I

104TH CONGRESS

1ST SESSION H. R. 2400

To establish standards for health plan relationships with enrollees, health

professionals, and providers.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1995

Mr. NORWOOD (for himself and Mr. BREWSTER) introduced the following bill;

which was referred to the Committee on Commerce

A BILL

To establish standards for health plan relationships with

enrollees, health professionals, and providers.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Family Health Care Fairness Act of 1995’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—DEFINITIONS; GENERAL PROVISIONS

Sec. 101. Definitions.

Sec. 102. Certification of health plans.

Sec. 103. Effect on certain State laws.
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TITLE II—CERTIFICATION OF HEALTH PLANS

Sec. 201. Enrollee access to care.

Sec. 202. Enrollee choice of health professionals and providers.

Sec. 203. Nondiscrimination; equitable access to networks.

Sec. 204. Development of plan policies.

Sec. 205. Due process for enrollees.

Sec. 206. Due process for health professionals and providers.

Sec. 207. Information reporting and disclosure by network plans.

Sec. 208. Other health plan requirements.

Sec. 209. Quality assurance program; case review.

Sec. 210. Related provisions.

TITLE III—ENFORCEMENT

Sec. 301. Health plan standards.

Sec. 302. Health plan liability.

1 TITLE I—DEFINITIONS;

2 GENERAL PROVISIONS

3 SEC. 101. DEFINITIONS.

4 For purposes of this Act:

5 (1) EMERGENCY MEDICAL CONDITION.—The

6 term ‘‘emergency medical condition’’ means a medi7 cal condition (including emergency labor and deliv8 ery) manifesting itself by acute symptoms of suffi9 cient severity (including severe pain) such that the

10 absence of immediate medical attention could rea11 sonably be expected to result in—

12 (A) placing the patient’s health in serious

13 jeopardy,

14 (B) serious impairment to bodily functions,

15 or

16 (C) serious dysfunction of any bodily organ

17 or part.
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1 (2) EMERGENCY SERVICES.—The term ‘‘emer2 gency services’’ means health care items and services

3 that are necessary for the treatment of an emer4 gency medical condition.

5 (3) ENROLLEE.—The term ‘‘enrollee’’ means,

6 with respect to a health plan, an individual enrolled

7 with the health plan.

8 (4) ENROLLEE WITH SPECIAL HEALTH CARE

9 NEEDS.—The term ‘‘enrollee with special health care

10 needs’’ means an enrollee who is an individual or a

11 member of a family that includes an individual with

12 a disability or chronic condition.

13 (A) For purposes of section 202(c)(2)(A),

14 relating to the Point-of-Service Option, such en15 rollee shall be additionally defined as having an

16 adjusted gross income that does not exceed 250

17 percent of the official poverty line (as defined

18 by the Office of Management and Budget, and

19 revised annually in accordance with section

20 673(2) of the Omnibus Budget Reconciliation

21 Act of 1981) applicable to a family of the size

22 involved.

23 (5) HEALTH PLAN.—The term ‘‘health plan’’ or

24 ‘‘plan’’ refers to any plan or arrangement that pro-
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1 vides, or pays the cost of, health benefits, whether

2 through insurance, reimbursement, or otherwise.

3 (6) HEALTH PROFESSIONAL.—The term

4 ‘‘health professional’’ means only an individual who

5 is licensed, certified, accredited, or otherwise

6 credentialed to provide health care items and serv7 ices as authorized by State law (or a State regu8 latory mechanism provided by State law).

9 (7) INDIVIDUALLY IDENTIFIABLE INFORMA10 TION.—The term ‘‘individually identifiable informa11 tion’’ means, with respect to an enrollee, a health

12 professional, or a provider, any information, whether

13 oral or recorded in any medium or form, that identi14 fies or can readily be associated with the identity of

15 the enrollee, the health professional, or the provider.

16 (8) MEDICALLY UNDERSERVED AREA.—The

17 term ‘‘medically underserved area’’ means an area

18 that is designated as a health professional shortage

19 area under section 332 of the Public Health Service

20 Act or as a medically underserved area for purposes

21 of section 330 or 1302(7) of such Act.

22 (9) NETWORK.—The term ‘‘network’’ means,

23 with respect to a network plan, the participating

24 health professionals and providers through whom the
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1 plan provides health care items and services to en2 rollees.

3 (10) NETWORK PLAN.—The term ‘‘network

4 plan’’ means a health plan that provides or arranges

5 for the provision of health care items and services to

6 enrollees through participating health professionals

7 and providers.

8 (11) PARTICIPATING.—The term ‘‘participat9 ing’’ means, with respect to a health professional or

10 provider, a health professional or provider that pro11 vides health care items and services to enrollees of

12 a network plan under an agreement with the plan.

13 (12) PROVIDER.—The term ‘‘provider’’ means a

14 health organization, health facility, or health agency

15 that is licensed, certified, credentialed, or otherwise

16 authorized to provide health care items and services

17 under applicable State law.

18 (13) RURAL AREA.—The term ‘‘rural area’’

19 means an area that is not within a Standard Metro20 politan Statistical Area or a New England County

21 Metropolitan Area (as defined by the Office of Man22 agement and Budget).

23 (14) SECRETARY.—The term ‘‘Secretary’’

24 means the Secretary of Health and Human Services.
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1 (15) SERVICE AREA.—The term ‘‘service area’’

2 means, with respect to a health plan, the geographic

3 area served by the plan.

4 (16) SPECIALIZED TREATMENT EXPERTISE.—

5 The term ‘‘specialized treatment expertise’’ means—

6 (A) expertise in diagnosing and treating

7 unusual diseases and conditions,

8 (B) diagnosing and treating diseases and

9 conditions that are unusually difficult to diag10 nose or treat, and

11 (C) providing other specialized health care.

12 (17) URGENT CARE SERVICES.—The term ‘‘ur13 gent care services’’ means health care items and

14 services that are necessary for the treatment of a

15 condition that—

16 (A) is not an emergency medical condition,

17 (B) requires prompt medical or clinical

18 treatment, and

19 (C) poses a danger to the patient if not

20 treated in a timely manner (as defined by the

21 Secretary).

22 (18) UTILIZATION REVIEW.—The term ‘‘utiliza23 tion review’’ means prospective, concurrent, or retro24 spective review of health care items and services for

25 medical necessity, appropriateness, or quality of care
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1 that includes preauthorization requirements for cov2 erage of such items and services.

3 SEC. 102. CERTIFICATION OF HEALTH PLANS.

4 (a) IN GENERAL.—The Secretary, shall establish a

5 process under which—

6 (1) a health plan may apply to be certified

7 under this Act;

8 (2) such certification is periodically reviewed;

9 and

10 (3) such certification is terminated or not re11 newed if the health plan fails substantially to meet

12 the requirements of this Act.

13 To the extent practicable, the process shall be the same

14 as the process used to determine if an entity is an eligible

15 organization under section 1876 of the Social Security

16 Act. To the extent the Secretary does not use that process,

17 the Secretary shall submit a report to Congress that ex18 plains the reasons for the differences.

19 (b) CONDITIONS OF CERTIFICATION.—The Secretary

20 shall certify a health plan under this Act if the Secretary

21 finds that the plan meets the applicable requirements of—

22 (1) section 201 (relating to enrollee access to

23 care);

24 (2) section 202 (relating to enrollee choice for

25 network plans);
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1 (3) section 203 (relating to nondiscrimination

2 and health professional and provider equity);

3 (4) section 204 (relating to development of plan

4 policies);

5 (5) section 205 (relating to due process for en6 rollees);

7 (6) section 206 (relating to due process for

8 health professionals and providers);

9 (7) section 207 (relating to information report10 ing and disclosure by network plans);

11 (8) section 208 (relating to other health plan

12 requirements), and

13 (9) section 209 (relating to quality assurance

14 program and case review).

15 SEC. 103. EFFECT ON CERTAIN STATE LAWS.

16 Nothing in this Act shall be construed as preempting

17 or otherwise superseding any State law that requires—

18 (1) a health plan to cover any item or service

19 furnished by a health professional or provider be20 longing to a category, class, or type of health profes21 sional or provider that is authorized under State law

22 to provide the item or service if the plan covers such

23 item or service when furnished by a health profes24 sional or provider belonging to another such cat25 egory, class, or type;
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1 (2) a network plan to include as a participating

2 health professional or provider any health profes3 sional or provider that accepts the terms and condi4 tions established by the plan for other participating

5 providers; or

6 (3) a health plan to permit enrollees access to

7 a specified category, class, or type of health profes8 sional or provider without a referral from a physi9 cian.

10 TITLE II—CERTIFICATION OF

11 HEALTH PLANS

12 SEC. 201. ENROLLEE ACCESS TO CARE.

13 (a) IN GENERAL.—A health plan meets the require14 ments of this section if the plan meets—

15 (1) the general access requirements of sub16 section (b);

17 (2) the requirements for access to emergency

18 and urgent care services of subsection (c); and

19 (3) in the case of a network plan—

20 (A) the requirements for access to special21 ized services of subsection (d); and

22 (B) the requirements of subsection (e) re23 lating to incentive plans.

24 (b) GENERAL ACCESS.—
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1 (1) IN GENERAL.—Subject to paragraphs (2),

2 (3), and (4), a health plan meets the requirements

3 of this subsection if the plan establishes and main4 tains adequate arrangements with a sufficient num5 ber, mix, and distribution of health professionals and

6 providers to assure that covered items and services

7 are available and accessible to each enrollee—

8 (A) in the service area of the plan;

9 (B) in a variety of sites of service;

10 (C) with reasonable promptness (including

11 reasonable hours of operation and after-hours

12 services);

13 (D) with reasonable proximity to the resi14 dences and workplaces of enrollees; and

15 (E) in a manner that—

16 (i) takes into account the diverse

17 needs of enrollees, and

18 (ii) reasonably assures continuity of

19 care.

20 (2) EXCLUSIVE CONTRACTS.—A health plan

21 that has an arrangement with only 1 provider to fur22 nish a particular service or category of services to

23 enrollees may not be treated as meeting the require24 ments of this subsection unless such provider is the

25 only provider of such service or category of service
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1 in the service area of the plan and otherwise meets

2 the requirements of this Act.

3 (3) RURAL AND UNDERSERVED AREAS.—A

4 health plan that serves a geographic area that is

5 rural or medically underserved shall be treated as

6 meeting the requirement that it have a sufficient

7 number, mix, and distribution of health professionals

8 and providers with respect to such area if the plan—

9 (A) has arrangements with a sufficient

10 number of health professionals and providers in

11 those categories of health professionals and pro12 viders specified by the Secretary as having a

13 history of serving rural or medically under14 served areas, or

15 (B) meets such other conditions as the

16 Secretary may establish.

17 (4) RULE OF CONSTRUCTION.—Nothing in this

18 subsection shall be construed as requiring a health

19 plan to have arrangements that conflict with its re20 sponsibilities to establish measures designed to

21 maintain quality and control costs.

22 (c) EMERGENCY AND URGENT CARE.—A health plan

23 meets the requirements of this subsection if the plan—

24 (1) assures the availability and accessibility of

25 medically or clinically necessary emergency services
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1 and urgent care services within the service area of

2 the plan 24 hours a day, 7 days a week;

3 (2) requires no preauthorization for items and

4 services furnished in a hospital emergency depart5 ment to an enrollee with symptoms that reasonably

6 suggest an emergency medical condition (including

7 items and services described in paragraph (3)(C));

8 (3) covers (and makes reasonable payments

9 for)—

10 (A) emergency services,

11 (B) services that are not emergency serv12 ices but are described in paragraph (2),

13 (C) medical screening examinations and

14 other ancillary services necessary to determine

15 if a medical condition is an emergency medical

16 condition, and

17 (D) urgent care services,

18 without regard to whether the health professional or

19 provider furnishing such services has a contractual

20 (or other) arrangement with the plan; and

21 (4) make preauthorization determinations for—

22 (A) services that are furnished in a hos23 pital emergency department (other than services

24 described in paragraph (3)), and

25 (B) urgent care services,
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1 within the time periods specified in (or pursuant to)

2 section 205(b)(8).

3 (d) SPECIALIZED SERVICES.—

4 (1) IN GENERAL.—A network plan meets the

5 requirement of this subsection if the plan dem6 onstrates that enrollees have access to specialized

7 treatment expertise when such treatment is medi8 cally or clinically indicated in the professional judg9 ment of the treating health professional, in consulta10 tion with the enrollee.

11 (2) METHOD OF MEETING REQUIREMENT.—A

12 network plan may meet the requirement of this sub13 section by entering into agreements with, and dem14 onstrating sufficient referrals to, centers of special15 ized treatment expertise designated by the Secretary.

16 (e) INCENTIVE PLANS.—A network plan meets the

17 requirements of this subsection if any health professional

18 or provider incentive plan operated by the plan meets the

19 requirements of section 1876(i)(8)(A) of the Social Secu20 rity Act.

21 SEC. 202. ENROLLEE CHOICE OF HEALTH PROFESSIONALS

22 AND PROVIDERS.

23 (a) IN GENERAL.—A health plan meets the require24 ments of this section if the plan meets—
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1 (1) the requirement of subsection (b) that en2 rollees have a choice of personal health professional;

3 (2) the requirement of subsection (c) that a

4 plan cover services furnished by out-of-network pro5 viders; and

6 (3) the requirements of subsection (d) that the

7 plan assure continuity of care.

8 (b) CHOICE OF PERSONAL HEALTH PROFES9 SIONAL.—The requirement of this subsection is that a net10 work plan permit each enrollee—

11 (1) to select a personal health professional from

12 among the participating health professionals of the

13 plan, and

14 (2) to change that selection as appropriate.

15 (c) POINT-OF-SERVICE OPTION.—

16 (1) IN GENERAL.—The requirement of this sub17 section is that a network plan—

18 (A) cover items and services furnished to

19 an enrollee by a health professional or provider

20 that is not a participating health professional or

21 provider; and

22 (B) establish cost-sharing requirements for

23 items and services described in subparagraph

24 (A) that do not exceed the limits on such cost

25 sharing established under paragraph (2).
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1 (2) LIMITS.—The Secretary shall establish—

2 (A) a schedule of limits on cost sharing for

3 items and services described in paragraph

4 (1)(A) for enrollees with special health care

5 needs or a chronic condition, as defined in sec6 tion 101(4)(A), and

7 (B) a schedule of limits on cost sharing for

8 such items and services for other enrollees.

9 The limits established under subparagraph (A) shall,

10 on average, provide for cost-sharing requirements

11 that are at least 40 percent lower than the limits es12 tablished under subparagraph (B).

13 (d) CONTINUITY OF CARE.—The requirements of this

14 subsection are that a network plan—

15 (1) ensure that any process established by the

16 plan to coordinate care and control costs does not

17 create an undue burden for enrollees with special

18 health care needs or chronic conditions;

19 (2) ensure direct access to relevant specialists

20 for the continued care of such enrollees when medi21 cally or clinically indicated in the judgment of the

22 treating health professional, in consultation with the

23 enrollee;

24 (3) in the case of an enrollee with special health

25 care needs or a chronic condition, determine wheth-
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1 er, based on the judgment of the treating health pro2 fessional, in consultation with the enrollee, it is

3 medically or clinically necessary or appropriate to

4 use a specialist or a care coordinator from an inter5 disciplinary team to ensure continuity of care; and

6 (4) in circumstances under which a change of

7 health professional or provider might disrupt the

8 continuity of care for an enrollee, such as—

9 (A) hospitalization, or

10 (B) dependency on high-technology home

11 medical equipment,

12 provide for continued coverage of items and services

13 furnished by the health professional or provider that

14 was treating the enrollee before such change for a

15 reasonable period of time (as specified by the Sec16 retary) after such change would otherwise occur.

17 For purposes of paragraph (4), the Secretary shall specify

18 such reasonable period of time, ranging from no fewer

19 than 1 to no greater than 150 days (or not greater than

20 60 days after delivery in the case of a pregnancy), with

21 extension of such a period permitted in the cases of medi22 cal necessity. For purposes of such paragraph a change

23 of health professional or provider may be due to changes

24 in the membership of a plan’s health professional and pro25 vider network, changes in the health plan made available
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1 by an employer, and other similar circumstances specified

2 by the Secretary as beyond the control of an enrollee.

3 SEC. 203. NONDISCRIMINATION; EQUITABLE ACCESS TO

4 NETWORKS.

5 (a) IN GENERAL.—A health plan meets the require6 ments of this section if the plan—

7 (1) meets the requirement of subsection (b)

8 that the plan not discriminate;

9 (2) in the case of a network plan, meets the re10 quirement of subsection (c) that the plan not dis11 criminate in the selection of providers and health

12 professionals; and

13 (3) meets the requirement of subsection (d)

14 that the plan not discriminate in the payment of

15 health professionals and providers.

16 (b) NONDISCRIMINATION.—No health plan may dis17 criminate (directly or through contractual arrangements)

18 in any activity, including the selection of a service area,

19 that has the effect of discriminating against an individual

20 on the basis of race, national origin, gender, language, so21 cioeconomic status, age, disability, health status, or antici22 pated need for health services.

23 (c) NONDISCRIMINATION IN SELECTION OF NET24 WORK MEMBERS.—The requirement of this subsection is

25 that a network plan does not discriminate in selecting the
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1 members of its health professional and provider network

2 (or in establishing the terms and conditions for member3 ship in such network) on the basis of—

4 (1) the race, national origin, gender, language,

5 age or disability of the health professional;

6 (2) the socioeconomic status, disability, health

7 status, or anticipated need for health services of the

8 patients of a health professional or provider; or

9 (3) the health professional or provider’s lack of

10 affiliation with, or admitting privileges at, a hospital

11 (unless such lack of affiliation is a result of infrac12 tions of quality standards and is not due to a provid13 er’s type of license).

14 (d) NONDISCRIMINATION IN ACCESS TO HEALTH

15 PLANS.—A health plan meets the requirements of this

16 subsection if the plan—

17 (1) does not—

18 (A) in the case of a network plan, discrimi19 nate in participation of, and

20 (B) in the case of a health plan that is not

21 a network plan, deny reimbursement or indem22 nification to,

23 a health professional who is acting within the scope

24 of the health professional’s license under applicable
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1 State law solely on the basis of such license or cer2 tification; and

3 (2) does not—

4 (A) in the case of a network plan, discrimi5 nate in participation of, and

6 (B) in the case of a health plan that is not

7 a network plan, deny reimbursement or indem8 nification to,

9 a provider that is providing services that are within

10 the scope of services that the provider is authorized

11 to provide under State law.

12 SEC. 204. DEVELOPMENT OF PLAN POLICIES.

13 The requirement of this section is that a network

14 plan establish mechanisms to incorporate the rec15 ommendations, suggestions, and views of enrollees and

16 participating health professionals and providers into—

17 (1) the medical policies of the plan (including

18 policies relating to coverage of new technologies,

19 treatments, and procedures);

20 (2) the utilization review criteria and proce21 dures of the plan;

22 (3) the quality and credentialing criteria of the

23 plan; and

24 (4) the medical management procedures of the

25 plan.
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1 SEC. 205. DUE PROCESS FOR ENROLLEES.

2 (a) IN GENERAL.—A health plan meets the require3 ments of this section if the plan meets—

4 (1) the requirements of subsection (b) relating

5 to utilization review and payment of claims;

6 (2) the requirements of subsection (c) relating

7 to external appeals; and

8 (3) the requirements of subsection (d) relating

9 to internal grievance procedures.

10 (b) UTILIZATION REVIEW.—The requirements of this

11 subsection are that the utilization review program of a

12 health plan—

13 (1) is developed (including any screening cri14 teria used by such program) with the involvement of

15 participating health professionals and providers;

16 (2) to the extent consistent with the protection

17 of proprietary business information (as defined for

18 purposes of section 552 of title 5, United States

19 Code), releases, upon request, to affected health pro20 fessionals, providers, and enrollees the screening cri21 teria, weighting elements, and computer algorithms

22 used in reviews and a description of the method by

23 which they were developed;

24 (3) uniformly applies review criteria that are

25 based on sound scientific principles and the most re26 cent medical evidence;
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1 (4) uses licensed, certified, or otherwise

2 credentialed health professionals to make review de3 terminations (and for services requiring specialized

4 training for their delivery, uses a health professional

5 who is qualified through equivalent specialized train6 ing);

7 (5) subject to reasonable safeguards specified

8 by the Secretary, discloses to health professionals

9 and providers, upon request, the names and creden10 tials of individuals conducting utilization review;

11 (6) does not compensate individuals conducting

12 utilization review for denials of payment or coverage

13 of benefits;

14 (7) complies with the requirement of section

15 201(c)(2) that preauthorization not be required for

16 emergency and related services furnished in a hos17 pital emergency department;

18 (8) makes preauthorization determinations—

19 (A) in the case of services to be furnished

20 in a hospital emergency department that are

21 not services described in section 201(c)(2),

22 within 30 minutes of a request for such deter23 mination, and
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1 (B) in the case of other services, within 24

2 hours after the time of a request for determina3 tion;

4 (9) includes in any notice of such determination

5 an explanation of the basis of the determination and

6 the right to an immediate appeal;

7 (10) treats a favorable preauthorization review

8 determination as a final determination for purposes

9 of making payment for a claim submitted for the

10 item or service involved unless such determination

11 was based on fraudulent information supplied by the

12 person requesting the determination;

13 (11) provides timely access to review personnel

14 and, if such personnel are not available, waives any

15 preauthorization that would otherwise be required;

16 and

17 (12) provides notice of an initial determination

18 on payment of a claim within 30 days after the date

19 the claim is submitted for such item or service, and

20 includes in such notice an explanation of the reasons

21 for such determination and of the right to an imme22 diate appeal.

23 For purposes of paragraph (10), failure of a plan to make

24 a determination described in paragraph (8)(A) within the

25 period of time specified in such paragraph shall be treated
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1 as a favorable determination for the items and services

2 for which the determination was requested.

3 (c) APPEALS PROCESS.—A health plan meets the re4 quirements of this subsection if the plan establishes and

5 maintains an accessible appeals process that—

6 (1) reviews an adverse preauthorization deter7 mination—

8 (A) for services described in subsection

9 (b)(8)(A) and urgent care services, within 1

10 hour after the time of a request for such review,

11 and

12 (B) for other services, within 24 hours

13 after the time of a request for such review;

14 (2) reviews an initial determination on payment

15 of claims described in subsection (b)(12) within 30

16 days after the date of a request for such review;

17 (3) provides for review of determinations de18 scribed in paragraphs (1) and (2) by an appropriate

19 clinical peer professional who is in the same or simi20 lar specialty as would typically provide the item or

21 service involved (or another licensed, certified, or

22 otherwise credentialed health professional acceptable

23 to the plan and the person requesting such review);

24 and

25 (4) provides for review of—
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1 (A) the determinations described in para2 graphs (1), (2), and (3), and

3 (B) enrollee complaints about inadequate

4 access to any category, class, or type of health

5 professional or provider in the network of the

6 plan and other matters specified by this Act,

7 by a person that is not involved in the operation of

8 the plan or in making the determination or policy

9 being appealed.

10 The procedures specified in this subsection shall not be

11 construed as preempting or superseding any other reviews

12 or appeals a plan is required by law to make available.

13 SEC. 206. DUE PROCESS FOR HEALTH PROFESSIONALS AND

14 PROVIDERS.

15 (a) IN GENERAL.—The requirements of this section

16 are that a network plan—

17 (1) allow all health professionals and providers

18 in its service area to apply to become a participating

19 health professional or provider during at least one

20 period in each calendar year;

21 (2) provide reasonable notice to such health

22 professionals and providers of the opportunity to

23 apply and of the period during which applications

24 are accepted;
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1 (3) provide for review of each application by a

2 credentialing committee with appropriate representa3 tion of the category, class, or type of health profes4 sional or provider;

5 (4) select participating health professionals and

6 providers based on objective standards of quality de7 veloped with the suggestions and advice of profes8 sional associations, health professionals, and provid9 ers;

10 (5) make such standards available to—

11 (A) those applying to become a participat12 ing provider or health professional;

13 (B) health plan purchasers, and

14 (C) enrollees;

15 (6) when economic considerations are taken

16 into account in selecting participating health profes17 sionals and providers, uses objective criteria that are

18 available to those applying to become a participating

19 provider or health professional and enrollees;

20 (7) adjust any economic profiling to take into

21 account patient characteristics (such as severity of

22 illness) that may result in atypical utilization of

23 services;
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1 (8) make the results of such profiling available

2 to plan purchasers, enrollees, and the health profes3 sional or provider involved;

4 (9) notify any health professional or provider

5 being reviewed under the process referred to in para6 graph (3) of any information indicating that the

7 health professional or provider fails to meet the

8 standards of the plan;

9 (10) offer a health professional or provider re10 ceiving notice pursuant to the requirement of para11 graph (9) with an opportunity to—

12 (A) review the information referred to in

13 such paragraph, and

14 (B) submit supplemental or corrected in15 formation;

16 (11) not include in its contracts with participat17 ing health professionals and providers a provision

18 permitting the plan to terminate the contract ‘‘with19 out cause’’;

20 (12) provide a due process appeal that con21 forms to the process specified in section 412 of the

22 Health Care Quality Improvement Act of 1986 (42

23 U.S.C. 11112) for all determinations that are ad24 verse to a health professional or provider; and
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1 (13) unless a health professional or provider

2 poses an imminent harm to enrollees or an adverse

3 action by a governmental agency effectively impairs

4 the ability to provide health care items and services,

5 provide—

6 (A) reasonable notice of any determination

7 to terminate a health professional or provider

8 ‘‘for cause’’ (including an explanation of the

9 reasons for the determination),

10 (B) an opportunity to review and discuss

11 all of the information on which the determina12 tion is based, and

13 (C) an opportunity to enter into a correc14 tive action plan,

15 before the determination becomes subject to appeal

16 under the process referred to in paragraph (12).

17 (b) RULE OF CONSTRUCTION.—The requirements of

18 subsection (a) shall not be construed as preempting or su19 perseding any other reviews and appeals a plan is required

20 by law to make available.

21 SEC. 207. INFORMATION REPORTING AND DISCLOSURE BY

22 NETWORK PLANS.

23 (a) IN GENERAL.—The requirement of this section

24 is that a network plan provide enrollees and prospective
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1 enrollees with truthful, accurate, and easily understand2 able marketing materials and information about—

3 (1) coverage provisions, benefits, and any exclu4 sions—

5 (A) by category of service,

6 (B) by category, class, or type of health

7 professional or provider, and

8 (C) if applicable, by specific service, includ9 ing experimental treatments;

10 (2) the specific amount of the premium charged

11 by the plan that is set aside for administration and

12 marketing of the plan;

13 (3) the specific amount of such premium that

14 is expended directly for patient care;

15 (4) the number, mix, and distribution of partici16 pating health professionals and providers;

17 (5) the ratio of enrollees to participating health

18 professionals and providers by category, class, and

19 type of health professional and provider,

20 (6) the expenditures and utilization per enrollee

21 by category, class, and type of health professional

22 and provider;

23 (7) the financial obligations of the enrollee and

24 the plan, including premiums, copayments,

25 deductibles, and established aggregate maximums on
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1 out-of-pocket costs, for all items and services, includ2 ing—

3 (A) those furnished by health professionals

4 and providers that are not participating health

5 professionals and providers, and

6 (B) those furnished to an enrollee who is

7 outside the service area of the plan;

8 (8) utilization review requirements of the plan

9 (including preauthorization review, concurrent re10 view, post-service review, post-payment review, and

11 any other procedures that may lead to denial of cov12 erage or payment for a service);

13 (9) financial arrangements and incentives that

14 may—

15 (A) limit the items and services furnished

16 to an enrollee,

17 (B) restrict referral or treatment options,

18 or

19 (C) negatively affect the fiduciary respon20 sibility of a health professional or provider to

21 an enrollee;

22 (10) other incentives for health professionals

23 and providers to control costs;

24 (11) the loss ratio of the plan;
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1 (12) enrollee satisfaction statistics (that include

2 data for enrollees receiving services from health pro3 fessionals and providers that are not participating

4 health professionals and providers), including—

5 (A) the percentage of enrollees reenrolling

6 with the plan, and

7 (B) the percentage of enrollees disenrolling

8 from the plan;

9 (13) quality indicators for the plan and partici10 pating health professionals and providers, includ11 ing—

12 (A) population-based statistics such as im13 munization rates, and

14 (B) performance measures, such as—

15 (i) survival after surgery (adjusted for

16 case mix),

17 (ii) hospital readmissions, and

18 (iii) appropriate referrals and preven19 tion of secondary complications following

20 treatment;

21 (14) grievance procedures and appeals rights

22 under the plan, and summary information about the

23 number and disposition of grievances and appeals in

24 the most recent period for which complete and accu25 rate information is available; and
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1 (15) the percentage of utilization review deter2 minations made by the plan that disagree with the

3 judgment of the treating health professional or pro4 vider and the percentage of such determinations that

5 are reversed on appeal.

6 (b) UNIFORM FORMAT.—The information required to

7 be provided pursuant to this section shall be displayed in

8 a uniform format specified by the State that includes the

9 service area of a plan. If a State fails to establish such

10 a format, such information shall be displayed in a uniform

11 format specified by the Secretary.

12 SEC. 208. OTHER HEALTH PLAN REQUIREMENTS.

13 (a) IN GENERAL.—A health plan meets the require14 ments of this section if the plan meets—

15 (1) the requirement of subsection (b) for pre16 serving confidentiality of records; and

17 (2) the requirements established pursuant to

18 subsection (c) to ensure the continued operation of

19 the plan.

20 (b) CONFIDENTIALITY.—The requirement of this

21 subsection is that a health plan establish mechanisms and

22 procedures to ensure compliance with applicable Federal

23 and State laws to protect the confidentiality of individually

24 identifiable information held by the plan with respect to

25 an enrollee, health professional, or provider.
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1 (c) FINANCIAL RESERVES; SOLVENCY.—A health

2 plan meets the requirements of this subsection if the

3 plan—

4 (1) meets such financial reserve or other sol5 vency-related requirements as the Secretary may es6 tablish to assure the continued availability of (and

7 appropriate payment for) covered items and services

8 for enrollees; and

9 (2) establishes mechanisms specified by the

10 Secretary to protect enrollees, health professionals,

11 and providers in the event of plan failure.

12 Such requirements shall not unduly impede the establish13 ment of health plans owned and operated by health care

14 professionals or providers or by non-profit community15 based organizations.

16 SEC. 209. QUALITY ASSURANCE PROGRAM; CASE REVIEW.

17 (a) QUALITY ASSURANCE PROGRAM.—

18 (1) IN GENERAL.—A health plan meets the re19 quirements of this section if the plan establishes a

20 quality improvement program (consistent with sub21 section (b)) that systematically and continuously as22 sesses and improves—

23 (A) enrollee health status, patient out24 comes, processes of care, and enrollee satisfac-
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1 tion associated with health care provided by the

2 plan; and

3 (B) the administrative and funding capac4 ity of the plan to support and emphasize pre5 ventive care, utilization, access and availability,

6 cost effectiveness, acceptable treatment modali7 ties, specialists referrals, the peer review proc8 ess, and the efficiency of the administrative

9 process.

10 (2) FUNCTIONS.—A quality improvement pro11 gram established pursuant to paragraph (1) shall—

12 (A) assess the performance of the plan and

13 its participating health professionals and pro14 viders and report the results of such assessment

15 to plan purchasers, participating health profes16 sionals and providers, and administrative per17 sonnel;

18 (B) demonstrate measurable improvements

19 in clinical outcomes and plan performance

20 measured by identified criteria, including those

21 specified in paragraph (1)(A); and

22 (C) analyze quality assessment data to de23 termine specific interactions in the delivery sys24 tem (both the design and funding of the plan
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1 and the clinical provision of care) that have an

2 adverse impact on the quality of care.

3 (3) COLLABORATION.—(A) Congress shall ap4 point a time-limited commission, consisting of health

5 care consumers, providers, and experts in the field,

6 to devise and recommend to the Secretary a mecha7 nism for ongoing collaboration among health profes8 sionals and providers, consumers, and experts on

9 quality assurance to provide for—

10 (i) educational intervention when services

11 are characterized by underutilization,

12 overutilization, or poor clinical quality;

13 (ii) organizational and financial consulta14 tion when a health plan is characterized by poor

15 access, availability, and utilization of services,

16 limitations in the scope of acceptable treatment

17 modalities, or high administrative costs; and

18 (iii) other remedies if the interventions de19 scribed in subparagraphs (A) and (B) are un20 successful.

21 (B) The Secretary shall, in consultation with

22 the commission created in section (A), develop a

23 mechanism for ongoing collaboration among health

24 professionals and providers, consumers, and experts
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1 on quality assurance, for the purposes delineated in

2 Section (A) subparts (i), (ii), and (iii).

3 (b) CASE REVIEW.—By January 1, 1998, a health

4 plan meets the requirements of this section only if the plan

5 has replaced individual case review with the analysis of

6 practice profiles, except for cases of health professionals

7 and providers identified as outliers which would require

8 individual case review to explain the health professional’s

9 or provider’s outlier status.

10 SEC. 210. RELATED PROVISIONS.

11 (a) INCENTIVES TO SERVE UNDERSERVED AREAS.—

12 The Secretary shall study and report to the Congress on

13 the feasibility and desirability of voluntary participation

14 by health plans in a system that—

15 (1) uses a risk adjustment mechanism to arrive

16 at appropriately enhanced premium payments to

17 health plans serving high risk or underserved popu18 lations, and

19 (2) requires part of such premiums to be passed

20 through to health professionals and providers serving

21 such populations in the form of bonus payments or

22 higher reimbursement rates.
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1 TITLE III—ENFORCEMENT

2 SEC. 301. HEALTH PLAN STANDARDS.

3 The Secretary shall promulgate such regulations as

4 are necessary and appropriate to provide for the enforce5 ment of the requirements of this Act. The remedies speci6 fied in subsection (i) of section 1876 of the Social Security

7 Act shall apply to health plans under this Act in the same

8 manner as they apply to eligible organizations under title

9 XVIII of such Act.

10 SEC. 302. HEALTH PLAN LIABILITY.

11 (a) HEALTH PLAN LIABILITY.—No health plan may

12 engage in any activity that has the effect of inappropri13 ately limiting or denying care to any individual enrolled

14 in such plan through any utilization review or cost con15 tainment technique. Any such individual who alleges an

16 injury caused by the application of a clinically or medically

17 inappropriate decision resulting from defects in the design

18 or application of any utilization review or cost containment

19 technique by a health plan may commence a civil action

20 against the health plan in the appropriate State court or

21 district court of the United States.

22 (b) INDEMNITY RESTRICTION.—No health plan may

23 require any health professional or provider to indemnify

24 the plan for any recovery by an individual in an action

25 brought under subsection (a).
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1 (c) RELIEF.—In any action commenced under sub2 section (a), a court that finds for the individual commenc3 ing the action may award appropriate relief to such indi4 vidual.

5 (d) PREEMPTION.—Notwithstanding any other provi6 sion of law, no State may limit the liability of a health

7 plan for any claim that is brought under subsection (a).

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