I

106TH CONGRESS

1ST SESSION H. R. 1133

To provide for comprehensive reform for managed health care plans.

IN THE HOUSE OF REPRESENTATIVES

MARCH 16, 1999

Mr. NADLER (for himself and Mr. FROST) introduced the following bill; which

was referred to the Committee on Ways and Means, and in addition to

the Committees on Commerce, and Education and the Workforce, for a

period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide for comprehensive reform for managed health

care plans.

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 ‘‘Comprehensive Managed Health Care Reform Act of

6 1999’’.

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

8 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.
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Sec. 3. Enforcement of requirements.

Sec. 4. Assuring adequate access to covered services and providers.

Sec. 5. Assuring adequate scope of coverage.

Sec. 6. Assuring unbiased medical determinations by health care professionals

and providers.

Sec. 7. Nondiscrimination against enrollees and in the selection of participating providers; equitable access to networks.

Sec. 8. Disclosure of information.

Sec. 9. Grievance procedures and deadline for responding to requests for coverage of services.

Sec. 10. Due process for health care professionals and providers.

Sec. 11. Requirements for quality improvement program and utilization review

programs.

Sec. 12. Minimum loss ratios; general consumer protections.

1 SEC. 2. DEFINITIONS.

2 (a) IN GENERAL.—For purposes of this Act:

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

4 with respect to a managed care plan offered by a

5 managed care organization, an individual enrolled

6 with the organization for coverage under such a

7 plan.

8 (2) HEALTH CARE PROFESSIONAL.—The term

9 ‘‘health care professional’’ means a physician or

10 other health care practitioner who is licensed under

11 State law with respect to the health care services the

12 practitioner furnishes.

13 (3) HEALTH PLAN.—The term ‘‘health plan’’

14 means a group health plan or health insurance cov15 erage offered by a health insurance issuer.

16 (4) MANAGED CARE ORGANIZATION.—The term

17 ‘‘managed care organization’’ means any entity, in18 cluding a group health plan, health maintenance or19 ganization, or provider-sponsored organization, in re-
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1 lation to its offering of a managed care plan, and in2 cludes any other entity that provides or manages the

3 coverage under such a plan under a contract or ar4 rangement with the entity.

5 (5) MANAGED CARE PLAN.—The term ‘‘man6 aged care plan’’ means a health plan offered by an

7 entity if the entity—

8 (A) provides or arranges for the provision

9 of health care items and services to enrollees in

10 the plan through participating health care pro11 fessionals and providers, or

12 (B) provides financial incentives (such as

13 variable copayments and deductibles) to induce

14 enrollees to obtain benefits through partici15 pating health care professionals and providers,

16 or both.

17 (6) PARTICIPATING.—The term ‘‘participating’’

18 means, with respect to a health care professional or

19 provider in relation to a health plan offered by an

20 entity, a physician or provider that furnishes health

21 care items and services to enrollees of the entity

22 under an agreement with the entity.

23 (7) PRIMARY CARE PROVIDER.—The term ‘‘pri24 mary care provider’’ means a health care profes-
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1 sional who acts as a gatekeeper for the overall care

2 of an enrollee.

3 (8) SECRETARY.—The term ‘‘Secretary’’ means

4 the Secretary of Health and Human Services .

5 (9) STATE.—The term ‘‘State’’ includes the

6 District of Columbia, Puerto Rico, the Virgin Is7 lands, Guam, American Samoa, and the Northern

8 Mariana Islands.

9 (b) INCORPORATION OF GENERAL DEFINITIONS

10 FROM HEALTH INSURANCE PORTABILITY AND ACCOUNT11 ABILITY ACT.—For purposes of this Act, the definitions

12 contained in section 2791 of the Public Health Service Act

13 (42 U.S.C. 300gg–91) shall apply under this Act.

14 SEC. 3. ENFORCEMENT OF REQUIREMENTS.

15 (a) APPLICATION TO GROUP HEALTH PLANS.—

16 (1) PUBLIC HEALTH SERVICE ACT.—For pur17 poses of applying title XXVII of the Public Health

18 Service Act, the requirements of the succeeding sec19 tions of this Act shall be treated as though they

20 were included in the subpart 2 of part A of such

21 title (42 U.S.C. 300gg–4 et seq.).

22 (2) EMPLOYEE RETIREMENT INCOME SECURITY

23 ACT OF 1974.—For purposes of applying part 7 of

24 subtitle B of title I of the Employee Retirement In25 come Security Act of 1974, the requirements of the
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1 succeeding sections of this Act shall be treated as

2 though they were included in subpart B of such part

3 (29 U.S.C. 1185 et seq.).

4 (3) INTERNAL REVENUE CODE OF 1986.—For

5 purposes of applying chapter 100 of the Internal

6 Revenue Code of 1986, the requirements of the suc7 ceeding sections of this Act shall be treated as

8 though they were included in subchapter B of such

9 chapter.

10 (b) APPLICATION TO INDIVIDUAL HEALTH INSUR11 ANCE COVERAGE.—For purposes of applying title XXVII

12 of the Public Health Service Act, the requirements of the

13 succeeding sections of this Act also shall be treated as

14 though they were part of subpart 2 of part B of such title

15 (42 U.S.C. 300gg–51 et seq.).

16 (c) MEDICARE.—The Secretary may not enter into

17 a contract under section 1857 of the Social Security Act

18 (42 U.S.C. 1395w–27) with a Medicare+Choice organiza19 tion that is a managed care organization unless the con20 tract contains assurances satisfactory to the Secretary

21 that the organization will comply with the applicable re22 quirements of the succeeding sections of this Act.

23 (d) MEDICAID.—Notwithstanding any other provision

24 of law, no funds shall be paid to a State under section

25 1903(a)(1) of the Social Security Act (42 U.S.C.
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1 1396b(a)(1)) with respect to medical assistance provided

2 through payment to a Medicaid managed care organiza3 tion (as defined in section 1903(m)(1)(A) of such Act, 42

4 U.S.C. 1396b(m)(1)(A)) unless the contract with such or5 ganization contains assurances satisfactory to the Sec6 retary that the organization will comply with the applica7 ble requirements of the succeeding sections of this Act.

8 (e) SECRETARIAL ENFORCEMENT AUTHORITY.—

9 (1) IN GENERAL.—In addition to any other au10 thority provided under law, the Secretary shall es11 tablish sanctions, consistent with this subsection, for

12 the enforcement of the requirements of the suc13 ceeding sections of this Act.

14 (2) PROGRESSIVE CIVIL MONETARY PEN15 ALTIES.—Such sanctions shall include the imposition

16 of civil monetary penalties for violations of such re17 quirements. The amount of such penalties shall in18 crease as the frequency or severity of the violations

19 by a managed care organization increases.

20 (3) OPPORTUNITY FOR CORRECTIVE ACTION

21 PLAN.—The Secretary shall provide an opportunity

22 for a managed care organization to implement a cor23 rective action plan before imposing sanctions for vio24 lations of such requirements.
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1 (4) DISQUALIFICATION FROM MEDICARE AND

2 MEDICAID.—In cases of repeated or egregious viola3 tions of such requirements by such an organization

4 that has entered into a contract under title XVIII or

5 XIX of the Social Security Act—

6 (A) the Secretary initially shall prohibit

7 the organization from enrolling any additional

8 individuals under either such title, and

9 (B) if the Secretary finds that the viola10 tions continue, the Secretary shall terminate

11 the contracts with the organization under such

12 titles and require the termination of enrollment

13 of individuals enrolled with the organization

14 under either such title.

15 (5) PRINTING LIST OF VIOLATORS.—The Sec16 retary shall periodically publish a list of the organi17 zations which have been sanctioned under this sub18 section, the nature of such sanctions, and the viola19 tions for which such sanctions were imposed. The

20 Secretary may exclude from such list an organiza21 tion that, in lieu of imposition of a sanction, is im22 plementing (or has completed implementation of) a

23 corrective plan.

24 (f) ADDITIONAL LIABILITY FOR WITHHOLDING OF

25 MEDICALLY NECESSARY CARE.—If a managed care orga-
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1 nization in connection with a managed care plan fails

2 (through the curtailment of a hospital stay, a limitation

3 on covered tests, a limitation on treatment, or otherwise)

4 to provide any such benefit in accordance with the terms

5 of the plan, insofar as such failure occurs pursuant to a

6 clinically or medically inappropriate decision or determina7 tion resulting from—

8 (1) the application of any cost containment

9 technique,

10 (2) any utilization review directed at cost con11 tainment, or

12 (3) any other medical care delivery policy deci13 sion which restricts the ability of providers of med14 ical care from utilizing their full discretion for treat15 ment of enrollees,

16 the organization, and any agent of the organization having

17 authority to make such decision or determination on be18 half of the organization, shall be jointly and severally lia19 ble to any enrollee aggrieved by such failure for actual

20 damages (including compensatory and consequential dam21 ages) proximately caused by such failure, and may, in the

22 court’s discretion, be liable to such enrollee for punitive

23 damages. The remedies under this subsection are in addi24 tion to remedies otherwise provided under this section.

25 (g) NO PREEMPTION OF STRICTER STATE LAW.—
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1 (1) IN GENERAL.—Subject to paragraph (2),

2 this Act shall not be construed to supersede any pro3 vision of State law that provides protections in rela4 tion to health insurance coverage that are greater

5 than the protections provided under this Act.

6 (2) CONTINUED PREEMPTION WITH RESPECT

7 TO GROUP HEALTH PLANS.—Nothing in this Act

8 shall be construed to affect or modify the provisions

9 of section 514 of the Employee Retirement Income

10 Security Act of 1974 with respect to group health

11 plans.

12 (h) NULLIFICATION OF CONTRARY CONTRACTUAL

13 PROVISIONS.—Any contract provision or agreement that

14 is in violation of any provision of this Act (or amendment

15 made by this Act) shall be null and void.

16 SEC. 4. ASSURING ADEQUATE ACCESS TO COVERED SERV17 ICES AND PROVIDERS.

18 (a) GENERAL ACCESS.—

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

20 managed care organization offering a managed care

21 plan shall establish and maintain adequate arrange22 ments, as defined under regulations of the Secretary,

23 with a sufficient number, mix, and distribution of

24 health care professionals and providers to assure
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1 that covered items and services are available and ac2 cessible to each enrollee under the plan—

3 (A) in the service area of the organization;

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

5 (C) with reasonable promptness (including

6 reasonable hours of operation and after-hours

7 services);

8 (D) with reasonable proximity to the resi9 dences and workplaces of enrollees; and

10 (E) in a manner that—

11 (i) takes into account the diverse

12 needs of enrollees, and

13 (ii) reasonably assures continuity of

14 care.

15 (2) TREATMENT OF ORGANIZATIONS SERVING

16 CERTAIN AREAS.—For a managed care organization

17 that serves a rural or medically underserved area,

18 the organization shall be treated as meeting the re19 quirement of paragraph (1) if the organization has

20 arrangements with a sufficient number, mix, and

21 distribution of health care professionals and pro22 viders having a history of serving such areas. The

23 use of telemedicine and other innovative means to

24 provide covered items and services by a managed

25 care organization that serves a rural or medically
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1 underserved area shall also be considered in deter2 mining whether the requirement of such paragraph

3 is met.

4 (3) DEFINITIONS.—For purposes of paragraph

5 (1):

6 (A) MEDICALLY UNDERSERVED AREA.—

7 The term ‘‘medically underserved area’’ means

8 an area that is designated as a health profes9 sional shortage area under section 332 of the

10 Public Health Service Act (42 U.S.C. 254e) or

11 as a medically underserved area for purposes of

12 section 330 or 1302(7) of such Act (42 U.S.C.

13 254c, 300e–1(7)).

14 (B) RURAL AREA.—The term ‘‘rural area’’

15 means an area that is not within a Standard

16 Metropolitan Statistical Area or a New England

17 County Metropolitan Area (as defined by the

18 Office of Management and Budget).

19 (b) ACCESS TO SPECIALIZED SERVICES.—

20 (1) IN GENERAL.—A managed care organiza21 tion shall demonstrate that enrollees have access to

22 specialized treatment expertise when such treatment

23 is medically or clinically indicated in the professional

24 judgment of the treating health care professional, in

25 consultation with the enrollee.
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1 (2) MEDICAL SPECIALISTS.—A managed care

2 organization shall develop a system to permit enroll3 ees to use a medical specialist primary care provider

4 as a primary care provider when the enrollee’s med5 ical conditions (including suffering from a chronic

6 disease or medical condition) warrant it.

7 (3) STANDING REFERRALS TO SPECIALISTS.—A

8 managed care organization shall provide for a stand9 ing referral to a medical specialist if the treating

10 primary care provider, in consultation with such spe11 cialists, determines such a referral is necessary to

12 provide adequate and continuous care for the pa13 tient.

14 (4) SPECIALIZED TREATMENT EXPERTISE DE15 FINED.—For purposes of this subsection, the term

16 ‘‘specialized treatment expertise’’ means expertise in

17 diagnosing or treating—

18 (A) unusual diseases or conditions, or

19 (B) diseases and conditions that are un20 usually difficult to diagnose or treat.

21 (5) MEDICAL SPECIALIST DEFINED.—For pur22 poses of paragraph (2), the term ‘‘medical spe23 cialist’’ means, with respect to a managed care orga24 nization, a health care professional who is certified

25 by a national accreditation board (or pursuant to
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1 State licensing authority) as possessing specialized

2 treatment expertise.

3 (c) USE OF GYNECOLOGISTS AS PRIMARY CARE PRO4 VIDERS.—A managed care organization may not require

5 an enrollee to obtain a referral from a physician in order

6 to obtain covered items and services from a physician who

7 specializes in obstetrics and gynecology.

8 (d) EMERGENCY AND URGENT CARE.—

9 (1) IN GENERAL.—A managed care organiza10 tion shall—

11 (A) assure the availability and accessibility

12 of medically or clinically necessary emergency

13 services and urgent care services within the

14 service area of the organization 24 hours a day,

15 7 days a week;

16 (B) require no prior authorization for

17 items and services furnished in a hospital emer18 gency department to an enrollee (without re19 gard to whether the health care professional or

20 hospital has a contractual or other arrangement

21 with the organization) with symptoms that

22 would reasonably suggest to a prudent

23 layperson that there is an emergency medical

24 condition (including items and services de25 scribed in subparagraph (C)(iii));
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1 (C) cover (and make reasonable payments

2 for)—

3 (i) emergency services,

4 (ii) services that are not emergency

5 services but are described in subparagraph

6 (B),

7 (iii) medical screening examinations

8 and other ancillary services necessary to

9 diagnose, treat, and stabilize an emergency

10 medical condition, and

11 (iv) urgent care services,

12 without regard to whether the health care pro13 fessional or provider furnishing such services

14 has a contractual (or other) arrangement with

15 the organization; and

16 (D) make prior authorization determina17 tions for—

18 (i) services that are furnished in a

19 hospital emergency department (other than

20 services described in clauses (i) and (iii) of

21 subparagraph (C)), and

22 (ii) urgent care services,

23 within the time periods specified in (or pursu24 ant to) sections 9(c)(3) and 10(f).
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1 (2) DEFINITIONS.—For purposes of this sub2 section:

3 (A) EMERGENCY MEDICAL CONDITION.—

4 The term ‘‘emergency medical condition’’ means

5 a medical condition (including emergency labor

6 and delivery) manifesting itself by acute symp7 toms of sufficient severity (including severe

8 pain) such that a prudent layperson, who pos9 sesses an average knowledge of health and med10 icine, could reasonably expect that the absence

11 of immediate medical attention might result

12 in—

13 (i) placing the patient’s health in seri14 ous jeopardy,

15 (ii) serious impairment to bodily func16 tions, or

17 (iii) serious dysfunction of any bodily

18 organ or part.

19 (B) EMERGENCY SERVICES.—The term

20 ‘‘emergency services’’ means health care items

21 and services that are necessary for the diag22 nosis, treatment, and stabilization of an emer23 gency medical condition.

24 (C) URGENT CARE SERVICES.—The term

25 ‘‘urgent care services’’ means health care items
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1 and services that are necessary for the treat2 ment of a condition that—

3 (i) is not an emergency medical condi4 tion,

5 (ii) requires prompt medical or clinical

6 treatment, and

7 (iii) poses a danger to the patient if

8 not treated in a timely manner, as defined

9 by the Secretary in consultation with rel10 evant treating health care professionals or

11 providers.

12 (e) RIGHT TO REFERRAL TO NONPARTICIPATING

13 PROVIDERS.—A managed care organization shall permit

14 an enrollee to obtain a referral to a nonparticipating pro15 vider if the organization does not have a participating pro16 vider with appropriate training and experience to meet the

17 enrollee’s needs and shall pay for care provided pursuant

18 to such a referral.

19 (f) ACCESS TO CENTERS OF EXCELLENCE FOR INDI20 VIDUALS REQUIRING SPECIALIZED CARE.—

21 (1) IN GENERAL.—Each managed care organi22 zation shall demonstrate that enrollees who have

23 chronic diseases or otherwise require specialized

24 services, as determined by the primary care provider

25 or treating specialist, have access through the orga-
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1 nization to specialized treatment expertise at des2 ignated centers of excellence in order to provide ade3 quate and continuous care for such enrollees. Such

4 an organization shall demonstrate such access ac5 cording to standards developed by the Secretary, in6 cluding requirements relating to arrangements with

7 such centers and referral of enrollees to such cen8 ters.

9 (2) DESIGNATION PROCESS.—The Secretary

10 shall establish a process for the designation of facili11 ties as centers of excellence for purposes of this sub12 section. A facility may not be designated unless the

13 facility is determined—

14 (A) to provide specialty care,

15 (B) to deliver care for complex cases re16 quiring specialized treatment or for individuals

17 with chronic diseases, and

18 (C) to meet other requirements that may

19 be established by the Secretary relating to spe20 cialized education and training of health care

21 professionals, participation in peer-reviewed re22 search, or treatment of patients from outside

23 the geographic area of the facility.

24 (g) PATIENT ACCESS TO CLINICAL STUDIES.—
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1 (1) PERMITTING PARTICIPATION IN APPROVED

2 CLINICAL STUDIES.—A managed care organization

3 may not deny (or limit or impose additional condi4 tions on) coverage of items and services furnished to

5 an enrollee if—

6 (A) the enrollee is participating in an ap7 proved clinical study,

8 (B) the items and services are furnished

9 according to the design of the study or to treat

10 conditions resulting from participation in the

11 study, and

12 (C) the items and services would otherwise

13 be covered by the organization except for the

14 fact that they are provided in connection with

15 participation in such a study.

16 Such an organization may not discriminate against

17 an enrollee on the basis of the enrollee’s participa18 tion in such a study.

19 (2) CONSTRUCTION.—Nothing in paragraph (1)

20 shall be construed as requiring an organization to

21 provide for payment for items and services routinely

22 paid for as part of an approved clinical study.

23 (3) APPROVED CLINICAL STUDY DEFINED.—

24 For purposes of this subsection, the term ‘‘approved

25 clinical study’’ means—
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1 (A) a research study approved by the Sec2 retary, the Director of the National Institutes

3 of Health, the Commissioner of the Food and

4 Drug Administration, the Secretary of Veterans

5 Affairs, the Secretary of Defense, or a qualified

6 nongovernmental research entity (as defined in

7 guidelines of the National Institute of Health),

8 or

9 (B) a peer-reviewed and approved research

10 program, as defined by the Secretary, con11 ducted for the primary purpose of determining

12 whether or not a treatment is safe, efficacious,

13 or having any other characteristic of a treat14 ment which must be demonstrated in order for

15 the treatment to be medically necessary or ap16 propriate.

17 (h) ACCESS TO EXPERIMENTAL TREATMENTS.—A

18 managed care organization shall provide access to experi19 mental treatments in the case of enrollees who have a life20 threatening disease or condition, when determined to be

21 medically necessary and appropriate by the treating health

22 care provider in consultation with the enrollee.

23 (i) REQUIREMENTS REGARDING USE OF PRESCRIP24 TION DRUG FORMULARIES.—
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1 (1) IN GENERAL.—A managed care organiza2 tion shall provide coverage for a prescribed drug, ap3 proved for dispensing by the Food and Drug Admin4 istration, whether or not such drug is on a prescrip5 tion drug formulary used by the organization if the

6 use of such drug is judged to be medically necessary

7 and appropriate by the prescribing health care pro8 fessional.

9 (2) NOT PERMITTING CHANGES IN PRESCRIP10 TIONS.—No pharmacist or health care facility shall

11 change the prescription prescribed by a health care

12 provider, or change the drug dispensed to carry out

13 a prescription for an enrollee of a managed care

14 plan unless—

15 (A) the prescribing health care provider

16 has approved the change, and

17 (B) the enrollee has been informed and

18 given consent to the change.

19 (3) USE OF GENERICS PERMITTED.—Nothing

20 in this subsection shall be construed as preventing a

21 managed care organization from using medically ap22 proved generic drugs.

23 SEC. 5. ASSURING ADEQUATE SCOPE OF COVERAGE.

24 (a) COVERAGE OF PRESCRIPTION DRUGS, PREVEN25 TIVE SERVICES, AND INPATIENT AND OUTPATIENT SERV-
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1 ICES.—A managed care organization, in offering coverage

2 under a managed care plan, shall include coverage of pre3 scription drugs, preventive services, and inpatient and out4 patient services, and shall—

5 (1) include coverage of annual screening mam6 mography for any female enrollee who is 40 years of

7 age or older and for any female enrollee who is less

8 than 40 years of age and who has a medical condi9 tion that makes such coverage medically necessary

10 and appropriate;

11 (2) not restrict benefits for any hospital length

12 of stay in connection with—

13 (A) a mastectomy for the treatment of

14 breast cancer to less than 48 hours, or

15 (B) a lymph node dissection for the treat16 ment of breast cancer to less than 24 hours;

17 and

18 (3) not exclude or restrict benefits—

19 (A) for prescription contraceptive drugs or

20 devices approved by the Food and Drug Admin21 istration, or generic equivalents approved as

22 substitutable by the Food and Drug Adminis23 tration, or

24 (B) for outpatient contraceptive services

25 (including consultations, examinations, proce-
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1 dures, and medical services, provided on an out2 patient basis and related to the use of contra3 ceptive methods (including natural family plan4 ning) to prevent an unintended pregnancy).

5 (b) MENTAL HEALTH PARITY.—A managed care or6 ganization, in offering a managed care plan, may not dis7 tinguish in the amount, duration, or scope of coverage

8 under the plan among items and services based on whether

9 the items and services relate to mental health (or treat10 ment of mental illness or disease) or to physical health

11 (or treatment of physical illness or disease).

12 (c) COVERAGE OF SERVICES OF ESSENTIAL COMMU13 NITY PROVIDERS.—

14 (1) IN GENERAL.—The Secretary may require a

15 managed care organization to enter into agreements

16 with essential community providers serving the orga17 nization’s service area (in relation to the coverage)

18 to join the organization’s provider network if such

19 Secretary finds that such agreements are necessary

20 for the organization to make contracted for services

21 (A) available and accessible to each enrollee, within

22 the area served by the organization (in relation to

23 such coverage), with reasonable promptness and in

24 a manner which assures continuity, and (B) when
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1 medically necessary, available and accessible 24

2 hours a day and 7 days a week.

3 (2) ESSENTIAL COMMUNITY PROVIDER DE4 FINED.—For purposes of paragraph (1), the term

5 ‘‘essential community provider’’ means a rural

6 health clinic (described in paragraph (2) of section

7 1861(aa) of the Social Security Act, 42 U.S.C.

8 1395x(aa)), a Federally qualified health center (de9 scribed in paragraph (4) of such section), and any

10 other provider meeting such standards as the Sec11 retary may require.

12 (d) COVERAGE OF EMERGENCY SERVICES.—A man13 aged care organization shall provide for coverage of emer14 gency services (as defined in section 4(d)(2)(B)), 24-hours

15 a day, 7-days-a-week, without the need for any prior ap16 proval for coverage of such services.

17 (e) REQUIREMENT FOR POINT OF SERVICE OP18 TION.—A managed care organization that offers a man19 aged care plan shall offer each enrollee an enrollment op20 tion under which the enrollee may receive benefits for serv21 ices provided by nonparticipating health care professionals

22 and providers. The organization may require that the en23 rollee pay a reasonable premium to reflect the cost of such

24 option.
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1 (f) REQUIREMENT FOR CONTINUITY OF CARE.—A

2 managed care organization shall provide for continuity of

3 care following enrollment, including appropriate continuity

4 of care following termination of participation of a provider

5 that is providing a course of treatment to an enrollee at

6 the time of the termination.

7 (g) COVERAGE OF CONSULTATION FOR SECOND

8 OPINIONS.—A managed care organization shall provide

9 enrollees with access to a consultation for a second opinion

10 regarding treatment options.

11 SEC. 6. ASSURING UNBIASED MEDICAL DETERMINATIONS

12 BY HEALTH CARE PROFESSIONALS AND PRO13 VIDERS.

14 (a) REQUIRING MEDICAL DETERMINATIONS BY

15 TREATING PROFESSIONAL.—A managed care organiza16 tion may not deny payment for services covered under a

17 managed care plan based upon the fact that the services

18 are not medically necessary or appropriate with respect

19 to an enrollee unless the determination is made solely by

20 the health care professional treating the enrollee.

21 (b) PROHIBITION OF CERTAIN INCENTIVE ARRANGE22 MENTS.—

23 (1) IN GENERAL.—No managed care organiza24 tion shall offer monetary rewards, penalties, or in25 ducements (including varying the amount of com-
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1 pensation) to a health care professional or provider,

2 or condition the initial or continued participation of

3 such a professional or provider in a managed care

4 plan offered by the organization, on the basis of the

5 professional’s or provider’s decision (or decisions) to

6 reduce or limit the availability of appropriate med7 ical tests, services, or treatment, on the basis of any

8 utilization review decisions relating to the profes9 sional or provider, or the number of referrals, tests,

10 or other procedures ordered or performed by the

11 professional or provider.

12 (2) PENALTY.—Any managed care organiza13 tion, or executive of such an organization, that

14 knowingly offers a reward, penalty, or inducement in

15 violation of paragraph (1) shall be fined in accord16 ance with title 18, United States Code, imprisoned

17 for not more than 2 years, or both.

18 (c) PROHIBITION OF INTERFERENCE WITH CERTAIN

19 MEDICAL COMMUNICATIONS.—

20 (1) IN GENERAL.—The provisions of any con21 tract or agreement, or the operation of any contract

22 or agreement, between a managed care organization

23 and a health care professional shall not prohibit or

24 restrict the health care professional from engaging
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1 in medical communications with a patient of the pro2 fessional.

3 (2) MEDICAL COMMUNICATION DEFINED.—For

4 purposes of this subsection, the term ‘‘medical com5 munication’’ means a communication made by a

6 health care professional with a patient of the health

7 care professional (or the guardian or legal represent8 ative of the patient) with respect to—

9 (A) the patient’s health status, medical

10 care, or treatment options;

11 (B) any utilization review requirements

12 that may affect treatment options for the pa13 tient; or

14 (C) any financial incentives that may af15 fect the treatment of the patient.

16 (d) WHISTLEBLOWER PROTECTION.—

17 (1) IN GENERAL.—No managed care organiza18 tion may discharge or otherwise discriminate against

19 any employee with respect to compensation, terms,

20 conditions, or privileges of employment because the

21 employee (or any person acting pursuant to the re22 quest of the employee) provided information to a

23 Federal or State official with any enforcement re24 sponsibility or authority concerning the provisions of

25 this Act regarding a possible violation of any provi-
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1 sion of this Act, or any regulation under any such

2 provision, by the organization or any director, offi3 cer, or employee of the organization.

4 (2) ENFORCEMENT.—Any employee or former

5 employee who believes that such employee has been

6 discharged or discriminated against in violation of

7 paragraph (1) may file a civil action in the appro8 priate United States District Court before the end of

9 the 2-year period beginning on the date of such dis10 charge or discrimination.

11 (3) REMEDIES.—If the District Court deter12 mines that a violation has occurred, the court may

13 order the organization which committed the

14 violation—

15 (A) to reinstate the employee to the em16 ployee’s former position;

17 (B) to pay compensatory damages; or

18 (C) to take other appropriate actions to

19 remedy any past discrimination.

20 (4) LIMITATION.—The protections of this sub21 section shall not apply to any employee who—

22 (A) deliberately causes or participates in

23 the alleged violation of law or regulation; or
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1 (B) knowingly or recklessly provides sub2 stantially false information to the Federal or

3 State official involved.

4 (e) PROTECTION OF ADVOCACY FUNCTIONS.—No

5 managed care organization shall terminate, vary the com6 pensation or working conditions, or refuse to renew a con7 tract for participation with a health care professional be8 cause the professional has—

9 (1) advocated on behalf of an enrollee,

10 (2) filed a complaint against the organization,

11 (3) appealed a decision of the organization,

12 (4) provided information or filed a report with

13 an appropriate Federal or State official, or

14 (5) requested a hearing or review pursuant to

15 this Act.

16 SEC. 7. NONDISCRIMINATION AGAINST ENROLLEES AND IN

17 THE SELECTION OF PARTICIPATING PRO18 VIDERS; EQUITABLE ACCESS TO NETWORKS.

19 (a) NONDISCRIMINATION AGAINST ENROLLEES.—No

20 managed care organization may discriminate (directly or

21 through contractual arrangements) against any enrollee

22 on the basis of age, gender, disability, health status, ge23 netic information, or anticipated need for health services.

24 (b) NONDISCRIMINATION IN SELECTION OF PARTICI25 PATING HEALTH CARE PROFESSIONALS.—A managed
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1 care organization shall not discriminate in selecting par2 ticipating health care professionals (or in establishing the

3 terms and conditions for such participation) on the basis

4 of—

5 (1) the race, national origin, gender, age, or

6 disability (other than a disability that impairs the

7 ability of an individual to provide health care serv8 ices or that may threaten the health of enrollees) of

9 the professional; or

10 (2) the professional’s lack of affiliation with, or

11 admitting privileges at, a hospital (unless such lack

12 of affiliation is a result of infractions of quality

13 standards and is not due to a professional’s type of

14 license).

15 (c) NONDISCRIMINATION IN ACCESS TO HEALTH

16 PLANS.—

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

18 managed care organization shall not discriminate in

19 participation, reimbursement, or indemnification

20 against a health care professional, who is acting

21 within the scope of the professional’s license or cer22 tification under applicable State law, solely on the

23 basis of such license or certification.

24 (2) CONSTRUCTION.—Nothing in this sub25 section shall be construed as a requirement to in-
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1 clude for participation every willing health care pro2 fessional who meets the terms and conditions of a

3 managed care organization.

4 SEC. 8. DISCLOSURE OF INFORMATION.

5 (a) PROVISION OF INFORMATION AND ORIENTA6 TION.—

7 (1) GENERAL REQUIREMENT.—A managed care

8 organization offering a managed care plan shall pro9 vide enrollees and, upon request, prospective enroll10 ees with written information concerning the terms

11 and conditions of the plan, including the information

12 described in subsection (c).

13 (2) INFORMATION UPON REQUEST.—In addition

14 to the information provided under subsection (c), a

15 managed care organization offering a managed care

16 plan shall provide, upon request of an enrollee or

17 prospective enrollee, the information described in

18 subsection (d).

19 (3) REQUIREMENT FOR INITIAL INFORMATION

20 SESSION.—

21 (A) IN GENERAL.—Within 30 days of en22 rolling an individual under a managed care

23 plan, the managed care organization shall pro24 vide for an in-person information session with
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1 the enrollee for the purpose of outlining the in2 formation described in this section.

3 (B) PAYMENT.—Such a session shall be

4 held with an enrollee before the enrollee is re5 quired to pay for services. This subparagraph

6 shall not affect the coverage of items and serv7 ices under the plan immediately upon the effec8 tive date of enrollment.

9 (4) COMPARATIVE FORM.—The information

10 provided under this section shall be in a form, speci11 fied by the Secretary, so that prospective enrollees

12 may compare the attributes of all such plans offered

13 within a coverage area.

14 (b) UNDERSTANDABILITY.—Information provided

15 under this section, whether written or oral shall be easily

16 understandable, truthful, linguistically appropriate and

17 objective with respect to the terms used.

18 (c) REQUIRED INFORMATION.—Information required

19 under subsection (a)(1) shall include information con20 cerning each of the following:

21 (1) COVERAGE AND BENEFITS.—Coverage pro22 visions, benefits, and any exclusions by category of

23 service or product, including 24-hour coverage of

24 emergency services without a requirement for prior

25 approval.
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1 (2) PRIOR AUTHORIZATION REQUIREMENTS.—

2 Prior authorization requirements for coverage of

3 benefits.

4 (3) UTILIZATION REVIEW POLICIES.—Utiliza5 tion review procedures and policies (including

6 preauthorization review, concurrent review, post7 service review, post-payment review procedures that

8 may lead an enrollee to be denied coverage for or not

9 be provided a particular service or product), includ10 ing time frames for review decisions and enrollee

11 rights relating to notice, reconsideration, and appeal

12 of utilization review decisions, and including infor13 mation on the percentage of utilization review deter14 minations that disagree with the judgment of the

15 initial treating health care professional and the per16 centage of such determinations which are reversed

17 (whether internally or externally) on appeal.

18 (4) PAYMENT METHODS.—Types of methodolo19 gies used by the organization to reimburse types of

20 providers or for types of services.

21 (5) ENROLLEE FINANCIAL RESPONSIBIL22 ITIES.—Enrollees’ financial responsibility for serv23 ices, including any variation in the responsibility

24 based on whether the provider is a participating pro25 vider.
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1 (6) GRIEVANCE PROCEDURES.—Grievance pro2 cedures.

3 (7) PROVIDER SELECTION PROCEDURES.—Pro4 cedures used by enrollees to select and change pri5 mary and specialty providers and to be referred to

6 nonparticipating providers and appropriate special7 ists, consistent with the requirements of this Act.

8 (8) ENROLLEE PARTICIPATION IN POLICY DE9 VELOPMENT.—Procedures which enrollees may use

10 to participate in development of policy of the organi11 zation.

12 (9) PROCEDURES FOR NON-ENGLISH PRO13 FICIENT ENROLLEES.—Procedures which the organi14 zation has established to meet the needs of enrollees

15 who are not proficient in English.

16 (10) INFORMATION.—An address and phone

17 number at which enrollees and prospective enrollees

18 can obtain information about the organization and

19 managed care plans offered by the organization.

20 (11) LIST OF CONTRACT FACILITIES.—A list,

21 annually updated, of the facilities and providers, by

22 specialty, through which the organization provides

23 its benefits. For each such facility or provider the

24 list shall include the name, address, phone number,

25 and (in the case of a physician) board certification.
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1 (12) NON-HEALTH CARE EXPENDITURES.—A

2 statement of the percentage of health-care related

3 revenues of the organization used for administration,

4 the percentage of such revenues used for marketing,

5 and the percentage of such revenues attributable to

6 profit.

7 (13) ENROLLEE SATISFACTION.—Statistics on

8 enrollee satisfaction, stated separately for those who

9 continue enrollment and those who discontinue en10 rollment, and on the proportion of enrollees who

11 disenroll.

12 (14) AVAILABILITY OF PROVIDERS; PROVIDER

13 INCENTIVES.—The characteristics and availability of

14 participating health care providers and professionals,

15 including a description of any financial or contrac16 tual arrangements with hospitals, utilization review

17 organizations, physicians, or other health care pro18 viders or professionals that would affect the services

19 offered, referral or treatment options, or providers’

20 fiduciary responsibility to patients, including any fi21 nancial or other incentives regarding the provision,

22 denial, or limitation of needed services.

23 (15) QUALITY INDICATORS.—Indicators that

24 measure the quality of services provided by the orga25 nization and by participating health providers with
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1 the organization, including population-based statis2 tics such as immunization rates and performance

3 measures such as survival after surgery, adjusted for

4 case mix.

5 (16) PHYSICIAN CREDENTIALING STAND6 ARDS.—Standards used by the organization in the

7 credentialing of participating physicians.

8 (17) FORMULARIES.—Information on prescrip9 tion drug formularies used by the organization, con10 sistent with section 4(i).

11 (18) LOSS-RATIO.—Its loss-ratio.

12 (d) INFORMATION SUPPLIED UPON REQUEST.—For

13 purposes of subsection (a)(2), the information described

14 in this subsection concerning a managed care organization

15 offering a managed care plan is as follows:

16 (1) ANNUAL FINANCIAL STATEMENT.—The

17 most recent annual financial statement of the orga18 nization.

19 (2) SUBSCRIBER CONTRACT.—A copy of the

20 most recent individual, direct pay subscriber con21 tract, or, in the case of a group health plan, any

22 contract between the plan and a health insurance

23 issuer providing coverage under the plan.
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1 (3) CONSUMER COMPLAINTS.—Information re2 lating to consumer complaints compiled pursuant to

3 insurance or other law.

4 (4) CHARGES AND BENEFITS FOR SERVICES.—

5 Information on the enrollee charges for all covered

6 items and services, including, for the point of service

7 option described in section 5(e), the amounts that

8 are payable with respect to items and services fur9 nished by nonparticipating health care professionals

10 and providers.

11 (5) CONFIDENTIALITY OF MEDICAL

12 RECORDS.—Information on the procedures used by

13 the organization to protect the confidentiality of

14 medical records maintained in relation to enrollees.

15 (6) QUALITY ASSURANCE PROGRAMS.—A de16 scription of quality assurance programs maintained

17 by the organization in relation to the plan.

18 (7) COVERAGE OF EXPERIMENTAL OR INVES19 TIGATIONAL DRUGS.—A description of procedures

20 used by the organization to determine whether

21 drugs, devices, or treatments in clinical trials are ex22 perimental or investigational.

23 (8) PROVIDER AFFILIATIONS.—Information on

24 affiliations of participating health care professionals

25 with participating hospitals.
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1 (9) CLINICAL REVIEW CRITERIA.—Upon written

2 request, a description of the specific clinical written

3 review criteria relating to a particular condition or

4 disease and how such criteria are used.

5 (10) PARTICIPATION PROCEDURES AND QUALI6 FICATIONS.—A description of the written application

7 procedures and qualification requirements for pro8 viders to be considered for participation under the

9 plan.

10 (11) OFFICIALS.—A list of the names, business

11 addresses, and official positions of the membership

12 of the board of directors, officers, or persons with an

13 ownership or control interest in the organization.

14 (e) NOTICE OF TERMINATION OF PROVIDERS.—A

15 managed care organization shall provide written notice to

16 each enrollee within 15 business days of the date that the

17 organization is aware that the participation of a health

18 care provider, that is currently in a course of treating the

19 enrollee, is being withdrawn or terminated. The organiza20 tion shall include in such notice the procedures under sec21 tion 5(f) for the enrollee to continue to receive care from

22 the provider.
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1 SEC. 9. GRIEVANCE PROCEDURES AND DEADLINE FOR RE2 SPONDING TO REQUESTS FOR COVERAGE OF

3 SERVICES.

4 (a) GRIEVANCE PROCEDURES.—A managed care or5 ganization shall provide meaningful procedures for hear6 ing and resolving grievances between the organization (or

7 any entity or individual through which the organization

8 provides health care services) and its enrollees.

9 (b) DETAILS.—The procedures provided under sub10 section (a) shall include—

11 (1) recorded (written or otherwise) procedures

12 for registering and responding to complaints and

13 grievances in a timely manner;

14 (2) documentation concerning the substance of

15 complaints, grievances, and actions taken concerning

16 such complaints and grievances, which shall be in

17 writing;

18 (3) procedures to ensure a resolution of a com19 plaint or grievance;

20 (4) the compilation and analysis of complaint

21 and grievance data;

22 (5) procedures to expedite the complaint proc23 ess if the complaint involves a dispute about the cov24 erage of an immediately and urgently needed service;

25 and
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1 (6) procedures to ensure that if an enrollee

2 orally notifies the organization about a complaint,

3 the organization (if requested) must send the en4 rollee a complaint form that includes the telephone

5 numbers and addresses of member services, and a

6 description of the organization’s grievance proce7 dure.

8 The Secretary may establish deadlines for the complaint

9 procedures under paragraph (5) in order to ensure timely

10 resolution of disputes involving immediately and urgently

11 needed services.

12 (c) APPEALS PROCESS.—Each managed care organi13 zation shall adopt an appeals process to enable enrollees

14 to appeal decisions that are adverse to them. Such a proc15 ess shall include—

16 (1) the right to a review by a grievance panel

17 composed of clinical peer professionals who are in

18 the same or similar specialty or field that would pro19 vide the item or service involved in the grievance;

20 (2) the right to a second review with a different

21 panel that is independent of the organization and

22 that is composed of clinical peer professionals who

23 are in the same or similar specialty or field that

24 would provide the item or service involved in the

25 grievance, or to a review through an impartial arbi-
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1 tration process which shall be described in writing

2 by the organization;

3 (3) a process for completion of review in the

4 case of urgent or emergency care services within 24

5 hours; and

6 (4) covering the costs of all appeals and not im7 posing any such costs on an enrollee.

8 The Secretary shall develop guidelines for the structure

9 and requirements applicable to the independent review

10 panel and impartial arbitration process described in para11 graph (2).

12 (d) WRITTEN DECISION.—With respect to the com13 plaint, grievance, and appeals processes required under

14 this section, the organization shall, upon the request of

15 an enrollee, provide the enrollee a written decision con16 cerning a complaint, grievance, or appeal in a timely man17 ner consistent with subsections (c)(3) and (f).

18 (e) CONSTRUCTION.—The complaint, grievance, and

19 appeals processes established in accordance with this sec20 tion may not be used in any fashion to discourage or pre21 vent an enrollee from receiving medically necessary care

22 in a timely manner.

23 (f) PROMPT RESPONSE TO REQUESTS FOR SERV24 ICES.—In addition to the procedures available pursuant

25 to the previous provisions of this section, in the case of
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1 the request of an enrollee with a managed care

2 organization—

3 (1) the organization shall respond to the re4 quest not later than 24 hours after the request is

5 made; and

6 (2) the organization shall hear and resolve the

7 enrollee’s appeal of a denial of coverage of such serv8 ices in accordance with a process meeting standards

9 established by the Secretary.

10 SEC. 10. DUE PROCESS FOR HEALTH CARE PROFESSIONALS

11 AND PROVIDERS.

12 (a) IN GENERAL.—A managed care organization

13 shall—

14 (1) allow all health care professionals and pro15 viders in its service area to apply to become a par16 ticipating health care professional or provider during

17 at least one period in each calendar year;

18 (2) provide reasonable notice to such health

19 care professionals and providers of the opportunity

20 to apply and of the period during which applications

21 are accepted;

22 (3) provide for review of each application by a

23 credentialing committee with appropriate representa24 tion of the category or type of health care profes25 sional or provider;
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1 (4) select participating health care professionals

2 and providers based on objective standards of qual3 ity developed with the suggestions and advice of pro4 fessional associations, health care professionals, and

5 providers;

6 (5) make such selection standards available

7 to—

8 (A) those applying to become a partici9 pating provider or health care professional,

10 (B) health plan purchasers, and

11 (C) enrollees;

12 (6) when economic considerations are taken

13 into account in selecting participating health care

14 professionals and providers, use objective criteria

15 that are available to those applying to become a par16 ticipating provider or health care professional and

17 enrollees;

18 (7) adjust any economic profiling to take into

19 account patient characteristics (such as severity of

20 illness) that may result in atypical utilization of

21 services;

22 (8) make the results of such profiling available

23 to insurance purchasers, enrollees, and the health

24 care professional or provider involved;
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1 (9) notify any health care professional or pro2 vider being reviewed under the process referred to in

3 paragraph (3) of any information indicating that the

4 health care professional or provider fails to meet the

5 standards of the organization;

6 (10) offer a health care professional or provider

7 receiving notice pursuant to the requirement of

8 paragraph (9) with an opportunity to—

9 (A) review the information referred to in

10 such paragraph, and

11 (B) submit supplemental or corrected in12 formation;

13 (11) not include in its contracts with partici14 pating health care professionals and providers a pro15 vision permitting the organization to terminate the

16 contract ‘‘without cause’’;

17 (12) provide a due process appeal that con18 forms to the process specified in section 412 of the

19 Health Care Quality Improvement Act of 1986 (42

20 U.S.C. 11112) for all determinations that are ad21 verse to a health care professional or provider; and

22 (13) unless a health care professional or pro23 vider poses an imminent harm to enrollees or an ad24 verse action by a governmental agency effectively im-
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1 pairs the ability to provide health care items and

2 services, provide—

3 (A) reasonable notice of any decision to

4 terminate a health care professional or provider

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

6 reasons for the determination),

7 (B) an opportunity to review and discuss

8 all of the information on which the determina9 tion is based, and

10 (C) an opportunity to enter into a correc11 tive action plan, before the determination be12 comes subject to appeal under the process re13 ferred to in paragraph (12).

14 (b) LIMITATION ON USE OF NON-COMPETE

15 CLAUSES.—A managed care organization may not (di16 rectly or indirectly) seek to enforce any contractual provi17 sion which prevents a health care professional or provider

18 whose contractual obligations to the organization for the

19 provision of services through the organization have ended

20 from joining or forming any competing managed care or21 ganization, whether or not the organization serves the

22 same geographic area.

23 (c) EQUAL COMPENSATION ARRANGEMENTS.—

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

25 managed care organization shall provide for com-
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1 parable payment for all health care professionals and

2 providers in the same field or specialty located in the

3 same geographic area.

4 (2) ADJUSTMENTS AUTHORIZED.—A managed

5 care organization may adjust the amount of com6 pensation among professionals and providers for ex7 perience and other relevant factors, including bonus

8 payments that reflect quality factors, such as en9 rollee satisfaction and medical chart reviews, unless

10 such payments are based solely on cost-effectiveness

11 of services provided.

12 (d) RULE OF CONSTRUCTION.—The requirements of

13 subsection (a) shall not be construed as preempting or su14 perseding any other reviews and appeals a managed care

15 organization is required by law to make available.

16 SEC. 11. REQUIREMENTS FOR QUALITY IMPROVEMENT

17 PROGRAM AND UTILIZATION REVIEW PRO18 GRAMS.

19 (a) QUALITY IMPROVEMENT PROGRAM.—

20 (1) IN GENERAL.—A managed care organiza21 tion shall establish a quality improvement program

22 (consistent with paragraph (2)) that systematically

23 and continuously assesses and improves—

24 (A) enrollee health status, patient out25 comes, processes of care, and enrollee satisfac-
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1 tion associated with health care provided by the

2 organization; and

3 (B) the administrative and funding capac4 ity of the organization to support and empha5 size preventive care, utilization, access and

6 availability, cost effectiveness, acceptable treat7 ment modalities, specialists referrals, the peer

8 review process, and the efficiency of the admin9 istrative process.

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

12 (A) assess the performance of the organi13 zation and its participating health care profes14 sionals and providers and report the results of

15 such assessment to purchasers, participating

16 health care professionals and providers, and ad17 ministrative personnel;

18 (B) demonstrate measurable improvements

19 in clinical outcomes and plan performance

20 measured by identified criteria, including those

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

22 (C) analyze quality assessment data to de23 termine specific interactions in the delivery sys24 tem (both the design and funding of the health

25 care coverage and the clinical provision of care)
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1 that have an adverse impact on the quality of

2 care.

3 (b) UTILIZATION REVIEW.—The utilization review

4 program of a managed care organization shall—

5 (1) be developed (including any screening cri6 teria used by such program) with the involvement of

7 participating health professionals and providers;

8 (2) to the extent consistent with the protection

9 of proprietary business information (as defined for

10 purposes of section 552 of title 5, United States

11 Code) release, upon request, to affected health pro12 fessionals, providers, and enrollees the screening cri13 teria, weighting elements, and computer algorithms

14 used in reviews and a description of the method by

15 which they were developed;

16 (3) uniformly apply review criteria that are

17 based on sound scientific principles and the most re18 cent medical evidence;

19 (4) use licensed, accredited, or certified health

20 professionals to make review determinations (and for

21 services requiring specialized training for their deliv22 ery, use a health professional who is qualified

23 through equivalent specialized training and experi24 ence);
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1 (5) subject to reasonable safeguards, disclose to

2 health professionals and providers, upon request, the

3 names and credentials of individuals conducting uti4 lization review;

5 (6) not compensate individuals conducting utili6 zation review for denials of payment or coverage of

7 benefits;

8 (7) comply with the requirement of section

9 4(d)(1) that prior authorization not be required for

10 emergency and related services furnished in a hos11 pital emergency department;

12 (8) make prior authorization determinations—

13 (A) in the case of services that are urgent

14 care services described in section 4(d)(2)(C),

15 within 30 minutes of a request for such deter16 mination, and

17 (B) in the case of other services, within 24

18 hours after the time of a request for determina19 tion;

20 (9) include in any notice of such determination

21 an explanation of the basis of the determination and

22 the right to an immediate appeal;

23 (10) treat a favorable prior authorization review

24 determination as a final determination for purposes

25 of making payment for a claim submitted for the
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1 item or service involved unless such determination

2 was based on false information knowingly supplied

3 by the person requesting the determination;

4 (11) provide timely access, as defined by the

5 applicable State authority, to utilization review per6 sonnel and, if such personnel are not available,

7 waives any prior authorization that would otherwise

8 be required; and

9 (12) provide notice of an initial determination

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

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

12 include in such notice an explanation of the reasons

13 for such determination and of the right to an imme14 diate appeal.

15 SEC. 12. MINIMUM LOSS RATIOS; GENERAL CONSUMER

16 PROTECTIONS.

17 (a) MINIMUM LOSS RATIO.—The loss-ratio (as de18 fined by the Secretary) for a managed care organization

19 shall not be less than 85 percent with respect to managed

20 care plans it offers.

21 (b) PARTICIPATION IN POLICY DEVELOPMENT.—A

22 managed care organization shall have a procedure whereby

23 enrollees may participate in the development of policies of

24 the organization.
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1 (c) NEEDS OF NON-ENGLISH PROFICIENT ENROLL2 EES.—A managed care organization shall have procedures

3 for addressing the needs of enrollees who are not pro4 ficient in English.

Æ