II

Calendar No. 75

107TH CONGRESS

1ST SESSION S. 1052

To amend the Public Health Service Act and the Employee Retirement

Income Security Act of 1974 to protect consumers in managed care

plans and other health coverage.

IN THE SENATE OF THE UNITED STATES

JUNE 14, 2001

Mr. MCCAIN (for himself, Mr. EDWARDS, and Mr. KENNEDY) introduced the

following bill; which was read the first time

JUNE 18, 2001

Read the second time and placed on the calendar

A BILL

To amend the Public Health Service Act and the Employee

Retirement Income Security Act of 1974 to protect consumers in managed care plans and other health coverage.

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’’.
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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.

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.

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

Sec. 201. Application to group health plans and group health insurance coverage.
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Sec. 202. Application to individual health insurance coverage.

TITLE III—AMENDMENTS TO THE EMPLOYEE RETIREMENT

INCOME SECURITY ACT OF 1974

Sec. 301. Application of patient protection standards to group health plans and

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

Sec. 302. Availability of civil remedies.

Sec. 303. Limitations on actions.

TITLE IV—EFFECTIVE DATES; COORDINATION IN

IMPLEMENTATION

Sec. 401. Effective dates.

Sec. 402. Coordination in implementation.

Sec. 403. Severability.

TITLE V—MISCELLANEOUS PROVISIONS

Sec. 501. No impact on Social Security Trust Fund.

Sec. 502. Customs user fees.

Sec. 503. Fiscal year 2002 medicare payments.

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

2 section shall be construed as preventing a group

3 health plan or health insurance issuer from arrang4 ing through a contract or otherwise for persons or

5 entities to conduct utilization review activities on be6 half of the plan or issuer, so long as such activities

7 are conducted in accordance with a utilization review

8 program that meets the requirements of this section.

9 (3) UTILIZATION REVIEW DEFINED.—For pur10 poses of this section, the terms ‘‘utilization review’’

11 and ‘‘utilization review activities’’ mean procedures

12 used to monitor or evaluate the use or coverage,

13 clinical necessity, appropriateness, efficacy, or effi14 ciency of health care services, procedures or settings,

15 and includes prospective review, concurrent review,

16 second opinions, case management, discharge plan17 ning, or retrospective review.

18 (b) WRITTEN POLICIES AND CRITERIA.—

19 (1) WRITTEN POLICIES.—A utilization review

20 program shall be conducted consistent with written

21 policies and procedures that govern all aspects of the

22 program.

23 (2) USE OF WRITTEN CRITERIA.—

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

25 utilize written clinical review criteria developed
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1 with input from a range of appropriate actively

2 practicing health care professionals, as deter3 mined by the plan, pursuant to the program.

4 Such criteria shall include written clinical re5 view criteria that are based on valid clinical evi6 dence where available and that are directed spe7 cifically at meeting the needs of at-risk popu8 lations and covered individuals with chronic

9 conditions or severe illnesses, including gender10 specific criteria and pediatric-specific criteria

11 where available and appropriate.

12 (B) CONTINUING USE OF STANDARDS IN

13 RETROSPECTIVE REVIEW.—If a health care

14 service has been specifically pre-authorized or

15 approved for a participant, beneficiary, or en16 rollee under such a program, the program shall

17 not, pursuant to retrospective review, revise or

18 modify the specific standards, criteria, or proce19 dures used for the utilization review for proce20 dures, treatment, and services delivered to the

21 enrollee during the same course of treatment.

22 (C) REVIEW OF SAMPLE OF CLAIMS DENI23 ALS.—Such a program shall provide for a peri24 odic evaluation of the clinical appropriateness of
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1 at least a sample of denials of claims for bene2 fits.

3 (c) CONDUCT OF PROGRAM ACTIVITIES.—

4 (1) ADMINISTRATION BY HEALTH CARE PRO5 FESSIONALS.—A utilization review program shall be

6 administered by qualified health care professionals

7 who shall oversee review decisions.

8 (2) USE OF QUALIFIED, INDEPENDENT PER9 SONNEL.—

10 (A) IN GENERAL.—A utilization review

11 program shall provide for the conduct of utiliza12 tion review activities only through personnel

13 who are qualified and have received appropriate

14 training in the conduct of such activities under

15 the program.

16 (B) PROHIBITION OF CONTINGENT COM17 PENSATION ARRANGEMENTS.—Such a program

18 shall not, with respect to utilization review ac19 tivities, permit or provide compensation or any20 thing of value to its employees, agents, or con21 tractors in a manner that encourages denials of

22 claims for benefits.

23 (C) PROHIBITION OF CONFLICTS.—Such a

24 program shall not permit a health care profes25 sional who is providing health care services to
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1 an individual to perform utilization review ac2 tivities in connection with the health care serv3 ices being provided to the individual.

4 (3) ACCESSIBILITY OF REVIEW.—Such a pro5 gram shall provide that appropriate personnel per6 forming utilization review activities under the pro7 gram, including the utilization review administrator,

8 are reasonably accessible by toll-free telephone dur9 ing normal business hours to discuss patient care

10 and allow response to telephone requests, and that

11 appropriate provision is made to receive and respond

12 promptly to calls received during other hours.

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

14 shall not provide for the performance of utilization

15 review activities with respect to a class of services

16 furnished to an individual more frequently than is

17 reasonably required to assess whether the services

18 under review are medically necessary and appro19 priate.

20 SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENE21 FITS AND PRIOR AUTHORIZATION DETER22 MINATIONS.

23 (a) PROCEDURES OF INITIAL CLAIMS FOR BENE24 FITS.—
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1 (1) IN GENERAL.—A group health plan, or

2 health insurance issuer offering health insurance

3 coverage, shall—

4 (A) make a determination on an initial

5 claim for benefits by a participant, beneficiary,

6 or enrollee (or authorized representative) re7 garding payment or coverage for items or serv8 ices under the terms and conditions of the plan

9 or coverage involved, including any cost-sharing

10 amount that the participant, beneficiary, or en11 rollee is required to pay with respect to such

12 claim for benefits; and

13 (B) notify a participant, beneficiary, or en14 rollee (or authorized representative) and the

15 treating health care professional involved re16 garding a determination on an initial claim for

17 benefits made under the terms and conditions

18 of the plan or coverage, including any cost-shar19 ing amounts that the participant, beneficiary,

20 or enrollee may be required to make with re21 spect to such claim for benefits, and of the

22 right of the participant, beneficiary, or enrollee

23 to an internal appeal under section 103.

24 (2) ACCESS TO INFORMATION.—
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1 (A) TIMELY PROVISION OF NECESSARY IN2 FORMATION.—With respect to an initial claim

3 for benefits, the participant, beneficiary, or en4 rollee (or authorized representative) and the

5 treating health care professional (if any) shall

6 provide the plan or issuer with access to infor7 mation requested by the plan or issuer that is

8 necessary to make a determination relating to

9 the claim. Such access shall be provided not

10 later than 5 days after the date on which the

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

12 described in subparagraph (B) or (C) of sub13 section (b)(1), by such earlier time as may be

14 necessary to comply with the applicable timeline

15 under such subparagraph.

16 (B) LIMITED EFFECT OF FAILURE ON

17 PLAN OR ISSUER’S OBLIGATIONS.—Failure of

18 the participant, beneficiary, or enrollee to com19 ply with the requirements of subparagraph (A)

20 shall not remove the obligation of the plan or

21 issuer to make a decision in accordance with

22 the medical exigencies of the case and as soon

23 as possible, based on the available information,

24 and failure to comply with the time limit estab25 lished by this paragraph shall not remove the
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1 obligation of the plan or issuer to comply with

2 the requirements of this section.

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

4 for benefits involving an expedited or concurrent de5 termination, a participant, beneficiary, or enrollee

6 (or authorized representative) may make an initial

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

8 health insurance issuer offering health insurance

9 coverage, may require that the participant, bene10 ficiary, or enrollee (or authorized representative)

11 provide written confirmation of such request in a

12 timely manner on a form provided by the plan or

13 issuer. In the case of such an oral request for bene14 fits, the making of the request (and the timing of

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

16 time of a claims for such benefits without regard to

17 whether and when a written confirmation of such re18 quest is made.

19 (b) TIMELINE FOR MAKING DETERMINATIONS.—

20 (1) PRIOR AUTHORIZATION DETERMINATION.—

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

22 health insurance issuer offering health insur23 ance coverage, shall make a prior authorization

24 determination on a claim for benefits (whether

25 oral or written) in accordance with the medical
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1 exigencies of the case and as soon as possible,

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

3 on which the plan or issuer receives information

4 that is reasonably necessary to enable the plan

5 or issuer to make a determination on the re6 quest for prior authorization and in no case

7 later than 28 days after the date of the claim

8 for benefits is received.

9 (B) EXPEDITED DETERMINATION.—Not10 withstanding subparagraph (A), a group health

11 plan, or health insurance issuer offering health

12 insurance coverage, shall expedite a prior au13 thorization determination on a claim for bene14 fits described in such subparagraph when a re15 quest for such an expedited determination is

16 made by a participant, beneficiary, or enrollee

17 (or authorized representative) at any time dur18 ing the process for making a determination and

19 a health care professional certifies, with the re20 quest, that a determination under the proce21 dures described in subparagraph (A) would seri22 ously jeopardize the life or health of the partici23 pant, beneficiary, or enrollee or the ability of

24 the participant, beneficiary, or enrollee to main25 tain or regain maximum function. Such deter-
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1 mination shall be made in accordance with the

2 medical exigencies of the case and as soon as

3 possible, but in no case later than 72 hours

4 after the time the request is received by the

5 plan or issuer under this subparagraph.

6 (C) ONGOING CARE.—

7 (i) CONCURRENT REVIEW.—

8 (I) IN GENERAL.—Subject to

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

10 review of ongoing care (including hos11 pitalization), which results in a termi12 nation or reduction of such care, the

13 plan or issuer must provide by tele14 phone and in printed form notice of

15 the concurrent review determination

16 to the individual or the individual’s

17 designee and the individual’s health

18 care provider in accordance with the

19 medical exigencies of the case and as

20 soon as possible, with sufficient time

21 prior to the termination or reduction

22 to allow for an appeal under section

23 103(b)(3) to be completed before the

24 termination or reduction takes effect.
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1 (II) CONTENTS OF NOTICE.—

2 Such notice shall include, with respect

3 to ongoing health care items and serv4 ices, the number of ongoing services

5 approved, the new total of approved

6 services, the date of onset of services,

7 and the next review date, if any, as

8 well as a statement of the individual’s

9 rights to further appeal.

10 (ii) RULE OF CONSTRUCTION.—Clause

11 (i) shall not be construed as requiring

12 plans or issuers to provide coverage of care

13 that would exceed the coverage limitations

14 for such care.

15 (2) RETROSPECTIVE DETERMINATION.—A

16 group health plan, or health insurance issuer offer17 ing health insurance coverage, shall make a retro18 spective determination on a claim for benefits in ac19 cordance with the medical exigencies of the case and

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

21 the date on which the plan or issuer receives infor22 mation that is reasonably necessary to enable the

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

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

25 claim for benefits.
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1 (c) NOTICE OF A DENIAL OF A CLAIM FOR BENE2 FITS.—Written notice of a denial made under an initial

3 claim for benefits shall be issued to the participant, bene4 ficiary, or enrollee (or authorized representative) and the

5 treating health care professional in accordance with the

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

7 in no case later than 2 days after the date of the deter8 mination (or, in the case described in subparagraph (B)

9 or (C) of subsection (b)(1), within the 72-hour or applica10 ble period referred to in such subparagraph).

11 (d) REQUIREMENTS OF NOTICE OF DETERMINA12 TIONS.—The written notice of a denial of a claim for bene13 fits determination under subsection (c) shall be provided

14 in printed form and written in a manner calculated to be

15 understood by the participant, beneficiary, or enrollee and

16 shall include—

17 (1) the specific reasons for the determination

18 (including a summary of the clinical or scientific evi19 dence used in making the determination);

20 (2) the procedures for obtaining additional in21 formation concerning the determination; and

22 (3) notification of the right to appeal the deter23 mination and instructions on how to initiate an ap24 peal in accordance with section 103.

25 (e) DEFINITIONS.—For purposes of this part:
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1 (1) AUTHORIZED REPRESENTATIVE.—The term

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

3 an individual who is a participant, beneficiary, or en4 rollee, any health care professional or other person

5 acting on behalf of the individual with the individ6 ual’s consent or without such consent if the indi7 vidual is medically unable to provide such consent.

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

9 for benefits’’ means any request for coverage (in10 cluding authorization of coverage), for eligibility, or

11 for payment in whole or in part, for an item or serv12 ice under a group health plan or health insurance

13 coverage.

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

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

16 benefits, a denial (in whole or in part) of, or a fail17 ure to act on a timely basis upon, the claim for ben18 efits and includes a failure to provide benefits (in19 cluding items and services) required to be provided

20 under this title.

21 (4) TREATING HEALTH CARE PROFESSIONAL.—

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

23 with respect to services to be provided to a partici24 pant, beneficiary, or enrollee, a health care profes25 sional who is primarily responsible for delivering
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1 those services to the participant, beneficiary, or en2 rollee.

3 SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.

4 (a) RIGHT TO INTERNAL APPEAL.—

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

6 enrollee (or authorized representative) may appeal

7 any denial of a claim for benefits under section 102

8 under the procedures described in this section.

9 (2) TIME FOR APPEAL.—

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

11 health insurance issuer offering health insur12 ance coverage, shall ensure that a participant,

13 beneficiary, or enrollee (or authorized represent14 ative) has a period of not less than 180 days

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

16 benefits under section 102 in which to appeal

17 such denial under this section.

18 (B) DATE OF DENIAL.—For purposes of

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

20 be deemed to be the date as of which the partic21 ipant, beneficiary, or enrollee knew of the denial

22 of the claim for benefits.

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

24 issuer to issue a determination on a claim for bene25 fits under section 102 within the applicable timeline
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1 established for such a determination under such sec2 tion is a denial of a claim for benefits for purposes

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

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

5 group health plan, or health insurance issuer offer6 ing health insurance coverage, may waive the inter7 nal review process under this section. In such case

8 the plan or issuer shall provide notice to the partici9 pant, beneficiary, or enrollee (or authorized rep10 resentative) involved, the participant, beneficiary, or

11 enrollee (or authorized representative) involved shall

12 be relieved of any obligation to complete the internal

13 review involved, and may, at the option of such par14 ticipant, beneficiary, enrollee, or representative pro15 ceed directly to seek further appeal through external

16 review under section 104 or otherwise.

17 (b) TIMELINES FOR MAKING DETERMINATIONS.—

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

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

20 that involves an expedited or concurrent determina21 tion, a participant, beneficiary, or enrollee (or au22 thorized representative) may request such appeal

23 orally. A group health plan, or health insurance

24 issuer offering health insurance coverage, may re25 quire that the participant, beneficiary, or enrollee
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1 (or authorized representative) provide written con2 firmation of such request in a timely manner on a

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

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

5 making of the request (and the timing of such re6 quest) shall be treated as the making at that time

7 of a request for an appeal without regard to whether

8 and when a written confirmation of such request is

9 made.

10 (2) ACCESS TO INFORMATION.—

11 (A) TIMELY PROVISION OF NECESSARY IN12 FORMATION.—With respect to an appeal of a

13 denial of a claim for benefits, the participant,

14 beneficiary, or enrollee (or authorized represent15 ative) and the treating health care professional

16 (if any) shall provide the plan or issuer with ac17 cess to information requested by the plan or

18 issuer that is necessary to make a determina19 tion relating to the appeal. Such access shall be

20 provided not later than 5 days after the date on

21 which the request for information is received,

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

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

24 may be necessary to comply with the applicable

25 timeline under such subparagraph.
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1 (B) LIMITED EFFECT OF FAILURE ON

2 PLAN OR ISSUER’S OBLIGATIONS.—Failure of

3 the participant, beneficiary, or enrollee to com4 ply with the requirements of subparagraph (A)

5 shall not remove the obligation of the plan or

6 issuer to make a decision in accordance with

7 the medical exigencies of the case and as soon

8 as possible, based on the available information,

9 and failure to comply with the time limit estab10 lished by this paragraph shall not remove the

11 obligation of the plan or issuer to comply with

12 the requirements of this section.

13 (3) PRIOR AUTHORIZATION DETERMINA14 TIONS.—

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

16 health insurance issuer offering health insur17 ance coverage, shall make a determination on

18 an appeal of a denial of a claim for benefits

19 under this subsection in accordance with the

20 medical exigencies of the case and as soon as

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

22 the date on which the plan or issuer receives in23 formation that is reasonably necessary to enable

24 the plan or issuer to make a determination on

25 the appeal and in no case later than 28 days
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1 after the date the request for the appeal is re2 ceived.

3 (B) EXPEDITED DETERMINATION.—Not4 withstanding subparagraph (A), a group health

5 plan, or health insurance issuer offering health

6 insurance coverage, shall expedite a prior au7 thorization determination on an appeal of a de8 nial of a claim for benefits described in sub9 paragraph (A), when a request for such an ex10 pedited determination is made by a participant,

11 beneficiary, or enrollee (or authorized represent12 ative) at any time during the process for mak13 ing a determination and a health care profes14 sional certifies, with the request, that a deter15 mination under the procedures described in sub16 paragraph (A) would seriously jeopardize the

17 life or health of the participant, beneficiary, or

18 enrollee or the ability of the participant, bene19 ficiary, or enrollee to maintain or regain max20 imum function. Such determination shall be

21 made in accordance with the medical exigencies

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

23 case later than 72 hours after the time the re24 quest for such appeal is received by the plan or

25 issuer under this subparagraph.
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1 (C) ONGOING CARE DETERMINATIONS.—

2 (i) IN GENERAL.—Subject to clause

3 (ii), in the case of a concurrent review de4 termination described in section

5 102(b)(1)(C)(i)(I), which results in a ter6 mination or reduction of such care, the

7 plan or issuer must provide notice of the

8 determination on the appeal under this

9 section by telephone and in printed form to

10 the individual or the individual’s designee

11 and the individual’s health care provider in

12 accordance with the medical exigencies of

13 the case and as soon as possible, with suf14 ficient time prior to the termination or re15 duction to allow for an external appeal

16 under section 104 to be completed before

17 the termination or reduction takes effect.

18 (ii) RULE OF CONSTRUCTION.—Clause

19 (i) shall not be construed as requiring

20 plans or issuers to provide coverage of care

21 that would exceed the coverage limitations

22 for such care.

23 (4) RETROSPECTIVE DETERMINATION.—A

24 group health plan, or health insurance issuer offer25 ing health insurance coverage, shall make a retro-
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1 spective determination on an appeal of a claim for

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

3 on which the plan or issuer receives necessary infor4 mation that is reasonably necessary to enable the

5 plan or issuer to make a determination on the ap6 peal and in no case later than 60 days after the

7 date the request for the appeal is received.

8 (c) CONDUCT OF REVIEW.—

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

10 claim for benefits under this section shall be con11 ducted by an individual with appropriate expertise

12 who was not involved in the initial determination.

13 (2) REVIEW OF MEDICAL DECISIONS BY PHYSI14 CIANS.—A review of an appeal of a denial of a claim

15 for benefits that is based on a lack of medical neces16 sity and appropriateness, or based on an experi17 mental or investigational treatment, or requires an

18 evaluation of medical facts, shall be made by a phy19 sician (allopathic or osteopathic) with appropriate

20 expertise (including, in the case of a child, appro21 priate pediatric expertise) who was not involved in

22 the initial determination.

23 (d) NOTICE OF DETERMINATION.—

24 (1) IN GENERAL.—Written notice of a deter25 mination made under an internal appeal of a denial
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1 of a claim for benefits shall be issued to the partici2 pant, beneficiary, or enrollee (or authorized rep3 resentative) and the treating health care professional

4 in accordance with the medical exigencies of the case

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

6 2 days after the date of completion of the review (or,

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

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

9 period referred to in such subparagraph).

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

11 plan or issuer under this section shall be treated as

12 the final determination of the plan or issuer on a de13 nial of a claim for benefits. The failure of a plan or

14 issuer to issue a determination on an appeal of a de15 nial of a claim for benefits under this section within

16 the applicable timeline established for such a deter17 mination shall be treated as a final determination on

18 an appeal of a denial of a claim for benefits for pur19 poses of proceeding to external review under section

20 104.

21 (3) REQUIREMENTS OF NOTICE.—With respect

22 to a determination made under this section, the no23 tice described in paragraph (1) shall be provided in

24 printed form and written in a manner calculated to
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1 be understood by the participant, beneficiary, or en2 rollee and shall include—

3 (A) the specific reasons for the determina4 tion (including a summary of the clinical or sci5 entific evidence used in making the determina6 tion);

7 (B) the procedures for obtaining additional

8 information concerning the determination; and

9 (C) notification of the right to an inde10 pendent external review under section 104 and

11 instructions on how to initiate such a review.

12 SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCE13 DURES.

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

15 plan, and a health insurance issuer offering health insur16 ance coverage, shall provide in accordance with this sec17 tion participants, beneficiaries, and enrollees (or author18 ized representatives) with access to an independent exter19 nal review for any denial of a claim for benefits.

20 (b) INITIATION OF THE INDEPENDENT EXTERNAL

21 REVIEW PROCESS.—

22 (1) TIME TO FILE.—A request for an inde23 pendent external review under this section shall be

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

25 after the date on which the participant, beneficiary,
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1 or enrollee receives notice of the denial under section

2 103(d) or notice of waiver of internal review under

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

4 issuer has failed to make a timely decision under

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

6 beneficiary that it has failed to make a timely deci7 sion and that the beneficiary must file an appeal

8 with an external review entity within 180 days if the

9 participant or beneficiary desires to file such an ap10 peal.

11 (2) FILING OF REQUEST.—

12 (A) IN GENERAL.—Subject to the suc13 ceeding provisions of this subsection, a group

14 health plan, and a health insurance issuer offer15 ing health insurance coverage, may—

16 (i) except as provided in subparagraph

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

18 in writing;

19 (ii) limit the filing of such a request

20 to the participant, beneficiary, or enrollee

21 involved (or an authorized representative);

22 (iii) except if waived by the plan or

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

24 access to an independent external review

25 under this section upon a final determina-
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1 tion of a denial of a claim for benefits

2 under the internal review procedure under

3 section 103;

4 (iv) except as provided in subpara5 graph (B)(ii), require payment of a filing

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

7 not exceed $25; and

8 (v) require that a request for review

9 include the consent of the participant, ben10 eficiary, or enrollee (or authorized rep11 resentative) for the release of necessary

12 medical information or records of the par13 ticipant, beneficiary, or enrollee to the

14 qualified external review entity only for

15 purposes of conducting external review ac16 tivities.

17 (B) REQUIREMENTS AND EXCEPTION RE18 LATING TO GENERAL RULE.—

19 (i) ORAL REQUESTS PERMITTED IN

20 EXPEDITED OR CONCURRENT CASES.—In

21 the case of an expedited or concurrent ex22 ternal review as provided for under sub23 section (e), the request may be made oral24 ly. A group health plan, or health insur25 ance issuer offering health insurance cov-
27

S 1052 PCS

1 erage, may require that the participant,

2 beneficiary, or enrollee (or authorized rep3 resentative) provide written confirmation

4 of such request in a timely manner on a

5 form provided by the plan or issuer. Such

6 written confirmation shall be treated as a

7 consent for purposes of subparagraph

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

9 for such a review, the making of the re10 quest (and the timing of such request)

11 shall be treated as the making at that time

12 of a request for such an external review

13 without regard to whether and when a

14 written confirmation of such request is

15 made.

16 (ii) EXCEPTION TO FILING FEE RE17 QUIREMENT.—

18 (I) INDIGENCY.—Payment of a

19 filing fee shall not be required under

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

21 certification (in a form and manner

22 specified in guidelines established by

23 the appropriate Secretary) that the

24 participant, beneficiary, or enrollee is
28

S 1052 PCS

1 indigent (as defined in such guide2 lines).

3 (II) FEE NOT REQUIRED.—Pay4 ment of a filing fee shall not be re5 quired under subparagraph (A)(iv) if

6 the plan or issuer waives the internal

7 appeals process under section

8 103(a)(4).

9 (III) REFUNDING OF FEE.—The

10 filing fee paid under subparagraph

11 (A)(iv) shall be refunded if the deter12 mination under the independent exter13 nal review is to reverse or modify the

14 denial which is the subject of the re15 view.

16 (IV) COLLECTION OF FILING

17 FEE.—The failure to pay such a filing

18 fee shall not prevent the consideration

19 of a request for review but, subject to

20 the preceding provisions of this clause,

21 shall constitute a legal liability to pay.

22 (c) REFERRAL TO QUALIFIED EXTERNAL REVIEW

23 ENTITY UPON REQUEST.—

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

25 for independent external review with the group
29

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1 health plan, or health insurance issuer offering

2 health insurance coverage, the plan or issuer shall

3 immediately refer such request, and forward the

4 plan or issuer’s initial decision (including the infor5 mation described in section 103(d)(3)(A)), to a

6 qualified external review entity selected in accord7 ance with this section.

8 (2) ACCESS TO PLAN OR ISSUER AND HEALTH

9 PROFESSIONAL INFORMATION.—With respect to an

10 independent external review conducted under this

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

12 authorized representative), the plan or issuer, and

13 the treating health care professional (if any) shall

14 provide the external review entity with information

15 that is necessary to conduct a review under this sec16 tion, as determined and requested by the entity.

17 Such information shall be provided not later than 5

18 days after the date on which the request for infor19 mation is received, or, in a case described in clause

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

21 time as may be necessary to comply with the appli22 cable timeline under such clause.

23 (3) SCREENING OF REQUESTS BY QUALIFIED

24 EXTERNAL REVIEW ENTITIES.—
30

S 1052 PCS

1 (A) IN GENERAL.—With respect to a re2 quest referred to a qualified external review en3 tity under paragraph (1) relating to a denial of

4 a claim for benefits, the entity shall refer such

5 request for the conduct of an independent med6 ical review unless the entity determines that—

7 (i) any of the conditions described in

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

9 have not been met;

10 (ii) the denial of the claim for benefits

11 does not involve a medically reviewable de12 cision under subsection (d)(2);

13 (iii) the denial of the claim for bene14 fits relates to a decision regarding whether

15 an individual is a participant, beneficiary,

16 or enrollee who is enrolled under the terms

17 and conditions of the plan or coverage (in18 cluding the applicability of any waiting pe19 riod under the plan or coverage); or

20 (iv) the denial of the claim for bene21 fits is a decision as to the application of

22 cost-sharing requirements or the applica23 tion of a specific exclusion or express limi24 tation on the amount, duration, or scope of

25 coverage of items or services under the
31

S 1052 PCS

1 terms and conditions of the plan or cov2 erage unless the decision is a denial de3 scribed in subsection (d)(2).

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

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

6 shall determine that the denial of a claim for benefits in7 volved is not eligible for independent medical review under

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

9 subparagraph (C).

10 (B) PROCESS FOR MAKING DETERMINA11 TIONS.—

12 (i) NO DEFERENCE TO PRIOR DETER13 MINATIONS.—In making determinations

14 under subparagraph (A), there shall be no

15 deference given to determinations made by

16 the plan or issuer or the recommendation

17 of a treating health care professional (if

18 any).

19 (ii) USE OF APPROPRIATE PER20 SONNEL.—A qualified external review enti21 ty shall use appropriately qualified per22 sonnel to make determinations under this

23 section.

24 (C) NOTICES AND GENERAL TIMELINES

25 FOR DETERMINATION.—
32

S 1052 PCS

1 (i) NOTICE IN CASE OF DENIAL OF

2 REFERRAL.—If the entity under this para3 graph does not make a referral to an inde4 pendent medical reviewer, the entity shall

5 provide notice to the plan or issuer, the

6 participant, beneficiary, or enrollee (or au7 thorized representative) filing the request,

8 and the treating health care professional

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

10 independent medical review. Such notice—

11 (I) shall be written (and, in addi12 tion, may be provided orally) in a

13 manner calculated to be understood

14 by a participant or enrollee;

15 (II) shall include the reasons for

16 the determination;

17 (III) include any relevant terms

18 and conditions of the plan or cov19 erage; and

20 (IV) include a description of any

21 further recourse available to the indi22 vidual.

23 (ii) GENERAL TIMELINE FOR DETER24 MINATIONS.—Upon receipt of information

25 under paragraph (2), the qualified external
33

S 1052 PCS

1 review entity, and if required the inde2 pendent medical reviewer, shall make a de3 termination within the overall timeline that

4 is applicable to the case under review as

5 described in subsection (e), except that if

6 the entity determines that a referral to an

7 independent medical reviewer is not re8 quired, the entity shall provide notice of

9 such determination to the participant, ben10 eficiary, or enrollee (or authorized rep11 resentative) within such timeline and with12 in 2 days of the date of such determina13 tion.

14 (d) INDEPENDENT MEDICAL REVIEW.—

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

16 entity determines under subsection (c) that a denial

17 of a claim for benefits is eligible for independent

18 medical review, the entity shall refer the denial in19 volved to an independent medical reviewer for the

20 conduct of an independent medical review under this

21 subsection.

22 (2) MEDICALLY REVIEWABLE DECISIONS.—A

23 denial of a claim for benefits is eligible for inde24 pendent medical review if the benefit for the item or

25 service for which the claim is made would be a cov-
34

S 1052 PCS

1 ered benefit under the terms and conditions of the

2 plan or coverage but for one (or more) of the fol3 lowing determinations:

4 (A) DENIALS BASED ON MEDICAL NECES5 SITY AND APPROPRIATENESS.—A determination

6 that the item or service is not covered because

7 it is not medically necessary and appropriate or

8 based on the application of substantially equiva9 lent terms.

10 (B) DENIALS BASED ON EXPERIMENTAL

11 OR INVESTIGATIONAL TREATMENT.—A deter12 mination that the item or service is not covered

13 because it is experimental or investigational or

14 based on the application of substantially equiva15 lent terms.

16 (C) DENIALS OTHERWISE BASED ON AN

17 EVALUATION OF MEDICAL FACTS.—A deter18 mination that the item or service or condition

19 is not covered based on grounds that require an

20 evaluation of the medical facts by a health care

21 professional in the specific case involved to de22 termine the coverage and extent of coverage of

23 the item or service or condition.

24 (3) INDEPENDENT MEDICAL REVIEW DETER25 MINATION.—
35

S 1052 PCS

1 (A) IN GENERAL.—An independent med2 ical reviewer under this section shall make a

3 new independent determination with respect to

4 whether or not the denial of a claim for a ben5 efit that is the subject of the review should be

6 upheld, reversed, or modified.

7 (B) STANDARD FOR DETERMINATION.—

8 The independent medical reviewer’s determina9 tion relating to the medical necessity and ap10 propriateness, or the experimental or investiga11 tion nature, or the evaluation of the medical

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

13 based on the medical condition of the partici14 pant, beneficiary, or enrollee (including the

15 medical records of the participant, beneficiary,

16 or enrollee) and valid, relevant scientific evi17 dence and clinical evidence, including peer-re18 viewed medical literature or findings and in19 cluding expert opinion.

20 (C) NO COVERAGE FOR EXCLUDED BENE21 FITS.—Nothing in this subsection shall be con22 strued to permit an independent medical re23 viewer to require that a group health plan, or

24 health insurance issuer offering health insur25 ance coverage, provide coverage for items or
36

S 1052 PCS

1 services for which benefits are specifically ex2 cluded or expressly limited under the plan or

3 coverage in the plain language of the plan docu4 ment (and which are disclosed under section

5 121(b)(1)(C)) except to the extent that the ap6 plication or interpretation of the exclusion or

7 limitation involves a determination described in

8 paragraph (2).

9 (D) EVIDENCE AND INFORMATION TO BE

10 USED IN MEDICAL REVIEWS.—In making a de11 termination under this subsection, the inde12 pendent medical reviewer shall also consider ap13 propriate and available evidence and informa14 tion, including the following:

15 (i) The determination made by the

16 plan or issuer with respect to the claim

17 upon internal review and the evidence,

18 guidelines, or rationale used by the plan or

19 issuer in reaching such determination.

20 (ii) The recommendation of the treat21 ing health care professional and the evi22 dence, guidelines, and rationale used by

23 the treating health care professional in

24 reaching such recommendation.
37

S 1052 PCS

1 (iii) Additional relevant evidence or

2 information obtained by the reviewer or

3 submitted by the plan, issuer, participant,

4 beneficiary, or enrollee (or an authorized

5 representative), or treating health care

6 professional.

7 (iv) The plan or coverage document.

8 (E) INDEPENDENT DETERMINATION.—In

9 making determinations under this subtitle, a

10 qualified external review entity and an inde11 pendent medical reviewer shall—

12 (i) consider the claim under review

13 without deference to the determinations

14 made by the plan or issuer or the rec15 ommendation of the treating health care

16 professional (if any); and

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

18 definition used by the plan or issuer of

19 ‘‘medically necessary and appropriate’’, or

20 ‘‘experimental or investigational’’, or other

21 substantially equivalent terms that are

22 used by the plan or issuer to describe med23 ical necessity and appropriateness or ex24 perimental or investigational nature of the

25 treatment.
38

S 1052 PCS

1 (F) DETERMINATION OF INDEPENDENT

2 MEDICAL REVIEWER.—An independent medical

3 reviewer shall, in accordance with the deadlines

4 described in subsection (e), prepare a written

5 determination to uphold, reverse, or modify the

6 denial under review. Such written determination

7 shall include—

8 (i) the determination of the reviewer;

9 (ii) the specific reasons of the re10 viewer for such determination, including a

11 summary of the clinical or scientific evi12 dence used in making the determination;

13 and

14 (iii) with respect to a determination to

15 reverse or modify the denial under review,

16 a timeframe within which the plan or

17 issuer must comply with such determina18 tion.

19 (G) NONBINDING NATURE OF ADDITIONAL

20 RECOMMENDATIONS.—In addition to the deter21 mination under subparagraph (F), the reviewer

22 may provide the plan or issuer and the treating

23 health care professional with additional rec24 ommendations in connection with such a deter25 mination, but any such recommendations shall
39

S 1052 PCS

1 not affect (or be treated as part of) the deter2 mination and shall not be binding on the plan

3 or issuer.

4 (e) TIMELINES AND NOTIFICATIONS.—

5 (1) TIMELINES FOR INDEPENDENT MEDICAL

6 REVIEW.—

7 (A) PRIOR AUTHORIZATION DETERMINA8 TION.—

9 (i) IN GENERAL.—The independent

10 medical reviewer (or reviewers) shall make

11 a determination on a denial of a claim for

12 benefits that is referred to the reviewer

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

14 the medical exigencies of the case and as

15 soon as possible, but in no case later than

16 14 days after the date of receipt of infor17 mation under subsection (c)(2) if the re18 view involves a prior authorization of items

19 or services and in no case later than 21

20 days after the date the request for external

21 review is received.

22 (ii) EXPEDITED DETERMINATION.—

23 Notwithstanding clause (i) and subject to

24 clause (iii), the independent medical re25 viewer (or reviewers) shall make an expe-
40

S 1052 PCS

1 dited determination on a denial of a claim

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

3 request for such an expedited determina4 tion is made by a participant, beneficiary,

5 or enrollee (or authorized representative)

6 at any time during the process for making

7 a determination, and a health care profes8 sional certifies, with the request, that a de9 termination under the timeline described in

10 clause (i) would seriously jeopardize the

11 life or health of the participant, bene12 ficiary, or enrollee or the ability of the par13 ticipant, beneficiary, or enrollee to main14 tain or regain maximum function. Such de15 termination shall be made as soon in ac16 cordance with the medical exigencies of the

17 case and as soon as possible, but in no

18 case later than 72 hours after the time the

19 request for external review is received by

20 the qualified external review entity.

21 (iii) ONGOING CARE DETERMINA22 TION.—Notwithstanding clause (i), in the

23 case of a review described in such sub24 clause that involves a termination or reduc25 tion of care, the notice of the determina-
41

S 1052 PCS

1 tion shall be completed not later than 24

2 hours after the time the request for exter3 nal review is received by the qualified ex4 ternal review entity and before the end of

5 the approved period of care.

6 (B) RETROSPECTIVE DETERMINATION.—

7 The independent medical reviewer (or review8 ers) shall complete a review in the case of a ret9 rospective determination on an appeal of a de10 nial of a claim for benefits that is referred to

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

12 later than 30 days after the date of receipt of

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

14 case later than 60 days after the date the re15 quest for external review is received by the

16 qualified external review entity.

17 (2) NOTIFICATION OF DETERMINATION.—The

18 external review entity shall ensure that the plan or

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

20 authorized representative) and the treating health

21 care professional (if any) receives a copy of the writ22 ten determination of the independent medical re23 viewer prepared under subsection (d)(3)(F). Nothing

24 in this paragraph shall be construed as preventing
42

S 1052 PCS

1 an entity or reviewer from providing an initial oral

2 notice of the reviewer’s determination.

3 (3) FORM OF NOTICES.—Determinations and

4 notices under this subsection shall be written in a

5 manner calculated to be understood by a participant.

6 (f) COMPLIANCE.—

7 (1) APPLICATION OF DETERMINATIONS.—

8 (A) EXTERNAL REVIEW DETERMINATIONS

9 BINDING ON PLAN.—The determinations of an

10 external review entity and an independent med11 ical reviewer under this section shall be binding

12 upon the plan or issuer involved.

13 (B) COMPLIANCE WITH DETERMINA14 TION.—If the determination of an independent

15 medical reviewer is to reverse or modify the de16 nial, the plan or issuer, upon the receipt of such

17 determination, shall authorize coverage to com18 ply with the medical reviewer’s determination in

19 accordance with the timeframe established by

20 the medical reviewer.

21 (2) FAILURE TO COMPLY.—

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

23 to comply with the timeframe established under

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

25 beneficiary, or enrollee, where such failure to
43

S 1052 PCS

1 comply is caused by the plan or issuer, the par2 ticipant, beneficiary, or enrollee may obtain the

3 items or services involved (in a manner con4 sistent with the determination of the inde5 pendent external reviewer) from any provider

6 regardless of whether such provider is a partici7 pating provider under the plan or coverage.

8 (B) REIMBURSEMENT.—

9 (i) IN GENERAL.—Where a partici10 pant, beneficiary, or enrollee obtains items

11 or services in accordance with subpara12 graph (A), the plan or issuer involved shall

13 provide for reimbursement of the costs of

14 such items or services. Such reimburse15 ment shall be made to the treating health

16 care professional or to the participant, ben17 eficiary, or enrollee (in the case of a partic18 ipant, beneficiary, or enrollee who pays for

19 the costs of such items or services).

20 (ii) AMOUNT.—The plan or issuer

21 shall fully reimburse a professional, partici22 pant, beneficiary, or enrollee under clause

23 (i) for the total costs of the items or serv24 ices provided (regardless of any plan limi25 tations that may apply to the coverage of
44

S 1052 PCS

1 such items or services) so long as the items

2 or services were provided in a manner con3 sistent with the determination of the inde4 pendent medical reviewer.

5 (C) FAILURE TO REIMBURSE.—Where a

6 plan or issuer fails to provide reimbursement to

7 a professional, participant, beneficiary, or en8 rollee in accordance with this paragraph, the

9 professional, participant, beneficiary, or enrollee

10 may commence a civil action (or utilize other

11 remedies available under law) to recover only

12 the amount of any such reimbursement that is

13 owed by the plan or issuer and any necessary

14 legal costs or expenses (including attorney’s

15 fees) incurred in recovering such reimburse16 ment.

17 (D) AVAILABLE REMEDIES.—The remedies

18 provided under this paragraph are in addition

19 to any other available remedies.

20 (3) PENALTIES AGAINST AUTHORIZED OFFI21 CIALS FOR REFUSING TO AUTHORIZE THE DETER22 MINATION OF AN EXTERNAL REVIEW ENTITY.—

23 (A) MONETARY PENALTIES.—

24 (i) IN GENERAL.—In any case in

25 which the determination of an external re-
45

S 1052 PCS

1 view entity is not followed by a group

2 health plan, or by a health insurance issuer

3 offering health insurance coverage, any

4 person who, acting in the capacity of au5 thorizing the benefit, causes such refusal

6 may, in the discretion in a court of com7 petent jurisdiction, be liable to an ag8 grieved participant, beneficiary, or enrollee

9 for a civil penalty in an amount of up to

10 $1,000 a day from the date on which the

11 determination was transmitted to the plan

12 or issuer by the external review entity until

13 the date the refusal to provide the benefit

14 is corrected.

15 (ii) ADDITIONAL PENALTY FOR FAIL16 ING TO FOLLOW TIMELINE.—In any case

17 in which treatment was not commenced by

18 the plan in accordance with the determina19 tion of an independent external reviewer,

20 the Secretary shall assess a civil penalty of

21 $10,000 against the plan and the plan

22 shall pay such penalty to the participant,

23 beneficiary, or enrollee involved.

24 (B) CEASE AND DESIST ORDER AND

25 ORDER OF ATTORNEY’S FEES.—In any action
46

S 1052 PCS

1 described in subparagraph (A) brought by a

2 participant, beneficiary, or enrollee with respect

3 to a group health plan, or a health insurance

4 issuer offering health insurance coverage, in

5 which a plaintiff alleges that a person referred

6 to in such subparagraph has taken an action re7 sulting in a refusal of a benefit determined by

8 an external appeal entity to be covered, or has

9 failed to take an action for which such person

10 is responsible under the terms and conditions of

11 the plan or coverage and which is necessary

12 under the plan or coverage for authorizing a

13 benefit, the court shall cause to be served on

14 the defendant an order requiring the

15 defendant—

16 (i) to cease and desist from the al17 leged action or failure to act; and

18 (ii) to pay to the plaintiff a reasonable

19 attorney’s fee and other reasonable costs

20 relating to the prosecution of the action on

21 the charges on which the plaintiff prevails.

22 (C) ADDITIONAL CIVIL PENALTIES.—

23 (i) IN GENERAL.—In addition to any

24 penalty imposed under subparagraph (A)

25 or (B), the appropriate Secretary may as-
47

S 1052 PCS

1 sess a civil penalty against a person acting

2 in the capacity of authorizing a benefit de3 termined by an external review entity for

4 one or more group health plans, or health

5 insurance issuers offering health insurance

6 coverage, for—

7 (I) any pattern or practice of re8 peated refusal to authorize a benefit

9 determined by an external appeal enti10 ty to be covered; or

11 (II) any pattern or practice of re12 peated violations of the requirements

13 of this section with respect to such

14 plan or coverage.

15 (ii) STANDARD OF PROOF AND

16 AMOUNT OF PENALTY.—Such penalty shall

17 be payable only upon proof by clear and

18 convincing evidence of such pattern or

19 practice and shall be in an amount not to

20 exceed the lesser of—

21 (I) 25 percent of the aggregate

22 value of benefits shown by the appro23 priate Secretary to have not been pro24 vided, or unlawfully delayed, in viola-
48

S 1052 PCS

1 tion of this section under such pattern

2 or practice; or

3 (II) $500,000.

4 (D) REMOVAL AND DISQUALIFICATION.—

5 Any person acting in the capacity of author6 izing benefits who has engaged in any such pat7 tern or practice described in subparagraph

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

9 the petition of the appropriate Secretary, may

10 be removed by the court from such position,

11 and from any other involvement, with respect to

12 such a plan or coverage, and may be precluded

13 from returning to any such position or involve14 ment for a period determined by the court.

15 (4) PROTECTION OF LEGAL RIGHTS.—Nothing

16 in this subsection or subtitle shall be construed as

17 altering or eliminating any cause of action or legal

18 rights or remedies of participants, beneficiaries, en19 rollees, and others under State or Federal law (in20 cluding sections 502 and 503 of the Employee Re21 tirement Income Security Act of 1974), including

22 the right to file judicial actions to enforce rights.

23 (g) QUALIFICATIONS OF INDEPENDENT MEDICAL

24 REVIEWERS.—
49

S 1052 PCS

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

2 more individuals to conduct independent medical re3 view under subsection (c), the qualified external re4 view entity shall ensure that—

5 (A) each independent medical reviewer

6 meets the qualifications described in paragraphs

7 (2) and (3);

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

9 such reviewer meets the requirements described

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

11 (C) compensation provided by the entity to

12 the reviewer is consistent with paragraph (6).

13 (2) LICENSURE AND EXPERTISE.—Each inde14 pendent medical reviewer shall be a physician

15 (allopathic or osteopathic) or health care profes16 sional who—

17 (A) is appropriately credentialed or li18 censed in 1 or more States to deliver health

19 care services; and

20 (B) typically treats the condition, makes

21 the diagnosis, or provides the type of treatment

22 under review.

23 (3) INDEPENDENCE.—
50

S 1052 PCS

1 (A) IN GENERAL.—Subject to subpara2 graph (B), each independent medical reviewer

3 in a case shall—

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

5 in paragraph (7));

6 (ii) not have a material familial, fi7 nancial, or professional relationship with

8 such a party; and

9 (iii) not otherwise have a conflict of

10 interest with such a party (as determined

11 under regulations).

12 (B) EXCEPTION.—Nothing in subpara13 graph (A) shall be construed to—

14 (i) prohibit an individual, solely on the

15 basis of affiliation with the plan or issuer,

16 from serving as an independent medical re17 viewer if—

18 (I) a non-affiliated individual is

19 not reasonably available;

20 (II) the affiliated individual is

21 not involved in the provision of items

22 or services in the case under review;

23 (III) the fact of such an affili24 ation is disclosed to the plan or issuer

25 and the participant, beneficiary, or
51

S 1052 PCS

1 enrollee (or authorized representative)

2 and neither party objects; and

3 (IV) the affiliated individual is

4 not an employee of the plan or issuer

5 and does not provide services exclu6 sively or primarily to or on behalf of

7 the plan or issuer;

8 (ii) prohibit an individual who has

9 staff privileges at the institution where the

10 treatment involved takes place from serv11 ing as an independent medical reviewer

12 merely on the basis of such affiliation if

13 the affiliation is disclosed to the plan or

14 issuer and the participant, beneficiary, or

15 enrollee (or authorized representative), and

16 neither party objects; or

17 (iii) prohibit receipt of compensation

18 by an independent medical reviewer from

19 an entity if the compensation is provided

20 consistent with paragraph (6).

21 (4) PRACTICING HEALTH CARE PROFESSIONAL

22 IN SAME FIELD.—

23 (A) IN GENERAL.—In a case involving

24 treatment, or the provision of items or

25 services—
52

S 1052 PCS

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

2 a practicing physician (allopathic or osteo3 pathic) of the same or similar specialty, as

4 a physician who typically treats the condi5 tion, makes the diagnosis, or provides the

6 type of treatment under review; or

7 (ii) by a health care professional

8 (other than a physician), a reviewer shall

9 be a practicing physician (allopathic or os10 teopathic) or, if determined appropriate by

11 the qualified external review entity, a prac12 ticing health care professional (other than

13 such a physician), of the same or similar

14 specialty as the health care professional

15 who typically treats the condition, makes

16 the diagnosis, or provides the type of treat17 ment under review.

18 (B) PRACTICING DEFINED.—For purposes

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

20 with respect to an individual who is a physician

21 or other health care professional that the indi22 vidual provides health care services to individual

23 patients on average at least 2 days per week.
53

S 1052 PCS

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

2 external review relating to a child, a reviewer shall

3 have expertise under paragraph (2) in pediatrics.

4 (6) LIMITATIONS ON REVIEWER COMPENSA5 TION.—Compensation provided by a qualified exter6 nal review entity to an independent medical reviewer

7 in connection with a review under this section

8 shall—

9 (A) not exceed a reasonable level; and

10 (B) not be contingent on the decision ren11 dered by the reviewer.

12 (7) RELATED PARTY DEFINED.—For purposes

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

14 respect to a denial of a claim under a plan or cov15 erage relating to a participant, beneficiary, or en16 rollee, any of the following:

17 (A) The plan, plan sponsor, or issuer in18 volved, or any fiduciary, officer, director, or em19 ployee of such plan, plan sponsor, or issuer.

20 (B) The participant, beneficiary, or en21 rollee (or authorized representative).

22 (C) The health care professional that pro23 vides the items or services involved in the de24 nial.
54

S 1052 PCS

1 (D) The institution at which the items or

2 services (or treatment) involved in the denial

3 are provided.

4 (E) The manufacturer of any drug or

5 other item that is included in the items or serv6 ices involved in the denial.

7 (F) Any other party determined under any

8 regulations to have a substantial interest in the

9 denial involved.

10 (h) QUALIFIED EXTERNAL REVIEW ENTITIES.—

11 (1) SELECTION OF QUALIFIED EXTERNAL RE12 VIEW ENTITIES.—

13 (A) LIMITATION ON PLAN OR ISSUER SE14 LECTION.—The appropriate Secretary shall im15 plement procedures—

16 (i) to assure that the selection process

17 among qualified external review entities

18 will not create any incentives for external

19 review entities to make a decision in a bi20 ased manner; and

21 (ii) for auditing a sample of decisions

22 by such entities to assure that no such de23 cisions are made in a biased manner.

24 No such selection process under the procedures

25 implemented by the appropriate Secretary may
55

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1 give either the patient or the plan or issuer any

2 ability to determine or influence the selection of

3 a qualified external review entity to review the

4 case of any participant, beneficiary, or enrollee.

5 (B) STATE AUTHORITY WITH RESPECT TO

6 QUALIFIED EXTERNAL REVIEW ENTITIES FOR

7 HEALTH INSURANCE ISSUERS.—With respect to

8 health insurance issuers offering health insur9 ance coverage in a State, the State may provide

10 for external review activities to be conducted by

11 a qualified external appeal entity that is des12 ignated by the State or that is selected by the

13 State in a manner determined by the State to

14 assure an unbiased determination.

15 (2) CONTRACT WITH QUALIFIED EXTERNAL RE16 VIEW ENTITY.—Except as provided in paragraph

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

18 issuer under this section shall be conducted under a

19 contract between the plan or issuer and 1 or more

20 qualified external review entities (as defined in para21 graph (4)(A)).

22 (3) TERMS AND CONDITIONS OF CONTRACT.—

23 The terms and conditions of a contract under para24 graph (2) shall—
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1 (A) be consistent with the standards the

2 appropriate Secretary shall establish to assure

3 there is no real or apparent conflict of interest

4 in the conduct of external review activities; and

5 (B) provide that the costs of the external

6 review process shall be borne by the plan or

7 issuer.

8 Subparagraph (B) shall not be construed as apply9 ing to the imposition of a filing fee under subsection

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

11 beneficiary, or enrollee (or authorized representative)

12 or treating health care professional (if any) in sup13 port of the review, including the provision of addi14 tional evidence or information.

15 (4) QUALIFICATIONS.—

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

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

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

19 initially certified (and periodically recertified)

20 under subparagraph (C) as meeting the fol21 lowing requirements:

22 (i) The entity has (directly or through

23 contracts or other arrangements) sufficient

24 medical, legal, and other expertise and suf25 ficient staffing to carry out duties of a
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1 qualified external review entity under this

2 section on a timely basis, including making

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

4 and providing for independent medical re5 views under subsection (d).

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

7 or an affiliate or a subsidiary of a plan or

8 issuer, and is not an affiliate or subsidiary

9 of a professional or trade association of

10 plans or issuers or of health care providers.

11 (iii) The entity has provided assur12 ances that it will conduct external review

13 activities consistent with the applicable re14 quirements of this section and standards

15 specified in subparagraph (C), including

16 that it will not conduct any external review

17 activities in a case unless the independence

18 requirements of subparagraph (B) are met

19 with respect to the case.

20 (iv) The entity has provided assur21 ances that it will provide information in a

22 timely manner under subparagraph (D).

23 (v) The entity meets such other re24 quirements as the appropriate Secretary

25 provides by regulation.
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1 (B) INDEPENDENCE REQUIREMENTS.—

2 (i) IN GENERAL.—Subject to clause

3 (ii), an entity meets the independence re4 quirements of this subparagraph with re5 spect to any case if the entity—

6 (I) is not a related party (as de7 fined in subsection (g)(7));

8 (II) does not have a material fa9 milial, financial, or professional rela10 tionship with such a party; and

11 (III) does not otherwise have a

12 conflict of interest with such a party

13 (as determined under regulations).

14 (ii) EXCEPTION FOR REASONABLE

15 COMPENSATION.—Nothing in clause (i)

16 shall be construed to prohibit receipt by a

17 qualified external review entity of com18 pensation from a plan or issuer for the

19 conduct of external review activities under

20 this section if the compensation is provided

21 consistent with clause (iii).

22 (iii) LIMITATIONS ON ENTITY COM23 PENSATION.—Compensation provided by a

24 plan or issuer to a qualified external review
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1 entity in connection with reviews under

2 this section shall—

3 (I) not exceed a reasonable level;

4 and

5 (II) not be contingent on any de6 cision rendered by the entity or by

7 any independent medical reviewer.

8 (C) CERTIFICATION AND RECERTIFICATION

9 PROCESS.—

10 (i) IN GENERAL.—The initial certifi11 cation and recertification of a qualified ex12 ternal review entity shall be made—

13 (I) under a process that is recog14 nized or approved by the appropriate

15 Secretary; or

16 (II) by a qualified private stand17 ard-setting organization that is ap18 proved by the appropriate Secretary

19 under clause (iii).

20 In taking action under subclause (I), the

21 appropriate Secretary shall give deference

22 to entities that are under contract with the

23 Federal Government or with an applicable

24 State authority to perform functions of the
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1 type performed by qualified external review

2 entities.

3 (ii) PROCESS.—The appropriate Sec4 retary shall not recognize or approve a

5 process under clause (i)(I) unless the proc6 ess applies standards (as promulgated in

7 regulations) that ensure that a qualified

8 external review entity—

9 (I) will carry out (and has car10 ried out, in the case of recertification)

11 the responsibilities of such an entity

12 in accordance with this section, in13 cluding meeting applicable deadlines;

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

15 the case of recertification) appropriate

16 indicators of fiscal integrity;

17 (III) will maintain (and has

18 maintained, in the case of recertifi19 cation) appropriate confidentiality

20 with respect to individually identifi21 able health information obtained in

22 the course of conducting external re23 view activities; and
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1 (IV) in the case recertification,

2 shall review the matters described in

3 clause (iv).

4 (iii) APPROVAL OF QUALIFIED PRI5 VATE STANDARD-SETTING ORGANIZA6 TIONS.—For purposes of clause (i)(II), the

7 appropriate Secretary may approve a quali8 fied private standard-setting organization

9 if such Secretary finds that the organiza10 tion only certifies (or recertifies) external

11 review entities that meet at least the

12 standards required for the certification (or

13 recertification) of external review entities

14 under clause (ii).

15 (iv) CONSIDERATIONS IN RECERTIFI16 CATIONS.—In conducting recertifications of

17 a qualified external review entity under

18 this paragraph, the appropriate Secretary

19 or organization conducting the recertifi20 cation shall review compliance of the entity

21 with the requirements for conducting ex22 ternal review activities under this section,

23 including the following:

24 (I) Provision of information

25 under subparagraph (D).
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1 (II) Adherence to applicable

2 deadlines (both by the entity and by

3 independent medical reviewers it re4 fers cases to).

5 (III) Compliance with limitations

6 on compensation (with respect to both

7 the entity and independent medical re8 viewers it refers cases to).

9 (IV) Compliance with applicable

10 independence requirements.

11 (v) PERIOD OF CERTIFICATION OR RE12 CERTIFICATION.—A certification or recer13 tification provided under this paragraph

14 shall extend for a period not to exceed 2

15 years.

16 (vi) REVOCATION.—A certification or

17 recertification under this paragraph may

18 be revoked by the appropriate Secretary or

19 by the organization providing such certifi20 cation upon a showing of cause.

21 (vii) SUFFICIENT NUMBER OF ENTI22 TIES.—The appropriate Secretary shall

23 certify and recertify a number of external

24 review entities which is sufficient to ensure
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1 the timely and efficient provision of review

2 services.

3 (D) PROVISION OF INFORMATION.—

4 (i) IN GENERAL.—A qualified external

5 review entity shall provide to the appro6 priate Secretary, in such manner and at

7 such times as such Secretary may require,

8 such information (relating to the denials

9 which have been referred to the entity for

10 the conduct of external review under this

11 section) as such Secretary determines ap12 propriate to assure compliance with the

13 independence and other requirements of

14 this section to monitor and assess the qual15 ity of its external review activities and lack

16 of bias in making determinations. Such in17 formation shall include information de18 scribed in clause (ii) but shall not include

19 individually identifiable medical informa20 tion.

21 (ii) INFORMATION TO BE IN22 CLUDED.—The information described in

23 this subclause with respect to an entity is

24 as follows:
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1 (I) The number and types of de2 nials for which a request for review

3 has been received by the entity.

4 (II) The disposition by the entity

5 of such denials, including the number

6 referred to a independent medical re7 viewer and the reasons for such dis8 positions (including the application of

9 exclusions), on a plan or issuer-spe10 cific basis and on a health care spe11 cialty-specific basis.

12 (III) The length of time in mak13 ing determinations with respect to

14 such denials.

15 (IV) Updated information on the

16 information required to be submitted

17 as a condition of certification with re18 spect to the entity’s performance of

19 external review activities.

20 (iii) INFORMATION TO BE PROVIDED

21 TO CERTIFYING ORGANIZATION.—

22 (I) IN GENERAL.—In the case of

23 a qualified external review entity

24 which is certified (or recertified)

25 under this subsection by a qualified
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1 private standard-setting organization,

2 at the request of the organization, the

3 entity shall provide the organization

4 with the information provided to the

5 appropriate Secretary under clause

6 (i).

7 (II) ADDITIONAL INFORMA8 TION.—Nothing in this subparagraph

9 shall be construed as preventing such

10 an organization from requiring addi11 tional information as a condition of

12 certification or recertification of an

13 entity.

14 (iv) USE OF INFORMATION.—Informa15 tion provided under this subparagraph may

16 be used by the appropriate Secretary and

17 qualified private standard-setting organiza18 tions to conduct oversight of qualified ex19 ternal review entities, including recertifi20 cation of such entities, and shall be made

21 available to the public in an appropriate

22 manner.

23 (E) LIMITATION ON LIABILITY.—No quali24 fied external review entity having a contract

25 with a plan or issuer, and no person who is em-
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1 ployed by any such entity or who furnishes pro2 fessional services to such entity (including as an

3 independent medical reviewer), shall be held by

4 reason of the performance of any duty, func5 tion, or activity required or authorized pursuant

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

7 of the United States or of any State (or polit8 ical subdivision thereof) if there was no actual

9 malice or gross misconduct in the performance

10 of such duty, function, or activity.

11 Subtitle B—Access to Care

12 SEC. 111. CONSUMER CHOICE OPTION.

13 (a) IN GENERAL.—If—

14 (1) a health insurance issuer providing health

15 insurance coverage in connection with a group health

16 plan offers to enrollees health insurance coverage

17 which provides for coverage of services only if such

18 services are furnished through health care profes19 sionals and providers who are members of a network

20 of health care professionals and providers who have

21 entered into a contract with the issuer to provide

22 such services, or

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

24 beneficiaries health benefits which provide for cov25 erage of services only if such services are furnished
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1 through health care professionals and providers who

2 are members of a network of health care profes3 sionals and providers who have entered into a con4 tract with the plan to provide such services,

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

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

7 the time of enrollment and during an annual open season

8 as provided under subsection (c)) the option of health in9 surance coverage or health benefits which provide for cov10 erage of such services which are not furnished through

11 health care professionals and providers who are members

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

13 beneficiaries are offered such non-network coverage

14 through another group health plan or through another

15 health insurance issuer in the group market.

16 (b) ADDITIONAL COSTS.—The amount of any addi17 tional premium charged by the health insurance issuer or

18 group health plan for the additional cost of the creation

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

20 and the amount of any additional cost sharing imposed

21 under such option shall be borne by the enrollee, partici22 pant, or beneficiary unless it is paid by the health plan

23 sponsor or group health plan through agreement with the

24 health insurance issuer.
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1 (c) OPEN SEASON.—An enrollee, participant, or ben2 eficiary, may change to the offering provided under this

3 section only during a time period determined by the health

4 insurance issuer or group health plan. Such time period

5 shall occur at least annually.

6 SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.

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

8 health insurance issuer that offers health insurance cov9 erage, requires or provides for designation by a partici10 pant, beneficiary, or enrollee of a participating primary

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

12 participant, beneficiary, and enrollee to designate any par13 ticipating primary care provider who is available to accept

14 such individual.

15 (b) SPECIALISTS.—

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

17 group health plan and a health insurance issuer that

18 offers health insurance coverage shall permit each

19 participant, beneficiary, or enrollee to receive medi20 cally necessary and appropriate specialty care, pur21 suant to appropriate referral procedures, from any

22 qualified participating health care professional who

23 is available to accept such individual for such care.

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

25 apply to specialty care if the plan or issuer clearly
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1 informs participants, beneficiaries, and enrollees of

2 the limitations on choice of participating health care

3 professionals with respect to such care.

4 (3) CONSTRUCTION.—Nothing in this sub5 section shall be construed as affecting the applica6 tion of section 114 (relating to access to specialty

7 care).

8 SEC. 113. ACCESS TO EMERGENCY CARE.

9 (a) COVERAGE OF EMERGENCY SERVICES.—

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

11 health insurance coverage offered by a health insur12 ance issuer, provides or covers any benefits with re13 spect to services in an emergency department of a

14 hospital, the plan or issuer shall cover emergency

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

16 (A) without the need for any prior author17 ization determination;

18 (B) whether the health care provider fur19 nishing such services is a participating provider

20 with respect to such services;

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

22 are provided to a participant, beneficiary, or

23 enrollee—
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1 (i) by a nonparticipating health care

2 provider with or without prior authoriza3 tion, or

4 (ii) by a participating health care pro5 vider without prior authorization,

6 the participant, beneficiary, or enrollee is not

7 liable for amounts that exceed the amounts of

8 liability that would be incurred if the services

9 were provided by a participating health care

10 provider with prior authorization; and

11 (D) without regard to any other term or

12 condition of such coverage (other than exclusion

13 or coordination of benefits, or an affiliation or

14 waiting period, permitted under section 2701 of

15 the Public Health Service Act, section 701 of

16 the Employee Retirement Income Security Act

17 of 1974, or section 9801 of the Internal Rev18 enue Code of 1986, and other than applicable

19 cost-sharing).

20 (2) DEFINITIONS.—In this section:

21 (A) EMERGENCY MEDICAL CONDITION.—

22 The term ‘‘emergency medical condition’’ means

23 a medical condition manifesting itself by acute

24 symptoms of sufficient severity (including se25 vere pain) such that a prudent layperson, who
71

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1 possesses an average knowledge of health and

2 medicine, could reasonably expect the absence

3 of immediate medical attention to result in a

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

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

6 Act.

7 (B) EMERGENCY SERVICES.—The term

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

9 emergency medical condition—

10 (i) a medical screening examination

11 (as required under section 1867 of the So12 cial Security Act) that is within the capa13 bility of the emergency department of a

14 hospital, including ancillary services rou15 tinely available to the emergency depart16 ment to evaluate such emergency medical

17 condition, and

18 (ii) within the capabilities of the staff

19 and facilities available at the hospital, such

20 further medical examination and treatment

21 as are required under section 1867 of such

22 Act to stabilize the patient.

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

24 with respect to an emergency medical condition

25 (as defined in subparagraph (A)), has the
72

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

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

3 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

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

5 health insurance coverage offered by a health insurance

6 issuer, must provide reimbursement for maintenance care

7 and post-stabilization care in accordance with the require8 ments of section 1852(d)(2) of the Social Security Act (42

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

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

11 (c) COVERAGE OF EMERGENCY AMBULANCE SERV12 ICES.—

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

14 health insurance coverage provided by a health in15 surance issuer, provides any benefits with respect to

16 ambulance services and emergency services, the plan

17 or issuer shall cover emergency ambulance services

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

19 plan or coverage under the same terms and condi20 tions under subparagraphs (A) through (D) of sub21 section (a)(1) under which coverage is provided for

22 emergency services.

23 (2) EMERGENCY AMBULANCE SERVICES.—For

24 purposes of this subsection, the term ‘‘emergency

25 ambulance services’’ means ambulance services (as
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1 defined for purposes of section 1861(s)(7) of the So2 cial Security Act) furnished to transport an indi3 vidual who has an emergency medical condition (as

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

5 receipt of emergency services (as defined in sub6 section (a)(2)(B)) in a case in which the emergency

7 services are covered under the plan or coverage pur8 suant to subsection (a)(1) and a prudent layperson,

9 with an average knowledge of health and medicine,

10 could reasonably expect that the absence of such

11 transport would result in placing the health of the

12 individual in serious jeopardy, serious impairment of

13 bodily function, or serious dysfunction of any bodily

14 organ or part.

15 SEC. 114. TIMELY ACCESS TO SPECIALISTS.

16 (a) TIMELY ACCESS.—

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

18 health insurance issuer offering health insurance

19 coverage shall ensure that participants, beneficiaries,

20 and enrollees receive timely access to specialists who

21 are appropriate to the condition of, and accessible

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

23 such specialty care is a covered benefit under the

24 plan or coverage.
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1 (2) RULE OF CONSTRUCTION.—Nothing in

2 paragraph (1) shall be construed—

3 (A) to require the coverage under a group

4 health plan or health insurance coverage of ben5 efits or services;

6 (B) to prohibit a plan or issuer from in7 cluding providers in the network only to the ex8 tent necessary to meet the needs of the plan’s

9 or issuer’s participants, beneficiaries, or enroll10 ees; or

11 (C) to override any State licensure or

12 scope-of-practice law.

13 (3) ACCESS TO CERTAIN PROVIDERS.—

14 (A) IN GENERAL.—With respect to spe15 cialty care under this section, if a participating

16 specialist is not available and qualified to pro17 vide such care to the participant, beneficiary, or

18 enrollee, the plan or issuer shall provide for cov19 erage of such care by a nonparticipating spe20 cialist.

21 (B) TREATMENT OF NONPARTICIPATING

22 PROVIDERS.—If a participant, beneficiary, or

23 enrollee receives care from a nonparticipating

24 specialist pursuant to subparagraph (A), such

25 specialty care shall be provided at no additional
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1 cost to the participant, beneficiary, or enrollee

2 beyond what the participant, beneficiary, or en3 rollee would otherwise pay for such specialty

4 care if provided by a participating specialist.

5 (b) REFERRALS.—

6 (1) AUTHORIZATION.—Subject to subsection

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

8 issuer may require an authorization in order to ob9 tain coverage for specialty services under this sec10 tion. Any such authorization—

11 (A) shall be for an appropriate duration of

12 time or number of referrals, including an au13 thorization for a standing referral where appro14 priate; and

15 (B) may not be refused solely because the

16 authorization involves services of a nonpartici17 pating specialist (described in subsection

18 (a)(3)).

19 (2) REFERRALS FOR ONGOING SPECIAL CONDI20 TIONS.—

21 (A) IN GENERAL.—Subject to subsection

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

23 issuer shall permit a participant, beneficiary, or

24 enrollee who has an ongoing special condition

25 (as defined in subparagraph (B)) to receive a
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1 referral to a specialist for the treatment of such

2 condition and such specialist may authorize

3 such referrals, procedures, tests, and other

4 medical services with respect to such condition,

5 or coordinate the care for such condition, sub6 ject to the terms of a treatment plan (if any)

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

8 condition.

9 (B) ONGOING SPECIAL CONDITION DE10 FINED.—In this subsection, the term ‘‘ongoing

11 special condition’’ means a condition or disease

12 that—

13 (i) is life-threatening, degenerative,

14 potentially disabling, or congenital; and

15 (ii) requires specialized medical care

16 over a prolonged period of time.

17 (c) TREATMENT PLANS.—

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

19 health insurance issuer may require that the spe20 cialty care be provided—

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

22 if the treatment plan—

23 (i) is developed by the specialist, in

24 consultation with the case manager or pri-
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1 mary care provider, and the participant,

2 beneficiary, or enrollee, and

3 (ii) is approved by the plan or issuer

4 in a timely manner, if the plan or issuer

5 requires such approval; and

6 (B) in accordance with applicable quality

7 assurance and utilization review standards of

8 the plan or issuer.

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

10 shall be construed as prohibiting a plan or issuer

11 from requiring the specialist to provide the plan or

12 issuer with regular updates on the specialty care

13 provided, as well as all other reasonably necessary

14 medical information.

15 (d) SPECIALIST DEFINED.—For purposes of this sec16 tion, the term ‘‘specialist’’ means, with respect to the con17 dition of the participant, beneficiary, or enrollee, a health

18 care professional, facility, or center that has adequate ex19 pertise through appropriate training and experience (in20 cluding, in the case of a child, appropriate pediatric exper21 tise) to provide high quality care in treating the condition.

22 SEC. 115. PATIENT ACCESS TO OBSTETRIC AND GYNECO23 LOGICAL CARE.

24 (a) GENERAL RIGHTS.—
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1 (1) DIRECT ACCESS.—A group health plan, or

2 health insurance issuer offering health insurance

3 coverage, described in subsection (b) may not re4 quire authorization or referral by the plan, issuer, or

5 any person (including a primary care provider de6 scribed in subsection (b)(2)) in the case of a female

7 participant, beneficiary, or enrollee who seeks cov8 erage for obstetrical or gynecological care provided

9 by a participating health care professional who spe10 cializes in obstetrics or gynecology.

11 (2) OBSTETRICAL AND GYNECOLOGICAL

12 CARE.—A group health plan or health insurance

13 issuer described in subsection (b) shall treat the pro14 vision of obstetrical and gynecological care, and the

15 ordering of related obstetrical and gynecological

16 items and services, pursuant to the direct access de17 scribed under paragraph (1), by a participating

18 health care professional who specializes in obstetrics

19 or gynecology as the authorization of the primary

20 care provider.

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

22 or health insurance issuer offering health insurance cov23 erage, described in this subsection is a group health plan

24 or coverage that—
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1 (1) provides coverage for obstetric or

2 gynecologic care; and

3 (2) requires the designation by a participant,

4 beneficiary, or enrollee of a participating primary

5 care provider.

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

7 be construed to—

8 (1) waive any exclusions of coverage under the

9 terms and conditions of the plan or health insurance

10 coverage with respect to coverage of obstetrical or

11 gynecological care; or

12 (2) preclude the group health plan or health in13 surance issuer involved from requiring that the ob14 stetrical or gynecological provider notify the primary

15 care health care professional or the plan or issuer of

16 treatment decisions.

17 SEC. 116. ACCESS TO PEDIATRIC CARE.

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

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

20 under a group health plan, or health insurance coverage

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

22 requires or provides for the designation of a participating

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

24 permit such person to designate a physician (allopathic or

25 osteopathic) who specializes in pediatrics as the child’s pri-
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1 mary care provider if such provider participates in the net2 work of the plan or issuer.

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

4 be construed to waive any exclusions of coverage under

5 the terms and conditions of the plan or health insurance

6 coverage with respect to coverage of pediatric care.

7 SEC. 117. CONTINUITY OF CARE.

8 (a) TERMINATION OF PROVIDER.—

9 (1) IN GENERAL.—If—

10 (A) a contract between a group health

11 plan, or a health insurance issuer offering

12 health insurance coverage, and a treating health

13 care provider is terminated (as defined in para14 graph (e)(4)), or

15 (B) benefits or coverage provided by a

16 health care provider are terminated because of

17 a change in the terms of provider participation

18 in such plan or coverage,

19 the plan or issuer shall meet the requirements of

20 paragraph (3) with respect to each continuing care

21 patient.

22 (2) TREATMENT OF TERMINATION OF CON23 TRACT WITH HEALTH INSURANCE ISSUER.—If a

24 contract for the provision of health insurance cov25 erage between a group health plan and a health in-
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1 surance issuer is terminated and, as a result of such

2 termination, coverage of services of a health care

3 provider is terminated with respect to an individual,

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

5 provisions of this section) shall apply under the plan

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

7 between the plan and the provider that had been ter8 minated, but only with respect to benefits that are

9 covered under the plan after the contract termi10 nation.

11 (3) REQUIREMENTS.—The requirements of this

12 paragraph are that the plan or issuer—

13 (A) notify the continuing care patient in14 volved, or arrange to have the patient notified

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

16 of the termination described in paragraph (1)

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

18 to elect continued transitional care from the

19 provider under this section;

20 (B) provide the patient with an oppor21 tunity to notify the plan or issuer of the pa22 tient’s need for transitional care; and

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

24 patient to elect to continue to be covered with

25 respect to the course of treatment by such pro-
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1 vider with the provider’s consent during a tran2 sitional period (as provided for under subsection

3 (b)).

4 (4) CONTINUING CARE PATIENT.—For purposes

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

6 means a participant, beneficiary, or enrollee who—

7 (A) is undergoing a course of treatment

8 for a serious and complex condition from the

9 provider at the time the plan or issuer receives

10 or provides notice of provider, benefit, or cov11 erage termination described in paragraph (1)

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

13 (B) is undergoing a course of institutional

14 or inpatient care from the provider at the time

15 of such notice;

16 (C) is scheduled to undergo non-elective

17 surgery from the provider at the time of such

18 notice;

19 (D) is pregnant and undergoing a course

20 of treatment for the pregnancy from the pro21 vider at the time of such notice; or

22 (E) is or was determined to be terminally

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

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

25 notice, but only with respect to a provider that
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1 was treating the terminal illness before the date

2 of such notice.

3 (b) TRANSITIONAL PERIODS.—

4 (1) SERIOUS AND COMPLEX CONDITIONS.—The

5 transitional period under this subsection with re6 spect to a continuing care patient described in sub7 section (a)(4)(A) shall extend for up to 90 days (as

8 determined by the treating health care professional)

9 from the date of the notice described in subsection

10 (a)(3)(A).

11 (2) INSTITUTIONAL OR INPATIENT CARE.—The

12 transitional period under this subsection for a con13 tinuing care patient described in subsection

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

15 (A) the expiration of the 90-day period be16 ginning on the date on which the notice under

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

18 (B) the date of discharge of the patient

19 from such care or the termination of the period

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

21 completion of reasonable follow-up care.

22 (3) SCHEDULED NON-ELECTIVE SURGERY.—

23 The transitional period under this subsection for a

24 continuing care patient described in subsection

25 (a)(4)(C) shall extend until the completion of the
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1 surgery involved and post-surgical follow-up care re2 lating to the surgery and occurring within 90 days

3 after the date of the surgery.

4 (4) PREGNANCY.—The transitional period

5 under this subsection for a continuing care patient

6 described in subsection (a)(4)(D) shall extend

7 through the provision of post-partum care directly

8 related to the delivery.

9 (5) TERMINAL ILLNESS.—The transitional pe10 riod under this subsection for a continuing care pa11 tient described in subsection (a)(4)(E) shall extend

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

13 is directly related to the treatment of the terminal

14 illness or its medical manifestations.

15 (c) PERMISSIBLE TERMS AND CONDITIONS.—A

16 group health plan or health insurance issuer may condi17 tion coverage of continued treatment by a provider under

18 this section upon the provider agreeing to the following

19 terms and conditions:

20 (1) The treating health care provider agrees to

21 accept reimbursement from the plan or issuer and

22 continuing care patient involved (with respect to

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

24 start of the transitional period as payment in full

25 (or, in the case described in subsection (a)(2), at the
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1 rates applicable under the replacement plan or cov2 erage after the date of the termination of the con3 tract with the group health plan or health insurance

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

5 to the patient in an amount that would exceed the

6 cost-sharing that could have been imposed if the

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

8 been terminated.

9 (2) The treating health care provider agrees to

10 adhere to the quality assurance standards of the

11 plan or issuer responsible for payment under para12 graph (1) and to provide to such plan or issuer nec13 essary medical information related to the care pro14 vided.

15 (3) The treating health care provider agrees

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

17 and procedures, including procedures regarding re18 ferrals and obtaining prior authorization and pro19 viding services pursuant to a treatment plan (if any)

20 approved by the plan or issuer.

21 (d) RULES OF CONSTRUCTION.—Nothing in this sec22 tion shall be construed—

23 (1) to require the coverage of benefits which

24 would not have been covered if the provider involved

25 remained a participating provider; or
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1 (2) with respect to the termination of a con2 tract under subsection (a) to prevent a group health

3 plan or health insurance issuer from requiring that

4 the health care provider—

5 (A) notify participants, beneficiaries, or en6 rollees of their rights under this section; or

7 (B) provide the plan or issuer with the

8 name of each participant, beneficiary, or en9 rollee who the provider believes is a continuing

10 care patient.

11 (e) DEFINITIONS.—In this section:

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

13 with respect to a plan or issuer and a treating

14 health care provider, a contract between such plan

15 or issuer and an organized network of providers that

16 includes the treating health care provider, and (in

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

18 treating health care provider and the organized net19 work.

20 (2) HEALTH CARE PROVIDER.—The term

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

22 (A) any individual who is engaged in the

23 delivery of health care services in a State and

24 who is required by State law or regulation to be
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1 licensed or certified by the State to engage in

2 the delivery of such services in the State; and

3 (B) any entity that is engaged in the deliv4 ery of health care services in a State and that,

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

6 licensed or certified by the State to engage in

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

8 licensed.

9 (3) SERIOUS AND COMPLEX CONDITION.—The

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

11 respect to a participant, beneficiary, or enrollee

12 under the plan or coverage—

13 (A) in the case of an acute illness, a condi14 tion that is serious enough to require special15 ized medical treatment to avoid the reasonable

16 possibility of death or permanent harm; or

17 (B) in the case of a chronic illness or con18 dition, is an ongoing special condition (as de19 fined in section 114(b)(2)(B)).

20 (4) TERMINATED.—The term ‘‘terminated’’ in21 cludes, with respect to a contract, the expiration or

22 nonrenewal of the contract, but does not include a

23 termination of the contract for failure to meet appli24 cable quality standards or for fraud.
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1 SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

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

3 plan, or health insurance coverage offered by a health in4 surance issuer, provides coverage for benefits with respect

5 to prescription drugs, and limits such coverage to drugs

6 included in a formulary, the plan or issuer shall—

7 (1) ensure the participation of physicians and

8 pharmacists in developing and reviewing such for9 mulary;

10 (2) provide for disclosure of the formulary to

11 providers; and

12 (3) in accordance with the applicable quality as13 surance and utilization review standards of the plan

14 or issuer, provide for exceptions from the formulary

15 limitation when a non-formulary alternative is medi16 cally necessary and appropriate and, in the case of

17 such an exception, apply the same cost-sharing re18 quirements that would have applied in the case of a

19 drug covered under the formulary.

20 (b) COVERAGE OF APPROVED DRUGS AND MEDICAL

21 DEVICES.—

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

23 health insurance coverage offered in connection with

24 such a plan) that provides any coverage of prescrip25 tion drugs or medical devices shall not deny coverage
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1 of such a drug or device on the basis that the use

2 is investigational, if the use—

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

4 (i) is included in the labeling author5 ized by the application in effect for the

6 drug pursuant to subsection (b) or (j) of

7 section 505 of the Federal Food, Drug,

8 and Cosmetic Act, without regard to any

9 postmarketing requirements that may

10 apply under such Act; or

11 (ii) is included in the labeling author12 ized by the application in effect for the

13 drug under section 351 of the Public

14 Health Service Act, without regard to any

15 postmarketing requirements that may

16 apply pursuant to such section; or

17 (B) in the case of a medical device, is in18 cluded in the labeling authorized by a regula19 tion under subsection (d) or (3) of section 513

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

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

22 an application approved under section 515 of

23 such Act, without regard to any postmarketing

24 requirements that may apply under such Act.
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1 (2) CONSTRUCTION.—Nothing in this sub2 section shall be construed as requiring a group

3 health plan (or health insurance coverage offered in

4 connection with such a plan) to provide any coverage

5 of prescription drugs or medical devices.

6 SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN

7 APPROVED CLINICAL TRIALS.

8 (a) COVERAGE.—

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

10 health insurance issuer that is providing health in11 surance coverage, provides coverage to a qualified in12 dividual (as defined in subsection (b)), the plan or

13 issuer—

14 (A) may not deny the individual participa15 tion in the clinical trial referred to in subsection

16 (b)(2);

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

18 (or limit or impose additional conditions on) the

19 coverage of routine patient costs for items and

20 services furnished in connection with participa21 tion in the trial; and

22 (C) may not discriminate against the indi23 vidual on the basis of the enrollee’s participa24 tion in such trial.
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1 (2) EXCLUSION OF CERTAIN COSTS.—For pur2 poses of paragraph (1)(B), routine patient costs do

3 not include the cost of the tests or measurements

4 conducted primarily for the purpose of the clinical

5 trial involved.

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

7 or more participating providers is participating in a

8 clinical trial, nothing in paragraph (1) shall be con9 strued as preventing a plan or issuer from requiring

10 that a qualified individual participate in the trial

11 through such a participating provider if the provider

12 will accept the individual as a participant in the

13 trial.

14 (b) QUALIFIED INDIVIDUAL DEFINED.—For pur15 poses of subsection (a), the term ‘‘qualified individual’’

16 means an individual who is a participant or beneficiary

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

18 insurance coverage, and who meets the following condi19 tions:

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

21 serious illness for which no standard treatment is ef22 fective.

23 (B) The individual is eligible to participate in

24 an approved clinical trial according to the trial pro25 tocol with respect to treatment of such illness.
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1 (C) The individual’s participation in the trial

2 offers meaningful potential for significant clinical

3 benefit for the individual.

4 (2) Either—

5 (A) the referring physician is a partici6 pating health care professional and has con7 cluded that the individual’s participation in

8 such trial would be appropriate based upon the

9 individual meeting the conditions described in

10 paragraph (1); or

11 (B) the participant, beneficiary, or enrollee

12 provides medical and scientific information es13 tablishing that the individual’s participation in

14 such trial would be appropriate based upon the

15 individual meeting the conditions described in

16 paragraph (1).

17 (c) PAYMENT.—

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

19 health plan or health insurance issuer shall provide

20 for payment for routine patient costs described in

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

22 of items and services that are reasonably expected

23 (as determined by the appropriate Secretary) to be

24 paid for by the sponsors of an approved clinical trial.
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1 (2) PAYMENT RATE.—In the case of covered

2 items and services provided by—

3 (A) a participating provider, the payment

4 rate shall be at the agreed upon rate; or

5 (B) a nonparticipating provider, the pay6 ment rate shall be at the rate the plan or issuer

7 would normally pay for comparable services

8 under subparagraph (A).

9 (d) APPROVED CLINICAL TRIAL DEFINED.—

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

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

12 study or clinical investigation—

13 (A) approved and funded (which may in14 clude funding through in-kind contributions) by

15 one or more of the following:

16 (i) the National Institutes of Health;

17 (ii) a cooperative group or center of

18 the National Institutes of Health;

19 (iii) either of the following if the con20 ditions described in paragraph (2) are

21 met—

22 (I) the Department of Veterans

23 Affairs;

24 (II) the Department of Defense;

25 or
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1 (B) approved by the Food and Drug Ad2 ministration.

3 (2) CONDITIONS FOR DEPARTMENTS.—The

4 conditions described in this paragraph, for a study

5 or investigation conducted by a Department, are

6 that the study or investigation has been reviewed

7 and approved through a system of peer review that

8 the appropriate Secretary determines—

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

10 review of studies and investigations used by the

11 National Institutes of Health; and

12 (B) assures unbiased review of the highest

13 scientific standards by qualified individuals who

14 have no interest in the outcome of the review.

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

16 construed to limit a plan’s or issuer’s coverage with re17 spect to clinical trials.

18 SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL

19 STAY FOR MASTECTOMIES AND LYMPH NODE

20 DISSECTIONS FOR THE TREATMENT OF

21 BREAST CANCER AND COVERAGE FOR SEC22 ONDARY CONSULTATIONS.

23 (a) INPATIENT CARE.—

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

25 health insurance issuer providing health insurance
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1 coverage, that provides medical and surgical benefits

2 shall ensure that inpatient coverage with respect to

3 the treatment of breast cancer is provided for a pe4 riod of time as is determined by the attending physi5 cian, in consultation with the patient, to be medi6 cally necessary and appropriate following—

7 (A) a mastectomy;

8 (B) a lumpectomy; or

9 (C) a lymph node dissection for the treat10 ment of breast cancer.

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

12 be construed as requiring the provision of inpatient

13 coverage if the attending physician and patient de14 termine that a shorter period of hospital stay is

15 medically appropriate.

16 (b) PROHIBITION ON CERTAIN MODIFICATIONS.—In

17 implementing the requirements of this section, a group

18 health plan, and a health insurance issuer providing health

19 insurance coverage, may not modify the terms and condi20 tions of coverage based on the determination by a partici21 pant, beneficiary, or enrollee to request less than the min22 imum coverage required under subsection (a).

23 (c) SECONDARY CONSULTATIONS.—

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

25 health insurance issuer providing health insurance
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1 coverage, that provides coverage with respect to

2 medical and surgical services provided in relation to

3 the diagnosis and treatment of cancer shall ensure

4 that full coverage is provided for secondary consulta5 tions by specialists in the appropriate medical fields

6 (including pathology, radiology, and oncology) to

7 confirm or refute such diagnosis. Such plan or issuer

8 shall ensure that full coverage is provided for such

9 secondary consultation whether such consultation is

10 based on a positive or negative initial diagnosis. In

11 any case in which the attending physician certifies in

12 writing that services necessary for such a secondary

13 consultation are not sufficiently available from spe14 cialists operating under the plan or coverage with re15 spect to whose services coverage is otherwise pro16 vided under such plan or by such issuer, such plan

17 or issuer shall ensure that coverage is provided with

18 respect to the services necessary for the secondary

19 consultation with any other specialist selected by the

20 attending physician for such purpose at no addi21 tional cost to the individual beyond that which the

22 individual would have paid if the specialist was par23 ticipating in the network of the plan or issuer.

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

25 shall be construed as requiring the provision of sec-
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1 ondary consultations where the patient determines

2 not to seek such a consultation.

3 (d) PROHIBITION ON PENALTIES OR INCENTIVES.—

4 A group health plan, and a health insurance issuer pro5 viding health insurance coverage, may not—

6 (1) penalize or otherwise reduce or limit the re7 imbursement of a provider or specialist because the

8 provider or specialist provided care to a participant,

9 beneficiary, or enrollee in accordance with this sec10 tion;

11 (2) provide financial or other incentives to a

12 physician or specialist to induce the physician or

13 specialist to keep the length of inpatient stays of pa14 tients following a mastectomy, lumpectomy, or a

15 lymph node dissection for the treatment of breast

16 cancer below certain limits or to limit referrals for

17 secondary consultations; or

18 (3) provide financial or other incentives to a

19 physician or specialist to induce the physician or

20 specialist to refrain from referring a participant,

21 beneficiary, or enrollee for a secondary consultation

22 that would otherwise be covered by the plan or cov23 erage involved under subsection (c).
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1 Subtitle C—Access to Information

2 SEC. 121. PATIENT ACCESS TO INFORMATION.

3 (a) REQUIREMENT.—

4 (1) DISCLOSURE.—

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

6 and a health insurance issuer that provides cov7 erage in connection with health insurance cov8 erage, shall provide for the disclosure to partici9 pants, beneficiaries, and enrollees—

10 (i) of the information described in

11 subsection (b) at the time of the initial en12 rollment of the participant, beneficiary, or

13 enrollee under the plan or coverage;

14 (ii) of such information on an annual

15 basis—

16 (I) in conjunction with the elec17 tion period of the plan or coverage if

18 the plan or coverage has such an elec19 tion period; or

20 (II) in the case of a plan or cov21 erage that does not have an election

22 period, in conjunction with the begin23 ning of the plan or coverage year; and

24 (iii) of information relating to any

25 material reduction to the benefits or infor-
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1 mation described in such subsection or

2 subsection (c), in the form of a notice pro3 vided not later than 30 days before the

4 date on which the reduction takes effect.

5 (B) PARTICIPANTS, BENEFICIARIES, AND

6 ENROLLEES.—The disclosure required under

7 subparagraph (A) shall be provided—

8 (i) jointly to each participant, bene9 ficiary, and enrollee who reside at the same

10 address; or

11 (ii) in the case of a beneficiary or en12 rollee who does not reside at the same ad13 dress as the participant or another en14 rollee, separately to the participant or

15 other enrollees and such beneficiary or en16 rollee.

17 (2) PROVISION OF INFORMATION.—Information

18 shall be provided to participants, beneficiaries, and

19 enrollees under this section at the last known ad20 dress maintained by the plan or issuer with respect

21 to such participants, beneficiaries, or enrollees, to

22 the extent that such information is provided to par23 ticipants, beneficiaries, or enrollees via the United

24 States Postal Service or other private delivery serv25 ice.
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1 (b) REQUIRED INFORMATION.—The informational

2 materials to be distributed under this section shall include

3 for each option available under the group health plan or

4 health insurance coverage the following:

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

6 benefits, including—

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

8 (B) specific preventive services covered

9 under the plan or coverage if such services are

10 covered;

11 (C) any specific exclusions or express limi12 tations of benefits described in section

13 104(b)(3)(C);

14 (D) any other benefit limitations, including

15 any annual or lifetime benefit limits and any

16 monetary limits or limits on the number of vis17 its, days, or services, and any specific coverage

18 exclusions; and

19 (E) any definition of medical necessity

20 used in making coverage determinations by the

21 plan, issuer, or claims administrator.

22 (2) COST SHARING.—A description of any cost23 sharing requirements, including—

24 (A) any premiums, deductibles, coinsur25 ance, copayment amounts, and liability for bal-
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1 ance billing, for which the participant, bene2 ficiary, or enrollee will be responsible under

3 each option available under the plan;

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

5 for which the participant, beneficiary, or en6 rollee may be liable;

7 (C) any cost-sharing requirements for out8 of-network benefits or services received from

9 nonparticipating providers; and

10 (D) any additional cost-sharing or charges

11 for benefits and services that are furnished

12 without meeting applicable plan or coverage re13 quirements, such as prior authorization or

14 precertification.

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

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

17 any out-of-area coverage.

18 (4) 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.
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1 (5) 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 (6) 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 (7) 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 (8) 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-
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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 (9) CLINICAL TRIALS.—A description of the cir6 cumstances and conditions under which participation

7 in clinical trials is covered under the terms and con8 ditions of the plan or coverage, and the right to ob9 tain coverage for approved clinical trials under sec10 tion 119 if such section applies.

11 (10) 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 (11) 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
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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 (12) 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 (13) 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 (14) 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-
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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 (15) 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 (16) 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 (17) 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
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1 paragraphs (1) through (16)) 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

9 in the information that would otherwise be provided

10 to the recipient.

11 (18) 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 (c) ADDITIONAL INFORMATION.—The informational

18 materials to be provided upon the request of a participant,

19 beneficiary, or enrollee shall include for each option avail20 able under a group health plan or health insurance cov21 erage the following:

22 (1) STATUS OF PROVIDERS.—The State licen23 sure status of the plan or issuer’s participating

24 health care professionals and participating health

25 care facilities, and, if available, the education, train-
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1 ing, specialty qualifications or certifications of such

2 professionals.

3 (2) COMPENSATION METHODS.—A summary

4 description by category of the applicable methods

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

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

7 for compensating prospective or treating health care

8 professionals (including primary care providers and

9 specialists) and facilities in connection with the pro10 vision of health care under the plan or coverage.

11 (3) PRESCRIPTION DRUGS.—Information about

12 whether a specific prescription medication is in13 cluded in the formulary of the plan or issuer, if the

14 plan or issuer uses a defined formulary.

15 (4) UTILIZATION REVIEW ACTIVITIES.—A de16 scription of procedures used and requirements (in17 cluding circumstances, timeframes, and appeals

18 rights) under any utilization review program under

19 sections 101 and 102, including any drug formulary

20 program under section 118.

21 (5) EXTERNAL APPEALS INFORMATION.—Ag22 gregate information on the number and outcomes of

23 external medical reviews, relative to the sample size

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

25 or under the coverage of the issuer.
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1 (d) MANNER OF DISCLOSURE.—The information de2 scribed in this section shall be disclosed in an accessible

3 medium and format that is calculated to be understood

4 by a participant or enrollee.

5 (e) RULES OF CONSTRUCTION.—Nothing in this sec6 tion shall be construed to prohibit a group health plan,

7 or a health insurance issuer in connection with health in8 surance coverage, from—

9 (1) distributing any other additional informa10 tion determined by the plan or issuer to be impor11 tant or necessary in assisting participants, bene12 ficiaries, and enrollees in the selection of a health

13 plan or health insurance coverage; and

14 (2) complying with the provisions of this section

15 by providing information in brochures, through the

16 Internet or other electronic media, or through other

17 similar means, so long as—

18 (A) the disclosure of such information in

19 such form is in accordance with requirements

20 as the appropriate Secretary may impose, and

21 (B) in connection with any such disclosure

22 of information through the Internet or other

23 electronic media—
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1 (i) the recipient has affirmatively con2 sented to the disclosure of such informa3 tion in such form,

4 (ii) the recipient is capable of access5 ing the information so disclosed on the re6 cipient’s individual workstation or at the

7 recipient’s home,

8 (iii) the recipient retains an ongoing

9 right to receive paper disclosure of such in10 formation and receives, in advance of any

11 attempt at disclosure of such information

12 to him or her through the Internet or

13 other electronic media, notice in printed

14 form of such ongoing right and of the

15 proper software required to view informa16 tion so disclosed, and

17 (iv) the plan administrator appro18 priately ensures that the intended recipient

19 is receiving the information so disclosed

20 and provides the information in printed

21 form if the information is not received.
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1 Subtitle D—Protecting the Doctor2 Patient Relationship

3 SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN

4 MEDICAL COMMUNICATIONS.

5 (a) GENERAL RULE.—The provisions of any contract

6 or agreement, or the operation of any contract or agree7 ment, between a group health plan or health insurance

8 issuer in relation to health insurance coverage (including

9 any partnership, association, or other organization that

10 enters into or administers such a contract or agreement)

11 and a health care provider (or group of health care pro12 viders) shall not prohibit or otherwise restrict a health

13 care professional from advising such a participant, bene14 ficiary, or enrollee who is a patient of the professional

15 about the health status of the individual or medical care

16 or treatment for the individual’s condition or disease, re17 gardless of whether benefits for such care or treatment

18 are provided under the plan or coverage, if the professional

19 is acting within the lawful scope of practice.

20 (b) NULLIFICATION.—Any contract provision or

21 agreement that restricts or prohibits medical communica22 tions in violation of subsection (a) shall be null and void.
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1 SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PRO2 VIDERS BASED ON LICENSURE.

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

4 insurance issuer with respect to health insurance coverage,

5 shall not discriminate with respect to participation or in6 demnification as to any provider who is acting within the

7 scope of the provider’s license or certification under appli8 cable State law, solely on the basis of such license or cer9 tification.

10 (b) CONSTRUCTION.—Subsection (a) shall not be

11 construed—

12 (1) as requiring the coverage under a group

13 health plan or health insurance coverage of a par14 ticular benefit or service or to prohibit a plan or

15 issuer from including providers only to the extent

16 necessary to meet the needs of the plan’s or issuer’s

17 participants, beneficiaries, or enrollees or from es18 tablishing any measure designed to maintain quality

19 and control costs consistent with the responsibilities

20 of the plan or issuer;

21 (2) to override any State licensure or scope-of22 practice law; or

23 (3) as requiring a plan or issuer that offers net24 work coverage to include for participation every will25 ing provider who meets the terms and conditions of

26 the plan or issuer.
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1 SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE

2 ARRANGEMENTS.

3 (a) IN GENERAL.—A group health plan and a health

4 insurance issuer offering health insurance coverage may

5 not operate any physician incentive plan (as defined in

6 subparagraph (B) of section 1876(i)(8) of the Social Secu7 rity Act) unless the requirements described in clauses (i),

8 (ii)(I), and (iii) of subparagraph (A) of such section are

9 met with respect to such a plan.

10 (b) APPLICATION.—For purposes of carrying out

11 paragraph (1), any reference in section 1876(i)(8) of the

12 Social Security Act to the Secretary, an eligible organiza13 tion, or an individual enrolled with the organization shall

14 be treated as a reference to the applicable authority, a

15 group health plan or health insurance issuer, respectively,

16 and a participant, beneficiary, or enrollee with the plan

17 or organization, respectively.

18 (c) CONSTRUCTION.—Nothing in this section shall be

19 construed as prohibiting all capitation and similar ar20 rangements or all provider discount arrangements.

21 SEC. 134. PAYMENT OF CLAIMS.

22 A group health plan, and a health insurance issuer

23 offering group health insurance coverage, shall provide for

24 prompt payment of claims submitted for health care serv25 ices or supplies furnished to a participant, beneficiary, or

26 enrollee with respect to benefits covered by the plan or
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1 issuer, in a manner consistent with the provisions of sec2 tion 1842(c)(2) of the Social Security Act (42 U.S.C.

3 1395u(c)(2)).

4 SEC. 135. PROTECTION FOR PATIENT ADVOCACY.

5 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

6 AND GRIEVANCE PROCESS.—A group health plan, and a

7 health insurance issuer with respect to the provision of

8 health insurance coverage, may not retaliate against a par9 ticipant, beneficiary, enrollee, or health care provider

10 based on the participant’s, beneficiary’s, enrollee’s or pro11 vider’s use of, or participation in, a utilization review proc12 ess or a grievance process of the plan or issuer (including

13 an internal or external review or appeal process) under

14 this title.

15 (b) PROTECTION FOR QUALITY ADVOCACY BY

16 HEALTH CARE PROFESSIONALS.—

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

18 health insurance issuer may not retaliate or dis19 criminate against a protected health care profes20 sional because the professional in good faith—

21 (A) discloses information relating to the

22 care, services, or conditions affecting one or

23 more participants, beneficiaries, or enrollees of

24 the plan or issuer to an appropriate public reg25 ulatory agency, an appropriate private accredi-
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1 tation body, or appropriate management per2 sonnel of the plan or issuer; or

3 (B) initiates, cooperates, or otherwise par4 ticipates in an investigation or proceeding by

5 such an agency with respect to such care, serv6 ices, or conditions.

7 If an institutional health care provider is a partici8 pating provider with such a plan or issuer or other9 wise receives payments for benefits provided by such

10 a plan or issuer, the provisions of the previous sen11 tence shall apply to the provider in relation to care,

12 services, or conditions affecting one or more patients

13 within an institutional health care provider in the

14 same manner as they apply to the plan or issuer in

15 relation to care, services, or conditions provided to

16 one or more participants, beneficiaries, or enrollees;

17 and for purposes of applying this sentence, any ref18 erence to a plan or issuer is deemed a reference to

19 the institutional health care provider.

20 (2) GOOD FAITH ACTION.—For purposes of

21 paragraph (1), a protected health care professional

22 is considered to be acting in good faith with respect

23 to disclosure of information or participation if, with

24 respect to the information disclosed as part of the

25 action—
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1 (A) the disclosure is made on the basis of

2 personal knowledge and is consistent with that

3 degree of learning and skill ordinarily possessed

4 by health care professionals with the same li5 censure or certification and the same experi6 ence;

7 (B) the professional reasonably believes the

8 information to be true;

9 (C) the information evidences either a vio10 lation of a law, rule, or regulation, of an appli11 cable accreditation standard, or of a generally

12 recognized professional or clinical standard or

13 that a patient is in imminent hazard of loss of

14 life or serious injury; and

15 (D) subject to subparagraphs (B) and (C)

16 of paragraph (3), the professional has followed

17 reasonable internal procedures of the plan,

18 issuer, or institutional health care provider es19 tablished for the purpose of addressing quality

20 concerns before making the disclosure.

21 (3) EXCEPTION AND SPECIAL RULE.—

22 (A) GENERAL EXCEPTION.—Paragraph (1)

23 does not protect disclosures that would violate

24 Federal or State law or diminish or impair the

25 rights of any person to the continued protection
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1 of confidentiality of communications provided

2 by such law.

3 (B) NOTICE OF INTERNAL PROCEDURES.—

4 Subparagraph (D) of paragraph (2) shall not

5 apply unless the internal procedures involved

6 are reasonably expected to be known to the

7 health care professional involved. For purposes

8 of this subparagraph, a health care professional

9 is reasonably expected to know of internal pro10 cedures if those procedures have been made

11 available to the professional through distribu12 tion or posting.

13 (C) INTERNAL PROCEDURE EXCEPTION.—

14 Subparagraph (D) of paragraph (2) also shall

15 not apply if—

16 (i) the disclosure relates to an immi17 nent hazard of loss of life or serious injury

18 to a patient;

19 (ii) the disclosure is made to an ap20 propriate private accreditation body pursu21 ant to disclosure procedures established by

22 the body; or

23 (iii) the disclosure is in response to an

24 inquiry made in an investigation or pro25 ceeding of an appropriate public regulatory
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1 agency and the information disclosed is

2 limited to the scope of the investigation or

3 proceeding.

4 (4) ADDITIONAL CONSIDERATIONS.—It shall

5 not be a violation of paragraph (1) to take an ad6 verse action against a protected health care profes7 sional if the plan, issuer, or provider taking the ad8 verse action involved demonstrates that it would

9 have taken the same adverse action even in the ab10 sence of the activities protected under such para11 graph.

12 (5) NOTICE.—A group health plan, health in13 surance issuer, and institutional health care provider

14 shall post a notice, to be provided or approved by

15 the Secretary of Labor, setting forth excerpts from,

16 or summaries of, the pertinent provisions of this

17 subsection and information pertaining to enforce18 ment of such provisions.

19 (6) CONSTRUCTIONS.—

20 (A) DETERMINATIONS OF COVERAGE.—

21 Nothing in this subsection shall be construed to

22 prohibit a plan or issuer from making a deter23 mination not to pay for a particular medical

24 treatment or service or the services of a type of

25 health care professional.
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1 (B) ENFORCEMENT OF PEER REVIEW PRO2 TOCOLS AND INTERNAL PROCEDURES.—Noth3 ing in this subsection shall be construed to pro4 hibit a plan, issuer, or provider from estab5 lishing and enforcing reasonable peer review or

6 utilization review protocols or determining

7 whether a protected health care professional has

8 complied with those protocols or from estab9 lishing and enforcing internal procedures for

10 the purpose of addressing quality concerns.

11 (C) RELATION TO OTHER RIGHTS.—Noth12 ing in this subsection shall be construed to

13 abridge rights of participants, beneficiaries, en14 rollees, and protected health care professionals

15 under other applicable Federal or State laws.

16 (7) PROTECTED HEALTH CARE PROFESSIONAL

17 DEFINED.—For purposes of this subsection, the

18 term ‘‘protected health care professional’’ means an

19 individual who is a licensed or certified health care

20 professional and who—

21 (A) with respect to a group health plan or

22 health insurance issuer, is an employee of the

23 plan or issuer or has a contract with the plan

24 or issuer for provision of services for which ben25 efits are available under the plan or issuer; or
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1 (B) with respect to an institutional health

2 care provider, is an employee of the provider or

3 has a contract or other arrangement with the

4 provider respecting the provision of health care

5 services.

6 Subtitle E—Definitions

7 SEC. 151. DEFINITIONS.

8 (a) INCORPORATION OF GENERAL DEFINITIONS.—

9 Except as otherwise provided, the provisions of section

10 2791 of the Public Health Service Act shall apply for pur11 poses of this title in the same manner as they apply for

12 purposes of title XXVII of such Act.

13 (b) SECRETARY.—Except as otherwise provided, the

14 term ‘‘Secretary’’ means the Secretary of Health and

15 Human Services, in consultation with the Secretary of

16 Labor and the term ‘‘appropriate Secretary’’ means the

17 Secretary of Health and Human Services in relation to

18 carrying out this title under sections 2706 and 2751 of

19 the Public Health Service Act and the Secretary of Labor

20 in relation to carrying out this title under section 713 of

21 the Employee Retirement Income Security Act of 1974.

22 (c) ADDITIONAL DEFINITIONS.—For purposes of this

23 title:

24 (1) APPLICABLE AUTHORITY.—The term ‘‘ap25 plicable authority’’ means—
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1 (A) in the case of a group health plan, the

2 Secretary of Health and Human Services and

3 the Secretary of Labor; and

4 (B) in the case of a health insurance issuer

5 with respect to a specific provision of this title,

6 the applicable State authority (as defined in

7 section 2791(d) of the Public Health Service

8 Act), or the Secretary of Health and Human

9 Services, if such Secretary is enforcing such

10 provision under section 2722(a)(2) or

11 2761(a)(2) of the Public Health Service Act.

12 (2) ENROLLEE.—The term ‘‘enrollee’’ means,

13 with respect to health insurance coverage offered by

14 a health insurance issuer, an individual enrolled with

15 the issuer to receive such coverage.

16 (3) GROUP HEALTH PLAN.—The term ‘‘group

17 health plan’’ has the meaning given such term in

18 section 733(a) of the Employee Retirement Income

19 Security Act of 1974, except that such term includes

20 a employee welfare benefit plan treated as a group

21 health plan under section 732(d) of such Act or de22 fined as such a plan under section 607(1) of such

23 Act.

24 (4) HEALTH CARE PROFESSIONAL.—The term

25 ‘‘health care professional’’ means an individual who
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1 is licensed, accredited, or certified under State law

2 to provide specified health care services and who is

3 operating within the scope of such licensure, accredi4 tation, or certification.

5 (5) HEALTH CARE PROVIDER.—The term

6 ‘‘health care provider’’ includes a physician or other

7 health care professional, as well as an institutional

8 or other facility or agency that provides health care

9 services and that is licensed, accredited, or certified

10 to provide health care items and services under ap11 plicable State law.

12 (6) NETWORK.—The term ‘‘network’’ means,

13 with respect to a group health plan or health insur14 ance issuer offering health insurance coverage, the

15 participating health care professionals and providers

16 through whom the plan or issuer provides health

17 care items and services to participants, beneficiaries,

18 or enrollees.

19 (7) NONPARTICIPATING.—The term ‘‘non20 participating’’ means, with respect to a health care

21 provider that provides health care items and services

22 to a participant, beneficiary, or enrollee under group

23 health plan or health insurance coverage, a health

24 care provider that is not a participating health care

25 provider with respect to such items and services.
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1 (8) PARTICIPATING.—The term ‘‘participating’’

2 means, with respect to a health care provider that

3 provides health care items and services to a partici4 pant, beneficiary, or enrollee under group health

5 plan or health insurance coverage offered by a

6 health insurance issuer, a health care provider that

7 furnishes such items and services under a contract

8 or other arrangement with the plan or issuer.

9 (9) PRIOR AUTHORIZATION.—The term ‘‘prior

10 authorization’’ means the process of obtaining prior

11 approval from a health insurance issuer or group

12 health plan for the provision or coverage of medical

13 services.

14 (10) TERMS AND CONDITIONS.—The term

15 ‘‘terms and conditions’’ includes, with respect to a

16 group health plan or health insurance coverage, re17 quirements imposed under this title with respect to

18 the plan or coverage.

19 SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUC20 TION.

21 (a) CONTINUED APPLICABILITY OF STATE LAW

22 WITH RESPECT TO HEALTH INSURANCE ISSUERS.—

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

24 this title shall not be construed to supersede any

25 provision of State law which establishes, implements,
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1 or continues in effect any standard or requirement

2 solely relating to health insurance issuers (in connec3 tion with group health insurance coverage or other4 wise) except to the extent that such standard or re5 quirement prevents the application of a requirement

6 of this title.

7 (2) CONTINUED PREEMPTION WITH RESPECT

8 TO GROUP HEALTH PLANS.—Nothing in this title

9 shall be construed to affect or modify the provisions

10 of section 514 of the Employee Retirement Income

11 Security Act of 1974 with respect to group health

12 plans.

13 (3) CONSTRUCTION.—In applying this section,

14 a State law that provides for equal access to, and

15 availability of, all categories of licensed health care

16 providers and services shall not be treated as pre17 venting the application of any requirement of this

18 title.

19 (b) APPLICATION OF SUBSTANTIALLY EQUIVALENT

20 STATE LAWS.—

21 (1) IN GENERAL.—In the case of a State law

22 that imposes, with respect to health insurance cov23 erage offered by a health insurance issuer and with

24 respect to a group health plan that is a non-Federal

25 governmental plan, a requirement that is substan-
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1 tially equivalent (within the meaning of subsection

2 (c)) to a patient protection requirement (as defined

3 in paragraph (3)) and does not prevent the applica4 tion of other requirements under this Act (except in

5 the case of other substantially equivalent require6 ments), in applying the requirements of this title

7 under section 2707 and 2753 (as applicable) of the

8 Public Health Service Act (as added by title II),

9 subject to subsection (a)(2)—

10 (A) the State law shall not be treated as

11 being superseded under subsection (a); and

12 (B) the State law shall apply instead of the

13 patient protection requirement otherwise appli14 cable with respect to health insurance coverage

15 and non-Federal governmental plans.

16 (2) LIMITATION.—In the case of a group health

17 plan covered under title I of the Employee Retire18 ment Income Security Act of 1974, paragraph (1)

19 shall be construed to apply only with respect to the

20 health insurance coverage (if any) offered in connec21 tion with the plan.

22 (3) PATIENT PROTECTION REQUIREMENT DE23 FINED.—For purposes of this section, the term ‘‘pa24 tient protection requirement’’ means a requirement

25 under this title, and includes (as a single require-
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1 ment) a group or related set of requirements under

2 a section or similar unit under this title.

3 (c) DETERMINATIONS OF SUBSTANTIAL EQUIVA4 LENCE.—

5 (1) CERTIFICATION BY STATES.—A State may

6 submit to the Secretary a certification that a State

7 law provides for patient protections that are at least

8 substantially equivalent to one or more patient pro9 tection requirements. Such certification shall be ac10 companied by such information as may be required

11 to permit the Secretary to make the determination

12 described in paragraph (2)(A).

13 (2) REVIEW.—

14 (A) IN GENERAL.—The Secretary shall

15 promptly review a certification submitted under

16 paragraph (1) with respect to a State law to de17 termine if the State law provides for at least

18 substantially equivalent and effective patient

19 protections to the patient protection require20 ment (or requirements) to which the law re21 lates.

22 (B) APPROVAL DEADLINES.—

23 (i) INITIAL REVIEW.—Such a certifi24 cation is considered approved unless the

25 Secretary notifies the State in writing,
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1 within 90 days after the date of receipt of

2 the certification, that the certification is

3 disapproved (and the reasons for dis4 approval) or that specified additional infor5 mation is needed to make the determina6 tion described in subparagraph (A).

7 (ii) ADDITIONAL INFORMATION.—

8 With respect to a State that has been noti9 fied by the Secretary under clause (i) that

10 specified additional information is needed

11 to make the determination described in

12 subparagraph (A), the Secretary shall

13 make the determination within 60 days

14 after the date on which such specified ad15 ditional information is received by the Sec16 retary.

17 (3) APPROVAL.—

18 (A) IN GENERAL.—The Secretary shall ap19 prove a certification under paragraph (1)

20 unless—

21 (i) the State fails to provide sufficient

22 information to enable the Secretary to

23 make a determination under paragraph

24 (2)(A); or
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1 (ii) the Secretary determines that the

2 State law involved does not provide for pa3 tient protections that are at least substan4 tially equivalent to and as effective as the

5 patient protection requirement (or require6 ments) to which the law relates.

7 (B) STATE CHALLENGE.—A State that has

8 a certification disapproved by the Secretary

9 under subparagraph (A) may challenge such

10 disapproval in the appropriate United States

11 district court.

12 (4) CONSTRUCTION.—Nothing in this sub13 section shall be construed as preventing the certifi14 cation (and approval of certification) of a State law

15 under this subsection solely because it provides for

16 greater protections for patients than those protec17 tions otherwise required to establish substantial

18 equivalence.

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.
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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—
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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.
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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.
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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’’.
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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 TITLE III—AMENDMENTS TO

13 THE EMPLOYEE RETIREMENT

14 INCOME SECURITY ACT OF

15 1974

16 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND17 ARDS TO GROUP HEALTH PLANS AND GROUP

18 HEALTH INSURANCE COVERAGE UNDER THE

19 EMPLOYEE RETIREMENT INCOME SECURITY

20 ACT OF 1974.

21 Subpart B of part 7 of subtitle B of title I of the

22 Employee Retirement Income Security Act of 1974 is

23 amended by adding at the end the following new section:

24 ‘‘SEC. 714. PATIENT PROTECTION STANDARDS.

25 ‘‘(a) IN GENERAL.—Subject to subsection (b), a

26 group health plan (and a health insurance issuer offering
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1 group health insurance coverage in connection with such

2 a plan) shall comply with the requirements of title I of

3 the Bipartisan Patient Protection Act (as in effect as of

4 the date of the enactment of such Act), and such require5 ments shall be deemed to be incorporated into this sub6 section.

7 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE8 MENTS.—

9 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE10 MENTS THROUGH INSURANCE.—For purposes of

11 subsection (a), insofar as a group health plan pro12 vides benefits in the form of health insurance cov13 erage through a health insurance issuer, the plan

14 shall be treated as meeting the following require15 ments of title I of the Bipartisan Patient Protection

16 Act with respect to such benefits and not be consid17 ered as failing to meet such requirements because of

18 a failure of the issuer to meet such requirements so

19 long as the plan sponsor or its representatives did

20 not cause such failure by the issuer:

21 ‘‘(A) Section 111 (relating to consumer

22 choice option).

23 ‘‘(B) Section 112 (relating to choice of

24 health care professional).
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1 ‘‘(C) Section 113 (relating to access to

2 emergency care).

3 ‘‘(D) Section 114 (relating to timely access

4 to specialists).

5 ‘‘(E) Section 115 (relating to patient ac6 cess to obstetrical and gynecological care).

7 ‘‘(F) Section 116 (relating to access to pe8 diatric care).

9 ‘‘(G) Section 117 (relating to continuity of

10 care), but only insofar as a replacement issuer

11 assumes the obligation for continuity of care.

12 ‘‘(H) Section 118 (relating to access to

13 needed prescription drugs).

14 ‘‘(I) Section 119 (relating to coverage for

15 individuals participating in approved clinical

16 trials).

17 ‘‘(J) Section 120 (relating to required cov18 erage for minimum hospital stay for

19 mastectomies and lymph node dissections for

20 the treatment of breast cancer and coverage for

21 secondary consultations).

22 ‘‘(K) Section 134 (relating to payment of

23 claims).

24 ‘‘(2) INFORMATION.—With respect to informa25 tion required to be provided or made available under
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1 section 121 of the Bipartisan Patient Protection

2 Act, in the case of a group health plan that provides

3 benefits in the form of health insurance coverage

4 through a health insurance issuer, the Secretary

5 shall determine the circumstances under which the

6 plan is not required to provide or make available the

7 information (and is not liable for the issuer’s failure

8 to provide or make available the information), if the

9 issuer is obligated to provide and make available (or

10 provides and makes available) such information.

11 ‘‘(3) INTERNAL APPEALS.—With respect to the

12 internal appeals process required to be established

13 under section 103 of such Act, in the case of a

14 group health plan that provides benefits in the form

15 of health insurance coverage through a health insur16 ance issuer, the Secretary shall determine the cir17 cumstances under which the plan is not required to

18 provide for such process and system (and is not lia19 ble for the issuer’s failure to provide for such proc20 ess and system), if the issuer is obligated to provide

21 for (and provides for) such process and system.

22 ‘‘(4) EXTERNAL APPEALS.—Pursuant to rules

23 of the Secretary, insofar as a group health plan en24 ters into a contract with a qualified external appeal

25 entity for the conduct of external appeal activities in
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1 accordance with section 104 of such Act, the plan

2 shall be treated as meeting the requirement of such

3 section and is not liable for the entity’s failure to

4 meet any requirements under such section.

5 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu6 ant to rules of the Secretary, if a health insurance

7 issuer offers health insurance coverage in connection

8 with a group health plan and takes an action in vio9 lation of any of the following sections of the Bipar10 tisan Patient Protection Act, the group health plan

11 shall not be liable for such violation unless the plan

12 caused such violation:

13 ‘‘(A) Section 131 (relating to prohibition of

14 interference with certain medical communica15 tions).

16 ‘‘(B) Section 132 (relating to prohibition

17 of discrimination against providers based on li18 censure).

19 ‘‘(C) Section 133 (relating to prohibition

20 against improper incentive arrangements).

21 ‘‘(D) Section 135 (relating to protection

22 for patient advocacy).

23 ‘‘(6) CONSTRUCTION.—Nothing in this sub24 section shall be construed to affect or modify the re-
137

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1 sponsibilities of the fiduciaries of a group health

2 plan under part 4 of subtitle B.

3 ‘‘(7) TREATMENT OF SUBSTANTIALLY EQUIVA4 LENT STATE LAWS.—For purposes of applying this

5 subsection, any reference in this subsection to a re6 quirement in a section or other provision in the Bi7 partisan Patient Protection Act with respect to a

8 health insurance issuer is deemed to include a ref9 erence to a requirement under a State law that is

10 substantially equivalent (as determined under section

11 152(c) of such Act) to the requirement in such sec12 tion or other provisions.

13 ‘‘(8) APPLICATION TO CERTAIN PROHIBITIONS

14 AGAINST RETALIATION.—With respect to compliance

15 with the requirements of section 135(b)(1) of the Bi16 partisan Patient Protection Act, for purposes of this

17 subtitle the term ‘group health plan’ is deemed to in18 clude a reference to an institutional health care pro19 vider.

20 ‘‘(c) ENFORCEMENT OF CERTAIN REQUIREMENTS.—

21 ‘‘(1) COMPLAINTS.—Any protected health care

22 professional who believes that the professional has

23 been retaliated or discriminated against in violation

24 of section 135(b)(1) of the Bipartisan Patient Pro25 tection Act may file with the Secretary a complaint
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1 within 180 days of the date of the alleged retaliation

2 or discrimination.

3 ‘‘(2) INVESTIGATION.—The Secretary shall in4 vestigate such complaints and shall determine if a

5 violation of such section has occurred and, if so,

6 shall issue an order to ensure that the protected

7 health care professional does not suffer any loss of

8 position, pay, or benefits in relation to the plan,

9 issuer, or provider involved, as a result of the viola10 tion found by the Secretary.

11 ‘‘(d) CONFORMING REGULATIONS.—The Secretary

12 shall issue regulations to coordinate the requirements on

13 group health plans and health insurance issuers under this

14 section with the requirements imposed under the other

15 provisions of this title. In order to reduce duplication and

16 clarify the rights of participants and beneficiaries with re17 spect to information that is required to be provided, such

18 regulations shall coordinate the information disclosure re19 quirements under section 121 of the Bipartisan Patient

20 Protection Act with the reporting and disclosure require21 ments imposed under part 1, so long as such coordination

22 does not result in any reduction in the information that

23 would otherwise be provided to participants and bene24 ficiaries.’’.
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1 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

2 REQUIREMENT.—Section 503 of such Act (29 U.S.C.

3 1133) is amended by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’

4 and by adding at the end the following new subsection:

5 ‘‘(b) In the case of a group health plan (as defined

6 in section 733) compliance with the requirements of sub7 title A of title I of the Bipartisan Patient Protection Act,

8 and compliance with regulations promulgated by the Sec9 retary, in the case of a claims denial shall be deemed com10 pliance with subsection (a) with respect to such claims de11 nial.’’.

12 (c) CONFORMING AMENDMENTS.—(1) Section 732(a)

13 of such Act (29 U.S.C. 1185(a)) is amended by striking

14 ‘‘section 711’’ and inserting ‘‘sections 711 and 714’’.

15 (2) The table of contents in section 1 of such Act

16 is amended by inserting after the item relating to section

17 713 the following new item:

‘‘Sec. 714. Patient protection standards.’’.

18 (3) Section 502(b)(3) of such Act (29 U.S.C.

19 1132(b)(3)) is amended by inserting ‘‘(other than section

20 135(b))’’ after ‘‘part 7’’.

21 SEC. 302. AVAILABILITY OF CIVIL REMEDIES.

22 (a) AVAILABILITY OF FEDERAL CIVIL REMEDIES IN

23 CASES NOT INVOLVING MEDICALLY REVIEWABLE DECI24 SIONS.—
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1 (1) IN GENERAL.—Section 502 of the Employee

2 Retirement Income Security Act of 1974 (29 U.S.C.

3 1132) is amended by adding at the end the following

4 new subsection:

5 ‘‘(n) CAUSE OF ACTION RELATING TO PROVISION OF

6 HEALTH BENEFITS.—

7 ‘‘(1) IN GENERAL.—In any case in which—

8 ‘‘(A) a person who is a fiduciary of a

9 group health plan, a health insurance issuer of10 fering health insurance coverage in connection

11 with the plan, or an agent of the plan, issuer,

12 or plan sponsor—

13 ‘‘(i) upon consideration of a claim for

14 benefits of a participant or beneficiary

15 under section 102 of the Bipartisan Pa16 tient Protection Act of 2001 (relating to

17 procedures for initial claims for benefits

18 and prior authorization determinations) or

19 upon review of a denial of such a claim

20 under section 103 of such Act (relating to

21 internal appeal of a denial of a claim for

22 benefits), fails to exercise ordinary care in

23 making a decision—

24 ‘‘(I) regarding whether an item

25 or service is covered under the terms
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1 and conditions of the plan or cov2 erage,

3 ‘‘(II) regarding whether an indi4 vidual is a participant or beneficiary

5 who is enrolled under the terms and

6 conditions of the plan or coverage (in7 cluding the applicability of any wait8 ing period under the plan or cov9 erage), or

10 ‘‘(III) as to the application of

11 cost-sharing requirements or the ap12 plication of a specific exclusion or ex13 press limitation on the amount, dura14 tion, or scope of coverage of items or

15 services under the terms and condi16 tions of the plan or coverage, or

17 ‘‘(ii) otherwise fails to exercise ordi18 nary care in the performance of a duty

19 under the terms and conditions of the plan

20 with respect to a participant or beneficiary,

21 and

22 ‘‘(B) such failure is a proximate cause of

23 personal injury to, or the death of, the partici24 pant or beneficiary,
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1 such person shall be liable to the participant or ben2 eficiary (or the estate of such participant or bene3 ficiary) for economic and noneconomic damages (but

4 not exemplary or punitive damages) in connection

5 with such personal injury or death.

6 ‘‘(2) CAUSE OF ACTION MUST NOT INVOLVE

7 MEDICALLY REVIEWABLE DECISION.—

8 ‘‘(A) IN GENERAL.—A cause of action is

9 established under paragraph (1)(A) only if the

10 decision referred to in clause (i) or the failure

11 described in clause (ii) does not include a medi12 cally reviewable decision.

13 ‘‘(B) MEDICALLY REVIEWABLE DECI14 SION.—For purposes of this subsection, the

15 term ‘medically reviewable decision’ means a de16 nial of a claim for benefits under the plan

17 which is described in section 104(d)(2) of the

18 Bipartisan Patient Protection Act of 2001 (re19 lating to medically reviewable decisions).

20 ‘‘(3) LIMITATION REGARDING CERTAIN TYPES

21 OF ACTIONS SAVED FROM PREEMPTION OF STATE

22 LAW.—A cause of action is not established under

23 paragraph (1)(A) in connection with a failure de24 scribed in paragraph (1)(A) to the extent that a

25 cause of action under State law (as defined in sec-
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1 tion 514(c)) for such failure would not be preempted

2 under section 514.

3 ‘‘(4) DEFINITIONS.—For purposes of this sub4 section.—

5 ‘‘(A) ORDINARY CARE.—The term ‘ordi6 nary care’ means—

7 ‘‘(i) with respect to a determination

8 on a claim for benefits, that degree of care,

9 skill, and diligence that a reasonable and

10 prudent individual would exercise in mak11 ing a fair determination on a claim for

12 benefits of like kind to the claim involved;

13 and

14 ‘‘(ii) with respect to the performance

15 of a duty, that degree of care, skill, and

16 diligence that a reasonable and prudent in17 dividual would exercise in performing the

18 duty or a duty of like character.

19 ‘‘(B) PERSONAL INJURY.—The term ‘per20 sonal injury’ means a physical injury and in21 cludes an injury arising out of the treatment

22 (or failure to treat) a mental illness or disease.

23 ‘‘(C) CLAIM FOR BENEFITS; DENIAL.—The

24 terms ‘claim for benefits’ and ‘denial of a claim

25 for benefits’ have the meanings provided such
144

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1 terms in section 102(e) of the Bipartisan Pa2 tient Protection Act of 2001.

3 ‘‘(D) TERMS AND CONDITIONS.—The term

4 ‘terms and conditions’ includes, with respect to

5 a group health plan or health insurance cov6 erage, requirements imposed under title I of the

7 Bipartisan Patient Protection Act of 2001 or

8 under part 6 or 7.

9 ‘‘(E) GROUP HEALTH PLAN AND OTHER

10 RELATED TERMS.—The provisions of sections

11 732(d) and 733 apply for purposes of this sub12 section in the same manner as they apply for

13 purposes of part 7, except that the term ‘group

14 health plan’ includes a group health plan (as

15 defined in section 607(1)).

16 ‘‘(5) EXCLUSION OF EMPLOYERS AND OTHER

17 PLAN SPONSORS.—

18 ‘‘(A) CAUSES OF ACTION AGAINST EM19 PLOYERS AND PLAN SPONSORS PRECLUDED.—

20 Subject to subparagraph (B), paragraph (1)(A)

21 does not authorize a cause of action against an

22 employer or other plan sponsor maintaining the

23 plan (or against an employee of such an em24 ployer or sponsor acting within the scope of em25 ployment).
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1 ‘‘(B) CERTAIN CAUSES OF ACTION PER2 MITTED.—Notwithstanding subparagraph (A),

3 a cause of action may arise against an employer

4 or other plan sponsor (or against an employee

5 of such an employer or sponsor acting within

6 the scope of employment)—

7 ‘‘(i) under clause (i) of paragraph

8 (1)(A), to the extent there was direct par9 ticipation by the employer or other plan

10 sponsor (or employee) in the decision of

11 the plan under section 102 of the Bipar12 tisan Patient Protection Act of 2001 upon

13 consideration of a claim for benefits or

14 under section 103 of such Act upon review

15 of a denial of a claim for benefits, or

16 ‘‘(ii) under clause (ii) of paragraph

17 (1)(A), to the extent there was direct par18 ticipation by the employer or other plan

19 sponsor (or employee) in the failure de20 scribed in such clause.

21 ‘‘(C) DIRECT PARTICIPATION.—

22 ‘‘(i) DIRECT PARTICIPATION IN DECI23 SIONS.—For purposes of subparagraph

24 (B), the term ‘direct participation’ means,

25 in connection with a decision described in
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1 clause (i) of paragraph (1)(A) or a failure

2 described in clause (ii) of such paragraph,

3 the actual making of such decision or the

4 actual exercise of control in making such

5 decision or in the conduct constituting the

6 failure.

7 ‘‘(ii) RULES OF CONSTRUCTION.—For

8 purposes of clause (i), the employer or plan

9 sponsor (or employee) shall not be con10 strued to be engaged in direct participation

11 because of any form of decisionmaking or

12 other conduct that is merely collateral or

13 precedent to the decision described in

14 clause (i) of paragraph (1)(A) on a par15 ticular claim for benefits of a participant

16 or beneficiary or that is merely collateral

17 or precedent to the conduct constituting a

18 failure described in clause (ii) of paragraph

19 (1)(A) with respect to a particular partici20 pant or beneficiary, including (but not lim21 ited to)—

22 ‘‘(I) any participation by the em23 ployer or other plan sponsor (or em24 ployee) in the selection of the group

25 health plan or health insurance cov-
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1 erage involved or the third party ad2 ministrator or other agent;

3 ‘‘(II) any engagement by the em4 ployer or other plan sponsor (or em5 ployee) in any cost-benefit analysis

6 undertaken in connection with the se7 lection of, or continued maintenance

8 of, the plan or coverage involved;

9 ‘‘(III) any participation by the

10 employer or other plan sponsor (or

11 employee) in the process of creating,

12 continuing, modifying, or terminating

13 the plan or any benefit under the

14 plan, if such process was not substan15 tially focused solely on the particular

16 situation of the participant or bene17 ficiary referred to in paragraph

18 (1)(A); and

19 ‘‘(IV) any participation by the

20 employer or other plan sponsor (or

21 employee) in the design of any benefit

22 under the plan, including the amount

23 of copayment and limits connected

24 with such benefit.
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1 ‘‘(iv) IRRELEVANCE OF CERTAIN COL2 LATERAL EFFORTS MADE BY EMPLOYER

3 OR PLAN SPONSOR.—For purposes of this

4 subparagraph, an employer or plan sponsor

5 shall not be treated as engaged in direct

6 participation in a decision with respect to

7 any claim for benefits or denial thereof in

8 the case of any particular participant or

9 beneficiary solely by reason of—

10 ‘‘(I) any efforts that may have

11 been made by the employer or plan

12 sponsor to advocate for authorization

13 of coverage for that or any other par14 ticipant or beneficiary (or any group

15 of participants or beneficiaries), or

16 ‘‘(II) any provision that may

17 have been made by the employer or

18 plan sponsor for benefits which are

19 not covered under the terms and con20 ditions of the plan for that or any

21 other participant or beneficiary (or

22 any group of participants or bene23 ficiaries).

24 ‘‘(6) EXCLUSION OF PHYSICIANS AND OTHER

25 HEALTH CARE PROFESSIONALS.—
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1 ‘‘(A) IN GENERAL.—No treating physician

2 or other treating health care professional of the

3 participant or beneficiary, and no person acting

4 under the direction of such a physician or

5 health care professional, shall be liable under

6 paragraph (1) for the performance of, or the

7 failure to perform, any non-medically reviewable

8 duty of the plan, the plan sponsor, or any

9 health insurance issuer offering health insur10 ance coverage in connection with the plan.

11 ‘‘(B) DEFINITIONS.—For purposes of sub12 paragraph (A)—

13 ‘‘(i) HEALTH CARE PROFESSIONAL.—

14 The term ‘health care professional’ means

15 an individual who is licensed, accredited, or

16 certified under State law to provide speci17 fied health care services and who is oper18 ating within the scope of such licensure,

19 accreditation, or certification.

20 ‘‘(ii) NON-MEDICALLY REVIEWABLE

21 DUTY.—The term ‘non-medically review22 able duty’ means a duty the discharge of

23 which does not include the making of a

24 medically reviewable decision.
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1 ‘‘(7) EXCLUSION OF HOSPITALS.—No treating

2 hospital of the participant or beneficiary shall be lia3 ble under paragraph (1) for the performance of, or

4 the failure to perform, any non-medically reviewable

5 duty (as defined in paragraph (6)(B)(ii)) of the

6 plan, the plan sponsor, or any health insurance

7 issuer offering health insurance coverage in connec8 tion with the plan.

9 ‘‘(8) RULE OF CONSTRUCTION RELATING TO

10 EXCLUSION FROM LIABILITY OF PHYSICIANS,

11 HEALTH CARE PROFESSIONALS, AND HOSPITALS.—

12 Nothing in paragraph (6) or (7) shall be construed

13 to limit the liability (whether direct or vicarious) of

14 the plan, the plan sponsor, or any health insurance

15 issuer offering health insurance coverage in connec16 tion with the plan.

17 ‘‘(9) REQUIREMENT OF EXHAUSTION.—

18 ‘‘(A) IN GENERAL.—Except as provided in

19 this paragraph, a cause of action may not be

20 brought under paragraph (1) in connection with

21 any denial of a claim for benefits of any indi22 vidual until all administrative processes under

23 sections 102 and 103 of the Bipartisan Patient

24 Protection Act of 2001 (if applicable) have been

25 exhausted.
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1 ‘‘(B) LATE MANIFESTATION OF INJURY.—

2 The requirements under subparagraph (A) for a

3 cause of action in connection with any denial of

4 a claim for benefits shall be deemed satisfied,

5 notwithstanding any failure to timely commence

6 review under section 103 with respect to the de7 nial, if the personal injury is first known (or

8 first reasonably should have been known) to the

9 individual (or the death occurs) after the latest

10 date by which the applicable requirements of

11 subparagraph (A) can be met in connection

12 with such denial.

13 ‘‘(C) OCCURRENCE OF IMMEDIATE AND IR14 REPARABLE HARM OR DEATH PRIOR TO COM15 PLETION OF PROCESS.—

16 ‘‘(i) IN GENERAL.—The requirements

17 of subparagraph (A) shall not apply in any

18 case of immediate and irreparable harm or

19 death occurring, as a result of the denial

20 of a claim for benefits, prior to the comple21 tion of the administrative processes re22 ferred to in subparagraph (A) with respect

23 to such denial.

24 ‘‘(ii) CONSTRUCTION.—Nothing in

25 clause (i) shall be construed to preclude—
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1 ‘‘(I) continuation of such proc2 esses to their conclusion if so moved

3 by any party, and

4 ‘‘(II) consideration in such action

5 of the final decisions issued in such

6 processes.

7 ‘‘(iii) DEFINITION.—In clause (i), the

8 term ‘irreparable harm’, with respect to an

9 individual, means an injury or condition

10 that, regardless of whether the individual

11 receives the treatment that is the subject

12 of the denial, cannot be repaired in a man13 ner that would restore the individual to the

14 individual’s pre-injured condition.

15 ‘‘(D) RECEIPT OF BENEFITS DURING AP16 PEALS PROCESS.—Receipt by the participant or

17 beneficiary of the benefits involved in the claim

18 for benefits during the pendency of any admin19 istrative processes referred to in subparagraph

20 (A) or of any action commenced under this

21 subsection—

22 ‘‘(i) shall not preclude continuation of

23 all such administrative processes to their

24 conclusion if so moved by any party, and
153

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1 ‘‘(ii) shall not preclude any liability

2 under subsection (a)(1)(C) and this sub3 section in connection with such claim.

4 The court in any action commenced under this

5 subsection shall take into account any receipt of

6 benefits during such administrative processes or

7 such action in determining the amount of the

8 damages awarded.

9 ‘‘(10) STATUTORY DAMAGES.—

10 ‘‘(A) IN GENERAL.—The remedies set

11 forth in this subsection (n) shall be the exclu12 sive remedies for causes of action brought

13 under this subsection.

14 ‘‘(B) ASSESSMENT OF CIVIL PENALTIES.—

15 In addition to the remedies provided for in

16 paragraph (1) (relating to the failure to provide

17 contract benefits in accordance with the plan),

18 a civil assessment, in an amount not to exceed

19 $5,000,000, payable to the claimant may be

20 awarded in any action under such paragraph if

21 the claimant establishes by clear and convincing

22 evidence that the alleged conduct carried out by

23 the defendant demonstrated bad faith and fla24 grant disregard for the rights of the participant

25 or beneficiary under the plan and was a proxi-
154

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1 mate cause of the personal injury or death that

2 is the subject of the claim.

3 ‘‘(11) LIMITATION OF ACTION.—Paragraph (1)

4 shall not apply in connection with any action com5 menced after 3 years after the later of—

6 ‘‘(A) the date on which the plaintiff first

7 knew, or reasonably should have known, of the

8 personal injury or death resulting from the fail9 ure described in paragraph (1), or

10 ‘‘(B) the date as of which the requirements

11 of paragraph (5) are first met.

12 ‘‘(12) TOLLING PROVISION.—The statute of

13 limitations for any cause of action arising under

14 State law relating to a denial of a claim for benefits

15 that is the subject of an action brought in Federal

16 court under this subsection shall be tolled until such

17 time as the Federal court makes a final disposition,

18 including all appeals, of whether such claim should

19 properly be within the jurisdiction of the Federal

20 court. The tolling period shall be determined by the

21 applicable Federal or State law, whichever period is

22 greater.

23 ‘‘(13) PURCHASE OF INSURANCE TO COVER LI24 ABILITY.—Nothing in section 410 shall be construed

25 to preclude the purchase by a group health plan of
155

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1 insurance to cover any liability or losses arising

2 under a cause of action under subsection (a)(1)(C)

3 and this subsection.

4 ‘‘(14) EXCLUSION OF DIRECTED RECORD5 KEEPERS.—

6 ‘‘(A) IN GENERAL.—Subject to subpara7 graph (C), paragraph (1) shall not apply with

8 respect to a directed recordkeeper in connection

9 with a group health plan.

10 ‘‘(B) DIRECTED RECORDKEEPER.—For

11 purposes of this paragraph, the term ‘directed

12 recordkeeper’ means, in connection with a

13 group health plan, a person engaged in directed

14 recordkeeping activities pursuant to the specific

15 instructions of the plan or the employer or

16 other plan sponsor, including the distribution of

17 enrollment information and distribution of dis18 closure materials under this Act or title I of the

19 Bipartisan Patient Protection Act of 2001 and

20 whose duties do not include making decisions

21 on claims for benefits.

22 ‘‘(C) LIMITATION.—Subparagraph (A)

23 does not apply in connection with any directed

24 recordkeeper to the extent that the directed rec25 ordkeeper fails to follow the specific instruction
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1 of the plan or the employer or other plan spon2 sor.

3 ‘‘(15) EXCLUSION OF HEALTH INSURANCE

4 AGENTS.—Paragraph (1) does not apply with re5 spect to a person whose sole involvement with the

6 group health plan is providing advice or administra7 tive services to the employer or other plan sponsor

8 relating to the selection of health insurance coverage

9 offered in connection with the plan.

10 ‘‘(16) NO EFFECT ON STATE LAW.—No provi11 sion of State law (as defined in section 514(c)(1))

12 shall be treated as superseded or otherwise altered,

13 amended, modified, invalidated, or impaired by rea14 son of the provisions of subsection (a)(1)(C) and this

15 subsection.’’.

16 (2) CONFORMING AMENDMENT.—Section

17 502(a)(1) of such Act (29 U.S.C. 1132(a)(1)) is

18 amended—

19 (A) by striking ‘‘or’’ at the end of subpara20 graph (A);

21 (B) in subparagraph (B), by striking

22 ‘‘plan;’’ and inserting ‘‘plan, or’’; and

23 (C) by adding at the end the following new

24 subparagraph:
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1 ‘‘(C) for the relief provided for in sub2 section (n) of this section.’’.

3 (b) RULES RELATING TO ERISA PREEMPTION.—

4 Section 514 of the Employee Retirement Income Security

5 Act of 1974 (29 U.S.C. 1144) is amended—

6 (1) by redesignating subsection (d) as sub7 section (f); and

8 (2) by inserting after subsection (c) the fol9 lowing new subsections:

10 ‘‘(d) PREEMPTION NOT TO APPLY TO CAUSES OF

11 ACTION UNDER STATE LAW INVOLVING MEDICALLY RE12 VIEWABLE DECISION.—

13 ‘‘(1) NON-PREEMPTION OF CERTAIN CAUSES OF

14 ACTION.—

15 ‘‘(A) IN GENERAL.—Except as provided in

16 this subsection, nothing in this title (including

17 section 502) shall be construed to supersede or

18 otherwise alter, amend, modify, invalidate, or

19 impair any cause of action under State law of

20 a participant or beneficiary under a group

21 health plan (or the estate of such a participant

22 or beneficiary) to recover damages resulting

23 from personal injury or for wrongful death

24 against any person if such cause of action
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1 arises by reason of a medically reviewable deci2 sion.

3 ‘‘(B) MEDICALLY REVIEWABLE DECI4 SION.—For purposes of subparagraph (A), the

5 term ‘medically reviewable decision’ means a de6 nial of a claim for benefits under the plan

7 which is described in section 104(d)(2) of the

8 Bipartisan Patient Protection Act of 2001 (re9 lating to medically reviewable decisions).

10 ‘‘(C) LIMITATION ON PUNITIVE DAM11 AGES.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clauses (ii) and (iii), with respect

14 to a cause of action described in subpara15 graph (A) brought with respect to a partic16 ipant or beneficiary, State law is super17 seded insofar as it provides any punitive,

18 exemplary, or similar damages if, as of the

19 time of the personal injury or death, all

20 the requirements of the following sections

21 of the Bipartisan Patient Protection Act of

22 2001 were satisfied with respect to the

23 participant or beneficiary:

24 ‘‘(I) Section 102 (relating to pro25 cedures for initial claims for benefits
159

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1 and prior authorization determina2 tions).

3 ‘‘(II) Section 103 of such Act

4 (relating to internal appeals of claims

5 denials).

6 ‘‘(III) Section 104 of such Act

7 (relating to independent external ap8 peals procedures).

9 ‘‘(ii) EXCEPTION FOR CERTAIN AC10 TIONS FOR WRONGFUL DEATH.—Clause (i)

11 shall not apply with respect to an action

12 for wrongful death if the applicable State

13 law provides (or has been construed to pro14 vide) for damages in such an action which

15 are only punitive or exemplary in nature.

16 ‘‘(iii) EXCEPTION FOR WILLFUL OR

17 WANTON DISREGARD FOR THE RIGHTS OR

18 SAFETY OF OTHERS.—Clause (i) shall not

19 apply with respect to any cause of action

20 described in subparagraph (A) if, in such

21 action, the plaintiff establishes by clear

22 and convincing evidence that conduct car23 ried out by the defendant with willful or

24 wanton disregard for the rights or safety

25 of others was a proximate cause of the per-
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1 sonal injury or wrongful death that is the

2 subject of the action.

3 ‘‘(2) DEFINITIONS.—For purposes of this sub4 section and subsection (e)—

5 ‘‘(A) GROUP HEALTH PLAN AND OTHER

6 RELATED TERMS.—The provisions of sections

7 732(d) and 733 apply for purposes of this sub8 section in the same manner as they apply for

9 purposes of part 7, except that the term ‘group

10 health plan’ includes a group health plan (as

11 defined in section 607(1)).

12 ‘‘(B) PERSONAL INJURY.—The term ‘per13 sonal injury’ means a physical injury and in14 cludes an injury arising out of the treatment

15 (or failure to treat) a mental illness or disease.

16 ‘‘(C) CLAIM FOR BENEFIT; DENIAL.—The

17 terms ‘claim for benefits’ and ‘denial of a claim

18 for benefits’ shall have the meaning provided

19 such terms under section 102(e) of the Bipar20 tisan Patient Protection Act of 2001.

21 ‘‘(3) EXCLUSION OF EMPLOYERS AND OTHER

22 PLAN SPONSORS.—

23 ‘‘(A) CAUSES OF ACTION AGAINST EM24 PLOYERS AND PLAN SPONSORS PRECLUDED.—
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1 Subject to subparagraph (B), paragraph (1)

2 does not apply with respect to—

3 ‘‘(i) any cause of action against an

4 employer or other plan sponsor maintain5 ing the plan (or against an employee of

6 such an employer or sponsor acting within

7 the scope of employment), or

8 ‘‘(ii) a right of recovery, indemnity, or

9 contribution by a person against an em10 ployer or other plan sponsor (or such an

11 employee) for damages assessed against

12 the person pursuant to a cause of action to

13 which paragraph (1) applies.

14 ‘‘(B) CERTAIN CAUSES OF ACTION PER15 MITTED.—Notwithstanding subparagraph (A),

16 paragraph (1) applies with respect to any cause

17 of action described in paragraph (1) maintained

18 by a participant or beneficiary against an em19 ployer or other plan sponsor (or against an em20 ployee of such an employer or sponsor acting

21 within the scope of employment)—

22 ‘‘(i) in the case of any cause of action

23 based on a decision of the plan under sec24 tion 102 of the Bipartisan Patient Protec25 tion Act of 2001 upon consideration of a
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1 claim for benefits or under section 103 of

2 such Act upon review of a denial of a claim

3 for benefits, to the extent there was direct

4 participation by the employer or other plan

5 sponsor (or employee) in the decision, or

6 ‘‘(ii) in the case of any cause of action

7 based on a failure to otherwise perform a

8 duty under the terms and conditions of the

9 plan with respect to a claim for benefits of

10 a participant or beneficiary, to the extent

11 there was direct participation by the em12 ployer or other plan sponsor (or employee)

13 in the failure.

14 ‘‘(C) DIRECT PARTICIPATION.—

15 ‘‘(i) DIRECT PARTICIPATION IN DECI16 SIONS.—For purposes of subparagraph

17 (B), the term ‘direct participation’ means,

18 in connection with a decision described in

19 subparagraph (B)(i) or a failure described

20 in subparagraph (B)(ii), the actual making

21 of such decision or the actual exercise of

22 control in making such decision or in the

23 conduct constituting the failure.

24 ‘‘(ii) RULES OF CONSTRUCTION.—For

25 purposes of clause (i), the employer or plan
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1 sponsor (or employee) shall not be con2 strued to be engaged in direct participation

3 because of any form of decisionmaking or

4 other conduct that is merely collateral or

5 precedent to the decision described in sub6 paragraph (B)(i) on a particular claim for

7 benefits of a particular participant or bene8 ficiary or that is merely collateral or prece9 dent to the conduct constituting a failure

10 described in subparagraph (B)(ii) with re11 spect to a particular participant or bene12 ficiary, including (but not limited to)—

13 ‘‘(I) any participation by the em14 ployer or other plan sponsor (or em15 ployee) in the selection of the group

16 health plan or health insurance cov17 erage involved or the third party ad18 ministrator or other agent;

19 ‘‘(II) any engagement by the em20 ployer or other plan sponsor (or em21 ployee) in any cost-benefit analysis

22 undertaken in connection with the se23 lection of, or continued maintenance

24 of, the plan or coverage involved;
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1 ‘‘(III) any participation by the

2 employer or other plan sponsor (or

3 employee) in the process of creating,

4 continuing, modifying, or terminating

5 the plan or any benefit under the

6 plan, if such process was not substan7 tially focused solely on the particular

8 situation of the participant or bene9 ficiary referred to in paragraph

10 (1)(A); and

11 ‘‘(IV) any participation by the

12 employer or other plan sponsor (or

13 employee) in the design of any benefit

14 under the plan, including the amount

15 of copayment and limits connected

16 with such benefit.

17 ‘‘(iv) IRRELEVANCE OF CERTAIN COL18 LATERAL EFFORTS MADE BY EMPLOYER

19 OR PLAN SPONSOR.—For purposes of this

20 subparagraph, an employer or plan sponsor

21 shall not be treated as engaged in direct

22 participation in a decision with respect to

23 any claim for benefits or denial thereof in

24 the case of any particular participant or

25 beneficiary solely by reason of—
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1 ‘‘(I) any efforts that may have

2 been made by the employer or plan

3 sponsor to advocate for authorization

4 of coverage for that or any other par5 ticipant or beneficiary (or any group

6 of participants or beneficiaries), or

7 ‘‘(II) any provision that may

8 have been made by the employer or

9 plan sponsor for benefits which are

10 not covered under the terms and con11 ditions of the plan for that or any

12 other participant or beneficiary (or

13 any group of participants or bene14 ficiaries).

15 ‘‘(4) REQUIREMENT OF EXHAUSTION.—

16 ‘‘(A) IN GENERAL.—Except as provided in

17 this paragraph, paragraph (1) shall not apply

18 with respect to a cause of action described in

19 such paragraph in connection with any denial of

20 a claim for benefits of any individual until all

21 administrative processes under sections 102,

22 103, and 104 of the Bipartisan Patient Protec23 tion Act of 2001 (if applicable) have been ex24 hausted.
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1 ‘‘(B) LATE MANIFESTATION OF INJURY.—

2 The requirements under subparagraph (A) for a

3 cause of action in connection with any denial of

4 a claim for benefits shall be deemed satisfied,

5 notwithstanding any failure to timely commence

6 review under section 103 or 104 with respect to

7 the denial, if the personal injury is first known

8 (or first should have been known) to the indi9 vidual (or the death occurs) after the latest

10 date by which the applicable requirements of

11 subparagraph (A) can be met in connection

12 with such denial.

13 ‘‘(C) OCCURRENCE OF IMMEDIATE AN IR14 REPARABLE HARM OR DEATH PRIOR TO COM15 PLETION OF PROCESS.—

16 ‘‘(i) IN GENERAL.—The requirements

17 of subparagraph (A) shall not apply in any

18 case of immediate and irreparable harm or

19 death occurring, as a result of the denial

20 of a claim for benefits, prior to the comple21 tion of the administrative processes re22 ferred to in subparagraph (A) with respect

23 to such denial.

24 ‘‘(ii) CONSTRUCTION.—Nothing in

25 clause (i) shall be construed to preclude—
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1 ‘‘(I) continuation of such proc2 esses to their conclusion if so moved

3 by any party, and

4 ‘‘(II) consideration in such action

5 of the final decisions issued in such

6 processes.

7 ‘‘(iii) DEFINITION.—In clause (i), the

8 term ‘irreparable harm’, with respect to an

9 individual, means an injury or condition

10 that, regardless of whether the individual

11 receives the treatment that is the subject

12 of the denial, cannot be repaired in a man13 ner that would restore the individual to the

14 individual’s pre-injured condition.

15 ‘‘(D) RECEIPT OF BENEFITS DURING AP16 PEALS PROCESS.—Receipt by the participant or

17 beneficiary of the benefits involved in the claim

18 for benefits during the pendency of any admin19 istrative processes referred to in subparagraph

20 (A) or of any action commenced under this

21 subsection—

22 ‘‘(i) shall not preclude continuation of

23 all such administrative processes to their

24 conclusion if so moved by any party, and
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1 ‘‘(ii) shall not preclude any liability

2 under subsection (a)(1)(C) and this sub3 section in connection with such claim.

4 ‘‘(5) TOLLING PROVISION.—The statute of limi5 tations for any cause of action arising under section

6 502(n) relating to a denial of a claim for benefits

7 that is the subject of an action brought in State

8 court shall be tolled until such time as the State

9 court makes a final disposition, including all ap10 peals, of whether such claim should properly be

11 within the jurisdiction of the State court. The tolling

12 period shall be determined by the applicable Federal

13 or State law, whichever period is greater.

14 ‘‘(6) EXCLUSION OF DIRECTED RECORD15 KEEPERS.—

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (C), paragraph (1) shall not apply with

18 respect to a directed recordkeeper in connection

19 with a group health plan.

20 ‘‘(B) DIRECTED RECORDKEEPER.—For

21 purposes of this paragraph, the term ‘directed

22 recordkeeper’ means, in connection with a

23 group health plan, a person engaged in directed

24 recordkeeping activities pursuant to the specific

25 instructions of the plan or the employer or
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1 other plan sponsor, including the distribution of

2 enrollment information and distribution of dis3 closure materials under this Act or title I of the

4 Bipartisan Patient Protection Act of 2001 and

5 whose duties do not include making decisions

6 on claims for benefits.

7 ‘‘(C) LIMITATION.—Subparagraph (A)

8 does not apply in connection with any directed

9 recordkeeper to the extent that the directed rec10 ordkeeper fails to follow the specific instruction

11 of the plan or the employer or other plan spon12 sor.

13 ‘‘(7) CONSTRUCTION.—Nothing in this sub14 section shall be construed as—

15 ‘‘(A) saving from preemption a cause of

16 action under State law for the failure to provide

17 a benefit for an item or service which is specifi18 cally excluded under the group health plan in19 volved, except to the extent that—

20 ‘‘(i) the application or interpretation

21 of the exclusion involves a determination

22 described in section 104(d)(2) of the Bi23 partisan Patient Protection Act of 2001,

24 or
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1 ‘‘(ii) the provision of the benefit for

2 the item or service is required under Fed3 eral law or under applicable State law con4 sistent with subsection (b)(2)(B);

5 ‘‘(B) preempting a State law which re6 quires an affidavit or certificate of merit in a

7 civil action;

8 ‘‘(C) affecting a cause of action or remedy

9 under State law in connection with the provi10 sion or arrangement of excepted benefits (as de11 fined in section 733(c)), other than those de12 scribed in section 733(c)(2)(A); or

13 ‘‘(D) affecting a cause of action under

14 State law other than a cause of action described

15 in paragraph (1)(A).

16 ‘‘(8) PURCHASE OF INSURANCE TO COVER LI17 ABILITY.—Nothing in section 410 shall be construed

18 to preclude the purchase by a group health plan of

19 insurance to cover any liability or losses arising

20 under a cause of action described in paragraph

21 (1)(A).

22 ‘‘(e) RULES OF CONSTRUCTION RELATING TO

23 HEALTH CARE.—Nothing in this title shall be construed

24 as—
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1 ‘‘(1) affecting any State law relating to the

2 practice of medicine or the provision of, or the fail3 ure to provide, medical care, or affecting any action

4 (whether the liability is direct or vicarious) based

5 upon such a State law,

6 ‘‘(2) superseding any State law permitted under

7 section 152(b)(1)(A) of the Bipartisan Patient Pro8 tection Act of 2001, or

9 ‘‘(3) affecting any applicable State law with re10 spect to limitations on monetary damages.’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to acts and omissions (from which

13 a cause of action arises) occurring on or after October 1,

14 2002.

15 SEC. 303. LIMITATIONS ON ACTIONS.

16 Section 502 of the Employee Retirement Income Se17 curity Act of 1974 (29 U.S.C. 1132) (as amended by sec18 tion 302(a)) is amended further by adding at the end the

19 following new subsection:

20 ‘‘(o) LIMITATIONS ON ACTIONS RELATING TO GROUP

21 HEALTH PLANS.—

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), no action may be brought under sub24 section (a)(1)(B), (a)(2), or (a)(3) by a participant

25 or beneficiary seeking relief based on the application
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1 of any provision in section 101, subtitle B, or sub2 title D of title I of the Bipartisan Patient Protection

3 Act (as incorporated under section 714).

4 ‘‘(2) CERTAIN ACTIONS ALLOWABLE.—An ac5 tion may be brought under subsection (a)(1)(B),

6 (a)(2), or (a)(3) by a participant or beneficiary seek7 ing relief based on the application of section 101,

8 113, 114, 115, 116, 117, 118(a)(3), 119, or 120 of

9 the Bipartisan Patient Protection Act (as incor10 porated under section 714) to the individual cir11 cumstances of that participant or beneficiary, except

12 that—

13 ‘‘(A) such an action may not be brought or

14 maintained as a class action; and

15 ‘‘(B) in such an action, relief may only

16 provide for the provision of (or payment of)

17 benefits, items, or services denied to the indi18 vidual participant or beneficiary involved (and

19 for attorney’s fees and the costs of the action,

20 at the discretion of the court) and shall not pro21 vide for any other relief to the participant or

22 beneficiary or for any relief to any other person.

23 ‘‘(3) OTHER PROVISIONS UNAFFECTED.—Noth24 ing in this subsection shall be construed as affecting

25 subsections (a)(1)(C) and (n) or section 514(d).
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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 TITLE IV—EFFECTIVE DATES;

6 COORDINATION IN IMPLE7 MENTATION

8 SEC. 401. EFFECTIVE DATES.

9 (a) GROUP HEALTH COVERAGE.—

10 (1) IN GENERAL.—Subject to paragraph (2)

11 and subsection (d), the amendments made by sec12 tions 201(a), 301, and 303 (and title I insofar as it

13 relates to such sections) shall apply with respect to

14 group health plans, and health insurance coverage

15 offered in connection with group health plans, for

16 plan years beginning on or after October 1, 2002 (in

17 this section referred to as the ‘‘general effective

18 date’’).

19 (2) TREATMENT OF COLLECTIVE BARGAINING

20 AGREEMENTS.—In the case of a group health plan

21 maintained pursuant to one or more collective bar22 gaining agreements between employee representa23 tives and one or more employers ratified before the

24 date of the enactment of this Act, the amendments

25 made by sections 201(a), 301, and 303 (and title I
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1 insofar as it relates to such sections) shall not apply

2 to plan years beginning before the later of—

3 (A) the date on which the last collective

4 bargaining agreements relating to the plan ter5 minates (determined without regard to any ex6 tension thereof agreed to after the date of the

7 enactment of this Act); or

8 (B) the general effective date.

9 For purposes of subparagraph (A), any plan amend10 ment made pursuant to a collective bargaining

11 agreement relating to the plan which amends the

12 plan solely to conform to any requirement added by

13 this Act shall not be treated as a termination of

14 such collective bargaining agreement.

15 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—

16 Subject to subsection (d), the amendments made by sec17 tion 202 shall apply with respect to individual health in18 surance coverage offered, sold, issued, renewed, in effect,

19 or operated in the individual market on or after the gen20 eral effective date.

21 (c) TREATMENT OF RELIGIOUS NONMEDICAL PRO22 VIDERS.—

23 (1) IN GENERAL.—Nothing in this Act (or the

24 amendments made thereby) shall be construed to—
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1 (A) restrict or limit the right of group

2 health plans, and of health insurance issuers of3 fering health insurance coverage, to include as

4 providers religious nonmedical providers;

5 (B) require such plans or issuers to—

6 (i) utilize medically based eligibility

7 standards or criteria in deciding provider

8 status of religious nonmedical providers;

9 (ii) use medical professionals or cri10 teria to decide patient access to religious

11 nonmedical providers;

12 (iii) utilize medical professionals or

13 criteria in making decisions in internal or

14 external appeals regarding coverage for

15 care by religious nonmedical providers; or

16 (iv) compel a participant or bene17 ficiary to undergo a medical examination

18 or test as a condition of receiving health

19 insurance coverage for treatment by a reli20 gious nonmedical provider; or

21 (C) require such plans or issuers to ex22 clude religious nonmedical providers because

23 they do not provide medical or other required

24 data, if such data is inconsistent with the reli-
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1 gious nonmedical treatment or nursing care

2 provided by the provider.

3 (2) RELIGIOUS NONMEDICAL PROVIDER.—For

4 purposes of this subsection, the term ‘‘religious non5 medical provider’’ means a provider who provides no

6 medical care but who provides only religious non7 medical treatment or religious nonmedical nursing

8 care.

9 (d) TRANSITION FOR NOTICE REQUIREMENT.—The

10 disclosure of information required under section 121 of

11 this Act shall first be provided pursuant to—

12 (1) subsection (a) with respect to a group

13 health plan that is maintained as of the general ef14 fective date, not later than 30 days before the begin15 ning of the first plan year to which title I applies

16 in connection with the plan under such subsection;

17 or

18 (2) subsection (b) with respect to a individual

19 health insurance coverage that is in effect as of the

20 general effective date, not later than 30 days before

21 the first date as of which title I applies to the cov22 erage under such subsection.

23 SEC. 402. COORDINATION IN IMPLEMENTATION.

24 The Secretary of Labor and the Secretary of Health

25 and Human Services shall ensure, through the execution
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1 of an interagency memorandum of understanding among

2 such Secretaries, that—

3 (1) regulations, rulings, and interpretations

4 issued by such Secretaries relating to the same mat5 ter over which such Secretaries have responsibility

6 under the provisions of this Act (and the amend7 ments made thereby) are administered so as to have

8 the same effect at all times; and

9 (2) coordination of policies relating to enforcing

10 the same requirements through such Secretaries in

11 order to have a coordinated enforcement strategy

12 that avoids duplication of enforcement efforts and

13 assigns priorities in enforcement.

14 SEC. 403. SEVERABILITY.

15 If any provision of this Act, an amendment made by

16 this Act, or the application of such provision or amend17 ment to any person or circumstance is held to be unconsti18 tutional, the remainder of this Act, the amendments made

19 by this Act, and the application of the provisions of such

20 to any person or circumstance shall not be affected there21 by.
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1 TITLE V—MISCELLANEOUS

2 PROVISIONS

3 SEC. 501. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

4 (a) IN GENERAL.—Nothing in this Act (or an amend5 ment made by this Act) shall be construed to alter or

6 amend the Social Security Act (or any regulation promul7 gated under that Act).

8 (b) TRANSFERS.—

9 (1) ESTIMATE OF SECRETARY.—The Secretary

10 of the Treasury shall annually estimate the impact

11 that the enactment of this Act has on the income

12 and balances of the trust funds established under

13 section 201 of the Social Security Act (42 U.S.C.

14 401).

15 (2) TRANSFER OF FUNDS.—If, under para16 graph (1), the Secretary of the Treasury estimates

17 that the enactment of this Act has a negative impact

18 on the income and balances of the trust funds estab19 lished under section 201 of the Social Security Act

20 (42 U.S.C. 401), the Secretary shall transfer, not

21 less frequently than quarterly, from the general reve22 nues of the Federal Government an amount suffi23 cient so as to ensure that the income and balances

24 of such trust funds are not reduced as a result of

25 the enactment of such Act.
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1 SEC. 502. CUSTOMS USER FEES.

2 Section 13031(j)(3) of the Consolidated Omnibus

3 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3))

4 is amended by striking ‘‘2003’’ and inserting ‘‘2011, ex5 cept that fees may not be charged under paragraphs (9)

6 and (10) of such subsection after March 31, 2006’’.

7 SEC. 503. FISCAL YEAR 2002 MEDICARE PAYMENTS.

8 Notwithstanding any other provision of law, any let9 ter of credit under part B of title XVIII of the Social Se10 curity Act (42 U.S.C. 1395j et seq.) that would otherwise

11 be sent to the Treasury or the Federal Reserve Board on

12 September 30, 2002, by a carrier with a contract under

13 section 1842 of that Act (42 U.S.C. 1395u) shall be sent

14 on October 1, 2002.
Calendar No. 75

107TH CONGRESS

1ST SESSION S. 1052

A BILL

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 18, 2001

Read the second time and placed on the calendar