, plan sponsor, or issuer in7 volved, or any fiduciary, officer, director, or em8 ployee of such plan, plan sponsor, or issuer. 

9 (B) The participant, beneficiary, or en10 rollee (or authorized representative). 

11 (C) The health care professional that pro12 vides the items or services involved in the de13 nial. 

14 (D) The institution at which the items or 

15 services (or treatment) involved in the denial 

16 are provided. 

17 (E) The manufacturer of any drug or 

18 other item that is included in the items or serv19 ices involved in the denial. 

20 (F) Any other party determined under any 

21 regulations to have a substantial interest in the 

22 denial involved. 

23 (h) QUALIFIED EXTERNAL REVIEW ENTITIES.— 

24 (1) SELECTION OF QUALIFIED EXTERNAL RE25 VIEW ENTITIES.— 
56 

•S 1012 IS

1 (A) LIMITATION ON PLAN OR ISSUER SE2 LECTION.—The appropriate Secretary shall im3 plement procedures— 

4 (i) to assure that the selection process 

5 among qualified external review entities 

6 will not create any incentives for external 

7 review entities to make a decision in a bi8 ased manner; and 

9 (ii) for auditing a sample of decisions 

10 by such entities to assure that no such de11 cisions are made in a biased manner. 

12 No such selection process under the procedures 

13 implemented by the appropriate Secretary may 

14 give either the patient or the plan or issuer any 

15 ability to determine or influence the selection of 

16 a qualified external review entity to review the 

17 case of any participant, beneficiary, or enrollee. 

18 (B) STATE AUTHORITY WITH RESPECT TO

19 QUALIFIED EXTERNAL REVIEW ENTITIES FOR

20 HEALTH INSURANCE ISSUERS.—With respect to 

21 health insurance issuers offering health insur22 ance coverage in a State, the State may provide 

23 for external review activities to be conducted by 

24 a qualified external appeal entity that is des25 ignated by the State or that is selected by the 
57 

•S 1012 IS

1 State in a manner determined by the State to 

2 assure an unbiased determination. 

3 (2) CONTRACT WITH QUALIFIED EXTERNAL RE4 VIEW ENTITY.—Except as provided in paragraph 

5 (1)(B), the external review process of a plan or 

6 issuer under this section shall be conducted under a 

7 contract between the plan or issuer and 1 or more 

8 qualified external review entities (as defined in para9 graph (4)(A)). 

10 (3) TERMS AND CONDITIONS OF CONTRACT.— 

11 The terms and conditions of a contract under para12 graph (2) shall— 

13 (A) be consistent with the standards the 

14 appropriate Secretary shall establish to assure 

15 there is no real or apparent conflict of interest 

16 in the conduct of external review activities; and 

17 (B) provide that the costs of the external 

18 review process shall be borne by the plan or 

19 issuer. 

20 Subparagraph (B) shall not be construed as apply21 ing to the imposition of a filing fee under subsection 

22 (b)(2)(A)(iv) or costs incurred by the participant, 

23 beneficiary, or enrollee (or authorized representative) 

24 or treating health care professional (if any) in sup-
58 

•S 1012 IS

1 port of the review, including the provision of addi2 tional evidence or information. 

3 (4) QUALIFICATIONS.— 

4 (A) IN GENERAL.—In this section, the 

5 term ‘‘qualified external review entity’’ means, 

6 in relation to a plan or issuer, an entity that is 

7 initially certified (and periodically recertified) 

8 under subparagraph (C) as meeting the fol9 lowing requirements: 

10 (i) The entity has (directly or through 

11 contracts or other arrangements) sufficient 

12 medical, legal, and other expertise and suf13 ficient staffing to carry out duties of a 

14 qualified external review entity under this 

15 section on a timely basis, including making 

16 determinations under subsection (b)(2)(A) 

17 and providing for independent medical re18 views under subsection (d). 

19 (ii) The entity is not a plan or issuer 

20 or an affiliate or a subsidiary of a plan or 

21 issuer, and is not an affiliate or subsidiary 

22 of a professional or trade association of 

23 plans or issuers or of health care providers. 

24 (iii) The entity has provided assur25 ances that it will conduct external review 
59 

•S 1012 IS

1 activities consistent with the applicable re2 quirements of this section and standards 

3 specified in subparagraph (C), including 

4 that it will not conduct any external review 

5 activities in a case unless the independence 

6 requirements of subparagraph (B) are met 

7 with respect to the case. 

8 (iv) The entity has provided assur9 ances that it will provide information in a 

10 timely manner under subparagraph (D). 

11 (v) The entity meets such other re12 quirements as the appropriate Secretary 

13 provides by regulation. 

14 (B) INDEPENDENCE REQUIREMENTS.— 

15 (i) IN GENERAL.—Subject to clause 

16 (ii), an entity meets the independence re17 quirements of this subparagraph with re18 spect to any case if the entity— 

19 (I) is not a related party (as de20 fined in subsection (g)(7)); 

21 (II) does not have a material fa22 milial, financial, or professional rela23 tionship with such a party; and 
60 

•S 1012 IS

1 (III) does not otherwise have a 

2 conflict of interest with such a party 

3 (as determined under regulations). 

4 (ii) EXCEPTION FOR REASONABLE

5 COMPENSATION.—Nothing in clause (i) 

6 shall be construed to prohibit receipt by a 

7 qualified external review entity of com8 pensation from a plan or issuer for the 

9 conduct of external review activities under 

10 this section if the compensation is provided 

11 consistent with clause (iii). 

12 (iii) LIMITATIONS ON ENTITY COM13 PENSATION.—Compensation provided by a 

14 plan or issuer to a qualified external review 

15 entity in connection with reviews under 

16 this section shall— 

17 (I) not exceed a reasonable level; 

18 and 

19 (II) not be contingent on any de20 cision rendered by the entity or by 

21 any independent medical reviewer. 

22 (C) CERTIFICATION AND RECERTIFICATION

23 PROCESS.— 
61 

•S 1012 IS

1 (i) IN GENERAL.—The initial certifi2 cation and recertification of a qualified ex3 ternal review entity shall be made— 

4 (I) under a process that is recog5 nized or approved by the appropriate 

6 Secretary; or 

7 (II) by a qualified private stand8 ard-setting organization that is ap9 proved by the appropriate Secretary 

10 under clause (iii). 

11 In taking action under subclause (I), the 

12 appropriate Secretary shall give deference 

13 to entities that are under contract with the 

14 Federal Government or with an applicable 

15 State authority to perform functions of the 

16 type performed by qualified external review 

17 entities. 

18 (ii) PROCESS.—The appropriate Sec19 retary shall not recognize or approve a 

20 process under clause (i)(I) unless the proc21 ess applies standards (as promulgated in 

22 regulations) that ensure that a qualified 

23 external review entity— 

24 (I) will carry out (and has car25 ried out, in the case of recertification) 
62 

•S 1012 IS

1 the responsibilities of such an entity 

2 in accordance with this section, in3 cluding meeting applicable deadlines; 

4 (II) will meet (and has met, in 

5 the case of recertification) appropriate 

6 indicators of fiscal integrity; 

7 (III) will maintain (and has 

8 maintained, in the case of recertifi9 cation) appropriate confidentiality 

10 with respect to individually identifi11 able health information obtained in 

12 the course of conducting external re13 view activities; and 

14 (IV) in the case of recertification, 

15 shall review the matters described in 

16 clause (iv). 

17 (iii) APPROVAL OF QUALIFIED PRI18 VATE STANDARD-SETTING ORGANIZA19 TIONS.—For purposes of clause (i)(II), the 

20 appropriate Secretary may approve a quali21 fied private standard-setting organization 

22 if such Secretary finds that the organiza23 tion only certifies (or recertifies) external 

24 review entities that meet at least the 

25 standards required for the certification (or 
63 

•S 1012 IS

1 recertification) of external review entities 

2 under clause (ii). 

3 (iv) CONSIDERATIONS IN RECERTIFI4 CATIONS.—In conducting recertifications of 

5 a qualified external review entity under 

6 this paragraph, the appropriate Secretary 

7 or organization conducting the recertifi8 cation shall review compliance of the entity 

9 with the requirements for conducting ex10 ternal review activities under this section, 

11 including the following: 

12 (I) Provision of information 

13 under subparagraph (D). 

14 (II) Adherence to applicable 

15 deadlines (both by the entity and by 

16 independent medical reviewers it re17 fers cases to). 

18 (III) Compliance with limitations 

19 on compensation (with respect to both 

20 the entity and independent medical re21 viewers it refers cases to). 

22 (IV) Compliance with applicable 

23 independence requirements. 

24 (V) Compliance with the require25 ment of subsection (d)(1) that only 
64 

•S 1012 IS

1 medically reviewable decisions shall be 

2 the subject of independent medical re3 view and with the requirement of sub4 section (d)(3) that independent med5 ical reviewers may not require cov6 erage for specifically excluded bene7 fits. 

8 (v) PERIOD OF CERTIFICATION OR RE9 CERTIFICATION.—A certification or recer10 tification provided under this paragraph 

11 shall extend for a period not to exceed 2 

12 years. 

13 (vi) REVOCATION.—A certification or 

14 recertification under this paragraph may 

15 be revoked by the appropriate Secretary or 

16 by the organization providing such certifi17 cation upon a showing of cause. The Sec18 retary, or organization, shall revoke a cer19 tification or deny a recertification with re20 spect to an entity if there is a showing that 

21 the entity has a pattern or practice of or22 dering coverage for benefits that are spe23 cifically excluded under the plan or cov24 erage. 
65 

•S 1012 IS

1 (vii) PETITION FOR DENIAL OR WITH2 DRAWAL.—An individual may petition the 

3 Secretary, or an organization providing the 

4 certification involves, for a denial of recer5 tification or a withdrawal of a certification 

6 with respect to an entity under this sub7 paragraph if there is a pattern or practice 

8 of such entity failing to meet a require9 ment of this section. 

10 (viii) SUFFICIENT NUMBER OF ENTI11 TIES.—The appropriate Secretary shall 

12 certify and recertify a number of external 

13 review entities which is sufficient to ensure 

14 the timely and efficient provision of review 

15 services. 

16 (D) PROVISION OF INFORMATION.— 

17 (i) IN GENERAL.—A qualified external 

18 review entity shall provide to the appro19 priate Secretary, in such manner and at 

20 such times as such Secretary may require, 

21 such information (relating to the denials 

22 which have been referred to the entity for 

23 the conduct of external review under this 

24 section) as such Secretary determines ap25 propriate to assure compliance with the 
66 

•S 1012 IS

1 independence and other requirements of 

2 this section to monitor and assess the qual3 ity of its external review activities and lack 

4 of bias in making determinations. Such in5 formation shall include information de6 scribed in clause (ii) but shall not include 

7 individually identifiable medical informa8 tion. 

9 (ii) INFORMATION TO BE IN10 CLUDED.—The information described in 

11 this subclause with respect to an entity is 

12 as follows: 

13 (I) The number and types of de14 nials for which a request for review 

15 has been received by the entity. 

16 (II) The disposition by the entity 

17 of such denials, including the number 

18 referred to a independent medical re19 viewer and the reasons for such dis20 positions (including the application of 

21 exclusions), on a plan or issuer-spe22 cific basis and on a health care spe23 cialty-specific basis. 
67 

•S 1012 IS

1 (III) The length of time in mak2 ing determinations with respect to 

3 such denials. 

4 (IV) Updated information on the 

5 information required to be submitted 

6 as a condition of certification with re7 spect to the entity’s performance of 

8 external review activities. 

9 (iii) INFORMATION TO BE PROVIDED

10 TO CERTIFYING ORGANIZATION.— 

11 (I) IN GENERAL.—In the case of 

12 a qualified external review entity 

13 which is certified (or recertified) 

14 under this subsection by a qualified 

15 private standard-setting organization, 

16 at the request of the organization, the 

17 entity shall provide the organization 

18 with the information provided to the 

19 appropriate Secretary under clause 

20 (i). 

21 (II) ADDITIONAL INFORMA22 TION.—Nothing in this subparagraph 

23 shall be construed as preventing such 

24 an organization from requiring addi25 tional information as a condition of 
68 

•S 1012 IS

1 certification or recertification of an 

2 entity. 

3 (iv) USE OF INFORMATION.—Informa4 tion provided under this subparagraph may 

5 be used by the appropriate Secretary and 

6 qualified private standard-setting organiza7 tions to conduct oversight of qualified ex8 ternal review entities, including recertifi9 cation of such entities, and shall be made 

10 available to the public in an appropriate 

11 manner. 

12 (E) LIMITATION ON LIABILITY.—No quali13 fied external review entity having a contract 

14 with a plan or issuer, and no person who is em15 ployed by any such entity or who furnishes pro16 fessional services to such entity (including as an 

17 independent medical reviewer), shall be held by 

18 reason of the performance of any duty, func19 tion, or activity required or authorized pursuant 

20 to this section, to be civilly liable under any law 

21 of the United States or of any State (or polit22 ical subdivision thereof) if there was no actual 

23 malice or gross misconduct in the performance 

24 of such duty, function, or activity. 
69 

•S 1012 IS

1 (5) REPORT.—Not later than 12 months after 

2 the general effective date referred to in section 601, 

3 the General Accounting Office shall prepare and 

4 submit to the appropriate committees of Congress a 

5 report concerning— 

6 (A) the information that is provided under 

7 paragraph (3)(D); 

8 (B) the number of denials that have been 

9 upheld by independent medical reviewers and 

10 the number of denials that have been reversed 

11 by such reviewers; and 

12 (C) the extent to which independent med13 ical reviewers are requiring coverage for bene14 fits that are specifically excluded under the plan 

15 or coverage. 

16 SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND. 

17 (a) GRANTS.— 

18 (1) IN GENERAL.—The Secretary of Health and 

19 Human Services (referred to in this section as the 

20 ‘‘Secretary’’) shall establish a fund, to be known as 

21 the ‘‘Health Care Consumer Assistance Fund’’, to be 

22 used to award grants to eligible States to carry out 

23 consumer assistance activities (including programs 

24 established by States prior to the enactment of this 
70 

•S 1012 IS

1 Act) designed to provide information, assistance, and 

2 referrals to consumers of health insurance products. 

3 (2) STATE ELIGIBILITY.—To be eligible to re4 ceive a grant under this subsection a State shall pre5 pare and submit to the Secretary an application at 

6 such time, in such manner, and containing such in7 formation as the Secretary may require, including a 

8 State plan that describes— 

9 (A) the manner in which the State will en10 sure that the health care consumer assistance 

11 office (established under paragraph (4)) will 

12 educate and assist health care consumers in ac13 cessing needed care; 

14 (B) the manner in which the State will co15 ordinate and distinguish the services provided 

16 by the health care consumer assistance office 

17 with the services provided by Federal, State and 

18 local health-related ombudsman, information, 

19 protection and advocacy, insurance, and fraud 

20 and abuse programs; 

21 (C) the manner in which the State will 

22 provide information, outreach, and services to 

23 underserved, minority populations with limited 

24 English proficiency and populations residing in 

25 rural areas; 
71 

•S 1012 IS

1 (D) the manner in which the State will 

2 oversee the health care consumer assistance of3 fice, its activities, product materials and evalu4 ate program effectiveness; 

5 (E) the manner in which the State will en6 sure that funds made available under this sec7 tion will be used to supplement, and not sup8 plant, any other Federal, State, or local funds 

9 expended to provide services for programs de10 scribed under this section and those described 

11 in subparagraphs (C) and (D); 

12 (F) the manner in which the State will en13 sure that health care consumer office personnel 

14 have the professional background and training 

15 to carry out the activities of the office; and 

16 (G) the manner in which the State will en17 sure that consumers have direct access to con18 sumer assistance personnel during regular busi19 ness hours. 

20 (3) AMOUNT OF GRANT.— 

21 (A) IN GENERAL.—From amounts appro22 priated under subsection (b) for a fiscal year, 

23 the Secretary shall award a grant to a State in 

24 an amount that bears the same ratio to such 

25 amounts as the number of individuals within 
72 

•S 1012 IS

1 the State covered under a group health plan or 

2 under health insurance coverage offered by a 

3 health insurance issuer bears to the total num4 ber of individuals so covered in all States (as 

5 determined by the Secretary). Any amounts 

6 provided to a State under this subsection that 

7 are not used by the State shall be remitted to 

8 the Secretary and reallocated in accordance 

9 with this subparagraph. 

10 (B) MINIMUM AMOUNT.—In no case shall 

11 the amount provided to a State under a grant 

12 under this subsection for a fiscal year be less 

13 than an amount equal to 0.5 percent of the 

14 amount appropriated for such fiscal year to 

15 carry out this section. 

16 (C) NON-FEDERAL CONTRIBUTIONS.—A 

17 State will provide for the collection of non-Fed18 eral contributions for the operation of the office 

19 in an amount that is not less than 25 percent 

20 of the amount of Federal funds provided to the 

21 State under this section. 

22 (4) PROVISION OF FUNDS FOR ESTABLISHMENT

23 OF OFFICE.— 

24 (A) IN GENERAL.—From amounts pro25 vided under a grant under this subsection, a 
73 

•S 1012 IS

1 State shall, directly or through a contract with 

2 an independent, nonprofit entity with dem3 onstrated experience in serving the needs of 

4 health care consumers, provide for the estab5 lishment and operation of a State health care 

6 consumer assistance office. 

7 (B) ELIGIBILITY OF ENTITY.—To be eligi8 ble to enter into a contract under subparagraph 

9 (A), an entity shall demonstrate that it has the 

10 technical, organizational, and professional ca11 pacity to deliver the services described in sub12 section (b) to all public and private health in13 surance participants, beneficiaries, enrollees, or 

14 prospective enrollees. 

15 (C) EXISTING STATE ENTITY.—Nothing in 

16 this section shall prevent the funding of an ex17 isting health care consumer assistance program 

18 that otherwise meets the requirements of this 

19 section. 

20 (b) USE OF FUNDS.— 

21 (1) BY STATE.—A State shall use amounts pro22 vided under a grant awarded under this section to 

23 carry out consumer assistance activities directly or 

24 by contract with an independent, non-profit organi25 zation. An eligible entity may use some reasonable 
74 

•S 1012 IS

1 amount of such grant to ensure the adequate train2 ing of personnel carrying out such activities. To re3 ceive amounts under this subsection, an eligible enti4 ty shall provide consumer assistance services, includ5 ing— 

6 (A) the operation of a toll-free telephone 

7 hotline to respond to consumer requests; 

8 (B) the dissemination of appropriate edu9 cational materials on available health insurance 

10 products and on how best to access health care 

11 and the rights and responsibilities of health 

12 care consumers; 

13 (C) the provision of education on effective 

14 methods to promptly and efficiently resolve 

15 questions, problems, and grievances; 

16 (D) the coordination of educational and 

17 outreach efforts with health plans, health care 

18 providers, payers, and governmental agencies; 

19 (E) referrals to appropriate private and 

20 public entities to resolve questions, problems 

21 and grievances; and 

22 (F) the provision of information and as23 sistance, including acting as an authorized rep24 resentative, regarding internal, external, or ad25 ministrative grievances or appeals procedures in 
75 

•S 1012 IS

1 nonlitigative settings to appeal the denial, ter2 mination, or reduction of health care services, 

3 or the refusal to pay for such services, under a 

4 group health plan or health insurance coverage 

5 offered by a health insurance issuer. 

6 (2) CONFIDENTIALITY AND ACCESS TO INFOR7 MATION.— 

8 (A) STATE ENTITY.—With respect to a 

9 State that directly establishes a health care con10 sumer assistance office, such office shall estab11 lish and implement procedures and protocols in 

12 accordance with applicable Federal and State 

13 laws. 

14 (B) CONTRACT ENTITY.—With respect to a 

15 State that, through contract, establishes a 

16 health care consumer assistance office, such of17 fice shall establish and implement procedures 

18 and protocols, consistent with applicable Fed19 eral and State laws, to ensure the confiden20 tiality of all information shared by a partici21 pant, beneficiary, enrollee, or their personal 

22 representative and their health care providers, 

23 group health plans, or health insurance insurers 

24 with the office and to ensure that no such infor25 mation is used by the office, or released or dis-
76 

•S 1012 IS

1 closed to State agencies or outside persons or 

2 entities without the prior written authorization 

3 (in accordance with section 164.508 of title 45, 

4 Code of Federal Regulations) of the individual 

5 or personal representative. The office may, con6 sistent with applicable Federal and State con7 fidentiality laws, collect, use or disclose aggre8 gate information that is not individually identi9 fiable (as defined in section 164.501 of title 45, 

10 Code of Federal Regulations). The office shall 

11 provide a written description of the policies and 

12 procedures of the office with respect to the 

13 manner in which health information may be 

14 used or disclosed to carry out consumer assist15 ance activities. The office shall provide health 

16 care providers, group health plans, or health in17 surance issuers with a written authorization (in 

18 accordance with section 164.508 of title 45, 

19 Code of Federal Regulations) to allow the office 

20 to obtain medical information relevant to the 

21 matter before the office. 

22 (3) AVAILABILITY OF SERVICES.—The health 

23 care consumer assistance office of a State shall not 

24 discriminate in the provision of information, refer25 rals, and services regardless of the source of the in-
77 

•S 1012 IS

1 dividual’s health insurance coverage or prospective 

2 coverage, including individuals covered under a 

3 group health plan or health insurance coverage of4 fered by a health insurance issuer, the medicare or 

5 medicaid programs under title XVIII or XIX of the 

6 Social Security Act (42 U.S.C. 1395 and 1396 et 

7 seq.), or under any other Federal or State health 

8 care program. 

9 (4) DESIGNATION OF RESPONSIBILITIES.— 

10 (A) WITHIN EXISTING STATE ENTITY.—If 

11 the health care consumer assistance office of a 

12 State is located within an existing State regu13 latory agency or office of an elected State offi14 cial, the State shall ensure that— 

15 (i) there is a separate delineation of 

16 the funding, activities, and responsibilities 

17 of the office as compared to the other 

18 funding, activities, and responsibilities of 

19 the agency; and 

20 (ii) the office establishes and imple21 ments procedures and protocols to ensure 

22 the confidentiality of all information 

23 shared by a participant, beneficiary, or en24 rollee or their personal representative and 

25 their health care providers, group health 
78 

•S 1012 IS

1 plans, or health insurance issuers with the 

2 office and to ensure that no information is 

3 disclosed to the State agency or office 

4 without the written authorization of the in5 dividual or their personal representative in 

6 accordance with paragraph (2). 

7 (B) CONTRACT ENTITY.—In the case of an 

8 entity that enters into a contract with a State 

9 under subsection (a)(3), the entity shall provide 

10 assurances that the entity has no conflict of in11 terest in carrying out the activities of the office 

12 and that the entity is independent of group 

13 health plans, health insurance issuers, pro14 viders, payers, and regulators of health care. 

15 (5) SUBCONTRACTS.—The health care con16 sumer assistance office of a State may carry out ac17 tivities and provide services through contracts en18 tered into with 1 or more nonprofit entities so long 

19 as the office can demonstrate that all of the require20 ments of this section are complied with by the office. 

21 (6) TERM.—A contract entered into under this 

22 subsection shall be for a term of 3 years. 

23 (c) REPORT.—Not later than 1 year after the Sec24 retary first awards grants under this section, and annually 

25 thereafter, the Secretary shall prepare and submit to the 
79 

•S 1012 IS

1 appropriate committees of Congress a report concerning 

2 the activities funded under this section and the effective3 ness of such activities in resolving health care-related 

4 problems and grievances. 

5 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

6 are authorized to be appropriated such sums as may be 

7 necessary to carry out this section. 

8 Subtitle B—Access to Care 

9 SEC. 111. CONSUMER CHOICE OPTION. 

10 (a) IN GENERAL.—If— 

11 (1) a health insurance issuer providing health 

12 insurance coverage in connection with a group health 

13 plan offers to enrollees health insurance coverage 

14 which provides for coverage of services (including 

15 physician pathology services) only if such services 

16 are furnished through health care professionals and 

17 providers who are members of a network of health 

18 care professionals and providers who have entered 

19 into a contract with the issuer to provide such serv20 ices, or 

21 (2) a group health plan offers to participants or 

22 beneficiaries health benefits which provide for cov23 erage of services only if such services are furnished 

24 through health care professionals and providers who 

25 are members of a network of health care profes-
80 

•S 1012 IS

1 sionals and providers who have entered into a con2 tract with the plan to provide such services, 

3 then the issuer or plan shall also offer or arrange to be 

4 offered to such enrollees, participants, or beneficiaries (at 

5 the time of enrollment and during an annual open season 

6 as provided under subsection (c)) the option of health in7 surance coverage or health benefits which provide for cov8 erage of such services which are not furnished through 

9 health care professionals and providers who are members 

10 of such a network unless such enrollees, participants, or 

11 beneficiaries are offered such non-network coverage 

12 through another group health plan or through another 

13 health insurance issuer in the group market. 

14 (b) ADDITIONAL COSTS.—The amount of any addi15 tional premium charged by the health insurance issuer or 

16 group health plan for the additional cost of the creation 

17 and maintenance of the option described in subsection (a) 

18 and the amount of any additional cost sharing imposed 

19 under such option shall be borne by the enrollee, partici20 pant, or beneficiary unless it is paid by the health plan 

21 sponsor or group health plan through agreement with the 

22 health insurance issuer. 

23 (c) OPEN SEASON.—An enrollee, participant, or ben24 eficiary, may change to the offering provided under this 

25 section only during a time period determined by the health 
81 

•S 1012 IS

1 insurance issuer or group health plan. Such time period 

2 shall occur at least annually. 

3 SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL. 

4 (a) PRIMARY CARE.—If a group health plan, or a 

5 health insurance issuer that offers health insurance cov6 erage, requires or provides for designation by a partici7 pant, beneficiary, or enrollee of a participating primary 

8 care provider, then the plan or issuer shall permit each 

9 participant, beneficiary, and enrollee to designate any par10 ticipating primary care provider who is available to accept 

11 such individual. 

12 (b) SPECIALISTS.— 

13 (1) IN GENERAL.—Subject to paragraph (2), a 

14 group health plan and a health insurance issuer that 

15 offers health insurance coverage shall permit each 

16 participant, beneficiary, or enrollee to receive medi17 cally necessary and appropriate specialty care, pur18 suant to appropriate referral procedures, from any 

19 qualified participating health care professional who 

20 is available to accept such individual for such care. 

21 (2) LIMITATION.—Paragraph (1) shall not 

22 apply to specialty care if the plan or issuer clearly 

23 informs participants, beneficiaries, and enrollees of 

24 the limitations on choice of participating health care 

25 professionals with respect to such care. 
82 

•S 1012 IS

1 (3) CONSTRUCTION.—Nothing in this sub2 section shall be construed as affecting the applica3 tion of section 114 (relating to access to specialty 

4 care). 

5 SEC. 113. ACCESS TO EMERGENCY CARE. 

6 (a) COVERAGE OF EMERGENCY SERVICES.— 

7 (1) IN GENERAL.—If a group health plan, or 

8 health insurance coverage offered by a health insur9 ance issuer, provides or covers any benefits with re10 spect to services in an emergency department of a 

11 hospital, the plan or issuer shall cover emergency 

12 services (as defined in paragraph (2)(B))— 

13 (A) without the need for any prior author14 ization determination; 

15 (B) whether the health care provider fur16 nishing such services is a participating provider 

17 with respect to such services; 

18 (C) in a manner so that, if such services 

19 are provided to a participant, beneficiary, or en20 rollee— 

21 (i) by a nonparticipating health care 

22 provider with or without prior authoriza23 tion, or 

24 (ii) by a participating health care pro25 vider without prior authorization, 
83 

•S 1012 IS

1 the participant, beneficiary, or enrollee is not 

2 liable for amounts that exceed the amounts of 

3 liability that would be incurred if the services 

4 were provided by a participating health care 

5 provider with prior authorization; and 

6 (D) without regard to any other term or 

7 condition of such coverage (other than exclusion 

8 or coordination of benefits, or an affiliation or 

9 waiting period, permitted under section 2701 of 

10 the Public Health Service Act, section 701 of 

11 the Employee Retirement Income Security Act 

12 of 1974, or section 9801 of the Internal Rev13 enue Code of 1986, and other than applicable 

14 cost-sharing). 

15 (2) DEFINITIONS.—In this section: 

16 (A) EMERGENCY MEDICAL CONDITION.— 

17 The term ‘‘emergency medical condition’’ means 

18 a medical condition manifesting itself by acute 

19 symptoms of sufficient severity (including se20 vere pain) such that a prudent layperson, who 

21 possesses an average knowledge of health and 

22 medicine, could reasonably expect the absence 

23 of immediate medical attention to result in a 

24 condition described in clause (i), (ii), or (iii) of 
84 

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1 section 1867(e)(1)(A) of the Social Security 

2 Act. 

3 (B) EMERGENCY SERVICES.—The term 

4 ‘‘emergency services’’ means, with respect to an 

5 emergency medical condition— 

6 (i) a medical screening examination 

7 (as required under section 1867 of the So8 cial Security Act) that is within the capa9 bility of the emergency department of a 

10 hospital, including ancillary services rou11 tinely available to the emergency depart12 ment to evaluate such emergency medical 

13 condition, and 

14 (ii) within the capabilities of the staff 

15 and facilities available at the hospital, such 

16 further medical examination and treatment 

17 as are required under section 1867 of such 

18 Act to stabilize the patient. 

19 (C) STABILIZE.—The term ‘‘to stabilize’’, 

20 with respect to an emergency medical condition 

21 (as defined in subparagraph (A)), has the 

22 meaning given in section 1867(e)(3) of the So23 cial Security Act (42 U.S.C. 1395dd(e)(3)). 

24 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

25 POST-STABILIZATION CARE.—A group health plan, and 
85 

•S 1012 IS

1 health insurance coverage offered by a health insurance 

2 issuer, must provide reimbursement for maintenance care 

3 and post-stabilization care in accordance with the require4 ments of section 1852(d)(2) of the Social Security Act (42 

5 U.S.C. 1395w–22(d)(2)). Such reimbursement shall be 

6 provided in a manner consistent with subsection (a)(1)(C). 

7 (c) COVERAGE OF EMERGENCY AMBULANCE SERV8 ICES.— 

9 (1) IN GENERAL.—If a group health plan, or 

10 health insurance coverage provided by a health in11 surance issuer, provides any benefits with respect to 

12 ambulance services and emergency services, the plan 

13 or issuer shall cover emergency ambulance services 

14 (as defined in paragraph (2)) furnished under the 

15 plan or coverage under the same terms and condi16 tions under subparagraphs (A) through (D) of sub17 section (a)(1) under which coverage is provided for 

18 emergency services. 

19 (2) EMERGENCY AMBULANCE SERVICES.—For 

20 purposes of this subsection, the term ‘‘emergency 

21 ambulance services’’ means ambulance services (as 

22 defined for purposes of section 1861(s)(7) of the So23 cial Security Act) furnished to transport an indi24 vidual who has an emergency medical condition (as 

25 defined in subsection (a)(2)(A)) to a hospital for the 
86 

•S 1012 IS

1 receipt of emergency services (as defined in sub2 section (a)(2)(B)) in a case in which the emergency 

3 services are covered under the plan or coverage pur4 suant to subsection (a)(1) and a prudent layperson, 

5 with an average knowledge of health and medicine, 

6 could reasonably expect that the absence of such 

7 transport would result in placing the health of the 

8 individual in serious jeopardy, serious impairment of 

9 bodily function, or serious dysfunction of any bodily 

10 organ or part. 

11 SEC. 114. TIMELY ACCESS TO SPECIALISTS. 

12 (a) TIMELY ACCESS.— 

13 (1) IN GENERAL.—A group health plan and a 

14 health insurance issuer offering health insurance 

15 coverage shall ensure that participants, beneficiaries, 

16 and enrollees receive timely access to specialists who 

17 are appropriate to the condition of, and accessible 

18 to, the participant, beneficiary, or enrollee, when 

19 such specialty care is a covered benefit under the 

20 plan or coverage. 

21 (2) RULE OF CONSTRUCTION.—Nothing in 

22 paragraph (1) shall be construed— 

23 (A) to require the coverage under a group 

24 health plan or health insurance coverage of ben25 efits or services; 
87 

•S 1012 IS

1 (B) to prohibit a plan or issuer from in2 cluding providers in the network only to the ex3 tent necessary to meet the needs of the plan’s 

4 or issuer’s participants, beneficiaries, or enroll5 ees; or 

6 (C) to override any State licensure or 

7 scope-of-practice law. 

8 (3) ACCESS TO CERTAIN PROVIDERS.— 

9 (A) IN GENERAL.—With respect to spe10 cialty care under this section, if a participating 

11 specialist is not available and qualified to pro12 vide such care to the participant, beneficiary, or 

13 enrollee, the plan or issuer shall provide for cov14 erage of such care by a nonparticipating spe15 cialist. 

16 (B) TREATMENT OF NONPARTICIPATING

17 PROVIDERS.—If a participant, beneficiary, or 

18 enrollee receives care from a nonparticipating 

19 specialist pursuant to subparagraph (A), such 

20 specialty care shall be provided at no additional 

21 cost to the participant, beneficiary, or enrollee 

22 beyond what the participant, beneficiary, or en23 rollee would otherwise pay for such specialty 

24 care if provided by a participating specialist. 

25 (b) REFERRALS.— 
88 

•S 1012 IS

1 (1) AUTHORIZATION.—Subject to subsection 

2 (a)(1), a group health plan or health insurance 

3 issuer may require an authorization in order to ob4 tain coverage for specialty services under this sec5 tion. Any such authorization— 

6 (A) shall be for an appropriate duration of 

7 time or number of referrals, including an au8 thorization for a standing referral where appro9 priate; and 

10 (B) may not be refused solely because the 

11 authorization involves services of a nonpartici12 pating specialist (described in subsection 

13 (a)(3)). 

14 (2) REFERRALS FOR ONGOING SPECIAL CONDI15 TIONS.— 

16 (A) IN GENERAL.—Subject to subsection 

17 (a)(1), a group health plan and a health insur18 ance issuer shall permit a participant, bene19 ficiary, or enrollee who has an ongoing special 

20 condition (as defined in subparagraph (B)) to 

21 receive a referral to a specialist for the treat22 ment of such condition and such specialist may 

23 authorize such referrals, procedures, tests, and 

24 other medical services with respect to such con25 dition, or coordinate the care for such condi-
89 

•S 1012 IS

1 tion, subject to the terms of a treatment plan 

2 (if any) referred to in subsection (c) with re3 spect to the condition. 

4 (B) ONGOING SPECIAL CONDITION DE5 FINED.—In this subsection, the term ‘‘ongoing 

6 special condition’’ means a condition or disease 

7 that— 

8 (i) is life-threatening, degenerative, 

9 potentially disabling, or congenital; and 

10 (ii) requires specialized medical care 

11 over a prolonged period of time. 

12 (c) TREATMENT PLANS.— 

13 (1) IN GENERAL.—A group health plan or 

14 health insurance issuer may require that the spe15 cialty care be provided— 

16 (A) pursuant to a treatment plan, but only 

17 if the treatment plan— 

18 (i) is developed by the specialist, in 

19 consultation with the case manager or pri20 mary care provider, and the participant, 

21 beneficiary, or enrollee, and 

22 (ii) is approved by the plan or issuer 

23 in a timely manner, if the plan or issuer 

24 requires such approval; and 
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•S 1012 IS

1 (B) in accordance with applicable quality 

2 assurance and utilization review standards of 

3 the plan or issuer. 

4 (2) NOTIFICATION.—Nothing in paragraph (1) 

5 shall be construed as prohibiting a plan or issuer 

6 from requiring the specialist to provide the plan or 

7 issuer with regular updates on the specialty care 

8 provided, as well as all other reasonably necessary 

9 medical information. 

10 (d) SPECIALIST DEFINED.—For purposes of this sec11 tion, the term ‘‘specialist’’ means, with respect to the con12 dition of the participant, beneficiary, or enrollee, a health 

13 care professional, facility, or center that has adequate ex14 pertise through appropriate training and experience (in15 cluding, in the case of a child, appropriate pediatric exper16 tise) to provide high quality care in treating the condition. 

17 SEC. 115. PATIENT ACCESS TO OBSTETRICAL AND GYNECO18 LOGICAL CARE. 

19 (a) GENERAL RIGHTS.— 

20 (1) DIRECT ACCESS.—A group health plan, and 

21 a health insurance issuer offering health insurance 

22 coverage, described in subsection (b) may not re23 quire authorization or referral by the plan, issuer, or 

24 any person (including a primary care provider de25 scribed in subsection (b)(2)) in the case of a female 
91 

•S 1012 IS

1 participant, beneficiary, or enrollee who seeks cov2 erage for obstetrical or gynecological care provided 

3 by a participating health care professional who spe4 cializes in obstetrics or gynecology. 

5 (2) OBSTETRICAL AND GYNECOLOGICAL

6 CARE.—A group health plan and a health insurance 

7 issuer described in subsection (b) shall treat the pro8 vision of obstetrical and gynecological care, and the 

9 ordering of related obstetrical and gynecological 

10 items and services, pursuant to the direct access de11 scribed under paragraph (1), by a participating 

12 health care professional who specializes in obstetrics 

13 or gynecology as the authorization of the primary 

14 care provider. 

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

16 or health insurance issuer offering health insurance cov17 erage, described in this subsection is a group health plan 

18 or coverage that— 

19 (1) provides coverage for obstetric or 

20 gynecologic care; and 

21 (2) requires the designation by a participant, 

22 beneficiary, or enrollee of a participating primary 

23 care provider. 

24 (c) CONSTRUCTION.—Nothing in subsection (a) shall 

25 be construed to— 
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•S 1012 IS

1 (1) waive any exclusions of coverage under the 

2 terms and conditions of the plan or health insurance 

3 coverage with respect to coverage of obstetrical or 

4 gynecological care; or 

5 (2) preclude the group health plan or health in6 surance issuer involved from requiring that the ob7 stetrical or gynecological provider notify the primary 

8 care health care professional or the plan or issuer of 

9 treatment decisions. 

10 SEC. 116. ACCESS TO PEDIATRIC CARE. 

11 (a) PEDIATRIC CARE.—In the case of a person who 

12 has a child who is a participant, beneficiary, or enrollee 

13 under a group health plan, or health insurance coverage 

14 offered by a health insurance issuer, if the plan or issuer 

15 requires or provides for the designation of a participating 

16 primary care provider for the child, the plan or issuer shall 

17 permit such person to designate a physician (allopathic or 

18 osteopathic) who specializes in pediatrics as the child’s pri19 mary care provider if such provider participates in the net20 work of the plan or issuer. 

21 (b) CONSTRUCTION.—Nothing in subsection (a) shall 

22 be construed to waive any exclusions of coverage under 

23 the terms and conditions of the plan or health insurance 

24 coverage with respect to coverage of pediatric care. 
93 

•S 1012 IS

1 SEC. 117. CONTINUITY OF CARE. 

2 (a) TERMINATION OF PROVIDER.— 

3 (1) IN GENERAL.—If— 

4 (A) a contract between a group health 

5 plan, or a health insurance issuer offering 

6 health insurance coverage, and a treating health 

7 care provider is terminated (as defined in para8 graph (e)(4)), or 

9 (B) benefits or coverage provided by a 

10 health care provider are terminated because of 

11 a change in the terms of provider participation 

12 in such plan or coverage, 

13 the plan or issuer shall meet the requirements of 

14 paragraph (3) with respect to each continuing care 

15 patient. 

16 (2) TREATMENT OF TERMINATION OF CON17 TRACT WITH HEALTH INSURANCE ISSUER.—If a 

18 contract for the provision of health insurance cov19 erage between a group health plan and a health in20 surance issuer is terminated and, as a result of such 

21 termination, coverage of services of a health care 

22 provider is terminated with respect to an individual, 

23 the provisions of paragraph (1) (and the succeeding 

24 provisions of this section) shall apply under the plan 

25 in the same manner as if there had been a contract 

26 between the plan and the provider that had been ter-
94 

•S 1012 IS

1 minated, but only with respect to benefits that are 

2 covered under the plan after the contract termi3 nation. 

4 (3) REQUIREMENTS.—The requirements of this 

5 paragraph are that the plan or issuer— 

6 (A) notify the continuing care patient in7 volved, or arrange to have the patient notified 

8 pursuant to subsection (d)(2), on a timely basis 

9 of the termination described in paragraph (1) 

10 (or paragraph (2), if applicable) and the right 

11 to elect continued transitional care from the 

12 provider under this section; 

13 (B) provide the patient with an oppor14 tunity to notify the plan or issuer of the pa15 tient’s need for transitional care; and 

16 (C) subject to subsection (c), permit the 

17 patient to elect to continue to be covered with 

18 respect to the course of treatment by such pro19 vider with the provider’s consent during a tran20 sitional period (as provided for under subsection 

21 (b)). 

22 (4) CONTINUING CARE PATIENT.—For purposes 

23 of this section, the term ‘‘continuing care patient’’ 

24 means a participant, beneficiary, or enrollee who— 
95 

•S 1012 IS

1 (A) is undergoing a course of treatment 

2 for a serious and complex condition from the 

3 provider at the time the plan or issuer receives 

4 or provides notice of provider, benefit, or cov5 erage termination described in paragraph (1) 

6 (or paragraph (2), if applicable); 

7 (B) is undergoing a course of institutional 

8 or inpatient care from the provider at the time 

9 of such notice; 

10 (C) is scheduled to undergo non-elective 

11 surgery from the provider at the time of such 

12 notice; 

13 (D) is pregnant and undergoing a course 

14 of treatment for the pregnancy from the pro15 vider at the time of such notice; or 

16 (E) is or was determined to be terminally 

17 ill (as determined under section 1861(dd)(3)(A) 

18 of the Social Security Act) at the time of such 

19 notice, but only with respect to a provider that 

20 was treating the terminal illness before the date 

21 of such notice. 

22 (b) TRANSITIONAL PERIODS.— 

23 (1) SERIOUS AND COMPLEX CONDITIONS.—The 

24 transitional period under this subsection with re25 spect to a continuing care patient described in sub-
96 

•S 1012 IS

1 section (a)(4)(A) shall extend for up to 90 days (as 

2 determined by the treating health care professional) 

3 from the date of the notice described in subsection 

4 (a)(3)(A). 

5 (2) INSTITUTIONAL OR INPATIENT CARE.—The 

6 transitional period under this subsection for a con7 tinuing care patient described in subsection 

8 (a)(4)(B) shall extend until the earlier of— 

9 (A) the expiration of the 90-day period be10 ginning on the date on which the notice under 

11 subsection (a)(3)(A) is provided; or 

12 (B) the date of discharge of the patient 

13 from such care or the termination of the period 

14 of institutionalization, or, if later, the date of 

15 completion of reasonable follow-up care. 

16 (3) SCHEDULED NON-ELECTIVE SURGERY.— 

17 The transitional period under this subsection for a 

18 continuing care patient described in subsection 

19 (a)(4)(C) shall extend until the completion of the 

20 surgery involved and post-surgical follow-up care re21 lating to the surgery and occurring within 90 days 

22 after the date of the surgery. 

23 (4) PREGNANCY.—The transitional period 

24 under this subsection for a continuing care patient 

25 described in subsection (a)(4)(D) shall extend 
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•S 1012 IS

1 through the provision of post-partum care directly 

2 related to the delivery. 

3 (5) TERMINAL ILLNESS.—The transitional pe4 riod under this subsection for a continuing care pa5 tient described in subsection (a)(4)(E) shall extend 

6 for the remainder of the patient’s life for care that 

7 is directly related to the treatment of the terminal 

8 illness or its medical manifestations. 

9 (c) PERMISSIBLE TERMS AND CONDITIONS.—A 

10 group health plan or health insurance issuer may condi11 tion coverage of continued treatment by a provider under 

12 this section upon the provider agreeing to the following 

13 terms and conditions: 

14 (1) The treating health care provider agrees to 

15 accept reimbursement from the plan or issuer and 

16 continuing care patient involved (with respect to 

17 cost-sharing) at the rates applicable prior to the 

18 start of the transitional period as payment in full 

19 (or, in the case described in subsection (a)(2), at the 

20 rates applicable under the replacement plan or cov21 erage after the date of the termination of the con22 tract with the group health plan or health insurance 

23 issuer) and not to impose cost-sharing with respect 

24 to the patient in an amount that would exceed the 

25 cost-sharing that could have been imposed if the 
98 

•S 1012 IS

1 contract referred to in subsection (a)(1) had not 

2 been terminated. 

3 (2) The treating health care provider agrees to 

4 adhere to the quality assurance standards of the 

5 plan or issuer responsible for payment under para6 graph (1) and to provide to such plan or issuer nec7 essary medical information related to the care pro8 vided. 

9 (3) The treating health care provider agrees 

10 otherwise to adhere to such plan’s or issuer’s policies 

11 and procedures, including procedures regarding re12 ferrals and obtaining prior authorization and pro13 viding services pursuant to a treatment plan (if any) 

14 approved by the plan or issuer. 

15 (d) RULES OF CONSTRUCTION.—Nothing in this sec16 tion shall be construed— 

17 (1) to require the coverage of benefits which 

18 would not have been covered if the provider involved 

19 remained a participating provider; or 

20 (2) with respect to the termination of a con21 tract under subsection (a) to prevent a group health 

22 plan or health insurance issuer from requiring that 

23 the health care provider— 

24 (A) notify participants, beneficiaries, or en25 rollees of their rights under this section; or 
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•S 1012 IS

1 (B) provide the plan or issuer with the 

2 name of each participant, beneficiary, or en3 rollee who the provider believes is a continuing 

4 care patient. 

5 (e) DEFINITIONS.—In this section: 

6 (1) CONTRACT.—The term ‘‘contract’’ includes, 

7 with respect to a plan or issuer and a treating 

8 health care provider, a contract between such plan 

9 or issuer and an organized network of providers that 

10 includes the treating health care provider, and (in 

11 the case of such a contract) the contract between the 

12 treating health care provider and the organized net13 work. 

14 (2) HEALTH CARE PROVIDER.—The term 

15 ‘‘health care provider’’ or ‘‘provider’’ means— 

16 (A) any individual who is engaged in the 

17 delivery of health care services in a State and 

18 who is required by State law or regulation to be 

19 licensed or certified by the State to engage in 

20 the delivery of such services in the State; and 

21 (B) any entity that is engaged in the deliv22 ery of health care services in a State and that, 

23 if it is required by State law or regulation to be 

24 licensed or certified by the State to engage in 
100 

•S 1012 IS

1 the delivery of such services in the State, is so 

2 licensed. 

3 (3) SERIOUS AND COMPLEX CONDITION.—The 

4 term ‘‘serious and complex condition’’ means, with 

5 respect to a participant, beneficiary, or enrollee 

6 under the plan or coverage— 

7 (A) in the case of an acute illness, a condi8 tion that is serious enough to require special9 ized medical treatment to avoid the reasonable 

10 possibility of death or permanent harm; or 

11 (B) in the case of a chronic illness or con12 dition, is an ongoing special condition (as de13 fined in section 114(b)(2)(B)). 

14 (4) TERMINATED.—The term ‘‘terminated’’ in15 cludes, with respect to a contract, the expiration or 

16 nonrenewal of the contract, but does not include a 

17 termination of the contract for failure to meet appli18 cable quality standards or for fraud. 

19 SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS. 

20 (a) IN GENERAL.—To the extent that a group health 

21 plan, or health insurance coverage offered by a health in22 surance issuer, provides coverage for benefits with respect 

23 to prescription drugs, and limits such coverage to drugs 

24 included in a formulary, the plan or issuer shall— 
101 

•S 1012 IS

1 (1) ensure the participation of physicians and 

2 pharmacists in developing and reviewing such for3 mulary; 

4 (2) provide for disclosure of the formulary to 

5 providers; and 

6 (3) in accordance with the applicable quality as7 surance and utilization review standards of the plan 

8 or issuer, provide for exceptions from the formulary 

9 limitation when a non-formulary alternative is medi10 cally necessary and appropriate and, in the case of 

11 such an exception, apply the same cost-sharing re12 quirements that would have applied in the case of a 

13 drug covered under the formulary. 

14 (b) COVERAGE OF APPROVED DRUGS AND MEDICAL

15 DEVICES.— 

16 (1) IN GENERAL.—A group health plan (and 

17 health insurance coverage offered in connection with 

18 such a plan) that provides any coverage of prescrip19 tion drugs or medical devices shall not deny coverage 

20 of such a drug or device on the basis that the use 

21 is investigational, if the use— 

22 (A) in the case of a prescription drug— 

23 (i) is included in the labeling author24 ized by the application in effect for the 

25 drug pursuant to subsection (b) or (j) of 
102 

•S 1012 IS

1 section 505 of the Federal Food, Drug, 

2 and Cosmetic Act, without regard to any 

3 postmarketing requirements that may 

4 apply under such Act; or 

5 (ii) is included in the labeling author6 ized by the application in effect for the 

7 drug under section 351 of the Public 

8 Health Service Act, without regard to any 

9 postmarketing requirements that may 

10 apply pursuant to such section; or 

11 (B) in the case of a medical device, is in12 cluded in the labeling authorized by a regula13 tion under subsection (d) or (3) of section 513 

14 of the Federal Food, Drug, and Cosmetic Act, 

15 an order under subsection (f) of such section, or 

16 an application approved under section 515 of 

17 such Act, without regard to any postmarketing 

18 requirements that may apply under such Act. 

19 (2) CONSTRUCTION.—Nothing in this sub20 section shall be construed as requiring a group 

21 health plan (or health insurance coverage offered in 

22 connection with such a plan) to provide any coverage 

23 of prescription drugs or medical devices. 
103 

•S 1012 IS

1 SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 

2 APPROVED CLINICAL TRIALS. 

3 (a) COVERAGE.— 

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

5 health insurance issuer that is providing health in6 surance coverage, provides coverage to a qualified in7 dividual (as defined in subsection (b)), the plan or 

8 issuer— 

9 (A) may not deny the individual participa10 tion in the clinical trial referred to in subsection 

11 (b)(2); 

12 (B) subject to subsection (c), may not deny 

13 (or limit or impose additional conditions on) the 

14 coverage of routine patient costs for items and 

15 services furnished in connection with participa16 tion in the trial; and 

17 (C) may not discriminate against the indi18 vidual on the basis of the enrollee’s participa19 tion in such trial. 

20 (2) EXCLUSION OF CERTAIN COSTS.—For pur21 poses of paragraph (1)(B), routine patient costs do 

22 not include the cost of the tests or measurements 

23 conducted primarily for the purpose of the clinical 

24 trial involved. 

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

26 or more participating providers is participating in a 
104 

•S 1012 IS

1 clinical trial, nothing in paragraph (1) shall be con2 strued as preventing a plan or issuer from requiring 

3 that a qualified individual participate in the trial 

4 through such a participating provider if the provider 

5 will accept the individual as a participant in the 

6 trial. 

7 (b) QUALIFIED INDIVIDUAL DEFINED.—For pur8 poses of subsection (a), the term ‘‘qualified individual’’ 

9 means an individual who is a participant or beneficiary 

10 in a group health plan, or who is an enrollee under health 

11 insurance coverage, and who meets the following condi12 tions: 

13 (1) (A) The individual has a life-threatening or 

14 serious illness for which no standard treatment is ef15 fective. 

16 (B) The individual is eligible to participate in 

17 an approved clinical trial according to the trial pro18 tocol with respect to treatment of such illness. 

19 (C) The individual’s participation in the trial 

20 offers meaningful potential for significant clinical 

21 benefit for the individual. 

22 (2) Either— 

23 (A) the referring physician is a partici24 pating health care professional and has con25 cluded that the individual’s participation in 
105 

•S 1012 IS

1 such trial would be appropriate based upon the 

2 individual meeting the conditions described in 

3 paragraph (1); or 

4 (B) the participant, beneficiary, or enrollee 

5 provides medical and scientific information es6 tablishing that the individual’s participation in 

7 such trial would be appropriate based upon the 

8 individual meeting the conditions described in 

9 paragraph (1). 

10 (c) PAYMENT.— 

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

12 health plan and a health insurance issuer shall pro13 vide for payment for routine patient costs described 

14 in subsection (a)(2) but is not required to pay for 

15 costs of items and services that are reasonably ex16 pected (as determined by the appropriate Secretary) 

17 to be paid for by the sponsors of an approved clin18 ical trial. 

19 (2) PAYMENT RATE.—In the case of covered 

20 items and services provided by— 

21 (A) a participating provider, the payment 

22 rate shall be at the agreed upon rate; or 

23 (B) a nonparticipating provider, the pay24 ment rate shall be at the rate the plan or issuer 
106 

•S 1012 IS

1 would normally pay for comparable services 

2 under subparagraph (A). 

3 (d) APPROVED CLINICAL TRIAL DEFINED.— 

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

5 ‘‘approved clinical trial’’ means a clinical research 

6 study or clinical investigation— 

7 (A) approved and funded (which may in8 clude funding through in-kind contributions) by 

9 one or more of the following: 

10 (i) the National Institutes of Health; 

11 (ii) a cooperative group or center of 

12 the National Institutes of Health, includ13 ing a qualified nongovernmental research 

14 entity to which the National Cancer Insti15 tute has awarded a center support grant; 

16 (iii) either of the following if the con17 ditions described in paragraph (2) are 

18 met— 

19 (I) the Department of Veterans 

20 Affairs; 

21 (II) the Department of Defense; 

22 or 

23 (B) approved by the Food and Drug Ad24 ministration. 
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•S 1012 IS

1 (2) CONDITIONS FOR DEPARTMENTS.—The 

2 conditions described in this paragraph, for a study 

3 or investigation conducted by a Department, are 

4 that the study or investigation has been reviewed 

5 and approved through a system of peer review that 

6 the appropriate Secretary determines— 

7 (A) to be comparable to the system of peer 

8 review of studies and investigations used by the 

9 National Institutes of Health; and 

10 (B) assures unbiased review of the highest 

11 ethical standards by qualified individuals who 

12 have no interest in the outcome of the review. 

13 (e) CONSTRUCTION.—Nothing in this section shall be 

14 construed to limit a plan’s or issuer’s coverage with re15 spect to clinical trials. 

16 SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL 

17 STAY FOR MASTECTOMIES AND LYMPH NODE 

18 DISSECTIONS FOR THE TREATMENT OF 

19 BREAST CANCER AND COVERAGE FOR SEC20 ONDARY CONSULTATIONS. 

21 (a) INPATIENT CARE.— 

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

23 health insurance issuer providing health insurance 

24 coverage, that provides medical and surgical benefits 

25 shall ensure that inpatient coverage with respect to 
108 

•S 1012 IS

1 the treatment of breast cancer is provided for a pe2 riod of time as is determined by the attending physi3 cian, in consultation with the patient, to be medi4 cally necessary and appropriate following— 

5 (A) a mastectomy; 

6 (B) a lumpectomy; or 

7 (C) a lymph node dissection for the treat8 ment of breast cancer. 

9 (2) EXCEPTION.—Nothing in this section shall 

10 be construed as requiring the provision of inpatient 

11 coverage if the attending physician and patient de12 termine that a shorter period of hospital stay is 

13 medically appropriate. 

14 (b) PROHIBITION ON CERTAIN MODIFICATIONS.—In 

15 implementing the requirements of this section, a group 

16 health plan, and a health insurance issuer providing health 

17 insurance coverage, may not modify the terms and condi18 tions of coverage based on the determination by a partici19 pant, beneficiary, or enrollee to request less than the min20 imum coverage required under subsection (a). 

21 (c) SECONDARY CONSULTATIONS.— 

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

23 health insurance issuer providing health insurance 

24 coverage, that provides coverage with respect to 

25 medical and surgical services provided in relation to 
109 

•S 1012 IS

1 the diagnosis and treatment of cancer shall ensure 

2 that full coverage is provided for secondary consulta3 tions by specialists in the appropriate medical fields 

4 (including pathology, radiology, and oncology) to 

5 confirm or refute such diagnosis. Such plan or issuer 

6 shall ensure that full coverage is provided for such 

7 secondary consultation whether such consultation is 

8 based on a positive or negative initial diagnosis. In 

9 any case in which the attending physician certifies in 

10 writing that services necessary for such a secondary 

11 consultation are not sufficiently available from spe12 cialists operating under the plan or coverage with re13 spect to whose services coverage is otherwise pro14 vided under such plan or by such issuer, such plan 

15 or issuer shall ensure that coverage is provided with 

16 respect to the services necessary for the secondary 

17 consultation with any other specialist selected by the 

18 attending physician for such purpose at no addi19 tional cost to the individual beyond that which the 

20 individual would have paid if the specialist was par21 ticipating in the network of the plan or issuer. 

22 (2) EXCEPTION.—Nothing in paragraph (1) 

23 shall be construed as requiring the provision of sec24 ondary consultations where the patient determines 

25 not to seek such a consultation. 
110 

•S 1012 IS

1 (d) PROHIBITION ON PENALTIES OR INCENTIVES.— 

2 A group health plan, and a health insurance issuer pro3 viding health insurance coverage, may not— 

4 (1) penalize or otherwise reduce or limit the re5 imbursement of a provider or specialist because the 

6 provider or specialist provided care to a participant, 

7 beneficiary, or enrollee in accordance with this sec8 tion; 

9 (2) provide financial or other incentives to a 

10 physician or specialist to induce the physician or 

11 specialist to keep the length of inpatient stays of pa12 tients following a mastectomy, lumpectomy, or a 

13 lymph node dissection for the treatment of breast 

14 cancer below certain limits or to limit referrals for 

15 secondary consultations; or 

16 (3) provide financial or other incentives to a 

17 physician or specialist to induce the physician or 

18 specialist to refrain from referring a participant, 

19 beneficiary, or enrollee for a secondary consultation 

20 that would otherwise be covered by the plan or cov21 erage involved under subsection (c). 

22 Subtitle C—Access to Information 

23 SEC. 121. PATIENT ACCESS TO INFORMATION. 

24 (a) REQUIREMENT.— 

25 (1) DISCLOSURE.— 
111 

•S 1012 IS

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

2 and a health insurance issuer that provides cov3 erage in connection with health insurance cov4 erage, shall provide for the disclosure to partici5 pants, beneficiaries, and enrollees— 

6 (i) of the information described in 

7 subsection (b) at the time of the initial en8 rollment of the participant, beneficiary, or 

9 enrollee under the plan or coverage; 

10 (ii) of such information on an annual 

11 basis— 

12 (I) in conjunction with the elec13 tion period of the plan or coverage if 

14 the plan or coverage has such an elec15 tion period; or 

16 (II) in the case of a plan or cov17 erage that does not have an election 

18 period, in conjunction with the begin19 ning of the plan or coverage year; and 

20 (iii) of information relating to any 

21 material reduction to the benefits or infor22 mation described in such subsection or 

23 subsection (c), in the form of a notice pro24 vided not later than 30 days before the 

25 date on which the reduction takes effect. 
112 

•S 1012 IS

1 (B) PARTICIPANTS, BENEFICIARIES, AND

2 ENROLLEES.—The disclosure required under 

3 subparagraph (A) shall be provided— 

4 (i) jointly to each participant, bene5 ficiary, and enrollee who reside at the same 

6 address; or 

7 (ii) in the case of a beneficiary or en8 rollee who does not reside at the same ad9 dress as the participant or another en10 rollee, separately to the participant or 

11 other enrollees and such beneficiary or en12 rollee. 

13 (2) PROVISION OF INFORMATION.—Information 

14 shall be provided to participants, beneficiaries, and 

15 enrollees under this section at the last known ad16 dress maintained by the plan or issuer with respect 

17 to such participants, beneficiaries, or enrollees, to 

18 the extent that such information is provided to par19 ticipants, beneficiaries, or enrollees via the United 

20 States Postal Service or other private delivery serv21 ice. 

22 (b) REQUIRED INFORMATION.—The informational 

23 materials to be distributed under this section shall include 

24 for each option available under the group health plan or 

25 health insurance coverage the following: 
113 

•S 1012 IS

1 (1) BENEFITS.—A description of the covered 

2 benefits, including— 

3 (A) any in- and out-of-network benefits; 

4 (B) specific preventive services covered 

5 under the plan or coverage if such services are 

6 covered; 

7 (C) any specific exclusions or express limi8 tations of benefits described in section 

9 104(d)(3)(C); 

10 (D) any other benefit limitations, including 

11 any annual or lifetime benefit limits and any 

12 monetary limits or limits on the number of vis13 its, days, or services, and any specific coverage 

14 exclusions; and 

15 (E) any definition of medical necessity 

16 used in making coverage determinations by the 

17 plan, issuer, or claims administrator. 

18 (2) COST SHARING.—A description of any cost19 sharing requirements, including— 

20 (A) any premiums, deductibles, coinsur21 ance, copayment amounts, and liability for bal22 ance billing, for which the participant, bene23 ficiary, or enrollee will be responsible under 

24 each option available under the plan; 
114 

•S 1012 IS

1 (B) any maximum out-of-pocket expense 

2 for which the participant, beneficiary, or en3 rollee may be liable; 

4 (C) any cost-sharing requirements for out5 of-network benefits or services received from 

6 nonparticipating providers; and 

7 (D) any additional cost-sharing or charges 

8 for benefits and services that are furnished 

9 without meeting applicable plan or coverage re10 quirements, such as prior authorization or 

11 precertification. 

12 (3) DISENROLLMENT.—Information relating to 

13 the disenrollment of a participant, beneficiary, or en14 rollee. 

15 (4) SERVICE AREA.—A description of the plan 

16 or issuer’s service area, including the provision of 

17 any out-of-area coverage. 

18 (5) PARTICIPATING PROVIDERS.—A directory of 

19 participating providers (to the extent a plan or 

20 issuer provides coverage through a network of pro21 viders) that includes, at a minimum, the name, ad22 dress, and telephone number of each participating 

23 provider, and information about how to inquire 

24 whether a participating provider is currently accept25 ing new patients. 
115 

•S 1012 IS

1 (6) CHOICE OF PRIMARY CARE PROVIDER.—A 

2 description of any requirements and procedures to 

3 be used by participants, beneficiaries, and enrollees 

4 in selecting, accessing, or changing their primary 

5 care provider, including providers both within and 

6 outside of the network (if the plan or issuer permits 

7 out-of-network services), and the right to select a pe8 diatrician as a primary care provider under section 

9 116 for a participant, beneficiary, or enrollee who is 

10 a child if such section applies. 

11 (7) PREAUTHORIZATION REQUIREMENTS.—A 

12 description of the requirements and procedures to be 

13 used to obtain preauthorization for health services, 

14 if such preauthorization is required. 

15 (8) EXPERIMENTAL AND INVESTIGATIONAL

16 TREATMENTS.—A description of the process for de17 termining whether a particular item, service, or 

18 treatment is considered experimental or investiga19 tional, and the circumstances under which such 

20 treatments are covered by the plan or issuer. 

21 (9) SPECIALTY CARE.—A description of the re22 quirements and procedures to be used by partici23 pants, beneficiaries, and enrollees in accessing spe24 cialty care and obtaining referrals to participating 

25 and nonparticipating specialists, including any limi-
116 

•S 1012 IS

1 tations on choice of health care professionals re2 ferred to in section 112(b)(2) and the right to timely 

3 access to specialists care under section 114 if such 

4 section applies. 

5 (10) CLINICAL TRIALS.—A description of the 

6 circumstances and conditions under which participa7 tion in clinical trials is covered under the terms and 

8 conditions of the plan or coverage, and the right to 

9 obtain coverage for approved clinical trials under 

10 section 119 if such section applies. 

11 (11) PRESCRIPTION DRUGS.—To the extent the 

12 plan or issuer provides coverage for prescription 

13 drugs, a statement of whether such coverage is lim14 ited to drugs included in a formulary, a description 

15 of any provisions and cost-sharing required for ob16 taining on- and off-formulary medications, and a de17 scription of the rights of participants, beneficiaries, 

18 and enrollees in obtaining access to access to pre19 scription drugs under section 118 if such section ap20 plies. 

21 (12) EMERGENCY SERVICES.—A summary of 

22 the rules and procedures for accessing emergency 

23 services, including the right of a participant, bene24 ficiary, or enrollee to obtain emergency services 

25 under the prudent layperson standard under section 
117 

•S 1012 IS

1 113, if such section applies, and any educational in2 formation that the plan or issuer may provide re3 garding the appropriate use of emergency services. 

4 (13) CLAIMS AND APPEALS.—A description of 

5 the plan or issuer’s rules and procedures pertaining 

6 to claims and appeals, a description of the rights 

7 (including deadlines for exercising rights) of partici8 pants, beneficiaries, and enrollees under subtitle A 

9 in obtaining covered benefits, filing a claim for bene10 fits, and appealing coverage decisions internally and 

11 externally (including telephone numbers and mailing 

12 addresses of the appropriate authority), and a de13 scription of any additional legal rights and remedies 

14 available under section 502 of the Employee Retire15 ment Income Security Act of 1974 and applicable 

16 State law. 

17 (14) ADVANCE DIRECTIVES AND ORGAN DONA18 TION.—A description of procedures for advance di19 rectives and organ donation decisions if the plan or 

20 issuer maintains such procedures. 

21 (15) INFORMATION ON PLANS AND ISSUERS.— 

22 The name, mailing address, and telephone number 

23 or numbers of the plan administrator and the issuer 

24 to be used by participants, beneficiaries, and enroll25 ees seeking information about plan or coverage bene-
118 

•S 1012 IS

1 fits and services, payment of a claim, or authoriza2 tion for services and treatment. Notice of whether 

3 the benefits under the plan or coverage are provided 

4 under a contract or policy of insurance issued by an 

5 issuer, or whether benefits are provided directly by 

6 the plan sponsor who bears the insurance risk. 

7 (16) TRANSLATION SERVICES.—A summary de8 scription of any translation or interpretation services 

9 (including the availability of printed information in 

10 languages other than English, audio tapes, or infor11 mation in Braille) that are available for non-English 

12 speakers and participants, beneficiaries, and enroll13 ees with communication disabilities and a description 

14 of how to access these items or services. 

15 (17) ACCREDITATION INFORMATION.—Any in16 formation that is made public by accrediting organi17 zations in the process of accreditation if the plan or 

18 issuer is accredited, or any additional quality indica19 tors (such as the results of enrollee satisfaction sur20 veys) that the plan or issuer makes public or makes 

21 available to participants, beneficiaries, and enrollees. 

22 (18) NOTICE OF REQUIREMENTS.—A descrip23 tion of any rights of participants, beneficiaries, and 

24 enrollees that are established by the Patients’ Bill of 

25 Rights Act of 2005 (excluding those described in 
119 

•S 1012 IS

1 paragraphs (1) through (17)) if such sections apply. 

2 The description required under this paragraph may 

3 be combined with the notices of the type described 

4 in sections 711(d), 713(b), or 606(a)(1) of the Em5 ployee Retirement Income Security Act of 1974 and 

6 with any other notice provision that the appropriate 

7 Secretary determines may be combined, so long as 

8 such combination does not result in any reduction in 

9 the information that would otherwise be provided to 

10 the recipient. 

11 (19) AVAILABILITY OF ADDITIONAL INFORMA12 TION.—A statement that the information described 

13 in subsection (c), and instructions on obtaining such 

14 information (including telephone numbers and, if 

15 available, Internet websites), shall be made available 

16 upon request. 

17 (20) DESIGNATED DECISIONMAKERS.—A de18 scription of the participants and beneficiaries with 

19 respect to whom each designated decisionmaker 

20 under the plan has assumed liability under section 

21 502(o) of the Employee Retirement Income Security 

22 Act of 1974 and the name and address of each such 

23 decisionmaker. 

24 (c) ADDITIONAL INFORMATION.—The informational 

25 materials to be provided upon the request of a participant, 
120 

•S 1012 IS

1 beneficiary, or enrollee shall include for each option avail2 able under a group health plan or health insurance cov3 erage the following: 

4 (1) STATUS OF PROVIDERS.—The State licen5 sure status of the plan or issuer’s participating 

6 health care professionals and participating health 

7 care facilities, and, if available, the education, train8 ing, specialty qualifications or certifications of such 

9 professionals. 

10 (2) COMPENSATION METHODS.—A summary 

11 description by category of the applicable methods 

12 (such as capitation, fee-for-service, salary, bundled 

13 payments, per diem, or a combination thereof) used 

14 for compensating prospective or treating health care 

15 professionals (including primary care providers and 

16 specialists) and facilities in connection with the pro17 vision of health care under the plan or coverage. 

18 (3) PRESCRIPTION DRUGS.—Information about 

19 whether a specific prescription medication is in20 cluded in the formulary of the plan or issuer, if the 

21 plan or issuer uses a defined formulary. 

22 (4) UTILIZATION REVIEW ACTIVITIES.—A de23 scription of procedures used and requirements (in24 cluding circumstances, timeframes, and appeals 

25 rights) under any utilization review program under 
121 

•S 1012 IS

1 sections 101 and 102, including any drug formulary 

2 program under section 118. 

3 (5) EXTERNAL APPEALS INFORMATION.—Ag4 gregate information on the number and outcomes of 

5 external medical reviews, relative to the sample size 

6 (such as the number of covered lives) under the plan 

7 or under the coverage of the issuer. 

8 (d) MANNER OF DISCLOSURE.—The information de9 scribed in this section shall be disclosed in an accessible 

10 medium and format that is calculated to be understood 

11 by a participant or enrollee. 

12 (e) RULES OF CONSTRUCTION.—Nothing in this sec13 tion shall be construed to prohibit a group health plan, 

14 or a health insurance issuer in connection with health in15 surance coverage, from— 

16 (1) distributing any other additional informa17 tion determined by the plan or issuer to be impor18 tant or necessary in assisting participants, bene19 ficiaries, and enrollees in the selection of a health 

20 plan or health insurance coverage; and 

21 (2) complying with the provisions of this section 

22 by providing information in brochures, through the 

23 Internet or other electronic media, or through other 

24 similar means, so long as— 
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•S 1012 IS

1 (A) the disclosure of such information in 

2 such form is in accordance with requirements 

3 as the appropriate Secretary may impose, and 

4 (B) in connection with any such disclosure 

5 of information through the Internet or other 

6 electronic media— 

7 (i) the recipient has affirmatively con8 sented to the disclosure of such informa9 tion in such form, 

10 (ii) the recipient is capable of access11 ing the information so disclosed on the re12 cipient’s individual workstation or at the 

13 recipient’s home, 

14 (iii) the recipient retains an ongoing 

15 right to receive paper disclosure of such in16 formation and receives, in advance of any 

17 attempt at disclosure of such information 

18 to him or her through the Internet or 

19 other electronic media, notice in printed 

20 form of such ongoing right and of the 

21 proper software required to view informa22 tion so disclosed, and 

23 (iv) the plan administrator appro24 priately ensures that the intended recipient 

25 is receiving the information so disclosed 
123 

•S 1012 IS

1 and provides the information in printed 

2 form if the information is not received. 

3 Subtitle D—Protecting the Doctor4 patient Relationship 

5 SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN 

6 MEDICAL COMMUNICATIONS. 

7 (a) GENERAL RULE.—The provisions of any contract 

8 or agreement, or the operation of any contract or agree9 ment, between a group health plan or health insurance 

10 issuer in relation to health insurance coverage (including 

11 any partnership, association, or other organization that 

12 enters into or administers such a contract or agreement) 

13 and a health care provider (or group of health care pro14 viders) shall not prohibit or otherwise restrict a health 

15 care professional from advising such a participant, bene16 ficiary, or enrollee who is a patient of the professional 

17 about the health status of the individual or medical care 

18 or treatment for the individual’s condition or disease, re19 gardless of whether benefits for such care or treatment 

20 are provided under the plan or coverage, if the professional 

21 is acting within the lawful scope of practice. 

22 (b) NULLIFICATION.—Any contract provision or 

23 agreement that restricts or prohibits medical communica24 tions in violation of subsection (a) shall be null and void. 
124 

•S 1012 IS

1 SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PRO2 VIDERS BASED ON LICENSURE. 

3 (a) IN GENERAL.—A group health plan, and a health 

4 insurance issuer with respect to health insurance coverage, 

5 shall not discriminate with respect to participation or in6 demnification as to any provider who is acting within the 

7 scope of the provider’s license or certification under appli8 cable State law, solely on the basis of such license or cer9 tification. 

10 (b) CONSTRUCTION.—Subsection (a) shall not be con11 strued— 

12 (1) as requiring the coverage under a group 

13 health plan or health insurance coverage of a par14 ticular benefit or service or to prohibit a plan or 

15 issuer from including providers only to the extent 

16 necessary to meet the needs of the plan’s or issuer’s 

17 participants, beneficiaries, or enrollees or from es18 tablishing any measure designed to maintain quality 

19 and control costs consistent with the responsibilities 

20 of the plan or issuer; 

21 (2) to override any State licensure or scope-of22 practice law; or 

23 (3) as requiring a plan or issuer that offers net24 work coverage to include for participation every will25 ing provider who meets the terms and conditions of 

26 the plan or issuer. 
125 

•S 1012 IS

1 SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE 

2 ARRANGEMENTS. 

3 (a) IN GENERAL.—A group health plan and a health 

4 insurance issuer offering health insurance coverage may 

5 not operate any physician incentive plan (as defined in 

6 subparagraph (B) of section 1852(j)(4) of the Social Secu7 rity Act) unless the requirements described in clauses (i), 

8 (ii)(I), and (iii) of subparagraph (A) of such section are 

9 met with respect to such a plan. 

10 (b) APPLICATION.—For purposes of carrying out 

11 paragraph (1), any reference in section 1852(j)(4) of the 

12 Social Security Act to the Secretary, a MedicareAdvantage 

13 organization, or an individual enrolled with the organiza14 tion shall be treated as a reference to the applicable au15 thority, a group health plan or health insurance issuer, 

16 respectively, and a participant, beneficiary, or enrollee 

17 with the plan or organization, respectively. 

18 (c) CONSTRUCTION.—Nothing in this section shall be 

19 construed as prohibiting all capitation and similar ar20 rangements or all provider discount arrangements. 

21 SEC. 134. PAYMENT OF CLAIMS. 

22 A group health plan, and a health insurance issuer 

23 offering health insurance coverage, shall provide for 

24 prompt payment of claims submitted for health care serv25 ices or supplies furnished to a participant, beneficiary, or 

26 enrollee with respect to benefits covered by the plan or 
126 

•S 1012 IS

1 issuer, in a manner that is no less protective than the pro2 visions of section 1842(c)(2) of the Social Security Act 

3 (42 U.S.C. 1395u(c)(2)). 

4 SEC. 135. PROTECTION FOR PATIENT ADVOCACY. 

5 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

6 AND GRIEVANCE PROCESS.—A group health plan, and a 

7 health insurance issuer with respect to the provision of 

8 health insurance coverage, may not retaliate against a par9 ticipant, beneficiary, enrollee, or health care provider 

10 based on the participant’s, beneficiary’s, enrollee’s or pro11 vider’s use of, or participation in, a utilization review proc12 ess or a grievance process of the plan or issuer (including 

13 an internal or external review or appeal process) under 

14 this title. 

15 (b) PROTECTION FOR QUALITY ADVOCACY BY

16 HEALTH CARE PROFESSIONALS.— 

17 (1) IN GENERAL.—A group health plan and a 

18 health insurance issuer may not retaliate or dis19 criminate against a protected health care profes20 sional because the professional in good faith— 

21 (A) discloses information relating to the 

22 care, services, or conditions affecting one or 

23 more participants, beneficiaries, or enrollees of 

24 the plan or issuer to an appropriate public reg25 ulatory agency, an appropriate private accredi-
127 

•S 1012 IS

1 tation body, or appropriate management per2 sonnel of the plan or issuer; or 

3 (B) initiates, cooperates, or otherwise par4 ticipates in an investigation or proceeding by 

5 such an agency with respect to such care, serv6 ices, or conditions. 

7 If an institutional health care provider is a partici8 pating provider with such a plan or issuer or other9 wise receives payments for benefits provided by such 

10 a plan or issuer, the provisions of the previous sen11 tence shall apply to the provider in relation to care, 

12 services, or conditions affecting one or more patients 

13 within an institutional health care provider in the 

14 same manner as they apply to the plan or issuer in 

15 relation to care, services, or conditions provided to 

16 one or more participants, beneficiaries, or enrollees; 

17 and for purposes of applying this sentence, any ref18 erence to a plan or issuer is deemed a reference to 

19 the institutional health care provider. 

20 (2) GOOD FAITH ACTION.—For purposes of 

21 paragraph (1), a protected health care professional 

22 is considered to be acting in good faith with respect 

23 to disclosure of information or participation if, with 

24 respect to the information disclosed as part of the 

25 action— 
128 

•S 1012 IS

1 (A) the disclosure is made on the basis of 

2 personal knowledge and is consistent with that 

3 degree of learning and skill ordinarily possessed 

4 by health care professionals with the same li5 censure or certification and the same experi6 ence; 

7 (B) the professional reasonably believes the 

8 information to be true; 

9 (C) the information evidences either a vio10 lation of a law, rule, or regulation, of an appli11 cable accreditation standard, or of a generally 

12 recognized professional or clinical standard or 

13 that a patient is in imminent hazard of loss of 

14 life or serious injury; and 

15 (D) subject to subparagraphs (B) and (C) 

16 of paragraph (3), the professional has followed 

17 reasonable internal procedures of the plan, 

18 issuer, or institutional health care provider es19 tablished for the purpose of addressing quality 

20 concerns before making the disclosure. 

21 (3) EXCEPTION AND SPECIAL RULE.— 

22 (A) GENERAL EXCEPTION.—Paragraph (1) 

23 does not protect disclosures that would violate 

24 Federal or State law or diminish or impair the 

25 rights of any person to the continued protection 
129 

•S 1012 IS

1 of confidentiality of communications provided 

2 by such law. 

3 (B) NOTICE OF INTERNAL PROCEDURES.— 

4 Subparagraph (D) of paragraph (2) shall not 

5 apply unless the internal procedures involved 

6 are reasonably expected to be known to the 

7 health care professional involved. For purposes 

8 of this subparagraph, a health care professional 

9 is reasonably expected to know of internal pro10 cedures if those procedures have been made 

11 available to the professional through distribu12 tion or posting. 

13 (C) INTERNAL PROCEDURE EXCEPTION.— 

14 Subparagraph (D) of paragraph (2) also shall 

15 not apply if— 

16 (i) the disclosure relates to an immi17 nent hazard of loss of life or serious injury 

18 to a patient; 

19 (ii) the disclosure is made to an ap20 propriate private accreditation body pursu21 ant to disclosure procedures established by 

22 the body; or 

23 (iii) the disclosure is in response to an 

24 inquiry made in an investigation or pro25 ceeding of an appropriate public regulatory 
130 

•S 1012 IS

1 agency and the information disclosed is 

2 limited to the scope of the investigation or 

3 proceeding. 

4 (4) ADDITIONAL CONSIDERATIONS.—It shall 

5 not be a violation of paragraph (1) to take an ad6 verse action against a protected health care profes7 sional if the plan, issuer, or provider taking the ad8 verse action involved demonstrates that it would 

9 have taken the same adverse action even in the ab10 sence of the activities protected under such para11 graph. 

12 (5) NOTICE.—A group health plan, health in13 surance issuer, and institutional health care provider 

14 shall post a notice, to be provided or approved by 

15 the Secretary of Labor, setting forth excerpts from, 

16 or summaries of, the pertinent provisions of this 

17 subsection and information pertaining to enforce18 ment of such provisions. 

19 (6) CONSTRUCTIONS.— 

20 (A) DETERMINATIONS OF COVERAGE.— 

21 Nothing in this subsection shall be construed to 

22 prohibit a plan or issuer from making a deter23 mination not to pay for a particular medical 

24 treatment or service or the services of a type of 

25 health care professional. 
131 

•S 1012 IS

1 (B) ENFORCEMENT OF PEER REVIEW PRO2 TOCOLS AND INTERNAL PROCEDURES.—Noth3 ing in this subsection shall be construed to pro4 hibit a plan, issuer, or provider from estab5 lishing and enforcing reasonable peer review or 

6 utilization review protocols or determining 

7 whether a protected health care professional has 

8 complied with those protocols or from estab9 lishing and enforcing internal procedures for 

10 the purpose of addressing quality concerns. 

11 (C) RELATION TO OTHER RIGHTS.—Noth12 ing in this subsection shall be construed to 

13 abridge rights of participants, beneficiaries, en14 rollees, and protected health care professionals 

15 under other applicable Federal or State laws. 

16 (7) PROTECTED HEALTH CARE PROFESSIONAL

17 DEFINED.—For purposes of this subsection, the 

18 term ‘‘protected health care professional’’ means an 

19 individual who is a licensed or certified health care 

20 professional and who— 

21 (A) with respect to a group health plan or 

22 health insurance issuer, is an employee of the 

23 plan or issuer or has a contract with the plan 

24 or issuer for provision of services for which ben25 efits are available under the plan or issuer; or 
132 

•S 1012 IS

1 (B) with respect to an institutional health 

2 care provider, is an employee of the provider or 

3 has a contract or other arrangement with the 

4 provider respecting the provision of health care 

5 services. 

6 Subtitle E—Definitions 

7 SEC. 151. DEFINITIONS. 

8 (a) INCORPORATION OF GENERAL DEFINITIONS.— 

9 Except as otherwise provided, the provisions of section 

10 2791 of the Public Health Service Act shall apply for pur11 poses of this title in the same manner as they apply for 

12 purposes of title XXVII of such Act. 

13 (b) SECRETARY.—Except as otherwise provided, the 

14 term ‘‘Secretary’’ means the Secretary of Health and 

15 Human Services, in consultation with the Secretary of 

16 Labor and the term ‘‘appropriate Secretary’’ means the 

17 Secretary of Health and Human Services in relation to 

18 carrying out this title under sections 2706 and 2751 of 

19 the Public Health Service Act and the Secretary of Labor 

20 in relation to carrying out this title under section 714 of 

21 the Employee Retirement Income Security Act of 1974. 

22 (c) ADDITIONAL DEFINITIONS.—For purposes of this 

23 title: 

24 (1) APPLICABLE AUTHORITY.—The term ‘‘ap25 plicable authority’’ means— 
133 

•S 1012 IS

1 (A) in the case of a group health plan, the 

2 Secretary of Health and Human Services and 

3 the Secretary of Labor; and 

4 (B) in the case of a health insurance issuer 

5 with respect to a specific provision of this title, 

6 the applicable State authority (as defined in 

7 section 2791(d) of the Public Health Service 

8 Act), or the Secretary of Health and Human 

9 Services, if such Secretary is enforcing such 

10 provision under section 2722(a)(2) or 

11 2761(a)(2) of the Public Health Service Act. 

12 (2) ENROLLEE.—The term ‘‘enrollee’’ means, 

13 with respect to health insurance coverage offered by 

14 a health insurance issuer, an individual enrolled with 

15 the issuer to receive such coverage. 

16 (3) GROUP HEALTH PLAN.—The term ‘‘group 

17 health plan’’ has the meaning given such term in 

18 section 733(a) of the Employee Retirement Income 

19 Security Act of 1974, except that such term includes 

20 a employee welfare benefit plan treated as a group 

21 health plan under section 732(d) of such Act or de22 fined as such a plan under section 607(1) of such 

23 Act. 

24 (4) HEALTH CARE PROFESSIONAL.—The term 

25 ‘‘health care professional’’ means an individual who 
134 

•S 1012 IS

1 is licensed, accredited, or certified under State law 

2 to provide specified health care services and who is 

3 operating within the scope of such licensure, accredi4 tation, or certification. 

5 (5) HEALTH CARE PROVIDER.—The term 

6 ‘‘health care provider’’ includes a physician or other 

7 health care professional, as well as an institutional 

8 or other facility or agency that provides health care 

9 services and that is licensed, accredited, or certified 

10 to provide health care items and services under ap11 plicable State law. 

12 (6) NETWORK.—The term ‘‘network’’ means, 

13 with respect to a group health plan or health insur14 ance issuer offering health insurance coverage, the 

15 participating health care professionals and providers 

16 through whom the plan or issuer provides health 

17 care items and services to participants, beneficiaries, 

18 or enrollees. 

19 (7) NONPARTICIPATING.—The term ‘‘non20 participating’’ means, with respect to a health care 

21 provider that provides health care items and services 

22 to a participant, beneficiary, or enrollee under group 

23 health plan or health insurance coverage, a health 

24 care provider that is not a participating health care 

25 provider with respect to such items and services. 
135 

•S 1012 IS

1 (8) PARTICIPATING.—The term ‘‘participating’’ 

2 means, with respect to a health care provider that 

3 provides health care items and services to a partici4 pant, beneficiary, or enrollee under group health 

5 plan or health insurance coverage offered by a 

6 health insurance issuer, a health care provider that 

7 furnishes such items and services under a contract 

8 or other arrangement with the plan or issuer. 

9 (9) PRIOR AUTHORIZATION.—The term ‘‘prior 

10 authorization’’ means the process of obtaining prior 

11 approval from a health insurance issuer or group 

12 health plan for the provision or coverage of medical 

13 services. 

14 (10) TERMS AND CONDITIONS.—The term 

15 ‘‘terms and conditions’’ includes, with respect to a 

16 group health plan or health insurance coverage, re17 quirements imposed under this title with respect to 

18 the plan or coverage. 

19 SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUC20 TION. 

21 (a) CONTINUED APPLICABILITY OF STATE LAW

22 WITH RESPECT TO HEALTH INSURANCE ISSUERS.— 

23 (1) IN GENERAL.—Subject to paragraph (2), 

24 this title shall not be construed to supersede any 

25 provision of State law which establishes, implements, 
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•S 1012 IS

1 or continues in effect any standard or requirement 

2 solely relating to health insurance issuers (in connec3 tion with group health insurance coverage or other4 wise) except to the extent that such standard or re5 quirement prevents the application of a requirement 

6 of this title. 

7 (2) CONTINUED PREEMPTION WITH RESPECT

8 TO GROUP HEALTH PLANS.—Nothing in this title 

9 shall be construed to affect or modify the provisions 

10 of section 514 of the Employee Retirement Income 

11 Security Act of 1974 with respect to group health 

12 plans. 

13 (3) CONSTRUCTION.—In applying this section, 

14 a State law that provides for equal access to, and 

15 availability of, all categories of licensed health care 

16 providers and services shall not be treated as pre17 venting the application of any requirement of this 

18 title. 

19 (b) APPLICATION OF SUBSTANTIALLY COMPLIANT

20 STATE LAWS.— 

21 (1) IN GENERAL.—In the case of a State law 

22 that imposes, with respect to health insurance cov23 erage offered by a health insurance issuer and with 

24 respect to a group health plan that is a non-Federal 

25 governmental plan, a requirement that substantially 
137 

•S 1012 IS

1 complies (within the meaning of subsection (c)) with 

2 a patient protection requirement (as defined in para3 graph (3)) and does not prevent the application of 

4 other requirements under this Act (except in the 

5 case of other substantially compliant requirements), 

6 in applying the requirements of this title under sec7 tion 2707 and 2753 (as applicable) of the Public 

8 Health Service Act (as added by title II), subject to 

9 subsection (a)(2)— 

10 (A) the State law shall not be treated as 

11 being superseded under subsection (a); and 

12 (B) the State law shall apply instead of the 

13 patient protection requirement otherwise appli14 cable with respect to health insurance coverage 

15 and non-Federal governmental plans. 

16 (2) LIMITATION.—In the case of a group health 

17 plan covered under title I of the Employee Retire18 ment Income Security Act of 1974, paragraph (1) 

19 shall be construed to apply only with respect to the 

20 health insurance coverage (if any) offered in connec21 tion with the plan. 

22 (3) DEFINITIONS.—In this section: 

23 (A) PATIENT PROTECTION REQUIRE24 MENT.—The term ‘‘patient protection require25 ment’’ means a requirement under this title, 
138 

•S 1012 IS

1 and includes (as a single requirement) a group 

2 or related set of requirements under a section 

3 or similar unit under this title. 

4 (B) SUBSTANTIALLY COMPLIANT.—The 

5 terms ‘‘substantially compliant’’, substantially 

6 complies’’, or ‘‘substantial compliance’’ with re7 spect to a State law, mean that the State law 

8 has the same or similar features as the patient 

9 protection requirements and has a similar ef10 fect. 

11 (c) DETERMINATIONS OF SUBSTANTIAL COMPLI12 ANCE.— 

13 (1) CERTIFICATION BY STATES.—A State may 

14 submit to the Secretary a certification that a State 

15 law provides for patient protections that are at least 

16 substantially compliant with one or more patient 

17 protection requirements. Such certification shall be 

18 accompanied by such information as may be re19 quired to permit the Secretary to make the deter20 mination described in paragraph (2)(A). 

21 (2) REVIEW.— 

22 (A) IN GENERAL.—The Secretary shall 

23 promptly review a certification submitted under 

24 paragraph (1) with respect to a State law to de25 termine if the State law substantially complies 
139 

•S 1012 IS

1 with the patient protection requirement (or re2 quirements) to which the law relates. 

3 (B) APPROVAL DEADLINES.— 

4 (i) INITIAL REVIEW.—Such a certifi5 cation is considered approved unless the 

6 Secretary notifies the State in writing, 

7 within 90 days after the date of receipt of 

8 the certification, that the certification is 

9 disapproved (and the reasons for dis10 approval) or that specified additional infor11 mation is needed to make the determina12 tion described in subparagraph (A). 

13 (ii) ADDITIONAL INFORMATION.— 

14 With respect to a State that has been noti15 fied by the Secretary under clause (i) that 

16 specified additional information is needed 

17 to make the determination described in 

18 subparagraph (A), the Secretary shall 

19 make the determination within 60 days 

20 after the date on which such specified ad21 ditional information is received by the Sec22 retary. 

23 (3) APPROVAL.— 
140 

•S 1012 IS

1 (A) IN GENERAL.—The Secretary shall ap2 prove a certification under paragraph (1) un3 less— 

4 (i) the State fails to provide sufficient 

5 information to enable the Secretary to 

6 make a determination under paragraph 

7 (2)(A); or 

8 (ii) the Secretary determines that the 

9 State law involved does not provide for pa10 tient protections that substantially comply 

11 with the patient protection requirement (or 

12 requirements) to which the law relates. 

13 (B) STATE CHALLENGE.—A State that has 

14 a certification disapproved by the Secretary 

15 under subparagraph (A) may challenge such 

16 disapproval in the appropriate United States 

17 district court. 

18 (C) DEFERENCE TO STATES.—With re19 spect to a certification submitted under para20 graph (1), the Secretary shall give deference to 

21 the State’s interpretation of the State law in22 volved with respect to the patient protection in23 volved. 

24 (D) PUBLIC NOTIFICATION.—The Sec25 retary shall— 
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•S 1012 IS

1 (i) provide a State with a notice of the 

2 determination to approve or disapprove a 

3 certification under this paragraph; 

4 (ii) promptly publish in the Federal 

5 Register a notice that a State has sub6 mitted a certification under paragraph (1); 

7 (iii) promptly publish in the Federal 

8 Register the notice described in clause (i) 

9 with respect to the State; and 

10 (iv) annually publish the status of all 

11 States with respect to certifications. 

12 (4) CONSTRUCTION.—Nothing in this sub13 section shall be construed as preventing the certifi14 cation (and approval of certification) of a State law 

15 under this subsection solely because it provides for 

16 greater protections for patients than those protec17 tions otherwise required to establish substantial 

18 compliance. 

19 (5) PETITIONS.— 

20 (A) PETITION PROCESS.—Effective on the 

21 date on which the provisions of this Act become 

22 effective, as provided for in section 601, a 

23 group health plan, health insurance issuer, par24 ticipant, beneficiary, or enrollee may submit a 

25 petition to the Secretary for an advisory opinion 
142 

•S 1012 IS

1 as to whether or not a standard or requirement 

2 under a State law applicable to the plan, issuer, 

3 participant, beneficiary, or enrollee that is not 

4 the subject of a certification under this sub5 section, is superseded under subsection (a)(1) 

6 because such standard or requirement prevents 

7 the application of a requirement of this title. 

8 (B) OPINION.—The Secretary shall issue 

9 an advisory opinion with respect to a petition 

10 submitted under subparagraph (A) within the 

11 60-day period beginning on the date on which 

12 such petition is submitted. 

13 (d) DEFINITIONS.—For purposes of this section: 

14 (1) STATE LAW.—The term ‘‘State law’’ in15 cludes all laws, decisions, rules, regulations, or other 

16 State action having the effect of law, of any State. 

17 A law of the United States applicable only to the 

18 District of Columbia shall be treated as a State law 

19 rather than a law of the United States. 

20 (2) STATE.—The term ‘‘State’’ includes a 

21 State, the District of Columbia, Puerto Rico, the 

22 Virgin Islands, Guam, American Samoa, the North23 ern Mariana Islands, any political subdivisions of 

24 such, or any agency or instrumentality of such. 
143 

•S 1012 IS

1 SEC. 153. EXCLUSIONS. 

2 (a) NO BENEFIT REQUIREMENTS.—Nothing in this 

3 title shall be construed to require a group health plan or 

4 a health insurance issuer offering health insurance cov5 erage to include specific items and services under the 

6 terms of such a plan or coverage, other than those pro7 vided under the terms and conditions of such plan or cov8 erage. 

9 (b) EXCLUSION FROM ACCESS TO CARE MANAGED

10 CARE PROVISIONS FOR FEE-FOR-SERVICE COVERAGE.— 

11 (1) IN GENERAL.—The provisions of sections 

12 111 through 117 shall not apply to a group health 

13 plan or health insurance coverage if the only cov14 erage offered under the plan or coverage is fee-for15 service coverage (as defined in paragraph (2)). 

16 (2) FEE-FOR-SERVICE COVERAGE DEFINED.— 

17 For purposes of this subsection, the term ‘‘fee-for18 service coverage’’ means coverage under a group 

19 health plan or health insurance coverage that— 

20 (A) reimburses hospitals, health profes21 sionals, and other providers on a fee-for-service 

22 basis without placing the provider at financial 

23 risk; 

24 (B) does not vary reimbursement for such 

25 a provider based on an agreement to contract 
144 

•S 1012 IS

1 terms and conditions or the utilization of health 

2 care items or services relating to such provider; 

3 (C) allows access to any provider that is 

4 lawfully authorized to provide the covered serv5 ices and that agrees to accept the terms and 

6 conditions of payment established under the 

7 plan or by the issuer; and 

8 (D) for which the plan or issuer does not 

9 require prior authorization before providing for 

10 any health care services. 

11 SEC. 154. TREATMENT OF EXCEPTED BENEFITS. 

12 (a) IN GENERAL.—The requirements of this title and 

13 the provisions of sections 502(a)(1)(C), 502(n), and 

14 514(d) of the Employee Retirement Income Security Act 

15 of 1974 (added by section 402) shall not apply to excepted 

16 benefits (as defined in section 733(c) of such Act), other 

17 than benefits described in section 733(c)(2)(A) of such 

18 Act, in the same manner as the provisions of part 7 of 

19 subtitle B of title I of such Act do not apply to such bene20 fits under subsections (b) and (c) of section 732 of such 

21 Act. 

22 (b) COVERAGE OF CERTAIN LIMITED SCOPE

23 PLANS.—Only for purposes of applying the requirements 

24 of this title under sections 2707 and 2753 of the Public 

25 Health Service Act, section 714 of the Employee Retire-
145 

•S 1012 IS

1 ment Income Security Act of 1974, and section 9813 of 

2 the Internal Revenue Code of 1986, the following sections 

3 shall be deemed not to apply: 

4 (1) Section 2791(c)(2)(A) of the Public Health 

5 Service Act. 

6 (2) Section 733(c)(2)(A) of the Employee Re7 tirement Income Security Act of 1974. 

8 (3) Section 9832(c)(2)(A) of the Internal Rev9 enue Code of 1986. 

10 SEC. 155. REGULATIONS. 

11 The Secretaries of Health and Human Services, 

12 Labor, and the Treasury shall issue such regulations as 

13 may be necessary or appropriate to carry out this title. 

14 Such regulations shall be issued consistent with section 

15 104 of Health Insurance Portability and Accountability 

16 Act of 1996. Such Secretaries may promulgate any in17 terim final rules as the Secretaries determine are appro18 priate to carry out this title. 

19 SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOC20 UMENTS. 

21 The requirements of this title with respect to a group 

22 health plan or health insurance coverage are, subject to 

23 section 154, deemed to be incorporated into, and made 

24 a part of, such plan or the policy, certificate, or contract 

25 providing such coverage and are enforceable under law as 
146 

•S 1012 IS

1 if directly included in the documentation of such plan or 

2 such policy, certificate, or contract. 

3 SEC. 157. PRESERVATION OF PROTECTIONS. 

4 (a) IN GENERAL.—The rights under this Act (includ5 ing the right to maintain a civil action and any other 

6 rights under the amendments made by this Act) may not 

7 be waived, deferred, or lost pursuant to any agreement 

8 not authorized under this Act. 

9 (b) EXCEPTION.—Subsection (a) shall not apply to 

10 an agreement providing for arbitration or participation in 

11 any other nonjudicial procedure to resolve a dispute if the 

12 agreement— 

13 (1) is entered into knowingly and voluntarily by 

14 the parties involved after the dispute has arisen; or 

15 (2) is pursuant to the terms of a collective bar16 gaining agreement. 

17 Nothing in this subsection shall be construed to permit 

18 the waiver of the requirements of sections 103 and 104 

19 (relating to internal and external review). 
147 

•S 1012 IS

1 TITLE II—APPLICATION OF 

2 QUALITY CARE STANDARDS 

3 TO GROUP HEALTH PLANS 

4 AND HEALTH INSURANCE 

5 COVERAGE UNDER THE PUB6 LIC HEALTH SERVICE ACT 

7 SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND 

8 GROUP HEALTH INSURANCE COVERAGE. 

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

10 XXVII of the Public Health Service Act is amended by 

11 adding at the end the following new section: 

12 ‘‘SEC. 2707. PATIENT PROTECTION STANDARDS. 

13 ‘‘Each group health plan shall comply with patient 

14 protection requirements under title I of the Patients’ Bill 

15 of Rights Act of 2005, and each health insurance issuer 

16 shall comply with patient protection requirements under 

17 such title with respect to group health insurance coverage 

18 it offers, and such requirements shall be deemed to be in19 corporated into this subsection.’’. 

20 (b) CONFORMING AMENDMENT.—Section 

21 2721(b)(2)(A) of such Act (42 U.S.C. 300gg–21(b)(2)(A)) 

22 is amended by inserting ‘‘(other than section 2707)’’ after 

23 ‘‘requirements of such subparts’’. 
148 

•S 1012 IS

1 SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR2 ANCE COVERAGE. 

3 Part B of title XXVII of the Public Health Service 

4 Act is amended by inserting after section 2752 the fol5 lowing new section: 

6 ‘‘SEC. 2753. PATIENT PROTECTION STANDARDS. 

7 ‘‘Each health insurance issuer shall comply with pa8 tient protection requirements under title I of the Patients’ 

9 Bill of Rights Act of 2005 with respect to individual health 

10 insurance coverage it offers, and such requirements shall 

11 be deemed to be incorporated into this subsection.’’. 

12 SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE 

13 AUTHORITIES. 

14 Part C of title XXVII of the Public Health Service 

15 Act (42 U.S.C. 300gg–91 et seq.) is amended by adding 

16 at the end the following: 

17 ‘‘SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE 

18 AUTHORITIES. 

19 ‘‘(a) AGREEMENT WITH STATES.—A State may 

20 enter into an agreement with the Secretary for the delega21 tion to the State of some or all of the Secretary’s authority 

22 under this title to enforce the requirements applicable 

23 under title I of the Patients’ Bill of Rights Act of 2005 

24 with respect to health insurance coverage offered by a 

25 health insurance issuer and with respect to a group health 

26 plan that is a non-Federal governmental plan. 
149 

•S 1012 IS

1 ‘‘(b) DELEGATIONS.—Any department, agency, or in2 strumentality of a State to which authority is delegated 

3 pursuant to an agreement entered into under this section 

4 may, if authorized under State law and to the extent con5 sistent with such agreement, exercise the powers of the 

6 Secretary under this title which relate to such authority.’’. 

7 TITLE III—APPLICATION OF PA8 TIENT PROTECTION STAND9 ARDS TO FEDERAL HEALTH 

10 INSURANCE PROGRAMS 

11 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND12 ARDS TO FEDERAL HEALTH INSURANCE PRO13 GRAMS. 

14 (a) SENSE OF CONGRESS.—It is the sense of Con15 gress that enrollees in Federal health insurance programs 

16 should have the same rights and privileges as those af17 forded under title I and under the amendments made by 

18 title IV to participants and beneficiaries under group 

19 health plans. 

20 (b) CONFORMING FEDERAL HEALTH INSURANCE

21 PROGRAMS.—It is the sense of Congress that the Presi22 dent should require, by executive order, the Federal offi23 cial with authority over each Federal health insurance pro24 gram, to the extent feasible, to take such steps as are nec-
150 

•S 1012 IS

1 essary to implement the rights and privileges described in 

2 subsection (a) with respect to such program. 

3 (c) GAO REPORT ON ADDITIONAL STEPS RE4 QUIRED.—Not later than 1 year after the date of the en5 actment of this Act, the Comptroller General of the United 

6 States shall submit to Congress a report on statutory 

7 changes that are required to implement such rights and 

8 privileges in a manner that is consistent with the missions 

9 of the Federal health insurance programs and that avoids 

10 unnecessary duplication or disruption of such programs. 

11 (d) FEDERAL HEALTH INSURANCE PROGRAM.—In 

12 this section, the term ‘‘Federal health insurance program’’ 

13 means a Federal program that provides creditable cov14 erage (as defined in section 2701(c)(1) of the Public 

15 Health Service Act) and includes a health program of the 

16 Department of Veterans Affairs. 
151 

•S 1012 IS

1 TITLE IV—AMENDMENTS TO THE 

2 EMPLOYEE RETIREMENT IN3 COME SECURITY ACT OF 1974 

4 SEC. 401. APPLICATION OF PATIENT PROTECTION STAND5 ARDS TO GROUP HEALTH PLANS AND GROUP 

6 HEALTH INSURANCE COVERAGE UNDER THE 

7 EMPLOYEE RETIREMENT INCOME SECURITY 

8 ACT OF 1974. 

9 Subpart B of part 7 of subtitle B of title I of the 

10 Employee Retirement Income Security Act of 1974 is 

11 amended by adding at the end the following new section: 

12 ‘‘SEC. 714. PATIENT PROTECTION STANDARDS. 

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

14 group health plan (and a health insurance issuer offering 

15 group health insurance coverage in connection with such 

16 a plan) shall comply with the requirements of title I of 

17 the Patients’ Bill of Rights Act of 2005 (as in effect as 

18 of the date of the enactment of such Act), and such re19 quirements shall be deemed to be incorporated into this 

20 subsection. 

21 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE22 MENTS.— 

23 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE24 MENTS THROUGH INSURANCE.—For purposes of 

25 subsection (a), insofar as a group health plan pro-
152 

•S 1012 IS

1 vides benefits in the form of health insurance cov2 erage through a health insurance issuer, the plan 

3 shall be treated as meeting the following require4 ments of title I of the Patients’ Bill of Rights Act 

5 of 2005 with respect to such benefits and not be 

6 considered as failing to meet such requirements be7 cause of a failure of the issuer to meet such require8 ments so long as the plan sponsor or its representa9 tives did not cause such failure by the issuer: 

10 ‘‘(A) Section 111 (relating to consumer 

11 choice option). 

12 ‘‘(B) Section 112 (relating to choice of 

13 health care professional). 

14 ‘‘(C) Section 113 (relating to access to 

15 emergency care). 

16 ‘‘(D) Section 114 (relating to timely access 

17 to specialists). 

18 ‘‘(E) Section 115 (relating to patient ac19 cess to obstetrical and gynecological care). 

20 ‘‘(F) Section 116 (relating to access to pe21 diatric care). 

22 ‘‘(G) Section 117 (relating to continuity of 

23 care), but only insofar as a replacement issuer 

24 assumes the obligation for continuity of care. 
153 

•S 1012 IS

1 ‘‘(H) Section 118 (relating to access to 

2 needed prescription drugs). 

3 ‘‘(I) Section 119 (relating to coverage for 

4 individuals participating in approved clinical 

5 trials). 

6 ‘‘(J) Section 120 (relating to required cov7 erage for minimum hospital stay for 

8 mastectomies and lymph node dissections for 

9 the treatment of breast cancer and coverage for 

10 secondary consultations). 

11 ‘‘(K) Section 134 (relating to payment of 

12 claims). 

13 ‘‘(2) INFORMATION.—With respect to informa14 tion required to be provided or made available under 

15 section 121 of the Patients’ Bill of Rights Act of 

16 2005, in the case of a group health plan that pro17 vides benefits in the form of health insurance cov18 erage through a health insurance issuer, the Sec19 retary shall determine the circumstances under 

20 which the plan is not required to provide or make 

21 available the information (and is not liable for the 

22 issuer’s failure to provide or make available the in23 formation), if the issuer is obligated to provide and 

24 make available (or provides and makes available) 

25 such information. 
154 

•S 1012 IS

1 ‘‘(3) INTERNAL APPEALS.—With respect to the 

2 internal appeals process required to be established 

3 under section 103 of such Act, in the case of a 

4 group health plan that provides benefits in the form 

5 of health insurance coverage through a health insur6 ance issuer, the Secretary shall determine the cir7 cumstances under which the plan is not required to 

8 provide for such process and system (and is not lia9 ble for the issuer’s failure to provide for such proc10 ess and system), if the issuer is obligated to provide 

11 for (and provides for) such process and system. 

12 ‘‘(4) EXTERNAL APPEALS.—Pursuant to rules 

13 of the Secretary, insofar as a group health plan en14 ters into a contract with a qualified external appeal 

15 entity for the conduct of external appeal activities in 

16 accordance with section 104 of such Act, the plan 

17 shall be treated as meeting the requirement of such 

18 section and is not liable for the entity’s failure to 

19 meet any requirements under such section. 

20 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu21 ant to rules of the Secretary, if a health insurance 

22 issuer offers health insurance coverage in connection 

23 with a group health plan and takes an action in vio24 lation of any of the following sections of the Pa25 tients’ Bill of Rights Act of 2005, the group health 
155 

•S 1012 IS

1 plan shall not be liable for such violation unless the 

2 plan caused such violation: 

3 ‘‘(A) Section 131 (relating to prohibition of 

4 interference with certain medical communica5 tions). 

6 ‘‘(B) Section 132 (relating to prohibition 

7 of discrimination against providers based on li8 censure). 

9 ‘‘(C) Section 133 (relating to prohibition 

10 against improper incentive arrangements). 

11 ‘‘(D) Section 135 (relating to protection 

12 for patient advocacy). 

13 ‘‘(6) CONSTRUCTION.—Nothing in this sub14 section shall be construed to affect or modify the re15 sponsibilities of the fiduciaries of a group health 

16 plan under part 4 of subtitle B. 

17 ‘‘(7) TREATMENT OF SUBSTANTIALLY COMPLI18 ANT STATE LAWS.—For purposes of applying this 

19 subsection in connection with health insurance cov20 erage, any reference in this subsection to a require21 ment in a section or other provision in the Patients’ 

22 Bill of Rights Act of 2005 with respect to a health 

23 insurance issuer is deemed to include a reference to 

24 a requirement under a State law that substantially 

25 complies (as determined under section 152(c) of 
156 

•S 1012 IS

1 such Act) with the requirement in such section or 

2 other provisions. 

3 ‘‘(8) APPLICATION TO CERTAIN PROHIBITIONS

4 AGAINST RETALIATION.—With respect to compliance 

5 with the requirements of section 135(b)(1) of the 

6 Patients’ Bill of Rights Act of 2005, for purposes of 

7 this subtitle the term ‘group health plan’ is deemed 

8 to include a reference to an institutional health care 

9 provider. 

10 ‘‘(c) ENFORCEMENT OF CERTAIN REQUIREMENTS.— 

11 ‘‘(1) COMPLAINTS.—Any protected health care 

12 professional who believes that the professional has 

13 been retaliated or discriminated against in violation 

14 of section 135(b)(1) of the Patients’ Bill of Rights 

15 Act of 2005 may file with the Secretary a complaint 

16 within 180 days of the date of the alleged retaliation 

17 or discrimination. 

18 ‘‘(2) INVESTIGATION.—The Secretary shall in19 vestigate such complaints and shall determine if a 

20 violation of such section has occurred and, if so, 

21 shall issue an order to ensure that the protected 

22 health care professional does not suffer any loss of 

23 position, pay, or benefits in relation to the plan, 

24 issuer, or provider involved, as a result of the viola25 tion found by the Secretary. 
157 

•S 1012 IS

1 ‘‘(d) CONFORMING REGULATIONS.—The Secretary 

2 shall issue regulations to coordinate the requirements on 

3 group health plans and health insurance issuers under this 

4 section with the requirements imposed under the other 

5 provisions of this title. In order to reduce duplication and 

6 clarify the rights of participants and beneficiaries with re7 spect to information that is required to be provided, such 

8 regulations shall coordinate the information disclosure re9 quirements under section 121 of the Patients’ Bill of 

10 Rights Act of 2005 with the reporting and disclosure re11 quirements imposed under part 1, so long as such coordi12 nation does not result in any reduction in the information 

13 that would otherwise be provided to participants and bene14 ficiaries.’’. 

15 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

16 REQUIREMENT.—Section 503 of such Act (29 U.S.C. 

17 1133) is amended by inserting ‘‘(a)’’ after ‘‘Sec. 503.’’ and 

18 by adding at the end the following new subsection: 

19 ‘‘(b) In the case of a group health plan (as defined 

20 in section 733), compliance with the requirements of sub21 title A of title I of the Patients’ Bill of Rights Act of 2005, 

22 and compliance with regulations promulgated by the Sec23 retary, in the case of a claims denial, shall be deemed com24 pliance with subsection (a) with respect to such claims de25 nial.’’. 
158 

•S 1012 IS

1 (c) CONFORMING AMENDMENTS.—(1) Section 732(a) 

2 of such Act (29 U.S.C. 1185(a)) is amended by striking 

3 ‘‘section 711’’ and inserting ‘‘sections 711 and 714’’. 

4 (2) The table of contents in section 1 of such Act 

5 is amended by inserting after the item relating to section 

6 713 the following new item: 

‘‘714. Patient protection standards’’. 

7 (3) Section 502(b)(3) of such Act (29 U.S.C. 

8 1132(b)(3)) is amended by inserting ‘‘(other than section 

9 135(b) of the Patients’ Bill of Rights Act of 2005, as 

10 deemed by subsection (a) of section 714 of this Act to 

11 be incorporated into such subsection)’’ after ‘‘part 7’’. 

12 SEC. 402. AVAILABILITY OF CIVIL REMEDIES. 

13 (a) AVAILABILITY OF FEDERAL CIVIL REMEDIES IN

14 CASES NOT INVOLVING MEDICALLY REVIEWABLE DECI15 SIONS.— 

16 (1) IN GENERAL.—Section 502 of the Employee 

17 Retirement Income Security Act of 1974 (29 U.S.C. 

18 1132) is amended by adding at the end the following 

19 new subsections: 

20 ‘‘(n) CAUSE OF ACTION RELATING TO PROVISION OF

21 HEALTH BENEFITS.— 

22 ‘‘(1) IN GENERAL.—In any case in which— 

23 ‘‘(A) a person who is a fiduciary of a 

24 group health plan, a health insurance issuer of25 fering health insurance coverage in connection 
159 

•S 1012 IS

1 with the plan, or an agent of the plan, issuer, 

2 or plan sponsor, upon consideration of a claim 

3 for benefits of a participant or beneficiary 

4 under section 102 of the Patients’ Bill of 

5 Rights Act of 2005 (relating to procedures for 

6 initial claims for benefits and prior authoriza7 tion determinations) or upon review of a denial 

8 of such a claim under section 103 of such Act 

9 (relating to internal appeal of a denial of a 

10 claim for benefits), fails to exercise ordinary 

11 care in making a decision— 

12 ‘‘(i) regarding whether an item or 

13 service is covered under the terms and con14 ditions of the plan or coverage, 

15 ‘‘(ii) regarding whether an individual 

16 is a participant or beneficiary who is en17 rolled under the terms and conditions of 

18 the plan or coverage (including the applica19 bility of any waiting period under the plan 

20 or coverage), or 

21 ‘‘(iii) as to the application of cost22 sharing requirements or the application of 

23 a specific exclusion or express limitation on 

24 the amount, duration, or scope of coverage 
160 

•S 1012 IS

1 of items or services under the terms and 

2 conditions of the plan or coverage, and 

3 ‘‘(B) such failure is a proximate cause of 

4 personal injury to, or the death of, the partici5 pant or beneficiary, 

6 such plan, plan sponsor, or issuer shall be liable to 

7 the participant or beneficiary (or the estate of such 

8 participant or beneficiary) for economic and non9 economic damages (but not exemplary or punitive 

10 damages) in connection with such personal injury or 

11 death. 

12 ‘‘(2) CAUSE OF ACTION MUST NOT INVOLVE

13 MEDICALLY REVIEWABLE DECISION.— 

14 ‘‘(A) IN GENERAL.—A cause of action is 

15 established under paragraph (1)(A) only if the 

16 decision referred to in paragraph (1)(A) does 

17 not include a medically reviewable decision. 

18 ‘‘(B) MEDICALLY REVIEWABLE DECI19 SION.—For purposes of this subsection, the 

20 term ‘medically reviewable decision’ means a de21 nial of a claim for benefits under the plan 

22 which is described in section 104(d)(2) of the 

23 Patients’ Bill of Rights Act of 2005 (relating to 

24 medically reviewable decisions). 
161 

•S 1012 IS

1 ‘‘(3) LIMITATION REGARDING CERTAIN TYPES

2 OF ACTIONS SAVED FROM PREEMPTION OF STATE

3 LAW.—A cause of action is not established under 

4 paragraph (1)(A) in connection with a failure de5 scribed in paragraph (1)(A) to the extent that a 

6 cause of action under State law (as defined in sec7 tion 514(c)) for such failure would not be preempted 

8 under section 514. 

9 ‘‘(4) DEFINITIONS AND RELATED RULES.—For 

10 purposes of this subsection.— 

11 ‘‘(A) ORDINARY CARE.—The term ‘ordi12 nary care’ means, with respect to a determina13 tion on a claim for benefits, that degree of care, 

14 skill, and diligence that a reasonable and pru15 dent individual would exercise in making a fair 

16 determination on a claim for benefits of like 

17 kind to the claims involved. 

18 ‘‘(B) PERSONAL INJURY.—The term ‘per19 sonal injury’ means a physical injury and in20 cludes an injury arising out of the treatment 

21 (or failure to treat) a mental illness or disease. 

22 ‘‘(C) CLAIM FOR BENEFITS; DENIAL.—The 

23 terms ‘claim for benefits’ and ‘denial of a claim 

24 for benefits’ have the meanings provided such 
162 

•S 1012 IS

1 terms in section 102(e) of the Patients’ Bill of 

2 Rights Act of 2005. 

3 ‘‘(D) TERMS AND CONDITIONS.—The term 

4 ‘terms and conditions’ includes, with respect to 

5 a group health plan or health insurance cov6 erage, requirements imposed under title I of the 

7 Patients’ Bill of Rights Act of 2005. 

8 ‘‘(E) TREATMENT OF EXCEPTED BENE9 FITS.—Under section 154(a) of the Patients’ 

10 Bill of Rights Act of 2005, the provisions of 

11 this subsection and subsection (a)(1)(C) do not 

12 apply to certain excepted benefits. 

13 ‘‘(5) EXCLUSION OF EMPLOYERS AND OTHER

14 PLAN SPONSORS.— 

15 ‘‘(A) CAUSES OF ACTION AGAINST EM16 PLOYERS AND PLAN SPONSORS PRECLUDED.— 

17 Subject to subparagraph (B), paragraph (1)(A) 

18 does not authorize a cause of action against an 

19 employer or other plan sponsor maintaining the 

20 plan (or against an employee of such an em21 ployer or sponsor acting within the scope of em22 ployment). 

23 ‘‘(B) CERTAIN CAUSES OF ACTION PER24 MITTED.—Notwithstanding subparagraph (A), 

25 a cause of action may arise against an employer 
163 

•S 1012 IS

1 or other plan sponsor (or against an employee 

2 of such an employer or sponsor acting within 

3 the scope of employment) under paragraph 

4 (1)(A), to the extent there was direct participa5 tion by the employer or other plan sponsor (or 

6 employee) in the decision of the plan under sec7 tion 102 of the Patients’ Bill of Rights Act of 

8 2005 upon consideration of a claim for benefits 

9 or under section 103 of such Act upon review 

10 of a denial of a claim for benefits. 

11 ‘‘(C) DIRECT PARTICIPATION.— 

12 ‘‘(i) IN GENERAL.—For purposes of 

13 subparagraph (B), the term ‘direct partici14 pation’ means, in connection with a deci15 sion described in paragraph (1)(A), the ac16 tual making of such decision or the actual 

17 exercise of control in making such decision. 

18 ‘‘(ii) RULES OF CONSTRUCTION.—For 

19 purposes of clause (i), the employer or plan 

20 sponsor (or employee) shall not be con21 strued to be engaged in direct participation 

22 because of any form of decisionmaking or 

23 other conduct that is merely collateral or 

24 precedent to the decision described in 

25 paragraph (1)(A) on a particular claim for 
164 

•S 1012 IS

1 benefits of a participant or beneficiary, in2 cluding (but not limited to)— 

3 ‘‘(I) any participation by the em4 ployer or other plan sponsor (or em5 ployee) in the selection of the group 

6 health plan or health insurance cov7 erage involved or the third party ad8 ministrator or other agent; 

9 ‘‘(II) any engagement by the em10 ployer or other plan sponsor (or em11 ployee) in any cost-benefit analysis 

12 undertaken in connection with the se13 lection of, or continued maintenance 

14 of, the plan or coverage involved; 

15 ‘‘(III) any participation by the 

16 employer or other plan sponsor (or 

17 employee) in the process of creating, 

18 continuing, modifying, or terminating 

19 the plan or any benefit under the 

20 plan, if such process was not substan21 tially focused solely on the particular 

22 situation of the participant or bene23 ficiary referred to in paragraph 

24 (1)(A); and 
165 

•S 1012 IS

1 ‘‘(IV) any participation by the 

2 employer or other plan sponsor (or 

3 employee) in the design of any benefit 

4 under the plan, including the amount 

5 of copayment and limits connected 

6 with such benefit. 

7 ‘‘(iii) IRRELEVANCE OF CERTAIN COL8 LATERAL EFFORTS MADE BY EMPLOYER

9 OR PLAN SPONSOR.—For purposes of this 

10 subparagraph, an employer or plan sponsor 

11 shall not be treated as engaged in direct 

12 participation in a decision with respect to 

13 any claim for benefits or denial thereof in 

14 the case of any particular participant or 

15 beneficiary solely by reason of— 

16 ‘‘(I) any efforts that may have 

17 been made by the employer or plan 

18 sponsor to advocate for authorization 

19 of coverage for that or any other par20 ticipant or beneficiary (or any group 

21 of participants or beneficiaries), or 

22 ‘‘(II) any provision that may 

23 have been made by the employer or 

24 plan sponsor for benefits which are 

25 not covered under the terms and con-
166 

•S 1012 IS

1 ditions of the plan for that or any 

2 other participant or beneficiary (or 

3 any group of participants or bene4 ficiaries). 

5 ‘‘(D) APPLICATION TO CERTAIN PLANS.— 

6 ‘‘(i) IN GENERAL.—Notwithstanding 

7 any other provision of this subsection, no 

8 group health plan described in clause (ii) 

9 (or plan sponsor of such a plan) shall be 

10 liable under paragraph (1) for the perform11 ance of, or the failure to perform, any non12 medically reviewable duty under the plan. 

13 ‘‘(ii) DEFINITION.—A group health 

14 plan described in this clause is— 

15 ‘‘(I) a group health plan that is 

16 self-insured and self administered by 

17 an employer (including an employee of 

18 such an employer acting within the 

19 scope of employment); or 

20 ‘‘(II) a multiemployer plan as de21 fined in section 3(37)(A) (including 

22 an employee of a contributing em23 ployer or of the plan, or a fiduciary of 

24 the plan, acting within the scope of 

25 employment or fiduciary responsi-
167 

•S 1012 IS

1 bility) that is self-insured and self-ad2 ministered. 

3 ‘‘(6) EXCLUSION OF PHYSICIANS AND OTHER

4 HEALTH CARE PROFESSIONALS.— 

5 ‘‘(A) IN GENERAL.—No treating physician 

6 or other treating health care professional of the 

7 participant or beneficiary, and no person acting 

8 under the direction of such a physician or 

9 health care professional, shall be liable under 

10 paragraph (1) for the performance of, or the 

11 failure to perform, any non-medically reviewable 

12 duty of the plan, the plan sponsor, or any 

13 health insurance issuer offering health insur14 ance coverage in connection with the plan. 

15 ‘‘(B) DEFINITIONS.—For purposes of sub16 paragraph (A)— 

17 ‘‘(i) HEALTH CARE PROFESSIONAL.— 

18 The term ‘health care professional’ means 

19 an individual who is licensed, accredited, or 

20 certified under State law to provide speci21 fied health care services and who is oper22 ating within the scope of such licensure, 

23 accreditation, or certification. 

24 ‘‘(ii) NON-MEDICALLY REVIEWABLE

25 DUTY.—The term ‘non-medically review-
168 

•S 1012 IS

1 able duty’ means a duty the discharge of 

2 which does not include the making of a 

3 medically reviewable decision. 

4 ‘‘(7) EXCLUSION OF HOSPITALS.—No treating 

5 hospital of the participant or beneficiary shall be lia6 ble under paragraph (1) for the performance of, or 

7 the failure to perform, any non-medically reviewable 

8 duty (as defined in paragraph (6)(B)(ii)) of the 

9 plan, the plan sponsor, or any health insurance 

10 issuer offering health insurance coverage in connec11 tion with the plan. 

12 ‘‘(8) RULE OF CONSTRUCTION RELATING TO

13 EXCLUSION FROM LIABILITY OF PHYSICIANS, 

14 HEALTH CARE PROFESSIONALS, AND HOSPITALS.— 

15 Nothing in paragraph (6) or (7) shall be construed 

16 to limit the liability (whether direct or vicarious) of 

17 the plan, the plan sponsor, or any health insurance 

18 issuer offering health insurance coverage in connec19 tion with the plan. 

20 ‘‘(9) REQUIREMENT OF EXHAUSTION.— 

21 ‘‘(A) IN GENERAL.—A cause of action may 

22 not be brought under paragraph (1) in connec23 tion with any denial of a claim for benefits of 

24 any individual until all administrative processes 

25 under sections 102 and 103 of the Patients’ 
169 

•S 1012 IS

1 Bill of Rights Act of 2005 (if applicable) have 

2 been exhausted. 

3 ‘‘(B) EXCEPTION FOR NEEDED CARE.—A 

4 participant or beneficiary may seek relief exclu5 sively in Federal court under subsection 

6 502(a)(1)(B) prior to the exhaustion of admin7 istrative remedies under sections 102, 103, or 

8 104 of the Patients’ Bill of Rights Act of 2005 

9 (as required under subparagraph (A)) if it is 

10 demonstrated to the court that the exhaustion 

11 of such remedies would cause irreparable harm 

12 to the health of the participant or beneficiary. 

13 Notwithstanding the awarding of relief under 

14 subsection 502(a)(1)(B) pursuant to this sub15 paragraph, no relief shall be available as a re16 sult of, or arising under, paragraph (1)(A) or 

17 paragraph (10)(B), with respect to a partici18 pant or beneficiary, unless the requirements of 

19 subparagraph (A) are met. 

20 ‘‘(C) RECEIPT OF BENEFITS DURING AP21 PEALS PROCESS.—Receipt by the participant or 

22 beneficiary of the benefits involved in the claim 

23 for benefits during the pendency of any admin24 istrative processes referred to in subparagraph 
170 

•S 1012 IS

1 (A) or of any action commenced under this sub2 section— 

3 ‘‘(i) shall not preclude continuation of 

4 all such administrative processes to their 

5 conclusion if so moved by any party, and 

6 ‘‘(ii) shall not preclude any liability 

7 under subsection (a)(1)(C) and this sub8 section in connection with such claim. 

9 The court in any action commenced under this 

10 subsection shall take into account any receipt of 

11 benefits during such administrative processes or 

12 such action in determining the amount of the 

13 damages awarded. 

14 ‘‘(D) ADMISSIBLE.—Any determination 

15 made by a reviewer in an administrative pro16 ceeding under section 103 of the Patients’ Bill 

17 of Rights Act of 2005 shall be admissible in 

18 any Federal court proceeding and shall be pre19 sented to the trier of fact. 

20 ‘‘(10) STATUTORY DAMAGES.— 

21 ‘‘(A) IN GENERAL.—The remedies set 

22 forth in this subsection (n) shall be the exclu23 sive remedies for causes of action brought 

24 under this subsection. 
171 

•S 1012 IS

1 ‘‘(B) ASSESSMENT OF CIVIL PENALTIES.— 

2 In addition to the remedies provided for in 

3 paragraph (1) (relating to the failure to provide 

4 contract benefits in accordance with the plan), 

5 a civil assessment, in an amount not to exceed 

6 $5,000,000, payable to the claimant may be 

7 awarded in any action under such paragraph if 

8 the claimant establishes by clear and convincing 

9 evidence that the alleged conduct carried out by 

10 the defendant demonstrated bad faith and fla11 grant disregard for the rights of the participant 

12 or beneficiary under the plan and was a proxi13 mate cause of the personal injury or death that 

14 is the subject of the claim. 

15 ‘‘(11) LIMITATION ON ATTORNEYS’ FEES.— 

16 ‘‘(A) IN GENERAL.—Notwithstanding any 

17 other provision of law, or any arrangement, 

18 agreement, or contract regarding an attorney’s 

19 fee, the amount of an attorney’s contingency fee 

20 allowable for a cause of action brought pursuant to this subsection shall not exceed 1 21 ⁄3 of the 

22 total amount of the plaintiff’s recovery (not in23 cluding the reimbursement of actual out-of24 pocket expenses of the attorney). 
172 

•S 1012 IS

1 ‘‘(B) DETERMINATION BY DISTRICT

2 COURT.—The last Federal district court in 

3 which the action was pending upon the final 

4 disposition, including all appeals, of the action 

5 shall have jurisdiction to review the attorney’s 

6 fee to ensure that the fee is a reasonable one. 

7 ‘‘(12) LIMITATION OF ACTION.—Paragraph (1) 

8 shall not apply in connection with any action com9 menced after 3 years after the later of— 

10 ‘‘(A) the date on which the plaintiff first 

11 knew, or reasonably should have known, of the 

12 personal injury or death resulting from the fail13 ure described in paragraph (1), or 

14 ‘‘(B) the date as of which the requirements 

15 of paragraph (9) are first met. 

16 ‘‘(13) TOLLING PROVISION.—The statute of 

17 limitations for any cause of action arising under 

18 State law relating to a denial of a claim for benefits 

19 that is the subject of an action brought in Federal 

20 court under this subsection shall be tolled until such 

21 time as the Federal court makes a final disposition, 

22 including all appeals, of whether such claim should 

23 properly be within the jurisdiction of the Federal 

24 court. The tolling period shall be determined by the 
173 

•S 1012 IS

1 applicable Federal or State law, whichever period is 

2 greater. 

3 ‘‘(14) PURCHASE OF INSURANCE TO COVER LI4 ABILITY.—Nothing in section 410 shall be construed 

5 to preclude the purchase by a group health plan of 

6 insurance to cover any liability or losses arising 

7 under a cause of action under subsection (a)(1)(C) 

8 and this subsection. 

9 ‘‘(15) EXCLUSION OF DIRECTED RECORD10 KEEPERS.— 

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (C), paragraph (1) shall not apply with 

13 respect to a directed recordkeeper in connection 

14 with a group health plan. 

15 ‘‘(B) DIRECTED RECORDKEEPER.—For 

16 purposes of this paragraph, the term ‘directed 

17 recordkeeper’ means, in connection with a 

18 group health plan, a person engaged in directed 

19 recordkeeping activities pursuant to the specific 

20 instructions of the plan or the employer or 

21 other plan sponsor, including the distribution of 

22 enrollment information and distribution of dis23 closure materials under this Act or title I of the 

24 Patients’ Bill of Rights Act of 2005 and whose 
174 

•S 1012 IS

1 duties do not include making decisions on 

2 claims for benefits. 

3 ‘‘(C) LIMITATION.—Subparagraph (A) 

4 does not apply in connection with any directed 

5 recordkeeper to the extent that the directed rec6 ordkeeper fails to follow the specific instruction 

7 of the plan or the employer or other plan spon8 sor. 

9 ‘‘(16) EXCLUSION OF HEALTH INSURANCE

10 AGENTS.—Paragraph (1) does not apply with re11 spect to a person whose sole involvement with the 

12 group health plan is providing advice or administra13 tive services to the employer or other plan sponsor 

14 relating to the selection of health insurance coverage 

15 offered in connection with the plan. 

16 ‘‘(17) NO EFFECT ON STATE LAW.—No provi17 sion of State law (as defined in section 514(c)(1)) 

18 shall be treated as superseded or otherwise altered, 

19 amended, modified, invalidated, or impaired by rea20 son of the provisions of subsection (a)(1)(C) and this 

21 subsection. 

22 ‘‘(18) RELIEF FROM LIABILITY FOR EMPLOYER

23 OR OTHER PLAN SPONSOR BY MEANS OF DES24 IGNATED DECISIONMAKER.— 
175 

•S 1012 IS

1 ‘‘(A) IN GENERAL.—Notwithstanding the 

2 direct participation (as defined in paragraph 

3 (5)(C)(i)) of an employer or plan sponsor, in 

4 any case in which there is (or is deemed under 

5 subparagraph (B) to be) a designated decision6 maker under subparagraph (B) that meets the 

7 requirements of subsection (o)(1) for an em8 ployer or other plan sponsor— 

9 ‘‘(i) all liability of such employer or 

10 plan sponsor involved (and any employee of 

11 such employer or sponsor acting within the 

12 scope of employment) under this sub13 section in connection with any participant 

14 or beneficiary shall be transferred to, and 

15 assumed by, the designated decisionmaker, 

16 and 

17 ‘‘(ii) with respect to such liability, the 

18 designated decisionmaker shall be sub19 stituted for the employer or sponsor (or 

20 employee) in the action and may not raise 

21 any defense that the employer or sponsor 

22 (or employee) could not raise if such a de23 cisionmaker were not so deemed. 

24 ‘‘(B) AUTOMATIC DESIGNATION.—A health 

25 insurance issuer shall be deemed to be a des-
176 

•S 1012 IS

1 ignated decisionmaker for purposes of subpara2 graph (A) with respect to the participants and 

3 beneficiaries of an employer or plan sponsor, 

4 whether or not the employer or plan sponsor 

5 makes such a designation, and shall be deemed 

6 to have assumed unconditionally all liability of 

7 the employer or plan sponsor under such des8 ignation in accordance with subsection (o), un9 less the employer or plan sponsor affirmatively 

10 enters into a contract to prevent the service of 

11 the designated decisionmaker. 

12 ‘‘(C) TREATMENT OF CERTAIN TRUST

13 FUNDS.—For purposes of this paragraph, the 

14 terms ‘employer’ and ‘plan sponsor’, in connec15 tion with the assumption by a designated deci16 sionmaker of the liability of employer or other 

17 plan sponsor pursuant to this paragraph, shall 

18 be construed to include a trust fund maintained 

19 pursuant to section 302 of the Labor Manage20 ment Relations Act, 1947 (29 U.S.C. 186) or 

21 the Railway Labor Act (45 U.S.C. 151 et seq.). 

22 ‘‘(19) PREVIOUSLY PROVIDED SERVICES.— 

23 ‘‘(A) IN GENERAL.—Except as provided in 

24 this paragraph, a cause of action shall not arise 

25 under paragraph (1) where the denial involved 
177 

•S 1012 IS

1 relates to an item or service that has already 

2 been fully provided to the participant or bene3 ficiary under the plan or coverage and the claim 

4 relates solely to the subsequent denial of pay5 ment for the provision of such item or service. 

6 ‘‘(B) EXCEPTION.—Nothing in subpara7 graph (A) shall be construed to— 

8 ‘‘(i) prohibit a cause of action under 

9 paragraph (1) where the nonpayment in10 volved results in the participant or bene11 ficiary being unable to receive further 

12 items or services that are directly related 

13 to the item or service involved in the denial 

14 referred to in subparagraph (A) or that 

15 are part of a continuing treatment or se16 ries of procedures; or 

17 ‘‘(ii) limit liability that otherwise 

18 would arise from the provision of the item 

19 or services or the performance of a medical 

20 procedure. 

21 ‘‘(20) EXEMPTION FROM PERSONAL LIABILITY

22 FOR INDIVIDUAL MEMBERS OF BOARDS OF DIREC23 TORS, JOINT BOARDS OF TRUSTEES, ETC.—Any indi24 vidual who is— 
178 

•S 1012 IS

1 ‘‘(A) a member of a board of directors of 

2 an employer or plan sponsor; or 

3 ‘‘(B) a member of an association, com4 mittee, employee organization, joint board of 

5 trustees, or other similar group of representa6 tives of the entities that are the plan sponsor 

7 of plan maintained by two or more employers 

8 and one or more employee organizations; 

9 shall not be personally liable under this subsection 

10 for conduct that is within the scope of employment 

11 or of plan-related duties of the individuals unless the 

12 individual acts in a fraudulent manner for personal 

13 enrichment. 

14 ‘‘(o) REQUIREMENTS FOR DESIGNATED DECISION15 MAKERS OF GROUP HEALTH PLANS.— 

16 ‘‘(1) IN GENERAL.—For purposes of subsection 

17 (n)(18) and section 514(d)(9), a designated decision18 maker meets the requirements of this paragraph 

19 with respect to any participant or beneficiary if— 

20 ‘‘(A) such designation is in such form as 

21 may be prescribed in regulations of the Sec22 retary, 

23 ‘‘(B) the designated decisionmaker— 

24 ‘‘(i) meets the requirements of para25 graph (2), 
179 

•S 1012 IS

1 ‘‘(ii) assumes unconditionally all liabil2 ity of the employer or plan sponsor in3 volved (and any employee of such employer 

4 or sponsor acting within the scope of em5 ployment) either arising under subsection 

6 (n) or arising in a cause of action per7 mitted under section 514(d) in connection 

8 with actions (and failures to act) of the 

9 employer or plan sponsor (or employee) oc10 curring during the period in which the des11 ignation under subsection (n)(18) or sec12 tion 514(d)(9) is in effect relating to such 

13 participant and beneficiary, 

14 ‘‘(iii) agrees to be substituted for the 

15 employer or plan sponsor (or employee) in 

16 the action and not to raise any defense 

17 with respect to such liability that the em18 ployer or plan sponsor (or employee) may 

19 not raise, and 

20 ‘‘(iv) where paragraph (2)(B) applies, 

21 assumes unconditionally the exclusive au22 thority under the group health plan to 

23 make medically reviewable decisions under 

24 the plan with respect to such participant 

25 or beneficiary, and 
180 

•S 1012 IS

1 ‘‘(C) the designated decisionmaker and the 

2 participants and beneficiaries for whom the de3 cisionmaker has assumed liability are identified 

4 in the written instrument required under sec5 tion 402(a) and as required under section 

6 121(b)(19) of the Patients’ Bill of Rights Act 

7 of 2005. 

8 Any liability assumed by a designated decisionmaker 

9 pursuant to this subsection shall be in addition to 

10 any liability that it may otherwise have under appli11 cable law. 

12 ‘‘(2) QUALIFICATIONS FOR DESIGNATED DECI13 SIONMAKERS.— 

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), an entity is qualified under this 

16 paragraph to serve as a designated decision17 maker with respect to a group health plan if the 

18 entity has the ability to assume the liability de19 scribed in paragraph (1) with respect to partici20 pants and beneficiaries under such plan, includ21 ing requirements relating to the financial obli22 gation for timely satisfying the assumed liabil23 ity, and maintains with the plan sponsor and 

24 the Secretary certification of such ability. Such 

25 certification shall be provided to the plan spon-
181 

•S 1012 IS

1 sor or named fiduciary and to the Secretary 

2 upon designation under subsection (n)(18)(B) 

3 or section 517(d)(9)(B) and not less frequently 

4 than annually thereafter, or if such designation 

5 constitutes a multiyear arrangement, in con6 junction with the renewal of the arrangement. 

7 ‘‘(B) SPECIAL QUALIFICATION IN THE

8 CASE OF CERTAIN REVIEWABLE DECISIONS.—In 

9 the case of a group health plan that provides 

10 benefits consisting of medical care to a partici11 pant or beneficiary only through health insur12 ance coverage offered by a single health insur13 ance issuer, such issuer is the only entity that 

14 may be qualified under this paragraph to serve 

15 as a designated decisionmaker with respect to 

16 such participant or beneficiary, and shall serve 

17 as the designated decisionmaker unless the em18 ployer or other plan sponsor acts affirmatively 

19 to prevent such service. 

20 ‘‘(3) REQUIREMENTS RELATING TO FINANCIAL

21 OBLIGATIONS.—For purposes of paragraph (2)(A), 

22 the requirements relating to the financial obligation 

23 of an entity for liability shall include— 

24 ‘‘(A) coverage of such entity under an in25 surance policy or other arrangement, secured 
182 

•S 1012 IS

1 and maintained by such entity, to effectively in2 sure such entity against losses arising from pro3 fessional liability claims, including those arising 

4 from its service as a designated decisionmaker 

5 under this part; or 

6 ‘‘(B) evidence of minimum capital and sur7 plus levels that are maintained by such entity 

8 to cover any losses as a result of liability arising 

9 from its service as a designated decisionmaker 

10 under this part. 

11 The appropriate amounts of liability insurance and 

12 minimum capital and surplus levels for purposes of 

13 subparagraphs (A) and (B) shall be determined by 

14 an actuary using sound actuarial principles and ac15 counting practices pursuant to established guidelines 

16 of the American Academy of Actuaries and in ac17 cordance with such regulations as the Secretary may 

18 prescribe and shall be maintained throughout the 

19 term for which the designation is in effect. The pro20 visions of this paragraph shall not apply in the case 

21 of a designated decisionmaker that is a group health 

22 plan, plan sponsor, or health insurance issuer and 

23 that is regulated under Federal law or a State finan24 cial solvency law. 
183 

•S 1012 IS

1 ‘‘(4) LIMITATION ON APPOINTMENT OF TREAT2 ING PHYSICIANS.—A treating physician who directly 

3 delivered the care, treatment, or provided the patient 

4 service that is the subject of a cause of action by a 

5 participant or beneficiary under subsection (n) or 

6 section 514(d) may not be designated as a des7 ignated decisionmaker under this subsection with re8 spect to such participant or beneficiary.’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 502(a)(1) of such Act (29 U.S.C. 1132(a)(1)) is 

11 amended— 

12 (A) by striking ‘‘or’’ at the end of subpara13 graph (A); 

14 (B) in subparagraph (B), by striking 

15 ‘‘plan;’’ and inserting ‘‘plan, or’’; and 

16 (C) by adding at the end the following new 

17 subparagraph: 

18 ‘‘(C) for the relief provided for in sub19 section (n) of this section.’’. 

20 (b) RULES RELATING TO ERISA PREEMPTION.— 

21 Section 514 of the Employee Retirement Income Security 

22 Act of 1974 (29 U.S.C. 1144) is amended— 

23 (1) by redesignating subsection (d) as sub24 section (f); and 
184 

•S 1012 IS

1 (2) by inserting after subsection (c) the fol2 lowing new subsections: 

3 ‘‘(d) PREEMPTION NOT TO APPLY TO CAUSES OF AC4 TION UNDER STATE LAW INVOLVING MEDICALLY RE5 VIEWABLE DECISION.— 

6 ‘‘(1) NON-PREEMPTION OF CERTAIN CAUSES OF

7 ACTION.— 

8 ‘‘(A) IN GENERAL.—Except as provided in 

9 this subsection, nothing in this title (including 

10 section 502) shall be construed to supersede or 

11 otherwise alter, amend, modify, invalidate, or 

12 impair any cause of action under State law of 

13 a participant or beneficiary under a group 

14 health plan (or the estate of such a participant 

15 or beneficiary) against the plan, the plan spon16 sor, any health insurance issuer offering health 

17 insurance coverage in connection with the plan, 

18 or any managed care entity in connection with 

19 the plan to recover damages resulting from per20 sonal injury or for wrongful death if such cause 

21 of action arises by reason of a medically review22 able decision. 

23 ‘‘(B) MEDICALLY REVIEWABLE DECI24 SION.—For purposes of subparagraph (A), the 

25 term ‘medically reviewable decision’ means a de-
185 

•S 1012 IS

1 nial of a claim for benefits under the plan 

2 which is described in section 104(d)(2) of the 

3 Patients’ Bill of Rights Act of 2005 (relating to 

4 medically reviewable decisions). 

5 ‘‘(C) LIMITATION ON PUNITIVE DAM6 AGES.— 

7 ‘‘(i) IN GENERAL.—Except as pro8 vided in clauses (ii) and (iii), with respect 

9 to a cause of action described in subpara10 graph (A) brought with respect to a partic11 ipant or beneficiary, State law is super12 seded insofar as it provides any punitive, 

13 exemplary, or similar damages if, as of the 

14 time of the personal injury or death, all 

15 the requirements of the following sections 

16 of the Patients’ Bill of Rights Act of 2005 

17 were satisfied with respect to the partici18 pant or beneficiary: 

19 ‘‘(I) Section 102 (relating to pro20 cedures for initial claims for benefits 

21 and prior authorization determina22 tions). 

23 ‘‘(II) Section 103 of such Act 

24 (relating to internal appeals of claims 

25 denials). 
186 

•S 1012 IS

1 ‘‘(III) Section 104 of such Act 

2 (relating to independent external ap3 peals procedures). 

4 ‘‘(ii) EXCEPTION FOR CERTAIN AC5 TIONS FOR WRONGFUL DEATH.—Clause (i) 

6 shall not apply with respect to an action 

7 for wrongful death if the applicable State 

8 law provides (or has been construed to pro9 vide) for damages in such an action which 

10 are only punitive or exemplary in nature. 

11 ‘‘(iii) EXCEPTION FOR WILLFUL OR

12 WANTON DISREGARD FOR THE RIGHTS OR

13 SAFETY OF OTHERS.—Clause (i) shall not 

14 apply with respect to any cause of action 

15 described in subparagraph (A) if, in such 

16 action, the plaintiff establishes by clear 

17 and convincing evidence that conduct car18 ried out by the defendant with willful or 

19 wanton disregard for the rights or safety 

20 of others was a proximate cause of the per21 sonal injury or wrongful death that is the 

22 subject of the action. 

23 ‘‘(2) DEFINITIONS AND RELATED RULES.—For 

24 purposes of this subsection and subsection (e)— 
187 

•S 1012 IS

1 ‘‘(A) TREATMENT OF EXCEPTED BENE2 FITS.—Under section 154(a) of the Patients’ 

3 Bill of Rights Act of 2005, the provisions of 

4 this subsection do not apply to certain excepted 

5 benefits. 

6 ‘‘(B) PERSONAL INJURY.—The term ‘per7 sonal injury’ means a physical injury and in8 cludes an injury arising out of the treatment 

9 (or failure to treat) a mental illness or disease. 

10 ‘‘(C) CLAIM FOR BENEFIT; DENIAL.—The 

11 terms ‘claim for benefits’ and ‘denial of a claim 

12 for benefits’ shall have the meaning provided 

13 such terms under section 102(e) of the Pa14 tients’ Bill of Rights Act of 2005. 

15 ‘‘(D) MANAGED CARE ENTITY.— 

16 ‘‘(i) IN GENERAL.—The term ‘man17 aged care entity’ means, in connection with 

18 a group health plan and subject to clause 

19 (ii), any entity that is involved in deter20 mining the manner in which or the extent 

21 to which items or services (or reimburse22 ment therefor) are to be provided as bene23 fits under the plan. 

24 ‘‘(ii) TREATMENT OF TREATING PHY25 SICIANS, OTHER TREATING HEALTH CARE
188 

•S 1012 IS

1 PROFESSIONALS, AND TREATING HOS2 PITALS.—Such term does not include a 

3 treating physician or other treating health 

4 care professional (as defined in section 

5 502(n)(6)(B)(i)) of the participant or ben6 eficiary and also does not include a treat7 ing hospital insofar as it is acting solely in 

8 the capacity of providing treatment or care 

9 to the participant or beneficiary. Nothing 

10 in the preceding sentence shall be con11 strued to preempt vicarious liability of any 

12 plan, plan sponsor, health insurance issuer, 

13 or managed care entity. 

14 ‘‘(3) EXCLUSION OF EMPLOYERS AND OTHER

15 PLAN SPONSORS.— 

16 ‘‘(A) CAUSES OF ACTION AGAINST EM17 PLOYERS AND PLAN SPONSORS PRECLUDED.— 

18 Subject to subparagraph (B), paragraph (1) 

19 does not apply with respect to— 

20 ‘‘(i) any cause of action against an 

21 employer or other plan sponsor maintain22 ing the plan (or against an employee of 

23 such an employer or sponsor acting within 

24 the scope of employment), or 
189 

•S 1012 IS

1 ‘‘(ii) a right of recovery, indemnity, or 

2 contribution by a person against an em3 ployer or other plan sponsor (or such an 

4 employee) for damages assessed against 

5 the person pursuant to a cause of action to 

6 which paragraph (1) applies. 

7 ‘‘(B) CERTAIN CAUSES OF ACTION PER8 MITTED.—Notwithstanding subparagraph (A), 

9 paragraph (1) applies with respect to any cause 

10 of action that is brought by a participant or 

11 beneficiary under a group health plan (or the 

12 estate of such a participant or beneficiary) to 

13 recover damages resulting from personal injury 

14 or for wrongful death against any employer or 

15 other plan sponsor maintaining the plan (or 

16 against an employee of such an employer or 

17 sponsor acting within the scope of employment) 

18 if such cause of action arises by reason of a 

19 medically reviewable decision, to the extent that 

20 there was direct participation by the employer 

21 or other plan sponsor (or employee) in the deci22 sion. 

23 ‘‘(C) DIRECT PARTICIPATION.— 

24 ‘‘(i) DIRECT PARTICIPATION IN DECI25 SIONS.—For purposes of subparagraph 
190 

•S 1012 IS

1 (B), the term ‘direct participation’ means, 

2 in connection with a decision described in 

3 subparagraph (B), the actual making of 

4 such decision or the actual exercise of con5 trol in making such decision or in the con6 duct constituting the failure. 

7 ‘‘(ii) RULES OF CONSTRUCTION.—For 

8 purposes of clause (i), the employer or plan 

9 sponsor (or employee) shall not be con10 strued to be engaged in direct participation 

11 because of any form of decisionmaking or 

12 other conduct that is merely collateral or 

13 precedent to the decision described in sub14 paragraph (B) on a particular claim for 

15 benefits of a particular participant or bene16 ficiary, including (but not limited to)— 

17 ‘‘(I) any participation by the em18 ployer or other plan sponsor (or em19 ployee) in the selection of the group 

20 health plan or health insurance cov21 erage involved or the third party ad22 ministrator or other agent; 

23 ‘‘(II) any engagement by the em24 ployer or other plan sponsor (or em25 ployee) in any cost-benefit analysis 
191 

•S 1012 IS

1 undertaken in connection with the se2 lection of, or continued maintenance 

3 of, the plan or coverage involved; 

4 ‘‘(III) any participation by the 

5 employer or other plan sponsor (or 

6 employee) in the process of creating, 

7 continuing, modifying, or terminating 

8 the plan or any benefit under the 

9 plan, if such process was not substan10 tially focused solely on the particular 

11 situation of the participant or bene12 ficiary referred to in paragraph 

13 (1)(A); and 

14 ‘‘(IV) any participation by the 

15 employer or other plan sponsor (or 

16 employee) in the design of any benefit 

17 under the plan, including the amount 

18 of copayment and limits connected 

19 with such benefit. 

20 ‘‘(iv) IRRELEVANCE OF CERTAIN COL21 LATERAL EFFORTS MADE BY EMPLOYER

22 OR PLAN SPONSOR.—For purposes of this 

23 subparagraph, an employer or plan sponsor 

24 shall not be treated as engaged in direct 

25 participation in a decision with respect to 
192 

•S 1012 IS

1 any claim for benefits or denial thereof in 

2 the case of any particular participant or 

3 beneficiary solely by reason of— 

4 ‘‘(I) any efforts that may have 

5 been made by the employer or plan 

6 sponsor to advocate for authorization 

7 of coverage for that or any other par8 ticipant or beneficiary (or any group 

9 of participants or beneficiaries), or 

10 ‘‘(II) any provision that may 

11 have been made by the employer or 

12 plan sponsor for benefits which are 

13 not covered under the terms and con14 ditions of the plan for that or any 

15 other participant or beneficiary (or 

16 any group of participants or bene17 ficiaries). 

18 ‘‘(4) REQUIREMENT OF EXHAUSTION.— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraph (D), paragraph (1) shall not 

21 apply in connection with any action in connec22 tion with any denial of a claim for benefits of 

23 any individual until all administrative processes 

24 under sections 102, 103, and 104 of the Pa-
193 

•S 1012 IS

1 tients’ Bill of Rights Act of 2005 (if applicable) 

2 have been exhausted. 

3 ‘‘(B) LATE MANIFESTATION OF INJURY.— 

4 ‘‘(i) IN GENERAL.—A participant or 

5 beneficiary shall not be precluded from 

6 pursuing a review under section 104 of the 

7 Patients’ Bill of Rights Act of 2005 re8 garding an injury that such participant or 

9 beneficiary has experienced if the external 

10 review entity first determines that the in11 jury of such participant or beneficiary is a 

12 late manifestation of an earlier injury. 

13 ‘‘(ii) DEFINITION.—In this subpara14 graph, the term ‘late manifestation of an 

15 earlier injury’ means an injury sustained 

16 by the participant or beneficiary which was 

17 not known, and should not have been 

18 known, by such participant or beneficiary 

19 by the latest date that the requirements of 

20 subparagraph (A) should have been met 

21 regarding the claim for benefits which was 

22 denied. 

23 ‘‘(C) EXCEPTION FOR NEEDED CARE.—A 

24 participant or beneficiary may seek relief exclu25 sively in Federal court under subsection 
194 

•S 1012 IS

1 502(a)(1)(B) prior to the exhaustion of admin2 istrative remedies under sections 102, 103, or 

3 104 of the Patients’ Bill of Rights Act of 2005 

4 (as required under subparagraph (A)) if it is 

5 demonstrated to the court that the exhaustion 

6 of such remedies would cause irreparable harm 

7 to the health of the participant or beneficiary. 

8 Notwithstanding the awarding of relief under 

9 subsection 502(a)(1)(B) pursuant to this sub10 paragraph, no relief shall be available as a re11 sult of, or arising under, paragraph (1)(A) un12 less the requirements of subparagraph (A) are 

13 met. 

14 ‘‘(D) FAILURE TO REVIEW.— 

15 ‘‘(i) IN GENERAL.—If the external re16 view entity fails to make a determination 

17 within the time required under section 

18 104(e)(1)(A)(i) of the Patients’ Bill of 

19 Rights Act of 2005, subparagraph (A) 

20 shall not apply with respect to the action 

21 after 10 additional days after the date on 

22 which such time period has expired and the 

23 filing of such action shall not affect the 

24 duty of the independent medical reviewer 
195 

•S 1012 IS

1 (or reviewers) to make a determination 

2 pursuant to such section 104(e)(1)(A)(i). 

3 ‘‘(ii) EXPEDITED DETERMINATION.— 

4 If the external review entity fails to make 

5 a determination within the time required 

6 under section 104(e)(1)(A)(ii) of the Pa7 tients’ Bill of Rights Act of 2005, subpara8 graph (A) shall not apply with respect to 

9 the action and the filing of such an action 

10 shall not affect the duty of the independent 

11 medical reviewer (or reviewers) to make a 

12 determination pursuant to such section 

13 104(e)(1)(A)(ii). 

14 ‘‘(E) RECEIPT OF BENEFITS DURING AP15 PEALS PROCESS.—Receipt by the participant or 

16 beneficiary of the benefits involved in the claim 

17 for benefits during the pendency of any admin18 istrative processes referred to in subparagraph 

19 (A) or the pendency of any action with respect 

20 to which, under this paragraph, subparagraph 

21 (A) does not apply— 

22 ‘‘(i) shall not preclude continuation of 

23 all such administrative processes to their 

24 conclusion if so moved by any party, and 
196 

•S 1012 IS

1 ‘‘(ii) shall not preclude any liability 

2 under subsection (a)(1)(C) and this sub3 section in connection with such claim. 

4 ‘‘(F) ADMISSIBLE.—Any determination 

5 made by a reviewer in an administrative pro6 ceeding under section 104 of the Patients’ Bill 

7 of Rights Act of 2005 shall be admissible in 

8 any Federal or State court proceeding and shall 

9 be presented to the trier of fact. 

10 ‘‘(5) TOLLING PROVISION.—The statute of limi11 tations for any cause of action arising under section 

12 502(n) relating to a denial of a claim for benefits 

13 that is the subject of an action brought in State 

14 court shall be tolled until such time as the State 

15 court makes a final disposition, including all ap16 peals, of whether such claim should properly be 

17 within the jurisdiction of the State court. The tolling 

18 period shall be determined by the applicable Federal 

19 or State law, whichever period is greater. 

20 ‘‘(6) EXCLUSION OF DIRECTED RECORD21 KEEPERS.— 

22 ‘‘(A) IN GENERAL.—Subject to subpara23 graph (C), paragraph (1) shall not apply with 

24 respect to any action against a directed record25 keeper in connection with a group health plan. 
197 

•S 1012 IS

1 ‘‘(B) DIRECTED RECORDKEEPER.—For 

2 purposes of this paragraph, the term ‘directed 

3 recordkeeper’ means, in connection with a 

4 group health plan, a person engaged in directed 

5 recordkeeping activities pursuant to the specific 

6 instructions of the plan or the employer or 

7 other plan sponsor, including the distribution of 

8 enrollment information and distribution of dis9 closure materials under this Act or title I of the 

10 Patients’ Bill of Rights Act of 2005 and whose 

11 duties do not include making decisions on 

12 claims for benefits. 

13 ‘‘(C) LIMITATION.—Subparagraph (A) 

14 does not apply in connection with any directed 

15 recordkeeper to the extent that the directed rec16 ordkeeper fails to follow the specific instruction 

17 of the plan or the employer or other plan spon18 sor. 

19 ‘‘(7) CONSTRUCTION.—Nothing in this sub20 section shall be construed as— 

21 ‘‘(A) saving from preemption a cause of 

22 action under State law for the failure to provide 

23 a benefit for an item or service which is specifi24 cally excluded under the group health plan in25 volved, except to the extent that— 
198 

•S 1012 IS

1 ‘‘(i) the application or interpretation 

2 of the exclusion involves a determination 

3 described in section 104(d)(2) of the Pa4 tients’ Bill of Rights Act of 2005, or 

5 ‘‘(ii) the provision of the benefit for 

6 the item or service is required under Fed7 eral law or under applicable State law con8 sistent with subsection (b)(2)(B); 

9 ‘‘(B) preempting a State law which re10 quires an affidavit or certificate of merit in a 

11 civil action; 

12 ‘‘(C) affecting a cause of action or remedy 

13 under State law in connection with the provi14 sion or arrangement of excepted benefits (as de15 fined in section 733(c)), other than those de16 scribed in section 733(c)(2)(A); or 

17 ‘‘(D) affecting a cause of action under 

18 State law other than a cause of action described 

19 in paragraph (1)(A). 

20 ‘‘(8) PURCHASE OF INSURANCE TO COVER LI21 ABILITY.—Nothing in section 410 shall be construed 

22 to preclude the purchase by a group health plan of 

23 insurance to cover any liability or losses arising 

24 under a cause of action described in paragraph 

25 (1)(A). 
199 

•S 1012 IS

1 ‘‘(9) RELIEF FROM LIABILITY FOR EMPLOYER

2 OR OTHER PLAN SPONSOR BY MEANS OF DES3 IGNATED DECISIONMAKER.— 

4 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

5 not apply with respect to any cause of action 

6 described in paragraph (1)(A) under State law 

7 insofar as such cause of action provides for li8 ability with respect to a participant or bene9 ficiary of an employer or plan sponsor (or an 

10 employee of such employer or sponsor acting 

11 within the scope of employment), if with respect 

12 to the employer or plan sponsor there is (or is 

13 deemed under subparagraph (B) to be) a des14 ignated decisionmaker that meets the require15 ments of section 502(o)(1) with respect to such 

16 participant or beneficiary. Such paragraph (1) 

17 shall apply with respect to any cause of action 

18 described in paragraph (1)(A) under State law 

19 against the designated decisionmaker of such 

20 employer or other plan sponsor with respect to 

21 the participant or beneficiary. 

22 ‘‘(B) AUTOMATIC DESIGNATION.—A health 

23 insurance issuer shall be deemed to be a des24 ignated decisionmaker for purposes of subpara25 graph (A) with respect to the participants and 
200 

•S 1012 IS

1 beneficiaries of an employer or plan sponsor, 

2 whether or not the employer or plan sponsor 

3 makes such a designation, and shall be deemed 

4 to have assumed unconditionally all liability of 

5 the employer or plan sponsor under such des6 ignation in accordance with subsection (o), un7 less the employer or plan sponsor affirmatively 

8 enters into a contract to prevent the service of 

9 the designated decisionmaker. 

10 ‘‘(C) TREATMENT OF CERTAIN TRUST

11 FUNDS.—For purposes of this paragraph, the 

12 terms ‘employer’ and ‘plan sponsor’, in connec13 tion with the assumption by a designated deci14 sionmaker of the liability of employer or other 

15 plan sponsor pursuant to this paragraph, shall 

16 be construed to include a trust fund maintained 

17 pursuant to section 302 of the Labor Manage18 ment Relations Act, 1947 (29 U.S.C. 186) or 

19 the Railway Labor Act (45 U.S.C. 151 et seq.). 

20 ‘‘(10) PREVIOUSLY PROVIDED SERVICES.— 

21 ‘‘(A) IN GENERAL.—Except as provided in 

22 this paragraph, paragraph (1) shall not apply 

23 with respect to a cause of action where the de24 nial involved relates to an item or service that 

25 has already been fully provided to the partici-
201 

•S 1012 IS

1 pant or beneficiary under the plan or coverage 

2 and the claim relates solely to the subsequent 

3 denial of payment for the provision of such item 

4 or service. 

5 ‘‘(B) EXCEPTION.—Nothing in subpara6 graph (A) shall be construed to— 

7 ‘‘(i) exclude a cause of action from ex8 emption under paragraph (1) where the 

9 nonpayment involved results in the partici10 pant or beneficiary being unable to receive 

11 further items or services that are directly 

12 related to the item or service involved in 

13 the denial referred to in subparagraph (A) 

14 or that are part of a continuing treatment 

15 or series of procedures; 

16 ‘‘(ii) exclude a cause of action from 

17 exemption under paragraph (1) relating to 

18 quality of care; or 

19 ‘‘(iii) limit liability that otherwise 

20 would arise from the provision of the item 

21 or services or the performance of a medical 

22 procedure. 

23 ‘‘(11) EXEMPTION FROM PERSONAL LIABILITY

24 FOR INDIVIDUAL MEMBERS OF BOARDS OF DIREC-
202 

•S 1012 IS

1 TORS, JOINT BOARDS OF TRUSTEES, ETC.—Any indi2 vidual who is— 

3 ‘‘(A) a member of a board of directors of 

4 an employer or plan sponsor; or 

5 ‘‘(B) a member of an association, com6 mittee, employee organization, joint board of 

7 trustees, or other similar group of representa8 tives of the entities that are the plan sponsor 

9 of plan maintained by two or more employers 

10 and one or more employee organizations; 

11 shall not be personally liable, by reason of the ex12 emption of a cause of action from preemption under 

13 this subsection, for conduct that is within the scope 

14 of employment or of plan-related duties of the indi15 viduals unless the individual acts in a fraudulent 

16 manner for personal enrichment. 

17 ‘‘(12) CHOICE OF LAW.—A cause of action ex18 empted from preemption under paragraph (1) shall 

19 be governed by the law (including choice of law 

20 rules) of the State in which the plaintiff resides. 

21 ‘‘(13) LIMITATION ON ATTORNEYS’ FEES.— 

22 ‘‘(A) IN GENERAL.—Notwithstanding any 

23 other provision of law, or any arrangement, 

24 agreement, or contract regarding an attorney’s 

25 fee, the amount of an attorney’s contingency fee 
203 

•S 1012 IS

1 allowable for a cause of action exemption from 

2 preemption under paragraph (1) shall not exceed 1 3 ⁄3 of the total amount of the plaintiff’s re4 covery (not including the reimbursement of ac5 tual out-of-pocket expenses of the attorney). 

6 ‘‘(B) DETERMINATION BY COURT.—The 

7 last court in which the action was pending upon 

8 the final disposition, including all appeals, of 

9 the action may review the attorney’s fee to en10 sure that the fee is a reasonable one. 

11 ‘‘(C) NO PREEMPTION OF STATE LAW.— 

12 Subparagraph (A) shall not apply with respect 

13 to a cause of action that is brought in a State 

14 that has a law or framework of laws with re15 spect to the amount of an attorney’s contin16 gency fee that may be incurred for the rep17 resentation of a participant or beneficiary (or 

18 the estate of such participant or beneficiary) 

19 who brings such a cause of action. 

20 ‘‘(e) RULES OF CONSTRUCTION RELATING TO

21 HEALTH CARE.—Nothing in this title shall be construed 

22 as— 

23 ‘‘(1) affecting any State law relating to the 

24 practice of medicine or the provision of, or the fail25 ure to provide, medical care, or affecting any action 
204 

•S 1012 IS

1 (whether the liability is direct or vicarious) based 

2 upon such a State law, 

3 ‘‘(2) superseding any State law permitted under 

4 section 152(b)(1)(A) of the Patients’ Bill of Rights 

5 Act of 2005, or 

6 ‘‘(3) affecting any applicable State law with re7 spect to limitations on monetary damages. 

8 ‘‘(f) NO RIGHT OF ACTION FOR RECOVERY, INDEM9 NITY, OR CONTRIBUTION BY ISSUERS AGAINST TREATING

10 HEALTH CARE PROFESSIONALS AND TREATING HOS11 PITALS.—In the case of any care provided, or any treat12 ment decision made, by the treating health care profes13 sional or the treating hospital of a participant or bene14 ficiary under a group health plan which consists of medical 

15 care provided under such plan, any cause of action under 

16 State law against the treating health care professional or 

17 the treating hospital by the plan or a health insurance 

18 issuer providing health insurance coverage in connection 

19 with the plan for recovery, indemnity, or contribution in 

20 connection with such care (or any medically reviewable de21 cision made in connection with such care) or such treat22 ment decision is superseded.’’. 

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

24 this section shall apply to acts and omissions (from which 
205 

•S 1012 IS

1 a cause of action arises) occurring on or after the applica2 ble effective date under section 601. 

3 SEC. 403. COOPERATION BETWEEN FEDERAL AND STATE 

4 AUTHORITIES. 

5 (a) IN GENERAL.—Subpart C of part 7 of subtitle 

6 B of title I of the Employee Retirement Income Security 

7 Act of 1974 (29 U.S.C. 1191 et seq.) is amended by add8 ing at the end the following new section: 

9 ‘‘SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE 

10 AUTHORITIES. 

11 ‘‘(a) AGREEMENT WITH STATES.—A State may 

12 enter into an agreement with the Secretary for the delega13 tion to the State of some or all of the Secretary’s authority 

14 under this title to enforce the requirements applicable 

15 under title I of the Patients’ Bill of Rights Act of 2005 

16 with respect to health insurance coverage offered by a 

17 health insurance issuer and with respect to a group health 

18 plan that is a non-Federal governmental plan. 

19 ‘‘(b) DELEGATIONS.—Any department, agency, or in20 strumentality of a State to which authority is delegated 

21 pursuant to an agreement entered into under this section 

22 may, if authorized under State law and to the extent con23 sistent with such agreement, exercise the powers of the 

24 Secretary under this title which relate to such authority.’’. 
206 

•S 1012 IS

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

2 of such Act is amended by inserting after the item relating 

3 to section 734 the following new item: 

‘‘Sec. 735. Cooperation between Federal and State authorities’’. 

4 TITLE V—AMENDMENTS TO THE 

5 INTERNAL REVENUE CODE 

6 OF 1986 

7 Subtitle A—Application of Patient 

8 Protection Provisions 

9 SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER 

10 THE INTERNAL REVENUE CODE OF 1986. 

11 Subchapter B of chapter 100 of the Internal Revenue 

12 Code of 1986 is amended— 

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

14 the item relating to section 9812 the following new 

15 item: 

‘‘Sec. 9813. Standard relating to patients’ bill of rights’’; and 

16 (2) by inserting after section 9812 the fol17 lowing: 

18 ‘‘SEC. 9813. STANDARD RELATING TO PATIENTS’ BILL OF 

19 RIGHTS. 

20 ‘‘A group health plan shall comply with the require21 ments of title I of the Patients’ Bill of Rights Act of 2005 

22 (as in effect as of the date of the enactment of such Act), 

23 and such requirements shall be deemed to be incorporated 

24 into this section.’’. 
207 

•S 1012 IS

1 SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN’S 

2 HEALTH AND CANCER RIGHTS. 

3 Subchapter B of chapter 100 of the Internal Revenue 

4 Code of 1986, as amended by section 501, is further 

5 amended— 

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

7 the item relating to section 9813 the following new 

8 item: 

‘‘Sec. 9814. Standard relating to women’s health and cancer rights’’; and 

9 (2) by inserting after section 9813 the fol10 lowing: 

11 ‘‘SEC. 9814. STANDARD RELATING TO WOMEN’S HEALTH 

12 AND CANCER RIGHTS. 

13 ‘‘The provisions of section 713 of the Employee Re14 tirement Income Security Act of 1974 (as in effect as of 

15 the date of the enactment of this section) shall apply to 

16 group health plans as if included in this subchapter.’’. 

17 Subtitle B—Health Care Coverage 

18 Access Tax Incentives 

19 SEC. 511. CREDIT FOR HEALTH INSURANCE EXPENSES OF 

20 SMALL BUSINESSES. 

21 (a) IN GENERAL.—Subpart D of part IV of sub22 chapter A of chapter 1 of the Internal Revenue Code of 

23 1986 (relating to business-related credits) is amended by 

24 adding at the end the following: 
208 

•S 1012 IS

1 ‘‘SEC. 45J. SMALL BUSINESS HEALTH INSURANCE EX2 PENSES. 

3 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

4 in the case of a small employer, the health insurance credit 

5 determined under this section for the taxable year is an 

6 amount equal to the applicable percentage of the expenses 

7 paid by the taxpayer during the taxable year for health 

8 insurance coverage for such year provided under a new 

9 health plan for employees of such employer. 

10 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

11 subsection (a), the applicable percentage is— 

12 ‘‘(1) in the case of insurance purchased as a 

13 member of a qualified health benefit purchasing coa14 lition (as defined in section 9841), 30 percent, and 

15 ‘‘(2) in the case of insurance not described in 

16 paragraph (1), 20 percent. 

17 ‘‘(c) LIMITATIONS.— 

18 ‘‘(1) PER EMPLOYEE DOLLAR LIMITATION.— 

19 The amount of expenses taken into account under 

20 subsection (a) with respect to any employee for any 

21 taxable year shall not exceed— 

22 ‘‘(A) $2,000 in the case of self-only cov23 erage, and 

24 ‘‘(B) $5,000 in the case of family coverage. 

25 In the case of an employee who is covered by a new 

26 health plan of the employer for only a portion of 
209 

•S 1012 IS

1 such taxable year, the limitation under the preceding 

2 sentence shall be an amount which bears the same 

3 ratio to such limitation (determined without regard 

4 to this sentence) as such portion bears to the entire 

5 taxable year. 

6 ‘‘(2) PERIOD OF COVERAGE.—Expenses may be 

7 taken into account under subsection (a) only with 

8 respect to coverage for the 4-year period beginning 

9 on the date the employer establishes a new health 

10 plan. 

11 ‘‘(d) DEFINITIONS.—For purposes of this section— 

12 ‘‘(1) HEALTH INSURANCE COVERAGE.—The 

13 term ‘health insurance coverage’ has the meaning 

14 given such term by section 9832(b)(1). 

15 ‘‘(2) NEW HEALTH PLAN.— 

16 ‘‘(A) IN GENERAL.—The term ‘new health 

17 plan’ means any arrangement of the employer 

18 which provides health insurance coverage to em19 ployees if— 

20 ‘‘(i) such employer (and any prede21 cessor employer) did not establish or main22 tain such arrangement (or any similar ar23 rangement) at any time during the 2 tax24 able years ending prior to the taxable year 
210 

•S 1012 IS

1 in which the credit under this section is 

2 first allowed, and 

3 ‘‘(ii) such arrangement provides 

4 health insurance coverage to at least 70 

5 percent of the qualified employees of such 

6 employer. 

7 ‘‘(B) QUALIFIED EMPLOYEE.— 

8 ‘‘(i) IN GENERAL.—The term ‘quali9 fied employee’ means any employee of an 

10 employer if the annual rate of such em11 ployee’s compensation (as defined in sec12 tion 414(s)) exceeds $10,000. 

13 ‘‘(ii) TREATMENT OF CERTAIN EM14 PLOYEES.—The term ‘employee’ shall in15 clude a leased employee within the mean16 ing of section 414(n). 

17 ‘‘(3) SMALL EMPLOYER.—The term ‘small em18 ployer’ has the meaning given to such term by sec19 tion 4980D(d)(2); except that only qualified employ20 ees shall be taken into account. 

21 ‘‘(e) SPECIAL RULES.— 

22 ‘‘(1) CERTAIN RULES MADE APPLICABLE.—For 

23 purposes of this section, rules similar to the rules of 

24 section 52 shall apply. 
211 

•S 1012 IS

1 ‘‘(2) AMOUNTS PAID UNDER SALARY REDUC2 TION ARRANGEMENTS.—No amount paid or incurred 

3 pursuant to a salary reduction arrangement shall be 

4 taken into account under subsection (a). 

5 ‘‘(f) TERMINATION.—This section shall not apply to 

6 expenses paid or incurred by an employer with respect to 

7 any arrangement established on or after January 1, 

8 2014.’’. 

9 (b) CREDIT TO BE PART OF GENERAL BUSINESS

10 CREDIT.—Section 38(b) of such Code (relating to current 

11 year business credit) is amended by striking ‘‘plus’’ at the 

12 end of paragraph (18), by striking the period at the end 

13 of paragraph (19) and inserting ‘‘, plus’’, and by adding 

14 at the end the following: 

15 ‘‘(20) in the case of a small employer (as de16 fined in section 45J(d)(3)), the health insurance 

17 credit determined under section 45J(a).’’. 

18 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

19 such Code is amended by adding at the end the following 

20 new subsection: 

21 ‘‘(e) CREDIT FOR SMALL BUSINESS HEALTH INSUR22 ANCE EXPENSES.— 

23 ‘‘(1) IN GENERAL.—No deduction shall be al24 lowed for that portion of the expenses (otherwise al25 lowable as a deduction) taken into account in deter-
212 

•S 1012 IS

1 mining the credit under section 45J for the taxable 

2 year which is equal to the amount of the credit de3 termined for such taxable year under section 45J(a). 

4 ‘‘(2) CONTROLLED GROUPS.—Persons treated 

5 as a single employer under subsection (a) or (b) of 

6 section 52 shall be treated as 1 person for purposes 

7 of this section.’’. 

8 (d) CLERICAL AMENDMENT.—The table of sections 

9 for subpart D of part IV of subchapter A of chapter 1 

10 of such Code is amended by adding at the end the fol11 lowing: 

‘‘Sec. 45J. Small business health insurance expenses’’. 

12 (e) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to amounts paid or incurred in tax14 able years beginning after December 31, 2006, for ar15 rangements established after the date of the enactment 

16 of this Act. 

17 SEC. 512. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO 

18 QUALIFIED HEALTH BENEFIT PURCHASING 

19 COALITIONS. 

20 (a) IN GENERAL.—Section 4942 of the Internal Rev21 enue Code of 1986 (relating to taxes on failure to dis22 tribute income) is amended by adding at the end the fol23 lowing: 

24 ‘‘(k) CERTAIN QUALIFIED HEALTH BENEFIT PUR25 CHASING COALITION DISTRIBUTIONS.— 
213 

•S 1012 IS

1 ‘‘(1) IN GENERAL.—For purposes of subsection 

2 (g), sections 170, 501, 507, 509, and 2522, and this 

3 chapter, a qualified health benefit purchasing coali4 tion distribution by a private foundation shall be 

5 considered to be a distribution for a charitable pur6 pose. 

7 ‘‘(2) QUALIFIED HEALTH BENEFIT PUR8 CHASING COALITION DISTRIBUTION.—For purposes 

9 of paragraph (1)— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 health benefit purchasing coalition distribution’ 

12 means any amount paid or incurred by a pri13 vate foundation to or on behalf of a qualified 

14 health benefit purchasing coalition (as defined 

15 in section 9841) for purposes of payment or re16 imbursement of amounts paid or incurred in 

17 connection with the establishment and mainte18 nance of such coalition. 

19 ‘‘(B) EXCLUSIONS.—Such term shall not 

20 include any amount used by a qualified health 

21 benefit purchasing coalition (as so defined)— 

22 ‘‘(i) for the purchase of real property, 

23 ‘‘(ii) as payment to, or for the benefit 

24 of, members (or employees or affiliates of 

25 such members) of such coalition, or 
214 

•S 1012 IS

1 ‘‘(iii) for any expense paid or incurred 

2 more than 48 months after the date of es3 tablishment of such coalition. 

4 ‘‘(3) TERMINATION.—This subsection shall not 

5 apply— 

6 ‘‘(A) to qualified health benefit purchasing 

7 coalition distributions paid or incurred after 

8 December 31, 2013, and 

9 ‘‘(B) with respect to start-up costs of a co10 alition which are paid or incurred after Decem11 ber 31, 2014.’’. 

12 (b) QUALIFIED HEALTH BENEFIT PURCHASING CO13 ALITION.— 

14 (1) IN GENERAL.—Chapter 100 of such Code 

15 (relating to group health plan requirements) is 

16 amended by adding at the end the following new 

17 subchapter: 

18 ‘‘Subchapter D—Qualified Health Benefit 

19 Purchasing Coalition 

‘‘Sec. 9841. Qualified health benefit purchasing coalition 

20 ‘‘SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING CO21 ALITION. 

22 ‘‘(a) IN GENERAL.—A qualified health benefit pur23 chasing coalition is a private not-for-profit corporation 

24 which— 
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•S 1012 IS

1 ‘‘(1) sells health insurance through State li2 censed health insurance issuers in the State in which 

3 the employers to which such coalition is providing 

4 insurance are located, and 

5 ‘‘(2) establishes to the Secretary, under State 

6 certification procedures or other procedures as the 

7 Secretary may provide by regulation, that such coali8 tion meets the requirements of this section. 

9 ‘‘(b) BOARD OF DIRECTORS.— 

10 ‘‘(1) IN GENERAL.—Each purchasing coalition 

11 under this section shall be governed by a Board of 

12 Directors. 

13 ‘‘(2) ELECTION.—The Secretary shall establish 

14 procedures governing election of such Board. 

15 ‘‘(3) MEMBERSHIP.—The Board of Directors 

16 shall— 

17 ‘‘(A) be composed of representatives of the 

18 members of the coalition, in equal number, in19 cluding small employers and employee rep20 resentatives of such employers, but 

21 ‘‘(B) not include other interested parties, 

22 such as service providers, health insurers, or in23 surance agents or brokers which may have a 

24 conflict of interest with the purposes of the coa25 lition. 
216 

•S 1012 IS

1 ‘‘(c) MEMBERSHIP OF COALITION.— 

2 ‘‘(1) IN GENERAL.—A purchasing coalition 

3 shall accept all small employers residing within the 

4 area served by the coalition as members if such em5 ployers request such membership. 

6 ‘‘(2) OTHER MEMBERS.—The coalition, at the 

7 discretion of its Board of Directors, may be open to 

8 individuals and large employers. 

9 ‘‘(3) VOTING.—Members of a purchasing coali10 tion shall have voting rights consistent with the rules 

11 established by the State. 

12 ‘‘(d) DUTIES OF PURCHASING COALITIONS.—Each 

13 purchasing coalition shall— 

14 ‘‘(1) enter into agreements with small employ15 ers (and, at the discretion of its Board, with individ16 uals and other employers) to provide health insur17 ance benefits to employees and retirees of such em18 ployers, 

19 ‘‘(2) where feasible, enter into agreements with 

20 3 or more unaffiliated, qualified licensed health 

21 plans, to offer benefits to members, 

22 ‘‘(3) offer to members at least 1 open enroll23 ment period of at least 30 days per calendar year, 

24 ‘‘(4) serve a significant geographical area and 

25 market to all eligible members in that area, and 
217 

•S 1012 IS

1 ‘‘(5) carry out other functions provided for 

2 under this section. 

3 ‘‘(e) LIMITATION ON ACTIVITIES.—A purchasing coa4 lition shall not— 

5 ‘‘(1) perform any activity (including certifi6 cation or enforcement) relating to compliance or li7 censing of health plans, 

8 ‘‘(2) assume insurance or financial risk in rela9 tion to any health plan, or 

10 ‘‘(3) perform other activities identified by the 

11 State as being inconsistent with the performance of 

12 its duties under this section. 

13 ‘‘(f) ADDITIONAL REQUIREMENTS FOR PURCHASING

14 COALITIONS.—As provided by the Secretary in regula15 tions, a purchasing coalition shall be subject to require16 ments similar to the requirements of a group health plan 

17 under this chapter. 

18 ‘‘(g) RELATION TO OTHER LAWS.— 

19 ‘‘(1) PREEMPTION OF STATE FICTITIOUS

20 GROUP LAWS.—Requirements (commonly referred to 

21 as fictitious group laws) relating to grouping and 

22 similar requirements for health insurance coverage 

23 are preempted to the extent such requirements im24 pede the establishment and operation of qualified 

25 health benefit purchasing coalitions. 
218 

•S 1012 IS

1 ‘‘(2) ALLOWING SAVINGS TO BE PASSED

2 THROUGH.—Any State law that prohibits health in3 surance issuers from reducing premiums on health 

4 insurance coverage sold through a qualified health 

5 benefit purchasing coalition to reflect administrative 

6 savings is preempted. This paragraph shall not be 

7 construed to preempt State laws that impose restric8 tions on premiums based on health status, claims 

9 history, industry, age, gender, or other underwriting 

10 factors. 

11 ‘‘(3) NO WAIVER OF HIPAA REQUIREMENTS.— 

12 Nothing in this section shall be construed to change 

13 the obligation of health insurance issuers to comply 

14 with the requirements of title XXVII of the Public 

15 Health Service Act with respect to health insurance 

16 coverage offered to small employers in the small 

17 group market through a qualified health benefit pur18 chasing coalition. 

19 ‘‘(h) DEFINITION OF SMALL EMPLOYER.—For pur20 poses of this section— 

21 ‘‘(1) IN GENERAL.—The term ‘small employer’ 

22 means, with respect to any calendar year, any em23 ployer if such employer employed an average of at 

24 least 2 and not more than 50 qualified employees on 

25 business days during either of the 2 preceding cal-
219 

•S 1012 IS

1 endar years. For purposes of the preceding sentence, 

2 a preceding calendar year may be taken into account 

3 only if the employer was in existence throughout 

4 such year. 

5 ‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE6 CEDING YEAR.—In the case of an employer which 

7 was not in existence throughout the 1st preceding 

8 calendar year, the determination under paragraph 

9 (1) shall be based on the average number of quali10 fied employees that it is reasonably expected such 

11 employer will employ on business days in the current 

12 calendar year.’’. 

13 (2) CONFORMING AMENDMENT.—The table of 

14 subchapters for chapter 100 of such Code is amend15 ed by adding at the end the following item: 

‘‘SUBCHAPTER D—QUALIFIED HEALTH BENEFIT PURCHASING COALITION’’. 

16 (c) EFFECTIVE DATE.—The amendment made by 

17 subsection (a) shall apply to taxable years beginning after 

18 December 31, 2006. 

19 SEC. 513. STATE GRANT PROGRAM FOR MARKET INNOVA20 TION. 

21 (a) IN GENERAL.—The Secretary of Health and 

22 Human Services (in this section referred to as the ‘‘Sec23 retary’’) shall establish a program (in this section referred 

24 to as the ‘‘program’’) to award demonstration grants 
220 

•S 1012 IS

1 under this section to States to allow States to demonstrate 

2 the effectiveness of innovative ways to increase access to 

3 health insurance through market reforms and other inno4 vative means. Such innovative means may include (and are 

5 not limited to) any of the following: 

6 (1) Alternative group purchasing or pooling ar7 rangements, such as purchasing cooperatives for 

8 small businesses, reinsurance pools, or high risk 

9 pools. 

10 (2) Individual or small group market reforms. 

11 (3) Consumer education and outreach. 

12 (4) Subsidies to individuals, employers, or both, 

13 in obtaining health insurance. 

14 (b) SCOPE; DURATION.—The program shall be lim15 ited to not more than 10 States and to a total period of 

16 5 years, beginning on the date the first demonstration 

17 grant is made. 

18 (c) CONDITIONS FOR DEMONSTRATION GRANTS.— 

19 (1) IN GENERAL.—The Secretary may not pro20 vide for a demonstration grant to a State under the 

21 program unless the Secretary finds that under the 

22 proposed demonstration grant— 

23 (A) the State will provide for demonstrated 

24 increase of access for some portion of the exist25 ing uninsured population through a market in-
221 

•S 1012 IS

1 novation (other than merely through a financial 

2 expansion of a program initiated before the 

3 date of the enactment of this Act); 

4 (B) the State will comply with applicable 

5 Federal laws; 

6 (C) the State will not discriminate among 

7 participants on the basis of any health status8 related factor (as defined in section 2791(d)(9) 

9 of the Public Health Service Act), except to the 

10 extent a State wishes to focus on populations 

11 that otherwise would not obtain health insur12 ance because of such factors; and 

13 (D) the State will provide for such evalua14 tion, in coordination with the evaluation re15 quired under subsection (d), as the Secretary 

16 may specify. 

17 (2) APPLICATION.—The Secretary shall not 

18 provide a demonstration grant under the program to 

19 a State unless— 

20 (A) the State submits to the Secretary 

21 such an application, in such a form and man22 ner, as the Secretary specifies; 

23 (B) the application includes information 

24 regarding how the demonstration grant will ad25 dress issues such as governance, targeted popu-
222 

•S 1012 IS

1 lation, expected cost, and the continuation after 

2 the completion of the demonstration grant pe3 riod; and 

4 (C) the Secretary determines that the dem5 onstration grant will be used consistent with 

6 this section. 

7 (3) FOCUS.—A demonstration grant proposal 

8 under section need not cover all uninsured individ9 uals in a State or all health care benefits with re10 spect to such individuals. 

11 (d) EVALUATION.—The Secretary shall enter into a 

12 contract with an appropriate entity outside the Depart13 ment of Health and Human Services to conduct an overall 

14 evaluation of the program at the end of the program pe15 riod. Such evaluation shall include an analysis of improve16 ments in access, costs, quality of care, or choice of cov17 erage, under different demonstration grants. 

18 (e) OPTION TO PROVIDE FOR INITIAL PLANNING

19 GRANTS.—Notwithstanding the previous provisions of this 

20 section, under the program the Secretary may provide for 

21 a portion of the amounts appropriated under subsection 

22 (f) (not to exceed $5,000,000) to be made available to any 

23 State for initial planning grants to permit States to de24 velop demonstration grant proposals under the previous 

25 provisions of this section. 
223 

•S 1012 IS

1 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated $100,000,000 for each 

3 fiscal year to carry out this section. Amounts appropriated 

4 under this subsection shall remain available until ex5 pended. 

6 (g) STATE DEFINED.—For purposes of this section, 

7 the term ‘‘State’’ has the meaning given such term for 

8 purposes of title XIX of the Social Security Act. 

9 SEC. 514. GRANT PROGRAM TO FACILITATE HEALTH BENE10 FITS INFORMATION FOR SMALL EMPLOYERS. 

11 (a) IN GENERAL.—The Small Business Administra12 tion shall award grants to 1 or more States, local govern13 ments, and non-profit organizations for the purposes of— 

14 (1) demonstrating new and effective ways to 

15 provide information about the benefits of health in16 surance to small employers, including tax benefits, 

17 increased productivity of employees, and decreased 

18 turnover of employees, 

19 (2) making employers aware of their current 

20 rights in the marketplace under State and Federal 

21 health insurance reforms, and 

22 (3) making employers aware of the tax treat23 ment of insurance premiums. 

24 (b) AUTHORIZATION.—There is authorized to be ap25 propriated $10,000,000 for each of the first 5 fiscal years 
224 

•S 1012 IS

1 beginning after the date of the enactment of this Act for 

2 grants under subsection (a). 

3 SEC. 515. STATE GRANT PROGRAM FOR MARKET INNOVA4 TION. 

5 (a) IN GENERAL.—The Secretary of Health and 

6 Human Services (in this section referred to as the ‘‘Sec7 retary’’) shall establish a program (in this section referred 

8 to as the ‘‘program’’) to award demonstration grants 

9 under this section to States to allow States to demonstrate 

10 the effectiveness of innovative ways to increase access to 

11 health insurance through market reforms and other inno12 vative means. Such innovative means may include (and are 

13 not limited to) any of the following: 

14 (1) Alternative group purchasing or pooling ar15 rangements, such as purchasing cooperatives for 

16 small businesses, reinsurance pools, or high risk 

17 pools. 

18 (2) Individual or small group market reforms. 

19 (3) Consumer education and outreach. 

20 (4) Subsidies to individuals, employers, or both, 

21 in obtaining health insurance. 

22 (b) SCOPE; DURATION.—The program shall be lim23 ited to not more than 10 States and to a total period of 

24 5 years, beginning on the date the first demonstration 

25 grant is made. 
225 

•S 1012 IS

1 (c) CONDITIONS FOR DEMONSTRATION GRANTS.— 

2 (1) IN GENERAL.—The Secretary may not pro3 vide for a demonstration grant to a State under the 

4 program unless the Secretary finds that under the 

5 proposed demonstration grant— 

6 (A) the State will provide for demonstrated 

7 increase of access for some portion of the exist8 ing uninsured population through a market in9 novation (other than merely through a financial 

10 expansion of a program initiated before the 

11 date of the enactment of this Act); 

12 (B) the State will comply with applicable 

13 Federal laws; 

14 (C) the State will not discriminate among 

15 participants on the basis of any health status16 related factor (as defined in section 2791(d)(9) 

17 of the Public Health Service Act), except to the 

18 extent a State wishes to focus on populations 

19 that otherwise would not obtain health insur20 ance because of such factors; and 

21 (D) the State will provide for such evalua22 tion, in coordination with the evaluation re23 quired under subsection (d), as the Secretary 

24 may specify. 
226 

•S 1012 IS

1 (2) APPLICATION.—The Secretary shall not 

2 provide a demonstration grant under the program to 

3 a State unless— 

4 (A) the State submits to the Secretary 

5 such an application, in such a form and man6 ner, as the Secretary specifies; 

7 (B) the application includes information 

8 regarding how the demonstration grant will ad9 dress issues such as governance, targeted popu10 lation, expected cost, and the continuation after 

11 the completion of the demonstration grant pe12 riod; and 

13 (C) the Secretary determines that the dem14 onstration grant will be used consistent with 

15 this section. 

16 (3) FOCUS.—A demonstration grant proposal 

17 under section need not cover all uninsured individ18 uals in a State or all health care benefits with re19 spect to such individuals. 

20 (d) EVALUATION.—The Secretary shall enter into a 

21 contract with an appropriate entity outside the Depart22 ment of Health and Human Services to conduct an overall 

23 evaluation of the program at the end of the program pe24 riod. Such evaluation shall include an analysis of improve-
227 

•S 1012 IS

1 ments in access, costs, quality of care, or choice of cov2 erage, under different demonstration grants. 

3 (e) OPTION TO PROVIDE FOR INITIAL PLANNING

4 GRANTS.—Notwithstanding the previous provisions of this 

5 section, under the program the Secretary may provide for 

6 a portion of the amounts appropriated under subsection 

7 (f) (not to exceed $5,000,000) to be made available to any 

8 State for initial planning grants to permit States to de9 velop demonstration grant proposals under the previous 

10 provisions of this section. 

11 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

12 are authorized to be appropriated $100,000,000 for each 

13 fiscal year to carry out this section. Amounts appropriated 

14 under this subsection shall remain available until ex15 pended. 

16 (g) STATE DEFINED.—For purposes of this section, 

17 the term ‘‘State’’ has the meaning given such term for 

18 purposes of title XIX of the Social Security Act. 

19 TITLE VI—EFFECTIVE DATES; 

20 COORDINATION IN IMPLE21 MENTATION 

22 SEC. 601. EFFECTIVE DATES. 

23 (a) GROUP HEALTH COVERAGE.— 

24 (1) IN GENERAL.—Subject to paragraph (2) 

25 and subsection (d), the amendments made by sec-
228 

•S 1012 IS

1 tions 201(a), 401, 501, and 502 (and title I insofar 

2 as it relates to such sections) shall apply with re3 spect to group health plans, and health insurance 

4 coverage offered in connection with group health 

5 plans, for plan years beginning on or after October 

6 1, 2006 (in this section referred to as the ‘‘general 

7 effective date’’). 

8 (2) TREATMENT OF COLLECTIVE BARGAINING

9 AGREEMENTS.—In the case of a group health plan 

10 maintained pursuant to one or more collective bar11 gaining agreements between employee representa12 tives and one or more employers ratified before the 

13 date of the enactment of this Act, the amendments 

14 made by sections 201(a), 401, 501, and 502 (and 

15 title I insofar as it relates to such sections) shall not 

16 apply to plan years beginning before the later of— 

17 (A) the date on which the last collective 

18 bargaining agreements relating to the plan ter19 minates (excluding any extension thereof agreed 

20 to after the date of the enactment of this Act); 

21 or 

22 (B) the general effective date; 

23 but shall apply not later than 1 year after the gen24 eral effective date. For purposes of subparagraph 

25 (A), any plan amendment made pursuant to a collec-
229 

•S 1012 IS

1 tive bargaining agreement relating to the plan which 

2 amends the plan solely to conform to any require3 ment added by this Act shall not be treated as a ter4 mination of such collective bargaining agreement. 

5 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.— 

6 Subject to subsection (d), the amendments made by sec7 tion 202 shall apply with respect to individual health in8 surance coverage offered, sold, issued, renewed, in effect, 

9 or operated in the individual market on or after the gen10 eral effective date. 

11 (c) TREATMENT OF RELIGIOUS NONMEDICAL PRO12 VIDERS.— 

13 (1) IN GENERAL.—Nothing in this Act (or the 

14 amendments made thereby) shall be construed to— 

15 (A) restrict or limit the right of group 

16 health plans, and of health insurance issuers of17 fering health insurance coverage, to include as 

18 providers religious nonmedical providers; 

19 (B) require such plans or issuers to— 

20 (i) utilize medically based eligibility 

21 standards or criteria in deciding provider 

22 status of religious nonmedical providers; 

23 (ii) use medical professionals or cri24 teria to decide patient access to religious 

25 nonmedical providers; 
230 

•S 1012 IS

1 (iii) utilize medical professionals or 

2 criteria in making decisions in internal or 

3 external appeals regarding coverage for 

4 care by religious nonmedical providers; or 

5 (iv) compel a participant or bene6 ficiary to undergo a medical examination 

7 or test as a condition of receiving health 

8 insurance coverage for treatment by a reli9 gious nonmedical provider; or 

10 (C) require such plans or issuers to ex11 clude religious nonmedical providers because 

12 they do not provide medical or other required 

13 data, if such data is inconsistent with the reli14 gious nonmedical treatment or nursing care 

15 provided by the provider. 

16 (2) RELIGIOUS NONMEDICAL PROVIDER.—For 

17 purposes of this subsection, the term ‘‘religious non18 medical provider’’ means a provider who provides no 

19 medical care but who provides only religious non20 medical treatment or religious nonmedical nursing 

21 care. 

22 (d) TRANSITION FOR NOTICE REQUIREMENT.—The 

23 disclosure of information required under section 121 of 

24 this Act shall first be provided pursuant to— 
231 

•S 1012 IS

1 (1) subsection (a) with respect to a group 

2 health plan that is maintained as of the general ef3 fective date, not later than 30 days before the begin4 ning of the first plan year to which title I applies 

5 in connection with the plan under such subsection; 

6 or 

7 (2) subsection (b) with respect to an individual 

8 health insurance coverage that is in effect as of the 

9 general effective date, not later than 30 days before 

10 the first date as of which title I applies to the cov11 erage under such subsection. 

12 SEC. 602. COORDINATION IN IMPLEMENTATION. 

13 The Secretary of Labor and the Secretary of Health 

14 and Human Services shall ensure, through the execution 

15 of an interagency memorandum of understanding among 

16 such Secretaries, that— 

17 (1) regulations, rulings, and interpretations 

18 issued by such Secretaries relating to the same mat19 ter over which such Secretaries have responsibility 

20 under the provisions of this Act (and the amend21 ments made thereby) are administered so as to have 

22 the same effect at all times; and 

23 (2) coordination of policies relating to enforcing 

24 the same requirements through such Secretaries in 

25 order to have a coordinated enforcement strategy 
232 

•S 1012 IS

1 that avoids duplication of enforcement efforts and 

2 assigns priorities in enforcement. 

3 SEC. 603. SEVERABILITY. 

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

5 this Act, or the application of such provision or amend6 ment to any person or circumstance is held to be unconsti7 tutional, the remainder of this Act, the amendments made 

8 by this Act, and the application of the provisions of such 

9 to any person or circumstance shall not be affected there10 by. 

11 TITLE VII—MISCELLANEOUS 

12 PROVISIONS 

13 SEC. 701. NO IMPACT ON SOCIAL SECURITY TRUST FUND. 

14 (a) IN GENERAL.—Nothing in this Act (or an amend15 ment made by this Act) shall be construed to alter or 

16 amend the Social Security Act (or any regulation promul17 gated under that Act). 

18 (b) TRANSFERS.— 

19 (1) ESTIMATE OF SECRETARY.—The Secretary 

20 of the Treasury shall annually estimate the impact 

21 that the enactment of this Act has on the income 

22 and balances of the trust funds established under 

23 section 201 of the Social Security Act (42 U.S.C. 

24 401). 
233 

•S 1012 IS

1 (2) TRANSFER OF FUNDS.—If, under para2 graph (1), the Secretary of the Treasury estimates 

3 that the enactment of this Act has a negative impact 

4 on the income and balances of the trust funds estab5 lished under section 201 of the Social Security Act 

6 (42 U.S.C. 401), the Secretary shall transfer, not 

7 less frequently than quarterly, from the general reve8 nues of the Federal Government an amount suffi9 cient so as to ensure that the income and balances 

10 of such trust funds are not reduced as a result of 

11 the enactment of such Act. 

Æ