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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5628 Introduced in House (IH)]

106th CONGRESS
  2d Session
                                H. R. 5628

   To amend the Employee Retirement Income Security Act of 1974, the 
  Public Health Service Act, and the Internal Revenue Code of 1986 to 
provide for a patients' bill of rights, patient access to information, 
and accountability of health plans, and to expand access to health care 
                    coverage through tax incentives.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            November 3, 2000

  Mr. Shadegg (for himself, Mr. Coburn, Mr. Salmon, and Mr. Aderholt) 
 introduced the following bill; which was referred to the Committee on 
   Commerce, and in addition to the Committees on Education and the 
    Workforce, and Ways and Means, 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 amend the Employee Retirement Income Security Act of 1974, the 
  Public Health Service Act, and the Internal Revenue Code of 1986 to 
provide for a patients' bill of rights, patient access to information, 
and accountability of health plans, and to expand access to health care 
                    coverage through tax incentives.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Common Sense 
Patients' Bill of Rights Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

Sec. 101.``subpart c--patient right to medical advice and care.
        ``Sec. 721. Access to emergency care.
        ``Sec. 722. Offering of choice of coverage options.
        ``Sec. 723. Patient access to obstetric and gynecological care.
        ``Sec. 724. Access to pediatric care.
        ``Sec. 725. Timely access to specialists.
        ``Sec. 726. Continuity of care.
        ``Sec. 727. Prohibition of interference with certain medical 
                            communications.
        ``Sec. 728. Patient's right to prescription drugs.
        ``Sec. 729. Self-payment for behavioral health care services.
        ``Sec. 730. Coverage for individuals participating in approved 
                            cancer clinical trials.
        ``Sec. 730A. Prohibition of discrimination against providers 
                            based on licensure.
        ``Sec. 730B. Prohibition against improper incentive 
                            arrangements.
        ``Sec. 730C. Payment of clean claims.
        ``Sec. 730D. Generally applicable provision.
        ``Sec. 730E. Exclusion from access to managed care provisions 
                            for fee-for-service coverage.
        ``Sec. 730F. Additional definitions.
Sec. 102. Conforming amendments to the Public Health Service Act.
Sec. 103. Conforming amendments to the Internal Revenue Code of 1986.
       Subtitle B--Right to Information About Plans and Providers

Sec. 111. Information about plans and coverage under ERISA.
        ``Sec. 714. Patient access to information.
Sec. 112. Conforming amendments to Public Health Service Act.
Sec. 113. Conforming amendments to the Internal Revenue Code of 1986.
           Subtitle C--Right to Hold Health Plans Accountable

Sec. 121. Amendments to Employee Retirement Income Security Act of 
                            1974.
        ``Sec. 503A. Utilization review activities.
        ``Sec. 503B. Procedures for initial claims for benefits and 
                            prior authorization determinations.
        ``Sec. 503C. Internal appeals of claims denials.
        ``Sec. 503D. Independent external appeals procedures.
Sec. 122. Conforming amendments to Public Health Service Act.
Sec. 123. Conforming amendments to the Internal Revenue Code of 1986.
   Subtitle D--State Flexibility in Applying Requirements to Health 
                           Insurance Issuers

Sec. 141. State flexibility in applying requirements to health 
                            insurance issuers under ERISA; plan 
                            satisfaction of certain requirements.
Sec. 142. State flexibility in applying requirements to health 
                            insurance issuers under the Public Health 
                            Service Act.
     Subtitle E--Effective Dates; Coordination in Implementation; 
                        Miscellaneous Provisions

Sec. 151. Effective dates.
Sec. 152. Regulations; coordination.
Sec. 153. No benefit requirements.
Sec. 154. Severability.
                           TITLE II--REMEDIES

Sec. 201. Availability of court remedies.
Sec. 202. Severability.
         TITLE III--HEALTH CARE COVERAGE ACCESS TAX INCENTIVES

Sec. 301. Expanded availability of medical savings accounts.
Sec. 302. Deduction for 100 percent of health insurance costs of self-
                            employed individuals.
                    TITLE IV--HEALTH CARE PAPERWORK

Sec. 401. Health care paperwork simplification.

                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

SEC. 101. PATIENT RIGHT TO MEDICAL ADVICE AND CARE UNDER ERISA.

    (a) In General.--Part 7 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1181 et seq.) is 
amended--
            (1) by redesignating subpart C as subpart D; and
            (2) by inserting after subpart B the following:

         ``Subpart C--Patient Right to Medical Advice and Care

``SEC. 721. ACCESS TO EMERGENCY CARE.

    ``(a) Coverage of Emergency Services.--
            ``(1) In general.--If a group health plan, or health 
        insurance coverage offered by a health insurance issuer in 
        connection with such a plan, provides or covers any benefits 
        with respect to services in an emergency department of a 
        hospital, the plan or issuer shall cover emergency services (as 
        defined in paragraph (2)(B))--
                    ``(A) without the need for any prior authorization 
                determination;
                    ``(B) whether the health care provider furnishing 
                such services is a participating provider with respect 
                to such services;
                    ``(C) in a manner so that, if such services are 
                provided to a participant or beneficiary--
                            ``(i) by a nonparticipating health care 
                        provider with or without prior authorization, 
                        or
                            ``(ii) by a participating health care 
                        provider without prior authorization,
                the participant or beneficiary is not liable for 
                amounts that exceed the amounts of liability that would 
                be incurred if the services were provided by a 
                participating health care provider with prior 
                authorization; and
                    ``(D) without regard to any other term or condition 
                of such coverage (other than exclusion or coordination 
                of benefits, or an affiliation or waiting period, 
                permitted under section 2701 of the Public Health 
                Service Act, section 701, or section 9801 of the 
                Internal Revenue Code of 1986, and other than 
                applicable cost-sharing).
            ``(2) Definitions.--In this section:
                    ``(A) Emergency medical condition.--The term 
                `emergency medical condition' means a medical condition 
                manifesting itself by acute symptoms of sufficient 
                severity (including severe pain) such that a prudent 
                layperson, who possesses an average knowledge of health 
                and medicine, could reasonably expect the absence of 
                immediate medical attention to result in a condition 
                described in clause (i), (ii), or (iii) of section 
                1867(e)(1)(A) of the Social Security Act (42 U.S.C. 
                1395dd(e)(1)(A)).
                    ``(B) Emergency services.--The term `emergency 
                services' means with respect to an emergency medical 
                condition--
                            ``(i) a medical screening examination (as 
                        required under section 1867 of the Social 
                        Security Act) that is within the capability of 
                        the emergency department of a hospital, 
                        including ancillary services routinely 
                        available to the emergency department to 
                        evaluate such emergency medical condition, and
                            ``(ii) within the capabilities of the staff 
                        and facilities available at the hospital, such 
                        further medical examination and treatment as 
                        are required under section 1867 of such Act to 
                        stabilize the patient.
                    ``(C) Stabilize.--The term `to stabilize' means, 
                with respect to an emergency medical condition, to 
                provide such medical treatment of the condition as may 
                be necessary to assure, within reasonable medical 
                probability, that no material deterioration of the 
                condition is likely to result from or occur during the 
                transfer of the individual from a facility.
    ``(b) Reimbursement for Maintenance Care and Post-Stabilization 
Care.--If benefits are available under a group health plan, or under 
health insurance coverage offered by a health insurance issuer in 
connection with such a plan, with respect to maintenance care or post-
stabilization care covered under the guidelines established under 
section 1852(d)(2) of the Social Security Act, the plan or issuer shall 
provide for reimbursement with respect to such services provided to a 
participant or beneficiary other than through a participating health 
care provider in a manner consistent with subsection (a)(1)(C) (and 
shall otherwise comply with such guidelines).
    ``(c) Coverage of Emergency Ambulance Services.--
            ``(1) In general.--If a group health plan, or health 
        insurance coverage provided by a health insurance issuer in 
        connection with such a plan, provides any benefits with respect 
        to ambulance services and emergency services, the plan or 
        issuer shall cover emergency ambulance services (as defined in 
        paragraph (2)) furnished under the plan or coverage under the 
        same terms and conditions under subparagraphs (A) through (D) 
        of subsection (a)(1) under which coverage is provided for 
        emergency services.
            ``(2) Emergency ambulance services.--For purposes of this 
        subsection, the term `emergency ambulance services' means 
        ambulance services (as defined for purposes of section 
        1861(s)(7) of the Social Security Act) furnished to transport 
        an individual who has an emergency medical condition (as 
        defined in subsection (a)(2)(A)) to a hospital for the receipt 
        of emergency services (as defined in subsection (a)(2)(B)) in a 
        case in which the emergency services are covered under the plan 
        or coverage pursuant to subsection (a)(1) and a prudent 
        layperson, with an average knowledge of health and medicine, 
        could reasonably expect that the absence of such transport 
        would result in placing the health of the individual in serious 
        jeopardy, serious impairment of bodily function, or serious 
        dysfunction of any bodily organ or part.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a group health plan or a health insurance issuer 
from negotiating reimbursement rates with a nonparticipating provider 
for items or services provided under this section.

``SEC. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.

    ``(a) Requirement.--If a group health plan provides coverage for 
benefits only through a defined set of participating health care 
professionals, the plan shall offer each participant the option to 
purchase point-of-service coverage (as defined in subsection (b)) for 
all such benefits for which coverage is otherwise so limited. Such 
option shall be made available to the participant at the time of 
enrollment under the plan and at such other times as the plan offers 
the participant a choice of coverage options.
    ``(b) Point-of-Service Coverage Defined.--In this section, the term 
`point-of-service coverage' means, with respect to benefits covered 
under a group health plan, coverage of such benefits when provided by a 
nonparticipating health care professional.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--The requirement of subsection (a) shall 
        not apply to a group health plan with respect to a small 
        employer if the employer demonstrates that compliance with such 
        requirement would result in an increase in overall costs to the 
        employer.
            ``(2) Small employer defined.--For purposes of subparagraph 
        (A), the term `small employer' means, in connection with a 
        group health plan with respect to a calendar year and a plan 
        year, an employer who employed an average of fewer than 25 
        employees on days during the preceding calendar year and fewer 
        than 25 employees on the first day of the plan year.
            ``(3) Determination of employer size.--For purposes of this 
        subsection, the provisions of subparagraph (C) of section 
        712(c)(1) shall apply in determining employer size.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed--
            ``(1) as requiring coverage for benefits for a particular 
        type of health care professional;
            ``(2) as requiring an increase in the level of employer 
        contributions or as permitting an employer to comply with the 
        requirements of this section by means of reducing the level of 
        employer contributions attributable to coverage with respect to 
        any participant or group of participants in relation to the 
        level that would otherwise be maintained if such requirements 
        did not apply;
            ``(3) as preventing a group health plan from imposing, on a 
        participant who exercises the point-of-service coverage option 
        under subsection (a), the additional cost of creation and 
        maintenance of the option as well as any additional other costs 
        (including additional cost-sharing) attributable to the option; 
        or
            ``(4) to require that a group health plan include coverage 
        of health care professionals that the plan excludes because of 
        fraud, quality of care, or other similar reasons with respect 
        to such professionals.

``SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

    ``(a) General Rights.--
            ``(1) Direct access.--A group health plan, or health 
        insurance coverage offered by a health insurance issuer in 
        connection with such a plan, described in subsection (b) may 
        not require authorization or referral by the plan, issuer, or 
        any other person, including the primary care provider described 
        in subsection (b)(2), in the case of a female participant or 
        beneficiary who seeks coverage for obstetric or gynecological 
        care provided by a participating physician who specializes in 
        obstetrics or gynecology.
            ``(2) Obstetric and gynecological care.--Such a plan or 
        issuer shall treat the provision of obstetric and gynecological 
        care, and the ordering of related obstetric and gynecological 
        items and services, pursuant to the direct access described 
        under paragraph (1), by a participating physician who 
        specializes in obstetrics or gynecology as the authorization of 
        the primary care provider.
    ``(b) Application of Section.--A group health plan, or health 
insurance coverage offered by a health insurance issuer in connection 
with such a plan, described in this subsection is a plan or coverage 
that--
            ``(1) provides coverage for obstetric or gynecologic care; 
        and
            ``(2) requires the designation by a participant or 
        beneficiary of a participating primary care provider other than 
        a physician who specializes in obstetrics or gynecology.
    ``(c) Rules of Construction.--Nothing in this section shall be 
construed--
            ``(1) to require that a group health plan or health 
        insurance issuer approve or provide coverage for--
                    ``(A) any items or services that are not covered 
                under the terms and conditions of the group health plan 
                or the health insurance coverage;
                    ``(B) any items or services that are not medically 
                necessary and appropriate; or
                    ``(C) any items or services that are provided, 
                ordered, or otherwise authorized under subsection 
                (a)(2) by a physician unless such items or services are 
                related to obstetric or gynecologic care; or
            ``(2) to preclude a group health plan or a health insurance 
        issuer from requiring that the physician described in 
        subsection (a) notify the designated primary care professional 
        or case manager of treatment decisions in accordance with a 
        process implemented by the plan or issuer, except that the plan 
        or issuer shall not impose such a notification requirement on 
        the participant or beneficiary involved in the treatment 
        decision.

``SEC. 724. ACCESS TO PEDIATRIC CARE.

    ``If a group health plan, or health insurance coverage offered by a 
health insurance issuer in connection with such a plan, requires or 
provides for a participant or beneficiary to designate a participating 
primary care provider for a child of such participant or beneficiary, 
the plan or issuer shall permit the participant or beneficiary to 
designate a physician who specializes in pediatrics as the child's 
primary care provider if such provider participates in the network of 
the plan or issuer.

``SEC. 725. TIMELY ACCESS TO SPECIALISTS.

    ``(a) Timely Access.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer that offers health insurance coverage in 
        connection with such a plan, shall ensure that participants and 
        beneficiaries receive timely coverage for access to specialists 
        who are appropriate to the medical condition of the participant 
        or beneficiary, when such specialty care is a covered benefit 
        under the plan or coverage.
            ``(2) Rule of construction.--Nothing in paragraph (1) shall 
        be construed--
                    ``(A) to require the coverage under a group health 
                plan or health insurance coverage of benefits or 
                services;
                    ``(B) to prohibit a plan or issuer from including 
                providers in the network only to the extent 
necessary to meet the needs of the plan's participants and 
beneficiaries; or
                    ``(C) to override any State licensure or scope-of-
                practice law.
            ``(3) Access to certain providers.--
                    ``(A) Participating providers.--Nothing in this 
                section shall be construed to prohibit a group health 
                plan or health insurance issuer from requiring that a 
                participant or beneficiary obtain specialty care from a 
                participating specialist.
                    ``(B) Nonparticipating providers.--
                            ``(i) In general.--With respect to 
                        specialty care under this section, if a group 
                        health plan or health insurance issuer 
                        determines that a participating specialist is 
                        not available to provide such care to the 
                        participant or beneficiary, the plan or issuer 
                        shall provide for coverage of such care by a 
                        nonparticipating specialist.
                            ``(ii) Treatment of nonparticipating 
                        providers.--If a group health plan or health 
                        insurance issuer refers a participant or 
                        beneficiary to a nonparticipating specialist 
                        pursuant to clause (i), such specialty care 
                        shall be provided at no additional cost to the 
                        participant or beneficiary beyond what the 
                        participant or beneficiary would otherwise pay 
                        for such specialty care if provided by a 
                        participating specialist.
    ``(b) Referrals.--
            ``(1) Authorization.--Nothing in this section shall be 
        construed to prohibit a group health plan or health insurance 
        issuer from requiring an authorization in order to obtain 
        coverage for specialty services so long as such authorization 
        is for an appropriate duration or number of referrals.
            ``(2) Specialists as gatekeeper for treatment of ongoing 
        special conditions.--
                    ``(A) In general.--A group health plan, or a health 
                insurance issuer in connection with the provision of 
                group health insurance coverage, shall have a procedure 
                by which an individual who is a participant or 
                beneficiary and who has an ongoing special condition 
                (as defined in subparagraph (C)) may request and 
                receive a referral to a specialist for such condition 
                who shall be responsible for and capable of providing 
                and coordinating the individual's care with respect to 
                the condition. Under such procedures if such an 
                individual's care would most appropriately be 
                coordinated by such a specialist, such plan or issuer 
                shall refer the individual to such specialist.
                    ``(B) Treatment for related referrals.--Such 
                specialists shall be permitted to treat the individual 
                without a referral from the individual's primary care 
                provider and may authorize such referrals, procedures, 
                tests, and other medical services as the individual's 
                primary care provider would otherwise be permitted to 
                provide or authorize, subject to the terms of the 
                treatment (referred to in subsection (a)(3)(A)) with 
                respect to the ongoing special condition.
                    ``(C) Ongoing special condition defined.--In this 
                paragraph, the term `ongoing special condition' means a 
                condition or disease that--
                            ``(i) is life-threatening, degenerative, 
                        congenital, or disabling, and
                            ``(ii) requires specialized medical care 
                        over a prolonged period of time.
                    ``(D) Terms of referral.--The provisions of 
                paragraphs (3) through (5) of subsection (a) apply with 
                respect to referrals under subparagraph (A) in the same 
                manner as they apply to referrals under subsection 
                (a)(1).
                    ``(E) Construction.--Nothing in this paragraph 
                shall be construed as preventing an individual who is a 
                participant or beneficiary and who has an ongoing 
                special condition from having the individual's primary 
                care physician assume the responsibilities for 
                providing and coordinating care described in 
                subparagraph (A).
    ``(c) Treatment Plans.--
            ``(1) In general.--Nothing in this section shall be 
        construed to prohibit a group health plan or health insurance 
        issuer from requiring that specialty care be provided pursuant 
        to a treatment plan so long as the treatment plan is--
                    ``(A) developed by the specialist, in consultation 
                with the case manager or primary care provider, and the 
                participant or beneficiary;
                    ``(B) approved by the plan or issuer in a timely 
                manner if the plan requires such approval; and
                    ``(C) in accordance with the applicable quality 
                assurance and utilization review standards of the plan 
                or issuer.
            ``(2) Notification.--Nothing in paragraph (1) shall be 
        construed as prohibiting a plan or issuer from requiring the 
        specialist to provide the plan or issuer with regular updates 
        on the specialty care provided, as well as all other necessary 
        medical information.
    ``(d) Specialist Defined.--For purposes of this section, the term 
`specialist' means, with respect to the medical condition of the 
participant or beneficiary, a health care professional, facility, or 
center that has adequate expertise (including age-appropriate 
expertise) through appropriate training and experience or a physician 
pathologist who has adequate expertise through appropriate training and 
experience.

``SEC. 726. CONTINUITY OF CARE.

    ``(a) Termination of Provider.--If a contract between a group 
health plan, or health insurance issuer that offers health insurance 
coverage in connection with such a plan, and a treating health care 
provider is terminated (as defined in paragraph (e)(4)), or benefits or 
coverage provided by a health care provider are terminated because of a 
change in the terms of provider participation in such plan or coverage, 
and an individual who is a participant or beneficiary in the plan is 
undergoing an active course of treatment for a serious and complex 
condition, institutional care, pregnancy, or terminal illness from the 
provider at the time the plan or issuer receives or provides notice of 
such termination, the plan or issuer shall--
            ``(1) notify the individual, or arrange to have the 
        individual notified pursuant to subsection (d)(2), on a timely 
        basis of such termination;
            ``(2) provide the individual with an opportunity to notify 
        the plan or issuer of the individual's need for transitional 
        care; and
            ``(3) subject to subsection (c), permit the individual to 
        elect to continue to be covered with respect to the active 
        course of treatment with the provider's consent during a 
        transitional period (as provided for under subsection (b)).
    ``(b) Transitional Period.--
            ``(1) Serious and complex conditions.--The transitional 
        period under this section with respect to a serious and complex 
        condition shall extend for up to 90 days from the date of the 
        notice described in subsection (a)(1) of the provider's 
        termination.
            ``(2) Institutional or inpatient care.--
                    ``(A) In general.--The transitional period under 
                this section for institutional or non-elective 
                inpatient care from a provider shall extend until the 
                earlier of--
                            ``(i) the expiration of the 90-day period 
                        beginning on the date on which the notice 
                        described in subsection (a)(1) of the 
                        provider's termination is provided; or
                            ``(ii) the date of discharge of the 
                        individual from such care or the termination of 
                        the period of institutionalization.
                    ``(B) Scheduled care.--The 90 day limitation 
                described in subparagraph (A)(i) shall include post-
                surgical follow-up care relating to non-elective 
                surgery that has been scheduled before the date of the 
                notice of the termination of the provider under 
                subsection (a)(1).
            ``(3) Pregnancy.--If--
                    ``(A) a participant or beneficiary was determined 
                to be pregnant at the time of a provider's termination 
                of participation, and
                    ``(B) the provider was treating the pregnancy 
                before date of the termination,
        the transitional period under this subsection with respect to 
        provider's treatment of the pregnancy shall extend through the 
        provision of post-partum care directly related to the delivery.
            ``(4) Terminal illness.--If--
                    ``(A) a participant or beneficiary was determined 
                to be terminally ill (as determined under section 
                1861(dd)(3)(A) of the Social Security Act) at the time 
                of a provider's termination of participation; and
                    ``(B) the provider was treating the terminal 
                illness before the date of termination;
        the transitional period under this subsection shall extend for 
        the remainder of the individual's life for care that is 
        directly related to the treatment of the terminal illness.
    ``(c) Permissible Terms and Conditions.--A group health plan, and a 
health insurance issuer that offers health insurance coverage in 
connection with such a plan, may condition coverage of continued 
treatment by a provider under this section upon the provider agreeing 
to the following terms and conditions:
            ``(1) The treating health care provider agrees to accept 
        reimbursement from the plan or issuer and individual involved 
        (with respect to cost-sharing) at the rates applicable prior to 
        the start of the transitional period as payment in full (or at 
        the rates applicable under the replacement plan or coverage 
        after the date of the termination of the contract with the 
        group health plan or health insurance issuer) and not to impose 
        cost-sharing with respect to the individual in an amount that 
        would exceed the cost-sharing that could have been imposed if 
        the contract referred to in this section had not been 
        terminated.
            ``(2) The treating health care provider agrees to adhere to 
        the quality assurance standards of the plan or issuer 
        responsible for payment under paragraph (1) (to the extent such 
        quality assurance standards meet the professionally accepted 
        standards of care) and to provide to such plan or issuer 
        necessary medical information related to the care provided.
            ``(3) The treating health care provider agrees otherwise to 
        adhere to such plan's or issuer's policies and procedures (to 
        the extent such policies and procedures meet the professionally 
        accepted standards of care), including procedures regarding 
        referrals and obtaining prior authorization and providing 
        services pursuant to a treatment plan (if any) approved by the 
        plan or issuer.
    ``(d) Rules of Construction.--Nothing in this section shall be 
construed--
            ``(1) to require the coverage of benefits which would not 
        have been covered if the provider involved remained a 
        participating provider; or
            ``(2) with respect to the termination of a contract under 
        subsection (a) to prevent a group health plan or health 
        insurance issuer from requiring that the health care provider--
                    ``(A) notify participants or beneficiaries of their 
                rights under this section; or
                    ``(B) provide the plan or issuer with the name of 
                each participant or beneficiary who the provider 
                believes is eligible for transitional care under this 
                section.
    ``(e) Definitions.--In this section:
            ``(1) Contract.--The term `contract between a plan or 
        issuer and a treating health care provider' shall include a 
        contract between such a plan or issuer and an organized network 
        of providers.
            ``(2) Health care provider.--The term `health care 
        provider' or `provider' means--
                    ``(A) any individual who is engaged in the delivery 
                of health care services in a State and who is 
required by State law or regulation to be licensed or certified by the 
State to engage in the delivery of such services in the State; and
                    ``(B) any entity that is engaged in the delivery of 
                health care services in a State and that, if it is 
                required by State law or regulation to be licensed or 
                certified by the State to engage in the delivery of 
                such services in the State, is so licensed.
            ``(3) Serious and complex condition.--The term `serious and 
        complex condition' means, with respect to a participant or 
        beneficiary under the plan or coverage, a condition that is 
        medically determinable and--
                    ``(A) in the case of an acute illness, is a 
                condition serious enough to require specialized medical 
                treatment to avoid the reasonable possibility of death 
                or permanent harm; or
                    ``(B) in the case of a chronic illness or 
                condition, is an illness or condition that--
                            ``(i) is complex and difficult to manage;
                            ``(ii) is disabling or life-threatening; 
                        and
                            ``(iii) requires--
                                    ``(I) frequent monitoring over a 
                                prolonged period of time and requires 
                                substantial on-going specialized 
                                medical care; or
                                    ``(II) frequent ongoing specialized 
                                medical care across a variety of 
                                domains of care.
            ``(4) Terminated.--The term `terminated' includes, with 
        respect to a contract (as defined in paragraph (1)), the 
        expiration or nonrenewal of the contract by the group health 
        plan or the health insurance issuer, but does not include a 
        termination of the contract by the plan or issuer for failure 
        to meet applicable quality standards or for fraud.

SEC. 727. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    (a) General Rule.--The provisions of any contract or agreement, or 
the operation of any contract or agreement, between a group health plan 
or health insurance issuer in relation to health insurance coverage 
(including any partnership, association, or other organization that 
enters into or administers such a contract or agreement) and a health 
care provider (or group of health care providers) shall not prohibit or 
otherwise restrict a health care professional from advising such a 
participant, beneficiary, or enrollee who is a patient of the 
professional about the health status of the individual or medical care 
or treatment for the individual's condition or disease, regardless of 
whether benefits for such care or treatment are provided under the plan 
or coverage, if the professional is acting within the lawful scope of 
practice.
    (b) Nullification.--Any contract provision or agreement that 
restricts or prohibits medical communications in violation of 
subsection (a) shall be null and void.

``SEC. 728. PATIENT'S RIGHT TO PRESCRIPTION DRUGS.

    ``To the extent that a group health plan, or health insurance 
coverage offered by a health insurance issuer in connection with such a 
plan, provides coverage for benefits with respect to prescription 
drugs, and limits such coverage to drugs included in a formulary, the 
plan or issuer shall--
            ``(1) ensure the participation of physicians and 
        pharmacists in developing and reviewing such formulary;
            ``(2) disclose the nature of such limits on such coverage 
        to providers whose services (or reimbursement therefor) are 
        included under the coverage of the plan (in addition to 
        disclosure to participants and beneficiaries upon request in 
        accordance with section 714(c)(3)), and
            ``(3) in accordance with the applicable quality assurance 
        and utilization review standards of the plan or issuer, provide 
        for exceptions from the formulary limitation when a non-
        formulary alternative is medically necessary and appropriate.

``SEC. 729. SELF-PAYMENT FOR BEHAVIORAL HEALTH CARE SERVICES.

    ``(a) In General.--A group health plan, and a health insurance 
issuer in relation to its offering of health insurance coverage in 
connection with such a plan, may not--
            ``(1) prohibit or otherwise discourage a participant or 
        beneficiary from self-paying for behavioral health care 
        services once the plan or issuer has denied coverage for such 
        services; or
            ``(2) terminate a health care provider because such 
        provider permits participants or beneficiaries to self-pay for 
        behavioral health care services--
                    ``(A) that are not otherwise covered under the plan 
                or coverage; or
                    ``(B) for which the group health plan or coverage 
                provides limited coverage, to the extent that the plan 
                or issuer denies coverage of the services.
    ``(b) Rule of Construction.--Nothing in subsection (a)(2)(B) shall 
be construed as prohibiting a group health plan or health insurance 
issuer from terminating a contract with a health care provider for 
failure to meet applicable quality standards or for fraud.

``SEC. 730. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CANCER 
              CLINICAL TRIALS.

    ``(a) Coverage.--
            ``(1) In general.--If a group health plan, or a health 
        insurance issuer offering health insurance coverage in 
        connection with such a plan, provides coverage to a qualified 
        individual (as defined in subsection (b)), the plan or issuer--
                    ``(A) may not deny the individual participation in 
                the clinical trial referred to in subsection (b)(2);
                    ``(B) subject to subsections (b), (c), and (d), may 
                not deny (or limit or impose additional conditions on) 
                the coverage of routine patient costs for items 
and services furnished in connection with participation in the trial; 
and
                    ``(C) may not discriminate against the individual 
                on the basis of the individual's participation in such 
                trial.
            ``(2) Exclusion of certain costs.--For purposes of 
        paragraph (1)(B), routine patient costs do not include the cost 
        of the tests or measurements conducted primarily for the 
        purpose of the clinical trial involved.
            ``(3) Use of in-network providers.--If one or more 
        participating providers is participating in a clinical trial, 
        nothing in paragraph (1) shall be construed as preventing a 
        plan or issuer from requiring that a qualified individual 
        participate in the trial through such a participating provider 
        if the provider will accept the individual as a participant in 
        the trial.
    ``(b) Qualified Individual Defined.--For purposes of subsection 
(a), the term `qualified individual' means an individual who is a 
participant or beneficiary in a group health plan who meets the 
following conditions:
            ``(1)(A) The individual has been diagnosed with cancer.
            ``(B) The individual is eligible to participate in an 
        approved clinical trial according to the trial protocol with 
        respect to treatment of such illness.
            ``(C) The individual's participation in the trial offers 
        meaningful potential for significant clinical benefit for the 
        individual.
            ``(2) Either--
                    ``(A) the referring physician is a participating 
                health care professional and has concluded that the 
                individual's participation in such trial would be 
                appropriate based upon the individual meeting the 
                conditions described in paragraph (1); or
                    ``(B) the individual provides medical and 
                scientific information establishing that the 
                individual's participation in such trial would be 
                appropriate based upon the individual meeting the 
                conditions described in paragraph (1).
    ``(c) Payment.--
            ``(1) In general.--Under this section a group health plan 
        (or health insurance issuer offering health insurance) shall 
        provide for payment for routine patient costs described in 
        subsection (a)(2) but is not required to pay for costs of items 
        and services that are reasonably expected to be paid for by the 
        sponsors of an approved clinical trial.
            ``(2) Routine patient care costs.--For purposes of this 
        section--
                    ``(A) In general.--The term `routine patient care 
                costs' includes the costs associated with the provision 
                of items and services that--
                            ``(i) would otherwise be covered under the 
                        group health plan if such items and services 
                        were not provided in connection with an 
                        approved clinical trial program; and
                            ``(ii) are furnished according to the 
                        protocol of an approved clinical trial program.
                    ``(B) Exclusion.--Such term does include the costs 
                associated with the provision of--
                            ``(i) an investigational drug or device, 
                        unless the Secretary has authorized the 
                        manufacturer of such drug or device to charge 
                        for such drug or device; or
                            ``(ii) any item or service supplied without 
                        charge by the sponsor of the approved clinical 
                        trial program.
            ``(3) Payment rate.--In the case of covered items and 
        services provided by--
                    ``(A) a participating provider, the payment rate 
                shall be at the agreed upon rate, or
                    ``(B) a nonparticipating provider, the payment rate 
                shall be at the rate the plan or issuer would normally 
                pay for comparable items or services under subparagraph 
                (A).
    ``(d) Approved Clinical Trial Defined.--In this section, the term 
`approved clinical trial' means a cancer clinical research study or 
cancer clinical investigation approved by an Institutional Review 
Board.
    ``(e) Construction.--Nothing in this section shall be construed to 
limit a plan's or issuer's coverage with respect to clinical trials.
    ``(f) Plan Satisfaction of Certain Requirements; Responsibilities 
of Fiduciaries.--
            ``(1) In general.--For purposes of this section, insofar as 
        a group health plan provides benefits in the form of health 
        insurance coverage through a health insurance issuer, the plan 
        shall be treated as meeting the requirements of this section 
        with respect to such benefits and not be considered as failing 
        to meet such requirements because of a failure of the issuer to 
        meet such requirements so long as the plan sponsor or its 
        representatives did not cause such failure by the issuer.
            ``(2) Construction.--Nothing in this section shall be 
        construed to affect or modify the responsibilities of the 
        fiduciaries of a group health plan under part 4 of subtitle B.

``SEC. 730A. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS BASED ON 
              LICENSURE.

    ``(a) In General.--A group health plan, and a health insurance 
issuer in relation to its offering of health insurance coverage in 
connection with such a plan, shall not discriminate with respect to 
participation or indemnification as to any provider who is acting 
within the scope of the provider's license or certification under 
applicable State law, solely on the basis of such license or 
certification.
    ``(b) Construction.--Subsection (a) shall not be construed--
            ``(1) as requiring the coverage under a group health plan 
        or health insurance coverage of a particular benefit or service 
        or to prohibit a plan or issuer from including providers only 
        to the extent necessary to meet the needs of the plan's 
participants or beneficiaries or from establishing any measure designed 
to maintain quality and control costs consistent with the 
responsibilities of the plan or issuer;
            ``(2) to override any State licensure or scope-of-practice 
        law;
            ``(3) as requiring a plan or issuer that offers network 
        coverage to include for participation every willing provider 
        who meets the terms and conditions of the plan or issuer; or
            ``(4) as prohibiting a family practice physician with 
        appropriate expertise from providing pediatric or obstetric or 
        gynecological care.

``SEC. 730B. PROHIBITION AGAINST IMPROPER INCENTIVE ARRANGEMENTS.

    ``(a) In General.--A group health plan and a health insurance 
issuer offering health insurance coverage in connection with such a 
plan may not operate any physician incentive plan (as defined in 
subparagraph (B) of section 1876(i)(8) of the Social Security Act) 
unless the requirements described in clauses (i), (ii)(I), and (iii) of 
subparagraph (A) of such section are met with respect to such a plan.
    ``(b) Application.--For purposes of carrying out paragraph (1), any 
reference in section 1876(i)(8) of the Social Security Act to the 
Secretary, an eligible organization, or an individual enrolled with the 
organization shall be treated as a reference to the applicable 
authority, a group health plan or health insurance issuer, 
respectively, and a participant or beneficiary with the plan or 
organization, respectively.
    ``(c) Construction.--Nothing in this section shall be construed as 
prohibiting all capitation and similar arrangements or all provider 
discount arrangements.

``SEC. 730C. PAYMENT OF CLEAN CLAIMS.

    ``A group health plan, and a health insurance issuer offering group 
health insurance coverage, shall provide for prompt payment of claims 
submitted for health care services or supplies furnished to a 
participant or beneficiary with respect to benefits covered by the plan 
or issuer, in a manner consistent with the provisions of sections 
1816(c)(2) and 1842(c)(2) of the Social Security Act (42 U.S.C. 
1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for purposes of 
this section, subparagraph (C) of section 1816(c)(2) of the Social 
Security Act shall be treated as applying to claims received from a 
participant or beneficiary as well as claims referred to in such 
subparagraph.

``SEC. 730D. GENERALLY APPLICABLE PROVISION.

    ``In the case of a group health plan or health insurance coverage 
that provides benefits under 2 or more coverage options, the 
requirements of this subpart shall apply separately with respect to 
each coverage option.

``SEC. 730E. EXCLUSION FROM ACCESS TO MANAGED CARE PROVISIONS FOR FEE-
              FOR-SERVICE COVERAGE.

    ``(a) In General.--The provisions of sections 721 through 730D 
shall not apply to a group health plan or health insurance coverage if 
the only coverage offered under the plan or coverage is fee-for-service 
coverage (as defined in subsection (b)).
    ``(b) Fee-for-Service Coverage Defined.--For purposes of this 
section, the term `fee-for-service coverage' means coverage under a 
group health plan or health insurance coverage that--
            ``(1) reimburses hospitals, health professionals, and other 
        providers on a fee-for-service basis without placing the 
        provider at financial risk;
            ``(2) does not vary reimbursement for such a provider based 
        on an agreement to contract terms and conditions or the 
        utilization of health care items or services relating to such 
        provider;
            ``(3) allows access to any provider that is lawfully 
        authorized to provide the covered services and that agrees to 
        accept the terms and conditions of payment established under 
        the plan or by the issuer; and
            ``(4) for which the plan or issuer does not require prior 
        authorization before providing for any health care services.

``SEC. 730F. ADDITIONAL DEFINITIONS.

    ``For purposes of this subpart, section 714, and sections 503A 
through 503D:
            ``(1) Applicable authority.--The term `applicable 
        authority' means--
                    ``(A) in the case of a group health plan, the 
                Secretary of Health and Human Services and the 
                Secretary of Labor; and
                    ``(B) in the case of a health insurance issuer with 
                respect to a specific provision of this subpart, the 
                applicable State authority (as defined in section 
                2791(d) of the Public Health Service Act), or the 
                Secretary of Health and Human Services, if such 
                Secretary is enforcing such provision under section 
                2722(a)(2) or 2761(a)(2) of the Public Health Service 
                Act.
            ``(2) Group health plan.--The term `group health plan' has 
        the meaning given such term in section 733(a), except that such 
        term includes a employee welfare benefit plan treated as a 
        group health plan under section 732(d) or defined as such a 
        plan under section 607(1).
            ``(3) Health care professional.--The term `health care 
        professional' means an individual who is licensed, accredited, 
        or certified under State law to provide specified health care 
        services and who is operating within the scope of such 
        licensure, accreditation, or certification.
            ``(4) Health care provider.--The term `health care 
        provider' includes an allopathic or osteopathic physician or 
        other health care professional, as well as an institutional or 
        other facility or agency that provides health care services and 
        that is licensed, accredited, or certified to provide health 
        care items and services under applicable State law.
            ``(5) Network.--The term `network' means, with respect to a 
        group health plan or health insurance issuer offering health 
        insurance coverage, the participating health care professionals 
        and providers through whom the plan or issuer provides health 
care items and services to participants or beneficiaries.
            ``(6) Nonparticipating.--The term `nonparticipating' means, 
        with respect to a health care provider that provides health 
        care items and services to a participant or beneficiary under 
        group health plan or health insurance coverage, a health care 
        provider that is not a participating health care provider with 
        respect to such items and services.
            ``(7) Participating.--The term `participating' means, with 
        respect to a health care provider that provides health care 
        items and services to a participant or beneficiary under group 
        health plan or health insurance coverage offered by a health 
        insurance issuer, a health care provider that furnishes such 
        items and services under a contract or other arrangement with 
        the plan or issuer.
            ``(8) Prior authorization.--The term `prior authorization' 
        means the process of obtaining prior approval from a health 
        insurance issuer or group health plan for the provision or 
        coverage of medical services.
            ``(9) Terms and conditions.--The term `terms and 
        conditions' includes, with respect to a group health plan or 
        health insurance coverage, requirements imposed under this 
        subpart (and section 714 and sections 503A through 503D) with 
        respect to the plan or coverage.''.
    (b) Rule With Respect to Certain Plans.--
            (1) In general.--Notwithstanding any other provision of 
        law, health insurance issuers may offer, and eligible 
        individuals may purchase, high deductible health plans 
        described in section 220(c)(2)(A) of the Internal Revenue Code 
        of 1986. Effective for the 5-year period beginning on the date 
        of the enactment of this Act, such health plans shall not be 
        required to provide payment for any health care items or 
        services that are exempt from the plan's deductible.
            (2) Existing state laws.--A State law relating to payment 
        for health care items and services in effect on the date of 
        enactment of this Act that is preempted under paragraph (1), 
        shall not apply to high deductible health plans after the 
        expiration of the 5-year period described in such paragraph 
        unless the State reenacts such law after such period.
    (c) Conforming Amendment.--The table of contents in section 1 of 
the Employee Retirement Income Security Act of 1974 is amended--
            (1) in the item relating to subpart C of part 7 of subtitle 
        B of title I, by striking ``Subpart C'' and inserting ``Subpart 
        D''; and
            (2) by adding at the end of the items relating to subpart B 
        of part 7 of subtitle B of title I, the following:

         ``subpart c--patient right to medical advice and care
``Sec. 721. Access to emergency medical care.
``Sec. 722. Offering of choice of coverage options.
``Sec. 723. Patient access to obstetric and gynecological care.
``Sec. 724. Access to pediatric care.
``Sec. 725. Timely access to specialists.
``Sec. 726. Continuity of care.
``Sec. 727. Protection of patient-provider communications.
``Sec. 728. Patient's right to prescription drugs.
``Sec. 729. Self-payment for behavioral health care services.
``Sec. 730. Coverage for individuals participating in approved cancer 
                            clinical trials.
``Sec. 730B. Prohibition against improper incentive arrangements.
``Sec. 730C. Payment of clean claims.
``Sec. 730D. Generally applicable provision.''.

SEC. 102. CONFORMING AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Group Health Plans.--Title XXVII of the Public Health Service 
Act is amended by inserting after section 2706 the following new 
section:

``SEC. 2707. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

    ``Subject to section 2724, a group health plan, and health 
insurance coverage offered in connection with a group health plan, 
shall comply with the requirements of subpart C of part 7 of subtitle B 
of title I of the Employee Retirement Income Security Act of 1974 (as 
in effect as of the date of the enactment of such Act) and such 
requirements shall be deemed to be incorporated into this section.''.
    (b) Individual Health Plans.--Title XXVII of the Public Health 
Service Act is amended by inserting after section 2752 the following 
new section:

``SEC. 2753. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

    ``The provisions of section 2706 shall apply to health insurance 
coverage offered by a health insurance issuer in the individual market 
for an enrollee in the same manner as they apply to health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan for a participant or beneficiary in the small or 
large group market and the requirements referred to in such section 
shall be deemed to be incorporated into this section.''.

SEC. 103. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is 
amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9812 the following new item:

                              ``Sec. 9813. Standard relating to 
                                        patients' bill of rights.'';
        and
            (2) by inserting after section 9812 the following:

``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

    ``A group health plan shall comply with the requirements of subpart 
C of part 7 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 (as in effect as of the date of the enactment of 
such Act) and such requirements shall be deemed to be incorporated into 
this section.''.

       Subtitle B--Right to Information About Plans and Providers

SEC. 111. INFORMATION ABOUT PLANS AND COVERAGE UNDER ERISA.

    (a) Employee Retirement Income Security Act of 1974.--Subpart B of 
part 7 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at 
the end the following:

``SEC. 714. PATIENT ACCESS TO INFORMATION.

    ``(a) Disclosure Requirement.--
            ``(1) Group health plans.--A group health plan shall--
                    ``(A) provide to participants and beneficiaries at 
                the time of initial coverage under the plan (or the 
                effective date of this section, in the case of 
                individuals who are participants or beneficiaries as of 
                such date), and at least annually thereafter, the 
                information described in subsection (b);
                    ``(B) provide to participants and beneficiaries, 
                within a reasonable period (as specified by the 
                Secretary) before or after the date of significant 
                changes in the information described in subsection (b), 
                information on such significant changes; and
                    ``(C) upon request, make available to participants 
                and beneficiaries, the Secretary, and prospective 
                participants and beneficiaries, the information 
                described in subsection (b) or (c).
        The plan may charge a reasonable fee for provision in printed 
        form of any of the information described in subsection (b) or 
        (c) more than once during any plan year.
            ``(2) Health insurance issuers.--A health insurance issuer 
        in connection with the provision of health insurance coverage 
        in connection with a group health plan shall--
                    ``(A) provide to participants and beneficiaries 
                enrolled under such coverage at the time of enrollment, 
                and at least annually thereafter, the information 
                described in subsection (b);
                    ``(B) provide to such participants and 
                beneficiaries, within a reasonable period (as specified 
                by the Secretary) before or after the date of 
                significant changes in the information described in 
                subsection (b), information in printed form on such 
                significant changes; and
                    ``(C) upon request, make available to the 
                Secretary, to individuals who are prospective 
                participants and beneficiaries, and to the public the 
                information described in subsection (b) or (c).
            ``(3) Employers.--Effective 5 years after the date this 
        part first becomes effective, each employer (other than an 
        employer described in paragraph (1) of subsection (d)) shall 
        provide to each employee at least annually information 
        (consistent with such subsection) on the amount that the 
        employer contributes on behalf of the employee (and any 
        dependents of the employee) for health benefits coverage.
    ``(b) Information Provided.--The information described in this 
subsection with respect to a group health plan or health insurance 
coverage offered by a health insurance issuer shall be provided to a 
participant or beneficiary free of charge at least once a year and 
includes the following:
            ``(1) Service area.--The service area of the plan or 
        issuer.
            ``(2) Benefits.--Benefits offered under the plan or 
        coverage, including--
                    ``(A) those that are covered benefits, limits and 
                conditions on such benefits, and those benefits that 
                are explicitly excluded from coverage;
                    ``(B) cost sharing, such as deductibles, 
                coinsurance, and copayment amounts, including any 
                liability for balance billing, any maximum limitations 
                on out of pocket expenses, and the maximum out of 
                pocket costs for services that are provided by 
                nonparticipating providers or that are furnished 
                without meeting the applicable utilization review 
                requirements;
                    ``(C) the extent to which benefits may be obtained 
                from nonparticipating providers;
                    ``(D) the extent to which a participant or 
                beneficiary may select from among participating 
                providers and the types of providers participating in 
                the plan or issuer network;
                    ``(E) process for determining experimental 
                coverage;
                    ``(F) use of a prescription drug formulary (if 
                any); and
                    ``(G) any definition of medical necessity used in 
                making coverage determinations by the plan, issuer, or 
                claims administrator.
            ``(3) Access.--A description of the following:
                    ``(A) The number, mix, and distribution of 
                providers under the plan or coverage.
                    ``(B) Out-of-network coverage (if any) provided by 
                the plan or coverage.
                    ``(C) Any point-of-service option (including any 
                supplemental premium or cost-sharing for such option).
                    ``(D) The procedures for participants and 
                beneficiaries to select, access, and change 
                participating primary and specialty providers.
                    ``(E) The rights and procedures for obtaining 
                referrals (including standing referrals) to 
                participating and nonparticipating providers.
                    ``(F) The name, address, and telephone number of 
                participating health care providers and an indication 
                of whether each such provider is available to accept 
                new patients.
                    ``(G) Any limitations imposed on the selection of 
                qualifying participating health care providers, 
                including any limitations imposed under section 
                812(b)(2).
            ``(4) Out-of-area coverage.--Out-of-area coverage provided 
        by the plan or issuer.
            ``(5) Emergency coverage.--Coverage of emergency services, 
        including--
                    ``(A) the appropriate use of emergency services, 
                including use of the 911 telephone system or its local 
                equivalent in emergency situations and an explanation 
                of what constitutes an emergency situation;
                    ``(B) the process and procedures of the plan or 
                issuer for obtaining emergency services; and
                    ``(C) the locations of (i) emergency departments, 
                and (ii) other settings, in which plan physicians and 
                hospitals provide emergency services and post-
                stabilization care.
            ``(6) Prior authorization rules.--Rules regarding prior 
        authorization or other review requirements that could result in 
        noncoverage or nonpayment.
            ``(7) Grievance and appeals procedures.--All appeal or 
        grievance rights and procedures under the plan or coverage, 
        including the method for filing grievances and the time frames 
        and circumstances for acting on grievances and appeals, who is 
        the applicable authority with respect to the plan or issuer.
            ``(8) Accountability.--A description of the legal recourse 
        options available for participants and beneficiaries under the 
        plan including--
                    ``(A) the preemption that applies under section 514 
                to certain actions arising out of the provision of 
                health benefits; and
                    ``(B) the extent to which coverage decisions made 
                by the plan are subject to internal review or any 
                external review and the proper time frames under
            ``(9) Quality assurance.--Any information made public by an 
        accrediting organization in the process of accreditation of the 
        plan or issuer or any additional quality indicators the plan or 
        issuer makes available.
            ``(10) Information on issuer.--Notice of appropriate 
        mailing addresses and telephone numbers to be used by 
        participants and beneficiaries in seeking information or 
        authorization for treatment.
            ``(11) Availability of information on request.--Notice that 
        the information described in subsection (c) is available upon 
        request.
    ``(c) Information Made Available Upon Request.--The information 
described in this subsection is the following:
            ``(1) Utilization review activities.--A description of 
        procedures used and requirements (including circumstances, time 
        frames, and appeal rights) under any utilization review program 
        under section 801.
            ``(2) Grievance and appeals information.--Information on 
        the number of grievances and appeals and on the disposition in 
        the aggregate of such matters.
            ``(3) Formulary restrictions.--A description of the nature 
        of any drug formulary restrictions.
            ``(4) Participating provider list.--A list of current 
        participating health care providers.
    ``(d) Employer Information.--
            ``(1) Small employer exemption.--Subsection (a)(3) shall 
        not apply to an employer that is a small employer (as defined 
        in section 712(c)(1)(B)) or would be such an employer if `100' 
        were substituted for `50' in such section.
            ``(2) Computation.--The amount described in subsection 
        (a)(3) may be computed on an average, per employee basis, and 
        may be based on rules similar to the rules applied in computing 
        the applicable premium under section 604.
            ``(3) Form of disclosure.--The information under subsection 
        (a)(3) may be provided in any reasonable form, including as 
        part of the summary plan description, a letter, or information 
        accompanying a W-2 form.
    ``(e) Construction.--Nothing in this section shall be construed as 
requiring public disclosure of individual contracts or financial 
arrangements between a group health plan or health insurance issuer and 
any provider.''.
    (b) Conforming Amendments.--
            (1) Section 732(a) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by 
        striking ``section 711'' and inserting ``sections 711 and 
        714''.
            (2) The table of contents in section 1 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1001) is 
        amended by inserting after the item relating to section 713, 
        the following:

``Sec 714. Patient access to information.''.
            (3) Section 502(b)(3) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended by 
        striking ``733(a)(1))'' and inserting ``733(a)(1)), except with 
        respect to the requirements of section 714''.

SEC. 112. CONFORMING AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) Group Health Plans.--Title XXVII of the Public Health Service 
Act, as amended by section 102(a), is amended by inserting after 
section 2707 the following new section:

``SEC. 2708. STANDARD RELATING TO PATIENT ACCESS TO INFORMATION.

    ``A group health plan, and health insurance coverage offered in 
connection with a group health plan, shall comply with the requirements 
of section 714 of the Employee Retirement Income Security Act of 1974 
(as in effect as of the date of the enactment of such Act) and such 
requirements shall be deemed to be incorporated into this section.''.
    (b) Individual Health Plans.--Title XXVII of the Public Health 
Service Act, as amended by section 102(b), is amended by inserting 
after section 2753 the following new section:

``SEC. 2754. STANDARD RELATING TO PATIENT ACCESS TO INFORMATION.

    ``The provisions of section 2707 shall apply to health insurance 
coverage offered by a health insurance issuer in the individual market 
for an enrollee in the same manner as they apply to health insurance 
coverage offered by a health insurance issuer in connection with a 
group health plan for a participant or beneficiary in the small or 
large group market and the requirements referred to in such section 
shall be deemed to be incorporated into this section.''.

SEC. 113. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986, 
as amended by section 103, is amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9813 the following new item:

                              ``Sec. 9814. Standard relating to patient 
                                        access to information.'';
        and
            (2) by inserting after section 9812 the following:

``SEC. 9814. STANDARD RELATING TO PATIENT ACCESS TO INFORMATION.

    ``A group health plan shall comply with the requirements of section 
714 of the Employee Retirement Income Security Act of 1974 (as in 
effect as of the day after the date of the enactment of such Act) and 
such requirements shall be deemed to be incorporated into this 
section.''.

           Subtitle C--Right to Hold Health Plans Accountable

SEC. 121. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended by inserting after 
section 503 (29 U.S.C. 1133) the following new sections:

``SEC. 503A. UTILIZATION REVIEW ACTIVITIES.

    ``(a) Compliance With Requirements.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer that provides health insurance coverage, shall 
        conduct utilization review activities in connection with the 
        provision of benefits under such plan or coverage only in 
        accordance with a utilization review program that meets the 
        requirements of this section and section 503B.
            ``(2) Use of outside agents.--Nothing in this section shall 
        be construed as preventing a group health plan or health 
        insurance issuer from arranging through a contract or otherwise 
        for persons or entities to conduct utilization review 
        activities on behalf of the plan or issuer, so long as such 
        activities are conducted in accordance with a utilization 
        review program that meets the requirements of this section.
            ``(3) Utilization review defined.--For purposes of this 
        section, the terms `utilization review' and `utilization review 
        activities' mean procedures used to monitor or evaluate the use 
        or coverage, clinical necessity, appropriateness, efficacy, or 
        efficiency of health care services, procedures or settings, and 
        includes prospective review, concurrent review, second 
        opinions, case management, discharge planning, or retrospective 
        review.
    ``(b) Written Policies and Criteria.--
            ``(1) Written policies.--A utilization review program shall 
        be conducted consistent with written policies and procedures 
        that govern all aspects of the program.
            ``(2) Use of written criteria.--
                    ``(A) In general.--Such a program shall utilize 
                written clinical review criteria developed with input 
                from a range of appropriate actively practicing 
                physicians or dentists, as determined by the plan, 
                pursuant to the program. Such criteria shall include 
                written clinical review criteria that are based on 
                valid clinical evidence where available and that are 
                directed specifically at meeting the needs of at-risk 
                populations and covered individuals with chronic 
                conditions or severe illnesses, including gender-
                specific criteria and pediatric-specific criteria where 
                available and appropriate.
                    ``(B) Continuing use of standards in retrospective 
                review.--If a health care service has been specifically 
                pre-authorized or approved for a participant or 
                beneficiary under such a program, the program shall 
                not, pursuant to retrospective review, revise or modify 
                the specific standards, criteria, or procedures used 
                for the utilization review for procedures, treatment, 
                and services delivered to the participant or 
                beneficiary during the same course of treatment.
                    ``(C) Review of sample of claims denials.--Such a 
                program shall provide for an evaluation of the clinical 
                appropriateness of at least a sample of denials of 
                claims for benefits.
    ``(c) Conduct of Program Activities.--
            ``(1) Administration by physicians or dentists.--A 
        utilization review program shall be administered by qualified 
        physicians or dentists who shall oversee review decisions.
            ``(2) Use of qualified, independent personnel.--
                    ``(A) In general.--A utilization review program 
                shall provide for the conduct of utilization review 
                activities only through personnel who are qualified and 
                have received appropriate training in the conduct of 
                such activities under the program.
                    ``(B) Prohibition of contingent compensation 
                arrangements.--Such a program shall not, with respect 
                to utilization review activities, permit or provide 
                compensation or anything of value to its employees, 
                agents, or contractors in a manner that encourages 
                denials of claims for benefits.
                    ``(C) Prohibition of conflicts.--Such a program 
                shall not permit a health care professional who is 
                providing health care services to an individual to 
                perform utilization review activities in connection 
                with the health care services being provided to the 
                individual.
            ``(3) Accessibility of review.--Such a program shall 
        provide that appropriate personnel performing utilization 
        review activities under the program, including the utilization 
        review administrator, are reasonably accessible by toll-free 
        telephone during normal business hours to discuss patient care 
        and allow response to telephone requests, and that appropriate 
        provision is made to receive and respond promptly to calls 
        received during other hours.
            ``(4) Limits on frequency.--Such a program shall not 
        provide for the performance of utilization review activities 
with respect to a class of services furnished to an individual more 
frequently than is reasonably required to assess whether the services 
under review are medically necessary or appropriate.

``SEC. 503B. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND PRIOR 
              AUTHORIZATION DETERMINATIONS.

    ``(a) Procedures of Initial Claims for Benefits.--
            ``(1) In general.--A group health plan, or health insurance 
        issuer offering health insurance coverage in connection with a 
        group health plan, shall--
                    ``(A) make a determination on an initial claim for 
                benefits by a participant or beneficiary (or authorized 
                representative) regarding payment or coverage for items 
                or services under the terms and conditions of the plan 
                or coverage involved, including any cost-sharing amount 
                that the participant or beneficiary is required to pay 
                with respect to such claim for benefits; and
                    ``(B) notify a participant or beneficiary (or 
                authorized representative) and the treating health care 
                professional involved regarding a determination on an 
                initial claim for benefits made under the terms and 
                conditions of the plan or coverage, including any cost-
                sharing amounts that the participant or beneficiary may 
                be required to make with respect to such claim for 
                benefits, and of the right of the participant or 
                beneficiary to an internal appeal under section 503C.
            ``(2) Access to information.--With respect to an initial 
        claim for benefits, the participant or beneficiary (or 
        authorized representative) and the treating health care 
        professional (if any) shall provide the plan or issuer with 
        access to information requested by the plan or issuer that is 
        necessary to make a determination relating to the claim. Such 
        access shall be provided not later than 5 days after the date 
        on which the request for information is received, or, in a case 
        described in subparagraph (B) or (C) of subsection (b)(1), by 
        such earlier time as may be necessary to comply with the 
        applicable timeline under such subparagraph.
            ``(3) Oral requests.--In the case of a claim for benefits 
        involving an expedited or concurrent determination, a 
        participant or beneficiary (or authorized representative) may 
        make an initial claim for benefits orally, but a group health 
        plan, or health insurance issuer offering health insurance 
        coverage, may require that the participant or beneficiary (or 
        authorized representative) provide written confirmation of such 
        request in a timely manner on a form provided by the plan or 
        issuer. In the case of such an oral request for benefits, the 
        making of the request (and the timing of such request) shall be 
        treated as the making at that time of a claim for such benefits 
        without regard to whether and when a written confirmation of 
        such request is made.
    ``(b) Timeline for Making Determinations.--
            ``(1) Prior authorization determination.--
                    ``(A) In general.--A group health plan, or health 
                insurance issuer offering health insurance coverage in 
                connection with a group health plan, shall make a prior 
                authorization determination on a claim for benefits 
                (whether oral or written) as soon as possible in 
                accordance with the medical exigencies of the case but 
                in no case later than 14 days from the date on which 
                the plan or issuer receives information that is 
                reasonably necessary to enable the plan or issuer to 
                make a determination on the request for prior 
                authorization and in no case later than 28 days after 
                the date of the claim for benefits is received.
                    ``(B) Expedited determination.--Notwithstanding 
                subparagraph (A), a group health plan, or health 
                insurance issuer offering health insurance coverage in 
                connection with a group health plan, shall expedite a 
                prior authorization determination on a claim for 
                benefits described in such subparagraph when a request 
                for such an expedited determination is made by a 
                participant or beneficiary (or authorized 
                representative) at any time during the process for 
                making a determination and a health care professional 
                certifies, with the request, that a determination under 
                the procedures described in subparagraph (A) would 
                seriously jeopardize the life or health of the 
                participant or beneficiary or the ability of the 
                participant or beneficiary to maintain or regain 
                maximum function. Such determination shall be made as 
                soon as possible based on the medical exigencies of the 
                case involved and in no case later than 72 hours after 
                the time the request is received by the plan or issuer 
                under this subparagraph.
                    ``(C) Ongoing care.--
                            ``(i) Concurrent review.--
                                    ``(I) In general.--Subject to 
                                clause (ii), in the case of a 
                                concurrent review of ongoing care 
                                (including hospitalization), which 
                                results in a termination or reduction 
                                of such care, the plan or issuer must 
                                provide by telephone and in printed 
                                form notice of the concurrent review 
                                determination to the individual or the 
                                individual's designee and the 
                                individual's health care provider as 
                                soon as possible in accordance with the 
                                medical exigencies of the case, with 
                                sufficient time prior to the 
                                termination or reduction to allow for 
                                an appeal under section 503C(b)(3) to 
                                be completed before the termination or 
                                reduction takes effect.
                                    ``(II) Contents of notice.--Such 
                                notice shall include, with respect to 
                                ongoing health care items and services, 
                                the number of ongoing services 
                                approved, the new total of approved 
                                services, the date of onset of 
                                services, and the next review date, if 
                                any, as well as a statement of the 
                                individual's rights to further appeal.
                            ``(ii) Rule of construction.--Clause (i) 
                        shall not be construed as requiring plans or 
                        issuers to provide coverage of care that would 
exceed the coverage limitations for such care.
            ``(2) Retrospective determination.--A group health plan, or 
        health insurance issuer offering health insurance coverage in 
        connection with a group health plan, shall make a retrospective 
        determination on a claim for benefits as soon as possible in 
        accordance with the medical exigencies of the case but not 
        later than 30 days after the date on which the plan or issuer 
        receives information that is reasonably necessary to enable the 
        plan or issuer to make a determination on the claim, or, if 
        earlier, 60 days after the date of receipt of the claim for 
        benefits.
    ``(c) Notice of a Denial of a Claim for Benefits.--Written notice 
of a denial made under an initial claim for benefits shall be issued to 
the participant or beneficiary (or authorized representative) and the 
treating health care professional as soon as possible in accordance 
with the medical exigencies of the case and in no case later than 2 
days after the date of the determination (or, in the case described in 
subparagraph (B) or (C) of subsection (b)(1), within the 72-hour or 
applicable period referred to in such subparagraph).
    ``(d) Requirements of Notice of Determinations.--The written notice 
of a denial of a claim for benefits determination under subsection (c) 
shall be provided in printed form and written in a manner calculated to 
be understood by the average participant or beneficiary and shall 
include--
            ``(1) the specific reasons for the determination (including 
        a summary of the clinical or scientific evidence used in making 
        the determination);
            ``(2) the procedures for obtaining additional information 
        concerning the determination; and
            ``(3) notification of the right to appeal the determination 
        and instructions on how to initiate an appeal in accordance 
        with section 503C.
    ``(e) Definitions.--For purposes of this part:
            ``(1) Authorized representative.--The term `authorized 
        representative' means, with respect to an individual who is a 
        participant or beneficiary, any health care professional or 
        other person acting on behalf of the individual with the 
        individual's consent or without such consent if the individual 
        is medically unable to provide such consent.
            ``(2) Claim for benefits.--The term `claim for benefits' 
        means any request for coverage (including authorization of 
        coverage), for eligibility, or for payment in whole or in part, 
        for an item or service under a group health plan or health 
        insurance coverage.
            ``(3) Denial of claim for benefits.--The term `denial' 
        means, with respect to a claim for benefits, a denial (in whole 
        or in part) of, or a failure to act on a timely basis upon, the 
        claim for benefits and includes a failure to provide benefits 
        (including items and services) required to be provided under 
        this title.
            ``(4) Treating health care professional.--The term 
        `treating health care professional' means, with respect to 
        services to be provided to a participant or beneficiary, a 
        health care professional who is primarily responsible for 
        delivering those services to the participant or beneficiary.

``SEC. 503C. INTERNAL APPEALS OF CLAIMS DENIALS.

    ``(a) Right to Internal Appeal.--
            ``(1) In general.--A participant or beneficiary of a group 
        health plan (or authorized representative) may appeal any 
        denial of a claim for benefits under section 503B under the 
        procedures described in this section.
            ``(2) Time for appeal.--
                    ``(A) In general.--A group health plan, or health 
                insurance issuer offering health insurance coverage in 
                connection with a group health plan, shall ensure that 
                a participant or beneficiary (or authorized 
                representative) has a period of not less than 180 days 
                beginning on the date of a denial of a claim for 
                benefits under section 503B in which to appeal such 
                denial under this section.
                    ``(B) Date of denial.--For purposes of subparagraph 
                (A), the date of the denial shall be deemed to be the 
                date as of which the participant or beneficiary knew of 
                the denial of the claim for benefits.
            ``(3) Failure to act.--The failure of a plan or issuer to 
        issue a determination on a claim for benefits under section 
        503B within the applicable timeline established for such a 
        determination under such section is a denial of a claim for 
        benefits for purposes this section and section 503D as of the 
        date of the applicable deadline.
            ``(4) Plan waiver of internal review.--A group health plan, 
        or health insurance issuer offering health insurance coverage 
        in connection with a group health plan, may waive the internal 
        review process under this section. In such case the plan or 
        issuer shall provide notice to the participant or beneficiary 
        (or authorized representative) involved, the participant or 
        beneficiary (or authorized representative) involved shall be 
        relieved of any obligation to complete the internal review 
        involved, and may, at the option of such participant, 
        beneficiary, or representative proceed directly to seek further 
        appeal through external review under section 503D or otherwise.
    ``(b) Timelines for Making Determinations.--
            ``(1) Oral requests.--In the case of an appeal of a denial 
        of a claim for benefits under this section that involves an 
        expedited or concurrent determination, a participant or 
        beneficiary (or authorized representative) may request such 
        appeal orally. A group health plan, or health insurance issuer 
        offering health insurance coverage in connection with a group 
        health plan, may require that the participant or beneficiary 
        (or authorized representative) provide written confirmation of 
        such request in a timely manner on a form provided by the plan 
        or issuer. In the case of such an oral request for an appeal of 
        a denial, the making of the request (and the timing of such 
        request) shall be treated as the making at that time of a 
        request for an appeal without regard to whether and when a 
written confirmation of such request is made.
            ``(2) Access to information.--With respect to an appeal of 
        a denial of a claim for benefits, the participant or 
        beneficiary (or authorized representative) and the treating 
        health care professional (if any) shall provide the plan or 
        issuer with access to information requested by the plan or 
        issuer that is necessary to make a determination relating to 
        the appeal. Such access shall be provided not later than 5 days 
        after the date on which the request for information is 
        received, or, in a case described in subparagraph (B) or (C) of 
        paragraph (3), by such earlier time as may be necessary to 
        comply with the applicable timeline under such subparagraph.
            ``(3) Prior authorization determinations.--
                    ``(A) In general.--A group health plan, or health 
                insurance issuer offering health insurance coverage in 
                connection with a group health plan, shall make a 
                determination on an appeal of a denial of a claim for 
                benefits under this subsection as soon as possible in 
                accordance with the medical exigencies of the case but 
                in no case later than 14 days from the date on which 
                the plan or issuer receives information that is 
                reasonably necessary to enable the plan or issuer to 
                make a determination on the appeal and in no case later 
                than 28 days after the date the request for the appeal 
                is received.
                    ``(B) Expedited determination.--Notwithstanding 
                subparagraph (A), a group health plan, or health 
                insurance issuer offering health insurance coverage in 
                connection with a group health plan, shall expedite a 
                prior authorization determination on an appeal of a 
                denial of a claim for benefits described in 
                subparagraph (A), when a request for such an expedited 
                determination is made by a participant or beneficiary 
                (or authorized representative) at any time during the 
                process for making a determination and a health care 
                professional certifies, with the request, that a 
                determination under the procedures described in 
                subparagraph (A) would seriously jeopardize the life or 
                health of the participant or beneficiary or the ability 
                of the participant or beneficiary to maintain or regain 
                maximum function. Such determination shall be made as 
                soon as possible based on the medical exigencies of the 
                case involved and in no case later than 72 hours after 
                the time the request for such appeal is received by the 
                plan or issuer under this subparagraph.
                    ``(C) Ongoing care determinations.--
                            ``(i) In general.--Subject to clause (ii), 
                        in the case of a concurrent review 
                        determination described in section 
                        503B(b)(1)(C)(i)(I), which results in a 
                        termination or reduction of such care, the plan 
                        or issuer must provide notice of the 
                        determination on the appeal under this section 
                        by telephone and in printed form to the 
                        individual or the individual's designee and the 
                        individual's health care provider as soon as 
                        possible in accordance with the medical 
                        exigencies of the case, with sufficient time 
                        prior to the termination or reduction to allow 
                        for an external appeal under section 503D to be 
                        completed before the termination or reduction 
                        takes effect.
                            ``(ii) Rule of construction.--Clause (i) 
                        shall not be construed as requiring plans or 
                        issuers to provide coverage of care that would 
                        exceed the coverage limitations for such care.
            ``(4) Retrospective determination.--A group health plan, or 
        health insurance issuer offering health insurance coverage in 
        connection with a group health plan, shall make a retrospective 
        determination on an appeal of a claim for benefits in no case 
        later than 30 days after the date on which the plan or issuer 
        receives necessary information that is reasonably necessary to 
        enable the plan or issuer to make a determination on the appeal 
        and in no case later than 60 days after the date the request 
        for the appeal is received.
    ``(c) Conduct of Review.--
            ``(1) In general.--A review of a denial of a claim for 
        benefits under this section shall be conducted by an individual 
        with appropriate expertise who was not involved in the initial 
        determination.
            ``(2) Appropriate review of medical decisions.--A review of 
        an appeal of a denial of a claim for benefits that is based on 
        a lack of medical necessity and appropriateness, or based on an 
        experimental or investigational treatment, or requires an 
        evaluation of medical facts, shall be made by a physician 
        (allopathic or osteopathic) or dentist with appropriate 
        expertise (including, in the case of a child, appropriate 
        pediatric expertise) who was not involved in the initial 
        determination.
    ``(d) Notice of Determination.--
            ``(1) In general.--Written notice of a determination made 
        under an internal appeal of a denial of a claim for benefits 
        shall be issued to the participant or beneficiary (or 
        authorized representative) and the treating health care 
        professional as soon as possible in accordance with the medical 
        exigencies of the case and in no case later than 2 days after 
        the date of completion of the review (or, in the case described 
        in subparagraph (B) or (C) of subsection (b)(3), within the 72-
        hour or applicable period referred to in such subparagraph).
            ``(2) Final determination.--The decision by a plan or 
        issuer under this section shall be treated as the final 
        determination of the plan or issuer on a denial of a claim for 
        benefits. The failure of a plan or issuer to issue a 
        determination on an appeal of a denial of a claim for benefits 
        under this section within the applicable timeline established 
        for such a determination shall be treated as a final 
        determination on an appeal of a denial of a claim for benefits 
        for purposes of proceeding to external review under section 
        503D.
            ``(3) Requirements of notice.--With respect to a 
        determination made under this section, the notice described in 
        paragraph (1) shall be provided in printed form and written in 
        a manner calculated to be understood by the average participant 
        or beneficiary and shall include--
                    ``(A) the specific reasons for the determination 
                (including a summary of the clinical or scientific 
                evidence used in making the determination);
                    ``(B) the procedures for obtaining additional 
                information concerning the determination; and
                    ``(C) notification of the right to an independent 
                external review under section 503D and instructions on 
                how to initiate such a review.

``SEC. 503D. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A group health plan, and a health 
insurance issuer offering health insurance coverage in connection with 
a group health plan, shall provide in accordance with this section 
participants and beneficiaries (or authorized representatives) with 
access to an independent external review for any denial of a claim for 
benefits in any case in which the amount involved exceeds $100.
    ``(b) Initiation of the Independent External Review Process.--
            ``(1) Time to file.--A request for an independent external 
        review under this section shall be filed with the plan or 
        issuer not later than 180 days after the date on which the 
        participant or beneficiary receives notice of the denial under 
        section 503C(d) or notice of waiver of internal review under 
        section 503C(a)(4) or the date on which the plan or issuer has 
        failed to make a timely decision under section 503C(d)(2).
            ``(2) Filing of request.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, a group health plan, and 
                a health insurance issuer offering health insurance 
                coverage, may--
                            ``(i) except as provided in subparagraph 
                        (B)(i), require that a request for review be in 
                        writing;
                            ``(ii) limit the filing of such a request 
                        to the participant or beneficiary involved (or 
                        an authorized representative);
                            ``(iii) except if waived by the plan or 
                        issuer under section 503C(a)(4), condition 
                        access to an independent external review under 
                        this section upon a final determination of a 
                        denial of a claim for benefits under the 
                        internal review procedure under section 503C;
                            ``(iv) except as provided in subparagraph 
                        (B)(ii), require payment of a filing fee to the 
                        plan or issuer of a sum that does not exceed 
                        $25; and
                            ``(v) require that a request for review 
                        include the consent of the participant or 
                        beneficiary (or authorized representative) for 
                        the release of medical information or records 
                        of the participant or beneficiary to the 
                        qualified external review entity for the sole 
                        purpose of conducting external review 
                        activities.
                    ``(B) Requirements and exception relating to 
                general rule.--
                            ``(i) Oral requests permitted in expedited 
                        or concurrent cases.--In the case of an 
                        expedited or concurrent external review as 
                        provided for under subsection (e), the request 
                        may be made orally. A group health plan, or 
                        health insurance issuer offering health 
                        insurance coverage, may require that the 
                        participant or beneficiary (or authorized 
                        representative) provide written confirmation of 
                        such request in a timely manner on a form 
                        provided by the plan or issuer. Such written 
                        confirmation shall be treated as a consent for 
                        purposes of subparagraph (A)(v). In the case of 
                        such an oral request for such a review, the 
                        making of the request (and the timing of such 
                        request) shall be treated as the making at that 
                        time of a request for such an external review 
                        without regard to whether and when a written 
                        confirmation of such request is made.
                            ``(ii) Exception to filing fee 
                        requirement.--
                                    ``(I) Indigency.--Payment of a 
                                filing fee shall not be required under 
                                subparagraph (A)(iv) where there is a 
                                certification (in a form and manner 
                                specified in guidelines established by 
                                the Secretary) that the participant or 
                                beneficiary is indigent (as defined in 
                                such guidelines).
                                    ``(II) Fee not required.--Payment 
                                of a filing fee shall not be required 
                                under subparagraph (A)(iv) if the plan 
                                or issuer waives the internal appeals 
                                process under section 503C(a)(4).
                                    ``(III) Refunding of fee.--The 
                                filing fee paid under subparagraph 
                                (A)(iv) shall be refunded if the 
                                determination under the independent 
                                external review is to reverse the 
                                denial which is the subject of the 
                                review.
                                    ``(IV) Collection of filing fee.--
                                The failure to pay such a filing fee 
                                shall not prevent the consideration of 
                                a request for review but, subject to 
                                the preceding provisions of this 
                                clause, shall constitute a legal 
                                liability to pay.
    ``(c) Referral to Qualified External Review Entity Upon Request.--
            ``(1) In general.--Upon the filing of a request for 
        independent external review with the group health plan, or 
        health insurance issuer offering health insurance coverage, the 
        plan or issuer shall immediately refer such request, and 
        forward the plan or issuer's initial decision (including the 
        information described in section 503C(d)(3)(A)), to a qualified 
external review entity selected in accordance with this section.
            ``(2) Access to plan or issuer and health professional 
        information.--With respect to an independent external review 
        conducted under this section, the participant or beneficiary 
        (or authorized representative), the plan or issuer, and the 
        treating health care professional (if any) shall provide the 
        external review entity with information that is necessary to 
        conduct a review under this section, as determined and 
        requested by the entity. Such information shall be provided not 
        later than 5 days after the date on which the request for 
        information is received, or, in a case described in clause (ii) 
        or (iii) of subsection (e)(1)(A), by such earlier time as may 
        be necessary to comply with the applicable timeline under such 
        clause.
            ``(3) Screening of requests by qualified external review 
        entities.--
                    ``(A) In general.--With respect to a request 
                referred to a qualified external review entity under 
                paragraph (1) relating to a denial of a claim for 
                benefits, the entity shall refer such request for the 
                conduct of an independent medical review unless the 
                entity determines that--
                            ``(i) any of the conditions described in 
                        clauses (ii) or (iii) of subsection (b)(2)(A) 
                        have not been met;
                            ``(ii) the denial of the claim for benefits 
                        does not involve a medically reviewable 
                        decision under subsection (d)(2);
                            ``(iii) the denial of the claim for 
                        benefits relates to a decision regarding 
                        whether an individual is a participant or 
                        beneficiary who is enrolled under the terms and 
                        conditions of the plan or coverage (including 
                        the applicability of any waiting period under 
                        the plan or coverage); or
                            ``(iv) the denial of the claim for benefits 
                        is a decision as to the application of cost-
                        sharing requirements or the application of a 
                        specific exclusion or express limitation on the 
                        amount, duration, or scope of coverage of items 
                        or services under the terms and conditions of 
                        the plan or coverage unless the decision is a 
                        denial described in subsection (d)(2).
                Upon making a determination that any of clauses (i) 
                through (iv) applies with respect to the request, the 
                entity shall determine that the denial of a claim for 
                benefits involved is not eligible for independent 
                medical review under subsection (d), and shall provide 
                notice in accordance with subparagraph (C).
                    ``(B) Process for making determinations.--
                            ``(i) No deference to prior 
                        determinations.--In making determinations under 
                        subparagraph (A), there shall be no deference 
                        given to determinations made by the plan or 
                        issuer or the recommendation of a treating 
                        health care professional (if any).
                            ``(ii) Use of appropriate personnel.--A 
                        qualified external review entity shall use 
                        appropriately qualified personnel to make 
                        determinations under this section.
                    ``(C) Notices and general timelines for 
                determination.--
                            ``(i) Notice in case of denial of 
                        referral.--If the entity under this paragraph 
                        does not make a referral for the conduct of an 
                        independent medical review, the entity shall 
                        provide notice to the plan or issuer, the 
                        participant or beneficiary (or authorized 
                        representative) filing the request, and the 
                        treating health care professional (if any) that 
                        the denial is not subject to independent 
                        medical review. Such notice--
                                    ``(I) shall be written (and, in 
                                addition, may be provided orally) in a 
                                manner calculated to be understood by 
                                an average participant or beneficiary;
                                    ``(II) shall include the reasons 
                                for the determination;
                                    ``(III) include any relevant terms 
                                and conditions of the plan or coverage; 
                                and
                                    ``(IV) include a description of any 
                                further recourse available to the 
                                individual.
                            ``(ii) General timeline for 
                        determinations.--Upon receipt of information 
                        under paragraph (2), the qualified external 
                        review entity, and if required the independent 
                        medical review panel conducting independent 
                        medical review under subsection (d), shall make 
                        a determination within the overall timeline 
                        that is applicable to the case under review as 
                        described in subsection (e), except that if the 
                        entity determines that a referral to an 
                        independent medical review panel is not 
                        required, the entity shall provide notice of 
                        such determination to the participant or 
                        beneficiary (or authorized representative) 
                        within such timeline and within 2 days of the 
                        date of such determination.
    ``(d) Independent Medical Review.--
            ``(1) In general.--If a qualified external review entity 
        determines under subsection (c) that a denial of a claim for 
        benefits is eligible for independent medical review, the entity 
        shall refer the denial involved to an independent medical 
        review panel comprised of 3 members meeting the requirements of 
        subsection (g) for the conduct of an independent medical review 
        under this subsection.
            ``(2) Medically reviewable decisions.--A denial of a claim 
        for benefits is eligible for independent medical review if the 
        benefit for the item or service for which the claim is made 
        would be a covered benefit under the terms and conditions of 
        the plan or coverage but for one (or more) of the following 
        determinations:
                    ``(A) Denials based on medical necessity and 
                appropriateness.--A determination that the item or 
                service is not covered because it is not medically 
                necessary and appropriate or based on the application 
                of substantially equivalent terms.
                    ``(B) Denials based on experimental or 
                investigational treatment.--A determination that the 
                item or service is not covered because it is 
                experimental or investigational or based on the 
                application of substantially equivalent terms.
                    ``(C) Denials otherwise based on an evaluation of 
                medical facts.--A determination that the item or 
                service or condition is not covered based on grounds 
                that require an evaluation of the medical facts by a 
                health care professional in the specific case involved 
                to determine the coverage and extent of coverage of the 
                item or service or condition.
            ``(3) Independent medical review determination.--
                    ``(A) In general.--An independent medical review 
                panel under this section shall make a new independent 
                determination with respect to whether or not the denial 
                of a claim for a benefit that is the subject of the 
                review should be upheld, reversed, or modified.
                    ``(B) Standard for determination.--The independent 
                medical review panel's determination relating to the 
                medical necessity and appropriateness, or the 
                experimental or investigation nature, or the evaluation 
                of the medical facts of the item, service, or condition 
                shall be based on the medical condition of the 
                participant or beneficiary (including the medical 
                records of the participant or beneficiary) and valid, 
                relevant scientific evidence and clinical evidence, 
                including peer-reviewed medical literature or findings 
                and including expert opinion.
                    ``(C) No coverage for excluded benefits.--Nothing 
                in this subsection shall be construed to permit an 
                independent medical review panel to require that a 
                group health plan, or health insurance issuer offering 
                health insurance coverage, provide coverage for items 
                or services for which benefits are specifically 
                excluded or expressly limited under the plan or 
                coverage in the plain language of the plan document 
                (and which are disclosed under section 121(b)(1)(C)) 
                except to the extent that the application or 
                interpretation of the exclusion or limitation involves 
                a determination described in paragraph (2).
                    ``(D) Evidence and information to be used in 
                medical reviews.--In making a determination under this 
                subsection, the independent medical review panel shall 
                also consider appropriate and available evidence and 
                information, including the following:
                            ``(i) The determination made by the plan or 
                        issuer with respect to the claim upon internal 
                        review and the evidence, guidelines, or 
                        rationale used by the plan or issuer in 
                        reaching such determination.
                            ``(ii) The recommendation of the treating 
                        health care professional and the evidence, 
                        guidelines, and rationale used by the treating 
                        health care professional in reaching such 
                        recommendation.
                            ``(iii) Additional relevant evidence or 
                        information obtained by the independent medical 
                        review panel or submitted by the plan, issuer, 
                        participant or beneficiary (or an authorized 
                        representative), or treating health care 
                        professional.
                            ``(iv) The plan or coverage document.
                    ``(E) Independent determination.--In making 
                determinations under this subtitle, a qualified 
                external review entity and an independent medical 
                review panel shall--
                            ``(i) consider the claim under review 
                        without deference to the determinations made by 
                        the plan or issuer or the recommendation of the 
                        treating health care professional (if any); and
                            ``(ii) consider, but not be bound by the 
                        definition used by the plan or issuer of 
                        `medically necessary and appropriate', or 
                        `experimental or investigational', or other 
                        substantially equivalent terms that are used by 
                        the plan or issuer to describe medical 
                        necessity and appropriateness or experimental 
                        or investigational nature of the treatment.
                    ``(F) Determination of independent medical review 
                panel.--An independent medical review panel shall, in 
                accordance with the deadlines described in subsection 
                (e), prepare a written determination to uphold or 
                reverse the denial under review. Such written 
                determination shall include--
                            ``(i) the determination of the panel;
                            ``(ii) the specific reasons of the panel 
                        for such determination, including a summary of 
                        the clinical or scientific evidence used in 
                        making the determination; and
                            ``(iii) with respect to a determination to 
                        reverse the denial under review, a timeframe 
                        within which the plan or issuer must comply 
                        with such determination.
                    ``(G) Nonbinding nature of additional 
                recommendations.--In addition to the determination 
                under subparagraph (F), the independent medical review 
                panel may provide the plan or issuer and the treating 
                health care professional with additional 
                recommendations in connection with such a 
                determination, but any such recommendations shall not 
                affect (or be treated as part of) the determination and 
                shall not be binding on the plan or issuer.
    ``(e) Timelines and Notifications.--
            ``(1) Timelines for independent medical review.--
                    ``(A) Prior authorization determination.--
                            ``(i) In general.--The independent medical 
                        review panel shall make a determination under 
                        subsection (d) on a denial of a claim for 
                        benefits in accordance with the medical 
                        exigencies of the case but not later than 14 
                        days after the date of receipt of information 
                        under subsection (c)(2) if the review involves 
                        a prior authorization of items or services and 
                        in no case later than 21 days after the date 
                        the request for external review is received.
                            ``(ii) Expedited determination.--
                        Notwithstanding clause (i) and subject to 
                        clause (iii), the independent medical review 
                        panel shall make an expedited determination 
                        under subsection (d) on a denial of a claim for 
                        benefits described in clause (i), when a 
                        request for such an expedited determination is 
                        made by a participant or beneficiary (or 
                        authorized representative) at any time during 
                        the process for making a determination, and a 
                        health care professional certifies, with the 
                        request, that a determination under the 
                        timeline described in clause (i) would 
                        seriously jeopardize the life or health of the 
                        participant or beneficiary or the ability of 
                        the participant or beneficiary to maintain or 
                        regain maximum function. Such determination 
                        shall be made as soon as possible based on the 
                        medical exigencies of the case involved and in 
                        no case later than 72 hours after the time the 
                        request for external review is received by the 
                        qualified external review entity.
                            ``(iii) Ongoing care determination.--
                        Notwithstanding clause (i), in the case of a 
                        review described in such subclause that 
                        involves a termination or reduction of care, 
                        the notice of the determination shall be 
                        completed not later than 24 hours after the 
                        time the request for external review is 
                        received by the qualified external review 
                        entity and before the end of the approved 
                        period of care.
                    ``(B) Retrospective determination.--The independent 
                medical review panel shall complete a review under 
                subsection (d) in the case of a retrospective 
                determination concerting a denial of a claim for 
                benefits not later than 30 days after the date of 
                receipt of information under subsection (c)(2) and in 
                no case later than 60 days after the date the request 
                for external review is received by the qualified 
                external review entity.
            ``(2) Notification of determination.--The external review 
        entity shall ensure that the plan or issuer, the participant or 
        beneficiary (or authorized representative) and the treating 
        health care professional (if any) receives a copy of the 
        written determination of the independent medical review panel 
        prepared under subsection (d)(3)(F). Nothing in this paragraph 
        shall be construed as preventing an entity or panel from 
        providing an initial oral notice of the determination.
            ``(3) Form of notices.--Determinations and notices under 
        this subsection shall be written in a manner calculated to be 
        understood by an average participant.
    ``(f) Compliance.--
            ``(1) Application of determinations.--
                    ``(A) External review determinations binding on 
                plan.--The determinations of an external review entity 
                and an independent medical review panel under this 
                section shall be binding upon the plan or issuer 
                involved.
                    ``(B) Compliance with determination.--If the 
                determination of an independent medical review panel is 
                to reverse the denial, the plan or issuer, upon the 
                receipt of such determination, shall authorize coverage 
                to comply with the panel's determination in accordance 
                with the timeframe established by the panel.
            ``(2) Failure to comply.--
                    ``(A) In general.--If a plan or issuer fails to 
                comply with the timeframe established under paragraph 
                (1)(B) with respect to a participant or beneficiary, 
                where such failure to comply is caused by the plan or 
                issuer, the participant or beneficiary may obtain the 
                items or services involved (in a manner consistent with 
                the determination of the independent external review 
                entity) from any provider regardless of whether such 
                provider is a participating provider under the plan or 
                coverage.
                    ``(B) Reimbursement.--
                            ``(i) In general.--Where a participant or 
                        beneficiary obtains items or services in 
                        accordance with subparagraph (A), the plan or 
                        issuer involved shall provide for reimbursement 
                        of the costs of such items or services. Such 
                        reimbursement shall be made to the treating 
                        health care professional or to the participant 
                        or beneficiary (in the case of a participant or 
                        beneficiary who pays for the costs of such 
                        items or services).
                            ``(ii) Amount.--The plan or issuer shall 
                        fully reimburse a professional, participant or 
                        beneficiary under clause (i) for the total 
                        costs of the items or services provided 
                        (regardless of any plan limitations that may 
                        apply to the coverage of such items or 
                        services) so long as the items or services were 
                        provided in a manner consistent with the 
                        determination of the independent medical review 
                        panel.
                    ``(C) Failure to reimburse.--Where a plan or issuer 
                fails to provide reimbursement to a professional, 
                participant or beneficiary in accordance with this 
                paragraph, the professional, participant or beneficiary 
                may commence a civil action (or utilize other remedies 
                available under law) to recover only the amount of any 
                such reimbursement that is owed by the plan or issuer 
                and any necessary legal costs or expenses (including 
                attorney's fees) incurred in recovering such 
                reimbursement.
                    ``(D) Available remedies.--The remedies provided 
                under this paragraph are in addition to any other 
                available remedies.
            ``(3) Penalties against authorized officials for refusing 
        to authorize the determination of an independent medical review 
        panel.--
                    ``(A) Monetary penalties.--
                            ``(i) In general.--In any case in which the 
                        determination of an independent medical review 
                        panel under this section is not followed by a 
                        group health plan, or by a health insurance 
                        issuer offering health insurance coverage, any 
                        person who, acting in the capacity of 
                        authorizing the benefit, causes such refusal 
                        may, in the discretion in a court of competent 
                        jurisdiction, be liable to an aggrieved 
                        participant or beneficiary for a civil penalty 
                        in an amount of up to $1,000 a day from the 
                        date on which the determination was transmitted 
                        to the plan or issuer by the external review 
                        entity until the date the refusal to provide 
                        the benefit is corrected.
                            ``(ii) Additional penalty for failing to 
                        follow timeline.--In any case in which 
                        treatment was not commenced by the plan in 
                        accordance with the determination of an 
                        independent external review entity, the 
                        Secretary shall assess a civil penalty of 
                        $10,000 against the plan and the plan shall pay 
                        such penalty to the participant or beneficiary 
                        involved.
                    ``(B) Cease and desist order and order of 
                attorney's fees.--In any action described in 
                subparagraph (A) brought by a participant or 
                beneficiary with respect to a group health plan, or a 
                health insurance issuer offering health insurance 
                coverage, in which a plaintiff alleges that a person 
                referred to in such subparagraph has taken an action 
                resulting in a refusal of a benefit determined by an 
                external appeal entity to be covered, or has failed to 
                take an action for which such person is responsible 
                under the terms and conditions of the plan or coverage 
                and which is necessary under the plan or coverage for 
                authorizing a benefit, the court shall cause to be 
                served on the defendant an order requiring the 
                defendant--
                            ``(i) to cease and desist from the alleged 
                        action or failure to act; and
                            ``(ii) to pay to the plaintiff a reasonable 
                        attorney's fee and other reasonable costs 
                        relating to the prosecution of the action on 
                        the charges on which the plaintiff prevails.
                    ``(C) Additional civil penalties.--
                            ``(i) In general.--In addition to any 
                        penalty imposed under subparagraph (A) or (B), 
                        the Secretary may assess a civil penalty 
                        against a person acting in the capacity of 
                        authorizing a benefit determined by an external 
                        review entity for one or more group health 
                        plans, or health insurance issuers offering 
                        health insurance coverage, for--
                                    ``(I) any pattern or practice of 
                                repeated refusal to authorize a benefit 
                                determined by an external appeal entity 
                                to be covered; or
                                    ``(II) any pattern or practice of 
                                repeated violations of the requirements 
                                of this section with respect to such 
                                plan or coverage.
                            ``(ii) Standard of proof and amount of 
                        penalty.--Such penalty shall be payable only 
                        upon proof by clear and convincing evidence of 
                        such pattern or practice and shall be in an 
                        amount not to exceed the lesser of--
                                    ``(I) 25 percent of the aggregate 
                                value of benefits shown by the 
                                Secretary to have not been provided, or 
                                unlawfully delayed, in violation of 
                                this section under such pattern or 
                                practice; or
                                    ``(II) $500,000.
            ``(4) Protection of legal rights.--Nothing in this 
        subsection or subtitle shall be construed as altering or 
        eliminating any cause of action or legal rights or remedies of 
        participants, beneficiaries, and others under State or Federal 
        law (including sections 502 and 503), including the right to 
        file judicial actions to enforce rights.
    ``(g) Qualifications of Members of Independent Medical Review 
Panels.--
            ``(1) In general.--In referring a denial to an independent 
        medical review panel to conduct independent medical review 
        under subsection (c), the qualified external review entity 
        shall ensure that--
                    ``(A) each member of the panel meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review the requirements 
                described in paragraphs (4) and (5) for the panel are 
                met; and
                    ``(C) compensation provided by the entity to each 
                member of the panel is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each member of the 
        independent medical review panel shall be a physician 
        (allopathic or osteopathic) or health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each member of the independent medical review panel in 
                a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the plan or issuer, 
                        from serving as a member of an independent 
                        medical review panel if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the plan or 
                                issuer and the participant or 
                                beneficiary (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the plan or issuer 
                                and does not provide services 
                                exclusively or primarily to or on 
                                behalf of the plan or issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        a member of an independent medical review panel 
                        merely on the basis of such affiliation if the 
                        affiliation is disclosed to the plan or issuer 
                        and the participant or beneficiary (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        a member of an independent medical review panel 
                        from an entity if the compensation is provided 
                        consistent with paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, the members of an 
                        independent medical review panel shall be 
                        practicing physicians (allopathic or 
                        osteopathic) of the same or similar specialty 
                        as a physician who typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review; or
                            ``(ii) by a health care professional (other 
                        than a physician), at least two of the members 
                        of an independent medical review panel shall be 
                        practicing physicians (allopathic or 
                        osteopathic) of the same or similar specialty 
                        as the health care professional who typically 
                        treats the condition, makes the diagnosis, or 
                        provides the type of treatment under review, 
                        and, if determined appropriate by the qualified 
                        external review entity, the third member of 
                        such panel shall be a practicing health care 
                        professional (other than such a physician) of 
                        such a same or similar specialty.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a member of an independent medical 
        review panel shall have expertise under paragraph (2) in 
        pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by a qualified external review entity to a member of 
        an independent medical review panel in connection with a review 
        under this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a plan or coverage relating to a participant or 
        beneficiary, any of the following:
                    ``(A) The plan, plan sponsor, or issuer involved, 
                or any fiduciary, officer, director, or employee of 
                such plan, plan sponsor, or issuer.
                    ``(B) The participant or beneficiary (or authorized 
                representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
    ``(h) Qualified External Review Entities.--
            ``(1) Selection of qualified external review entities.--
                    ``(A) Limitation on plan or issuer selection.--The 
                Secretary shall implement procedures--
                            ``(i) to assure that the selection process 
                        among qualified external review entities will 
                        not create any incentives for external review 
                        entities to make a decision in a biased manner; 
                        and
                            ``(ii) for auditing a sample of decisions 
                        by such entities to assure that no such 
                        decisions are made in a biased manner.
                    ``(B) State authority with respect to qualified 
                external review entities for health insurance 
                issuers.--With respect to health insurance issuers 
                offering health insurance coverage in a State, the 
                State may provide for external review activities to be 
                conducted by a qualified external appeal entity that is 
designated by the State or that is selected by the State in a manner 
determined by the State to assure an unbiased determination.
            ``(2) Contract with qualified external review entity.--
        Except as provided in paragraph (1)(B), the external review 
        process of a plan or issuer under this section shall be 
        conducted under a contract between the plan or issuer and 1 or 
        more qualified external review entities (as defined in 
        paragraph (4)(A)).
            ``(3) Terms and conditions of contract.--The terms and 
        conditions of a contract under paragraph (2) shall--
                    ``(A) be consistent with the standards the 
                Secretary shall establish to assure there is no real or 
                apparent conflict of interest in the conduct of 
                external review activities; and
                    ``(B) provide that the costs of the external review 
                process shall be borne by the plan or issuer.
        Subparagraph (B) shall not be construed as applying to the 
        imposition of a filing fee under subsection (b)(2)(A)(iv) or 
        costs incurred by the participant or beneficiary (or authorized 
        representative) or treating health care professional (if any) 
        in support of the review, including the provision of additional 
        evidence or information.
            ``(4) Qualifications.--
                    ``(A) In general.--In this section, the term 
                `qualified external review entity' means, in relation 
                to a plan or issuer, an entity that is initially 
                certified (and periodically recertified) under 
                subparagraph (C) as meeting the following requirements:
                            ``(i) The entity has (directly or through 
                        contracts or other arrangements) sufficient 
                        medical, legal, and other expertise and 
                        sufficient staffing to carry out duties of a 
                        qualified external review entity under this 
                        section on a timely basis, including making 
                        determinations under subsection (b)(2)(A) and 
                        providing for independent medical reviews under 
                        subsection (d).
                            ``(ii) The entity is not a plan or issuer 
                        or an affiliate or a subsidiary of a plan or 
                        issuer, and is not an affiliate or subsidiary 
                        of a professional or trade association of plans 
                        or issuers or of health care providers.
                            ``(iii) The entity has provided assurances 
                        that it will conduct external review activities 
                        consistent with the applicable requirements of 
                        this section and standards specified in 
                        subparagraph (C), including that it will not 
                        conduct any external review activities in a 
                        case unless the independence requirements of 
                        subparagraph (B) are met with respect to the 
                        case.
                            ``(iv) The entity has provided assurances 
                        that it will provide information in a timely 
                        manner under subparagraph (D).
                            ``(v) The entity meets such other 
                        requirements as the Secretary provides by 
                        regulation.
                    ``(B) Independence requirements.--
                            ``(i) In general.--Subject to clause (ii), 
                        an entity meets the independence requirements 
                        of this subparagraph with respect to any case 
                        if the entity--
                                    ``(I) is not a related party (as 
                                defined in subsection (g)(7));
                                    ``(II) does not have a material 
                                familial, financial, or professional 
                                relationship with such a party; and
                                    ``(III) does not otherwise have a 
                                conflict of interest with such a party 
                                (as determined under regulations).
                            ``(ii) Exception for reasonable 
                        compensation.--Nothing in clause (i) shall be 
                        construed to prohibit receipt by a qualified 
                        external review entity of compensation from a 
                        plan or issuer for the conduct of external 
                        review activities under this section if the 
                        compensation is provided consistent with clause 
                        (iii).
                            ``(iii) Limitations on entity 
                        compensation.--Compensation provided by a plan 
                        or issuer to a qualified external review entity 
                        in connection with reviews under this section 
                        shall--
                                    ``(I) not exceed a reasonable 
                                level; and
                                    ``(II) not be contingent on any 
                                decision rendered by the entity or by 
                                any independent medical review panel.
                    ``(C) Certification and recertification process.--
                            ``(i) In general.--The initial 
                        certification and recertification of a 
                        qualified external review entity shall be 
                        made--
                                    ``(I) under a process that is 
                                recognized or approved by the 
                                Secretary; or
                                    ``(II) by a qualified private 
                                standard-setting organization that is 
                                approved by the Secretary under clause 
                                (iii).
                        In taking action under subclause (I), the 
                        Secretary shall give deference to entities that 
                        are under contract with the Federal Government 
                        or with an applicable State authority to 
                        perform functions of the type performed by 
                        qualified external review entities.
                            ``(ii) Process.--The Secretary shall not 
                        recognize or approve a process under clause 
                        (i)(I) unless the process applies standards (as 
                        promulgated in regulations) that ensure that a 
                        qualified external review entity--
                                    ``(I) will carry out (and has 
                                carried out, in the case of 
                                recertification) the responsibilities 
                                of such an entity in accordance with 
                                this section, including meeting 
                                applicable deadlines;
                                    ``(II) will meet (and has met, in 
                                the case of recertification) 
                                appropriate indicators of fiscal 
                                integrity;
                                    ``(III) will maintain (and has 
                                maintained, in the case of 
                                recertification) appropriate 
                                confidentiality with respect to 
                                individually identifiable health 
                                information obtained in the course of 
                                conducting external review activities; 
                                and
                                    ``(IV) in the case recertification, 
                                shall review the matters described in 
                                clause (iv).
                            ``(iii) Approval of qualified private 
                        standard-setting organizations.--For purposes 
                        of clause (i)(II), the Secretary may approve a 
                        qualified private standard-setting organization 
                        if such Secretary finds that the organization 
                        only certifies (or recertifies) external review 
                        entities that meet at least the standards 
                        required for the certification (or 
                        recertification) of external review entities 
                        under clause (ii).
                            ``(iv) Considerations in 
                        recertifications.--In conducting 
                        recertifications of a qualified external review 
                        entity under this paragraph, the Secretary or 
                        organization conducting the recertification 
                        shall review compliance of the entity with the 
                        requirements for conducting external review 
                        activities under this section, including the 
                        following:
                                    ``(I) Provision of information 
                                under subparagraph (D).
                                    ``(II) Adherence to applicable 
                                deadlines (both by the entity and by 
                                independent medical review panels it 
                                refers cases to).
                                    ``(III) Compliance with limitations 
                                on compensation (with respect to both 
                                the entity and independent medical 
                                review panels it refers cases to).
                                    ``(IV) Compliance with applicable 
                                independence requirements.
                            ``(v) Period of certification or 
                        recertification.--A certification or 
                        recertification provided under this paragraph 
                        shall extend for a period not to exceed 2 
                        years.
                            ``(vi) Revocation.--A certification or 
                        recertification under this paragraph may be 
                        revoked by the Secretary or by the organization 
                        providing such certification upon a showing of 
                        cause.
                    ``(D) Provision of information.--
                            ``(i) In general.--A qualified external 
                        review entity shall provide to the Secretary 
                        (or the State in the case of external review 
                        activities provided for by a State pursuant to 
                        paragraph (1)(B)), in such manner and at such 
                        times as such Secretary (or State) may require, 
                        such information (relating to the denials which 
                        have been referred to the entity for the 
                        conduct of external review under this section) 
                        as such Secretary (or State) determines 
                        appropriate to assure compliance with the 
                        independence and other requirements of this 
                        section to monitor and assess the quality of 
                        its external review activities and lack of bias 
                        in making determinations. Such information 
                        shall include information described in clause 
                        (ii) but shall not include individually 
                        identifiable medical information.
                            ``(ii) Information to be included.--The 
                        information described in this subclause with 
                        respect to an entity is as follows:
                                    ``(I) The number and types of 
                                denials for which a request for review 
                                has been received by the entity.
                                    ``(II) The disposition by the 
                                entity of such denials, including the 
                                number referred to an independent 
                                medical review panel and the reasons 
                                for such dispositions (including the 
                                application of exclusions), on a plan 
                                or issuer-specific basis and on a 
                                health care specialty-specific basis.
                                    ``(III) The length of time in 
                                making determinations with respect to 
                                such denials.
                                    ``(IV) Updated information on the 
                                information required to be submitted as 
                                a condition of certification with 
                                respect to the entity's performance of 
                                external review activities.
                            ``(iii) Information to be provided to 
                        certifying organization.--
                                    ``(I) In general.--In the case of a 
                                qualified external review entity which 
                                is certified (or recertified) under 
                                this subsection by a qualified private 
                                standard-setting organization, at the 
                                request of the organization, the entity 
                                shall provide the organization with the 
                                information provided to the Secretary 
                                under clause (i).
                                    ``(II) Additional information.--
                                Nothing in this subparagraph shall be 
                                construed as preventing such an 
                                organization from requiring additional 
                                information as a condition of 
                                certification or recertification of an 
                                entity.
                            ``(iv) Use of information.--Information 
                        provided under this subparagraph may be used by 
                        the Secretary and qualified private standard-
                        setting organizations to conduct oversight of 
                        qualified external review entities, including 
                        recertification of such entities, and shall be 
                        made available to the public in an appropriate 
                        manner.
                    ``(E) Limitation on liability.--No qualified 
                external review entity having a contract with a plan or 
                issuer, and no person who is employed by any such 
                entity or who furnishes professional services to such 
                entity (including as a member of an independent medical 
                review panel), shall be held by reason of the 
                performance of any duty, function, or activity required 
                or authorized pursuant to this section, to be civilly 
                liable under any law of the United States or of any 
State (or political subdivision thereof) if there was no actual malice 
or gross misconduct in the performance of such duty, function, or 
activity.''.
    (b) Conforming Amendment.--The table of contents in section 1 of 
the Employee Retirement Income Security Act of 1974 is amended by 
inserting after the item relating to section 503 the following:

``Sec. 503A. Utilization review activities.
``Sec. 503B. Procedures for initial claims for benefits and prior 
                            authorization determinations.
``Sec. 503C. Internal appeals of claims denials.
``Sec. 503D. Independent external appeals procedures.''.

SEC. 122. CONFORMING AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

    (a) Group Health Plans.--Title XXVII of the Public Health Service 
Act, as amended by sections 102(a) and 112(a), is amended by inserting 
after section 2708 the following new section:

``SEC. 2709. STANDARD RELATING TO ACCOUNTABILITY.

    ``Subject to section 2724(c), a group health plan, and health 
insurance coverage offered in connection with a group health plan, 
shall comply with the requirements of sections 503A through 503D of the 
Employee Retirement Income Security Act of 1974 (as in effect as of the 
day after the date of the enactment of such Act) and such requirements 
shall be deemed to be incorporated into this section. For purposes of 
this section, references in such sections 503A through 503D to the 
Secretary shall be deemed references to the Secretary of Health and 
Human Services.''.
    (b) Individual Health Plans.--Title XXVII of the Public Health 
Service Act, as amended by sections 102(b) and 112(b), is amended by 
inserting after section 2754 the following new section:

``SEC. 2755. STANDARD RELATING TO ACCOUNTABILITY.

    ``Subject to section 2762A(c), the provisions of sections 503A 
through 503D of the Employee Retirement Income Security Act of 1974 (as 
in effect as of the day after the date of the enactment of such Act) 
shall apply to health insurance coverage offered by a health insurance 
issuer in the individual market for an enrollee in the same manner as 
they apply to health insurance coverage offered by a health insurance 
issuer for a participant or beneficiary in connection with a group 
health plan in the small or large group market and the requirements 
referred to in such section shall be deemed to be incorporated into 
this section. For purposes of this section, references in such sections 
503A through 503D to the Secretary shall be deemed references to the 
Secretary of Health and Human Services.''.

SEC. 123. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986, 
as amended by sections 103 and 113, is amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9814 the following new item:

                              ``Sec. 9815. Standard relating to plan 
                                        accountability.'';
        and
            (2) by inserting after section 9814 the following:

``SEC. 9815. STANDARD RELATING TO PLAN ACCOUNTABILITY.

    ``A group health plan shall comply with the requirements of 
sections 503A through 503D of the Employee Retirement Income Security 
Act of 1974 (as in effect as of the day after the date of the enactment 
of such Act) and such requirements shall be deemed to be incorporated 
into this section. For purposes of this section, references in such 
sections 503A through 503D to the Secretary shall be deemed references 
to the Secretary of the Treasury.''.

   Subtitle D--State Flexibility in Applying Requirements to Health 
                           Insurance Issuers

SEC. 141. STATE FLEXIBILITY IN APPLYING REQUIREMENTS TO HEALTH 
              INSURANCE ISSUERS UNDER ERISA; PLAN SATISFACTION OF 
              CERTAIN REQUIREMENTS.

    (a) In General.--Section 731(a) of the Employee Retirement Income 
Security Act of 1974 is amended--
            (1) in section 731(a)(1) (29 U.S.C. 1191(a)), by inserting 
        ``and section 731A'' after ``Subject to paragraph (2)''; and
            (2) by inserting after section 731 the following new 
        section:

``SEC. 731A. STATE FLEXIBILITY IN APPLYING PATIENTS' BILL OF RIGHTS AND 
              PATIENT ACCESS TO INFORMATION REQUIREMENTS; PLAN 
              SATISFACTION OF CERTAIN REQUIREMENTS.

    ``(a) State Flexibility.--The requirements of a section of subpart 
C (relating to patients' bill of rights) and of section 714 (relating 
to patient access to information) shall not apply with respect to 
health insurance coverage (and to a group health plan insofar as it 
provides benefits in the form of health insurance coverage) in a 
State--
            ``(1) before January 1, 2003; and
            ``(2) on or after such date, during any period for which 
        the State certifies to the Patients' Protection Certification 
        Board (established under subsection (c)) that the State has in 
        effect a State law (as defined in section 2723(d)(1) of the 
        Public Health Service Act) that--
                    ``(A) addresses the patient protections or access 
                to information in such section; and
                            ``(B)(i) adopts the Federal standard under 
                        such section with respect to the requirements; 
                        or
                            ``(ii) is consistent with the purposes of 
                        the section and the Board has not found such 
                        certification invalid under subsection 
                        (b)(2)(A).
    ``(b) Patients' Protection Certification Board; Certification 
Review Process.--
            ``(1) Establishment of board.--
                    ``(A) In general.--There is hereby established in 
                the Health Resources and Services Administration of the 
                Department of Health and Human Services a Patients' 
                Protection Certification Board (in this section 
                referred to as the `Board').
                    ``(B) Composition.--The Board shall be composed of 
                13 members appointed by the President, by and with the 
                advice and consent of the Senate, from among 
                individuals who represent consumers and employers or 
                have expertise in law, medicine, insurance, employee 
                benefits, and related fields. Members shall first be 
                appointed to the Board not earlier than February 1, 
                2001, and no later than May 1, 2001.
                    ``(C) Terms.--The terms of members of the Board 
                shall be for 3 years except that for the members first 
                appointed the President shall designate staggered terms 
                of 3 years for 2 members, 2 years for 2 members, and 1 
                year for one member. A vacancy in the Board shall be 
                filled in the same manner in which the original 
                appointment was made and a member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be 
                appointed only for the remainder of that term.
                    ``(D) Compensation.--To the extent provided in 
                advance in appropriations Acts, while serving on the 
                business of the Board (including travel time), each 
                member of the Board--
                            ``(i) shall be entitled to receive 
                        compensation at the daily equivalent of the 
                        annual rate of basic pay provided for level IV 
                        of the Executive Schedule under section 5315 of 
                        title 5, United States Code for each day 
                        (including travel time) during which the member 
                        is engaged in the actual performance of duties 
                        as such a member; and
                            ``(ii) while so serving away from home and 
                        the member's regular place of business, may be 
                        allowed travel expenses, as authorized by the 
                        Board.
            ``(2) Duties.--
                    ``(A) Review of certifications submitted.--
                            ``(i) In general.--The Board shall review 
                        certifications submitted under subsection 
                        (a)(2).
                            ``(ii) Deference to states.--Such a 
                        certification submitted for a State law with 
                        respect to the requirements of a section is 
                        deemed valid unless, within 90 days after the 
                        date of its submittal to the Board, the Board 
                        finds that there is clear and convincing 
                        evidence of substantial non-compliance of the 
                        State law with the requirements of such 
                        section.
                    ``(B) Annual congressional reports.--The Board 
                shall submit to Congress an annual report on its 
                activities. The first annual report shall focus 
                specifically on the development by the Board of 
                criteria for the evaluation of State laws and any other 
                activities of the Board during its first year of 
                operation.
            ``(3) Organization.--
                    ``(A) Chair.--The Board shall elect a member of the 
                Board to serve as chair.
                    ``(B) Meetings.--The Board shall meet at least 
                quarterly and otherwise at the call of the chair or 
                upon the written request of a majority of its members.
                    ``(C) Quorum.--Seven members of the Board shall 
                constitute a quorum thereof, but a lesser number may 
                hold hearings and take testimony.
            ``(4) Director and staff; experts and consultants.--To the 
        extent provided in advance in appropriations Acts, the Board 
        may--
                    ``(A) employ and fix the compensation of an 
                Executive Director and such other personnel as may be 
                necessary to carry out the Board's duties, without 
                regard to the provisions of title 5, United States 
                Code, governing appointments in the competitive 
                service;
                    ``(B) procure temporary and intermittent services 
                under section 3109(b) of title 5, United States Code; 
                and
                    ``(C) provide transportation and subsistence for 
                persons serving the Board without compensation.
            ``(5) Powers.--
                    ``(A) Obtaining official data.--
                            ``(i) In general.--The Board may secure 
                        directly from any department or agency of the 
                        United States information necessary to enable 
                        it to carry out its duties.
                            ``(ii) Request of chair.--Upon request of 
                        the chair, the head of that department or 
                        agency shall furnish that information to the 
                        Board on an agreed upon schedule.
                    ``(B) Agency assistance.--The Board may seek such 
                assistance and support as may be required in the 
                performance of its duties from the Secretary of Health 
                and Human Services, acting through the Health Resources 
                and Services Administration. Any employee of such 
                Administration may be detailed to the Board to assist 
                the Board in carrying out its duties.
                    ``(C) Contract authority.--To the extent provided 
                in advance in appropriations Act, the Board may enter 
                into contracts or make other arrangements for 
                facilities and services as may be necessary for the 
                conduct of the work of the Board (without regard to 
                section 3709 of the Revised Statutes (41 U.S.C. 5)).
                    ``(D) Hearings.--The Board may, for the purpose of 
                carrying out its duties, hold hearings, sit and act at 
                times and places, take testimony, and receive evidence 
                as the Board considers appropriate. The Board may 
                administer oaths or affirmations to witnesses appearing 
                before it. To the extent provided in advance 
in appropriation Acts, the Board may pay reasonable travel expenses to 
witnesses for travel incident to hearings held by the Board. Nothing in 
this subsection shall be construed as authorizing the issuance of 
subpoenas in support of its duties.
                    ``(E) Rules.--The Board may prescribe such rules 
                and regulations as it deems necessary to carry out this 
                subsection.
            ``(6) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection--
                    ``(A) for fiscal year 2001, $500,000,
                    ``(B) for fiscal year 2002, $1,000,000, and
                    ``(C) for subsequent fiscal years, such sums as may 
                be necessary.
    ``(c) Relationship to Group Health Plan Requirements.--Nothing in 
this section shall be construed to affect or modify the provisions of 
section 514 with respect to group health plans (insofar as it provides 
benefits other than in the form of health insurance coverage).
    ``(d) Plan Satisfaction of Certain Requirements.--
            ``(1) Satisfaction of certain requirements through 
        insurance.--For purposes of this part, insofar as a group 
        health plan provides benefits in the form of health insurance 
        coverage through a health insurance issuer and, under the 
        arrangement to offer such coverage, the issuer is legally 
        responsible for compliance with any of the following 
        requirements of this subpart (or of section 714), the plan 
        shall be treated as meeting such requirements and not be 
        considered as failing to meet such requirements because of a 
        failure of the issuer to meet such requirements so long as the 
        plan sponsor or its representatives did not cause such failure 
        by the issuer:
                    ``(A) Section 721 (relating to access to emergency 
                care).
                    ``(B) Section 722 (relating to offering of choice 
                of coverage options).
                    ``(C) Section 723 (relating to access to obstetric 
                and gynecological care).
                    ``(D) Section 724 (relating to access to pediatric 
                care).
                    ``(E) Section 725 (relating to access to specialty 
                care).
                    ``(F) Section 726(a)(1) (relating to continuity in 
                case of termination of provider contract) and section 
                726(a)(2) (relating to continuity in case of 
                termination of issuer contract), but only insofar as a 
                replacement issuer assumes the obligation for 
                continuity of care.
                    ``(G) Section 728 (relating to access to needed 
                prescription drugs).
                    ``(H) Section 730 (relating to coverage for 
                individuals participating in approved clinical trials.)
                    ``(I) Section 730C (relating to payment of claims).
                    ``(J) Section 714 (relating to access to 
                information).
            ``(2) Application to prohibitions.--If a health insurance 
        issuer offers health insurance coverage in connection with a 
        group health plan and takes an action in violation of any of 
        the following sections, the group health plan shall not be 
        liable for such violation unless the plan caused such 
        violation:
                    ``(A) Section 727 (relating to prohibition of 
                interference with certain medical communications).
                    ``(B) Section 729 (relating to self-payment for 
                behavioral health).
                    ``(C) Section 730A (relating to prohibition of 
                discrimination against providers based on licensure).
                    ``(D) Section 730B (relating to prohibition against 
                improper incentive arrangements).
            ``(3) Construction.--Nothing in this subsection shall be 
        construed to affect or modify the responsibilities of the 
        fiduciaries of a group health plan under part 4 of subtitle B.
    ``(e) Conforming Regulations.--The Secretary may issue regulations 
to coordinate the requirements on group health plans under subpart C, 
section 714, and sections 503A through 503D with the requirements 
imposed under the other provisions of this title.''.
    (b) Satisfaction of ERISA Claims Procedure Requirement.--Section 
503 of such Act (29 U.S.C. 1133) is amended by inserting ``(a)'' after 
``Sec. 503.'' and by adding at the end the following new subsection:
    ``(b) In the case of a group health plan (as defined in section 
733) compliance with the requirements of sections 503A through 503D in 
the case of a claims denial shall be deemed compliance with subsection 
(a) with respect to such claims denial.''.
    (c) Clerical Amendment.--The table of contents in section 1 of such 
Act (29 U.S.C. 1001) is amended by inserting after the item relating to 
section 731, the following:

``Sec. 731A. State flexibility in applying patients' bill of rights and 
                            patient access to information requirements; 
                            plan satisfaction of certain 
                            requirements.''.

SEC. 142. STATE FLEXIBILITY IN APPLYING REQUIREMENTS UNDER THE PUBLIC 
              HEALTH SERVICE ACT.

    (a) Group Health Plans and Group Health Insurance Coverage.--Title 
XXVII of the Public Health Service Act is amended--
            (1) in section 2723(a)(1) (42 U.S.C. 300gg-23(a)(1)), by 
        inserting ``and section 2724'' after ``Subject to paragraph 
        (2)''; and
            (2) by inserting after section 2723 the following new 
        section:

``SEC. 2724. STATE FLEXIBILITY IN APPLYING PATIENTS' BILL OF RIGHTS, 
              PATIENT ACCESS TO INFORMATION, AND ACCOUNTABILITY 
              REQUIREMENTS.

    ``(a) In General.--The provisions of section 731A of the Employee 
Retirement Income Security Act of 1974, apply to the requirements of 
section 2707 (relating to patients' bill of rights), section 2708 
(relating to access to information), and (only with respect to group 
health plans as applied under section 2721(b)) section 2709 (relating 
to accountability) in the same manner as such provisions apply to 
comparable requirements with respect to health insurance coverage 
provided in connection with a group health plan.
    ``(b) Relationship to Group Health Plan Requirements.--Nothing in 
this section shall be construed to affect or modify the provisions of 
section 514 of the Employee Retirement Income Security Act of 1974 with 
respect to group health plans (insofar as it provides benefits other 
than in the form of health insurance coverage).''.
    (b) Individual Health Insurance Coverage.--Title XXVII of the 
Public Health Service Act is amended--
            (1) in section 2762(a) (42 U.S.C. 300gg-62(a)(1)), by 
        inserting ``and section 2762A'' after ``Subject to subsection 
        (b)''; and
            (2) by inserting after section 2762 the following new 
        section:

``SEC. 2762A. STATE FLEXIBILITY IN APPLYING PATIENTS' BILL OF RIGHTS, 
              PATIENT ACCESS TO INFORMATION, AND ACCOUNTABILITY 
              REQUIREMENTS.

    ``The provisions of section 2724 apply in relation to the 
requirements of section 2753 (relating to patients' bill of rights), 
section 2754 (relating to access to information), and section 2755 
(relating to accountability) with respect to individual health 
insurance coverage in the same manner as those provisions apply in 
relation to the requirements of sections 2707, 2708, and 2709, 
respectively, as applied to group health plans under section 
2721(b).''.

     Subtitle E--Effective Dates; Coordination in Implementation; 
                        Miscellaneous Provisions

SEC. 151. EFFECTIVE DATES.

    (a) Group Health Coverage.--
            (1) In general.--Subject to paragraph (2) and subsection 
        (d), the amendments made by sections 101, 102(a), 103, 111, 
        112(a), 113, 121, 122(a), and 123 shall apply with respect to 
        group health plans, and health insurance coverage offered in 
        connection with group health plans, for plan years beginning on 
        or after January 1, 2002 (in this section referred to as the 
        ``general effective date'') and also shall apply to portions of 
        plan years occurring on and after such date.
            (2) Treatment of collective bargaining agreements.--In the 
        case of a group health plan maintained pursuant to one or more 
        collective bargaining agreements between employee 
        representatives and one or more employers ratified before the 
        date of the enactment of this Act, the amendments made by the 
        provisions referred to in paragraph (1) shall not apply to plan 
        years beginning before the later of--
                    (A) the date on which the last collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of the enactment of this Act); 
                or
                    (B) the general effective date.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by this title shall not be treated as a termination of 
        such collective bargaining agreement.
    (b) Individual Health Insurance Coverage.--Subject to subsection 
(d), the amendments made by section 102(b), 112(b), and 122(b) shall 
apply with respect to individual health insurance coverage offered, 
sold, issued, renewed, in effect, or operated in the individual market 
on or after the general effective date.
    (c) Treatment of Religious Nonmedical Providers.--
            (1) In general.--Nothing in this Act (or the amendments 
        made thereby) shall be construed to--
                    (A) restrict or limit the right of group health 
                plans, and of health insurance issuers offering health 
                insurance coverage, to include as providers religious 
                nonmedical providers;
                    (B) require such plans or issuers to--
                            (i) utilize medically based eligibility 
                        standards or criteria in deciding provider 
                        status of religious nonmedical providers;
                            (ii) use medical professionals or criteria 
                        to decide patient access to religious 
                        nonmedical providers;
                            (iii) utilize medical professionals or 
                        criteria in making decisions in internal or 
                        external appeals regarding coverage for care by 
                        religious nonmedical providers; or
                            (iv) compel a participant or beneficiary to 
                        undergo a medical examination or test as a 
                        condition of receiving health insurance 
                        coverage for treatment by a religious 
                        nonmedical provider; or
                    (C) require such plans or issuers to exclude 
                religious nonmedical providers because they do not 
                provide medical or other required data, if such data is 
                inconsistent with the religious nonmedical treatment or 
                nursing care provided by the provider.
            (2) Religious nonmedical provider.--For purposes of this 
        subsection, the term ``religious nonmedical provider'' means a 
        provider who provides no medical care but who provides only 
        religious nonmedical treatment or religious nonmedical nursing 
        care.
    (d) Transition for Notice Requirement.--The disclosure of 
information required under the amendments made by subtitle B of this 
title shall first be provided pursuant to--
            (1) subsection (a) with respect to a group health plan that 
        is maintained as of the general effective date, not later than 
        30 days before the beginning of the first plan year to which 
the amendments made by such subtitle apply in connection with the plan 
under such subsection; or
            (2) subsection (b) with respect to an individual health 
        insurance coverage that is in effect as of the general 
        effective date, not later than 30 days before the first date as 
        of which the amendments made by such subtitle apply to the 
        coverage under such subsection.
    (e) Construction.--In applying section 731(a) of the Employee 
Retirement Income Security Act of 1974 and sections 2723(a) and 2762 of 
the Public Health Service Act, a State law that provides for equal 
access to, and availability of, all categories of licensed health care 
providers and services shall not be treated as preventing the 
application of any requirement of either such Act.
    (f) Coverage of Limited Scope Plans.--Section 2791(c)(2)(A) of the 
Public Health Service Act (42 U.S.C. 300gg-91(c)(2)(A)) and section 
733(c)(2)(A) of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1186(c)(2)(A)) shall be deemed not to apply for purposes of 
applying the requirements imposed by the amendments made by this title.

SEC. 152. REGULATIONS; COORDINATION.

    (a) Authority.--The Secretaries of Health and Human Services, 
Labor, and the Treasury shall issue such regulations as may be 
necessary or appropriate to carry out the amendments made by this title 
before the effective date thereof.
    (b) Coordination in Implementation.--The Secretary of Labor, the 
Secretary of Health and Human Services, and the Secretary of the 
Treasury shall ensure, through the execution of an interagency 
memorandum of understanding among such Secretaries, that--
            (1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which such 
        Secretaries have responsibility under the amendments made by 
        this title are administered so as to have the same effect at 
        all times; and
            (2) coordination of policies relating to enforcing the same 
        requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.
    (c) Use of Interim Final Rules.--Such Secretaries may promulgate 
any interim final rules as the Secretaries determine are appropriate to 
carry out this title.
    (d) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this title, against a 
group health plan or health insurance issuer with respect to a 
violation of a requirement imposed by such amendments before the date 
of issuance of regulations issued in connection with such requirement, 
if the plan or issuer has sought to comply in good faith with such 
requirement.

SEC. 153. NO BENEFIT REQUIREMENTS.

    Nothing in the amendments made by this title shall be construed to 
require a group health plan or a health insurance issuer offering 
health insurance coverage to include specific items and services under 
the terms of such a plan or coverage, other than those provided under 
the terms and conditions of such plan or coverage.

SEC. 154. SEVERABILITY.

    If any provision of this title, an amendment made by this title, or 
the application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this 
title, the amendments made by this title, and the application of the 
provisions of such to any person or circumstance shall not be affected 
thereby.

                           TITLE II--REMEDIES

SEC. 201. AVAILABILITY OF COURT REMEDIES.

    (a) Cause of Action Relating to Medically Reviewable Determinations 
and Timely Review of Claims.--Section 502 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1132) is amended--
            (1) in subsection (a)(1), by striking ``or'' at the end of 
        subparagraph (A), by striking ``plan;'' in subparagraph (B) and 
        inserting ``plan, or'', and by adding after subparagraph (B) 
        the following new subparagraph:
                    ``(C) in the case of a group health plan, for the 
                relief provided for in subsection (n) of this 
                section;''; and
            (2) by adding at the end the following:
    ``(n) Cause of Action Relating to Medically Reviewable 
Determinations and Timely Review of Claims.--
            ``(1) In general.--In any case in which--
                    ``(A) a person who is a designated health care 
                decision-maker of a group health plan breaches the 
                covenant of good faith and fair dealing in--
                            ``(i) making a medically reviewable 
                        determination regarding a benefit for items or 
                        services under the plan, or
                            ``(ii) failing to ensure that--
                                    ``(I) any denial of claim for 
                                benefits, or
                                    ``(II) any decision by the plan on 
                                a request, made by a participant or 
                                beneficiary under section 503C or 503D, 
                                for a reversal of an earlier decision 
                                of the plan,
                        is made and issued to the participant or 
                        beneficiary (in such form and manner as may be 
                        prescribed in regulations of the Secretary) 
                        before the end of the applicable period 
                        specified in section 503B, 503C, or 503D, and
                    ``(B) such breach is the proximate cause of 
                substantial harm to, or wrongful death of, the 
                participant or beneficiary,
        such person shall be liable to the participant or beneficiary 
        (or the estate of such participant or beneficiary) for economic 
        and noneconomic damages in connection with such breach and such 
        substantial harm or death (subject to paragraphs (5) and (6)).
            ``(2) Designated health care decision-maker.--
                    ``(A) In general.--A group health plan shall name a 
                designated health care decision-maker for purposes of 
                paragraph (1) with respect to any benefits that are not 
                provided through group health insurance coverage.
                    ``(B) Definition.--For purposes of this subsection, 
                the term `designated health care decision-maker' means 
                a person who--
                            ``(i) is named in the plan as the 
                        designated health care decision-maker,
                            ``(ii) agrees in writing to accept 
                        appointment as a designated health care 
                        decision-maker,
                            ``(iii) is any of the following:
                                    ``(I) the plan sponsor,
                                    ``(II) a health insurance issuer, 
                                or
                                    ``(III) any other person who can 
                                satisfy requirements set forth in 
                                regulations promulgated by the 
                                Secretary, including the abilities 
                                specified in subparagraph (C), and
                            ``(iv) is not the treating physician or 
                        other health care professional in the case 
                        involved.
                    ``(C) Abilities.--The abilities specified in this 
                subparagraph are the abilities to--
                            ``(i) carry out the responsibilities set 
                        forth in the plan,
                            ``(ii) carry out the applicable 
                        requirements of this subsection, and
                            ``(iii) meet other applicable requirements, 
                        including any financial obligation for 
                        liability under this subsection.
                    ``(D) Group health insurance coverage.--With 
                respect to benefits provided through group health 
                insurance coverage, the health insurance issuer 
                providing the group health insurance coverage shall be 
                deemed the designated health care decision-maker of the 
                plan.
                    ``(E) Absence of named designated health care 
                decision-maker.--In any case in which a designated 
                health care decision-maker is not named in the plan 
                with respect to benefits that are not provided through 
                group health insurance coverage, the plan sponsor shall 
                be treated as the designated health care decision-maker 
                for purposes of liability under this section with 
                respect to such benefits.
            ``(3) Definitions.--For purposes of this section--
                    ``(A) Medically reviewable determination.--The term 
                `medically reviewable determination' means a 
                determination described in section 503D(d)(2).
                    ``(B) Substantial harm.--The term `substantial 
                harm' means loss of life, loss or significant 
                impairment of limb, bodily, or mental function, 
                significant disfigurement, or severe and chronic pain.
                    ``(C) Claim for benefits; denial.--The terms `claim 
                for benefits' and `denial of a claim for benefits', in 
                connection with a group health plan or health insurance 
                coverage, have the meanings provided such terms in 
                section 503B(e).
                    ``(D) Terms and conditions.--The term `terms and 
                conditions' includes, with respect to a group health 
                plan or health insurance coverage, requirements imposed 
                under section 714 and subpart C of part 7.
                    ``(E) Group health plan and other related terms.--
                The provisions of sections 732(d) and 733 apply for 
                purposes of this subsection in the same manner as they 
                apply for purposes of part 7, except that the term 
                `group health plan' includes a group health plan (as 
                defined in section 607(1)).
                    ``(F) Economic and noneconomic damages.--The terms 
                `economic damages' and `noneconomic damages' do not 
                include punitive damages.
            ``(4) Requirement of exhaustion of administrative 
        remedies.--
                    ``(A) In general.--In the case of a cause of action 
                described in paragraph (1)(A)(i), paragraph (1) applies 
                only if all remedies under sections 503C and 503D with 
                respect to such cause of action have been exhausted.
                    ``(B) External review required where available.--
                For purposes of subparagraph (A), all remedies 
                described in subparagraph (A) shall be deemed not to be 
                exhausted until such remedies under section 503D (to 
                the extent they are available) have been elected and 
                are exhausted by issuance of a final determination by a 
                qualified external review entity or an independent 
                medical reviewer under such section.
                    ``(C) Receipt of benefits during appeals process.--
                Receipt by the participant or beneficiary of the 
                benefits involved in the claim for benefits during the 
                pendency of any administrative processes referred to in 
                subparagraph (A) or of any action commenced under this 
                subsection--
                            ``(i) shall not preclude continuation of 
                        all such administrative processes to their 
                        conclusion if so moved by any party, and
                            ``(ii) shall not preclude any liability 
                        under subsection (a)(1)(C) and this subsection 
                        in connection with such claim.
                The court in any action commenced under this subsection 
                shall take into account any receipt of benefits during 
                such administrative processes or such action in 
                determining the amount of the damages awarded.
                    ``(D) Consideration of administrative 
                determinations.--Any determinations made under section 
                503C or 503D regarding matters before the court in an 
                action under this section shall be given due 
                consideration by the court in such action.
            ``(5) Limitations on recovery of damages.--
                    ``(A) Maximum award of noneconomic damages.--The 
                aggregate amount of liability for noneconomic damages 
in an action under paragraph (1) may not exceed $500,000.
                    ``(B) Increase in amount.--The amount referred to 
                in subparagraph (A) shall be increased or decreased, 
                for each calendar year that ends after December 31, 
                2001, by the same percentage as the percentage by which 
                the Consumer Price Index for All Urban Consumers 
                (United States city average), published by the Bureau 
                of Labor Statistics, for September of the preceding 
                calendar year has increased or decreased from the such 
                Index for September of 2001.
            ``(6) Prohibition of award of punitive damages.--
                    ``(A) General rule.--Except as provided in this 
                paragraph, nothing in this subsection shall be 
                construed as authorizing a cause of action for 
                punitive, exemplary, or similar damages.
                    ``(B) Exception.--In addition other damages 
                authorized under paragraph (1), punitive damages are 
                authorized in any case described in such paragraph in 
                which such other damages are authorized and the 
                plaintiff establishes by clear and convincing evidence 
                that conduct carried out by the defendant with willful 
                or wanton disregard for the rights or safety of others 
                was the proximate cause of the substantial harm that is 
                the subject of the action.
                    ``(C) Limitation on amount.--
                            ``(i) In general.--The aggregate amount of 
                        liability for punitive damages in an action 
                        under paragraph (1) may not exceed $5,000,000.
                            ``(ii) Increase in amount.--The amount 
                        referred to in clause (i) shall be increased or 
                        decreased, for each calendar year that ends 
                        after December 31, 2001, by the same percentage 
                        as the percentage by which the Consumer Price 
                        Index for All Urban Consumers (United States 
                        city average), published by the Bureau of Labor 
                        Statistics, for September of the preceding 
                        calendar year has increased or decreased from 
                        the such Index for September of 2001.
                    ``(D) No punitive damages where defendant's 
                position previously supported by medical review panel 
                upon external review.--In any case in which the court 
                finds the defendant to be liable in an action under 
                this subsection, to the extent that--
                            ``(i) such liability is based on a finding 
                        by the court of a particular breach described 
                        in paragraph (1), and
                            ``(ii) such finding is contrary to a 
                        determination by a medical review panel in a 
                        decision previously rendered under section 503D 
                        with respect to such defendant,
                the defendant shall not be liable for punitive damages 
                under this subsection in connection with such breach.
            ``(7) Limitation of action.--Paragraph (1) shall not apply 
        in connection with any action commenced after 2 years after the 
        later of--
                    ``(A) the date on which the plaintiff first knew, 
                or reasonably should have known, of the personal injury 
                or death resulting from the failure described in 
                paragraph (1), or
                    ``(B) the date as of which the requirements of 
                paragraph (4), if applicable, are first met.
            ``(8) Purchase of insurance to cover liability.--Nothing in 
        section 410 shall be construed to preclude the purchase by a 
        group health plan of insurance to cover any liability or losses 
        arising under a cause of action under subsection (a)(1)(C) and 
        this subsection.
            ``(9) Exclusion of directed recordkeepers.--
                    ``(A) In general.--Subject to subparagraph (C), 
                paragraph (1) shall not apply with respect to a 
                directed recordkeeper in connection with a group health 
                plan.
                    ``(B) Directed recordkeeper.--For purposes of this 
                paragraph, the term `directed recordkeeper' means, in 
                connection with a group health plan, a person engaged 
                in directed recordkeeping activities pursuant to the 
                specific instructions of the plan or the employer or 
                other plan sponsor, including the distribution of 
                enrollment information and distribution of disclosure 
                materials under this title and whose duties do not 
                include making decisions on claims for benefits.
                    ``(C) Limitation.--Subparagraph (A) does not apply 
                in connection with any directed recordkeeper to the 
                extent that the directed recordkeeper fails to follow 
                the specific instruction of the plan or the employer or 
                other plan sponsor.
            ``(10) Construction.--Nothing in this subsection shall be 
        construed as authorizing a cause of action for the failure to 
        provide an item or service which is not covered under the group 
        health plan involved.
            ``(11) Applicability of state law.--No provision of State 
        law (as defined in section 514(c)(1)) relating to the 
        regulation of quality of care shall be treated as superseded, 
        preempted, or modified by reason of the provisions of 
        subsection (a)(1)(C) and this subsection, nor shall anything in 
        this subsection be construed to supersede, preempt, or modify 
        section 514 with respect to group health plans or the 
        preemptive effect of this section or section 503D with respect 
        to such plans.
            ``(12) Limitation on class action litigation.--A claim or 
        cause of action under this subsection may not be maintained as 
        a class action.''.
    (b) Expanded Remedies for Existing Causes of Action.--
            (1) In general.--Section 502 of such Act (as amended by 
        subsection (a)) is amended further--
                    (A) in subsection (a)(1)(B), by striking ``or'' 
                before ``to clarify'' and by striking ``plan;'' and 
                inserting ``plan, or, in the case of a group health 
                plan, for the additional relief provided in subsection 
                (o);''; and
                    (B) by adding after subsection (n) the following 
                new subsection:
    ``(o) Expanded Remedies Relating to Group Health Plan 
Determinations That Are Not Medically Reviewable.--In the case of any 
determination under a group health plan constituting a denial of a 
claim for benefits by a participant or beneficiary under the plan which 
is not a medically reviewable determination, if such determination is 
the proximate cause of substantial harm to, or wrongful death of, the 
participant or beneficiary, the relief for which the civil action may 
be brought under subsection (a)(1)(B) shall include liability of the 
designated health care decision-maker of the plan for economic and 
noneconomic damages in connection with such determination and such 
substantial harm or death, except that the aggregate amount of such 
liability for noneconomic damages may not exceed the maximum amount 
allowable under subsection (n)(5).''.
            (2) Special rule.--Nothing in the amendment made by 
        paragraph (1) shall affect the standard of review applicable 
        under section 502(a)(1)(B) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1132(a)(1)(B)).
    (c) Effective Date.--The amendments made by this section shall 
apply to acts and omissions (from which a cause of action arises) 
occurring on or after the date of the enactment of this Act.

SEC. 202. SEVERABILITY.

    If any provision of this title, an amendment made by this title, or 
the application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this 
title, the amendments made by this title, and the application of the 
provisions of such to any person or circumstance shall not be affected 
thereby.

         TITLE III--HEALTH CARE COVERAGE ACCESS TAX INCENTIVES

SEC. 301. EXPANDED AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

    (a) Repeal of Limitations on Number of Medical Savings Accounts.--
            (1) In general.--Subsections (i) and (j) of section 220 of 
        the Internal Revenue Code of 1986 are hereby repealed.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 220(c) of such Code is 
                amended by striking subparagraph (D).
                    (B) Section 138 of such Code is amended by striking 
                subsection (f).
    (b) Availability Not Limited to Accounts for Employees of Small 
Employers and Self-Employed Individuals.--
            (1) In general.--Section 220(c)(1)(A) of such Code 
        (relating to eligible individual) is amended to read as 
        follows:
                    ``(A) In general.--The term `eligible individual' 
                means, with respect to any month, any individual if--
                            ``(i) such individual is covered under a 
                        high deductible health plan as of the 1st day 
                        of such month, and
                            ``(ii) such individual is not, while 
                        covered under a high deductible health plan, 
                        covered under any health plan--
                                    ``(I) which is not a high 
                                deductible health plan, and
                                    ``(II) which provides coverage for 
                                any benefit which is covered under the 
                                high deductible health plan.''.
            (2) Conforming amendments.--
                    (A) Section 220(c)(1) of such Code is amended by 
                striking subparagraph (C).
                    (B) Section 220(c) of such Code is amended by 
                striking paragraph (4) (defining small employer) and by 
                redesignating paragraph (5) as paragraph (4).
                    (C) Section 220(b) of such Code is amended by 
                striking paragraph (4) (relating to deduction limited 
                by compensation) and by redesignating paragraphs (5), 
                (6), and (7) as paragraphs (4), (5), and (6), 
                respectively.
    (c) Increase in Amount of Deduction Allowed for Contributions to 
Medical Savings Accounts.--
            (1) In general.--Paragraph (2) of section 220(b) of such 
        Code is amended to read as follows:
            ``(2) Monthly limitation.--The monthly limitation for any 
        month is the amount equal to \1/12\ of the annual deductible 
        (as of the first day of such month) of the individual's 
        coverage under the high deductible health plan.''.
            (2) Conforming amendment.--Clause (ii) of section 
        220(d)(1)(A) of such Code is amended by striking ``75 percent 
        of''.
    (d) Both Employers and Employees May Contribute to Medical Savings 
Accounts.--Paragraph (4) of section 220(b) of such Code (as 
redesignated by subsection (b)(2)(C)) is amended to read as follows:
            ``(4) Coordination with exclusion for employer 
        contributions.--The limitation which would (but for this 
        paragraph) apply under this subsection to the taxpayer for any 
        taxable year shall be reduced (but not below zero) by the 
        amount which would (but for section 106(b)) be includible in 
        the taxpayer's gross income for such taxable year.''.
    (e) Reduction of Permitted Deductibles Under High Deductible Health 
Plans.--
            (1) In general.--Subparagraph (A) of section 220(c)(2) of 
        such Code (defining high deductible health plan) is amended--
                    (A) by striking ``$1,500'' in clause (i) and 
                inserting ``$1,000''; and
                    (B) by striking ``$3,000'' in clause (ii) and 
                inserting ``$2,000''.
            (2) Conforming amendment.--Subsection (g) of section 220 of 
        such Code is amended to read as follows:
    ``(g) Cost-of-Living Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 1998, each dollar amount in 
        subsection (c)(2) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                such taxable year begins by substituting `calendar year 
                1997' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(2) Special rules.--In the case of the $1,000 amount in 
        subsection (c)(2)(A)(i) and the $2,000 amount in subsection 
        (c)(2)(A)(ii), paragraph (1)(B) shall be applied by 
        substituting `calendar year 1999' for `calendar year 1997'.
            ``(3) Rounding.--If any increase under paragraph (1) or (2) 
        is not a multiple of $50, such increase shall be rounded to the 
        nearest multiple of $50.''.
    (f) Medical Savings Accounts May Be Offered Under Cafeteria 
Plans.--Subsection (f) of section 125 of such Code is amended by 
striking ``106(b),''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.
    (h) GAO Study.--Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall prepare and submit a report to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of the Senate 
on the impact of medical savings accounts on the cost of conventional 
insurance (especially in those areas where there are higher numbers of 
such accounts) and on adverse selection and health care costs.

SEC. 302. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS OF SELF-
              EMPLOYED INDIVIDUALS.

    (a) In General.--Paragraph (1) of section 162(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) Allowance of deduction.--In the case of an individual 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to 100 percent of the amount paid during the 
        taxable year for insurance which constitutes medical care for 
        the taxpayer and the taxpayer's spouse and dependents.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2000.

                    TITLE IV--HEALTH CARE PAPERWORK

SEC. 401. HEALTH CARE PAPERWORK SIMPLIFICATION.

    (a) Establishment of Panel.--
            (1) Establishment.--There is established a panel to be 
        known as the Health Care Panel to Devise a Uniform Explanation 
        of Benefits (in this section referred to as the ``Panel'').
            (2) Duties of Panel.--
                    (A) In general.--The Panel shall devise a single 
                form for use by third-party health care payers for the 
                remittance of claims to providers.
                    (B) Definition.--For purposes of this section, the 
                term ``third-party health care payer'' means any entity 
                that contractually pays health care bills for an 
                individual.
            (3) Membership.--
                    (A) Size and composition.--The Secretary of Health 
                and Human Services, in consultation with the Majority 
                Leader of the Senate and the Speaker of the House of 
                Representatives, shall determine the number of members 
                and the composition of the Panel. Such Panel shall 
                include equal numbers of representatives of private 
                insurance organizations, consumer groups, State 
                insurance commissioners, State medical societies, State 
                hospital associations, and State medical specialty 
                societies.
                    (B) Terms of appointment.--The members of the Panel 
                shall serve for the life of the Panel.
                    (C) Vacancies.--A vacancy in the Panel shall not 
                affect the power of the remaining members to execute 
                the duties of the Panel, but any such vacancy shall be 
                filled in the same manner in which the original 
                appointment was made.
            (4) Procedures.--
                    (A) Meetings.--The Panel shall meet at the call of 
                a majority of its members.
                    (B) First meeting.--The Panel shall convene not 
                later than 60 days after the date of the enactment of 
                this Act.
                    (C) Quorum.--A quorum shall consist of a majority 
                of the members of the Panel.
                    (D) Hearings.--For the purpose of carrying out its 
                duties, the Panel may hold such hearings and undertake 
                such other activities as the Panel determines to be 
                necessary to carry out its duties.
            (5) Administration.--
                    (A) Compensation.--Except as provided in 
                subparagraph (B), members of the Panel shall receive no 
                additional pay, allowances, or benefits by reason of 
                their service on the Panel.
                    (B) Travel expenses and per diem.--Each member of 
                the Panel who is not an officer or employee of the 
                Federal Government shall receive travel expenses and 
                per diem in lieu of subsistence in accordance with 
                sections 5702 and 5703 of title 5, United States Code.
                    (C) Contract authority.--The Panel may contract 
                with and compensate government and private agencies or 
                persons for items and services, without regard to 
                section 3709 of the Revised Statutes (41 U.S.C. 5).
                    (D) Use of mails.--The Panel may use the United 
                States mails in the same manner and under the same 
                conditions as Federal agencies and shall, for purposes 
                of the frank, be considered a commission of Congress as 
                described in section 3215 of title 39, United States 
                Code.
                    (E) Administrative support services.--Upon the 
                request of the Panel, the Secretary of Health and Human 
                Services shall provide to the Panel on a reimbursable 
                basis such administrative support services as the Panel 
                may request.
            (6) Submission of form.--Not later than 2 years after the 
        first meeting, the Panel shall submit a form to the Secretary 
        of Health and Human Services for use by third-party health care 
        payers.
            (7) Termination.--The Panel shall terminate on the day 
        after submitting its the form under paragraph (6).
    (b) Requirement for Use of Form by Third-Party Care Payers.--A 
third-party health care payer shall be required to use the form devised 
under subsection (a) for plan years beginning on or after 5 years 
following the date of the enactment of this Act.
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