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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 719 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 719

  To amend the Public Health Service Act and the Employee Retirement 
Income Security Act of 1974 to protect consumers in managed care plans 
                       and other health coverage.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 11, 1999

Mr. Ganske (for himself, Mrs. Roukema, Mr. Leach, Mr. Wamp, Mr. Forbes, 
 Mr. Petri, Mr. Shays, Mr. Horn, Mr. Frelinghuysen, Mr. Foley, and Mr. 
   Cooksey) introduced the following bill; which was referred to the 
 Committee on Commerce, and in addition to the Committee on Education 
 and the Workforce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
  To amend the Public Health Service Act and the Employee Retirement 
Income Security Act of 1974 to protect consumers in managed care plans 
                       and other health coverage.

    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 ``Managed Care 
Reform Act of 1999''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
               TITLE I--MANAGED CARE CONSUMER PROTECTIONS

                       Subtitle A--Access to Care

Sec. 101. Access to emergency care.
Sec. 102. Offering of choice of coverage options under group health 
                            plans.
Sec. 103. Choice of providers.
Sec. 104. Access to specialty care.
Sec. 105. Continuity of care.
Sec. 106. Coverage for individuals participating in approved clinical 
                            trials.
Sec. 107. Access to needed prescription drugs.
Sec. 108. Adequacy of provider network.
                     Subtitle B--Quality Assurance

Sec. 111. Standards for utilization review activities.
                    Subtitle C--Patient Information

Sec. 121. Patient information.
Sec. 122. Protection of patient confidentiality.
Sec. 123. Health insurance ombudsmen.
              Subtitle D--Grievance and Appeals Procedures

Sec. 131. Establishment of grievance process.
Sec. 132. Internal appeals of adverse determinations.
Sec. 133. External appeals of adverse determinations.
         Subtitle E--Protecting the Doctor-Patient Relationship

Sec. 141. Prohibition of interference with certain medical 
                            communications.
Sec. 142. Prohibition against transfer of indemnification or improper 
                            incentive arrangements.
Sec. 143. Additional rules regarding participation of health care 
                            professionals.
Sec. 144. Protection for patient advocacy.
              Subtitle F--Promoting Good Medical Practice

Sec. 151. Promoting good medical practice.
Sec. 152. Standards relating to benefits for certain breast cancer 
                            treatment.
                        Subtitle G--Definitions

Sec. 191. Definitions.
Sec. 192. Preemption; State flexibility; construction.
Sec. 193. Regulations.
 TITLE II--APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH 
  PLANS AND HEALTH INSURANCE COVERAGE UNDER PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to group health plans and group health insurance 
                            coverage.
Sec. 202. Application to individual health insurance coverage.
TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 301. Application of patient protection standards to group health 
                            plans and group health insurance coverage 
                            under the Employee Retirement Income 
                            Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving 
                            health insurance policyholders.
       TITLE IV--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 401. Effective dates.
Sec. 402. Coordination in implementation.

               TITLE I--MANAGED CARE CONSUMER PROTECTIONS

                       Subtitle A--Access to Care

SEC. 101. 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, 
        provides any benefits with respect to emergency services (as 
        defined in paragraph (2)(B)), the plan or issuer shall cover 
        emergency services furnished under the plan or coverage--
                    (A) without the need for any prior authorization 
                determination;
                    (B) whether or not 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, beneficiary, or enrollee by 
                a nonparticipating health care provider the 
                participant, beneficiary, or enrollee 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; 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 of the Employee Retirement 
                Income Security Act of 1974, 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 based on prudent 
                layperson standard.--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.
                    (B) Emergency services.--The term ``emergency 
                services'' means--
                            (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 an emergency medical condition (as 
                        defined in subparagraph (A)), 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.
    (b) Reimbursement for Maintenance Care and Post-Stabilization 
Care.--In the case of services (other than emergency services) for 
which benefits are available under a group health plan, or under health 
insurance coverage offered by a health insurance issuer, the plan or 
issuer shall provide for reimbursement with respect to such services 
provided to a participant, beneficiary, or enrollee other than through 
a participating health care provider in a manner consistent with 
subsection (a)(1)(C) (and shall otherwise comply with the guidelines 
established under section 1852(d)(2) of the Social Security Act 
(relating to promoting efficient and timely coordination of appropriate 
maintenance and post-stabilization care of an enrollee after an 
enrollee has been determined to be stable), or, in the absence of 
guidelines under such section, such guidelines as the Secretary shall 
establish to carry out this subsection), if the services are 
maintenance care or post-stabilization care covered under such 
guidelines.

SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS UNDER GROUP HEALTH 
              PLANS.

    (a) Requirement.--
            (1) Offering of point-of-service coverage option.--Except 
        as provided in paragraph (2), if a group health plan (or health 
        insurance coverage offered by a health insurance issuer in 
        connection with a group health plan) provides benefits only 
        through participating health care providers, the plan or issuer 
        shall offer the 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 or coverage and at such other 
        times as the plan or issuer offers the participant a choice of 
        coverage options.
            (2) Exception.--Paragraph (1) shall not apply with respect 
        to a participant in a group health plan if the plan offers the 
        participant--
                    (A) a choice of health insurance coverage; and
                    (B) one or more coverage options which do not 
                provide benefits only through participating health care 
                providers and which provide for payment for 
                nonparticipating providers in an amount that is not 
                less than the amount paid to a participating provider 
                for the same services.
    (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 or health insurance issuer, coverage of such 
benefits when provided by a nonparticipating health care provider 
through payment of an amount that is not less than the amount paid to a 
participating health care provider for the same services. Such coverage 
need not include coverage of providers that the plan or issuer excludes 
because of fraud, quality, or similar reasons.
    (c) Construction.--Nothing in this section shall be construed--
            (1) as requiring coverage for benefits for a particular 
        type of health care provider;
            (2) as requiring an employer to pay any costs as a result 
        of this section or to make equal contributions with respect to 
        different health coverage options; or
            (3) as preventing a group health plan or health insurance 
        issuer from imposing higher premiums or cost-sharing on a 
        participant for the exercise of a point-of-service coverage 
        option.
    (d) No Requirement for Guaranteed Availability.--If a health 
insurance issuer offers health insurance coverage that includes point-
of-service coverage with respect to an employer solely in order to meet 
the requirement of subsection (a), nothing in section 2711(a)(1)(A) of 
the Public Health Service Act shall be construed as requiring the 
offering of such coverage with respect to another employer.

SEC. 103. CHOICE OF PROVIDERS.

    (a) Primary Care.--A group health plan, and a health insurance 
issuer that offers health insurance coverage, shall permit each 
participant, beneficiary, and enrollee to receive primary care from any 
participating primary care provider who is available to accept such 
individual.
    (b) Specialists.--
            (1) In general.--Subject to paragraph (2), a group health 
        plan and a health insurance issuer that offers health insurance 
        coverage shall permit each participant, beneficiary, or 
        enrollee to receive medically necessary or appropriate 
        specialty care, pursuant to appropriate referral procedures, 
        from any qualified participating health care provider who is 
        available to accept such individual for such care.
            (2) Limitation.--Paragraph (1) shall not apply to specialty 
        care if the plan or issuer clearly informs participants, 
        beneficiaries, and enrollees of the limitations on choice of 
        participating providers with respect to such care.

SEC. 104. ACCESS TO SPECIALTY CARE.

    (a) Obstetrical and Gynecological Care.--
            (1) In general.--If a group health plan, or a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, requires or provides for a participant, 
        beneficiary, or enrollee to designate a participating primary 
        care provider, the plan or issuer--
                    (A) may not require authorization or a referral by 
                the individual's primary care provider or otherwise for 
                coverage of routine gynecological care (such as 
                preventive women's health examinations) and pregnancy-
                related services provided by a participating health 
                care professional who specializes in obstetrics and 
                gynecology to the extent such care is otherwise 
                covered, and
                    (B) may treat the ordering of other gynecological 
                care by such a participating physician as the 
                authorization of the primary care provider with respect 
                to such care under the plan or coverage.
            (2) Construction.--Nothing in paragraph (1)(B) shall waive 
        any requirements of coverage relating to medical necessity or 
        appropriateness with respect to coverage of gynecological care 
        so ordered.
    (b) Pediatric Care.--If a group health plan, or a health insurance 
issuer in connection with the provision of health insurance coverage, 
requires or providers for an enrollee to designate a participating 
primary care provider for a child of such enrollee, the plan or issuer 
shall permit the enrollee to designate a physician who specializes in 
pediatrics as the child's primary care provider.
    (c) Specialty Care.--
            (1) Specialty care for covered services.--
                    (A) In general.--If--
                            (i) an individual is a participant or 
                        beneficiary under a group health plan or an 
                        enrollee who is covered under health insurance 
                        coverage offered by a health insurance issuer,
                            (ii) the individual has a condition or 
                        disease of sufficient seriousness and 
                        complexity to require treatment by a 
                        specialist, and
                            (iii) benefits for such treatment are 
                        provided under the plan or coverage,
                the plan or issuer shall make or provide for a referral 
                to a specialist who is available and accessible to 
                provide the treatment for such condition or disease.
                    (B) Specialist defined.--For purposes of this 
                subsection, the term ``specialist'' means, with respect 
                to a condition, a health care practitioner, facility, 
                or center (such as a center of excellence) that has 
                adequate expertise through appropriate training and 
                experience (including, in the case of a child, 
                appropriate pediatric expertise) to provide high 
                quality care in treating the condition.
                    (C) Care under referral.--A group health plan or 
                health insurance issuer may require that the care 
                provided to an individual pursuant to such referral 
                under subparagraph (A) be--
                            (i) pursuant to a treatment plan, only if 
                        the treatment plan is developed by the 
                        specialist and approved by the plan or issuer, 
                        in consultation with the designated primary 
                        care provider or specialist and the individual 
                        (or the individual's designee), and
                            (ii) in accordance with applicable quality 
                        assurance and utilization review standards of 
                        the plan or issuer.
                Nothing in this subsection shall be construed as 
                preventing such a treatment plan for an individual from 
                requiring a specialist to provide the primary care 
                provider with regular updates on the specialty care 
                provided, as well as all necessary medical information.
                    (D) Referrals to participating providers.--A group 
                health plan or health insurance issuer is not required 
                under subparagraph (A) to provide for a referral to a 
                specialist that is not a participating provider, unless 
                the plan or issuer does not have an appropriate 
                specialist that is available and accessible to treat 
                the individual's condition and that is a participating 
                provider with respect to such treatment.
                    (E) Treatment of nonparticipating providers.--If a 
                plan or issuer refers an individual to a 
                nonparticipating specialist pursuant to subparagraph 
                (A), services provided pursuant to the approved 
                treatment plan (if any) shall be provided at no 
                additional cost to the individual beyond what the 
                individual would otherwise pay for services received by 
                such a specialist that is a participating provider.
            (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 
                health insurance coverage, shall have a procedure by 
                which an individual who is a participant, beneficiary, 
                or enrollee and who has an ongoing special condition 
                (as defined in subparagraph (C)) may 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. 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 as primary care provider for related 
                referrals.--Such specialist 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 plan (referred to in paragraph 
                (1)(C)(i)) 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, or 
                        disabling, and
                            (ii) requires specialized medical care over 
                        a prolonged period of time.
                    (D) Terms of referral.--The provisions of 
                subparagraphs (C) through (E) of paragraph (1) apply 
                with respect to referrals under subparagraph (A) of 
                this paragraph in the same manner as they apply to 
                referrals under paragraph (1)(A).
            (3) Standing referrals.--
                    (A) In general.--A group health plan, and a health 
                insurance issuer in connection with the provision of 
                health insurance coverage, shall have a procedure by 
                which an individual who is a participant, beneficiary, 
                or enrollee and who has a condition that requires 
                ongoing care from a specialist may receive a standing 
                referral to such specialist for treatment of such 
                condition. If the plan or issuer, or if the primary 
                care provider in consultation with the medical director 
                of the plan or issuer and the specialist (if any), 
                determines that such a standing referral is 
                appropriate, the plan or issuer shall make such a 
                referral to such a specialist.
                    (B) Terms of referral.--The provisions of 
                subparagraphs (C) through (E) of paragraph (1) apply 
                with respect to referrals under subparagraph (A) of 
                this paragraph in the same manner as they apply to 
                referrals under paragraph (1)(A).

SEC. 105. CONTINUITY OF CARE.

    (a) In General.--
            (1) Termination of provider.--If a contract between a group 
        health plan, or a health insurance issuer in connection with 
        the provision of health insurance coverage, and a health care 
        provider is terminated (as defined in paragraph (3)), or 
        benefits or coverage provided by a health care provider are 
        terminated because of a change in the terms of provider 
        participation in a group health plan, and an individual who is 
        a participant, beneficiary, or enrollee in the plan or coverage 
        is undergoing a course of treatment from the provider at the 
        time of such termination, the plan or issuer shall--
                    (A) notify the individual on a timely basis of such 
                termination, and
                    (B) subject to subsection (c), permit the 
                individual to continue or be covered with respect to 
                the course of treatment with the provider during a 
                transitional period (provided under subsection (b)).
            (2) Treatment of termination of contract with health 
        insurance issuer.--If a contract for the provision of health 
        insurance coverage between a group health plan and a health 
        insurance issuer is terminated and, as a result of such 
        termination, coverage of services of a health care provider is 
        terminated with respect to an individual, the provisions of 
        paragraph (1) (and the succeeding provisions of this section) 
        shall apply under the plan in the same manner as if there had 
        been a contract between the plan and the provider that had been 
        terminated, but only with respect to benefits that are covered 
        under the plan after the contract termination.
            (3) Termination.--In this section, the term ``terminated'' 
        includes, with respect to a contract, the expiration or 
        nonrenewal of the contract, but does not include a termination 
        of the contract by the plan or issuer for failure to meet 
        applicable quality standards or for fraud.
    (b) Transitional Period.--
            (1) In general.--Except as provided in paragraphs (2) 
        through (4), the transitional period under this subsection 
        shall extend for at least 90 days from the date of the notice 
        described in subsection (a)(1)(A) of the provider's 
        termination.
            (2) Institutional care.--The transitional period under this 
        subsection for institutional or inpatient care from a provider 
        shall extend until the discharge or termination of the period 
        of institutionalization and also shall include institutional 
        care provided within a reasonable time of the date of 
        termination of the provider status if the care was scheduled 
        before the date of the announcement of the termination of the 
        provider status under subsection (a)(1)(A) or if the individual 
        on such date was on an established waiting list or otherwise 
        scheduled to have such care.
            (3) Pregnancy.--If--
                    (A) a participant, beneficiary, or enrollee has 
                entered the second trimester of pregnancy 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, beneficiary, or enrollee 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 directly 
        related to the treatment of the terminal illness or its medical 
        manifestations.
    (c) Permissible Terms and Conditions.--A group health plan or 
health insurance issuer may condition coverage of continued treatment 
by a provider under subsection (a)(1)(B) upon the provider agreeing to 
the following terms and conditions:
            (1) The 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, in the case described in 
subsection (a)(2), at the rates applicable under the replacement plan 
or issuer after the date of the termination of the contract with the 
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 subsection 
(a)(1) had not been terminated.
            (2) The provider agrees to adhere to the quality assurance 
        standards of the plan or issuer responsible for payment under 
        paragraph (1) and to provide to such plan or issuer necessary 
        medical information related to the care provided.
            (3) The provider agrees otherwise to adhere to such plan's 
        or issuer's policies and procedures, 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) Construction.--Nothing in this section shall be construed to 
require the coverage of benefits which would not have been covered if 
the provider involved remained a participating provider.

SEC. 106. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL 
              TRIALS.

    (a) Coverage.--
            (1) In general.--If a group health plan, or health 
        insurance issuer that is providing health insurance coverage, 
        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 subsection (c), 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 enrollee'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, or who is an 
enrollee under health insurance coverage, and who meets the following 
conditions:
            (1)(A) The individual has a life-threatening or serious 
        illness for which no standard treatment is effective.
            (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 participant, beneficiary, or enrollee 
                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 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 (as determined by the Secretary) to be paid 
        for by the sponsors of an approved clinical trial.
            (2) 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 services under subparagraph (A).
    (d) Approved Clinical Trial Defined.--
            (1) In general.--In this section, the term ``approved 
        clinical trial'' means a clinical research study or clinical 
        investigation approved and funded (which may include funding 
        through in-kind contributions) by one or more of the following:
                    (A) The National Institutes of Health.
                    (B) A cooperative group or center of the National 
                Institutes of Health.
                    (C) Either of the following if the conditions 
                described in paragraph (2) are met:
                            (i) The Department of Veterans Affairs.
                            (ii) The Department of Defense.
            (2) Conditions for departments.--The conditions described 
        in this paragraph, for a study or investigation conducted by a 
        Department, are that the study or investigation has been 
        reviewed and approved through a system of peer review that the 
        Secretary determines--
                    (A) to be comparable to the system of peer review 
                of studies and investigations used by the National 
                Institutes of Health, and
                    (B) assures unbiased review of the highest 
                scientific standards by qualified individuals who have 
                no interest in the outcome of the review.
    (e) Construction.--Nothing in this section shall be construed to 
limit a plan's or issuer's coverage with respect to clinical trials.

SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.

    (a) In General.--If a group health plan, or health insurance issuer 
that offers health insurance coverage, provides benefits with respect 
to prescription drugs but the coverage limits such benefits to drugs 
included in a formulary, the plan or issuer shall--
            (1) ensure participation of participating physicians and 
        pharmacists in the development of the formulary;
            (2) disclose to providers and, disclose upon request under 
        section 121(c)(6) to participants, beneficiaries, and 
        enrollees, the nature of the formulary restrictions; and
            (3) consistent with the standards for a utilization review 
        program under section 111, provide for exceptions from the 
        formulary limitation when a non-formulary alternative is 
        medically indicated.
    (b) Coverage of Approved Drugs and Medical Devices.--
            (1) In general.--A group health plan (or health insurance 
        coverage offered in connection with such a plan) that provides 
        any coverage of prescription drugs or medical devices shall not 
        deny coverage of such a drug or device on the basis that the 
        use is investigational, if the use--
                    (A) in the case of a prescription drug--
                            (i) is included in the labeling authorized 
                        by the application in effect for the drug 
                        pursuant to subsection (b) or (j) of section 
                        505 of the Federal Food, Drug, and Cosmetic 
                        Act, without regard to any postmarketing 
                        requirements that may apply under such Act; or
                            (ii) is included in the labeling authorized 
                        by the application in effect for the drug under 
                        section 351 of the Public Health Service Act, 
                        without regard to any postmarketing 
                        requirements that may apply pursuant to such 
                        section; or
                    (B) in the case of a medical device, is included in 
                the labeling authorized by a regulation under 
                subsection (d) or (3) of section 513 of the Federal 
                Food, Drug, and Cosmetic Act, an order under subsection 
                (f) of such section, or an application approved under 
                section 515 of such Act, without regard to any 
                postmarketing requirements that may apply under such 
                Act.
            (2) Construction.--Nothing in this subsection shall be 
        construed as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        coverage of prescription drugs or medical devices.

SEC. 108. ADEQUACY OF PROVIDER NETWORK.

    (a) In General.--Each group health plan, and each health insurance 
issuer offering health insurance coverage, that provides benefits, in 
whole or in part, through participating health care providers shall 
have (in relation to the coverage) a sufficient number, distribution, 
and variety of qualified participating health care providers to ensure 
that all covered health care services, including specialty services, 
will be available and accessible in a timely manner to all 
participants, beneficiaries, and enrollees under the plan or coverage. 
This subsection shall only apply to a plan's or issuer's application of 
restrictions on the participation of health care providers in a network 
and shall not be construed as requiring a plan or issuer to create or 
establish new health care providers in an area.
    (b) Treatment of Certain Providers.--The qualified health care 
providers under subsection (a) may include Federally qualified health 
centers, rural health clinics, migrant health centers, and other 
essential community providers located in the service area of the plan 
or issuer and shall include such providers if necessary to meet the 
standards established to carry out such subsection.

                     Subtitle B--Quality Assurance

SEC. 111. STANDARDS FOR 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.
            (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 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 pursuant to 
                the program with the input of appropriate physicians.
                    (B) Continuing use of standards in retrospective 
                review.--If a health care service has been specifically 
                pre-authorized or approved for an enrollee 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 enrollee during the same course of treatment.
    (c) Conduct of Program Activities.--
            (1) Administration by health care professionals.--A 
        utilization review program shall be administered by qualified 
        health care professionals who shall oversee review decisions. 
        In this subsection, the term ``health care professional'' means 
        a physician or other health care practitioner licensed, 
        accredited, or certified to perform specified health services 
        consistent with State law.
            (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, to the extent required, who have received 
                appropriate training in the conduct of such activities 
                under the program.
                    (B) Peer review of sample of adverse clinical 
                determinations.--Such a program shall provide that 
                clinical peers (as defined in section 191(c)(2)) shall 
                evaluate the clinical appropriateness of at least a 
                sample of adverse clinical determinations.
                    (C) 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--
                            (i) provides incentives, direct or 
                        indirect, for such persons to make 
                        inappropriate review decisions, or
                            (ii) is based, directly or indirectly, on 
                        the quantity or type of adverse determinations 
                        rendered.
                    (D) Prohibition of conflicts.--Such a program shall 
                not permit a health care professional who provides 
                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 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.
            (5) Limitation on information requests.--Under such a 
        program, information shall be required to be provided by health 
        care providers only to the extent it is necessary to perform 
        the utilization review activity involved.
    (d) Deadline for Determinations.--
            (1) Prior authorization services.--Except as provided in 
        paragraph (2), in the case of a utilization review activity 
        involving the prior authorization of health care items and 
        services for an individual, the utilization review program 
        shall make a determination concerning such authorization, and 
        provide notice of the determination to the individual or the 
        individual's designee and the individual's health care provider 
        by telephone and in printed form, as soon as possible in 
        accordance with the medical exigencies of the cases, and in no 
        event later than 3 business days after the date of receipt of 
        information that is reasonably necessary to make such 
        determination.
            (2) Continued care.--In the case of a utilization review 
        activity involving authorization for continued or extended 
        health care services for an individual, or additional services 
        for an individual undergoing a course of continued treatment 
        prescribed by a health care provider, the utilization review 
        program shall make a determination concerning such 
        authorization, and provide notice of the determination to the 
        individual or the individual's designee and the individual's 
        health care provider by telephone and in printed form, as soon 
        as possible in accordance with the medical exigencies of the 
        cases, and in no event later than 1 business day after the date 
        of receipt of information that is reasonably necessary to make 
        such determination. Such notice shall include, with respect to 
        continued or extended health care services, the number of 
        extended services approved, the new total of approved services, 
        the date of onset of services, and the next review date, if 
        any.
            (3) Previously provided services.--In the case of a 
        utilization review activity involving retrospective review of 
        health care services previously provided for an individual, the 
        utilization review program shall make a determination 
        concerning such services, and provide notice of the 
        determination to the individual or the individual's designee 
        and the individual's health care provider by telephone and in 
        printed form, within 30 days of the date of receipt of 
        information that is reasonably necessary to make such 
        determination.
            (4) Reference to special rules for emergency services, 
        maintenance care, and post-stabilization care.--For waiver of 
        prior authorization requirements in certain cases involving 
        emergency services and maintenance care and post-stabilization 
        care, see subsections (a)(1) and (b) of section 101, 
        respectively.
    (e) Notice of Adverse Determinations.--
            (1) In general.--Notice of an adverse determination under a 
        utilization review program shall be provided in printed form 
        and shall include--
                    (A) the reasons for the determination (including 
                the clinical rationale);
                    (B) instructions on how to initiate an appeal under 
                section 132; and
                    (C) notice of the availability, upon request of the 
                individual (or the individual's designee) of the 
                clinical review criteria relied upon to make such 
                determination.
            (2) Specification of any additional information.--Such a 
        notice shall also specify what (if any) additional necessary 
        information must be provided to, or obtained by, the person 
        making the determination in order to make a decision on such an 
        appeal.

                    Subtitle C--Patient Information

SEC. 121. PATIENT 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) in printed 
                form;
                    (B) provide to participants and beneficiaries, 
                within a reasonable period (as specified by the 
                appropriate 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 participants 
                and beneficiaries, the applicable authority, and 
                prospective participants and beneficiaries, the 
                information described in subsection (b) or (c) in 
                printed form.
            (2) Health insurance issuers.--A health insurance issuer in 
        connection with the provision of health insurance coverage 
        shall--
                    (A) provide to individuals enrolled under such 
                coverage at the time of enrollment, and at least 
                annually thereafter, the information described in 
                subsection (b) in printed form;
                    (B) provide to enrollees, within a reasonable 
                period (as specified by the appropriate 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 applicable 
                authority, to individuals who are prospective 
                enrollees, and to the public the information described 
                in subsection (b) or (c) in printed form.
    (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 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) covered benefits, including benefit limits and 
                coverage exclusions;
                    (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, beneficiary, 
                or enrollee may select from among participating 
                providers and the types of providers participating in 
                the plan or issuer network;
                    (E) process for determining experimental coverage; 
                and
                    (F) use of a prescription drug formulary.
            (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, beneficiaries, 
                and enrollees 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 
                103(b)(2).
                    (H) How the plan or issuer addresses the needs of 
                participants, beneficiaries, and enrollees and others 
                who do not speak English or who have other special 
                communications needs in accessing providers under the 
                plan or coverage, including the provision of 
                information described in this subsection and subsection 
                (c) to such individuals and including the provision of 
                information in a language other than English if 5 
                percent of the number of participants, beneficiaries, 
                and enrollees communicate in that language instead of 
                English.
            (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) Percentage of premiums used for benefits (loss-
        ratios).--In the case of health insurance coverage only (and 
        not with respect to group health plans that do not provide 
        coverage through health insurance coverage), a description of 
        the overall loss-ratio for the coverage (as defined in 
        accordance with rules established or recognized by the 
        Secretary of Health and Human Services).
            (7) Prior authorization rules.--Rules regarding prior 
        authorization or other review requirements that could result in 
        noncoverage or nonpayment.
            (8) 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, 
        and the availability of assistance through an ombudsman to 
        individuals in relation to group health plans and health 
        insurance coverage.
            (9) Summary of provider financial incentives.--A summary 
        description of the information on the types of financial 
        payment incentives (described in section 1852(j)(4) of the 
        Social Security Act) provided by the plan or issuer under the 
        coverage.
            (10) Information on issuer.--Notice of appropriate mailing 
        addresses and telephone numbers to be used by participants, 
        beneficiaries, and enrollees 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 111, including under any drug formulary program 
        under section 107.
            (2) Grievance and appeals information.--Information on the 
        number of grievances and appeals and on the disposition in the 
        aggregate of such matters.
            (3) Method of physician compensation.--An overall summary 
        description as to the method of compensation of participating 
        physicians, including information on the types of financial 
        payment incentives (described in section 1852(j)(4) of the 
        Social Security Act) provided by the plan or issuer under the 
        coverage.
            (4) Specific information on credentials of participating 
        providers.--In the case of each participating provider, a 
        description of the credentials of the provider as they relate 
        to education, training, specialty qualifications, and national 
        accreditation.
            (5) Confidentiality policies and procedures.--A description 
        of the policies and procedures established to carry out section 
        122.
            (6) Formulary restrictions.--A description of the nature of 
        any drug formula restrictions.
            (7) Participating provider list.--A list of current 
        participating health care providers.
    (d) Form of Disclosure.--
            (1) Uniformity.--Information required to be disclosed under 
        this section shall be provided in accordance with uniform, 
        national reporting standards specified by the Secretary, after 
        consultation with applicable State authorities, so that 
        prospective enrollees may compare the attributes of different 
        issuers and coverage offered within an area.
            (2) Information into handbook.--Nothing in this section 
        shall be construed as preventing a group health plan or health 
        insurance issuer from making the information under subsections 
        (b) and (c) available to participants, beneficiaries, and 
        enrollees through an enrollee handbook or similar publication.
            (3) Updating participating provider information.--The 
        information on participating health care providers described in 
        subsection (b)(3)(C) shall be updated within such reasonable 
        period as determined appropriate by the Secretary. Nothing in 
        this section shall prevent an issuer from changing or updating 
        other information made available under this section.
    (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.

SEC. 122. PROTECTION OF PATIENT CONFIDENTIALITY.

    Insofar as a group health plan, or a health insurance issuer that 
offers health insurance coverage, maintains medical records or other 
health information regarding participants, beneficiaries, and 
enrollees, the plan or issuer shall establish procedures--
            (1) to safeguard the privacy of any individually 
        identifiable enrollee information;
            (2) to maintain such records and information in a manner 
        that is accurate and timely, and
            (3) to assure timely access of such individuals to such 
        records and information.

SEC. 123. HEALTH INSURANCE OMBUDSMEN.

    (a) In General.--Each State that obtains a grant under subsection 
(c) shall provide for creation and operation of a Health Insurance 
Ombudsman through a contract with a not-for-profit organization that 
operates independent of group health plans and health insurance 
issuers. Such Ombudsman shall be responsible for at least the 
following:
            (1) To assist consumers in the State in choosing among 
        health insurance coverage or among coverage options offered 
        within group health plans.
            (2) To provide counseling and assistance to enrollees 
        dissatisfied with their treatment by health insurance issuers 
        and group health plans in regard to such coverage or plans and 
        with respect to grievances and appeals regarding determinations 
        under such coverage or plans.
    (b) Federal Role.--In the case of any State that does not provide 
for such an Ombudsman under subsection (a), the Secretary shall provide 
for the creation and operation of a Health Insurance Ombudsman through 
a contract with a not-for-profit organization that operates independent 
of group health plans and health insurance issuers and that is 
responsible for carrying out with respect to that State the functions 
otherwise provided under subsection (a) by a Health Insurance 
Ombudsman.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Health and Human Services such amounts 
as may be necessary to provide for grants to States for contracts for 
Health Insurance Ombudsmen under subsection (a) or contracts for such 
Ombudsmen under subsection (b).
    (d) Construction.--Nothing in this section shall be construed to 
prevent the use of other forms of enrollee assistance.

              Subtitle D--Grievance and Appeals Procedures

SEC. 131. ESTABLISHMENT OF GRIEVANCE PROCESS.

    (a) Establishment of Grievance System.--
            (1) In general.--A group health plan, and a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, shall establish and maintain a system to 
        provide for the presentation and resolution of oral and written 
        grievances brought by individuals who are participants, 
        beneficiaries, or enrollees, or health care providers or other 
        individuals acting on behalf of an individual and with the 
        individual's consent, regarding any aspect of the plan's or 
        issuer's services.
            (2) Scope.--The system shall include grievances regarding 
        access to and availability of services, quality of care, choice 
        and accessibility of providers, network adequacy, and 
        compliance with the requirements of this title.
    (b) Grievance System.--Such system shall include the following 
components with respect to individuals who are participants, 
beneficiaries, or enrollees:
            (1) Written notification to all such individuals and 
        providers of the telephone numbers and business addresses of 
        the plan or issuer personnel responsible for resolution of 
        grievances and appeals.
            (2) A system to record and document, over a period of at 
        least 3 previous years, all grievances and appeals made and 
        their status.
            (3) A process providing for timely processing and 
        resolution of grievances.
            (4) Procedures for follow-up action, including the methods 
        to inform the person making the grievance of the resolution of 
        the grievance.

SEC. 132. INTERNAL APPEALS OF ADVERSE DETERMINATIONS.

    (a) Right of Appeal.--
            (1) In general.--A participant or beneficiary in a group 
        health plan, and an enrollee in health insurance coverage 
        offered by a health insurance issuer, and any provider or other 
        person acting on behalf of such an individual with the 
        individual's consent, may appeal any appealable decision (as 
        defined in paragraph (2)) under the procedures described in 
        this section and (to the extent applicable) section 133. Such 
        individuals and providers shall be provided with a written 
        explanation of the appeal process and the determination upon 
        the conclusion of the appeals process and as provided in 
        section 121(b)(8).
            (2) Appealable decision defined.--In this section, the term 
        ``appealable decision'' means any of the following:
                    (A) Denial, reduction, or termination of, or 
                failure to provide or make payment (in whole or in 
                part) for, a benefit, including a failure to cover an 
                item or service for which benefits are otherwise 
                provided because it is determined to be experimental or 
                investigational or not medically necessary or 
                appropriate.
                    (B) Failure to provide coverage of emergency 
                services or reimbursement of maintenance care or post-
                stabilization care under section 101.
                    (C) Failure to provide a choice of provider under 
                section 103.
                    (D) Failure to provide qualified health care 
                providers under section 103.
                    (E) Failure to provide access to specialty and 
                other care under section 104.
                    (F) Failure to provide continuation of care under 
                section 105.
                    (G) Failure to provide coverage of routine patient 
                costs in connection with an approval clinical trial 
                under section 106.
                    (H) Failure to provide access to needed drugs under 
                section 107(a)(3) or 107(b).
                    (I) An adverse determination under a utilization 
                review program under section 111.
                    (J) The imposition of a limitation that is 
                prohibited under section 151.
    (b) Internal Appeal Process.--
            (1) In general.--Each group health plan and health 
        insurance issuer shall establish and maintain an internal 
        appeal process under which any participant, beneficiary, 
        enrollee, or provider acting on behalf of such an individual 
        with the individual's consent, who is dissatisfied with any 
        appealable decision has the opportunity to appeal the decision 
        through an internal appeal process. The appeal may be 
        communicated orally.
            (2) Conduct of review.--
                    (A) In general.--The process shall include a review 
                of the decision by a physician or other health care 
                professional (or professionals) who has been selected 
                by the plan or issuer and who has not been involved in 
                the appealable decision at issue in the appeal.
                    (B) Availability and participation of clinical 
                peers.--The individuals conducting such review shall 
                include one or more clinical peers (as defined in 
                section 191(c)(2)) who have not been involved in the 
                appealable decision at issue in the appeal.
            (3) Deadline.--
                    (A) In general.--Subject to subsection (c), the 
                plan or issuer shall conclude each appeal as soon as 
                possible after the time of the receipt of the appeal in 
                accordance with medical exigencies of the case 
                involved, but in no event later than--
                            (i) 72 hours after the time of receipt of 
                        an expedited appeal, and
                            (ii) except as provided in subparagraph 
                        (B), 30 days after such time (or, if the 
                        participant, beneficiary, or enrollee supplies 
                        additional information that was not available 
                        to the plan or issuer at the time of the 
                        receipt of the appeal, after the date of 
                        supplying such additional information) in the 
                        case of all other appeals.
                    (B) Extension.--In the case of an appeal that does 
                not relate to a decision regarding an expedited appeal 
                and that does not involve medical exigencies, if a 
                group health plan or health insurance issuer is unable 
                to conclude the appeal within the time period provided 
                under subparagraph (A)(ii) due to circumstances beyond 
                the control of the plan or issuer, the deadline shall 
                be extended for up to an additional 3 business days if 
                the plan or issuer provides, on or before 10 days 
                before the deadline otherwise applicable, written 
                notice to the participant, beneficiary, or enrollee and 
                the provider involved of the extension and the reasons 
                for the extension.
            (4) Notice.--If a plan or issuer denies an appeal, the plan 
        or issuer shall provide the participant, beneficiary, or 
        enrollee and provider involved with notice in printed form of 
        the denial and the reasons therefore, together with a notice in 
        printed form of rights to any further appeal.
    (c) Expedited Review Process.--
            (1) In general.--A group health plan, and a health 
        insurance issuer, shall establish procedures in writing for the 
        expedited consideration of appeals under subsection (b) in 
        situations in which the application of the normal timeframe for 
        making a determination could seriously jeopardize the life or 
        health of the participant, beneficiary, or enrollee or such an 
        individual's ability to regain maximum function.
            (2) Process.--Under such procedures--
                    (A) the request for expedited appeal may be 
                submitted orally or in writing by an individual or 
                provider who is otherwise entitled to request the 
                appeal;
                    (B) all necessary information, including the plan's 
                or issuer's decision, shall be transmitted between the 
                plan or issuer and the requester by telephone, 
                facsimile, or other similarly expeditious available 
                method; and
                    (C) the plan or issuer shall expedite the appeal if 
                the request for an expedited appeal is submitted under 
                subparagraph (A) by a physician and the request 
                indicates that the situation described in paragraph (1) 
                exists.
    (d) Direct Use of Further Appeals.--In the event that the plan or 
issuer fails to comply with any of the deadlines for completion of 
appeals under this section or in the event that the plan or issuer for 
any reason expressly waives its rights to an internal review of an 
appeal under subsection (b), the participant, beneficiary, or enrollee 
involved and the provider involved shall be relieved of any obligation 
to complete the appeal involved and may, at such an individual's or 
provider's option, proceed directly to seek further appeal through any 
applicable external appeals process.

SEC. 133. EXTERNAL APPEALS OF ADVERSE DETERMINATIONS.

    (a) Right to External Appeal.--
            (1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, 
        shall provide for an external appeals process that meets the 
        requirements of this section in the case of an externally 
        appealable decision described in paragraph (2), for which a 
        timely appeal is made either by the plan or issuer or by the 
        participant, beneficiary, or enrollee, or a representative of 
        any of them. The appropriate Secretary shall establish 
        standards to carry out such requirements.
            (2) Externally appealable decision defined.--For purposes 
        of this section, the term ``externally appealable decision'' 
        means an appealable decision (as defined in section 132(a)(2)) 
        if--
                    (A) the amount involved exceeds $100; or
                    (B) the patient's life or health is jeopardized as 
                a consequence of the decision.
        Such term does not include a denial of coverage for services 
        that are specifically listed in plan or coverage documents as 
        excluded from coverage.
            (3) Exhaustion of internal appeals process.--A plan or 
        issuer may condition the use of an external appeal process in 
        the case of an externally appealable decision upon completion 
        of the internal review process provided under section 132, but 
        only if the decision is made in a timely basis consistent with 
        the deadlines provided under this subtitle.
    (b) General Elements of External Appeals Process.--
            (1) Contract with qualified external appeal entity.--
                    (A) Contract requirement.--Subject to subparagraph 
                (B), the external appeal process under this section of 
a plan or issuer shall be conducted under a contract between the plan 
or issuer and one or more qualified external appeal entities (as 
defined in subsection (c)).
                    (B) Restrictions on qualified external appeal 
                entity.--
                            (i) By state for health insurance 
                        issuers.--With respect to health insurance 
                        issuers 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 such a manner as to assure an 
                        unbiased determination.
                            (ii) By federal government for group health 
                        plans.--With respect to group health plans, the 
                        appropriate Secretary may exercise the same 
                        authority as a State may exercise with respect 
                        to health insurance issuers under clause (i). 
                        Such authority may include requiring the use of 
                        the qualified external appeal entity designated 
                        or selected under such clause.
                            (iii) Limitation on plan or issuer 
                        selection.--If an applicable authority permits 
                        more than one entity to qualify as a qualified 
                        external appeal entity with respect to a group 
                        health plan or health insurance issuer and the 
                        plan or issuer may select among such qualified 
                        entities, the applicable authority--
                                    (I) shall assure that the selection 
                                process will not create any incentives 
                                for external appeal entities to make a 
                                decision in a biased manner, and
                                    (II) shall implement procedures for 
                                auditing a sample of decisions by such 
                                entities to assure that no such 
                                decisions are made in a biased manner.
                    (C) Other terms and conditions.--The terms and 
                conditions of a contract under this paragraph shall be 
                consistent with the standards the appropriate Secretary 
                shall establish to assure there is no real or apparent 
                conflict of interest in the conduct of external appeal 
                activities. Such contract shall provide that the direct 
                costs of the process (not including costs of 
                representation of a participant, beneficiary, or 
                enrollee) shall be paid by the plan or issuer, and not 
                by the participant, beneficiary, or enrollee.
            (2) Elements of process.--An external appeal process shall 
        be conducted consistent with standards established by the 
        appropriate Secretary that include at least the following:
                    (A) Fair process; de novo determination.--The 
                process shall provide for a fair, de novo 
                determination. In carrying out this subparagraph, the 
                determination of medical necessity shall be made under 
                the process without regard to the definition used by 
                the plan or issuer. However, nothing in this sentence 
                shall be construed as providing for coverage of items 
                and services for which benefits are specifically 
                excluded under the plan or coverage.
                    (B) Determination concerning externally appealable 
                decisions.--A qualified external appeal entity shall 
                determine whether a decision is an externally 
                appealable decision and related decisions, including--
                            (i) whether such a decision involves an 
                        expedited appeal;
                            (ii) the appropriate deadlines for internal 
                        review process required due to medical 
                        exigencies in a case; and
                            (iii) whether such a process has been 
                        completed.
                    (C) Opportunity to submit evidence, have 
                representation, and make oral presentation.--Each party 
                to an externally appealable decision (directly or 
                through an authorized representative or 
                representatives, any of whom may be an attorney)--
                            (i) may submit and review evidence related 
                        to the issues in dispute,
                            (ii) may use the assistance or 
                        representation of one or more individuals (any 
                        of whom may be an attorney), and
                            (iii) may make an oral presentation.
                    (D) Provision of information.--The plan or issuer 
                involved shall provide timely access to all its records 
                relating to the matter of the externally appealable 
                decision and to all provisions of the plan or health 
                insurance coverage (including any coverage manual) 
                relating to the matter.
                    (E) Timely decisions.--A determination by the 
                external appeal entity on the decision shall--
                            (i) be made orally or in writing and, if it 
                        is made orally, shall be supplied to the 
                        parties in writing as soon as possible;
                            (ii) be binding on the plan or issuer;
                            (iii) be made in accordance with the 
                        medical exigencies of the case involved, but in 
                        no event later than 60 days (or 72 hours in the 
                        case of an expedited appeal or, in the case of 
                        an appeal involving emergency circumstances, as 
                        soon as possible in accordance with the medical 
                        exigencies of the case, and in no event later 
                        than 24 hours) from the date of completion of 
                        the filing of notice requesting an external 
                        appeal of the decision;
                            (iv) state, in layperson's language, the 
                        basis for the determination, including, if 
                        relevant, any basis in the terms or conditions 
                        of the plan or coverage; and
                            (v) inform the participant, beneficiary, or 
                        enrollee of the individual's rights (including 
                        any limitation on such rights) to seek further 
                        review by the courts (or other process) of the 
external appeal determination.
    (c) Qualifications of External Appeal Entities.--
            (1) In general.--For purposes of this section, the term 
        ``qualified external appeal entity'' means, in relation to a 
        plan or issuer, an entity (which may be a governmental entity) 
        that is certified under paragraph (2) as meeting the following 
        requirements:
                    (A) There is no real or apparent conflict of 
                interest that would impede the entity conducting 
                external appeal activities independent of the plan or 
                issuer.
                    (B) The entity conducts external appeal activities 
                through clinical peers.
                    (C) The entity has sufficient medical, legal, and 
                other expertise and sufficient staffing to conduct 
                external appeal activities for the plan or issuer on a 
                timely basis consistent with subsection (b)(3)(E).
                    (D) The entity meets such other requirements as the 
                appropriate Secretary may impose.
            (2) Certification of external appeal entities.--
                    (A) In general.--In order to be treated as a 
                qualified external appeal entity with respect to--
                            (i) a group health plan, the entity must be 
                        certified (and, in accordance with subparagraph 
                        (B), periodically recertified) as meeting the 
                        requirements of paragraph (1) by the Secretary 
                        of Labor (or under a process recognized or 
                        approved by the Secretary of Labor); or
                            (ii) a health insurance issuer operating in 
                        a State, the entity must be certified (and, in 
                        accordance with subparagraph (B), periodically 
                        recertified) as meeting such requirements by 
                        the applicable State authority (or, if the 
                        State has not established an adequate 
                        certification and recertification process, by 
                        the Secretary of Health and Human Services, or 
                        under a process recognized or approved by such 
                        Secretary).
                    (B) Recertification process.--The appropriate 
                Secretary shall develop standards for the 
                recertification of external appeal entities. Such 
                standards shall include a specification of--
                            (i) the information required to be 
                        submitted as a condition of recertification on 
                        the entity's performance of external appeal 
                        activities, which information shall include the 
                        number of cases reviewed, a summary of the 
                        disposition of those cases, the length of time 
                        in making determinations on those cases, and 
                        such information as may be necessary to assure 
                        the independence of the entity from the plans 
                        or issuers for which external appeal activities 
                        are being conducted; and
                            (ii) the periodicity which recertification 
                        will be required.
            (3) Limitation on liability of reviewers.--No qualified 
        external appeal entity having a contract with a plan or issuer 
        under this part and no person who is employed by, or who has a 
        fiduciary relationship with, any such entity or who furnishes 
        professional services to such entity, shall be held by reason 
        of the performance of any duty, function, or activity required 
        or authorized pursuant to this section, to have violated any 
        criminal law, or to be civilly liable under any law of the 
        United States or of any State (or political subdivision 
        thereof) if due care was exercised in the performance of such 
        duty, function, or activity and there was no actual malice or 
        gross misconduct in the performance of such duty, function, or 
        activity.
    (d) External Appeal Determination Binding on Plan.--
            (1) In general.--Subject to paragraph (2), the 
        determination by an external appeals entity under this section 
        is binding on the plan (and issuer, if any) involved in the 
        determination.
            (2) Vacation or modification of decision.--The 
        determination by an external appeals entity under this section 
        may be vacated or modified by a court under the same 
        circumstances as the decision of an arbitrator may be vacated 
        or modified under sections 10 and 11 of title 9, United States 
        Code.

         Subtitle E--Protecting the Doctor-Patient Relationship

SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    (a) Prohibition.--
            (1) 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 covered health care 
        professional (as defined in subsection (b)) 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.
            (2) Nullification.--Any contract provision or agreement 
        that restricts or prohibits medical communications in violation 
        of paragraph (1) shall be null and void.
    (b) Health Care Professional Defined.--For purposes of this 
section, the term ``health care professional'' means a physician (as 
defined in section 1861(r) of the Social Security Act) or other health 
care professional if coverage for the professional's services of the 
professional is provided under the group health plan or health 
insurance coverage. Such term includes a podiatrist, optometrist, 
chiropractor, psychologist, dentist, physician assistant, physical or 
occupational therapist and therapy assistant, speech-language 
pathologist, audiologist, registered or licensed practical nurse 
(including nurse practitioner, clinical nurse specialist, certified 
registered nurse anesthetist, and certified nurse-midwife), licensed 
clinical social worker, registered respiratory therapist, and certified 
respiratory therapy technician.

SEC. 142. PROHIBITION AGAINST TRANSFER OF INDEMNIFICATION OR IMPROPER 
              INCENTIVE ARRANGEMENTS.

    (a) Prohibition of Transfer of Indemnification.--
            (1) In general.--No contract or agreement between a group 
        health plan or health insurance issuer (or any agent acting on 
        behalf of such a plan or issuer) and a health care provider 
        shall contain any provision purporting to transfer to the 
        health care provider by indemnification or otherwise any 
        liability relating to activities, actions, or omissions of the 
        plan, issuer, or agent (as opposed to the provider).
            (2) Nullification.--Any contract or agreement provision 
        described in paragraph (1) shall be null and void.
    (b) Prohibition of Improper Physician Incentive Plans.--
            (1) In general.--A group health plan and a health insurance 
        issuer offering health insurance coverage 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 subparagraph (A) of such section are 
        met with respect to such a plan.
            (2) 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, 
        beneficiary, or enrollee with the plan or organization, 
        respectively.

SEC. 143. ADDITIONAL RULES REGARDING PARTICIPATION OF HEALTH CARE 
              PROFESSIONALS.

    (a) Procedures.--Insofar as a group health plan, or health 
insurance issuer that offers health insurance coverage, provides 
benefits through participating health care professionals, the plan or 
issuer shall establish reasonable procedures relating to the 
participation (under an agreement between a professional and the plan 
or issuer) of such professionals under the plan or coverage. Such 
procedures shall include--
            (1) providing notice of the rules regarding participation;
            (2) providing written notice of participation decisions 
        that are adverse to professionals; and
            (3) providing a process within the plan or issuer for 
        appealing such adverse decisions, including the presentation of 
        information and views of the professional regarding such 
        decision.
    (b) Consultation in Medical Policies.--A group health plan, and 
health insurance issuer that offers health insurance coverage, shall 
consult with participating physicians (if any) regarding the plan's or 
issuer's medical policy, quality, and medical management procedures.

SEC. 144. PROTECTION FOR PATIENT ADVOCACY.

    (a) Protection for Use of Utilization Review and Grievance 
Process.--A group health plan, and a health insurance issuer with 
respect to the provision of health insurance coverage, may not 
retaliate against a participant, beneficiary, enrollee, or health care 
provider based on the participant's, beneficiary's, enrollee's or 
provider's use of, or participation in, a utilization review process or 
a grievance process of the plan or issuer (including an internal or 
external review or appeal process) under this title.
    (b) Protection for Quality Advocacy by Health Care Professionals.--
            (1) In general.--A group health plan or health insurance 
        issuer may not retaliate or discriminate against a protected 
        health care professional because the professional in good 
        faith--
                    (A) discloses information relating to the care, 
                services, or conditions affecting one or more 
                participants, beneficiaries, or enrollees of the plan 
                or issuer to an appropriate public regulatory agency, 
                an appropriate private accreditation body, or 
                appropriate management personnel of the plan or issuer;
                    (B) initiates, cooperates, or otherwise 
                participates in an investigation or proceeding by such 
                an agency with respect to such care, services, or 
                conditions; or
                    (C) participates in an external appeals process 
                under section 133.
        If an institutional health care provider is a participating 
        provider with such a plan or issuer or otherwise receives 
        payments for benefits provided by such a plan or issuer, the 
        provisions of the previous sentence shall apply to the provider 
        in relation to care, services, or conditions affecting one or 
        more patients within an institutional health care provider in 
        the same manner as they apply to the plan or issuer in relation 
        to care, services, or conditions provided to one or more 
        participants, beneficiaries, or enrollees; and for purposes of 
        applying this sentence, any reference to a plan or issuer is 
        deemed a reference to the institutional health care provider.
            (2) Good faith action.--For purposes of paragraph (1), a 
        protected health care professional is considered to be acting 
        in good faith with respect to disclosure of information or 
        participation if, with respect to the information disclosed as 
        part of the action--
                    (A) the disclosure is made on the basis of personal 
                knowledge and is consistent with that degree of 
                learning and skill ordinarily possessed by health care 
                professionals with the same licensure or certification 
                and the same experience;
                    (B) the professional reasonably believes the 
                information to be true;
                    (C) the information evidences either a violation of 
                a law, rule, or regulation, of an applicable 
                accreditation standard, or of a generally recognized 
                professional or clinical standard or that a patient is 
                in imminent hazard of loss of life or serious injury; 
                and
                    (D) subject to subparagraphs (B) and (C) of 
                paragraph (3), the professional has followed reasonable 
                internal procedures of the plan, issuer, or 
                institutional health care provider established or the 
                purpose of addressing quality concerns before making 
                the disclosure.
            (3) Exception and special rule.--
                    (A) General exception.--Paragraph (1) does not 
                protect disclosures that would violate Federal or State 
                law or diminish or impair the rights of any person to 
                the continued protection of confidentiality of 
                communications provided by such law.
                    (B) Notice of internal procedures.--Subparagraph 
                (D) of paragraph (2) shall not apply unless the 
                internal procedures involved are reasonably expected to 
                be known to the health care professional involved. For 
                purposes of this subparagraph, a health care 
                professional is reasonably expected to know of internal 
                procedures if those procedures have been made available 
                to the professional through distribution or posting.
                    (C) Internal procedure exception.--Subparagraph (D) 
                of paragraph (2) also shall not apply if--
                            (i) the disclosure relates to an imminent 
                        hazard of loss of life or serious injury to a 
                        patient;
                            (ii) the disclosure is made to an 
                        appropriate private accreditation body pursuant 
                        to disclosure procedures established by the 
                        body; or
                            (iii) the disclosure is in response to an 
                        inquiry made in an investigation or proceeding 
                        of an appropriate public regulatory agency and 
                        the information disclosed is limited to the 
scope of the investigation or proceeding.
            (4) Additional considerations.--It shall not be a violation 
        of paragraph (1) to take an adverse action against a protected 
        health care professional if the plan, issuer, or provider 
        taking the adverse action involved demonstrates that it would 
        have taken the same adverse action even in the absence of the 
        activities protected under such paragraph.
            (5) Notice.--A group health plan, health insurance issuer, 
        and institutional health care provider shall post a notice, to 
        be provided or approved by the Secretary of Labor, setting 
        forth excerpts from, or summaries of, the pertinent provisions 
        of this subsection and information pertaining to enforcement of 
        such provisions.
            (6) Constructions.--
                    (A) Determinations of coverage.--Nothing in this 
                subsection shall be construed to prohibit a plan or 
                issuer from making a determination not to pay for a 
                particular medical treatment or service or the services 
                of a type of health care professional.
                    (B) Enforcement of peer review protocols and 
                internal procedures.--Nothing in this subsection shall 
                be construed to prohibit a plan, issuer, or provider 
                from establishing and enforcing reasonable peer review 
                or utilization review protocols or determining whether 
                a protected health care professional has complied with 
                those protocols or from establishing and enforcing 
                internal procedures for the purpose of addressing 
                quality concerns.
                    (C) Relation to other rights.--Nothing in this 
                subsection shall be construed to abridge rights of 
                participants, beneficiaries, enrollees, and protected 
                health care professionals under other applicable 
                Federal or State laws.
            (7) Protected health care professional defined.--For 
        purposes of this subsection, the term ``protected health care 
        professional'' means an individual who is a licensed or 
        certified health care professional and who--
                    (A) with respect to a group health plan or health 
                insurance issuer, is an employee of the plan or issuer 
                or has a contract with the plan or issuer for provision 
                of services for which benefits are available under the 
                plan or issuer; or
                    (B) with respect to an institutional health care 
                provider, is an employee of the provider or has a 
                contract or other arrangement with the provider 
                respecting the provision of health care services.

              Subtitle F--Promoting Good Medical Practice

SEC. 151. PROMOTING GOOD MEDICAL PRACTICE.

    (a) Prohibiting Arbitrary Limitations or Conditions for the 
Provision of Services.--
            (1) In general.--A group health plan, and a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, may not arbitrarily interfere with or alter 
        the decision of the treating physician regarding the manner or 
        setting in which particular services are delivered if the 
        services are medically necessary or appropriate for treatment 
        or diagnosis to the extent that such treatment or diagnosis is 
        otherwise a covered benefit.
            (2) Construction.--Paragraph (1) shall not be construed as 
        prohibiting a plan or issuer from limiting the delivery of 
        services to one or more health care providers within a network 
        of such providers.
            (3) Manner or setting defined.--In paragraph (1), the term 
        ``manner or setting'' means the location of treatment, such as 
        whether treatment is provided on an inpatient or outpatient 
        basis, and the duration of treatment, such as the number of 
        days in a hospital. Such term does not include the coverage of 
        a particular service or treatment.
    (b) No Change in Coverage.--Subsection (a) shall not be construed 
as requiring coverage of particular services the coverage of which is 
otherwise not covered under the terms of the plan or coverage or from 
conducting utilization review activities consistent with this 
subsection.
    (c) Medical Necessity or Appropriateness Defined.--In subsection 
(a), the term ``medically necessary or appropriate'' means, with 
respect to a service or benefit, a service or benefit which is 
consistent with generally accepted principles of professional medical 
practice.

SEC. 152. STANDARDS RELATING TO BENEFITS FOR CERTAIN BREAST CANCER 
              TREATMENT.

    (a) Inpatient Care.--
            (1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, that 
        provides medical and surgical benefits shall ensure that 
        inpatient coverage with respect to the treatment of breast 
        cancer is provided for a period of time as is determined by the 
        attending physician, in the physician's professional judgment 
        consistent with generally accepted medical standards, in 
        consultation with the patient, to be medically appropriate 
        following--
                    (A) a mastectomy;
                    (B) a lumpectomy; or
                    (C) a lymph node dissection for the treatment of 
                breast cancer.
            (2) Exception.--Nothing in this section shall be construed 
        as requiring the provision of inpatient coverage if the 
        attending physician and patient determine that a shorter period 
        of hospital stay is medically appropriate.
    (b) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            (1) deny to a woman eligibility, or continued eligibility, 
        to enroll or to renew coverage under the terms of the plan, 
        solely for the purpose of avoiding the requirements of this 
        section;
            (2) provide monetary payments or rebates to women to 
        encourage such women to accept less than the minimum 
        protections available under this section;
            (3) penalize or otherwise reduce or limit the reimbursement 
        of an attending provider because such provider provided care to 
        an individual participant or beneficiary in accordance with 
        this section;
            (4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to 
        an individual participant or beneficiary in a manner 
        inconsistent with this section; or
            (5) subject to subsection (c)(3), restrict benefits for any 
        portion of a period within a hospital length of stay required 
        under subsection (a) in a manner which is less favorable than 
        the benefits provided for any preceding portion of such stay.
    (c) Rules of Construction.--
            (1) Nothing in this section shall be construed to require a 
        woman who is a participant or beneficiary--
                    (A) to undergo a mastectomy, lumpectomy, or lymph 
                node dissection in a hospital; or
                    (B) to stay in the hospital for a fixed period of 
                time following a mastectomy, lumpectomy, or lymph node 
                dissection.
            (2) This section shall not apply with respect to any group 
        health plan, or any group health insurance coverage offered by 
        a health insurance issuer, which does not provide benefits for 
        hospital lengths of stay in connection with a mastectomy, 
        lumpectomy, or lymph node dissection for the treatment of 
        breast cancer.
            (3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in relation to 
        benefits for hospital lengths of stay in connection with a 
        mastectomy or lymph node dissection for the treatment of breast 
        cancer under the plan (or under health insurance coverage 
        offered in connection with a group health plan), except that 
        such coinsurance or other cost-sharing for any portion of a 
        period within a hospital length of stay required under 
        subsection (a) may not be greater than such coinsurance or 
        cost-sharing for any preceding portion of such stay.
    (d) Level and Type of Reimbursements.--Nothing in this section 
shall be construed to prevent a group health plan or a health insurance 
issuer offering group health insurance coverage from negotiating the 
level and type of reimbursement with a provider for care provided in 
accordance with this section.
    (e) Exception for Health Insurance Coverage in Certain States.--
            (1) In general.--The requirements of this section shall not 
        apply with respect to health insurance coverage if there is a 
        State law (as defined in section 2723(d)(1) of the Public 
        Health Service Act) for a State that regulates such coverage 
        that is described in any of the following subparagraphs:
                    (A) Such State law requires such coverage to 
                provide for at least a 48-hour hospital length of stay 
                following a mastectomy performed for treatment of 
                breast cancer and at least a 24-hour hospital length of 
                stay following a lymph node dissection for treatment of 
                breast cancer.
                    (B) Such State law requires, in connection with 
                such coverage for surgical treatment of breast cancer, 
                that the hospital length of stay for such care is left 
                to the decision of (or required to be made by) the 
                attending provider in consultation with the woman 
                involved.
            (2) Construction.--Section 2723(a)(1) of the Public Health 
        Service Act and section 731(a)(1) of the Employee Retirement 
        Income Security Act of 1974 shall not be construed as 
        superseding a State law described in paragraph (1).

                        Subtitle G--Definitions

SEC. 191. DEFINITIONS.

    (a) Incorporation of General Definitions.--The provisions of 
section 2971 of the Public Health Service Act shall apply for purposes 
of this title in the same manner as they apply for purposes of title 
XXVII of such Act.
    (b) Secretary.--Except as otherwise provided, the term 
``Secretary'' means the Secretary of Health and Human Services, in 
consultation with the Secretary of Labor and the Secretary of the 
Treasury and the term ``appropriate Secretary'' means the Secretary of 
Health and Human Services in relation to carrying out this title under 
sections 2706 and 2751 of the Public Health Service Act, the Secretary 
of Labor in relation to carrying out this title under section 714 of 
the Employee Retirement Income Security Act of 1974, and the Secretary 
of the Treasury in relation to carrying out this title under chapter 
100 and section 4980D of the Internal Revenue Code of 1986.
    (c) Additional Definitions.--For purposes of this title:
            (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 title, 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) Clinical peer.--The term ``clinical peer'' means, with 
        respect to a review or appeal, a physician (allopathic or 
        osteopathic) or other health care professional who holds a 
        license, and who, in the case of a physician, is appropriately 
        certified by a nationally recognized, peer reviewed accrediting 
        body in the same or similar specialty as typically manages the 
medical condition, procedure, or treatment under review or appeal and 
includes a pediatric specialist where appropriate; except that only a 
physician may be a clinical peer with respect to the review or appeal 
of treatment recommended or rendered by a physician.
            (3) Health care provider.--The term ``health care 
        provider'' includes a physician or other health care 
        professional, as well as an institutional provider of health 
        care services.
            (4) Nonparticipating.--The term ``nonparticipating'' means, 
        with respect to a health care provider that provides health 
        care items and services to a participant, beneficiary, or 
        enrollee 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.
            (5) Participating.--The term ``participating'' mean, with 
        respect to a health care provider that provides health care 
        items and services to a participant, beneficiary, or enrollee 
        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.

SEC. 192. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

    (a) Continued Applicability of State Law With Respect to Health 
Insurance Issuers.--
            (1) In General.--Subject to paragraph (2), this title shall 
        not be construed to supersede any provision of State law which 
        establishes, implements, or continues in effect any standard or 
        requirement solely relating to health insurance issuers in 
        connection with group health insurance coverage, except to the 
        extent that such standard or requirement prevents the 
        application of a requirement of this title, or which requires 
        (in connection with any litigation against a health insurance 
        issuer) that the dispute be first, or simultaneously, 
        considered through an alternative dispute resolution system.
            (2) Continued preemption with respect to group health 
        plans.--Nothing in this title 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.
    (b) Rules of Construction.--Except as provided in section 152, 
nothing in this title shall be construed as requiring a group health 
plan or health insurance coverage to provide specific benefits under 
the terms of such plan or coverage.
    (c) Definitions.--For purposes of this section:
            (1) State law.--The term ``State law'' includes all laws, 
        decisions, rules, regulations, or other State action having the 
        effect of law, of any State. A law of the United States 
        applicable only to the District of Columbia shall be treated as 
        a State law rather than a law of the United States.
            (2) State.--The term ``State'' includes a State, the 
        Northern Mariana Islands, any political subdivisions of a State 
        or such Islands, or any agency or instrumentality of either.

SEC. 193. REGULATIONS.

    The Secretaries of Health and Human Services and Labor shall issue 
such regulations as may be necessary or appropriate to carry out this 
title, other than section 151. Such regulations shall be issued 
consistent with section 104 of Health Insurance Portability and 
Accountability Act of 1996. Such Secretaries may promulgate any interim 
final rules as the Secretaries determine are appropriate to carry out 
this title.

 TITLE II--APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH 
  PLANS AND HEALTH INSURANCE COVERAGE UNDER PUBLIC HEALTH SERVICE ACT

SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
              COVERAGE.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act is amended by adding at the end the following new 
section:

``SEC. 2706. PATIENT PROTECTION STANDARDS.

    ``(a) In General.--Each group health plan shall comply with patient 
protection requirements under title I of the Managed Care Reform Act of 
1999, and each health insurance issuer shall comply with patient 
protection requirements under such title with respect to group health 
insurance coverage it offers, and such requirements shall be deemed to 
be incorporated into this subsection.
    ``(b) Notice.--A group health plan shall comply with the notice 
requirement under section 711(d) of the Employee Retirement Income 
Security Act of 1974 with respect to the requirements referred to in 
subsection (a) and a health insurance issuer shall comply with such 
notice requirement as if such section applied to such issuer and such 
issuer were a group health plan.''.
    (b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42 
U.S.C. 300gg-21(b)(2)(A)) is amended by inserting ``(other than section 
2706)'' after ``requirements of such subparts''.

SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE COVERAGE.

    Part B of title XXVII of the Public Health Service Act is amended 
by inserting after section 2751 the following new section:

``SEC. 2752. PATIENT PROTECTION STANDARDS.

    ``(a) In General.--Each health insurance issuer shall comply with 
patient protection requirements under title I of the Managed Care 
Reform Act of 1999 with respect to individual health insurance coverage 
it offers, and such requirements shall be deemed to be incorporated 
into this subsection.
    ``(b) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 711(d) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of such title as if such section applied to such issuer and such issuer 
were a group health plan.''.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH 
              PLANS AND GROUP HEALTH INSURANCE COVERAGE UNDER THE 
              EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 is amended by 
adding at the end the following new section:

``SEC. 714. PATIENT PROTECTION STANDARDS.

    ``(a) In General.--Subject to subsection (b), a group health plan 
(and a health insurance issuer offering group health insurance coverage 
in connection with such a plan) shall comply with the requirements of 
title I of the Managed Care Reform Act of 1999 (as in effect as of the 
date of the enactment of such Act), and such requirements shall be 
deemed to be incorporated into this subsection.
    ``(b) Plan Satisfaction of Certain Requirements.--
            ``(1) Satisfaction of certain requirements through 
        insurance.--For purposes of subsection (a), 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 following requirements of title I of the 
        Managed Care Reform Act of 1999 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:
                    ``(A) Section 101 (relating to access to emergency 
                care).
                    ``(B) Section 102(a)(1) (relating to offering 
                option to purchase point-of-service coverage), but only 
                insofar as the plan is meeting such requirement through 
                an agreement with the issuer to offer the option to 
                purchase point-of-service coverage under such section.
                    ``(C) Section 103 (relating to choice of 
                providers).
                    ``(D) Section 104 (relating to access to specialty 
                care).
                    ``(E) Section 105(a)(1) (relating to continuity in 
                case of termination of provider contract) and section 
                105(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.
                    ``(F) Section 106 (relating to coverage for 
                individuals participating in approved clinical trials.)
                    ``(G) Section 107 (relating to access to needed 
                prescription drugs).
                    ``(H) Section 108 (relating to adequacy of provider 
                network).
                    ``(I) Subtitle B (relating to quality assurance).
                    ``(J) Section 143 (relating to additional rules 
                regarding participation of health care professionals).
                    ``(K) Section 152 (relating to standards relating 
                to benefits for certain breast cancer treatment).
            ``(2) Information.--With respect to information required to 
        be provided or made available under section 121, in the case of 
        a group health plan that provides benefits in the form of 
        health insurance coverage through a health insurance issuer, 
        the Secretary shall determine the circumstances under which the 
        plan is not required to provide or make available the 
        information (and is not liable for the issuer's failure to 
        provide or make available the information), if the issuer is 
        obligated to provide and make available (or provides and makes 
        available) such information.
            ``(3) Grievance and internal appeals.--With respect to the 
        grievance system and internal appeals process required to be 
        established under sections 131 and 132, in the case of a group 
        health plan that provides benefits in the form of health 
        insurance coverage through a health insurance issuer, the 
        Secretary shall determine the circumstances under which the 
        plan is not required to provide for such system and process 
        (and is not liable for the issuer's failure to provide for such 
        system and process), if the issuer is obligated to provide for 
        (and provides for) such system and process.
            ``(4) External appeals.--Pursuant to rules of the 
        Secretary, insofar as a group health plan enters into a 
        contract with a qualified external appeal entity for the 
        conduct of external appeal activities in accordance with 
        section 133, the plan shall be treated as meeting the 
        requirement of such section and is not liable for the entity's 
        failure to meet any requirements under such section.
            ``(5) Application to prohibitions.--Pursuant to rules of 
        the Secretary, 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 141 (relating to prohibition of 
                interference with certain medical communications).
                    ``(B) Section 142 (relating to prohibition against 
                transfer of indemnification or improper incentive 
                arrangements).
                    ``(C) Section 144 (relating to prohibition on 
                retaliation).
                    ``(D) Section 151 (relating to promoting good 
                medical practice).
            ``(6) 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.
            ``(7) Application to certain prohibitions against 
        retaliation.--With respect to compliance with the requirements 
        of section 144(b)(1) of the Managed Care Reform Act of 1999, 
        for purposes of this subtitle the term `group health plan' is 
        deemed to include a reference to an institutional health care 
        provider.
    ``(c) Enforcement of Certain Requirements.--
            ``(1) Complaints.--Any protected health care professional 
        who believes that the professional has been retaliated or 
        discriminated against in violation of section 144(b)(1) of the 
        Managed Care Reform Act of 1999 may file with the Secretary a 
        complaint within 180 days of the date of the alleged 
        retaliation or discrimination.
            ``(2) Investigation.--The Secretary shall investigate such 
        complaints and shall determine if a violation of such section 
        has occurred and, if so, shall issue an order to ensure that 
        the protected health care professional does not suffer any loss 
        of position, pay, or benefits in relation to the plan, issuer, 
        or provider involved, as a result of the violation found by the 
        Secretary.
    ``(d) Conforming Regulations.--The Secretary may issue regulations 
to coordinate the requirements on group health plans under this section 
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 subtitle D (and section 111) 
of title I of the Managed Care Reform Act of 1999 in the case of a 
claims denial shall be deemed compliance with subsection (a) with 
respect to such claims denial.''.
    (c) Conforming Amendments.--(1) Section 732(a) of such Act (29 
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting 
``sections 711 and 714''.
    (2) The table of contents in section 1 of such Act is amended by 
inserting after the item relating to section 712 the following new 
item:

``Sec. 714. Patient protection standards.''.
    (3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is amended 
by inserting ``(other than section 144(b))'' after ``part 7''.

SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS INVOLVING 
              HEALTH INSURANCE POLICYHOLDERS.

    (a) In General.--Section 514 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144) is amended by adding at the end 
the following subsection:
    ``(e) Preemption Not To Apply to Certain Actions Arising Out of 
Provision of Health Benefits.--
            ``(1) Non-preemption of certain causes of action.--
                    ``(A) In general.--Except as provided in this 
                subsection, nothing in this title shall be construed to 
                invalidate, impair, or supersede any cause of action 
                brought by a plan participant or beneficiary (or the 
                estate of a plan participant or beneficiary) under 
                State law to recover damages resulting from personal 
                injury or for wrongful death against any person--
                            ``(i) in connection with the provision of 
                        insurance, administrative services, or medical 
                        services by such person to or for a group 
                        health plan (as defined in section 733), or
                            ``(ii) that arises out of the arrangement 
                        by such person for the provision of such 
                        insurance, administrative services, or medical 
                        services by other persons.
                    ``(B) Limitation on punitive damages.--The plan or 
                issuer is not liable for any punitive, exemplary, or 
                similar damages in the case of a cause of action 
                brought under subparagraph (A) if--
                            ``(i) it relates to an externally 
                        appealable decision (as defined in subsection 
                        (a)(2) of section 133 of the Managed Care 
                        Reform Act of 1999);
                            ``(ii) an external appeal with respect to 
                        such decision was completed under such section 
                        133;
                            ``(iii) in the case such external appeal 
                        was initiated by the plan or issuer filing the 
                        request for the external appeal, the request 
                        was filed on a timely basis before the date the 
                        action was brought or, if later, within 30 days 
                        after the date the externally appealable 
                        decision was made;
                            ``(iv) the plan or issuer promptly followed 
                        the recommendation of the qualified external 
                        appeal entity involved; and
                            ``(v) such recommendation is not vacated 
                        under subsection (d)(3) of such section based 
                        upon an action of the plan or issuer.
                The provisions of this subparagraph supersede any State 
                law or common law to the contrary.
                    ``(C) Personal injury defined.--For purposes of 
                this subsection, the term `personal injury' means a 
                physical injury and includes an injury arising out of 
                the treatment (or failure to treat) a mental illness or 
                disease.
            ``(2) Exception for employers and other plan sponsors.--
                    ``(A) In general.--Subject to subparagraph (B), 
                paragraph (1) does not authorize--
                            ``(i) any cause of action against an 
                        employer or other plan sponsor maintaining the 
                        group health plan (or against an employee of 
                        such an employer or sponsor acting within the 
                        scope of employment), or
                            ``(ii) a right of recovery or indemnity by 
                        a person against an employer or other plan 
                        sponsor (or such an employee) for damages 
                        assessed against the person pursuant to a cause 
                        of action under paragraph (1).
                    ``(B) Special rule.--Subparagraph (A) shall not 
                preclude any cause of action described in paragraph (1) 
                against an employer or other plan sponsor (or against 
                an employee of such an employer or sponsor acting 
                within the scope of employment) if--
                            ``(i) such action is based on the 
                        employer's or other plan sponsor's (or 
                        employee's) exercise of discretionary authority 
                        to make a decision on a claim for benefits 
                        covered under the plan or health insurance 
                        coverage in the case at issue; and
                            ``(ii) the exercise by such employer or 
                        other plan sponsor (or employee) of such 
                        authority resulted in personal injury or 
                        wrongful death.
            ``(3) Construction.--Nothing in this subsection shall be 
        construed as permitting a cause of action under State law for 
        the failure to provide an item or service which is specifically 
        excluded under the group health plan involved.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to acts and omissions occurring on or after the date of the 
enactment of this Act from which a cause of action arises.

       TITLE IV--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 401. EFFECTIVE DATES.

    (a) Group Health Coverage.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by sections 201(a) and 301 (and title I insofar as it 
        relates to such sections) 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 October 1, 2000 (in this section referred to as the 
        ``general effective date'').
            (2) Treatment of collective bargaining agreements.--In the 
        case of a group health plan maintained pursuant to 1 or more 
        collective bargaining agreements between employee 
        representatives and 1 or more employers ratified before the 
        date of enactment of this Act, the amendments made by sections 
        201(a) and 301 (and title I insofar as it relates to such 
        sections) 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 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 Act shall not be treated as a termination of such 
        collective bargaining agreement.
    (b) Individual Health Insurance Coverage.--The amendments made by 
section 202 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.

SEC. 402. COORDINATION IN IMPLEMENTATION.

    The Secretary of Health and Human Services and the Secretary of 
Labor 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 two or 
        more such Secretaries have responsibility under title I (and 
        the amendments made by titles II and III) 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.
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