II

June 29, 2001

Ordered to be printed as passed

107TH CONGRESS

1ST SESSION S. 1052

AN ACT

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.

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 ‘‘Bipartisan Patient Protection Act’’.
2

S 1052 ES/PP

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

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—IMPROVING MANAGED CARE

Subtitle A—Utilization Review; Claims; and Internal and External Appeals

Sec. 101. Utilization review activities.

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

Sec. 103. Internal appeals of claims denials.

Sec. 104. Independent external appeals procedures.

Sec. 105. Health care consumer assistance fund.

Subtitle B—Access to Care

Sec. 111. Consumer choice option.

Sec. 112. Choice of health care professional.

Sec. 113. Access to emergency care.

Sec. 114. Timely access to specialists.

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

Sec. 116. Access to pediatric care.

Sec. 117. Continuity of care.

Sec. 118. Access to needed prescription drugs.

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

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

lymph node dissections for the treatment of breast cancer and

coverage for secondary consultations.

Subtitle C—Access to Information

Sec. 121. Patient access to information.

Sec. 122. Genetic information.

Subtitle D—Protecting the Doctor-Patient Relationship

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

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

Sec. 133. Prohibition against improper incentive arrangements.

Sec. 134. Payment of claims.

Sec. 135. Protection for patient advocacy.

Subtitle E—Definitions

Sec. 151. Definitions.

Sec. 152. Preemption; State flexibility; construction.

Sec. 153. Exclusions.

Sec. 154. Coverage of limited scope plans.

Sec. 155. Regulations.

Sec. 156. Incorporation into plan or coverage documents.

TITLE II—APPLICATION OF QUALITY CARE STANDARDS TO

GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE

UNDER THE PUBLIC HEALTH SERVICE ACT
3

S 1052 ES/PP

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

Sec. 202. Application to individual health insurance coverage.

Sec. 203. Cooperation between Federal and State authorities.

Sec. 204. Elimination of option of non-Federal governmental plans to be excepted from requirements concerning genetic information.

TITLE III—APPLICATION OF PATIENT PROTECTION STANDARDS

TO FEDERAL HEALTH CARE PROGRAMS

Sec. 301. Application of patient protection standards to Federal health care

programs.

TITLE IV—AMENDMENTS TO THE EMPLOYEE RETIREMENT

INCOME SECURITY ACT OF 1974

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

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

Sec. 402. Availability of civil remedies.

Sec. 403. Limitation on certain class action litigation.

Sec. 404. Limitations on actions.

Sec. 405. Cooperation between Federal and State authorities.

Sec. 406. Sense of the Senate concerning the importance of certain unpaid

services.

TITLE V—EFFECTIVE DATES; COORDINATION IN

IMPLEMENTATION

Sec. 501. Effective dates.

Sec. 502. Coordination in implementation.

Sec. 503. Severability.

TITLE VI—MISCELLANEOUS PROVISIONS

Sec. 601. No impact on Social Security Trust Fund.

Sec. 602. Customs user fees.

Sec. 603. Fiscal year 2002 medicare payments.

Sec. 604. Sense of Senate with respect to participation in clinical trials and access to specialty care.

Sec. 605. Sense of the Senate regarding fair review process.

Sec. 606. Annual review.

Sec. 607. Definition of born-alive infant.
4

S 1052 ES/PP

1 TITLE I—IMPROVING MANAGED

2 CARE

3 Subtitle A—Utilization Review;

4 Claims; and Internal and Exter5 nal Appeals

6 SEC. 101. UTILIZATION REVIEW ACTIVITIES.

7 (a) COMPLIANCE WITH REQUIREMENTS.—

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

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

12 under such plan or coverage only in accordance with

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

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

16 section shall be construed as preventing a group

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

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

21 are conducted in accordance with a utilization review

22 program that meets the requirements of this section.

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

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

S 1052 ES/PP

1 used to monitor or evaluate the use or coverage,

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

4 and includes prospective review, concurrent review,

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

7 (b) WRITTEN POLICIES AND CRITERIA.—

8 (1) WRITTEN POLICIES.—A utilization review

9 program shall be conducted consistent with written

10 policies and procedures that govern all aspects of the

11 program.

12 (2) USE OF WRITTEN CRITERIA.—

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

14 utilize written clinical review criteria developed

15 with input from a range of appropriate actively

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

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

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

25 where available and appropriate.
6

S 1052 ES/PP

1 (B) CONTINUING USE OF STANDARDS IN

2 RETROSPECTIVE REVIEW.—If a health care

3 service has been specifically pre-authorized or

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

6 not, pursuant to retrospective review, revise or

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

10 enrollee during the same course of treatment.

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

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

16 (c) CONDUCT OF PROGRAM ACTIVITIES.—

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

19 administered by qualified health care professionals

20 who shall oversee review decisions.

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

23 (A) IN GENERAL.—A utilization review

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

S 1052 ES/PP

1 who are qualified and have received appropriate

2 training in the conduct of such activities under

3 the program.

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

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

10 claims for benefits.

11 (C) PROHIBITION OF CONFLICTS.—Such a

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

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

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

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

23 and allow response to telephone requests, and that

24 appropriate provision is made to receive and respond

25 promptly to calls received during other hours.
8

S 1052 ES/PP

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

2 shall not provide for the performance of utilization

3 review activities with respect to a class of services

4 furnished to an individual more frequently than is

5 reasonably required to assess whether the services

6 under review are medically necessary and appro7 priate.

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

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

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

14 health insurance issuer offering health insurance

15 coverage, shall—

16 (A) make a determination on an initial

17 claim for benefits by a participant, beneficiary,

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

21 or coverage involved, including any cost-sharing

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

24 claim for benefits; and
9

S 1052 ES/PP

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

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

5 benefits made under the terms and conditions

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

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

10 right of the participant, beneficiary, or enrollee

11 to an internal appeal under section 103.

12 (2) ACCESS TO INFORMATION.—

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

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

17 treating health care professional (if any) shall

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

20 necessary to make a determination relating to

21 the claim. Such access shall be provided not

22 later than 5 days after the date on which the

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

24 described in subparagraph (B) or (C) of sub25 section (b)(1), by such earlier time as may be
10

S 1052 ES/PP

1 necessary to comply with the applicable timeline

2 under such subparagraph.

3 (B) LIMITED EFFECT OF FAILURE ON

4 PLAN OR ISSUER’S OBLIGATIONS.—Failure of

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

7 shall not remove the obligation of the plan or

8 issuer to make a decision in accordance with

9 the medical exigencies of the case and as soon

10 as possible, based on the available information,

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

13 obligation of the plan or issuer to comply with

14 the requirements of this section.

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

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

18 (or authorized representative) may make an initial

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

20 health insurance issuer offering health insurance

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

23 provide written confirmation of such request in a

24 timely manner on a form provided by the plan or

25 issuer. In the case of such an oral request for bene-
11

S 1052 ES/PP

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

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

3 time of a claims for such benefits without regard to

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

6 (b) TIMELINE FOR MAKING DETERMINATIONS.—

7 (1) PRIOR AUTHORIZATION DETERMINATION.—

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

9 health insurance issuer offering health insur10 ance coverage, shall make a prior authorization

11 determination on a claim for benefits (whether

12 oral or written) in accordance with the medical

13 exigencies of the case and as soon as possible,

14 but in no case later than 14 days from the date

15 on which the plan or issuer receives information

16 that is reasonably necessary to enable the plan

17 or issuer to make a determination on the re18 quest for prior authorization and in no case

19 later than 28 days after the date of the claim

20 for benefits is received.

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

23 plan, or health insurance issuer offering health

24 insurance coverage, shall expedite a prior au25 thorization determination on a claim for bene-
12

S 1052 ES/PP

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

3 made by a participant, beneficiary, or enrollee

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

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

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

14 medical exigencies of the case and as soon as

15 possible, but in no case later than 72 hours

16 after the time the request is received by the

17 plan or issuer under this subparagraph.

18 (C) ONGOING CARE.—

19 (i) CONCURRENT REVIEW.—

20 (I) IN GENERAL.—Subject to

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

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

25 plan or issuer must provide by tele-
13

S 1052 ES/PP

1 phone and in printed form notice of

2 the concurrent review determination

3 to the individual or the individual’s

4 designee and the individual’s health

5 care provider in accordance with the

6 medical exigencies of the case and as

7 soon as possible, with sufficient time

8 prior to the termination or reduction

9 to allow for an appeal under section

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

11 termination or reduction takes effect.

12 (II) CONTENTS OF NOTICE.—

13 Such notice shall include, with respect

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

16 approved, the new total of approved

17 services, the date of onset of services,

18 and the next review date, if any, as

19 well as a statement of the individual’s

20 rights to further appeal.

21 (ii) RULE OF CONSTRUCTION.—Clause

22 (i) shall not be construed as requiring

23 plans or issuers to provide coverage of care

24 that would exceed the coverage limitations

25 for such care.
14

S 1052 ES/PP

1 (2) RETROSPECTIVE DETERMINATION.—A

2 group health plan, or health insurance issuer offer3 ing health insurance coverage, shall make a retro4 spective determination on a claim for benefits in ac5 cordance with the medical exigencies of the case and

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

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

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

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

11 claim for benefits.

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

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

16 treating health care professional in accordance with the

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

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

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

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

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

S 1052 ES/PP

1 understood by the participant, beneficiary, or enrollee and

2 shall include—

3 (1) the specific reasons for the determination

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

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

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

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

12 (1) AUTHORIZED REPRESENTATIVE.—The term

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

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

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

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

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

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

24 coverage.
16

S 1052 ES/PP

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

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

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

7 under this title.

8 (4) TREATING HEALTH CARE PROFESSIONAL.—

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

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

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

15 SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.

16 (a) RIGHT TO INTERNAL APPEAL.—

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

18 enrollee (or authorized representative) may appeal

19 any denial of a claim for benefits under section 102

20 under the procedures described in this section.

21 (2) TIME FOR APPEAL.—

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

23 health insurance issuer offering health insur24 ance coverage, shall ensure that a participant,

25 beneficiary, or enrollee (or authorized represent-
17

S 1052 ES/PP

1 ative) has a period of not less than 180 days

2 beginning on the date of a denial of a claim for

3 benefits under section 102 in which to appeal

4 such denial under this section.

5 (B) DATE OF DENIAL.—For purposes of

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

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

9 of the claim for benefits.

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

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

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

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

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

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

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

23 enrollee (or authorized representative) involved shall

24 be relieved of any obligation to complete the internal

25 review involved, and may, at the option of such par-
18

S 1052 ES/PP

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

3 review under section 104 or otherwise.

4 (b) TIMELINES FOR MAKING DETERMINATIONS.—

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

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

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

10 orally. A group health plan, or health insurance

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

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

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

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

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

19 of a request for an appeal without regard to whether

20 and when a written confirmation of such request is

21 made.

22 (2) ACCESS TO INFORMATION.—

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

25 denial of a claim for benefits, the participant,
19

S 1052 ES/PP

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

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

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

7 provided not later than 5 days after the date on

8 which the request for information is received,

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

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

11 may be necessary to comply with the applicable

12 timeline under such subparagraph.

13 (B) LIMITED EFFECT OF FAILURE ON

14 PLAN OR ISSUER’S OBLIGATIONS.—Failure of

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

17 shall not remove the obligation of the plan or

18 issuer to make a decision in accordance with

19 the medical exigencies of the case and as soon

20 as possible, based on the available information,

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

23 obligation of the plan or issuer to comply with

24 the requirements of this section.
20

S 1052 ES/PP

1 (3) PRIOR AUTHORIZATION DETERMINA2 TIONS.—

3 (A) IN GENERAL.—A group health plan, or

4 health insurance issuer offering health insur5 ance coverage, shall make a determination on

6 an appeal of a denial of a claim for benefits

7 under this subsection in accordance with the

8 medical exigencies of the case and as soon as

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

10 the date on which the plan or issuer receives in11 formation that is reasonably necessary to enable

12 the plan or issuer to make a determination on

13 the appeal and in no case later than 28 days

14 after the date the request for the appeal is re15 ceived.

16 (B) EXPEDITED DETERMINATION.—Not17 withstanding subparagraph (A), a group health

18 plan, or health insurance issuer offering health

19 insurance coverage, shall expedite a prior au20 thorization determination on an appeal of a de21 nial of a claim for benefits described in sub22 paragraph (A), when a request for such an ex23 pedited determination is made by a participant,

24 beneficiary, or enrollee (or authorized represent25 ative) at any time during the process for mak-
21

S 1052 ES/PP

1 ing a determination and a health care profes2 sional certifies, with the request, that a deter3 mination under the procedures described in sub4 paragraph (A) would seriously jeopardize the

5 life or health of the participant, beneficiary, or

6 enrollee or the ability of the participant, bene7 ficiary, or enrollee to maintain or regain max8 imum function. Such determination shall be

9 made in accordance with the medical exigencies

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

11 case later than 72 hours after the time the re12 quest for such appeal is received by the plan or

13 issuer under this subparagraph.

14 (C) ONGOING CARE DETERMINATIONS.—

15 (i) IN GENERAL.—Subject to clause

16 (ii), in the case of a concurrent review de17 termination described in section

18 102(b)(1)(C)(i)(I), which results in a ter19 mination or reduction of such care, the

20 plan or issuer must provide notice of the

21 determination on the appeal under this

22 section by telephone and in printed form to

23 the individual or the individual’s designee

24 and the individual’s health care provider in

25 accordance with the medical exigencies of
22

S 1052 ES/PP

1 the case and as soon as possible, with suf2 ficient time prior to the termination or re3 duction to allow for an external appeal

4 under section 104 to be completed before

5 the termination or reduction takes effect.

6 (ii) RULE OF CONSTRUCTION.—Clause

7 (i) shall not be construed as requiring

8 plans or issuers to provide coverage of care

9 that would exceed the coverage limitations

10 for such care.

11 (4) RETROSPECTIVE DETERMINATION.—A

12 group health plan, or health insurance issuer offer13 ing health insurance coverage, shall make a retro14 spective determination on an appeal of a claim for

15 benefits in no case later than 30 days after the date

16 on which the plan or issuer receives necessary infor17 mation that is reasonably necessary to enable the

18 plan or issuer to make a determination on the ap19 peal and in no case later than 60 days after the date

20 the request for the appeal is received.

21 (c) CONDUCT OF REVIEW.—

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

23 claim for benefits under this section shall be con24 ducted by an individual with appropriate expertise

25 who was not involved in the initial determination.
23

S 1052 ES/PP

1 (2) PEER REVIEW OF MEDICAL DECISIONS BY

2 HEALTH CARE PROFESSIONALS.—A review of an ap3 peal of a denial of a claim for benefits that is based

4 on a lack of medical necessity and appropriateness,

5 or based on an experimental or investigational treat6 ment, or requires an evaluation of medical facts—

7 (A) shall be made by a physician

8 (allopathic or osteopathic); or

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

10 non-physician health professional, shall be made

11 by reviewer (or reviewers) including at least one

12 practicing non-physician health professional of

13 the same or similar specialty;

14 with appropriate expertise (including, in the case of

15 a child, appropriate pediatric expertise) and acting

16 within the appropriate scope of practice within the

17 State in which the service is provided or rendered,

18 who was not involved in the initial determination.

19 (d) NOTICE OF DETERMINATION.—

20 (1) IN GENERAL.—Written notice of a deter21 mination made under an internal appeal of a denial

22 of a claim for benefits shall be issued to the partici23 pant, beneficiary, or enrollee (or authorized rep24 resentative) and the treating health care professional

25 in accordance with the medical exigencies of the case
24

S 1052 ES/PP

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

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

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

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

5 period referred to in such subparagraph).

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

7 plan or issuer under this section shall be treated as

8 the final determination of the plan or issuer on a de9 nial of a claim for benefits. The failure of a plan or

10 issuer to issue a determination on an appeal of a de11 nial of a claim for benefits under this section within

12 the applicable timeline established for such a deter13 mination shall be treated as a final determination on

14 an appeal of a denial of a claim for benefits for pur15 poses of proceeding to external review under section

16 104.

17 (3) REQUIREMENTS OF NOTICE.—With respect

18 to a determination made under this section, the no19 tice described in paragraph (1) shall be provided in

20 printed form and written in a manner calculated to

21 be understood by the participant, beneficiary, or en22 rollee and shall include—

23 (A) the specific reasons for the determina24 tion (including a summary of the clinical or sci-
25

S 1052 ES/PP

1 entific evidence used in making the determina2 tion);

3 (B) the procedures for obtaining additional

4 information concerning the determination; and

5 (C) notification of the right to an inde6 pendent external review under section 104 and

7 instructions on how to initiate such a review.

8 SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCE9 DURES.

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

11 plan, and a health insurance issuer offering health insur12 ance coverage, shall provide in accordance with this sec13 tion participants, beneficiaries, and enrollees (or author14 ized representatives) with access to an independent exter15 nal review for any denial of a claim for benefits.

16 (b) INITIATION OF THE INDEPENDENT EXTERNAL

17 REVIEW PROCESS.—

18 (1) TIME TO FILE.—A request for an inde19 pendent external review under this section shall be

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

21 after the date on which the participant, beneficiary,

22 or enrollee receives notice of the denial under section

23 103(d) or notice of waiver of internal review under

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

25 issuer has failed to make a timely decision under
26

S 1052 ES/PP

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

2 beneficiary that it has failed to make a timely deci3 sion and that the beneficiary must file an appeal

4 with an external review entity within 180 days if the

5 participant or beneficiary desires to file such an ap6 peal.

7 (2) FILING OF REQUEST.—

8 (A) IN GENERAL.—Subject to the suc9 ceeding provisions of this subsection, a group

10 health plan, and a health insurance issuer offer11 ing health insurance coverage, may—

12 (i) except as provided in subparagraph

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

14 in writing;

15 (ii) limit the filing of such a request

16 to the participant, beneficiary, or enrollee

17 involved (or an authorized representative);

18 (iii) except if waived by the plan or

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

20 access to an independent external review

21 under this section upon a final determina22 tion of a denial of a claim for benefits

23 under the internal review procedure under

24 section 103;
27

S 1052 ES/PP

1 (iv) except as provided in subpara2 graph (B)(ii), require payment of a filing

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

4 not exceed $25; and

5 (v) require that a request for review

6 include the consent of the participant, ben7 eficiary, or enrollee (or authorized rep8 resentative) for the release of necessary

9 medical information or records of the par10 ticipant, beneficiary, or enrollee to the

11 qualified external review entity only for

12 purposes of conducting external review ac13 tivities.

14 (B) REQUIREMENTS AND EXCEPTION RE15 LATING TO GENERAL RULE.—

16 (i) ORAL REQUESTS PERMITTED IN

17 EXPEDITED OR CONCURRENT CASES.—In

18 the case of an expedited or concurrent ex19 ternal review as provided for under sub20 section (e), the request may be made oral21 ly. A group health plan, or health insur22 ance issuer offering health insurance cov23 erage, may require that the participant,

24 beneficiary, or enrollee (or authorized rep25 resentative) provide written confirmation
28

S 1052 ES/PP

1 of such request in a timely manner on a

2 form provided by the plan or issuer. Such

3 written confirmation shall be treated as a

4 consent for purposes of subparagraph

5 (A)(v). In the case of such an oral request

6 for such a review, the making of the re7 quest (and the timing of such request)

8 shall be treated as the making at that time

9 of a request for such an external review

10 without regard to whether and when a

11 written confirmation of such request is

12 made.

13 (ii) EXCEPTION TO FILING FEE RE14 QUIREMENT.—

15 (I) INDIGENCY.—Payment of a

16 filing fee shall not be required under

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

18 certification (in a form and manner

19 specified in guidelines established by

20 the appropriate Secretary) that the

21 participant, beneficiary, or enrollee is

22 indigent (as defined in such guide23 lines).

24 (II) FEE NOT REQUIRED.—Pay25 ment of a filing fee shall not be re-
29

S 1052 ES/PP

1 quired under subparagraph (A)(iv) if

2 the plan or issuer waives the internal

3 appeals process under section

4 103(a)(4).

5 (III) REFUNDING OF FEE.—The

6 filing fee paid under subparagraph

7 (A)(iv) shall be refunded if the deter8 mination under the independent exter9 nal review is to reverse or modify the

10 denial which is the subject of the re11 view.

12 (IV) COLLECTION OF FILING

13 FEE.—The failure to pay such a filing

14 fee shall not prevent the consideration

15 of a request for review but, subject to

16 the preceding provisions of this clause,

17 shall constitute a legal liability to pay.

18 (c) REFERRAL TO QUALIFIED EXTERNAL REVIEW

19 ENTITY UPON REQUEST.—

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

21 for independent external review with the group

22 health plan, or health insurance issuer offering

23 health insurance coverage, the plan or issuer shall

24 immediately refer such request, and forward the

25 plan or issuer’s initial decision (including the infor-
30

S 1052 ES/PP

1 mation described in section 103(d)(3)(A)), to a

2 qualified external review entity selected in accord3 ance with this section.

4 (2) ACCESS TO PLAN OR ISSUER AND HEALTH

5 PROFESSIONAL INFORMATION.—With respect to an

6 independent external review conducted under this

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

8 authorized representative), the plan or issuer, and

9 the treating health care professional (if any) shall

10 provide the external review entity with information

11 that is necessary to conduct a review under this sec12 tion, as determined and requested by the entity.

13 Such information shall be provided not later than 5

14 days after the date on which the request for infor15 mation is received, or, in a case described in clause

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

17 time as may be necessary to comply with the appli18 cable timeline under such clause.

19 (3) SCREENING OF REQUESTS BY QUALIFIED

20 EXTERNAL REVIEW ENTITIES.—

21 (A) IN GENERAL.—With respect to a re22 quest referred to a qualified external review en23 tity under paragraph (1) relating to a denial of

24 a claim for benefits, the entity shall refer such
31

S 1052 ES/PP

1 request for the conduct of an independent med2 ical review unless the entity determines that—

3 (i) any of the conditions described in

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

5 have not been met;

6 (ii) the denial of the claim for benefits

7 does not involve a medically reviewable de8 cision under subsection (d)(2);

9 (iii) the denial of the claim for bene10 fits relates to a decision regarding whether

11 an individual is a participant, beneficiary,

12 or enrollee who is enrolled under the terms

13 and conditions of the plan or coverage (in14 cluding the applicability of any waiting pe15 riod under the plan or coverage); or

16 (iv) the denial of the claim for bene17 fits is a decision as to the application of

18 cost-sharing requirements or the applica19 tion of a specific exclusion or express limi20 tation on the amount, duration, or scope of

21 coverage of items or services under the

22 terms and conditions of the plan or cov23 erage unless the decision is a denial de24 scribed in subsection (d)(2).
32

S 1052 ES/PP

1 Upon making a determination that any of clauses (i)

2 through (iv) applies with respect to the request, the entity

3 shall determine that the denial of a claim for benefits in4 volved is not eligible for independent medical review under

5 subsection (d), and shall provide notice in accordance with

6 subparagraph (C).

7 (B) PROCESS FOR MAKING DETERMINA8 TIONS.—

9 (i) NO DEFERENCE TO PRIOR DETER10 MINATIONS.—In making determinations

11 under subparagraph (A), there shall be no

12 deference given to determinations made by

13 the plan or issuer or the recommendation

14 of a treating health care professional (if

15 any).

16 (ii) USE OF APPROPRIATE PER17 SONNEL.—A qualified external review enti18 ty shall use appropriately qualified per19 sonnel to make determinations under this

20 section.

21 (C) NOTICES AND GENERAL TIMELINES

22 FOR DETERMINATION.—

23 (i) NOTICE IN CASE OF DENIAL OF

24 REFERRAL.—If the entity under this para25 graph does not make a referral to an inde-
33

S 1052 ES/PP

1 pendent medical reviewer, the entity shall

2 provide notice to the plan or issuer, the

3 participant, beneficiary, or enrollee (or au4 thorized representative) filing the request,

5 and the treating health care professional

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

7 independent medical review. Such notice—

8 (I) shall be written (and, in addi9 tion, may be provided orally) in a

10 manner calculated to be understood

11 by a participant or enrollee;

12 (II) shall include the reasons for

13 the determination;

14 (III) include any relevant terms

15 and conditions of the plan or cov16 erage; and

17 (IV) include a description of any

18 further recourse available to the indi19 vidual.

20 (ii) GENERAL TIMELINE FOR DETER21 MINATIONS.—Upon receipt of information

22 under paragraph (2), the qualified external

23 review entity, and if required the inde24 pendent medical reviewer, shall make a de25 termination within the overall timeline that
34

S 1052 ES/PP

1 is applicable to the case under review as

2 described in subsection (e), except that if

3 the entity determines that a referral to an

4 independent medical reviewer is not re5 quired, the entity shall provide notice of

6 such determination to the participant, ben7 eficiary, or enrollee (or authorized rep8 resentative) within such timeline and with9 in 2 days of the date of such determina10 tion.

11 (d) INDEPENDENT MEDICAL REVIEW.—

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

13 entity determines under subsection (c) that a denial

14 of a claim for benefits is eligible for independent

15 medical review, the entity shall refer the denial in16 volved to an independent medical reviewer for the

17 conduct of an independent medical review under this

18 subsection.

19 (2) MEDICALLY REVIEWABLE DECISIONS.—A

20 denial of a claim for benefits is eligible for inde21 pendent medical review if the benefit for the item or

22 service for which the claim is made would be a cov23 ered benefit under the terms and conditions of the

24 plan or coverage but for one (or more) of the fol25 lowing determinations:
35

S 1052 ES/PP

1 (A) DENIALS BASED ON MEDICAL NECES2 SITY AND APPROPRIATENESS.—A determination

3 that the item or service is not covered because

4 it is not medically necessary and appropriate or

5 based on the application of substantially equiva6 lent terms.

7 (B) DENIALS BASED ON EXPERIMENTAL

8 OR INVESTIGATIONAL TREATMENT.—A deter9 mination that the item or service is not covered

10 because it is experimental or investigational or

11 based on the application of substantially equiva12 lent terms.

13 (C) DENIALS OTHERWISE BASED ON AN

14 EVALUATION OF MEDICAL FACTS.—A deter15 mination that the item or service or condition

16 is not covered based on grounds that require an

17 evaluation of the medical facts by a health care

18 professional in the specific case involved to de19 termine the coverage and extent of coverage of

20 the item or service or condition.

21 (3) INDEPENDENT MEDICAL REVIEW DETER22 MINATION.—

23 (A) IN GENERAL.—An independent med24 ical reviewer under this section shall make a

25 new independent determination with respect to
36

S 1052 ES/PP

1 whether or not the denial of a claim for a ben2 efit that is the subject of the review should be

3 upheld, reversed, or modified.

4 (B) STANDARD FOR DETERMINATION.—

5 The independent medical reviewer’s determina6 tion relating to the medical necessity and ap7 propriateness, or the experimental or investiga8 tion nature, or the evaluation of the medical

9 facts of the item, service, or condition shall be

10 based on the medical condition of the partici11 pant, beneficiary, or enrollee (including the

12 medical records of the participant, beneficiary,

13 or enrollee) and valid, relevant scientific evi14 dence and clinical evidence, including peer-re15 viewed medical literature or findings and in16 cluding expert opinion.

17 (C) NO COVERAGE FOR EXCLUDED BENE18 FITS.—Nothing in this subsection shall be con19 strued to permit an independent medical re20 viewer to require that a group health plan, or

21 health insurance issuer offering health insur22 ance coverage, provide coverage for items or

23 services for which benefits are specifically ex24 cluded or expressly limited under the plan or

25 coverage in the plain language of the plan docu-
37

S 1052 ES/PP

1 ment (and which are disclosed under section

2 121(b)(1)(C)). Notwithstanding any other pro3 vision of this Act, any exclusion of an exact

4 medical procedure, any exact time limit on the

5 duration or frequency of coverage, and any

6 exact dollar limit on the amount of coverage

7 that is specifically enumerated and defined (in

8 the plain language of the plan or coverage docu9 ments) under the plan or coverage offered by a

10 group health plan or health insurance issuer of11 fering health insurance coverage and that is

12 disclosed under section 121(b)(1) shall be con13 sidered to govern the scope of the benefits that

14 may be required: Provided, That the terms and

15 conditions of the plan or coverage relating to

16 such an exclusion or limit are in compliance

17 with the requirements of law.

18 (D) EVIDENCE AND INFORMATION TO BE

19 USED IN MEDICAL REVIEWS.—In making a de20 termination under this subsection, the inde21 pendent medical reviewer shall also consider ap22 propriate and available evidence and informa23 tion, including the following:

24 (i) The determination made by the

25 plan or issuer with respect to the claim
38

S 1052 ES/PP

1 upon internal review and the evidence,

2 guidelines, or rationale used by the plan or

3 issuer in reaching such determination.

4 (ii) The recommendation of the treat5 ing health care professional and the evi6 dence, guidelines, and rationale used by

7 the treating health care professional in

8 reaching such recommendation.

9 (iii) Additional relevant evidence or

10 information obtained by the reviewer or

11 submitted by the plan, issuer, participant,

12 beneficiary, or enrollee (or an authorized

13 representative), or treating health care

14 professional.

15 (iv) The plan or coverage document.

16 (E) INDEPENDENT DETERMINATION.—In

17 making determinations under this subtitle, a

18 qualified external review entity and an inde19 pendent medical reviewer shall—

20 (i) consider the claim under review

21 without deference to the determinations

22 made by the plan or issuer or the rec23 ommendation of the treating health care

24 professional (if any); and
39

S 1052 ES/PP

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

2 definition used by the plan or issuer of

3 ‘‘medically necessary and appropriate’’, or

4 ‘‘experimental or investigational’’, or other

5 substantially equivalent terms that are

6 used by the plan or issuer to describe med7 ical necessity and appropriateness or ex8 perimental or investigational nature of the

9 treatment.

10 (F) DETERMINATION OF INDEPENDENT

11 MEDICAL REVIEWER.—An independent medical

12 reviewer shall, in accordance with the deadlines

13 described in subsection (e), prepare a written

14 determination to uphold, reverse, or modify the

15 denial under review. Such written determination

16 shall include—

17 (i) the determination of the reviewer;

18 (ii) the specific reasons of the re19 viewer for such determination, including a

20 summary of the clinical or scientific evi21 dence used in making the determination;

22 and

23 (iii) with respect to a determination to

24 reverse or modify the denial under review,

25 a timeframe within which the plan or
40

S 1052 ES/PP

1 issuer must comply with such determina2 tion.

3 (G) NONBINDING NATURE OF ADDITIONAL

4 RECOMMENDATIONS.—In addition to the deter5 mination under subparagraph (F), the reviewer

6 may provide the plan or issuer and the treating

7 health care professional with additional rec8 ommendations in connection with such a deter9 mination, but any such recommendations shall

10 not affect (or be treated as part of) the deter11 mination and shall not be binding on the plan

12 or issuer.

13 (e) TIMELINES AND NOTIFICATIONS.—

14 (1) TIMELINES FOR INDEPENDENT MEDICAL

15 REVIEW.—

16 (A) PRIOR AUTHORIZATION DETERMINA17 TION.—

18 (i) IN GENERAL.—The independent

19 medical reviewer (or reviewers) shall make

20 a determination on a denial of a claim for

21 benefits that is referred to the reviewer

22 under subsection (c)(3) in accordance with

23 the medical exigencies of the case and as

24 soon as possible, but in no case later than

25 14 days after the date of receipt of infor-
41

S 1052 ES/PP

1 mation under subsection (c)(2) if the re2 view involves a prior authorization of items

3 or services and in no case later than 21

4 days after the date the request for external

5 review is received.

6 (ii) EXPEDITED DETERMINATION.—

7 Notwithstanding clause (i) and subject to

8 clause (iii), the independent medical re9 viewer (or reviewers) shall make an expe10 dited determination on a denial of a claim

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

12 request for such an expedited determina13 tion is made by a participant, beneficiary,

14 or enrollee (or authorized representative)

15 at any time during the process for making

16 a determination, and a health care profes17 sional certifies, with the request, that a de18 termination under the timeline described in

19 clause (i) would seriously jeopardize the

20 life or health of the participant, bene21 ficiary, or enrollee or the ability of the par22 ticipant, beneficiary, or enrollee to main23 tain or regain maximum function. Such de24 termination shall be made as soon in ac25 cordance with the medical exigencies of the
42

S 1052 ES/PP

1 case and as soon as possible, but in no

2 case later than 72 hours after the time the

3 request for external review is received by

4 the qualified external review entity.

5 (iii) ONGOING CARE DETERMINA6 TION.—Notwithstanding clause (i), in the

7 case of a review described in such sub8 clause that involves a termination or reduc9 tion of care, the notice of the determina10 tion shall be completed not later than 24

11 hours after the time the request for exter12 nal review is received by the qualified ex13 ternal review entity and before the end of

14 the approved period of care.

15 (B) RETROSPECTIVE DETERMINATION.—

16 The independent medical reviewer (or review17 ers) shall complete a review in the case of a ret18 rospective determination on an appeal of a de19 nial of a claim for benefits that is referred to

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

21 later than 30 days after the date of receipt of

22 information under subsection (c)(2) and in no

23 case later than 60 days after the date the re24 quest for external review is received by the

25 qualified external review entity.
43

S 1052 ES/PP

1 (2) NOTIFICATION OF DETERMINATION.—The

2 external review entity shall ensure that the plan or

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

4 authorized representative) and the treating health

5 care professional (if any) receives a copy of the writ6 ten determination of the independent medical re7 viewer prepared under subsection (d)(3)(F). Nothing

8 in this paragraph shall be construed as preventing

9 an entity or reviewer from providing an initial oral

10 notice of the reviewer’s determination.

11 (3) FORM OF NOTICES.—Determinations and

12 notices under this subsection shall be written in a

13 manner calculated to be understood by a participant.

14 (f) COMPLIANCE.—

15 (1) APPLICATION OF DETERMINATIONS.—

16 (A) EXTERNAL REVIEW DETERMINATIONS

17 BINDING ON PLAN.—The determinations of an

18 external review entity and an independent med19 ical reviewer under this section shall be binding

20 upon the plan or issuer involved.

21 (B) COMPLIANCE WITH DETERMINA22 TION.—If the determination of an independent

23 medical reviewer is to reverse or modify the de24 nial, the plan or issuer, upon the receipt of such

25 determination, shall authorize coverage to com-
44

S 1052 ES/PP

1 ply with the medical reviewer’s determination in

2 accordance with the timeframe established by

3 the medical reviewer.

4 (2) FAILURE TO COMPLY.—

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

6 to comply with the timeframe established under

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

8 beneficiary, or enrollee, where such failure to

9 comply is caused by the plan or issuer, the par10 ticipant, beneficiary, or enrollee may obtain the

11 items or services involved (in a manner con12 sistent with the determination of the inde13 pendent external reviewer) from any provider

14 regardless of whether such provider is a partici15 pating provider under the plan or coverage.

16 (B) REIMBURSEMENT.—

17 (i) IN GENERAL.—Where a partici18 pant, beneficiary, or enrollee obtains items

19 or services in accordance with subpara20 graph (A), the plan or issuer involved shall

21 provide for reimbursement of the costs of

22 such items or services. Such reimburse23 ment shall be made to the treating health

24 care professional or to the participant, ben25 eficiary, or enrollee (in the case of a partic-
45

S 1052 ES/PP

1 ipant, beneficiary, or enrollee who pays for

2 the costs of such items or services).

3 (ii) AMOUNT.—The plan or issuer

4 shall fully reimburse a professional, partici5 pant, beneficiary, or enrollee under clause

6 (i) for the total costs of the items or serv7 ices provided (regardless of any plan limi8 tations that may apply to the coverage of

9 such items or services) so long as the items

10 or services were provided in a manner con11 sistent with the determination of the inde12 pendent medical reviewer.

13 (C) FAILURE TO REIMBURSE.—Where a

14 plan or issuer fails to provide reimbursement to

15 a professional, participant, beneficiary, or en16 rollee in accordance with this paragraph, the

17 professional, participant, beneficiary, or enrollee

18 may commence a civil action (or utilize other

19 remedies available under law) to recover only

20 the amount of any such reimbursement that is

21 owed by the plan or issuer and any necessary

22 legal costs or expenses (including attorney’s

23 fees) incurred in recovering such reimburse24 ment.
46

S 1052 ES/PP

1 (D) AVAILABLE REMEDIES.—The remedies

2 provided under this paragraph are in addition

3 to any other available remedies.

4 (3) PENALTIES AGAINST AUTHORIZED OFFI5 CIALS FOR REFUSING TO AUTHORIZE THE DETER6 MINATION OF AN EXTERNAL REVIEW ENTITY.—

7 (A) MONETARY PENALTIES.—

8 (i) IN GENERAL.—In any case in

9 which the determination of an external re10 view entity is not followed by a group

11 health plan, or by a health insurance issuer

12 offering health insurance coverage, any

13 person who, acting in the capacity of au14 thorizing the benefit, causes such refusal

15 may, in the discretion in a court of com16 petent jurisdiction, be liable to an ag17 grieved participant, beneficiary, or enrollee

18 for a civil penalty in an amount of up to

19 $1,000 a day from the date on which the

20 determination was transmitted to the plan

21 or issuer by the external review entity until

22 the date the refusal to provide the benefit

23 is corrected.

24 (ii) ADDITIONAL PENALTY FOR FAIL25 ING TO FOLLOW TIMELINE.—In any case
47

S 1052 ES/PP

1 in which treatment was not commenced by

2 the plan in accordance with the determina3 tion of an independent external reviewer,

4 the Secretary shall assess a civil penalty of

5 $10,000 against the plan and the plan

6 shall pay such penalty to the participant,

7 beneficiary, or enrollee involved.

8 (B) CEASE AND DESIST ORDER AND

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

10 described in subparagraph (A) brought by a

11 participant, beneficiary, or enrollee with respect

12 to a group health plan, or a health insurance

13 issuer offering health insurance coverage, in

14 which a plaintiff alleges that a person referred

15 to in such subparagraph has taken an action re16 sulting in a refusal of a benefit determined by

17 an external appeal entity to be covered, or has

18 failed to take an action for which such person

19 is responsible under the terms and conditions of

20 the plan or coverage and which is necessary

21 under the plan or coverage for authorizing a

22 benefit, the court shall cause to be served on

23 the defendant an order requiring the

24 defendant—
48

S 1052 ES/PP

1 (i) to cease and desist from the al2 leged action or failure to act; and

3 (ii) to pay to the plaintiff a reasonable

4 attorney’s fee and other reasonable costs

5 relating to the prosecution of the action on

6 the charges on which the plaintiff prevails.

7 (C) ADDITIONAL CIVIL PENALTIES.—

8 (i) IN GENERAL.—In addition to any

9 penalty imposed under subparagraph (A)

10 or (B), the appropriate Secretary may as11 sess a civil penalty against a person acting

12 in the capacity of authorizing a benefit de13 termined by an external review entity for

14 one or more group health plans, or health

15 insurance issuers offering health insurance

16 coverage, for—

17 (I) any pattern or practice of re18 peated refusal to authorize a benefit

19 determined by an external appeal enti20 ty to be covered; or

21 (II) any pattern or practice of re22 peated violations of the requirements

23 of this section with respect to such

24 plan or coverage.
49

S 1052 ES/PP

1 (ii) STANDARD OF PROOF AND

2 AMOUNT OF PENALTY.—Such penalty shall

3 be payable only upon proof by clear and

4 convincing evidence of such pattern or

5 practice and shall be in an amount not to

6 exceed the lesser of—

7 (I) 25 percent of the aggregate

8 value of benefits shown by the appro9 priate Secretary to have not been pro10 vided, or unlawfully delayed, in viola11 tion of this section under such pattern

12 or practice; or

13 (II) $500,000.

14 (D) REMOVAL AND DISQUALIFICATION.—

15 Any person acting in the capacity of author16 izing benefits who has engaged in any such pat17 tern or practice described in subparagraph

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

19 the petition of the appropriate Secretary, may

20 be removed by the court from such position,

21 and from any other involvement, with respect to

22 such a plan or coverage, and may be precluded

23 from returning to any such position or involve24 ment for a period determined by the court.
50

S 1052 ES/PP

1 (4) PROTECTION OF LEGAL RIGHTS.—Nothing

2 in this subsection or subtitle shall be construed as

3 altering or eliminating any cause of action or legal

4 rights or remedies of participants, beneficiaries, en5 rollees, and others under State or Federal law (in6 cluding sections 502 and 503 of the Employee Re7 tirement Income Security Act of 1974), including

8 the right to file judicial actions to enforce rights.

9 (g) QUALIFICATIONS OF INDEPENDENT MEDICAL

10 REVIEWERS.—

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

12 more individuals to conduct independent medical re13 view under subsection (c), the qualified external re14 view entity shall ensure that—

15 (A) each independent medical reviewer

16 meets the qualifications described in paragraphs

17 (2) and (3);

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

19 such reviewer meets the requirements described

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

21 (C) compensation provided by the entity to

22 the reviewer is consistent with paragraph (6).

23 (2) LICENSURE AND EXPERTISE.—Each inde24 pendent medical reviewer shall be a physician
51

S 1052 ES/PP

1 (allopathic or osteopathic) or health care profes2 sional who—

3 (A) is appropriately credentialed or li4 censed in 1 or more States to deliver health

5 care services; and

6 (B) typically treats the condition, makes

7 the diagnosis, or provides the type of treatment

8 under review.

9 (3) INDEPENDENCE.—

10 (A) IN GENERAL.—Subject to subpara11 graph (B), each independent medical reviewer

12 in a case shall—

13 (i) not be a related party (as defined

14 in paragraph (7));

15 (ii) not have a material familial, fi16 nancial, or professional relationship with

17 such a party; and

18 (iii) not otherwise have a conflict of

19 interest with such a party (as determined

20 under regulations).

21 (B) EXCEPTION.—Nothing in subpara22 graph (A) shall be construed to—

23 (i) prohibit an individual, solely on the

24 basis of affiliation with the plan or issuer,
52

S 1052 ES/PP

1 from serving as an independent medical re2 viewer if—

3 (I) a non-affiliated individual is

4 not reasonably available;

5 (II) the affiliated individual is

6 not involved in the provision of items

7 or services in the case under review;

8 (III) the fact of such an affili9 ation is disclosed to the plan or issuer

10 and the participant, beneficiary, or

11 enrollee (or authorized representative)

12 and neither party objects; and

13 (IV) the affiliated individual is

14 not an employee of the plan or issuer

15 and does not provide services exclu16 sively or primarily to or on behalf of

17 the plan or issuer;

18 (ii) prohibit an individual who has

19 staff privileges at the institution where the

20 treatment involved takes place from serv21 ing as an independent medical reviewer

22 merely on the basis of such affiliation if

23 the affiliation is disclosed to the plan or

24 issuer and the participant, beneficiary, or
53

S 1052 ES/PP

1 enrollee (or authorized representative), and

2 neither party objects; or

3 (iii) prohibit receipt of compensation

4 by an independent medical reviewer from

5 an entity if the compensation is provided

6 consistent with paragraph (6).

7 (4) PRACTICING HEALTH CARE PROFESSIONAL

8 IN SAME FIELD.—

9 (A) IN GENERAL.—In a case involving

10 treatment, or the provision of items or

11 services—

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

13 a practicing physician (allopathic or osteo14 pathic) of the same or similar specialty, as

15 a physician who, acting within the appro16 priate scope of practice within the State in

17 which the service is provided or rendered,

18 typically treats the condition, makes the

19 diagnosis, or provides the type of treat20 ment under review; or

21 (ii) by a non-physician health care

22 professional, a reviewer (or reviewers) shall

23 include at least one practicing non-physi24 cian health care professional of the same

25 or similar specialty as the non-physician
54

S 1052 ES/PP

1 health care professional who, acting within

2 the appropriate scope of practice within

3 the State in which the service is provided

4 or rendered, typically treats the condition,

5 makes the diagnosis, or provides the type

6 of treatment under review.

7 (B) PRACTICING DEFINED.—For purposes

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

9 with respect to an individual who is a physician

10 or other health care professional that the indi11 vidual provides health care services to individual

12 patients on average at least 2 days per week.

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

14 external review relating to a child, a reviewer shall

15 have expertise under paragraph (2) in pediatrics.

16 (6) LIMITATIONS ON REVIEWER COMPENSA17 TION.—Compensation provided by a qualified exter18 nal review entity to an independent medical reviewer

19 in connection with a review under this section

20 shall—

21 (A) not exceed a reasonable level; and

22 (B) not be contingent on the decision ren23 dered by the reviewer.

24 (7) RELATED PARTY DEFINED.—For purposes

25 of this section, the term ‘‘related party’’ means, with
55

S 1052 ES/PP

1 respect to a denial of a claim under a plan or cov2 erage relating to a participant, beneficiary, or en3 rollee, any of the following:

4 (A) The plan, plan sponsor, or issuer in5 volved, or any fiduciary, officer, director, or em6 ployee of such plan, plan sponsor, or issuer.

7 (B) The participant, beneficiary, or en8 rollee (or authorized representative).

9 (C) The health care professional that pro10 vides the items or services involved in the de11 nial.

12 (D) The institution at which the items or

13 services (or treatment) involved in the denial

14 are provided.

15 (E) The manufacturer of any drug or

16 other item that is included in the items or serv17 ices involved in the denial.

18 (F) Any other party determined under any

19 regulations to have a substantial interest in the

20 denial involved.

21 (h) QUALIFIED EXTERNAL REVIEW ENTITIES.—

22 (1) SELECTION OF QUALIFIED EXTERNAL RE23 VIEW ENTITIES.—
56

S 1052 ES/PP

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

4 (i) to assure that the selection process

5 among qualified external review entities

6 will not create any incentives for external

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

9 (ii) for auditing a sample of decisions

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

12 No such selection process under the procedures

13 implemented by the appropriate Secretary may

14 give either the patient or the plan or issuer any

15 ability to determine or influence the selection of

16 a qualified external review entity to review the

17 case of any participant, beneficiary, or enrollee.

18 (B) STATE AUTHORITY WITH RESPECT TO

19 QUALIFIED EXTERNAL REVIEW ENTITIES FOR

20 HEALTH INSURANCE ISSUERS.—With respect to

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

23 for external review activities to be conducted by

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

S 1052 ES/PP

1 State in a manner determined by the State to

2 assure an unbiased determination.

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

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

6 issuer under this section shall be conducted under a

7 contract between the plan or issuer and 1 or more

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

10 (3) TERMS AND CONDITIONS OF CONTRACT.—

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

13 (A) be consistent with the standards the

14 appropriate Secretary shall establish to assure

15 there is no real or apparent conflict of interest

16 in the conduct of external review activities; and

17 (B) provide that the costs of the external

18 review process shall be borne by the plan or

19 issuer.

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

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

23 beneficiary, or enrollee (or authorized representative)

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

S 1052 ES/PP

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

3 (4) QUALIFICATIONS.—

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

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

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

7 initially certified (and periodically recertified)

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

10 (i) The entity has (directly or through

11 contracts or other arrangements) sufficient

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

14 qualified external review entity under this

15 section on a timely basis, including making

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

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

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

20 or an affiliate or a subsidiary of a plan or

21 issuer, and is not an affiliate or subsidiary

22 of a professional or trade association of

23 plans or issuers or of health care providers.

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

S 1052 ES/PP

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

3 specified in subparagraph (C), including

4 that it will not conduct any external review

5 activities in a case unless the independence

6 requirements of subparagraph (B) are met

7 with respect to the case.

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

10 timely manner under subparagraph (D).

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

13 provides by regulation.

14 (B) INDEPENDENCE REQUIREMENTS.—

15 (i) IN GENERAL.—Subject to clause

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

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

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

S 1052 ES/PP

1 (III) does not otherwise have a

2 conflict of interest with such a party

3 (as determined under regulations).

4 (ii) EXCEPTION FOR REASONABLE

5 COMPENSATION.—Nothing in clause (i)

6 shall be construed to prohibit receipt by a

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

9 conduct of external review activities under

10 this section if the compensation is provided

11 consistent with clause (iii).

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

14 plan or issuer to a qualified external review

15 entity in connection with reviews under

16 this section shall—

17 (I) not exceed a reasonable level;

18 and

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

21 any independent medical reviewer.

22 (C) CERTIFICATION AND RECERTIFICATION

23 PROCESS.—
61

S 1052 ES/PP

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

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

6 Secretary; or

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

10 under clause (iii).

11 In taking action under subclause (I), the

12 appropriate Secretary shall give deference

13 to entities that are under contract with the

14 Federal Government or with an applicable

15 State authority to perform functions of the

16 type performed by qualified external review

17 entities.

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

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

22 regulations) that ensure that a qualified

23 external review entity—

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

S 1052 ES/PP

1 the responsibilities of such an entity

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

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

5 the case of recertification) appropriate

6 indicators of fiscal integrity;

7 (III) will maintain (and has

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

10 with respect to individually identifi11 able health information obtained in

12 the course of conducting external re13 view activities; and

14 (IV) in the case recertification,

15 shall review the matters described in

16 clause (iv).

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

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

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

24 review entities that meet at least the

25 standards required for the certification (or
63

S 1052 ES/PP

1 recertification) of external review entities

2 under clause (ii).

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

5 a qualified external review entity under

6 this paragraph, the appropriate Secretary

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

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

11 including the following:

12 (I) Provision of information

13 under subparagraph (D).

14 (II) Adherence to applicable

15 deadlines (both by the entity and by

16 independent medical reviewers it re17 fers cases to).

18 (III) Compliance with limitations

19 on compensation (with respect to both

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

22 (IV) Compliance with applicable

23 independence requirements.

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

S 1052 ES/PP

1 medically reviewable decisions shall be

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

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

11 shall extend for a period not to exceed 2

12 years.

13 (vi) REVOCATION.—A certification or

14 recertification under this paragraph may

15 be revoked by the appropriate Secretary or

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

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

S 1052 ES/PP

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

3 Secretary, or an organization providing the

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

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

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

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

12 certify and recertify a number of external

13 review entities which is sufficient to ensure

14 the timely and efficient provision of review

15 services.

16 (D) PROVISION OF INFORMATION.—

17 (i) IN GENERAL.—A qualified external

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

20 such times as such Secretary may require,

21 such information (relating to the denials

22 which have been referred to the entity for

23 the conduct of external review under this

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

S 1052 ES/PP

1 independence and other requirements of

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

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

7 individually identifiable medical informa8 tion.

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

11 this subclause with respect to an entity is

12 as follows:

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

15 has been received by the entity.

16 (II) The disposition by the entity

17 of such denials, including the number

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

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

S 1052 ES/PP

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

3 such denials.

4 (IV) Updated information on the

5 information required to be submitted

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

8 external review activities.

9 (iii) INFORMATION TO BE PROVIDED

10 TO CERTIFYING ORGANIZATION.—

11 (I) IN GENERAL.—In the case of

12 a qualified external review entity

13 which is certified (or recertified)

14 under this subsection by a qualified

15 private standard-setting organization,

16 at the request of the organization, the

17 entity shall provide the organization

18 with the information provided to the

19 appropriate Secretary under clause

20 (i).

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

23 shall be construed as preventing such

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

S 1052 ES/PP

1 certification or recertification of an

2 entity.

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

5 be used by the appropriate Secretary and

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

10 available to the public in an appropriate

11 manner.

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

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

17 independent medical reviewer), shall be held by

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

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

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

23 malice or gross misconduct in the performance

24 of such duty, function, or activity.
69

S 1052 ES/PP

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

2 the general effective date referred to in section 501,

3 the General Accounting Office shall prepare and

4 submit to the appropriate committees of Congress a

5 report concerning—

6 (A) the information that is provided under

7 paragraph (3)(D);

8 (B) the number of denials that have been

9 upheld by independent medical reviewers and

10 the number of denials that have been reversed

11 by such reviewers; and

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

15 or coverage.

16 SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND.

17 (a) GRANTS.—

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

19 Human Services (referred to in this section as the

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

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

22 used to award grants to eligible States to carry out

23 consumer assistance activities (including programs

24 established by States prior to the enactment of this
70

S 1052 ES/PP

1 Act) designed to provide information, assistance, and

2 referrals to consumers of health insurance products.

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

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

8 State plan that describes—

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

11 office (established under paragraph (4)) will

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

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

16 by the health care consumer assistance office

17 with the services provided by Federal, State and

18 local health-related ombudsman, information,

19 protection and advocacy, insurance, and fraud

20 and abuse programs;

21 (C) the manner in which the State will

22 provide information, outreach, and services to

23 underserved, minority populations with limited

24 English proficiency and populations residing in

25 rural areas;
71

S 1052 ES/PP

1 (D) the manner in which the State will

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

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

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

11 in subparagraphs (C) and (D);

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

14 have the professional background and training

15 to carry out the activities of the office; and

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

20 (3) AMOUNT OF GRANT.—

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

23 the Secretary shall award a grant to a State in

24 an amount that bears the same ratio to such

25 amounts as the number of individuals within
72

S 1052 ES/PP

1 the State covered under a group health plan or

2 under health insurance coverage offered by a

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

5 determined by the Secretary). Any amounts

6 provided to a State under this subsection that

7 are not used by the State shall be remitted to

8 the Secretary and reallocated in accordance

9 with this subparagraph.

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

11 the amount provided to a State under a grant

12 under this subsection for a fiscal year be less

13 than an amount equal to 0.5 percent of the

14 amount appropriated for such fiscal year to

15 carry out this section.

16 (C) NON-FEDERAL CONTRIBUTIONS.—A

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

19 in an amount that is not less than 25 percent

20 of the amount of Federal funds provided to the

21 State under this section.

22 (4) PROVISION OF FUNDS FOR ESTABLISHMENT

23 OF OFFICE.—

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

S 1052 ES/PP

1 State shall, directly or through a contract with

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

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

6 consumer assistance office.

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

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

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

14 prospective enrollees.

15 (C) EXISTING STATE ENTITY.—Nothing in

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

18 that otherwise meets the requirements of this

19 section.

20 (b) USE OF FUNDS.—

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

23 carry out consumer assistance activities directly or

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

S 1052 ES/PP

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

5 including—

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

7 hotline to respond to consumer requests;

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

10 products and on how best to access health care

11 and the rights and responsibilities of health

12 care consumers;

13 (C) the provision of education on effective

14 methods to promptly and efficiently resolve

15 questions, problems, and grievances;

16 (D) the coordination of educational and

17 outreach efforts with health plans, health care

18 providers, payers, and governmental agencies;

19 (E) referrals to appropriate private and

20 public entities to resolve questions, problems

21 and grievances; and

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

S 1052 ES/PP

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

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

4 group health plan or health insurance coverage

5 offered by a health insurance issuer.

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

8 (A) STATE ENTITY.—With respect to a

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

12 accordance with applicable Federal and State

13 laws.

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

15 State that, through contract, establishes a

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

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

22 representative and their health care providers,

23 group health plans, or health insurance insurers

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

S 1052 ES/PP

1 closed to State agencies or outside persons or

2 entities without the prior written authorization

3 (in accordance with section 164.508 of title 45,

4 Code of Federal Regulations) of the individual

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

10 Code of Federal Regulations). The office shall

11 provide a written description of the policies and

12 procedures of the office with respect to the

13 manner in which health information may be

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

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

18 accordance with section 164.508 of title 45,

19 Code of Federal Regulations) to allow the office

20 to obtain medical information relevant to the

21 matter before the office.

22 (3) AVAILABILITY OF SERVICES.—The health

23 care consumer assistance office of a State shall not

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

S 1052 ES/PP

1 dividual’s health insurance coverage or prospective

2 coverage, including individuals covered under a

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

5 medicaid programs under title XVIII or XIX of the

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

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

8 care program.

9 (4) DESIGNATION OF RESPONSIBILITIES.—

10 (A) WITHIN EXISTING STATE ENTITY.—If

11 the health care consumer assistance office of a

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

15 (i) there is a separate delineation of

16 the funding, activities, and responsibilities

17 of the office as compared to the other

18 funding, activities, and responsibilities of

19 the agency; and

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

22 the confidentiality of all information

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

25 their health care providers, group health
78

S 1052 ES/PP

1 plans, or health insurance issuers with the

2 office and to ensure that no information is

3 disclosed to the State agency or office

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

6 accordance with paragraph (2).

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

8 entity that enters into a contract with a State

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

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

12 and that the entity is independent of group

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

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

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

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

22 subsection shall be for a term of 3 years.

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

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

S 1052 ES/PP

1 appropriate committees of Congress a report concerning

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

4 problems and grievances.

5 (d) AUTHORIZATION OF APPROPRIATIONS.—There

6 are authorized to be appropriated such sums as may be

7 necessary to carry out this section.

8 Subtitle B—Access to Care

9 SEC. 111. CONSUMER CHOICE OPTION.

10 (a) IN GENERAL.—If—

11 (1) a health insurance issuer providing health

12 insurance coverage in connection with a group health

13 plan offers to enrollees health insurance coverage

14 which provides for coverage of services only if such

15 services are furnished through health care profes16 sionals and providers who are members of a network

17 of health care professionals and providers who have

18 entered into a contract with the issuer to provide

19 such services, or

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

21 beneficiaries health benefits which provide for cov22 erage of services only if such services are furnished

23 through health care professionals and providers who

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

S 1052 ES/PP

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

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

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

5 the time of enrollment and during an annual open season

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

9 health care professionals and providers who are members

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

11 beneficiaries are offered such non-network coverage

12 through another group health plan or through another

13 health insurance issuer in the group market.

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

16 group health plan for the additional cost of the creation

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

18 and the amount of any additional cost sharing imposed

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

21 sponsor or group health plan through agreement with the

22 health insurance issuer.

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

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

S 1052 ES/PP

1 insurance issuer or group health plan. Such time period

2 shall occur at least annually.

3 SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.

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

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

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

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

11 such individual.

12 (b) SPECIALISTS.—

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

14 group health plan and a health insurance issuer that

15 offers health insurance coverage shall permit each

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

19 qualified participating health care professional who

20 is available to accept such individual for such care.

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

22 apply to specialty care if the plan or issuer clearly

23 informs participants, beneficiaries, and enrollees of

24 the limitations on choice of participating health care

25 professionals with respect to such care.
82

S 1052 ES/PP

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

4 care).

5 SEC. 113. ACCESS TO EMERGENCY CARE.

6 (a) COVERAGE OF EMERGENCY SERVICES.—

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

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

11 hospital, the plan or issuer shall cover emergency

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

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

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

17 with respect to such services;

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

19 are provided to a participant, beneficiary, or

20 enrollee—

21 (i) by a nonparticipating health care

22 provider with or without prior authoriza23 tion, or

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

S 1052 ES/PP

1 the participant, beneficiary, or enrollee is not

2 liable for amounts that exceed the amounts of

3 liability that would be incurred if the services

4 were provided by a participating health care

5 provider with prior authorization; and

6 (D) without regard to any other term or

7 condition of such coverage (other than exclusion

8 or coordination of benefits, or an affiliation or

9 waiting period, permitted under section 2701 of

10 the Public Health Service Act, section 701 of

11 the Employee Retirement Income Security Act

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

14 cost-sharing).

15 (2) DEFINITIONS.—In this section:

16 (A) EMERGENCY MEDICAL CONDITION.—

17 The term ‘‘emergency medical condition’’ means

18 a medical condition manifesting itself by acute

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

21 possesses an average knowledge of health and

22 medicine, could reasonably expect the absence

23 of immediate medical attention to result in a

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

S 1052 ES/PP

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

2 Act.

3 (B) EMERGENCY SERVICES.—The term

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

5 emergency medical condition—

6 (i) a medical screening examination

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

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

13 condition, and

14 (ii) within the capabilities of the staff

15 and facilities available at the hospital, such

16 further medical examination and treatment

17 as are required under section 1867 of such

18 Act to stabilize the patient.

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

20 with respect to an emergency medical condition

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

22 meaning give in section 1867(e)(3) of the Social

23 Security Act (42 U.S.C. 1395dd(e)(3)).

24 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

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

S 1052 ES/PP

1 health insurance coverage offered by a health insurance

2 issuer, must provide reimbursement for maintenance care

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

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

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

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

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

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

12 ambulance services and emergency services, the plan

13 or issuer shall cover emergency ambulance services

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

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

18 emergency services.

19 (2) EMERGENCY AMBULANCE SERVICES.—For

20 purposes of this subsection, the term ‘‘emergency

21 ambulance services’’ means ambulance services (as

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

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

S 1052 ES/PP

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

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

5 with an average knowledge of health and medicine,

6 could reasonably expect that the absence of such

7 transport would result in placing the health of the

8 individual in serious jeopardy, serious impairment of

9 bodily function, or serious dysfunction of any bodily

10 organ or part.

11 SEC. 114. TIMELY ACCESS TO SPECIALISTS.

12 (a) TIMELY ACCESS.—

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

14 health insurance issuer offering health insurance

15 coverage shall ensure that participants, beneficiaries,

16 and enrollees receive timely access to specialists who

17 are appropriate to the condition of, and accessible

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

19 such specialty care is a covered benefit under the

20 plan or coverage.

21 (2) RULE OF CONSTRUCTION.—Nothing in

22 paragraph (1) shall be construed—

23 (A) to require the coverage under a group

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

S 1052 ES/PP

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

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

6 (C) to override any State licensure or

7 scope-of-practice law.

8 (3) ACCESS TO CERTAIN PROVIDERS.—

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

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

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

16 (B) TREATMENT OF NONPARTICIPATING

17 PROVIDERS.—If a participant, beneficiary, or

18 enrollee receives care from a nonparticipating

19 specialist pursuant to subparagraph (A), such

20 specialty care shall be provided at no additional

21 cost to the participant, beneficiary, or enrollee

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

24 care if provided by a participating specialist.

25 (b) REFERRALS.—
88

S 1052 ES/PP

1 (1) AUTHORIZATION.—Subject to subsection

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

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

6 (A) shall be for an appropriate duration of

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

10 (B) may not be refused solely because the

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

13 (a)(3)).

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

16 (A) IN GENERAL.—Subject to subsection

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

18 issuer shall permit a participant, beneficiary, or

19 enrollee who has an ongoing special condition

20 (as defined in subparagraph (B)) to receive a

21 referral to a specialist for the treatment of such

22 condition and such specialist may authorize

23 such referrals, procedures, tests, and other

24 medical services with respect to such condition,

25 or coordinate the care for such condition, sub-
89

S 1052 ES/PP

1 ject to the terms of a treatment plan (if any)

2 referred to in subsection (c) with respect to the

3 condition.

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

6 special condition’’ means a condition or disease

7 that—

8 (i) is life-threatening, degenerative,

9 potentially disabling, or congenital; and

10 (ii) requires specialized medical care

11 over a prolonged period of time.

12 (c) TREATMENT PLANS.—

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

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

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

17 if the treatment plan—

18 (i) is developed by the specialist, in

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

21 beneficiary, or enrollee, and

22 (ii) is approved by the plan or issuer

23 in a timely manner, if the plan or issuer

24 requires such approval; and
90

S 1052 ES/PP

1 (B) in accordance with applicable quality

2 assurance and utilization review standards of

3 the plan or issuer.

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

5 shall be construed as prohibiting a plan or issuer

6 from requiring the specialist to provide the plan or

7 issuer with regular updates on the specialty care

8 provided, as well as all other reasonably necessary

9 medical information.

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

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

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

19 (a) GENERAL RIGHTS.—

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

21 health insurance issuer offering health insurance

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

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

S 1052 ES/PP

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

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

5 (2) OBSTETRICAL AND GYNECOLOGICAL

6 CARE.—A group health plan or health insurance

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

9 ordering of related obstetrical and gynecological

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

12 health care professional who specializes in obstetrics

13 or gynecology as the authorization of the primary

14 care provider.

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

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

18 or coverage that—

19 (1) provides coverage for obstetric or

20 gynecologic care; and

21 (2) requires the designation by a participant,

22 beneficiary, or enrollee of a participating primary

23 care provider.

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

25 be construed to—
92

S 1052 ES/PP

1 (1) waive any exclusions of coverage under the

2 terms and conditions of the plan or health insurance

3 coverage with respect to coverage of obstetrical or

4 gynecological care; or

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

8 care health care professional or the plan or issuer of

9 treatment decisions.

10 SEC. 116. ACCESS TO PEDIATRIC CARE.

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

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

13 under a group health plan, or health insurance coverage

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

15 requires or provides for the designation of a participating

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

17 permit such person to designate a physician (allopathic or

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

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

22 be construed to waive any exclusions of coverage under

23 the terms and conditions of the plan or health insurance

24 coverage with respect to coverage of pediatric care.
93

S 1052 ES/PP

1 SEC. 117. CONTINUITY OF CARE.

2 (a) TERMINATION OF PROVIDER.—

3 (1) IN GENERAL.—If—

4 (A) a contract between a group health

5 plan, or a health insurance issuer offering

6 health insurance coverage, and a treating health

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

9 (B) benefits or coverage provided by a

10 health care provider are terminated because of

11 a change in the terms of provider participation

12 in such plan or coverage,

13 the plan or issuer shall meet the requirements of

14 paragraph (3) with respect to each continuing care

15 patient.

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

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

21 termination, coverage of services of a health care

22 provider is terminated with respect to an individual,

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

24 provisions of this section) shall apply under the plan

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

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

S 1052 ES/PP

1 minated, but only with respect to benefits that are

2 covered under the plan after the contract termi3 nation.

4 (3) REQUIREMENTS.—The requirements of this

5 paragraph are that the plan or issuer—

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

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

9 of the termination described in paragraph (1)

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

11 to elect continued transitional care from the

12 provider under this section;

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

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

17 patient to elect to continue to be covered with

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

21 (b)).

22 (4) CONTINUING CARE PATIENT.—For purposes

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

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

S 1052 ES/PP

1 (A) is undergoing a course of treatment

2 for a serious and complex condition from the

3 provider at the time the plan or issuer receives

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

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

7 (B) is undergoing a course of institutional

8 or inpatient care from the provider at the time

9 of such notice;

10 (C) is scheduled to undergo non-elective

11 surgery from the provider at the time of such

12 notice;

13 (D) is pregnant and undergoing a course

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

16 (E) is or was determined to be terminally

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

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

19 notice, but only with respect to a provider that

20 was treating the terminal illness before the date

21 of such notice.

22 (b) TRANSITIONAL PERIODS.—

23 (1) SERIOUS AND COMPLEX CONDITIONS.—The

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

S 1052 ES/PP

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

2 determined by the treating health care professional)

3 from the date of the notice described in subsection

4 (a)(3)(A).

5 (2) INSTITUTIONAL OR INPATIENT CARE.—The

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

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

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

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

12 (B) the date of discharge of the patient

13 from such care or the termination of the period

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

15 completion of reasonable follow-up care.

16 (3) SCHEDULED NON-ELECTIVE SURGERY.—

17 The transitional period under this subsection for a

18 continuing care patient described in subsection

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

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

22 after the date of the surgery.

23 (4) PREGNANCY.—The transitional period

24 under this subsection for a continuing care patient

25 described in subsection (a)(4)(D) shall extend
97

S 1052 ES/PP

1 through the provision of post-partum care directly

2 related to the delivery.

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

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

7 is directly related to the treatment of the terminal

8 illness or its medical manifestations.

9 (c) PERMISSIBLE TERMS AND CONDITIONS.—A

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

12 this section upon the provider agreeing to the following

13 terms and conditions:

14 (1) The treating health care provider agrees to

15 accept reimbursement from the plan or issuer and

16 continuing care patient involved (with respect to

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

18 start of the transitional period as payment in full

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

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

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

24 to the patient in an amount that would exceed the

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

S 1052 ES/PP

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

2 been terminated.

3 (2) The treating health care provider agrees to

4 adhere to the quality assurance standards of the

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

9 (3) The treating health care provider agrees

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

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

14 approved by the plan or issuer.

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

17 (1) to require the coverage of benefits which

18 would not have been covered if the provider involved

19 remained a participating provider; or

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

22 plan or health insurance issuer from requiring that

23 the health care provider—

24 (A) notify participants, beneficiaries, or en25 rollees of their rights under this section; or
99

S 1052 ES/PP

1 (B) provide the plan or issuer with the

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

4 care patient.

5 (e) DEFINITIONS.—In this section:

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

7 with respect to a plan or issuer and a treating

8 health care provider, a contract between such plan

9 or issuer and an organized network of providers that

10 includes the treating health care provider, and (in

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

12 treating health care provider and the organized net13 work.

14 (2) HEALTH CARE PROVIDER.—The term

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

16 (A) any individual who is engaged in the

17 delivery of health care services in a State and

18 who is required by State law or regulation to be

19 licensed or certified by the State to engage in

20 the delivery of such services in the State; and

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

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

24 licensed or certified by the State to engage in
100

S 1052 ES/PP

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

2 licensed.

3 (3) SERIOUS AND COMPLEX CONDITION.—The

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

5 respect to a participant, beneficiary, or enrollee

6 under the plan or coverage—

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

10 possibility of death or permanent harm; or

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

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

16 nonrenewal of the contract, but does not include a

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

19 SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

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

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

23 to prescription drugs, and limits such coverage to drugs

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

S 1052 ES/PP

1 (1) ensure the participation of physicians and

2 pharmacists in developing and reviewing such for3 mulary;

4 (2) provide for disclosure of the formulary to

5 providers; and

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

8 or issuer, provide for exceptions from the formulary

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

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

13 drug covered under the formulary.

14 (b) COVERAGE OF APPROVED DRUGS AND MEDICAL

15 DEVICES.—

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

17 health insurance coverage offered in connection with

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

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

21 is investigational, if the use—

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

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

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

S 1052 ES/PP

1 section 505 of the Federal Food, Drug,

2 and Cosmetic Act, without regard to any

3 postmarketing requirements that may

4 apply under such Act; or

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

7 drug under section 351 of the Public

8 Health Service Act, without regard to any

9 postmarketing requirements that may

10 apply pursuant to such section; or

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

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

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

16 an application approved under section 515 of

17 such Act, without regard to any postmarketing

18 requirements that may apply under such Act.

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

21 health plan (or health insurance coverage offered in

22 connection with such a plan) to provide any coverage

23 of prescription drugs or medical devices.
103

S 1052 ES/PP

1 SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN

2 APPROVED CLINICAL TRIALS.

3 (a) COVERAGE.—

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

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

8 issuer—

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

11 (b)(2);

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

13 (or limit or impose additional conditions on) the

14 coverage of routine patient costs for items and

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

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

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

22 not include the cost of the tests or measurements

23 conducted primarily for the purpose of the clinical

24 trial involved.

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

26 or more participating providers is participating in a
104

S 1052 ES/PP

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

3 that a qualified individual participate in the trial

4 through such a participating provider if the provider

5 will accept the individual as a participant in the

6 trial.

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

9 means an individual who is a participant or beneficiary

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

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

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

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

16 (B) The individual is eligible to participate in

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

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

20 offers meaningful potential for significant clinical

21 benefit for the individual.

22 (2) Either—

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

S 1052 ES/PP

1 such trial would be appropriate based upon the

2 individual meeting the conditions described in

3 paragraph (1); or

4 (B) the participant, beneficiary, or enrollee

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

7 such trial would be appropriate based upon the

8 individual meeting the conditions described in

9 paragraph (1).

10 (c) PAYMENT.—

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

12 health plan or health insurance issuer shall provide

13 for payment for routine patient costs described in

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

15 of items and services that are reasonably expected

16 (as determined by the appropriate Secretary) to be

17 paid for by the sponsors of an approved clinical trial.

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

19 items and services provided by—

20 (A) a participating provider, the payment

21 rate shall be at the agreed upon rate; or

22 (B) a nonparticipating provider, the pay23 ment rate shall be at the rate the plan or issuer

24 would normally pay for comparable services

25 under subparagraph (A).
106

S 1052 ES/PP

1 (d) APPROVED CLINICAL TRIAL DEFINED.—

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

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

4 study or clinical investigation—

5 (A) approved and funded (which may in6 clude funding through in-kind contributions) by

7 one or more of the following:

8 (i) the National Institutes of Health;

9 (ii) a cooperative group or center of

10 the National Institutes of Health, such as

11 a qualified nongovernmental research enti12 ty to which the National Cancer Institute

13 has awarded a center support grant;

14 (iii) either of the following if the con15 ditions described in paragraph (2) are

16 met—

17 (I) the Department of Veterans

18 Affairs;

19 (II) the Department of Defense;

20 or

21 (B) approved by the Food and Drug Ad22 ministration.

23 (2) CONDITIONS FOR DEPARTMENTS.—The

24 conditions described in this paragraph, for a study

25 or investigation conducted by a Department, are
107

S 1052 ES/PP

1 that the study or investigation has been reviewed

2 and approved through a system of peer review that

3 the appropriate Secretary determines—

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

5 review of studies and investigations used by the

6 National Institutes of Health; and

7 (B) assures unbiased review of the highest

8 ethical standards by qualified individuals who

9 have no interest in the outcome of the review.

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

11 construed to limit a plan’s or issuer’s coverage with re12 spect to clinical trials.

13 SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL

14 STAY FOR MASTECTOMIES AND LYMPH NODE

15 DISSECTIONS FOR THE TREATMENT OF

16 BREAST CANCER AND COVERAGE FOR SEC17 ONDARY CONSULTATIONS.

18 (a) INPATIENT CARE.—

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

20 health insurance issuer providing health insurance

21 coverage, that provides medical and surgical benefits

22 shall ensure that inpatient coverage with respect to

23 the treatment of breast cancer is provided for a pe24 riod of time as is determined by the attending physi-
108

S 1052 ES/PP

1 cian, in consultation with the patient, to be medi2 cally necessary and appropriate following—

3 (A) a mastectomy;

4 (B) a lumpectomy; or

5 (C) a lymph node dissection for the treat6 ment of breast cancer.

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

8 be construed as requiring the provision of inpatient

9 coverage if the attending physician and patient de10 termine that a shorter period of hospital stay is

11 medically appropriate.

12 (b) PROHIBITION ON CERTAIN MODIFICATIONS.—In

13 implementing the requirements of this section, a group

14 health plan, and a health insurance issuer providing health

15 insurance coverage, may not modify the terms and condi16 tions of coverage based on the determination by a partici17 pant, beneficiary, or enrollee to request less than the min18 imum coverage required under subsection (a).

19 (c) SECONDARY CONSULTATIONS.—

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

21 health insurance issuer providing health insurance

22 coverage, that provides coverage with respect to

23 medical and surgical services provided in relation to

24 the diagnosis and treatment of cancer shall ensure

25 that full coverage is provided for secondary consulta-
109

S 1052 ES/PP

1 tions by specialists in the appropriate medical fields

2 (including pathology, radiology, and oncology) to

3 confirm or refute such diagnosis. Such plan or issuer

4 shall ensure that full coverage is provided for such

5 secondary consultation whether such consultation is

6 based on a positive or negative initial diagnosis. In

7 any case in which the attending physician certifies in

8 writing that services necessary for such a secondary

9 consultation are not sufficiently available from spe10 cialists operating under the plan or coverage with re11 spect to whose services coverage is otherwise pro12 vided under such plan or by such issuer, such plan

13 or issuer shall ensure that coverage is provided with

14 respect to the services necessary for the secondary

15 consultation with any other specialist selected by the

16 attending physician for such purpose at no addi17 tional cost to the individual beyond that which the

18 individual would have paid if the specialist was par19 ticipating in the network of the plan or issuer.

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

21 shall be construed as requiring the provision of sec22 ondary consultations where the patient determines

23 not to seek such a consultation.
110

S 1052 ES/PP

1 (d) PROHIBITION ON PENALTIES OR INCENTIVES.—

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

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

6 provider or specialist provided care to a participant,

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

9 (2) provide financial or other incentives to a

10 physician or specialist to induce the physician or

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

13 lymph node dissection for the treatment of breast

14 cancer below certain limits or to limit referrals for

15 secondary consultations; or

16 (3) provide financial or other incentives to a

17 physician or specialist to induce the physician or

18 specialist to refrain from referring a participant,

19 beneficiary, or enrollee for a secondary consultation

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

22 Subtitle C—Access to Information

23 SEC. 121. PATIENT ACCESS TO INFORMATION.

24 (a) REQUIREMENT.—

25 (1) DISCLOSURE.—
111

S 1052 ES/PP

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

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

6 (i) of the information described in

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

9 enrollee under the plan or coverage;

10 (ii) of such information on an annual

11 basis—

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

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

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

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

20 (iii) of information relating to any

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

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

25 date on which the reduction takes effect.
112

S 1052 ES/PP

1 (B) PARTICIPANTS, BENEFICIARIES, AND

2 ENROLLEES.—The disclosure required under

3 subparagraph (A) shall be provided—

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

6 address; or

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

11 other enrollees and such beneficiary or en12 rollee.

13 (2) PROVISION OF INFORMATION.—Information

14 shall be provided to participants, beneficiaries, and

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

17 to such participants, beneficiaries, or enrollees, to

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

20 States Postal Service or other private delivery serv21 ice.

22 (b) REQUIRED INFORMATION.—The informational

23 materials to be distributed under this section shall include

24 for each option available under the group health plan or

25 health insurance coverage the following:
113

S 1052 ES/PP

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

2 benefits, including—

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

4 (B) specific preventive services covered

5 under the plan or coverage if such services are

6 covered;

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

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

10 (D) any other benefit limitations, including

11 any annual or lifetime benefit limits and any

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

14 exclusions; and

15 (E) any definition of medical necessity

16 used in making coverage determinations by the

17 plan, issuer, or claims administrator.

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

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

24 each option available under the plan;
114

S 1052 ES/PP

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

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

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

6 nonparticipating providers; and

7 (D) any additional cost-sharing or charges

8 for benefits and services that are furnished

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

11 precertification.

12 (3) DISENROLLMENT.—Information relating to

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

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

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

17 any out-of-area coverage.

18 (5) PARTICIPATING PROVIDERS.—A directory of

19 participating providers (to the extent a plan or

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

23 provider, and information about how to inquire

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

S 1052 ES/PP

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

2 description of any requirements and procedures to

3 be used by participants, beneficiaries, and enrollees

4 in selecting, accessing, or changing their primary

5 care provider, including providers both within and

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

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

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

10 a child if such section applies.

11 (7) PREAUTHORIZATION REQUIREMENTS.—A

12 description of the requirements and procedures to be

13 used to obtain preauthorization for health services,

14 if such preauthorization is required.

15 (8) EXPERIMENTAL AND INVESTIGATIONAL

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

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

20 treatments are covered by the plan or issuer.

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

25 and nonparticipating specialists, including any limi-
116

S 1052 ES/PP

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

3 access to specialists care under section 114 if such

4 section applies.

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

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

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

9 obtain coverage for approved clinical trials under

10 section 119 if such section applies.

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

12 plan or issuer provides coverage for prescription

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

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

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

21 (12) EMERGENCY SERVICES.—A summary of

22 the rules and procedures for accessing emergency

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

25 under the prudent layperson standard under section
117

S 1052 ES/PP

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

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

5 the plan or issuer’s rules and procedures pertaining

6 to claims and appeals, a description of the rights

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

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

11 externally (including telephone numbers and mailing

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

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

16 State law.

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

20 issuer maintains such procedures.

21 (15) INFORMATION ON PLANS AND ISSUERS.—

22 The name, mailing address, and telephone number

23 or numbers of the plan administrator and the issuer

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

S 1052 ES/PP

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

3 the benefits under the plan or coverage are provided

4 under a contract or policy of insurance issued by an

5 issuer, or whether benefits are provided directly by

6 the plan sponsor who bears the insurance risk.

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

9 (including the availability of printed information in

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

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

14 of how to access these items or services.

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

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

21 available to participants, beneficiaries, and enrollees.

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

24 enrollees that are established by the Bipartisan Pa25 tient Protection Act (excluding those described in
119

S 1052 ES/PP

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

2 The description required under this paragraph may

3 be combined with the notices of the type described

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

6 with any other notice provision that the appropriate

7 Secretary determines may be combined, so long as

8 such combination does not result in any reduction in

9 the information that would otherwise be provided to

10 the recipient.

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

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

14 information (including telephone numbers and, if

15 available, Internet websites), shall be made available

16 upon request.

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

19 respect to whom each designated decisionmaker

20 under the plan has assumed liability under section

21 502(o) of the Employee Retirement Income Security

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

23 decisionmaker.

24 (c) ADDITIONAL INFORMATION.—The informational

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

S 1052 ES/PP

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

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

6 health care professionals and participating health

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

9 professionals.

10 (2) COMPENSATION METHODS.—A summary

11 description by category of the applicable methods

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

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

14 for compensating prospective or treating health care

15 professionals (including primary care providers and

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

18 (3) PRESCRIPTION DRUGS.—Information about

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

21 plan or issuer uses a defined formulary.

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

25 rights) under any utilization review program under
121

S 1052 ES/PP

1 sections 101 and 102, including any drug formulary

2 program under section 118.

3 (5) EXTERNAL APPEALS INFORMATION.—Ag4 gregate information on the number and outcomes of

5 external medical reviews, relative to the sample size

6 (such as the number of covered lives) under the plan

7 or under the coverage of the issuer.

8 (d) MANNER OF DISCLOSURE.—The information de9 scribed in this section shall be disclosed in an accessible

10 medium and format that is calculated to be understood

11 by a participant or enrollee.

12 (e) RULES OF CONSTRUCTION.—Nothing in this sec13 tion shall be construed to prohibit a group health plan,

14 or a health insurance issuer in connection with health in15 surance coverage, from—

16 (1) distributing any other additional informa17 tion determined by the plan or issuer to be impor18 tant or necessary in assisting participants, bene19 ficiaries, and enrollees in the selection of a health

20 plan or health insurance coverage; and

21 (2) complying with the provisions of this section

22 by providing information in brochures, through the

23 Internet or other electronic media, or through other

24 similar means, so long as—
122

S 1052 ES/PP

1 (A) the disclosure of such information in

2 such form is in accordance with requirements

3 as the appropriate Secretary may impose, and

4 (B) in connection with any such disclosure

5 of information through the Internet or other

6 electronic media—

7 (i) the recipient has affirmatively con8 sented to the disclosure of such informa9 tion in such form,

10 (ii) the recipient is capable of access11 ing the information so disclosed on the re12 cipient’s individual workstation or at the

13 recipient’s home,

14 (iii) the recipient retains an ongoing

15 right to receive paper disclosure of such in16 formation and receives, in advance of any

17 attempt at disclosure of such information

18 to him or her through the Internet or

19 other electronic media, notice in printed

20 form of such ongoing right and of the

21 proper software required to view informa22 tion so disclosed, and

23 (iv) the plan administrator appro24 priately ensures that the intended recipient

25 is receiving the information so disclosed
123

S 1052 ES/PP

1 and provides the information in printed

2 form if the information is not received.

3 SEC. 122. GENETIC INFORMATION.

4 (a) DEFINITIONS.—In this section:

5 (1) FAMILY MEMBER.—The term ‘‘family mem6 ber’’ means with respect to an individual—

7 (A) the spouse of the individual;

8 (B) a dependent child of the individual, in9 cluding a child who is born to or placed for

10 adoption with the individual; and

11 (C) all other individuals related by blood to

12 the individual or the spouse or child described

13 in subparagraph (A) or (B).

14 (2) GENETIC INFORMATION.—The term ‘‘ge15 netic information’’ means information about genes,

16 gene products, or inherited characteristics that may

17 derive from an individual or a family member of

18 such individual (including information about a re19 quest for or the receipt of genetic services by such

20 individual or a family member of such individual).

21 (3) GENETIC SERVICES.—The term ‘‘genetic

22 services’’ means health services, including genetic

23 tests, provided to obtain, assess, or interpret genetic

24 information for diagnostic and therapeutic purposes,

25 and for genetic education and counseling.
124

S 1052 ES/PP

1 (4) GENETIC TEST.—The term ‘‘genetic test’’

2 means the analysis of human DNA, RNA, chro3 mosomes, proteins, and certain metabolites, includ4 ing analysis of genotypes, mutations, phenotypes, or

5 karyotypes, for the purpose of predicting risk of dis6 ease in asymptomatic or undiagnosed individuals.

7 Such term does not include a physical test, such as

8 a chemical, blood, or urine analysis of an individual,

9 including a cholesterol test, or a physical exam of

10 the individual, in order to detect symptoms, clinical

11 signs, or a diagnosis of disease.

12 (5) GROUP HEALTH PLAN, HEALTH INSURANCE

13 ISSUER.—The terms ‘‘group health plan’’ and

14 ‘‘health insurance issuer’’ include a third party ad15 ministrator or other person acting for or on behalf

16 of such plan or issuer.

17 (6) PREDICTIVE GENETIC INFORMATION.—

18 (A) IN GENERAL.—The term ‘‘predictive

19 genetic information’’ means—

20 (i) information about an individual’s

21 genetic tests;

22 (ii) information about genetic tests of

23 family members of the individual; or

24 (iii) information about the occurrence

25 of a disease or disorder in family members.
125

S 1052 ES/PP

1 (B) LIMITATIONS.—The term ‘‘predictive

2 genetic information’’ shall not include—

3 (i) information about the sex or age of

4 the individual;

5 (ii) information about chemical, blood,

6 or urine analyses of the individual, includ7 ing cholesterol tests, unless these analyses

8 are genetic tests, as defined in paragraph

9 (4); or

10 (iii) information about physical exams

11 of the individual, and other information

12 relevant to determining the current health

13 status of the individual.

14 (b) NONDISCRIMINATION.—

15 (1) NO ENROLLMENT RESTRICTION FOR GE16 NETIC SERVICES.—A group health plan, and a

17 health insurance issuer offering health insurance

18 coverage, shall not establish rules for eligibility (in19 cluding continued eligibility) of any individual to en20 roll under the terms of the plan or coverage based

21 on genetic information (or information about a re22 quest for or the receipt of genetic services by such

23 individual or a family member of such individual) in

24 relation to the individual or a dependent of the indi25 vidual.
126

S 1052 ES/PP

1 (2) NO DISCRIMINATION IN RATE BASED ON

2 PREDICTIVE GENETIC INFORMATION.—A group

3 health plan, and a health insurance issuer offering

4 health insurance coverage, shall not deny eligibility

5 or adjust premium or contribution rates on the basis

6 of predictive genetic information concerning an indi7 vidual (or information about a request for or the re8 ceipt of genetic services by such individual or a fam9 ily member of such individual).

10 (c) COLLECTION OF PREDICTIVE GENETIC INFORMA11 TION.—

12 (1) LIMITATION ON REQUESTING OR REQUIRING

13 PREDICTIVE GENETIC INFORMATION.—Except as

14 provided in paragraph (2), a group health plan, or

15 a health insurance issuer offering health insurance

16 coverage, shall not request or require predictive ge17 netic information concerning an individual or a fam18 ily member of the individual (including information

19 about a request for or the receipt of genetic services

20 by such individual or a family member of such indi21 vidual).

22 (2) INFORMATION NEEDED FOR DIAGNOSIS,

23 TREATMENT, OR PAYMENT.—

24 (A) IN GENERAL.—Notwithstanding para25 graph (1), a group health plan, or a health in-
127

S 1052 ES/PP

1 surance issuer offering health insurance cov2 erage, that provides health care items and serv3 ices to an individual or dependent may request

4 (but may not require) that such individual or

5 dependent disclose, or authorize the collection

6 or disclosure of, predictive genetic information

7 for purposes of diagnosis, treatment, or pay8 ment relating to the provision of health care

9 items and services to such individual or depend10 ent.

11 (B) NOTICE OF CONFIDENTIALITY PRAC12 TICES AND DESCRIPTION OF SAFEGUARDS.—As

13 a part of a request under subparagraph (A),

14 the group health plan, or a health insurance

15 issuer offering health insurance coverage, shall

16 provide to the individual or dependent a de17 scription of the procedures in place to safe18 guard the confidentiality, as described in sub19 section (d), of such predictive genetic informa20 tion.

21 (d) CONFIDENTIALITY WITH RESPECT TO PRE22 DICTIVE GENETIC INFORMATION.—

23 (1) NOTICE OF CONFIDENTIALITY PRAC24 TICES.—A group health plan, or a health insurance

25 issuer offering health insurance coverage, shall post
128

S 1052 ES/PP

1 or provide, in writing and in a clear and conspicuous

2 manner, notice of the plan or issuer’s confidentiality

3 practices, that shall include—

4 (A) a description of an individual’s rights

5 with respect to predictive genetic information;

6 (B) the procedures established by the plan

7 or issuer for the exercise of the individual’s

8 rights; and

9 (C) a description of the right to obtain a

10 copy of the notice of the confidentiality prac11 tices required under this subsection.

12 (2) ESTABLISHMENT OF SAFEGUARDS.—A

13 group health plan, or a health insurance issuer offer14 ing health insurance coverage, shall establish and

15 maintain appropriate administrative, technical, and

16 physical safeguards to protect the confidentiality, se17 curity, accuracy, and integrity of predictive genetic

18 information created, received, obtained, maintained,

19 used, transmitted, or disposed of by such plan or

20 issuer.

21 (3) COMPLIANCE WITH CERTAIN STANDARDS.—

22 With respect to the establishment and maintenance

23 of safeguards under this subsection or subsection

24 (c)(2)(B), a group health plan, or a health insurance

25 issuer offering health insurance coverage, shall be
129

S 1052 ES/PP

1 deemed to be in compliance with such subsections if

2 such plan or issuer is in compliance with the stand3 ards promulgated by the Secretary of Health and

4 Human Services under—

5 (A) part C of title XI of the Social Secu6 rity Act (42 U.S.C. 1320d et seq.); or

7 (B) section 264(c) of Health Insurance

8 Portability and Accountability Act of 1996 (42

9 U.S.C. 1320d–2 note).

10 (e) SPECIAL RULE IN CASE OF GENETIC INFORMA11 TION.—With respect to health insurance coverage offered

12 by a health insurance issuer, the provisions of this section

13 relating to genetic information (including information

14 about a request for or the receipt of genetic services by

15 an individual or a family member of such individual) shall

16 not be construed to supersede any provision of State law

17 that establishes, implements, or continues in effect a

18 standard, requirement, or remedy that more completely—

19 (1) protects the confidentiality of genetic infor20 mation (including information about a request for or

21 the receipt of genetic services by an individual or a

22 family member of such individual) or the privacy of

23 an individual or a family member of the individual

24 with respect to genetic information (including infor25 mation about a request for or the receipt of genetic
130

S 1052 ES/PP

1 services by the individual or a family member of

2 such individual); or

3 (2) prohibits discrimination on the basis of ge4 netic information than does this section.

5 Subtitle D—Protecting the Doctor6 Patient Relationship

7 SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN

8 MEDICAL COMMUNICATIONS.

9 (a) GENERAL RULE.—The provisions of any contract

10 or agreement, or the operation of any contract or agree11 ment, between a group health plan or health insurance

12 issuer in relation to health insurance coverage (including

13 any partnership, association, or other organization that

14 enters into or administers such a contract or agreement)

15 and a health care provider (or group of health care pro16 viders) shall not prohibit or otherwise restrict a health

17 care professional from advising such a participant, bene18 ficiary, or enrollee who is a patient of the professional

19 about the health status of the individual or medical care

20 or treatment for the individual’s condition or disease, re21 gardless of whether benefits for such care or treatment

22 are provided under the plan or coverage, if the professional

23 is acting within the lawful scope of practice.
131

S 1052 ES/PP

1 (b) NULLIFICATION.—Any contract provision or

2 agreement that restricts or prohibits medical communica3 tions in violation of subsection (a) shall be null and void.

4 SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PRO5 VIDERS BASED ON LICENSURE.

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

7 insurance issuer with respect to health insurance coverage,

8 shall not discriminate with respect to participation or in9 demnification as to any provider who is acting within the

10 scope of the provider’s license or certification under appli11 cable State law, solely on the basis of such license or cer12 tification.

13 (b) CONSTRUCTION.—Subsection (a) shall not be

14 construed—

15 (1) as requiring the coverage under a group

16 health plan or health insurance coverage of a par17 ticular benefit or service or to prohibit a plan or

18 issuer from including providers only to the extent

19 necessary to meet the needs of the plan’s or issuer’s

20 participants, beneficiaries, or enrollees or from es21 tablishing any measure designed to maintain quality

22 and control costs consistent with the responsibilities

23 of the plan or issuer;

24 (2) to override any State licensure or scope-of25 practice law; or
132

S 1052 ES/PP

1 (3) as requiring a plan or issuer that offers net2 work coverage to include for participation every will3 ing provider who meets the terms and conditions of

4 the plan or issuer.

5 SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE

6 ARRANGEMENTS.

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

8 insurance issuer offering health insurance coverage may

9 not operate any physician incentive plan (as defined in

10 subparagraph (B) of section 1876(i)(8) of the Social Secu11 rity Act) unless the requirements described in clauses (i),

12 (ii)(I), and (iii) of subparagraph (A) of such section are

13 met with respect to such a plan.

14 (b) APPLICATION.—For purposes of carrying out

15 paragraph (1), any reference in section 1876(i)(8) of the

16 Social Security Act to the Secretary, an eligible organiza17 tion, or an individual enrolled with the organization shall

18 be treated as a reference to the applicable authority, a

19 group health plan or health insurance issuer, respectively,

20 and a participant, beneficiary, or enrollee with the plan

21 or organization, respectively.

22 (c) CONSTRUCTION.—Nothing in this section shall be

23 construed as prohibiting all capitation and similar ar24 rangements or all provider discount arrangements.
133

S 1052 ES/PP

1 SEC. 134. PAYMENT OF CLAIMS.

2 A group health plan, and a health insurance issuer

3 offering group health insurance coverage, shall provide for

4 prompt payment of claims submitted for health care serv5 ices or supplies furnished to a participant, beneficiary, or

6 enrollee with respect to benefits covered by the plan or

7 issuer, in a manner consistent with the provisions of sec8 tion 1842(c)(2) of the Social Security Act (42 U.S.C.

9 1395u(c)(2)).

10 SEC. 135. PROTECTION FOR PATIENT ADVOCACY.

11 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

12 AND GRIEVANCE PROCESS.—A group health plan, and a

13 health insurance issuer with respect to the provision of

14 health insurance coverage, may not retaliate against a par15 ticipant, beneficiary, enrollee, or health care provider

16 based on the participant’s, beneficiary’s, enrollee’s or pro17 vider’s use of, or participation in, a utilization review proc18 ess or a grievance process of the plan or issuer (including

19 an internal or external review or appeal process) under

20 this title.

21 (b) PROTECTION FOR QUALITY ADVOCACY BY

22 HEALTH CARE PROFESSIONALS.—

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

24 health insurance issuer may not retaliate or dis25 criminate against a protected health care profes26 sional because the professional in good faith—
134

S 1052 ES/PP

1 (A) discloses information relating to the

2 care, services, or conditions affecting one or

3 more participants, beneficiaries, or enrollees of

4 the plan or issuer to an appropriate public reg5 ulatory agency, an appropriate private accredi6 tation body, or appropriate management per7 sonnel of the plan or issuer; or

8 (B) initiates, cooperates, or otherwise par9 ticipates in an investigation or proceeding by

10 such an agency with respect to such care, serv11 ices, or conditions.

12 If an institutional health care provider is a partici13 pating provider with such a plan or issuer or other14 wise receives payments for benefits provided by such

15 a plan or issuer, the provisions of the previous sen16 tence shall apply to the provider in relation to care,

17 services, or conditions affecting one or more patients

18 within an institutional health care provider in the

19 same manner as they apply to the plan or issuer in

20 relation to care, services, or conditions provided to

21 one or more participants, beneficiaries, or enrollees;

22 and for purposes of applying this sentence, any ref23 erence to a plan or issuer is deemed a reference to

24 the institutional health care provider.
135

S 1052 ES/PP

1 (2) GOOD FAITH ACTION.—For purposes of

2 paragraph (1), a protected health care professional

3 is considered to be acting in good faith with respect

4 to disclosure of information or participation if, with

5 respect to the information disclosed as part of the

6 action—

7 (A) the disclosure is made on the basis of

8 personal knowledge and is consistent with that

9 degree of learning and skill ordinarily possessed

10 by health care professionals with the same li11 censure or certification and the same experi12 ence;

13 (B) the professional reasonably believes the

14 information to be true;

15 (C) the information evidences either a vio16 lation of a law, rule, or regulation, of an appli17 cable accreditation standard, or of a generally

18 recognized professional or clinical standard or

19 that a patient is in imminent hazard of loss of

20 life or serious injury; and

21 (D) subject to subparagraphs (B) and (C)

22 of paragraph (3), the professional has followed

23 reasonable internal procedures of the plan,

24 issuer, or institutional health care provider es-
136

S 1052 ES/PP

1 tablished for the purpose of addressing quality

2 concerns before making the disclosure.

3 (3) EXCEPTION AND SPECIAL RULE.—

4 (A) GENERAL EXCEPTION.—Paragraph (1)

5 does not protect disclosures that would violate

6 Federal or State law or diminish or impair the

7 rights of any person to the continued protection

8 of confidentiality of communications provided

9 by such law.

10 (B) NOTICE OF INTERNAL PROCEDURES.—

11 Subparagraph (D) of paragraph (2) shall not

12 apply unless the internal procedures involved

13 are reasonably expected to be known to the

14 health care professional involved. For purposes

15 of this subparagraph, a health care professional

16 is reasonably expected to know of internal pro17 cedures if those procedures have been made

18 available to the professional through distribu19 tion or posting.

20 (C) INTERNAL PROCEDURE EXCEPTION.—

21 Subparagraph (D) of paragraph (2) also shall

22 not apply if—

23 (i) the disclosure relates to an immi24 nent hazard of loss of life or serious injury

25 to a patient;
137

S 1052 ES/PP

1 (ii) the disclosure is made to an ap2 propriate private accreditation body pursu3 ant to disclosure procedures established by

4 the body; or

5 (iii) the disclosure is in response to an

6 inquiry made in an investigation or pro7 ceeding of an appropriate public regulatory

8 agency and the information disclosed is

9 limited to the scope of the investigation or

10 proceeding.

11 (4) ADDITIONAL CONSIDERATIONS.—It shall

12 not be a violation of paragraph (1) to take an ad13 verse action against a protected health care profes14 sional if the plan, issuer, or provider taking the ad15 verse action involved demonstrates that it would

16 have taken the same adverse action even in the ab17 sence of the activities protected under such para18 graph.

19 (5) NOTICE.—A group health plan, health in20 surance issuer, and institutional health care provider

21 shall post a notice, to be provided or approved by

22 the Secretary of Labor, setting forth excerpts from,

23 or summaries of, the pertinent provisions of this

24 subsection and information pertaining to enforce25 ment of such provisions.
138

S 1052 ES/PP

1 (6) CONSTRUCTIONS.—

2 (A) DETERMINATIONS OF COVERAGE.—

3 Nothing in this subsection shall be construed to

4 prohibit a plan or issuer from making a deter5 mination not to pay for a particular medical

6 treatment or service or the services of a type of

7 health care professional.

8 (B) ENFORCEMENT OF PEER REVIEW PRO9 TOCOLS AND INTERNAL PROCEDURES.—Noth10 ing in this subsection shall be construed to pro11 hibit a plan, issuer, or provider from estab12 lishing and enforcing reasonable peer review or

13 utilization review protocols or determining

14 whether a protected health care professional has

15 complied with those protocols or from estab16 lishing and enforcing internal procedures for

17 the purpose of addressing quality concerns.

18 (C) RELATION TO OTHER RIGHTS.—Noth19 ing in this subsection shall be construed to

20 abridge rights of participants, beneficiaries, en21 rollees, and protected health care professionals

22 under other applicable Federal or State laws.

23 (7) PROTECTED HEALTH CARE PROFESSIONAL

24 DEFINED.—For purposes of this subsection, the

25 term ‘‘protected health care professional’’ means an
139

S 1052 ES/PP

1 individual who is a licensed or certified health care

2 professional and who—

3 (A) with respect to a group health plan or

4 health insurance issuer, is an employee of the

5 plan or issuer or has a contract with the plan

6 or issuer for provision of services for which ben7 efits are available under the plan or issuer; or

8 (B) with respect to an institutional health

9 care provider, is an employee of the provider or

10 has a contract or other arrangement with the

11 provider respecting the provision of health care

12 services.

13 Subtitle E—Definitions

14 SEC. 151. DEFINITIONS.

15 (a) INCORPORATION OF GENERAL DEFINITIONS.—

16 Except as otherwise provided, the provisions of section

17 2791 of the Public Health Service Act shall apply for pur18 poses of this title in the same manner as they apply for

19 purposes of title XXVII of such Act.

20 (b) SECRETARY.—Except as otherwise provided, the

21 term ‘‘Secretary’’ means the Secretary of Health and

22 Human Services, in consultation with the Secretary of

23 Labor and the term ‘‘appropriate Secretary’’ means the

24 Secretary of Health and Human Services in relation to

25 carrying out this title under sections 2706 and 2751 of
140

S 1052 ES/PP

1 the Public Health Service Act and the Secretary of Labor

2 in relation to carrying out this title under section 713 of

3 the Employee Retirement Income Security Act of 1974.

4 (c) ADDITIONAL DEFINITIONS.—For purposes of this

5 title:

6 (1) APPLICABLE AUTHORITY.—The term ‘‘ap7 plicable authority’’ means—

8 (A) in the case of a group health plan, the

9 Secretary of Health and Human Services and

10 the Secretary of Labor; and

11 (B) in the case of a health insurance issuer

12 with respect to a specific provision of this title,

13 the applicable State authority (as defined in

14 section 2791(d) of the Public Health Service

15 Act), or the Secretary of Health and Human

16 Services, if such Secretary is enforcing such

17 provision under section 2722(a)(2) or

18 2761(a)(2) of the Public Health Service Act.

19 (2) ENROLLEE.—The term ‘‘enrollee’’ means,

20 with respect to health insurance coverage offered by

21 a health insurance issuer, an individual enrolled with

22 the issuer to receive such coverage.

23 (3) GROUP HEALTH PLAN.—The term ‘‘group

24 health plan’’ has the meaning given such term in

25 section 733(a) of the Employee Retirement Income
141

S 1052 ES/PP

1 Security Act of 1974, except that such term includes

2 a employee welfare benefit plan treated as a group

3 health plan under section 732(d) of such Act or de4 fined as such a plan under section 607(1) of such

5 Act.

6 (4) HEALTH CARE PROFESSIONAL.—The term

7 ‘‘health care professional’’ means an individual who

8 is licensed, accredited, or certified under State law

9 to provide specified health care services and who is

10 operating within the scope of such licensure, accredi11 tation, or certification.

12 (5) HEALTH CARE PROVIDER.—The term

13 ‘‘health care provider’’ includes a physician or other

14 health care professional, as well as an institutional

15 or other facility or agency that provides health care

16 services and that is licensed, accredited, or certified

17 to provide health care items and services under ap18 plicable State law.

19 (6) NETWORK.—The term ‘‘network’’ means,

20 with respect to a group health plan or health insur21 ance issuer offering health insurance coverage, the

22 participating health care professionals and providers

23 through whom the plan or issuer provides health

24 care items and services to participants, beneficiaries,

25 or enrollees.
142

S 1052 ES/PP

1 (7) NONPARTICIPATING.—The term ‘‘non2 participating’’ means, with respect to a health care

3 provider that provides health care items and services

4 to a participant, beneficiary, or enrollee under group

5 health plan or health insurance coverage, a health

6 care provider that is not a participating health care

7 provider with respect to such items and services.

8 (8) PARTICIPATING.—The term ‘‘participating’’

9 means, with respect to a health care provider that

10 provides health care items and services to a partici11 pant, beneficiary, or enrollee under group health

12 plan or health insurance coverage offered by a

13 health insurance issuer, a health care provider that

14 furnishes such items and services under a contract

15 or other arrangement with the plan or issuer.

16 (9) PRIOR AUTHORIZATION.—The term ‘‘prior

17 authorization’’ means the process of obtaining prior

18 approval from a health insurance issuer or group

19 health plan for the provision or coverage of medical

20 services.

21 (10) TERMS AND CONDITIONS.—The term

22 ‘‘terms and conditions’’ includes, with respect to a

23 group health plan or health insurance coverage, re24 quirements imposed under this title with respect to

25 the plan or coverage.
143

S 1052 ES/PP

1 SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUC2 TION.

3 (a) CONTINUED APPLICABILITY OF STATE LAW

4 WITH RESPECT TO HEALTH INSURANCE ISSUERS.—

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

6 this title shall not be construed to supersede any

7 provision of State law which establishes, implements,

8 or continues in effect any standard or requirement

9 solely relating to health insurance issuers (in connec10 tion with group health insurance coverage or other11 wise) except to the extent that such standard or re12 quirement prevents the application of a requirement

13 of this title.

14 (2) CONTINUED PREEMPTION WITH RESPECT

15 TO GROUP HEALTH PLANS.—Nothing in this title

16 shall be construed to affect or modify the provisions

17 of section 514 of the Employee Retirement Income

18 Security Act of 1974 with respect to group health

19 plans.

20 (3) CONSTRUCTION.—In applying this section,

21 a State law that provides for equal access to, and

22 availability of, all categories of licensed health care

23 providers and services shall not be treated as pre24 venting the application of any requirement of this

25 title.
144

S 1052 ES/PP

1 (b) APPLICATION OF SUBSTANTIALLY COMPLIANT

2 STATE LAWS.—

3 (1) IN GENERAL.—In the case of a State law

4 that imposes, with respect to health insurance cov5 erage offered by a health insurance issuer and with

6 respect to a group health plan that is a non-Federal

7 governmental plan, a requirement that substantially

8 complies (within the meaning of subsection (c)) with

9 a patient protection requirement (as defined in para10 graph (3)) and does not prevent the application of

11 other requirements under this Act (except in the

12 case of other substantially compliant requirements),

13 in applying the requirements of this title under sec14 tion 2707 and 2753 (as applicable) of the Public

15 Health Service Act (as added by title II), subject to

16 subsection (a)(2)—

17 (A) the State law shall not be treated as

18 being superseded under subsection (a); and

19 (B) the State law shall apply instead of the

20 patient protection requirement otherwise appli21 cable with respect to health insurance coverage

22 and non-Federal governmental plans.

23 (2) LIMITATION.—In the case of a group health

24 plan covered under title I of the Employee Retire25 ment Income Security Act of 1974, paragraph (1)
145

S 1052 ES/PP

1 shall be construed to apply only with respect to the

2 health insurance coverage (if any) offered in connec3 tion with the plan.

4 (3) DEFINITIONS.—In this section:

5 (A) PATIENT PROTECTION REQUIRE6 MENT.—The term ‘‘patient protection require7 ment’’ means a requirement under this title,

8 and includes (as a single requirement) a group

9 or related set of requirements under a section

10 or similar unit under this title.

11 (B) SUBSTANTIALLY COMPLIANT.—The

12 terms ‘‘substantially compliant’’, substantially

13 complies’’, or ‘‘substantial compliance’’ with re14 spect to a State law, mean that the State law

15 has the same or similar features as the patient

16 protection requirements and has a similar ef17 fect.

18 (c) DETERMINATIONS OF SUBSTANTIAL COMPLI19 ANCE.—

20 (1) CERTIFICATION BY STATES.—A State may

21 submit to the Secretary a certification that a State

22 law provides for patient protections that are at least

23 substantially compliant with one or more patient

24 protection requirements. Such certification shall be

25 accompanied by such information as may be re-
146

S 1052 ES/PP

1 quired to permit the Secretary to make the deter2 mination described in paragraph (2)(A).

3 (2) REVIEW.—

4 (A) IN GENERAL.—The Secretary shall

5 promptly review a certification submitted under

6 paragraph (1) with respect to a State law to de7 termine if the State law substantially complies

8 with the patient protection requirement (or re9 quirements) to which the law relates.

10 (B) APPROVAL DEADLINES.—

11 (i) INITIAL REVIEW.—Such a certifi12 cation is considered approved unless the

13 Secretary notifies the State in writing,

14 within 90 days after the date of receipt of

15 the certification, that the certification is

16 disapproved (and the reasons for dis17 approval) or that specified additional infor18 mation is needed to make the determina19 tion described in subparagraph (A).

20 (ii) ADDITIONAL INFORMATION.—

21 With respect to a State that has been noti22 fied by the Secretary under clause (i) that

23 specified additional information is needed

24 to make the determination described in

25 subparagraph (A), the Secretary shall
147

S 1052 ES/PP

1 make the determination within 60 days

2 after the date on which such specified ad3 ditional information is received by the Sec4 retary.

5 (3) APPROVAL.—

6 (A) IN GENERAL.—The Secretary shall ap7 prove a certification under paragraph (1)

8 unless—

9 (i) the State fails to provide sufficient

10 information to enable the Secretary to

11 make a determination under paragraph

12 (2)(A); or

13 (ii) the Secretary determines that the

14 State law involved does not provide for pa15 tient protections that substantially comply

16 with the patient protection requirement (or

17 requirements) to which the law relates.

18 (B) STATE CHALLENGE.—A State that has

19 a certification disapproved by the Secretary

20 under subparagraph (A) may challenge such

21 disapproval in the appropriate United States

22 district court.

23 (C) DEFERENCE TO STATES.—With re24 spect to a certification submitted under para25 graph (1), the Secretary shall give deference to
148

S 1052 ES/PP

1 the State’s interpretation of the State law in2 volved and the compliance of the law with a pa3 tient protection requirement.

4 (D) PUBLIC NOTIFICATION.—The Sec5 retary shall—

6 (i) provide a State with a notice of the

7 determination to approve or disapprove a

8 certification under this paragraph;

9 (ii) promptly publish in the Federal

10 Register a notice that a State has sub11 mitted a certification under paragraph (1);

12 (iii) promptly publish in the Federal

13 Register the notice described in clause (i)

14 with respect to the State; and

15 (iv) annually publish the status of all

16 States with respect to certifications.

17 (4) CONSTRUCTION.—Nothing in this sub18 section shall be construed as preventing the certifi19 cation (and approval of certification) of a State law

20 under this subsection solely because it provides for

21 greater protections for patients than those protec22 tions otherwise required to establish substantial

23 compliance.

24 (5) PETITIONS.—
149

S 1052 ES/PP

1 (A) PETITION PROCESS.—Effective on the

2 date on which the provisions of this Act become

3 effective, as provided for in section 501, a

4 group health plan, health insurance issuer, par5 ticipant, beneficiary, or enrollee may submit a

6 petition to the Secretary for an advisory opinion

7 as to whether or not a standard or requirement

8 under a State law applicable to the plan, issuer,

9 participant, beneficiary, or enrollee that is not

10 the subject of a certification under this sub11 section, is superseded under subsection (a)(1)

12 because such standard or requirement prevents

13 the application of a requirement of this title.

14 (B) OPINION.—The Secretary shall issue

15 an advisory opinion with respect to a petition

16 submitted under subparagraph (A) within the

17 60-day period beginning on the date on which

18 such petition is submitted.

19 (d) DEFINITIONS.—For purposes of this section:

20 (1) STATE LAW.—The term ‘‘State law’’ in21 cludes all laws, decisions, rules, regulations, or other

22 State action having the effect of law, of any State.

23 A law of the United States applicable only to the

24 District of Columbia shall be treated as a State law

25 rather than a law of the United States.
150

S 1052 ES/PP

1 (2) STATE.—The term ‘‘State’’ includes a

2 State, the District of Columbia, Puerto Rico, the

3 Virgin Islands, Guam, American Samoa, the North4 ern Mariana Islands, any political subdivisions of

5 such, or any agency or instrumentality of such.

6 SEC. 153. EXCLUSIONS.

7 (a) NO BENEFIT REQUIREMENTS.—Nothing in this

8 title shall be construed to require a group health plan or

9 a health insurance issuer offering health insurance cov10 erage to include specific items and services under the

11 terms of such a plan or coverage, other than those pro12 vided under the terms and conditions of such plan or cov13 erage.

14 (b) EXCLUSION FROM ACCESS TO CARE MANAGED

15 CARE PROVISIONS FOR FEE-FOR-SERVICE COVERAGE.—

16 (1) IN GENERAL.—The provisions of sections

17 111 through 117 shall not apply to a group health

18 plan or health insurance coverage if the only cov19 erage offered under the plan or coverage is fee-for20 service coverage (as defined in paragraph (2)).

21 (2) FEE-FOR-SERVICE COVERAGE DEFINED.—

22 For purposes of this subsection, the term ‘‘fee-for23 service coverage’’ means coverage under a group

24 health plan or health insurance coverage that—
151

S 1052 ES/PP

1 (A) reimburses hospitals, health profes2 sionals, and other providers on a fee-for-service

3 basis without placing the provider at financial

4 risk;

5 (B) does not vary reimbursement for such

6 a provider based on an agreement to contract

7 terms and conditions or the utilization of health

8 care items or services relating to such provider;

9 (C) allows access to any provider that is

10 lawfully authorized to provide the covered serv11 ices and that agrees to accept the terms and

12 conditions of payment established under the

13 plan or by the issuer; and

14 (D) for which the plan or issuer does not

15 require prior authorization before providing for

16 any health care services.

17 SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

18 Only for purposes of applying the requirements of

19 this title under sections 2707 and 2753 of the Public

20 Health Service Act and section 714 of the Employee Re21 tirement Income Security Act of 1974, section

22 2791(c)(2)(A), and section 733(c)(2)(A) of the Employee

23 Retirement Income Security Act of 1974 shall be deemed

24 not to apply.
152

S 1052 ES/PP

1 SEC. 155. REGULATIONS.

2 The Secretaries of Health and Human Services and

3 Labor shall issue such regulations as may be necessary

4 or appropriate to carry out this title. Such regulations

5 shall be issued consistent with section 104 of Health In6 surance Portability and Accountability Act of 1996. Such

7 Secretaries may promulgate any interim final rules as the

8 Secretaries determine are appropriate to carry out this

9 title.

10 SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOC11 UMENTS.

12 The requirements of this title with respect to a group

13 health plan or health insurance coverage are deemed to

14 be incorporated into, and made a part of, such plan or

15 the policy, certificate, or contract providing such coverage

16 and are enforceable under law as if directly included in

17 the documentation of such plan or such policy, certificate,

18 or contract.
153

S 1052 ES/PP

1 TITLE II—APPLICATION OF

2 QUALITY CARE STANDARDS

3 TO GROUP HEALTH PLANS

4 AND HEALTH INSURANCE

5 COVERAGE UNDER THE PUB6 LIC HEALTH SERVICE ACT

7 SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND

8 GROUP HEALTH INSURANCE COVERAGE.

9 (a) IN GENERAL.—Subpart 2 of part A of title

10 XXVII of the Public Health Service Act is amended by

11 adding at the end the following new section:

12 ‘‘SEC. 2707. PATIENT PROTECTION STANDARDS.

13 ‘‘Each group health plan shall comply with patient

14 protection requirements under title I of the Bipartisan Pa15 tient Protection Act, and each health insurance issuer

16 shall comply with patient protection requirements under

17 such title with respect to group health insurance coverage

18 it offers, and such requirements shall be deemed to be in19 corporated into this subsection.’’.

20 (b) CONFORMING AMENDMENT.—Section

21 2721(b)(2)(A) of such Act (42 U.S.C. 300gg–21(b)(2)(A))

22 is amended by inserting ‘‘(other than section 2707)’’ after

23 ‘‘requirements of such subparts’’.
154

S 1052 ES/PP

1 SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR2 ANCE COVERAGE.

3 Part B of title XXVII of the Public Health Service

4 Act is amended by inserting after section 2752 the fol5 lowing new section:

6 ‘‘SEC. 2753. PATIENT PROTECTION STANDARDS.

7 ‘‘Each health insurance issuer shall comply with pa8 tient protection requirements under title I of the Bipar9 tisan Patient Protection Act with respect to individual

10 health insurance coverage it offers, and such requirements

11 shall be deemed to be incorporated into this subsection.’’.

12 SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE

13 AUTHORITIES.

14 Part C of title XXVII of the Public Health Service

15 Act (42 U.S.C. 300gg–91 et seq.) is amended by adding

16 at the end the following:

17 ‘‘SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE

18 AUTHORITIES.

19 ‘‘(a) AGREEMENT WITH STATES.—A State may enter

20 into an agreement with the Secretary for the delegation

21 to the State of some or all of the Secretary’s authority

22 under this title to enforce the requirements applicable

23 under title I of the Bipartisan Patient Protection Act with

24 respect to health insurance coverage offered by a health

25 insurance issuer and with respect to a group health plan

26 that is a non-Federal governmental plan.
155

S 1052 ES/PP

1 ‘‘(b) DELEGATIONS.—Any department, agency, or in2 strumentality of a State to which authority is delegated

3 pursuant to an agreement entered into under this section

4 may, if authorized under State law and to the extent con5 sistent with such agreement, exercise the powers of the

6 Secretary under this title which relate to such authority.’’.

7 SEC. 204. ELIMINATION OF OPTION OF NON-FEDERAL GOV8 ERNMENTAL PLANS TO BE EXCEPTED FROM

9 REQUIREMENTS CONCERNING GENETIC IN10 FORMATION.

11 Section 2721(b)(2) of the Public Health Service Act

12 (42 U.S. C. 300gg–21(b)(2)) is amended—

13 (1) in subparagraph (A), by striking ‘‘If the

14 plan sponsor’’ and inserting ‘‘Except as provided in

15 subparagraph (D), if the plan sponsor’’; and

16 (2) by adding at the end the following:

17 ‘‘(D) ELECTION NOT APPLICABLE TO RE18 QUIREMENTS CONCERNING GENETIC INFORMA19 TION.—The election described in subparagraph

20 (A) shall not be available with respect to the

21 provisions of subsections (b), (c), and (d) of

22 section 122 of the Bipartisan Patient Protec23 tion Act and the provisions of section 2702(b)

24 to the extent that the subsections and section

25 apply to genetic information (or information
156

S 1052 ES/PP

1 about a request for or the receipt of genetic

2 services by an individual or a family member of

3 such individual).’’.

4 TITLE III—APPLICATION OF PA5 TIENT PROTECTION STAND6 ARDS TO FEDERAL HEALTH

7 CARE PROGRAMS

8 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND9 ARDS TO FEDERAL HEALTH CARE PRO10 GRAMS.

11 (a) APPLICATION OF STANDARDS.—

12 (1) IN GENERAL.—Each Federal health care

13 program shall comply with the patient protection re14 quirements under title I, and such requirements

15 shall be deemed to be incorporated into this section.

16 (2) CAUSE OF ACTION RELATING TO PROVISION

17 OF HEALTH BENEFITS.—Any individual who receives

18 a health care item or service under a Federal health

19 care program shall have a cause of action against

20 the Federal Government under sections 502(n) and

21 514(d) of the Employee Retirement Income Security

22 Act of 1974, and the provisions of such sections

23 shall be deemed to be incorporated into this section.

24 (3) RULES OF CONSTRUCTION.—For purposes

25 of this subsection—
157

S 1052 ES/PP

1 (A) each Federal health care program shall

2 be deemed to be a group health plan;

3 (B) the Federal Government shall be

4 deemed to be the plan sponsor of each Federal

5 health care program; and

6 (C) each individual eligible for benefits

7 under a Federal health care program shall be

8 deemed to be a participant, beneficiary, or en9 rollee under that program.

10 (b) FEDERAL HEALTH CARE PROGRAM DEFINED.—

11 In this section, the term ‘‘Federal health care program’’

12 has the meaning given that term under section 1128B(f)

13 of the Social Security Act (42 U.S.C. 1320a–7b) except

14 that, for purposes of this section, such term includes the

15 Federal employees health benefits program established

16 under chapter 89 of title 5, United States Code.
158

S 1052 ES/PP

1 TITLE IV—AMENDMENTS TO THE

2 EMPLOYEE RETIREMENT IN3 COME SECURITY ACT OF 1974

4 SEC. 401. APPLICATION OF PATIENT PROTECTION STAND5 ARDS TO GROUP HEALTH PLANS AND GROUP

6 HEALTH INSURANCE COVERAGE UNDER THE

7 EMPLOYEE RETIREMENT INCOME SECURITY

8 ACT OF 1974.

9 Subpart B of part 7 of subtitle B of title I of the

10 Employee Retirement Income Security Act of 1974 is

11 amended by adding at the end the following new section:

12 ‘‘SEC. 714. PATIENT PROTECTION STANDARDS.

13 ‘‘(a) IN GENERAL.—Subject to subsection (b), a

14 group health plan (and a health insurance issuer offering

15 group health insurance coverage in connection with such

16 a plan) shall comply with the requirements of title I of

17 the Bipartisan Patient Protection Act (as in effect as of

18 the date of the enactment of such Act), and such require19 ments shall be deemed to be incorporated into this sub20 section.

21 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE22 MENTS.—

23 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE24 MENTS THROUGH INSURANCE.—For purposes of

25 subsection (a), insofar as a group health plan pro-
159

S 1052 ES/PP

1 vides benefits in the form of health insurance cov2 erage through a health insurance issuer, the plan

3 shall be treated as meeting the following require4 ments of title I of the Bipartisan Patient Protection

5 Act with respect to such benefits and not be consid6 ered as failing to meet such requirements because of

7 a failure of the issuer to meet such requirements so

8 long as the plan sponsor or its representatives did

9 not cause such failure by the issuer:

10 ‘‘(A) Section 111 (relating to consumer

11 choice option).

12 ‘‘(B) Section 112 (relating to choice of

13 health care professional).

14 ‘‘(C) Section 113 (relating to access to

15 emergency care).

16 ‘‘(D) Section 114 (relating to timely access

17 to specialists).

18 ‘‘(E) Section 115 (relating to patient ac19 cess to obstetrical and gynecological care).

20 ‘‘(F) Section 116 (relating to access to pe21 diatric care).

22 ‘‘(G) Section 117 (relating to continuity of

23 care), but only insofar as a replacement issuer

24 assumes the obligation for continuity of care.
160

S 1052 ES/PP

1 ‘‘(H) Section 118 (relating to access to

2 needed prescription drugs).

3 ‘‘(I) Section 119 (relating to coverage for

4 individuals participating in approved clinical

5 trials).

6 ‘‘(J) Section 120 (relating to required cov7 erage for minimum hospital stay for

8 mastectomies and lymph node dissections for

9 the treatment of breast cancer and coverage for

10 secondary consultations).

11 ‘‘(K) Section 134 (relating to payment of

12 claims).

13 ‘‘(2) INFORMATION.—With respect to informa14 tion required to be provided or made available under

15 section 121 of the Bipartisan Patient Protection

16 Act, in the case of a group health plan that provides

17 benefits in the form of health insurance coverage

18 through a health insurance issuer, the Secretary

19 shall determine the circumstances under which the

20 plan is not required to provide or make available the

21 information (and is not liable for the issuer’s failure

22 to provide or make available the information), if the

23 issuer is obligated to provide and make available (or

24 provides and makes available) such information.
161

S 1052 ES/PP

1 ‘‘(3) INTERNAL APPEALS.—With respect to the

2 internal appeals process required to be established

3 under section 103 of such Act, in the case of a

4 group health plan that provides benefits in the form

5 of health insurance coverage through a health insur6 ance issuer, the Secretary shall determine the cir7 cumstances under which the plan is not required to

8 provide for such process and system (and is not lia9 ble for the issuer’s failure to provide for such proc10 ess and system), if the issuer is obligated to provide

11 for (and provides for) such process and system.

12 ‘‘(4) EXTERNAL APPEALS.—Pursuant to rules

13 of the Secretary, insofar as a group health plan en14 ters into a contract with a qualified external appeal

15 entity for the conduct of external appeal activities in

16 accordance with section 104 of such Act, the plan

17 shall be treated as meeting the requirement of such

18 section and is not liable for the entity’s failure to

19 meet any requirements under such section.

20 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu21 ant to rules of the Secretary, if a health insurance

22 issuer offers health insurance coverage in connection

23 with a group health plan and takes an action in vio24 lation of any of the following sections of the Bipar25 tisan Patient Protection Act, the group health plan
162

S 1052 ES/PP

1 shall not be liable for such violation unless the plan

2 caused such violation:

3 ‘‘(A) Section 131 (relating to prohibition of

4 interference with certain medical communica5 tions).

6 ‘‘(B) Section 132 (relating to prohibition

7 of discrimination against providers based on li8 censure).

9 ‘‘(C) Section 133 (relating to prohibition

10 against improper incentive arrangements).

11 ‘‘(D) Section 135 (relating to protection

12 for patient advocacy).

13 ‘‘(6) CONSTRUCTION.—Nothing in this sub14 section shall be construed to affect or modify the re15 sponsibilities of the fiduciaries of a group health

16 plan under part 4 of subtitle B.

17 ‘‘(7) TREATMENT OF SUBSTANTIALLY COMPLI18 ANT STATE LAWS.—For purposes of applying this

19 subsection, any reference in this subsection to a re20 quirement in a section or other provision in the Bi21 partisan Patient Protection Act with respect to a

22 health insurance issuer is deemed to include a ref23 erence to a requirement under a State law that sub24 stantially complies (as determined under section
163

S 1052 ES/PP

1 152(c) of such Act) with the requirement in such

2 section or other provisions.

3 ‘‘(8) APPLICATION TO CERTAIN PROHIBITIONS

4 AGAINST RETALIATION.—With respect to compliance

5 with the requirements of section 135(b)(1) of the Bi6 partisan Patient Protection Act, for purposes of this

7 subtitle the term ‘group health plan’ is deemed to in8 clude a reference to an institutional health care pro9 vider.

10 ‘‘(c) ENFORCEMENT OF CERTAIN REQUIREMENTS.—

11 ‘‘(1) COMPLAINTS.—Any protected health care

12 professional who believes that the professional has

13 been retaliated or discriminated against in violation

14 of section 135(b)(1) of the Bipartisan Patient Pro15 tection Act may file with the Secretary a complaint

16 within 180 days of the date of the alleged retaliation

17 or discrimination.

18 ‘‘(2) INVESTIGATION.—The Secretary shall in19 vestigate such complaints and shall determine if a

20 violation of such section has occurred and, if so,

21 shall issue an order to ensure that the protected

22 health care professional does not suffer any loss of

23 position, pay, or benefits in relation to the plan,

24 issuer, or provider involved, as a result of the viola25 tion found by the Secretary.
164

S 1052 ES/PP

1 ‘‘(d) CONFORMING REGULATIONS.—The Secretary

2 shall issue regulations to coordinate the requirements on

3 group health plans and health insurance issuers under this

4 section with the requirements imposed under the other

5 provisions of this title. In order to reduce duplication and

6 clarify the rights of participants and beneficiaries with re7 spect to information that is required to be provided, such

8 regulations shall coordinate the information disclosure re9 quirements under section 121 of the Bipartisan Patient

10 Protection Act with the reporting and disclosure require11 ments imposed under part 1, so long as such coordination

12 does not result in any reduction in the information that

13 would otherwise be provided to participants and bene14 ficiaries.’’.

15 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

16 REQUIREMENT.—Section 503 of such Act (29 U.S.C.

17 1133) is amended by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’

18 and by adding at the end the following new subsection:

19 ‘‘(b) In the case of a group health plan (as defined

20 in section 733) compliance with the requirements of sub21 title A of title I of the Bipartisan Patient Protection Act,

22 and compliance with regulations promulgated by the Sec23 retary, in the case of a claims denial shall be deemed com24 pliance with subsection (a) with respect to such claims de25 nial.’’.
165

S 1052 ES/PP

1 (c) CONFORMING AMENDMENTS.—(1) Section 732(a)

2 of such Act (29 U.S.C. 1185(a)) is amended by striking

3 ‘‘section 711’’ and inserting ‘‘sections 711 and 714’’.

4 (2) The table of contents in section 1 of such Act

5 is amended by inserting after the item relating to section

6 713 the following new item:

‘‘Sec. 714. Patient protection standards.’’.

7 (3) Section 502(b)(3) of such Act (29 U.S.C.

8 1132(b)(3)) is amended by inserting ‘‘(other than section

9 135(b))’’ after ‘‘part 7’’.

10 SEC. 402. AVAILABILITY OF CIVIL REMEDIES.

11 (a) AVAILABILITY OF FEDERAL CIVIL REMEDIES IN

12 CASES NOT INVOLVING MEDICALLY REVIEWABLE DECI13 SIONS.—

14 (1) IN GENERAL.—Section 502 of the Employee

15 Retirement Income Security Act of 1974 (29 U.S.C.

16 1132) is amended by adding at the end the following

17 new subsections:

18 ‘‘(n) CAUSE OF ACTION RELATING TO PROVISION OF

19 HEALTH BENEFITS.—

20 ‘‘(1) IN GENERAL.—In any case in which—

21 ‘‘(A) a person who is a fiduciary of a

22 group health plan, a health insurance issuer of23 fering health insurance coverage in connection

24 with the plan, or an agent of the plan, issuer,

25 or plan sponsor upon consideration of a claim
166

S 1052 ES/PP

1 for benefits of a participant or beneficiary

2 under section 102 of the Bipartisan Patient

3 Protection Act of 2001 (relating to procedures

4 for initial claims for benefits and prior author5 ization determinations) or upon review of a de6 nial of such a claim under section 103 of such

7 Act (relating to internal appeal of a denial of

8 a claim for benefits), fails to exercise ordinary

9 care in making a decision—

10 ‘‘(i) regarding whether an item or

11 service is covered under the terms and con12 ditions of the plan or coverage,

13 ‘‘(ii) regarding whether an individual

14 is a participant or beneficiary who is en15 rolled under the terms and conditions of

16 the plan or coverage (including the applica17 bility of any waiting period under the plan

18 or coverage), or

19 ‘‘(iii) as to the application of cost20 sharing requirements or the application of

21 a specific exclusion or express limitation on

22 the amount, duration, or scope of coverage

23 of items or services under the terms and

24 conditions of the plan or coverage, and
167

S 1052 ES/PP

1 ‘‘(B) such failure is a proximate cause of

2 personal injury to, or the death of, the partici3 pant or beneficiary,

4 such plan, plan sponsor or issuer shall be liable to

5 the participant or beneficiary (or the estate of such

6 participant or beneficiary) for economic and non7 economic damages (but not exemplary or punitive

8 damages) in connection with such personal injury or

9 death.

10 ‘‘(2) CAUSE OF ACTION MUST NOT INVOLVE

11 MEDICALLY REVIEWABLE DECISION.—

12 ‘‘(A) IN GENERAL.—A cause of action is

13 established under paragraph (1)(A) only if the

14 decision referred to in paragraph (1)(A) does

15 not include a medically reviewable decision.

16 ‘‘(B) MEDICALLY REVIEWABLE DECI17 SION.—For purposes of this subsection, the

18 term ‘medically reviewable decision’ means a de19 nial of a claim for benefits under the plan

20 which is described in section 104(d)(2) of the

21 Bipartisan Patient Protection Act of 2001 (re22 lating to medically reviewable decisions).

23 ‘‘(3) LIMITATION REGARDING CERTAIN TYPES

24 OF ACTIONS SAVED FROM PREEMPTION OF STATE

25 LAW.—A cause of action is not established under
168

S 1052 ES/PP

1 paragraph (1)(A) in connection with a failure de2 scribed in paragraph (1)(A) to the extent that a

3 cause of action under State law (as defined in sec4 tion 514(c)) for such failure would not be preempted

5 under section 514.

6 ‘‘(4) DEFINITIONS.—For purposes of this sub7 section.—

8 ‘‘(A) ORDINARY CARE.—The term ‘ordi9 nary care’ means, with respect to a determina10 tion on a claim for benefits, that degree of care,

11 skill, and diligence that a reasonable and pru12 dent individual would exercise in making a fair

13 determination on a claim for benefits of like

14 kind to the claims involved.

15 ‘‘(B) PERSONAL INJURY.—The term ‘per16 sonal injury’ means a physical injury and in17 cludes an injury arising out of the treatment

18 (or failure to treat) a mental illness or disease.

19 ‘‘(C) CLAIM FOR BENEFITS; DENIAL.—The

20 terms ‘claim for benefits’ and ‘denial of a claim

21 for benefits’ have the meanings provided such

22 terms in section 102(e) of the Bipartisan Pa23 tient Protection Act of 2001.

24 ‘‘(D) TERMS AND CONDITIONS.—The term

25 ‘terms and conditions’ includes, with respect to
169

S 1052 ES/PP

1 a group health plan or health insurance cov2 erage, requirements imposed under title I of the

3 Bipartisan Patient Protection Act of 2001.

4 ‘‘(E) GROUP HEALTH PLAN AND OTHER

5 RELATED TERMS.—The provisions of sections

6 732(d) and 733 apply for purposes of this sub7 section in the same manner as they apply for

8 purposes of part 7, except that the term ‘group

9 health plan’ includes a group health plan (as

10 defined in section 607(1)).

11 ‘‘(5) EXCLUSION OF EMPLOYERS AND OTHER

12 PLAN SPONSORS.—

13 ‘‘(A) CAUSES OF ACTION AGAINST EM14 PLOYERS AND PLAN SPONSORS PRECLUDED.—

15 Subject to subparagraph (B), paragraph (1)(A)

16 does not authorize a cause of action against an

17 employer or other plan sponsor maintaining the

18 plan (or against an employee of such an em19 ployer or sponsor acting within the scope of em20 ployment).

21 ‘‘(B) CERTAIN CAUSES OF ACTION PER22 MITTED.—Notwithstanding subparagraph (A),

23 a cause of action may arise against an employer

24 or other plan sponsor (or against an employee

25 of such an employer or sponsor acting within
170

S 1052 ES/PP

1 the scope of employment) under paragraph

2 (1)(A), to the extent there was direct participa3 tion by the employer or other plan sponsor (or

4 employee) in the decision of the plan under sec5 tion 102 of the Bipartisan Patient Protection

6 Act of 2001 upon consideration of a claim for

7 benefits or under section 103 of such Act upon

8 review of a denial of a claim for benefits.

9 ‘‘(C) DIRECT PARTICIPATION.—

10 ‘‘(i) IN GENERAL.—For purposes of

11 subparagraph (B), the term ‘direct partici12 pation’ means, in connection with a deci13 sion described in paragraph (1)(A), the ac14 tual making of such decision or the actual

15 exercise of control in making such decision.

16 ‘‘(ii) RULES OF CONSTRUCTION.—For

17 purposes of clause (i), the employer or plan

18 sponsor (or employee) shall not be con19 strued to be engaged in direct participation

20 because of any form of decisionmaking or

21 other conduct that is merely collateral or

22 precedent to the decision described in

23 paragraph (1)(A) on a particular claim for

24 benefits of a participant or beneficiary, in25 cluding (but not limited to)—
171

S 1052 ES/PP

1 ‘‘(I) any participation by the em2 ployer or other plan sponsor (or em3 ployee) in the selection of the group

4 health plan or health insurance cov5 erage involved or the third party ad6 ministrator or other agent;

7 ‘‘(II) any engagement by the em8 ployer or other plan sponsor (or em9 ployee) in any cost-benefit analysis

10 undertaken in connection with the se11 lection of, or continued maintenance

12 of, the plan or coverage involved;

13 ‘‘(III) any participation by the

14 employer or other plan sponsor (or

15 employee) in the process of creating,

16 continuing, modifying, or terminating

17 the plan or any benefit under the

18 plan, if such process was not substan19 tially focused solely on the particular

20 situation of the participant or bene21 ficiary referred to in paragraph

22 (1)(A); and

23 ‘‘(IV) any participation by the

24 employer or other plan sponsor (or

25 employee) in the design of any benefit
172

S 1052 ES/PP

1 under the plan, including the amount

2 of copayment and limits connected

3 with such benefit.

4 ‘‘(iii) IRRELEVANCE OF CERTAIN COL5 LATERAL EFFORTS MADE BY EMPLOYER

6 OR PLAN SPONSOR.—For purposes of this

7 subparagraph, an employer or plan sponsor

8 shall not be treated as engaged in direct

9 participation in a decision with respect to

10 any claim for benefits or denial thereof in

11 the case of any particular participant or

12 beneficiary solely by reason of—

13 ‘‘(I) any efforts that may have

14 been made by the employer or plan

15 sponsor to advocate for authorization

16 of coverage for that or any other par17 ticipant or beneficiary (or any group

18 of participants or beneficiaries), or

19 ‘‘(II) any provision that may

20 have been made by the employer or

21 plan sponsor for benefits which are

22 not covered under the terms and con23 ditions of the plan for that or any

24 other participant or beneficiary (or
173

S 1052 ES/PP

1 any group of participants or bene2 ficiaries).

3 ‘‘(D) APPLICATION TO CERTAIN PLANS.—

4 ‘‘(i) IN GENERAL.—Notwithstanding

5 any other provision of this subsection, no

6 group health plan described in clause (ii)

7 shall be liable under paragraph (1) for the

8 performance of, or the failure to perform,

9 any non-medically reviewable duty under

10 the plan.

11 ‘‘(ii) DEFINITION.—A group health

12 plan described in this clause is—

13 ‘‘(I) a group health plan that is

14 self-insured and self administered by

15 an employer (including an employee of

16 such an employer acting within the

17 scope of employment); or

18 ‘‘(II) a multiemployer plan as de19 fined in section 3(37)(A) (including

20 an employee of a contributing em21 ployer or of the plan, or a fiduciary of

22 the plan, acting within the scope of

23 employment or fiduciary responsi24 bility) that is self-insured and self-ad25 ministered.
174

S 1052 ES/PP

1 ‘‘(6) EXCLUSION OF PHYSICIANS AND OTHER

2 HEALTH CARE PROFESSIONALS.—

3 ‘‘(A) IN GENERAL.—No treating physician

4 or other treating health care professional of the

5 participant or beneficiary, and no person acting

6 under the direction of such a physician or

7 health care professional, shall be liable under

8 paragraph (1) for the performance of, or the

9 failure to perform, any non-medically reviewable

10 duty of the plan, the plan sponsor, or any

11 health insurance issuer offering health insur12 ance coverage in connection with the plan.

13 ‘‘(B) DEFINITIONS.—For purposes of sub14 paragraph (A)—

15 ‘‘(i) HEALTH CARE PROFESSIONAL.—

16 The term ‘health care professional’ means

17 an individual who is licensed, accredited, or

18 certified under State law to provide speci19 fied health care services and who is oper20 ating within the scope of such licensure,

21 accreditation, or certification.

22 ‘‘(ii) NON-MEDICALLY REVIEWABLE

23 DUTY.—The term ‘non-medically review24 able duty’ means a duty the discharge of
175

S 1052 ES/PP

1 which does not include the making of a

2 medically reviewable decision.

3 ‘‘(7) EXCLUSION OF HOSPITALS.—No treating

4 hospital of the participant or beneficiary shall be lia5 ble under paragraph (1) for the performance of, or

6 the failure to perform, any non-medically reviewable

7 duty (as defined in paragraph (6)(B)(ii)) of the

8 plan, the plan sponsor, or any health insurance

9 issuer offering health insurance coverage in connec10 tion with the plan.

11 ‘‘(8) RULE OF CONSTRUCTION RELATING TO

12 EXCLUSION FROM LIABILITY OF PHYSICIANS,

13 HEALTH CARE PROFESSIONALS, AND HOSPITALS.—

14 Nothing in paragraph (6) or (7) shall be construed

15 to limit the liability (whether direct or vicarious) of

16 the plan, the plan sponsor, or any health insurance

17 issuer offering health insurance coverage in connec18 tion with the plan.

19 ‘‘(9) REQUIREMENT OF EXHAUSTION.—

20 ‘‘(A) IN GENERAL.—A cause of action may

21 not be brought under paragraph (1) in connec22 tion with any denial of a claim for benefits of

23 any individual until all administrative processes

24 under sections 102 and 103 of the Bipartisan
176

S 1052 ES/PP

1 Patient Protection Act of 2001 (if applicable)

2 have been exhausted.

3 ‘‘(B) EXCEPTION FOR NEEDED CARE.—A

4 participant or beneficiary may seek relief exclu5 sively in Federal court under subsection

6 502(a)(1)(B) prior to the exhaustion of admin7 istrative remedies under sections 102, 103, or

8 104 of the Bipartisan Patient Protection Act

9 (as required under subparagraph (A)) if it is

10 demonstrated to the court that the exhaustion

11 of such remedies would cause irreparable harm

12 to the health of the participant or beneficiary.

13 Notwithstanding the awarding of relief under

14 subsection 502(a)(1)(B) pursuant to this sub15 paragraph, no relief shall be available as a re16 sult of, or arising under, paragraph (1)(A) or

17 paragraph (10)(B), with respect to a partici18 pant or beneficiary, unless the requirements of

19 subparagraph (A) are met.

20 ‘‘(C) RECEIPT OF BENEFITS DURING AP21 PEALS PROCESS.—Receipt by the participant or

22 beneficiary of the benefits involved in the claim

23 for benefits during the pendency of any admin24 istrative processes referred to in subparagraph
177

S 1052 ES/PP

1 (A) or of any action commenced under this

2 subsection—

3 ‘‘(i) shall not preclude continuation of

4 all such administrative processes to their

5 conclusion if so moved by any party, and

6 ‘‘(ii) shall not preclude any liability

7 under subsection (a)(1)(C) and this sub8 section in connection with such claim.

9 The court in any action commenced under this

10 subsection shall take into account any receipt of

11 benefits during such administrative processes or

12 such action in determining the amount of the

13 damages awarded.

14 ‘‘(D) ADMISSIBLE.—Any determination

15 made by a reviewer in an administrative pro16 ceeding under section 103 of the Bipartisan Pa17 tient Protection Act of 2001 shall be admissible

18 in any Federal court proceeding and shall be

19 presented to the trier of fact.

20 ‘‘(10) STATUTORY DAMAGES.—

21 ‘‘(A) IN GENERAL.—The remedies set

22 forth in this subsection (n) shall be the exclu23 sive remedies for causes of action brought

24 under this subsection.
178

S 1052 ES/PP

1 ‘‘(B) ASSESSMENT OF CIVIL PENALTIES.—

2 In addition to the remedies provided for in

3 paragraph (1) (relating to the failure to provide

4 contract benefits in accordance with the plan),

5 a civil assessment, in an amount not to exceed

6 $5,000,000, payable to the claimant may be

7 awarded in any action under such paragraph if

8 the claimant establishes by clear and convincing

9 evidence that the alleged conduct carried out by

10 the defendant demonstrated bad faith and fla11 grant disregard for the rights of the participant

12 or beneficiary under the plan and was a proxi13 mate cause of the personal injury or death that

14 is the subject of the claim.

15 ‘‘(11) LIMITATION ON ATTORNEYS’ FEES.—

16 ‘‘(A) IN GENERAL.—Notwithstanding any

17 other provision of law, or any arrangement,

18 agreement, or contract regarding an attorney’s

19 fee, the amount of an attorney’s contingency fee

20 allowable for a cause of action brought pursuant to this subsection shall not exceed 1 21 ⁄3 of the

22 total amount of the plaintiff’s recovery (not in23 cluding the reimbursement of actual out-of24 pocket expenses of the attorney).
179

S 1052 ES/PP

1 ‘‘(B) DETERMINATION BY DISTRICT

2 COURT.—The last Federal district court in

3 which the action was pending upon the final

4 disposition, including all appeals, of the action

5 shall have jurisdiction to review the attorney’s

6 fee to ensure that the fee is a reasonable one.

7 ‘‘(12) LIMITATION OF ACTION.—Paragraph (1)

8 shall not apply in connection with any action com9 menced after 3 years after the later of—

10 ‘‘(A) the date on which the plaintiff first

11 knew, or reasonably should have known, of the

12 personal injury or death resulting from the fail13 ure described in paragraph (1), or

14 ‘‘(B) the date as of which the requirements

15 of paragraph (9) are first met.

16 ‘‘(13) TOLLING PROVISION.—The statute of

17 limitations for any cause of action arising under

18 State law relating to a denial of a claim for benefits

19 that is the subject of an action brought in Federal

20 court under this subsection shall be tolled until such

21 time as the Federal court makes a final disposition,

22 including all appeals, of whether such claim should

23 properly be within the jurisdiction of the Federal

24 court. The tolling period shall be determined by the
180

S 1052 ES/PP

1 applicable Federal or State law, whichever period is

2 greater.

3 ‘‘(14) PURCHASE OF INSURANCE TO COVER LI4 ABILITY.—Nothing in section 410 shall be construed

5 to preclude the purchase by a group health plan of

6 insurance to cover any liability or losses arising

7 under a cause of action under subsection (a)(1)(C)

8 and this subsection.

9 ‘‘(15) EXCLUSION OF DIRECTED RECORD10 KEEPERS.—

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (C), paragraph (1) shall not apply with

13 respect to a directed recordkeeper in connection

14 with a group health plan.

15 ‘‘(B) DIRECTED RECORDKEEPER.—For

16 purposes of this paragraph, the term ‘directed

17 recordkeeper’ means, in connection with a

18 group health plan, a person engaged in directed

19 recordkeeping activities pursuant to the specific

20 instructions of the plan or the employer or

21 other plan sponsor, including the distribution of

22 enrollment information and distribution of dis23 closure materials under this Act or title I of the

24 Bipartisan Patient Protection Act of 2001 and
181

S 1052 ES/PP

1 whose duties do not include making decisions

2 on claims for benefits.

3 ‘‘(C) LIMITATION.—Subparagraph (A)

4 does not apply in connection with any directed

5 recordkeeper to the extent that the directed rec6 ordkeeper fails to follow the specific instruction

7 of the plan or the employer or other plan spon8 sor.

9 ‘‘(16) EXCLUSION OF HEALTH INSURANCE

10 AGENTS.—Paragraph (1) does not apply with re11 spect to a person whose sole involvement with the

12 group health plan is providing advice or administra13 tive services to the employer or other plan sponsor

14 relating to the selection of health insurance coverage

15 offered in connection with the plan.

16 ‘‘(17) NO EFFECT ON STATE LAW.—No provi17 sion of State law (as defined in section 514(c)(1))

18 shall be treated as superseded or otherwise altered,

19 amended, modified, invalidated, or impaired by rea20 son of the provisions of subsection (a)(1)(C) and this

21 subsection.

22 ‘‘(18) RELIEF FROM LIABILITY FOR EMPLOYER

23 OR OTHER PLAN SPONSOR BY MEANS OF DES24 IGNATED DECISIONMAKER.—
182

S 1052 ES/PP

1 ‘‘(A) IN GENERAL.—Notwithstanding the

2 direct participation (as defined in paragraph

3 (5)(C)(i)) of an employer or plan sponsor, in

4 any case in which there is deemed to be a des5 ignated decisionmaker under subparagraph (B)

6 that meets the requirements of subsection

7 (o)(1) for an employer or other plan sponsor—

8 ‘‘(i) all liability of such employer or

9 plan sponsor (and any employee thereof

10 acting within the scope of employment)

11 under this subsection in connection with

12 any participant or beneficiary shall be

13 transferred to, and assumed by, the des14 ignated decisionmaker, and

15 ‘‘(ii) with respect to such liability, the

16 designated decisionmaker shall be sub17 stituted for the employer or plan sponsor

18 (or employee) in the action and may not

19 raise any defense that the employer or plan

20 sponsor (or employee) could not raise if

21 such a decisionmaker were not so deemed.

22 ‘‘(B) AUTOMATIC DESIGNATION.—A health

23 insurance issuer shall be deemed to be a des24 ignated decisionmaker for purposes of subpara25 graph (A) with respect to the participants and
183

S 1052 ES/PP

1 beneficiaries of an employer or plan sponsor,

2 whether or not the employer or plan sponsor

3 makes such a designation, and shall be deemed

4 to have assumed unconditionally all liability of

5 the employer or plan sponsor under such des6 ignation in accordance with subsection (o), un7 less the employer or plan sponsor affirmatively

8 enters into a contract to prevent the service of

9 the designated decisionmaker.

10 ‘‘(19) PREVIOUSLY PROVIDED SERVICES.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 this paragraph, a cause of action shall not arise

13 under paragraph (1) where the denial involved

14 relates to an item or service that has already

15 been fully provided to the participant or bene16 ficiary under the plan or coverage and the claim

17 relates solely to the subsequent denial of pay18 ment for the provision of such item or service.

19 ‘‘(B) EXCEPTION.—Nothing in subpara20 graph (A) shall be construed to—

21 ‘‘(i) prohibit a cause of action under

22 paragraph (1) where the nonpayment in23 volved results in the participant or bene24 ficiary being unable to receive further

25 items or services that are directly related
184

S 1052 ES/PP

1 to the item or service involved in the denial

2 referred to in subparagraph (A) or that

3 are part of a continuing treatment or se4 ries of procedures;

5 ‘‘(ii) prohibit a cause of action under

6 paragraph (1) relating to quality of care;

7 or

8 ‘‘(iii) limit liability that otherwise

9 would arise from the provision of the item

10 or services or the performance of a medical

11 procedure.

12 ‘‘(20) EXEMPTION FROM PERSONAL LIABILITY

13 FOR INDIVIDUAL MEMBERS OF BOARDS OF DIREC14 TORS, JOINT BOARDS OF TRUSTEES, ETC.—Any indi15 vidual who is—

16 ‘‘(A) a member of a board of directors of

17 an employer or plan sponsor; or

18 ‘‘(B) a member of an association, com19 mittee, employee organization, joint board of

20 trustees, or other similar group of representa21 tives of the entities that are the plan sponsor

22 of plan maintained by two or more employers

23 and one or more employee organizations;

24 shall not be personally liable under this subsection

25 for conduct that is within the scope of employment
185

S 1052 ES/PP

1 of the individuals unless the individual acts in a

2 fraudulent manner for personal enrichment.

3 ‘‘(o) REQUIREMENTS FOR DESIGNATED DECISION4 MAKERS OF GROUP HEALTH

5 ‘‘(1) IN GENERAL.—For purposes of subsection

6 (n)(18) and section 514(d)(9), a designated decision7 maker meets the requirements of this paragraph

8 with respect to any participant or beneficiary if—

9 ‘‘(A) such designation is in such form as

10 may be prescribed in regulations of the Sec11 retary,

12 ‘‘(B) the designated decisionmaker—

13 ‘‘(i) meets the requirements of para14 graph (2),

15 ‘‘(ii) assumes unconditionally all liabil16 ity of the employer or plan sponsor in17 volved (and any employee thereof acting

18 within the scope of employment) either

19 arising under subsection (n) or arising in

20 a cause of action permitted under section

21 514(d) in connection with actions (and

22 failures to act) of the employer or plan

23 sponsor (or employee) occurring during the

24 period in which the designation under sub25 section (n)(18) or section 514(d)(9) is in
186

S 1052 ES/PP

1 effect relating to such participant and ben2 eficiary,

3 ‘‘(iii) agrees to be substituted for the

4 employer or plan sponsor (or employee) in

5 the action and not to raise any defense

6 with respect to such liability that the em7 ployer or plan sponsor (or employee) may

8 not raise, and

9 ‘‘(iv) where paragraph (2)(B) applies,

10 assumes unconditionally the exclusive au11 thority under the group health plan to

12 make medically reviewable decisions under

13 the plan with respect to such participant

14 or beneficiary, and

15 ‘‘(C) the designated decisionmaker and the

16 participants and beneficiaries for whom the de17 cisionmaker has assumed liability are identified

18 in the written instrument required under sec19 tion 402(a) and as required under section

20 121(b)(19) of the Bipartisan Patient Protection

21 Act.

22 Any liability assumed by a designated decisionmaker

23 pursuant to this subsection shall be in addition to

24 any liability that it may otherwise have under appli25 cable law.
187

S 1052 ES/PP

1 ‘‘(2) QUALIFICATIONS FOR DESIGNATED DECI2 SIONMAKERS.—

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), an entity is qualified under this

5 paragraph to serve as a designated decision6 maker with respect to a group health plan if the

7 entity has the ability to assume the liability de8 scribed in paragraph (1) with respect to partici9 pants and beneficiaries under such plan, includ10 ing requirements relating to the financial obli11 gation for timely satisfying the assumed liabil12 ity, and maintains with the plan sponsor and

13 the Secretary certification of such ability. Such

14 certification shall be provided to the plan spon15 sor or named fiduciary and to the Secretary

16 upon designation under subsection (n)(18)(B)

17 or section 517(d)(9)(B) and not less frequently

18 than annually thereafter, or if such designation

19 constitutes a multiyear arrangement, in con20 junction with the renewal of the arrangement.

21 ‘‘(B) SPECIAL QUALIFICATION IN THE

22 CASE OF CERTAIN REVIEWABLE DECISIONS.—In

23 the case of a group health plan that provides

24 benefits consisting of medical care to a partici25 pant or beneficiary only through health insur-
188

S 1052 ES/PP

1 ance coverage offered by a single health insur2 ance issue, such issuer is the only entity that

3 may be qualified under this paragraph to serve

4 as a designated decisionmaker with respect to

5 such participant or beneficiary, and shall serve

6 as the designated decisionmaker unless the em7 ployer or other plan sponsor acts affirmatively

8 to prevent such service.

9 ‘‘(3) REQUIREMENTS RELATING TO FINANCIAL

10 OBLIGATIONS.—For purposes of paragraph (2)(A),

11 the requirements relating to the financial obligation

12 of an entity for liability shall include—

13 ‘‘(A) coverage of such entity under an in14 surance policy or other arrangement, secured

15 and maintained by such entity, to effectively in16 sure such entity against losses arising from pro17 fessional liability claims, including those arising

18 from its service as a designated decisionmaker

19 under this part; or

20 ‘‘(B) evidence of minimum capital and sur21 plus levels that are maintained by such entity

22 to cover any losses as a result of liability arising

23 from its service as a designated decisionmaker

24 under this part.
189

S 1052 ES/PP

1 The appropriate amounts of liability insurance and

2 minimum capital and surplus levels for purposes of

3 subparagraphs (A) and (B) shall be determined by

4 an actuary using sound actuarial principles and ac5 counting practices pursuant to established guidelines

6 of the American Academy of Actuaries and in ac7 cordance with such regulations as the Secretary may

8 prescribe and shall be maintained throughout the

9 term for which the designation is in effect. The pro10 visions of this paragraph shall not apply in the case

11 of a designated decisionmaker that is a group health

12 plan, plan sponsor, or health insurance issuer and

13 that is regulated under Federal law or a State finan14 cial solvency law.

15 ‘‘(4) LIMITATION ON APPOINTMENT OF TREAT16 ING PHYSICIANS.—A treating physician who directly

17 delivered the care, treatment, or provided the patient

18 service that is the subject of a cause of action by a

19 participant or beneficiary under subsection (n) or

20 section 514(d) may not be designated as a des21 ignated decisionmaker under this subsection with re22 spect to such participant or beneficiary.’’.

23 (2) CONFORMING AMENDMENT.—Section

24 502(a)(1) of such Act (29 U.S.C. 1132(a)(1)) is

25 amended—
190

S 1052 ES/PP

1 (A) by striking ‘‘or’’ at the end of subpara2 graph (A);

3 (B) in subparagraph (B), by striking

4 ‘‘plan;’’ and inserting ‘‘plan, or’’; and

5 (C) by adding at the end the following new

6 subparagraph:

7 ‘‘(C) for the relief provided for in sub8 section (n) of this section.’’.

9 (b) RULES RELATING TO ERISA PREEMPTION.—

10 Section 514 of the Employee Retirement Income Security

11 Act of 1974 (29 U.S.C. 1144) is amended—

12 (1) by redesignating subsection (d) as sub13 section (f); and

14 (2) by inserting after subsection (c) the fol15 lowing new subsections:

16 ‘‘(d) PREEMPTION NOT TO APPLY TO CAUSES OF

17 ACTION UNDER STATE LAW INVOLVING MEDICALLY RE18 VIEWABLE DECISION.—

19 ‘‘(1) NON-PREEMPTION OF CERTAIN CAUSES OF

20 ACTION.—

21 ‘‘(A) IN GENERAL.—Except as provided in

22 this subsection, nothing in this title (including

23 section 502) shall be construed to supersede or

24 otherwise alter, amend, modify, invalidate, or

25 impair any cause of action under State law of
191

S 1052 ES/PP

1 a participant or beneficiary under a group

2 health plan (or the estate of such a participant

3 or beneficiary) to recover damages resulting

4 from personal injury or for wrongful death

5 against any person if such cause of action

6 arises by reason of a medically reviewable deci7 sion.

8 ‘‘(B) MEDICALLY REVIEWABLE DECI9 SION.—For purposes of subparagraph (A), the

10 term ‘medically reviewable decision’ means a de11 nial of a claim for benefits under the plan

12 which is described in section 104(d)(2) of the

13 Bipartisan Patient Protection Act of 2001 (re14 lating to medically reviewable decisions).

15 ‘‘(C) LIMITATION ON PUNITIVE DAM16 AGES.—

17 ‘‘(i) IN GENERAL.—Except as pro18 vided in clauses (ii) and (iii), with respect

19 to a cause of action described in subpara20 graph (A) brought with respect to a partic21 ipant or beneficiary, State law is super22 seded insofar as it provides any punitive,

23 exemplary, or similar damages if, as of the

24 time of the personal injury or death, all

25 the requirements of the following sections
192

S 1052 ES/PP

1 of the Bipartisan Patient Protection Act of

2 2001 were satisfied with respect to the

3 participant or beneficiary:

4 ‘‘(I) Section 102 (relating to pro5 cedures for initial claims for benefits

6 and prior authorization determina7 tions).

8 ‘‘(II) Section 103 of such Act

9 (relating to internal appeals of claims

10 denials).

11 ‘‘(III) Section 104 of such Act

12 (relating to independent external ap13 peals procedures).

14 ‘‘(ii) EXCEPTION FOR CERTAIN AC15 TIONS FOR WRONGFUL DEATH.—Clause (i)

16 shall not apply with respect to an action

17 for wrongful death if the applicable State

18 law provides (or has been construed to pro19 vide) for damages in such an action which

20 are only punitive or exemplary in nature.

21 ‘‘(iii) EXCEPTION FOR WILLFUL OR

22 WANTON DISREGARD FOR THE RIGHTS OR

23 SAFETY OF OTHERS.—Clause (i) shall not

24 apply with respect to any cause of action

25 described in subparagraph (A) if, in such
193

S 1052 ES/PP

1 action, the plaintiff establishes by clear

2 and convincing evidence that conduct car3 ried out by the defendant with willful or

4 wanton disregard for the rights or safety

5 of others was a proximate cause of the per6 sonal injury or wrongful death that is the

7 subject of the action.

8 ‘‘(2) DEFINITIONS.—For purposes of this sub9 section and subsection (e)—

10 ‘‘(A) GROUP HEALTH PLAN AND OTHER

11 RELATED TERMS.—The provisions of sections

12 732(d) and 733 apply for purposes of this sub13 section in the same manner as they apply for

14 purposes of part 7, except that the term ‘group

15 health plan’ includes a group health plan (as

16 defined in section 607(1)).

17 ‘‘(B) PERSONAL INJURY.—The term ‘per18 sonal injury’ means a physical injury and in19 cludes an injury arising out of the treatment

20 (or failure to treat) a mental illness or disease.

21 ‘‘(C) CLAIM FOR BENEFIT; DENIAL.—The

22 terms ‘claim for benefits’ and ‘denial of a claim

23 for benefits’ shall have the meaning provided

24 such terms under section 102(e) of the Bipar25 tisan Patient Protection Act of 2001.
194

S 1052 ES/PP

1 ‘‘(3) EXCLUSION OF EMPLOYERS AND OTHER

2 PLAN SPONSORS.—

3 ‘‘(A) CAUSES OF ACTION AGAINST EM4 PLOYERS AND PLAN SPONSORS PRECLUDED.—

5 Subject to subparagraph (B), paragraph (1)

6 does not apply with respect to—

7 ‘‘(i) any cause of action against an

8 employer or other plan sponsor maintain9 ing the plan (or against an employee of

10 such an employer or sponsor acting within

11 the scope of employment), or

12 ‘‘(ii) a right of recovery, indemnity, or

13 contribution by a person against an em14 ployer or other plan sponsor (or such an

15 employee) for damages assessed against

16 the person pursuant to a cause of action to

17 which paragraph (1) applies.

18 ‘‘(B) CERTAIN CAUSES OF ACTION PER19 MITTED.—Notwithstanding subparagraph (A),

20 paragraph (1) applies with respect to any cause

21 of action that is brought by a participant or

22 beneficiary under a group health plan (or the

23 estate of such a participant or beneficiary) to

24 recover damages resulting from personal injury

25 or for wrongful death against any employer or
195

S 1052 ES/PP

1 other plan sponsor maintaining the plan (or

2 against an employee of such an employer or

3 sponsor acting within the scope of employment)

4 if such cause of action arises by reason of a

5 medically reviewable decision, to the extent that

6 there was direct participation by the employer

7 or other plan sponsor (or employee) in the deci8 sion.

9 ‘‘(C) DIRECT PARTICIPATION.—

10 ‘‘(i) DIRECT PARTICIPATION IN DECI11 SIONS.—For purposes of subparagraph

12 (B), the term ‘direct participation’ means,

13 in connection with a decision described in

14 subparagraph (B), the actual making of

15 such decision or the actual exercise of con16 trol in making such decision or in the con17 duct constituting the failure.

18 ‘‘(ii) RULES OF CONSTRUCTION.—For

19 purposes of clause (i), the employer or plan

20 sponsor (or employee) shall not be con21 strued to be engaged in direct participation

22 because of any form of decisionmaking or

23 other conduct that is merely collateral or

24 precedent to the decision described in sub25 paragraph (B) on a particular claim for
196

S 1052 ES/PP

1 benefits of a particular participant or bene2 ficiary, including (but not limited to)—

3 ‘‘(I) any participation by the em4 ployer or other plan sponsor (or em5 ployee) in the selection of the group

6 health plan or health insurance cov7 erage involved or the third party ad8 ministrator or other agent;

9 ‘‘(II) any engagement by the em10 ployer or other plan sponsor (or em11 ployee) in any cost-benefit analysis

12 undertaken in connection with the se13 lection of, or continued maintenance

14 of, the plan or coverage involved;

15 ‘‘(III) any participation by the

16 employer or other plan sponsor (or

17 employee) in the process of creating,

18 continuing, modifying, or terminating

19 the plan or any benefit under the

20 plan, if such process was not substan21 tially focused solely on the particular

22 situation of the participant or bene23 ficiary referred to in paragraph

24 (1)(A); and
197

S 1052 ES/PP

1 ‘‘(IV) any participation by the

2 employer or other plan sponsor (or

3 employee) in the design of any benefit

4 under the plan, including the amount

5 of copayment and limits connected

6 with such benefit.

7 ‘‘(iv) IRRELEVANCE OF CERTAIN COL8 LATERAL EFFORTS MADE BY EMPLOYER

9 OR PLAN SPONSOR.—For purposes of this

10 subparagraph, an employer or plan sponsor

11 shall not be treated as engaged in direct

12 participation in a decision with respect to

13 any claim for benefits or denial thereof in

14 the case of any particular participant or

15 beneficiary solely by reason of—

16 ‘‘(I) any efforts that may have

17 been made by the employer or plan

18 sponsor to advocate for authorization

19 of coverage for that or any other par20 ticipant or beneficiary (or any group

21 of participants or beneficiaries), or

22 ‘‘(II) any provision that may

23 have been made by the employer or

24 plan sponsor for benefits which are

25 not covered under the terms and con-
198

S 1052 ES/PP

1 ditions of the plan for that or any

2 other participant or beneficiary (or

3 any group of participants or bene4 ficiaries).

5 ‘‘(4) REQUIREMENT OF EXHAUSTION.—

6 ‘‘(A) IN GENERAL.—Except as provided in

7 subparagraph (D), a cause of action may not be

8 brought under paragraph (1) in connection with

9 any denial of a claim for benefits of any indi10 vidual until all administrative processes under

11 sections 102, 103, and 104 of the Bipartisan

12 Patient Protection Act of 2001 (if applicable)

13 have been exhausted.

14 ‘‘(B) LATE MANIFESTATION OF INJURY.—

15 ‘‘(i) IN GENERAL.—A participant or

16 beneficiary shall not be precluded from

17 pursuing a review under section 104 of the

18 Bipartisan Patient Protection Act regard19 ing an injury that such participant or ben20 eficiary has experienced if the external re21 view entity first determines that the injury

22 of such participant or beneficiary is a late

23 manifestation of an earlier injury.

24 ‘‘(ii) DEFINITION.—In this subpara25 graph, the term ‘late manifestation of an
199

S 1052 ES/PP

1 earlier injury’ means an injury sustained

2 by the participant or beneficiary which was

3 not known, and should not have been

4 known, by such participant or beneficiary

5 by the latest date that the requirements of

6 subparagraph (A) should have been met

7 regarding the claim for benefits which was

8 denied.

9 ‘‘(C) EXCEPTION FOR NEEDED CARE.—A

10 participant or beneficiary may seek relief exclu11 sively in Federal court under subsection

12 502(a)(1)(B) prior to the exhaustion of admin13 istrative remedies under sections 102, 103, or

14 104 of the Bipartisan Patient Protection Act

15 (as required under subparagraph (A)) if it is

16 demonstrated to the court that the exhaustion

17 of such remedies would cause irreparable harm

18 to the health of the participant or beneficiary.

19 Notwithstanding the awarding of relief under

20 subsection 502(a)(1)(B) pursuant to this sub21 paragraph, no relief shall be available as a re22 sult of, or arising under, paragraph (1)(A) un23 less the requirements of subparagraph (A) are

24 met.

25 ‘‘(D) FAILURE TO REVIEW.—
200

S 1052 ES/PP

1 ‘‘(i) IN GENERAL.—If the external re2 view entity fails to make a determination

3 within the time required under section

4 104(e)(1)(A)(i), a participant or bene5 ficiary may bring an action under section

6 514(d) after 10 additional days after the

7 date on which such time period has expired

8 and the filing of such action shall not af9 fect the duty of the independent medical

10 reviewer (or reviewers) to make a deter11 mination pursuant to section

12 104(e)(1)(A)(i).

13 ‘‘(ii) EXPEDITED DETERMINATION.—

14 If the external review entity fails to make

15 a determination within the time required

16 under section 104(e)(1)(A)(ii), a partici17 pant or beneficiary may bring an action

18 under this subsection and the filing of such

19 an action shall not affect the duty of the

20 independent medical reviewer (or review21 ers) to make a determination pursuant to

22 section 104(e)(1)(A)(ii).

23 ‘‘(E) RECEIPT OF BENEFITS DURING AP24 PEALS PROCESS.—Receipt by the participant or

25 beneficiary of the benefits involved in the claim
201

S 1052 ES/PP

1 for benefits during the pendency of any admin2 istrative processes referred to in subparagraph

3 (A) or of any action commenced under this

4 subsection—

5 ‘‘(i) shall not preclude continuation of

6 all such administrative processes to their

7 conclusion if so moved by any party, and

8 ‘‘(ii) shall not preclude any liability

9 under subsection (a)(1)(C) and this sub10 section in connection with such claim.

11 ‘‘(F) ADMISSIBLE.—Any determination

12 made by a reviewer in an administrative pro13 ceeding under section 104 of the Bipartisan Pa14 tient Protection Act of 2001 shall be admissible

15 in any Federal or State court proceeding and

16 shall be presented to the trier of fact.

17 ‘‘(5) TOLLING PROVISION.—The statute of limi18 tations for any cause of action arising under section

19 502(n) relating to a denial of a claim for benefits

20 that is the subject of an action brought in State

21 court shall be tolled until such time as the State

22 court makes a final disposition, including all ap23 peals, of whether such claim should properly be

24 within the jurisdiction of the State court. The tolling
202

S 1052 ES/PP

1 period shall be determined by the applicable Federal

2 or State law, whichever period is greater.

3 ‘‘(6) EXCLUSION OF DIRECTED RECORD4 KEEPERS.—

5 ‘‘(A) IN GENERAL.—Subject to subpara6 graph (C), paragraph (1) shall not apply with

7 respect to a directed recordkeeper in connection

8 with a group health plan.

9 ‘‘(B) DIRECTED RECORDKEEPER.—For

10 purposes of this paragraph, the term ‘directed

11 recordkeeper’ means, in connection with a

12 group health plan, a person engaged in directed

13 recordkeeping activities pursuant to the specific

14 instructions of the plan or the employer or

15 other plan sponsor, including the distribution of

16 enrollment information and distribution of dis17 closure materials under this Act or title I of the

18 Bipartisan Patient Protection Act of 2001 and

19 whose duties do not include making decisions

20 on claims for benefits.

21 ‘‘(C) LIMITATION.—Subparagraph (A)

22 does not apply in connection with any directed

23 recordkeeper to the extent that the directed rec24 ordkeeper fails to follow the specific instruction
203

S 1052 ES/PP

1 of the plan or the employer or other plan spon2 sor.

3 ‘‘(7) CONSTRUCTION.—Nothing in this sub4 section shall be construed as—

5 ‘‘(A) saving from preemption a cause of

6 action under State law for the failure to provide

7 a benefit for an item or service which is specifi8 cally excluded under the group health plan in9 volved, except to the extent that—

10 ‘‘(i) the application or interpretation

11 of the exclusion involves a determination

12 described in section 104(d)(2) of the Bi13 partisan Patient Protection Act of 2001,

14 or

15 ‘‘(ii) the provision of the benefit for

16 the item or service is required under Fed17 eral law or under applicable State law con18 sistent with subsection (b)(2)(B);

19 ‘‘(B) preempting a State law which re20 quires an affidavit or certificate of merit in a

21 civil action;

22 ‘‘(C) affecting a cause of action or remedy

23 under State law in connection with the provi24 sion or arrangement of excepted benefits (as de-
204

S 1052 ES/PP

1 fined in section 733(c)), other than those de2 scribed in section 733(c)(2)(A); or

3 ‘‘(D) affecting a cause of action under

4 State law other than a cause of action described

5 in paragraph (1)(A).

6 ‘‘(8) PURCHASE OF INSURANCE TO COVER LI7 ABILITY.—Nothing in section 410 shall be construed

8 to preclude the purchase by a group health plan of

9 insurance to cover any liability or losses arising

10 under a cause of action described in paragraph

11 (1)(A).

12 ‘‘(9) RELIEF FROM LIABILITY FOR EMPLOYER

13 OR OTHER PLAN SPONSOR BY MEANS OF DES14 IGNATED DECISIONMAKER.—

15 ‘‘(A) IN GENERAL.—Paragraph (1) shall

16 not apply with respect to any cause of action

17 described in paragraph (1)(A) under State law

18 insofar as such cause of action provides for li19 ability of an employer or plan sponsor (or an

20 employee thereof acting within the scope of em21 ployment) with respect to a participant or bene22 ficiary, if with respect to the employer or plan

23 sponsor there is deemed to be a designated de24 cisionmaker that meets the requirements of sec25 tion 502(o)(1) with respect to such participant
205

S 1052 ES/PP

1 or beneficiary. Such paragraph (1) shall apply

2 with respect to any cause of action described in

3 paragraph (1)(A) under State law against the

4 designated decisionmaker of such employer or

5 other plan sponsor with respect to the partici6 pant or beneficiary.

7 ‘‘(B) AUTOMATIC DESIGNATION.—A health

8 insurance issuer shall be deemed to be a des9 ignated decisionmaker for purposes of subpara10 graph (A) with respect to the participants and

11 beneficiaries of an employer or plan sponsor,

12 whether or not the employer or plan sponsor

13 makes such a designation, and shall be deemed

14 to have assumed unconditionally all liability of

15 the employer or plan sponsor under such des16 ignation in accordance with subsection (o), un17 less the employer or plan sponsor affirmatively

18 enters into a contract to prevent the service of

19 the designated decisionmaker.

20 ‘‘(10) PREVIOUSLY PROVIDED SERVICES.—

21 ‘‘(A) IN GENERAL.—Except as provided in

22 this paragraph, a cause of action shall not arise

23 under paragraph (1) where the denial involved

24 relates to an item or service that has already

25 been fully provided to the participant or bene-
206

S 1052 ES/PP

1 ficiary under the plan or coverage and the claim

2 relates solely to the subsequent denial of pay3 ment for the provision of such item or service.

4 ‘‘(B) EXCEPTION.—Nothing in subpara5 graph (A) shall be construed to—

6 ‘‘(i) prohibit a cause of action under

7 paragraph (1) where the nonpayment in8 volved results in the participant or bene9 ficiary being unable to receive further

10 items or services that are directly related

11 to the item or service involved in the denial

12 referred to in subparagraph (A) or that

13 are part of a continuing treatment or se14 ries of procedures;

15 ‘‘(ii) prohibit a cause of action under

16 paragraph (1) relating to quality of care;

17 or

18 ‘‘(iii) limit liability that otherwise

19 would arise from the provision of the item

20 or services or the performance of a medical

21 procedure.

22 ‘‘(11) EXEMPTION FROM PERSONAL LIABILITY

23 FOR INDIVIDUAL MEMBERS OF BOARDS OF DIREC24 TORS, JOINT BOARDS OF TRUSTEES, ETC.—Any indi25 vidual who is—
207

S 1052 ES/PP

1 ‘‘(A) a member of a board of directors of

2 an employer or plan sponsor; or

3 ‘‘(B) a member of an association, com4 mittee, employee organization, joint board of

5 trustees, or other similar group of representa6 tives of the entities that are the plan sponsor

7 of plan maintained by two or more employers

8 and one or more employee organizations;

9 shall not be personally liable under this subsection

10 for conduct that is within the scope of employment

11 of the individuals unless the individual acts in a

12 fraudulent manner for personal enrichment.

13 ‘‘(12) CHOICE OF LAW.—A cause of action

14 brought under paragraph (1) shall be governed by

15 the law (including choice of law rules) of the State

16 in which the plaintiff resides.

17 ‘‘(13) LIMITATION ON ATTORNEYS’ FEES.—

18 ‘‘(A) IN GENERAL.—Notwithstanding any

19 other provision of law, or any arrangement,

20 agreement, or contract regarding an attorney’s

21 fee, the amount of an attorney’s contingency fee

22 allowable for a cause of action brought under

paragraph (1) shall not exceed 1 23 ⁄3 of the total

24 amount of the plaintiff’s recovery (not including
208

S 1052 ES/PP

1 the reimbursement of actual out-of-pocket ex2 penses of the attorney).

3 ‘‘(B) DETERMINATION BY COURT.—The

4 last court in which the action was pending upon

5 the final disposition, including all appeals, of

6 the action may review the attorney’s fee to en7 sure that the fee is a reasonable one.

8 ‘‘(C) NO PREEMPTION OF STATE LAW.—

9 Subparagraph (A) shall not apply with respect

10 to a cause of action under paragraph (1) that

11 is brought in a State that has a law or frame12 work of laws with respect to the amount of an

13 attorney’s contingency fee that may be incurred

14 for the representation of a participant or bene15 ficiary (or the estate of such participant or ben16 eficiary) who brings such a cause of action.

17 ‘‘(e) RULES OF CONSTRUCTION RELATING TO

18 HEALTH CARE.—Nothing in this title shall be construed

19 as—

20 ‘‘(1) affecting any State law relating to the

21 practice of medicine or the provision of, or the fail22 ure to provide, medical care, or affecting any action

23 (whether the liability is direct or vicarious) based

24 upon such a State law,
209

S 1052 ES/PP

1 ‘‘(2) superseding any State law permitted under

2 section 152(b)(1)(A) of the Bipartisan Patient Pro3 tection Act of 2001, or

4 ‘‘(3) affecting any applicable State law with re5 spect to limitations on monetary damages.’’.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to acts and omissions (from which

8 a cause of action arises) occurring on or after October 1,

9 2002.

10 SEC. 403. LIMITATION ON CERTAIN CLASS ACTION LITIGA11 TION.

12 Section 502 of the Employee Retirement Income Se13 curity Act of 1974 (29 U.S.C. 1132), as amended by sec14 tion 402, is further amended by adding at the end the

15 following:

16 ‘‘(p) LIMITATION ON CLASS ACTION LITIGATION.—

17 ‘‘(1) IN GENERAL.—Any claim or cause of ac18 tion that is maintained under this section in connec19 tion with a group health plan, or health insurance

20 coverage issued in connection with a group health

21 plan, as a class action, derivative action, or as an ac22 tion on behalf of any group of 2 or more claimants,

23 may be maintained only if the class, the derivative

24 claimant, or the group of claimants is limited to the

25 participants or beneficiaries of a group health plan
210

S 1052 ES/PP

1 established by only 1 plan sponsor. No action main2 tained by such class, such derivative claimant, or

3 such group of claimants may be joined in the same

4 proceeding with any action maintained by another

5 class, derivative claimant, or group of claimants or

6 consolidated for any purpose with any other pro7 ceeding. In this paragraph, the terms ‘group health

8 plan’ and ‘health insurance coverage’ have the mean9 ings given such terms in section 733.

10 ‘‘(2) EFFECTIVE DATE.—This subsection shall

11 apply to all civil actions that are filed on or after

12 January 1, 2002.’’.

13 SEC. 404. LIMITATIONS ON ACTIONS.

14 Section 502 of the Employee Retirement Income Se15 curity Act of 1974 (29 U.S.C. 1132) (as amended by sec16 tion 402(a)) is amended further by adding at the end the

17 following new subsection:

18 ‘‘(q) LIMITATIONS ON ACTIONS RELATING TO GROUP

19 HEALTH PLANS.—

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), no action may be brought under sub22 section (a)(1)(B), (a)(2), or (a)(3) by a participant

23 or beneficiary seeking relief based on the application

24 of any provision in section 101, subtitle B, or sub-
211

S 1052 ES/PP

1 title D of title I of the Bipartisan Patient Protection

2 Act (as incorporated under section 714).

3 ‘‘(2) CERTAIN ACTIONS ALLOWABLE.—An ac4 tion may be brought under subsection (a)(1)(B),

5 (a)(2), or (a)(3) by a participant or beneficiary seek6 ing relief based on the application of section 101,

7 113, 114, 115, 116, 117, 118(a)(3), 119, or 120 of

8 the Bipartisan Patient Protection Act (as incor9 porated under section 714) to the individual cir10 cumstances of that participant or beneficiary, except

11 that—

12 ‘‘(A) such an action may not be brought or

13 maintained as a class action; and

14 ‘‘(B) in such an action, relief may only

15 provide for the provision of (or payment of)

16 benefits, items, or services denied to the indi17 vidual participant or beneficiary involved (and

18 for attorney’s fees and the costs of the action,

19 at the discretion of the court) and shall not pro20 vide for any other relief to the participant or

21 beneficiary or for any relief to any other person.

22 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Noth23 ing in this subsection shall be construed as affecting

24 subsections (a)(1)(C) and (n) or section 514(d).
212

S 1052 ES/PP

1 ‘‘(4) ENFORCEMENT BY SECRETARY UNAF2 FECTED.—Nothing in this subsection shall be con3 strued as affecting any action brought by the Sec4 retary.’’.

5 SEC. 405. COOPERATION BETWEEN FEDERAL AND STATE

6 AUTHORITIES.

7 Subpart C of part 7 of subtitle B of title I of the

8 Employee Retirement Income Security Act of 1974 (29

9 U.S.C. 1191 et seq.) is amended by adding at the end

10 the following new section:

11 ‘‘SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE

12 AUTHORITIES.

13 ‘‘(a) AGREEMENT WITH STATES.—A State may enter

14 into an agreement with the Secretary for the delegation

15 to the State of some or all of the Secretary’s authority

16 under this title to enforce the requirements applicable

17 under title I of the Bipartisan Patient Protection Act with

18 respect to health insurance coverage offered by a health

19 insurance issuer and with respect to a group health plan

20 that is a non-Federal governmental plan.

21 ‘‘(b) DELEGATIONS.—Any department, agency, or in22 strumentality of a State to which authority is delegated

23 pursuant to an agreement entered into under this section

24 may, if authorized under State law and to the extent con-
213

S 1052 ES/PP

1 sistent with such agreement, exercise the powers of the

2 Secretary under this title which relate to such authority.’’.

3 SEC. 406. SENSE OF THE SENATE CONCERNING THE IMPOR4 TANCE OF CERTAIN UNPAID SERVICES.

5 It is the sense of the Senate that the court should

6 consider the loss of a nonwage earning spouse or parent

7 as an economic loss for the purposes of this section. Fur8 thermore, the court should define the compensation for the

9 loss not as minimum services, but, rather, in terms that

10 fully compensate for the true and whole replacement cost

11 to the family.

12 TITLE V—EFFECTIVE DATES; CO13 ORDINATION IN IMPLEMEN14 TATION

15 SEC. 501. EFFECTIVE DATES.

16 (a) GROUP HEALTH COVERAGE.—

17 (1) IN GENERAL.—Subject to paragraph (2)

18 and subsection (d), the amendments made by sec19 tions 201(a), 401, and 403 (and title I insofar as it

20 relates to such sections) shall apply with respect to

21 group health plans, and health insurance coverage

22 offered in connection with group health plans, for

23 plan years beginning on or after October 1, 2002 (in

24 this section referred to as the ‘‘general effective

25 date’’).
214

S 1052 ES/PP

1 (2) TREATMENT OF COLLECTIVE BARGAINING

2 AGREEMENTS.—In the case of a group health plan

3 maintained pursuant to one or more collective bar4 gaining agreements between employee representa5 tives and one or more employers ratified before the

6 date of the enactment of this Act, the amendments

7 made by sections 201(a), 401, and 403 (and title I

8 insofar as it relates to such sections) shall not apply

9 to plan years beginning before the later of—

10 (A) the date on which the last collective

11 bargaining agreements relating to the plan ter12 minates (excluding any extension thereof agreed

13 to after the date of the enactment of this Act);

14 or

15 (B) the general effective date;

16 but shall apply not later than 1 year after the gen17 eral effective date. For purposes of subparagraph

18 (A), any plan amendment made pursuant to a collec19 tive bargaining agreement relating to the plan which

20 amends the plan solely to conform to any require21 ment added by this Act shall not be treated as a ter22 mination of such collective bargaining agreement.

23 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—

24 Subject to subsection (d), the amendments made by sec25 tion 202 shall apply with respect to individual health in-
215

S 1052 ES/PP

1 surance coverage offered, sold, issued, renewed, in effect,

2 or operated in the individual market on or after the gen3 eral effective date.

4 (c) TREATMENT OF RELIGIOUS NONMEDICAL PRO5 VIDERS.—

6 (1) IN GENERAL.—Nothing in this Act (or the

7 amendments made thereby) shall be construed to—

8 (A) restrict or limit the right of group

9 health plans, and of health insurance issuers of10 fering health insurance coverage, to include as

11 providers religious nonmedical providers;

12 (B) require such plans or issuers to—

13 (i) utilize medically based eligibility

14 standards or criteria in deciding provider

15 status of religious nonmedical providers;

16 (ii) use medical professionals or cri17 teria to decide patient access to religious

18 nonmedical providers;

19 (iii) utilize medical professionals or

20 criteria in making decisions in internal or

21 external appeals regarding coverage for

22 care by religious nonmedical providers; or

23 (iv) compel a participant or bene24 ficiary to undergo a medical examination

25 or test as a condition of receiving health
216

S 1052 ES/PP

1 insurance coverage for treatment by a reli2 gious nonmedical provider; or

3 (C) require such plans or issuers to ex4 clude religious nonmedical providers because

5 they do not provide medical or other required

6 data, if such data is inconsistent with the reli7 gious nonmedical treatment or nursing care

8 provided by the provider.

9 (2) RELIGIOUS NONMEDICAL PROVIDER.—For

10 purposes of this subsection, the term ‘‘religious non11 medical provider’’ means a provider who provides no

12 medical care but who provides only religious non13 medical treatment or religious nonmedical nursing

14 care.

15 (d) TRANSITION FOR NOTICE REQUIREMENT.—The

16 disclosure of information required under section 121 of

17 this Act shall first be provided pursuant to—

18 (1) subsection (a) with respect to a group

19 health plan that is maintained as of the general ef20 fective date, not later than 30 days before the begin21 ning of the first plan year to which title I applies

22 in connection with the plan under such subsection;

23 or

24 (2) subsection (b) with respect to a individual

25 health insurance coverage that is in effect as of the
217

S 1052 ES/PP

1 general effective date, not later than 30 days before

2 the first date as of which title I applies to the cov3 erage under such subsection.

4 SEC. 502. COORDINATION IN IMPLEMENTATION.

5 The Secretary of Labor and the Secretary of Health

6 and Human Services shall ensure, through the execution

7 of an interagency memorandum of understanding among

8 such Secretaries, that—

9 (1) regulations, rulings, and interpretations

10 issued by such Secretaries relating to the same mat11 ter over which such Secretaries have responsibility

12 under the provisions of this Act (and the amend13 ments made thereby) are administered so as to have

14 the same effect at all times; and

15 (2) coordination of policies relating to enforcing

16 the same requirements through such Secretaries in

17 order to have a coordinated enforcement strategy

18 that avoids duplication of enforcement efforts and

19 assigns priorities in enforcement.

20 SEC. 503. SEVERABILITY.

21 If any provision of this Act, an amendment made by

22 this Act, or the application of such provision or amend23 ment to any person or circumstance is held to be unconsti24 tutional, the remainder of this Act, the amendments made

25 by this Act, and the application of the provisions of such
218

S 1052 ES/PP

1 to any person or circumstance shall not be affected there2 by.

3 TITLE VI—MISCELLANEOUS

4 PROVISIONS

5 SEC. 601. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

6 (a) IN GENERAL.—Nothing in this Act (or an amend7 ment made by this Act) shall be construed to alter or

8 amend the Social Security Act (or any regulation promul9 gated under that Act).

10 (b) TRANSFERS.—

11 (1) ESTIMATE OF SECRETARY.—The Secretary

12 of the Treasury shall annually estimate the impact

13 that the enactment of this Act has on the income

14 and balances of the trust funds established under

15 section 201 of the Social Security Act (42 U.S.C.

16 401).

17 (2) TRANSFER OF FUNDS.—If, under para18 graph (1), the Secretary of the Treasury estimates

19 that the enactment of this Act has a negative impact

20 on the income and balances of the trust funds estab21 lished under section 201 of the Social Security Act

22 (42 U.S.C. 401), the Secretary shall transfer, not

23 less frequently than quarterly, from the general reve24 nues of the Federal Government an amount suffi25 cient so as to ensure that the income and balances
219

S 1052 ES/PP

1 of such trust funds are not reduced as a result of

2 the enactment of such Act.

3 SEC. 602. CUSTOMS USER FEES.

4 Section 13031(j)(3) of the Consolidated Omnibus

5 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3))

6 is amended by striking ‘‘2003’’ and inserting ‘‘2011, ex7 cept that fees may not be charged under paragraphs (9)

8 and (10) of such subsection after March 31, 2006’’.

9 SEC. 603. FISCAL YEAR 2002 MEDICARE PAYMENTS.

10 Notwithstanding any other provision of law, any let11 ter of credit under part B of title XVIII of the Social Se12 curity Act (42 U.S.C. 1395j et seq.) that would otherwise

13 be sent to the Treasury or the Federal Reserve Board on

14 September 30, 2002, by a carrier with a contract under

15 section 1842 of that Act (42 U.S.C. 1395u) shall be sent

16 on October 1, 2002.

17 SEC. 604. SENSE OF SENATE WITH RESPECT TO PARTICIPA18 TION IN CLINICAL TRIALS AND ACCESS TO

19 SPECIALTY CARE.

20 (a) FINDINGS.—The Senate finds the following:

21 (1) Breast cancer is the most common form of

22 cancer among women, excluding skin cancers.

23 (2) During 2001, 182,800 new cases of female

24 invasive breast cancer will be diagnosed, and 40,800

25 women will die from the disease.
220

S 1052 ES/PP

1 (3) In addition, 1,400 male breast cancer cases

2 are projected to be diagnosed, and 400 men will die

3 from the disease.

4 (4) Breast cancer is the second leading cause of

5 cancer death among all women and the leading

6 cause of cancer death among women between ages

7 40 and 55.

8 (5) This year 8,600 children are expected to be

9 diagnosed with cancer.

10 (6) 1,500 children are expected to die from can11 cer this year.

12 (7) There are approximately 333,000 people di13 agnosed with multiple sclerosis in the United States

14 and 200 more cases are diagnosed each week.

15 (8) Parkinson’s disease is a progressive disorder

16 of the central nervous system affecting 1,000,000 in

17 the United States.

18 (9) An estimated 198,100 men will be diag19 nosed with prostate cancer this year.

20 (10) 31,500 men will die from prostate cancer

21 this year. It is the second leading cause of cancer in

22 men.

23 (11) While information obtained from clinical

24 trials is essential to finding cures for diseases, it is

25 still research which carries the risk of fatal results.
221

S 1052 ES/PP

1 Future efforts should be taken to protect the health

2 and safety of adults and children who enroll in clin3 ical trials.

4 (12) While employers and health plans should

5 be responsible for covering the routine costs associ6 ated with federally approved or funded clinical trials,

7 such employers and health plans should not be held

8 legally responsible for the design, implementation, or

9 outcome of such clinical trials, consistent with any

10 applicable State or Federal liability statutes.

11 (b) SENSE OF THE SENATE.—It is the sense of the

12 Senate that—

13 (1) men and women battling life-threatening,

14 deadly diseases, including advanced breast or ovar15 ian cancer, should have the opportunity to partici16 pate in a federally approved or funded clinical trial

17 recommended by their physician;

18 (2) an individual should have the opportunity to

19 participate in a federally approved or funded clinical

20 trial recommended by their physician if—

21 (A) that individual—

22 (i) has a life-threatening or serious ill23 ness for which no standard treatment is ef24 fective;
222

S 1052 ES/PP

1 (ii) is eligible to participate in a feder2 ally approved or funded clinical trial ac3 cording to the trial protocol with respect to

4 treatment of the illness;

5 (B) that individual’s participation in the

6 trial offers meaningful potential for significant

7 clinical benefit for the individual; and

8 (C) either—

9 (i) the referring physician is a partici10 pating health care professional and has

11 concluded that the individual’s participa12 tion in the trial would be appropriate,

13 based upon the individual meeting the con14 ditions described in subparagraph (A); or

15 (ii) the participant, beneficiary, or en16 rollee provides medical and scientific infor17 mation establishing that the individual’s

18 participation in the trial would be appro19 priate, based upon the individual meeting

20 the conditions described in subparagraph

21 (A);

22 (3) a child with a life-threatening illness, in23 cluding cancer, should be allowed to participate in a

24 federally approved or funded clinical trial if that
223

S 1052 ES/PP

1 participation meets the requirements of paragraph

2 (2);

3 (4) a child with a rare cancer should be allowed

4 to go to a cancer center capable of providing high

5 quality care for that disease; and

6 (5) a health maintenance organization’s deci7 sion that an in-network physician without the nec8 essary expertise can provide care for a seriously ill

9 patient, including a woman battling cancer, should

10 be appealable to an independent, impartial body, and

11 that this same right should be available to all Ameri12 cans in need of access to high quality specialty care.

13 SEC. 605. SENSE OF THE SENATE REGARDING FAIR REVIEW

14 PROCESS.

15 (a) FINDINGS.—The Senate finds the following:

16 (1) A fair, timely, impartial independent exter17 nal appeals process is essential to any meaningful

18 program of patient protection.

19 (2) The independence and objectivity of the re20 view organization and review process must be en21 sured.

22 (3) It is incompatible with a fair and inde23 pendent appeals process to allow a health mainte24 nance organization to select the review organization
224

S 1052 ES/PP

1 that is entrusted with providing a neutral and unbi2 ased medical review.

3 (4) The American Arbitration Association and

4 arbitration standards adopted under chapter 44 of

5 title 28, United States Code (28 U.S.C. 651 et seq.)

6 both prohibit, as inherently unfair, the right of one

7 party to a dispute to choose the judge in that dis8 pute.

9 (b) SENSE OF THE SENATE.—It is the sense of the

10 Senate that—

11 (1) every patient who is denied care by a health

12 maintenance organization or other health insurance

13 company should be entitled to a fair, speedy, impar14 tial appeal to a review organization that has not

15 been selected by the health plan;

16 (2) the States should be empowered to maintain

17 and develop the appropriate process for selection of

18 the independent external review entity;

19 (3) a child battling a rare cancer whose health

20 maintenance organization has denied a covered

21 treatment recommended by its physician should be

22 entitled to a fair and impartial external appeal to a

23 review organization that has not been chosen by the

24 organization or plan that has denied the care; and
225

S 1052 ES/PP

1 (4) patient protection legislation should not pre2 empt existing State laws in States where there al3 ready are strong laws in place regarding the selec4 tion of independent review organizations.

5 SEC. 606. ANNUAL REVIEW.

6 (a) IN GENERAL.—Not later than 24 months after

7 the general effective date referred to in section 501(a)(1),

8 and annually thereafter for each of the succeeding 4 cal9 endar years (or until a repeal is effective under subsection

10 (b)), the Secretary of Health and Human Services shall

11 request that the Institute of Medicine of the National

12 Academy of Sciences prepare and submit to the appro13 priate committees of Congress a report concerning the im14 pact of this Act, and the amendments made by this Act,

15 on the number of individuals in the United States with

16 health insurance coverage.

17 (b) LIMITATION WITH RESPECT TO CERTAIN

18 PLANS.—If the Secretary, in any report submitted under

19 subsection (a), determines that more than 1,000,000 indi20 viduals in the United States have lost their health insur21 ance coverage as a result of the enactment of this Act,

22 as compared to the number of individuals with health in23 surance coverage in the 12-month period preceding the

24 date of enactment of this Act, section 402 of this Act shall

25 be repealed effective on the date that is 12 month after
226

S 1052 ES/PP

1 the date on which the report is submitted, and the submis2 sion of any further reports under subsection (a) shall not

3 be required.

4 (c) FUNDING.—From funds appropriated to the De5 partment of Health and Human Services for fiscal years

6 2003 and 2004, the Secretary of Health and Human Serv7 ices shall provide for such funding as the Secretary deter8 mines necessary for the conduct of the study of the Na9 tional Academy of Sciences under this section.

10 SEC. 607. DEFINITION OF BORN-ALIVE INFANT.

11 (a) IN GENERAL.—Chapter 1 of title 1, United

12 States Code, is amended by adding at the end the fol13 lowing:

14 ‘‘§ 8. ‘Person’, ‘human being’, ‘child’, and ‘individual’

15 as including born-alive infant

16 ‘‘(a) In determining the meaning of any Act of Con17 gress, or of any ruling, regulation, or interpretation of the

18 various administrative bureaus and agencies of the United

19 States, the words ‘person’, ‘human being’, ‘child’, and ‘in20 dividual’, shall include every infant member of the species

21 homo sapiens who is born alive at any stage of develop22 ment.

23 ‘‘(b) As used in this section, the term ‘born alive’,

24 with respect to a member of the species homo sapiens,

25 means the complete expulsion or extraction from his or
227

S 1052 ES/PP

1 her mother of that member, at any stage of development,

2 who after such expulsion or extraction breathes or has a

3 beating heart, pulsation of the umbilical cord, or definite

4 movement of voluntary muscles, regardless of whether the

5 umbilical cord has been cut, and regardless of whether the

6 expulsion or extraction occurs as a result of natural or

7 induced labor, caesarean section, or induced abortion.

8 ‘‘(c) Nothing in this section shall be construed to af9 firm, deny, expand, or contract any legal status or legal

10 right applicable to any member of the species homo sapi11 ens at any point prior to being born alive as defined in

12 this section.’’.

13 (b) CLERICAL AMENDMENT.—The table of sections

14 at the beginning of chapter 1 of title 1, United States

15 Code, is amended by adding at the end the following new

16 item:

‘‘8. ‘Person’, ‘human being’, ‘child’, and ‘individual’ as including born-alive infant.’’.

Passed the Senate June 29, 2001.

Attest:

Secretary.

107TH CONGRESS

1ST SESSION S. 1052

AN ACT

To amend the Public Health Service Act and the

Employee Retirement Income Security Act of1974 to protect consumers in managed careplans and other health coverage.

June 29, 2001

Ordered to be printed as passed