I

104TH CONGRESS

2D SESSION H. R. 3222

To prohibit gag rule clauses, improper incentive programs, and indemnification clauses in health care insurance contracts and health care employment contracts, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 29, 1996

Mr. SANDERS (for himself, Mr. STARK, Ms. MCKINNEY, Mr. DELLUMS, Mr.

HILLIARD, and Mr. FRAZER) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committee

on Ways and Means, and Economic and Educational Opportunities, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To prohibit gag rule clauses, improper incentive programs,

and indemnification clauses in health care insurance contracts and health care employment contracts, and for

other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Hippocratic Oath and

5 Patient Protection Act of 1996’’.
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1 SEC. 2. DUTIES OF A HEALTH CARRIER.

2 Under a contract or agreement with a health care

3 provider or enrollee, a health carrier—

4 (1) shall not—

5 (A) prevent or limit a health care provid6 er’s protected communication to a patient or

7 the public as described in section 3;

8 (B) operate an improper incentive plan as

9 described in section 4; or

10 (C) include indemnification clauses as de11 scribed in section 5; and

12 (2) shall disclose (in plain English understand13 able by a layperson) to a health care provider and

14 to an enrollee—

15 (A) a list of all services and benefits of16 fered under the health plan, including any serv17 ice or benefit maximum, limitation, or exclu18 sion;

19 (B) the procedures used in authorizing, ap20 proving, limiting, or denying services or benefits

21 under the health plan; and

22 (C) any health care provider incentive plan

23 as described in section 4(b) that exists under

24 the contract or agreement.
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1 SEC. 3. PROTECTED COMMUNICATION.

2 (a) IN GENERAL.—Except as limited in subsection

3 (b), for purposes of section 2(1)(A) a protected commu4 nication is a communication of information relevant to the

5 care or course of treatment of a patient.

6 (b) LIMITATIONS.—Such a protected communication

7 does not include—

8 (1) a trade secret; or

9 (2) a knowing misrepresentation by a health

10 care provider.

11 SEC. 4. IMPROPER HEALTH CARE PROVIDER INCENTIVE

12 PLAN.

13 (a) IN GENERAL.—For purposes of section 2(1)(B),

14 a health care provider incentive plan is improper, unless

15 such plan meets the requirements of section 1876(i)(8)(A)

16 of the Social Security Act (42 U.S.C. 1395mm(i)(8)(A))

17 for physician incentive plans in contracts with eligible or18 ganizations under section 1876 of such Act.

19 (b) INCENTIVE PLAN DEFINED.—The term ‘‘health

20 care provider incentive plan’’ means any compensation or

21 other financial arrangement between a health carrier and

22 a health care provider that may directly or indirectly have

23 the effect of limiting services provided with respect to an

24 enrollee.
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1 SEC. 5. PROHIBITED INDEMNIFICATION CLAUSES.

2 For purposes of section 2(1)(C), a prohibited indem3 nification clause is any provision to indemnify a health

4 carrier against liability from a civil action brought by, or

5 on behalf of, an enrollee or a health care provider for any

6 damage caused to the enrollee or the health care provider

7 by the health carrier.

8 SEC. 6. ENFORCEMENT.

9 (a) IN GENERAL.—The Secretary of Health and

10 Human Services may impose upon a health carrier who

11 violates a provision of this Act a civil money penalty of—

12 (1) up to $25,000 for each violation, or

13 (2) up to $100,000 for each violation if the Sec14 retary determines that the health carrier has en15 gaged, within the 5 years immediately preceding

16 such violation, in a pattern of such violations.

17 (b) PROCEDURES.—Subsections (c) through (l) of

18 section 1128A of the Social Security Act (42 U.S.C.

19 1320a–7a) apply to a civil penalty under this paragraph

20 in the same manner as they apply to a civil penalty under

21 section 1128A(a) of such Act.

22 SEC. 7. PRIVATE CAUSE OF ACTION.

23 Whoever is aggrieved by a violation of this Act may

24 in a civil action obtain appropriate relief.
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1 SEC. 8. REPORT TO CONGRESS.

2 (a) IN GENERAL.—Not later than 1 year after the

3 date of the enactment of this Act, the Secretary of Health

4 and Human Services shall submit a report to Congress

5 that evaluates—

6 (1) the impact of this Act on health carriers,

7 health care providers, and enrollees; and

8 (2) the enforcement of this Act by the Sec9 retary.

10 (b) RECOMMENDATIONS.—The Secretary shall in11 clude in the report required under subsection (a) rec12 ommendations for such changes as may be needed to en13 sure compliance by health carriers with this Act.

14 SEC. 9. DEFINITIONS.

15 As used in this Act—

16 (1) the term ‘‘health plan’’ means any public or

17 private entity or program that provides for payments

18 for health care, including—

19 (A) a group health plan (as defined in sec20 tion 607 of the Employee Retirement Income

21 Security Act of 1974) or a multiple employer

22 welfare arrangement (as defined in section

23 3(40) of such Act) that provides health bene24 fits;

25 (B) any other health insurance arrange26 ment, including any arrangement consisting of
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1 a hospital or medical expense incurred policy or

2 certificate, hospital or medical service plan con3 tract, or health maintenance organization sub4 scriber contract;

5 (C) workers’ compensation or similar in6 surance to the extent that it relates to workers’

7 compensation medical benefits (as defined by

8 the Federal Trade Commission); and

9 (D) automobile medical insurance to the

10 extent that it relates to medical benefits (as de11 fined by the Federal Trade Commission);

12 (2) the term ‘‘health care provider’’ means a

13 person who contracts with a health carrier to provide

14 health care services to enrollees;

15 (3) the term ‘‘health carrier’’ means a person

16 who contracts or offers to contract on a risk-assum17 ing basis—

18 (A) to provide, deliver, or arrange for

19 health care services; or

20 (B) to pay for or reimburse any of the cost

21 of health care services; and

22 (4) the term ‘‘enrollee’’ means a person enrolled

23 under a health plan.
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1 SEC. 10. EFFECTIVE DATES.

2 (a) Subsections 2(1) (A) and (C) shall take effect on

3 the date of the enactment of this Act, and apply to con4 tracts or agreements entered into or renewed before, on,

5 or after the date of the enactment of this Act.

6 (b) Subsections 2(1)(B) and 2(2) shall take effect 90

7 days after the date of the enactment of this Act, and apply

8 to contracts or agreements entered into or renewed before,

9 on, or after the date of the enactment of this Act.

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