II 

113TH CONGRESS 

1ST SESSION S. 1860 

To reform the medical liability system, improve access to health care for 

rural and indigent patients, enhance access to affordable prescription 

drugs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 19, 2013 

Mr. HELLER introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To reform the medical liability system, improve access to 

health care for rural and indigent patients, enhance access to affordable prescription drugs, and for other purposes. 

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 ‘‘Steps Toward Access and Reform Act of 2013’’ or the 

6 ‘‘STAR Act of 2013’’. 

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

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—MEDICAL LIABILITY REFORM 

Sec. 101. Encouraging speedy resolution of claims. 

Sec. 102. Compensating patient injury. 

Sec. 103. Maximizing patient recovery. 

Sec. 104. Additional collateral source benefits. 

Sec. 105. Punitive damages. 

Sec. 106. Authorization of payment of future damages to claimants in health 

care lawsuits. 

Sec. 107. Effect on other laws. 

Sec. 108. State flexibility and protection of States’ rights. 

Sec. 109. Applicability; effective date. 

Sec. 110. Sense of Congress. 

Sec. 111. Definitions. 

TITLE II—IMPROVING ACCESS FOR RURAL AND INDIGENT 

PATIENTS 

Sec. 201. Improving access for rural and indigent patients. 

TITLE III—PROVIDING FOR AFFORDABLE PRESCRIPTION DRUGS 

Sec. 301. Providing for affordable prescription drugs. 

TITLE IV—EXPANDING CHOICES BY ALLOWING AMERICANS TO 

BUY HEALTH CARE COVERAGE ACROSS STATE LINES 

Sec. 401. Interstate purchasing of health insurance. 

1 TITLE I—MEDICAL LIABILITY 

2 REFORM 

3 SEC. 101. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS. 

4 The time for the commencement of a health care law5 suit shall be 3 years after the date of manifestation of 

6 injury or 1 year after the claimant discovers, or through 

7 the use of reasonable diligence should have discovered, the 

8 injury, whichever occurs first. In no event shall the time 

9 for commencement of a health care lawsuit exceed 3 years 

10 after the date of manifestation of injury unless tolled for 

11 any of the following— 

12 (1) upon proof of fraud; 


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1 (2) intentional concealment; or 

2 (3) the presence of a foreign body, which has no 

3 therapeutic or diagnostic purpose or effect, in the 

4 body of the injured person. 

5 Actions by a minor shall be commenced within 3 years 

6 from the date of the alleged manifestation of injury except 

7 that actions by a minor under the full age of 6 years shall 

8 be commenced within 3 years of manifestation of injury 

9 or prior to the minor’s 8th birthday, whichever provides 

10 a longer period. Such time limitation shall be tolled for 

11 minors for any period during which a parent or guardian 

12 and a health care provider or health care organization 

13 have committed fraud or collusion in the failure to bring 

14 an action on behalf of the injured minor. 

15 SEC. 102. COMPENSATING PATIENT INJURY. 

16 (a) UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL

17 ECONOMIC LOSSES IN HEALTH CARE LAWSUITS.—In any 

18 health care lawsuit, nothing in this title shall limit a claim19 ant’s recovery of the full amount of the available economic 

20 damages, notwithstanding the limitation in subsection (b). 

21 (b) ADDITIONAL NONECONOMIC DAMAGES.—In any 

22 health care lawsuit, the amount of noneconomic damages, 

23 if available, shall not exceed $250,000, regardless of the 

24 number of parties against whom the action is brought or 


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1 the number of separate claims or actions brought with re2 spect to the same injury. 

3 (c) NO DISCOUNT OF AWARD FOR NONECONOMIC

4 DAMAGES.—For purposes of applying the limitation in 

5 subsection (b), future noneconomic damages shall not be 

6 discounted to present value. The jury shall not be in7 formed about the maximum award for noneconomic dam8 ages. An award for noneconomic damages in excess of 

9 $250,000 shall be reduced either before the entry of judg10 ment, or by amendment of the judgment after entry of 

11 judgment, and such reduction shall be made before ac12 counting for any other reduction in damages required by 

13 law. If separate awards are rendered for past and future 

14 noneconomic damages and the combined awards exceed 

15 $250,000, the future noneconomic damages shall be re16 duced first. 

17 (d) FAIR SHARE RULE.—In any health care lawsuit, 

18 each party shall be liable for that party’s several share 

19 of any damages only and not for the share of any other 

20 person. Each party shall be liable only for the amount of 

21 damages allocated to such party in direct proportion to 

22 such party’s percentage of responsibility. Whenever a 

23 judgment of liability is rendered as to any party, a sepa24 rate judgment shall be rendered against each such party 

25 for the amount allocated to such party. For purposes of 


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1 this section, the trier of fact shall determine the propor2 tion of responsibility of each party for the claimant’s 

3 harm. 

4 SEC. 103. MAXIMIZING PATIENT RECOVERY. 

5 (a) COURT SUPERVISION OF SHARE OF DAMAGES

6 ACTUALLY PAID TO CLAIMANTS.—In any health care law7 suit, the court shall supervise the arrangements for pay8 ment of damages to protect against conflicts of interest 

9 that may have the effect of reducing the amount of dam10 ages awarded that are actually paid to claimants. In par11 ticular, in any health care lawsuit in which the attorney 

12 for a party claims a financial stake in the outcome by vir13 tue of a contingent fee, the court shall have the power 

14 to restrict the payment of a claimant’s damage recovery 

15 to such attorney, and to redirect such damages to the 

16 claimant based upon the interests of justice and principles 

17 of equity. In no event shall the total of all contingent fees 

18 for representing all claimants in a health care lawsuit ex19 ceed the following limits: 

20 (1) 40 percent of the first $50,000 recovered by 

21 the claimants. 

(2) 331 22 ⁄3 percent of the next $50,000 recovered 

23 by the claimants. 

24 (3) 25 percent of the next $500,000 recovered 

25 by the claimants. 


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1 (4) 15 percent of any amount by which the re2 covery by the claimants is in excess of $600,000. 

3 (b) APPLICABILITY.—The limitations in this section 

4 shall apply whether the recovery is by judgment, settle5 ment, mediation, arbitration, or any other form of alter6 native dispute resolution. In a health care lawsuit involv7 ing a minor or incompetent person, a court retains the 

8 authority to authorize or approve a fee that is less than 

9 the maximum permitted under this section. The require10 ment for court supervision in the first two sentences of 

11 subsection (a) applies only in civil actions. 

12 SEC. 104. ADDITIONAL COLLATERAL SOURCE BENEFITS. 

13 In any health care lawsuit involving injury or wrong14 ful death, any party may introduce evidence of collateral 

15 source benefits. If a party elects to introduce such evi16 dence, any opposing party may introduce evidence of any 

17 amount paid or contributed or reasonably likely to be paid 

18 or contributed in the future by or on behalf of the oppos19 ing party to secure the right to such collateral source bene20 fits. No provider of collateral source benefits shall recover 

21 any amount against the claimant or receive any lien or 

22 credit against the claimant’s recovery or be equitably or 

23 legally subrogated to the right of the claimant in a health 

24 care lawsuit involving injury or wrongful death. This sec25 tion shall apply to any health care lawsuit that is settled 


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1 as well as a health care lawsuit that is resolved by a fact 

2 finder. This section shall not apply to section 1862(b) (42 

3 U.S.C. 1395y(b)) or section 1902(a)(25) (42 U.S.C. 

4 1396a(a)(25)) of the Social Security Act. 

5 SEC. 105. PUNITIVE DAMAGES. 

6 (a) IN GENERAL.—Punitive damages may, if other7 wise permitted by applicable State or Federal law, be 

8 awarded against any person in a health care lawsuit only 

9 if it is proven by clear and convincing evidence that such 

10 person acted with malicious intent to injure the claimant, 

11 or that such person deliberately failed to avoid unneces12 sary injury that such person knew the claimant was sub13 stantially certain to suffer. In any health care lawsuit 

14 where no judgment for compensatory damages is rendered 

15 against such person, no punitive damages may be awarded 

16 with respect to the claim in such lawsuit. No demand for 

17 punitive damages shall be included in a health care lawsuit 

18 as initially filed. A court may allow a claimant to file an 

19 amended pleading for punitive damages only upon a mo20 tion by the claimant and after a finding by the court, upon 

21 review of supporting and opposing affidavits or after a 

22 hearing, after weighing the evidence, that the claimant has 

23 established by a substantial probability that the claimant 

24 will prevail on the claim for punitive damages. At the reVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 quest of any party in a health care lawsuit, the trier of 

2 fact shall consider in a separate proceeding— 

3 (1) whether punitive damages are to be award4 ed and the amount of such award; and 

5 (2) the amount of punitive damages following a 

6 determination of punitive liability. 

7 If a separate proceeding is requested, evidence relevant 

8 only to the claim for punitive damages, as determined by 

9 applicable State law, shall be inadmissible in any pro10 ceeding to determine whether compensatory damages are 

11 to be awarded. 

12 (b) DETERMINING AMOUNT OF PUNITIVE DAM13 AGES.— 

14 (1) FACTORS CONSIDERED.—In determining 

15 the amount of punitive damages, if awarded, in a 

16 health care lawsuit, the trier of fact shall consider 

17 only the following— 

18 (A) the severity of the harm caused by the 

19 conduct of such party; 

20 (B) the duration of the conduct or any 

21 concealment of it by such party; 

22 (C) the profitability of the conduct to such 

23 party; 

24 (D) the number of products sold or med25 ical procedures rendered for compensation, as 


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1 the case may be, by such party, of the kind 

2 causing the harm complained of by the claim3 ant; 

4 (E) any criminal penalties imposed on such 

5 party, as a result of the conduct complained of 

6 by the claimant; and 

7 (F) the amount of any civil fines assessed 

8 against such party as a result of the conduct 

9 complained of by the claimant. 

10 (2) MAXIMUM AWARD.—The amount of punitive 

11 damages, if awarded, in a health care lawsuit may 

12 not exceed $250,000 or two times the amount of 

13 economic damages awarded, whichever is greater. 

14 The jury shall not be informed of this limitation. 

15 (c) NO PUNITIVE DAMAGES FOR PRODUCTS THAT

16 COMPLY WITH FDA STANDARDS.— 

17 (1) IN GENERAL.— 

18 (A) No punitive damages may be awarded 

19 against the manufacturer or distributor of a 

20 medical product, or a supplier of any compo21 nent or raw material of such medical product, 

22 based on a claim that such product caused the 

23 claimant’s harm where— 

24 (i)(I) such medical product was sub25 ject to premarket approval, clearance, or liVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 censure by the Food and Drug Administra2 tion with respect to the safety of the for3 mulation or performance of the aspect of 

4 such medical product which caused the 

5 claimant’s harm or the adequacy of the 

6 packaging or labeling of such medical 

7 product; and 

8 (II) such medical product was so ap9 proved, cleared, or licensed; or 

10 (ii) such medical product is generally 

11 recognized among qualified experts as safe 

12 and effective pursuant to conditions estab13 lished by the Food and Drug Administra14 tion and applicable Food and Drug Admin15 istration regulations, including without 

16 limitation those related to packaging and 

17 labeling, unless the Food and Drug Admin18 istration has determined that such medical 

19 product was not manufactured or distrib20 uted in substantial compliance with appli21 cable Food and Drug Administration stat22 utes and regulations. 

23 (B) RULE OF CONSTRUCTION.—Subpara24 graph (A) may not be construed as establishing 

25 the obligation of the Food and Drug AdminisVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 tration to demonstrate affirmatively that a 

2 manufacturer, distributor, or supplier referred 

3 to in such subparagraph meets any of the con4 ditions described in such subparagraph. 

5 (2) LIABILITY OF HEALTH CARE PROVIDERS.— 

6 A health care provider who prescribes, or who dis7 penses pursuant to a prescription, a medical product 

8 approved, licensed, or cleared by the Food and Drug 

9 Administration shall not be named as a party to a 

10 product liability lawsuit involving such product and 

11 shall not be liable to a claimant in a class action 

12 lawsuit against the manufacturer, distributor, or 

13 seller of such product. Nothing in this paragraph 

14 prevents a court from consolidating cases involving 

15 health care providers and cases involving products li16 ability claims against the manufacturer, distributor, 

17 or product seller of such medical product. 

18 (3) PACKAGING.—In a health care lawsuit for 

19 harm which is alleged to relate to the adequacy of 

20 the packaging or labeling of a drug which is required 

21 to have tamper-resistant packaging under regula22 tions of the Secretary of Health and Human Serv23 ices (including labeling regulations related to such 

24 packaging), the manufacturer or product seller of 

25 the drug shall not be held liable for punitive damVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 ages unless such packaging or labeling is found by 

2 the trier of fact by clear and convincing evidence to 

3 be substantially out of compliance with such regula4 tions. 

5 (4) EXCEPTION.—Paragraph (1) shall not 

6 apply in any health care lawsuit in which— 

7 (A) a person, before or after premarket ap8 proval, clearance, or licensure of such medical 

9 product, knowingly misrepresented to or with10 held from the Food and Drug Administration 

11 information that is required to be submitted 

12 under the Federal Food, Drug, and Cosmetic 

13 Act (21 U.S.C. 301 et seq.) or section 351 of 

14 the Public Health Service Act (42 U.S.C. 262) 

15 that is material and is causally related to the 

16 harm which the claimant allegedly suffered; or 

17 (B) a person made an illegal payment to 

18 an official of the Food and Drug Administra19 tion for the purpose of either securing or main20 taining approval, clearance, or licensure of such 

21 medical product. 


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1 SEC. 106. AUTHORIZATION OF PAYMENT OF FUTURE DAM2 AGES TO CLAIMANTS IN HEALTH CARE LAW3 SUITS. 

4 (a) IN GENERAL.—In any health care lawsuit, if an 

5 award of future damages, without reduction to present 

6 value, equaling or exceeding $50,000 is made against a 

7 party with sufficient insurance or other assets to fund a 

8 periodic payment of such a judgment, the court shall, at 

9 the request of any party, enter a judgment ordering that 

10 the future damages be paid by periodic payments. In any 

11 health care lawsuit, the court may be guided by the Uni12 form Periodic Payment of Judgments Act promulgated by 

13 the National Conference of Commissioners on Uniform 

14 State Laws. 

15 (b) APPLICABILITY.—This section applies to all ac16 tions which have not been first set for trial or retrial be17 fore the effective date of this Act. 

18 SEC. 107. EFFECT ON OTHER LAWS. 

19 (a) VACCINE INJURY.— 

20 (1) To the extent that title XXI of the Public 

21 Health Service Act establishes a Federal rule of law 

22 applicable to a civil action brought for a vaccine-re23 lated injury or death— 

24 (A) this title does not affect the application 

25 of the rule of law to such an action; and 


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1 (B) any rule of law prescribed by this title 

2 in conflict with a rule of law of such title XXI 

3 shall not apply to such action. 

4 (2) If there is an aspect of a civil action 

5 brought for a vaccine-related injury or death to 

6 which a Federal rule of law under title XXI of the 

7 Public Health Service Act does not apply, then this 

8 title or otherwise applicable law (as determined 

9 under this title) will apply to such aspect of such ac10 tion. 

11 (b) OTHER FEDERAL LAW.—Except as provided in 

12 this section, nothing in this title shall be deemed to affect 

13 any defense available to a defendant in a health care law14 suit or action under any other provision of Federal law. 

15 SEC. 108. STATE FLEXIBILITY AND PROTECTION OF 

16 STATES’ RIGHTS. 

17 (a) HEALTH CARE LAWSUITS.—The provisions gov18 erning health care lawsuits set forth in this title preempt, 

19 subject to subsections (b) and (c), State law to the extent 

20 that State law prevents the application of any provisions 

21 of law established by or under this title. The provisions 

22 governing health care lawsuits set forth in this title super23 sede chapter 171 of title 28, United States Code, to the 

24 extent that such chapter— 


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1 (1) provides for a greater amount of damages 

2 or contingent fees, a longer period in which a health 

3 care lawsuit may be commenced, or a reduced appli4 cability or scope of periodic payment of future dam5 ages, than provided in this title; or 

6 (2) prohibits the introduction of evidence re7 garding collateral source benefits, or mandates or 

8 permits subrogation or a lien on collateral source 

9 benefits. 

10 (b) PROTECTION OF STATES’ RIGHTS AND OTHER

11 LAWS.—(1) Any issue that is not governed by any provi12 sion of law established by or under this title (including 

13 State standards of negligence) shall be governed by other14 wise applicable State or Federal law. 

15 (2) This title shall not preempt or supersede any 

16 State or Federal law that imposes greater procedural or 

17 substantive protections for health care providers and 

18 health care organizations from liability, loss, or damages 

19 than those provided by this title or create a cause of ac20 tion. 

21 (c) STATE FLEXIBILITY.—No provision of this title 

22 shall be construed to preempt— 

23 (1) any State law (whether effective before, on, 

24 or after the date of the enactment of this Act) that 

25 specifies a particular monetary amount of compenVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 satory or punitive damages (or the total amount of 

2 damages) that may be awarded in a health care law3 suit, regardless of whether such monetary amount is 

4 greater or lesser than is provided for under this title, 

5 notwithstanding section 104(a); or 

6 (2) any defense available to a party in a health 

7 care lawsuit under any other provision of State or 

8 Federal law. 

9 SEC. 109. APPLICABILITY; EFFECTIVE DATE. 

10 This title shall apply to any health care lawsuit 

11 brought in a Federal or State court, or subject to an alter12 native dispute resolution system, that is initiated on or 

13 after the date of the enactment of this Act, except that 

14 any health care lawsuit arising from an injury occurring 

15 prior to the date of the enactment of this Act shall be 

16 governed by the applicable statute of limitations provisions 

17 in effect at the time the injury occurred. 

18 SEC. 110. SENSE OF CONGRESS. 

19 It is the sense of Congress that a health insurer 

20 should be liable for damages for harm caused when it 

21 makes a decision as to what care is medically necessary 

22 and appropriate. 

23 SEC. 111. DEFINITIONS. 

24 In this title: 


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1 (1) ALTERNATIVE DISPUTE RESOLUTION SYS2 TEM; ADR.—The term ‘‘alternative dispute resolution 

3 system’’ or ‘‘ADR’’ means a system that provides 

4 for the resolution of health care lawsuits in a man5 ner other than through a civil action brought in a 

6 State or Federal court. 

7 (2) CLAIMANT.—The term ‘‘claimant’’ means 

8 any person who brings a title, including a person 

9 who asserts or claims a right to legal or equitable 

10 contribution, indemnity, or subrogation, arising out 

11 of a health care liability claim or action, and any 

12 person on whose behalf such a claim is asserted or 

13 such an action is brought, whether deceased, incom14 petent, or a minor. 

15 (3) COLLATERAL SOURCE BENEFITS.—The 

16 term ‘‘collateral source benefits’’ means any amount 

17 paid or reasonably likely to be paid in the future to 

18 or on behalf of the claimant, or any service, product, 

19 or other benefit provided or reasonably likely to be 

20 provided in the future to or on behalf of the claim21 ant, as a result of the injury or wrongful death, pur22 suant to— 

23 (A) any State or Federal health, sickness, 

24 income-disability, accident, or workers’ com25 pensation law; 


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1 (B) any health, sickness, income-disability, 

2 or accident insurance that provides health bene3 fits or income-disability coverage; 

4 (C) any contract or agreement of any 

5 group, organization, partnership, or corporation 

6 to provide, pay for, or reimburse the cost of 

7 medical, hospital, dental, or income-disability 

8 benefits; and 

9 (D) any other publicly or privately funded 

10 program. 

11 (4) COMPENSATORY DAMAGES.—The term 

12 ‘‘compensatory damages’’ means objectively 

13 verifiable monetary losses incurred as a result of the 

14 provision of, use of, or payment for (or failure to 

15 provide, use, or pay for) health care services or med16 ical products, such as past and future medical ex17 penses, loss of past and future earnings, cost of ob18 taining domestic services, loss of employment, and 

19 loss of business or employment opportunities, dam20 ages for physical and emotional pain, suffering, in21 convenience, physical impairment, mental anguish, 

22 disfigurement, loss of enjoyment of life, loss of soci23 ety and companionship, loss of consortium (other 

24 than loss of domestic service), hedonic damages, in25 jury to reputation, and all other nonpecuniary losses 


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1 of any kind or nature. The term ‘‘compensatory 

2 damages’’ includes economic damages and non3 economic damages, as such terms are defined in this 

4 section. 

5 (5) CONTINGENT FEE.—The term ‘‘contingent 

6 fee’’ includes all compensation to any person or per7 sons which is payable only if a recovery is effected 

8 on behalf of one or more claimants. 

9 (6) ECONOMIC DAMAGES.—The term ‘‘economic 

10 damages’’ means objectively verifiable monetary 

11 losses incurred as a result of the provision of, use 

12 of, or payment for (or failure to provide, use, or pay 

13 for) health care services or medical products, such as 

14 past and future medical expenses, loss of past and 

15 future earnings, cost of obtaining domestic services, 

16 loss of employment, and loss of business or employ17 ment opportunities. 

18 (7) HEALTH CARE LAWSUIT.—The term 

19 ‘‘health care lawsuit’’ means any health care liability 

20 claim concerning the provision of health care goods 

21 or services or any medical product affecting inter22 state commerce, or any health care liability action 

23 concerning the provision of health care goods or 

24 services or any medical product affecting interstate 

25 commerce, brought in a State or Federal court or 


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1 pursuant to an alternative dispute resolution system, 

2 against a health care provider, a health care organi3 zation, or the manufacturer, distributor, supplier, 

4 marketer, promoter, or seller of a medical product, 

5 regardless of the theory of liability on which the 

6 claim is based, or the number of claimants, plain7 tiffs, defendants, or other parties, or the number of 

8 claims or causes of action, in which the claimant al9 leges a health care liability claim. Such term does 

10 not include a claim or action which is based on 

11 criminal liability; which seeks civil fines or penalties 

12 paid to Federal, State, or local government; or which 

13 is grounded in antitrust. 

14 (8) HEALTH CARE LIABILITY ACTION.—The 

15 term ‘‘health care liability action’’ means a civil ac16 tion brought in a State or Federal court or pursuant 

17 to an alternative dispute resolution system, against 

18 a health care provider, a health care organization, or 

19 the manufacturer, distributor, supplier, marketer, 

20 promoter, or seller of a medical product, regardless 

21 of the theory of liability on which the claim is based, 

22 or the number of plaintiffs, defendants, or other par23 ties, or the number of causes of action, in which the 

24 claimant alleges a health care liability claim. 


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1 (9) HEALTH CARE LIABILITY CLAIM.—The 

2 term ‘‘health care liability claim’’ means a demand 

3 by any person, whether or not pursuant to ADR, 

4 against a health care provider, health care organiza5 tion, or the manufacturer, distributor, supplier, mar6 keter, promoter, or seller of a medical product, in7 cluding, but not limited to, third-party claims, cross8 claims, counter-claims, or contribution claims, which 

9 are based upon the provision of, use of, or payment 

10 for (or the failure to provide, use, or pay for) health 

11 care services or medical products, regardless of the 

12 theory of liability on which the claim is based, or the 

13 number of plaintiffs, defendants, or other parties, or 

14 the number of causes of action. 

15 (10) HEALTH CARE ORGANIZATION.—The term 

16 ‘‘health care organization’’ means any person or en17 tity which is obligated to provide or pay for health 

18 benefits under any health plan, including any person 

19 or entity acting under a contract or arrangement 

20 with a health care organization to provide or admin21 ister any health benefit. 

22 (11) HEALTH CARE PROVIDER.—The term 

23 ‘‘health care provider’’ means any person or entity 

24 required by State or Federal laws or regulations to 

25 be licensed, registered, or certified to provide health 


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1 care services, and being either so licensed, reg2 istered, or certified, or exempted from such require3 ment by other statute or regulation. 

4 (12) HEALTH CARE GOODS OR SERVICES.—The 

5 term ‘‘health care goods or services’’ means any 

6 goods or services provided by a health care organiza7 tion, provider, or by any individual working under 

8 the supervision of a health care provider, that relates 

9 to the diagnosis, prevention, or treatment of any 

10 human disease or impairment, or the assessment or 

11 care of the health of human beings. 

12 (13) MALICIOUS INTENT TO INJURE.—The 

13 term ‘‘malicious intent to injure’’ means inten14 tionally causing or attempting to cause physical in15 jury other than providing health care goods or serv16 ices. 

17 (14) MEDICAL PRODUCT.—The term ‘‘medical 

18 product’’ means a drug, device, or biological product 

19 intended for humans, and the terms ‘‘drug’’, ‘‘de20 vice’’, and ‘‘biological product’’ have the meanings 

21 given such terms in sections 201(g)(1) and 201(h) 

22 of the Federal Food, Drug, and Cosmetic Act (21 

23 U.S.C. 321(g)(1) and (h)) and section 351(a) of the 

24 Public Health Service Act (42 U.S.C. 262(a)), reVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 spectively, including any component or raw material 

2 used therein, but excluding health care services. 

3 (15) NONECONOMIC DAMAGES.—The term 

4 ‘‘noneconomic damages’’ means damages for phys5 ical and emotional pain, suffering, inconvenience, 

6 physical impairment, mental anguish, disfigurement, 

7 loss of enjoyment of life, loss of society and compan8 ionship, loss of consortium (other than loss of do9 mestic service), hedonic damages, injury to reputa10 tion, and all other nonpecuniary losses of any kind 

11 or nature. 

12 (16) PUNITIVE DAMAGES.—The term ‘‘punitive 

13 damages’’ means damages awarded, for the purpose 

14 of punishment or deterrence, and not solely for com15 pensatory purposes, against a health care provider, 

16 health care organization, or a manufacturer, dis17 tributor, or supplier of a medical product. Punitive 

18 damages are neither economic nor noneconomic 

19 damages. 

20 (17) RECOVERY.—The term ‘‘recovery’’ means 

21 the net sum recovered after deducting any disburse22 ments or costs incurred in connection with prosecu23 tion or settlement of the claim, including all costs 

24 paid or advanced by any person. Costs of health care 

25 incurred by the plaintiff and the attorneys’ office 


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1 overhead costs or charges for legal services are not 

2 deductible disbursements or costs for such purpose. 

3 (18) STATE.—The term ‘‘State’’ means each of 

4 the several States, the District of Columbia, the 

5 Commonwealth of Puerto Rico, the Virgin Islands, 

6 Guam, American Samoa, the Northern Mariana Is7 lands, the Trust Territory of the Pacific Islands, and 

8 any other territory or possession of the United 

9 States, or any political subdivision thereof. 

10 TITLE II—IMPROVING ACCESS 

11 FOR RURAL AND INDIGENT 

12 PATIENTS 

13 SEC. 201. IMPROVING ACCESS FOR RURAL AND INDIGENT 

14 PATIENTS. 

15 (a) LOAN FORGIVENESS FOR PRIMARY CARE PRO16 VIDERS.— 

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

18 Human Services shall carry out a program of enter19 ing into contracts with eligible individuals under 

20 which— 

21 (A) the individual agrees to serve for a pe22 riod of not less than 4 years as a primary care 

23 provider in a medically underserved community 

24 (as defined in section 799B of the Public 

25 Health Service Act (42 U.S.C. 295p)); and 


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•S 1860 IS

1 (B) in consideration of such service, the 

2 Secretary agrees to pay not more than 

3 $100,000 on the principal and interest on the 

4 individual’s graduate educational loans. 

5 (2) ELIGIBILITY.—To be eligible to enter into a 

6 contract under subsection (1), an individual must— 

7 (A) have a graduate degree in medicine, 

8 osteopathic medicine, or another health profes9 sion from an accredited (as determined by the 

10 Secretary of Health and Human Services) insti11 tution of higher education; and 

12 (B) have practiced as a primary care pro13 vider for a period (excluding any residency or 

14 fellowship training period) of not less than 3 

15 years in a medically underserved community (as 

16 defined in section 799B of the Public Health 

17 Service Act (42 U.S.C. 295p)). 

18 (3) INSTALLMENTS.—Payments under this sec19 tion may be made in installments of not more than 

20 $25,000 for each year of service described in para21 graph (1) (A). 

22 (4) APPLICABILITY OF CERTAIN PROVISIONS.— 

23 The provisions of subpart III of part D of title III 

24 of the Public Health Service Act shall, except as in25 consistent with this section, apply to the program esVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 tablished under this section in the same manner and 

2 to the same extent as such provisions apply to the 

3 National Health Service Corps Loan Repayment 

4 Program established in such subpart. 

5 (b) PERMITTING STATE DESIGNATION OF CRITICAL

6 ACCESS HOSPITALS.—Section 1820(c)(2)(B)(i)(II) of the 

7 Social Security Act (42 U.S.C. 1395i–4(c)(2)(B)(i)(II)) is 

8 amended by inserting ‘‘or on or after the date of enact9 ment of the Steps Toward Access and Reform Act of 

10 2013’’ after ‘‘January 1, 2006,’’. 

11 (c) PATIENT FAIRNESS AND INDIGENT CARE PRO12 MOTION.— 

13 (1) IN GENERAL.—Section 166 of the Internal 

14 Revenue Code of 1986 (relating to bad debts) is 

15 amended by redesignating subsection (f) as sub16 section (g) and by inserting after subsection (e) the 

17 following new subsection: 

18 ‘‘(f) UNPAID MEDICAL CARE PROVIDED TO LOW-IN19 COME INDIVIDUALS.— 

20 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

21 to whom this subsection applies, the deduction under 

22 subsection (a) for worthless qualified medical care 

23 debt shall not be less than 75 percent of the tax24 payer’s charge for such care. 


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1 ‘‘(2) TAXPAYER TO WHOM SUBSECTION AP2 PLIES.—This subsection shall apply to any taxpayer 

3 who is engaged in the trade or business of providing 

4 medical care other than as an employee and who 

5 used the cash receipts and disbursements method of 

6 accounting. 

7 ‘‘(3) QUALIFIED MEDICAL CARE DEBT.—For 

8 purposes of this subsection, the term ‘qualified med9 ical care debt’ means any debt for medical care pro10 vided by the taxpayer to a low-income individual who 

11 is a citizen or legal resident of the United States. 

12 ‘‘(4) DETERMINATION OF CHARGE.—The 

13 amount of the taxpayer’s charge which may be taken 

14 into account— 

15 ‘‘(A) shall not exceed the amount of the 

16 charge that would be recognized for purposes of 

17 title XVIII of the Social Security Act, and 

18 ‘‘(B) shall not include any amount for 

19 which the taxpayer is not entitled to reimburse20 ment from the low-income individual. 

21 ‘‘(5) LOW-INCOME INDIVIDUAL.—For purposes 

22 of this subsection, the term ‘low-income individual’ 

23 means an individual who, at the time the medical 

24 care attributable to the debt is provided, has an an25 nual household income below 135 percent of the povVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 erty line (as defined in section 673 of the Commu2 nity Services Block Grant Act (42 U.S.C. 9902)) ap3 plicable to the size of the family involved, and is a 

4 citizen or legal resident of the United States. 

5 ‘‘(6) MEDICAL CARE.—For purposes of this 

6 subsection, the term ‘medical care’ has the meaning 

7 given to such term by section 213(d). 

8 ‘‘(7) REGULATIONS.—The Secretary shall pre9 scribe such regulations as may be necessary or ap10 propriate to carry out this section, including regula11 tions providing for methods of establishing that an 

12 individual is a low-income individual for purposes of 

13 this section.’’. 

14 (2) EFFECTIVE DATE.—The amendment made 

15 by this section shall apply to taxable years beginning 

16 after the date of the enactment of this Act. 

17 TITLE III—PROVIDING FOR AF18 FORDABLE PRESCRIPTION 

19 DRUGS 

20 SEC. 301. PROVIDING FOR AFFORDABLE PRESCRIPTION 

21 DRUGS. 

22 Notwithstanding any other provision of law, the Food 

23 and Drug Administration shall not take any action to pre24 vent an individual not in the business of importing a pre25 scription drug (within the meaning of section 801(g) of 


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1 the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

2 381(g))) from importing a prescription drug from Canada 

3 that complies with the Federal Food, Drug, and Cosmetic 

4 Act. 

5 TITLE IV—EXPANDING CHOICES 

6 BY ALLOWING AMERICANS TO 

7 BUY HEALTH CARE COV8 ERAGE ACROSS STATE LINES 

9 SEC. 401. INTERSTATE PURCHASING OF HEALTH INSUR10 ANCE. 

11 (a) IN GENERAL.—Title XXVII of the Public Health 

12 Service Act (42 U.S.C. 300gg et seq.) is amended by add13 ing at the end the following: 

14 ‘‘PART D—COOPERATIVE GOVERNING OF 

15 INDIVIDUAL HEALTH INSURANCE COVERAGE 

16 ‘‘SEC. 2795. DEFINITIONS. 

17 ‘‘In this part: 

18 ‘‘(1) PRIMARY STATE.—The term ‘primary 

19 State’ means, with respect to individual health insur20 ance coverage offered by a health insurance issuer, 

21 the State designated by the issuer as the State 

22 whose covered laws shall govern the health insurance 

23 issuer in the sale of such coverage under this part. 

24 An issuer, with respect to a particular policy, may 

25 only designate one such State as its primary State 


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1 with respect to all such coverage it offers. Such an 

2 issuer may not change the designated primary State 

3 with respect to individual health insurance coverage 

4 once the policy is issued, except that such a change 

5 may be made upon renewal of the policy. With re6 spect to such designated State, the issuer is deemed 

7 to be doing business in that State. 

8 ‘‘(2) SECONDARY STATE.—The term ‘secondary 

9 State’ means, with respect to individual health insur10 ance coverage offered by a health insurance issuer, 

11 any State that is not the primary State. In the case 

12 of a health insurance issuer that is selling a policy 

13 in, or to a resident of, a secondary State, the issuer 

14 is deemed to be doing business in that secondary 

15 State. 

16 ‘‘(3) HEALTH INSURANCE ISSUER.—The term 

17 ‘health insurance issuer’ has the meaning given such 

18 term in section 2791(b)(2), except that such an 

19 issuer must be licensed in the primary State and be 

20 qualified to sell individual health insurance coverage 

21 in that State. 

22 ‘‘(4) INDIVIDUAL HEALTH INSURANCE COV23 ERAGE.—The term ‘individual health insurance cov24 erage’ means health insurance coverage offered in 


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1 the individual market, as defined in section 

2 2791(e)(1). 

3 ‘‘(5) APPLICABLE STATE AUTHORITY.—The 

4 term ‘applicable State authority’ means, with respect 

5 to a health insurance issuer in a State, the State in6 surance commissioner or official or officials des7 ignated by the State to enforce the requirements of 

8 this title for the State with respect to the issuer. 

9 ‘‘(6) HAZARDOUS FINANCIAL CONDITION.—The 

10 term ‘hazardous financial condition’ means that, 

11 based on its present or reasonably anticipated finan12 cial condition, a health insurance issuer is unlikely 

13 to be able— 

14 ‘‘(A) to meet obligations to policyholders 

15 with respect to known claims and reasonably 

16 anticipated claims; or 

17 ‘‘(B) to pay other obligations in the normal 

18 course of business. 

19 ‘‘(7) COVERED LAWS.— 

20 ‘‘(A) IN GENERAL.—The term ‘covered 

21 laws’ means the laws, rules, regulations, agree22 ments, and orders governing the insurance busi23 ness pertaining to— 

24 ‘‘(i) individual health insurance cov25 erage issued by a health insurance issuer; 


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•S 1860 IS

1 ‘‘(ii) the offer, sale, rating (including 

2 medical underwriting), renewal, and 

3 issuance of individual health insurance cov4 erage to an individual; 

5 ‘‘(iii) the provision to an individual in 

6 relation to individual health insurance cov7 erage of health care and insurance related 

8 services; 

9 ‘‘(iv) the provision to an individual in 

10 relation to individual health insurance cov11 erage of management, operations, and in12 vestment activities of a health insurance 

13 issuer; and 

14 ‘‘(v) the provision to an individual in 

15 relation to individual health insurance cov16 erage of loss control and claims adminis17 tration for a health insurance issuer with 

18 respect to liability for which the issuer pro19 vides insurance. 

20 ‘‘(B) EXCEPTION.—Such term does not in21 clude any law, rule, regulation, agreement, or 

22 order governing the use of care or cost manage23 ment techniques, including any requirement re24 lated to provider contracting, network access or 


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1 adequacy, health care data collection, or quality 

2 assurance. 

3 ‘‘(8) STATE.—The term ‘State’ means the 50 

4 States and includes the District of Columbia, Puerto 

5 Rico, the Virgin Islands, Guam, American Samoa, 

6 and the Northern Mariana Islands. 

7 ‘‘(9) UNFAIR CLAIMS SETTLEMENT PRAC8 TICES.—The term ‘unfair claims settlement prac9 tices’ means only the following practices: 

10 ‘‘(A) Knowingly misrepresenting to claim11 ants and insured individuals relevant facts or 

12 policy provisions relating to coverage at issue. 

13 ‘‘(B) Failing to acknowledge with reason14 able promptness pertinent communications with 

15 respect to claims arising under policies. 

16 ‘‘(C) Failing to adopt and implement rea17 sonable standards for the prompt investigation 

18 and settlement of claims arising under policies. 

19 ‘‘(D) Failing to effectuate prompt, fair, 

20 and equitable settlement of claims submitted in 

21 which liability has become reasonably clear. 

22 ‘‘(E) Refusing to pay claims without con23 ducting a reasonable investigation. 

24 ‘‘(F) Failing to affirm or deny coverage of 

25 claims within a reasonable period of time after 


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•S 1860 IS

1 having completed an investigation related to 

2 those claims. 

3 ‘‘(G) A pattern or practice of compelling 

4 insured individuals or their beneficiaries to in5 stitute suits to recover amounts due under its 

6 policies by offering substantially less than the 

7 amounts ultimately recovered in suits brought 

8 by them. 

9 ‘‘(H) A pattern or practice of attempting 

10 to settle or settling claims for less than the 

11 amount that a reasonable person would believe 

12 the insured individual or his or her beneficiary 

13 was entitled by reference to written or printed 

14 advertising material accompanying or made 

15 part of an application. 

16 ‘‘(I) Attempting to settle or settling claims 

17 on the basis of an application that was materi18 ally altered without notice to, or knowledge or 

19 consent of, the insured. 

20 ‘‘(J) Failing to provide forms necessary to 

21 present claims within 15 calendar days of a re22 quest with reasonable explanations regarding 

23 their use. 


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1 ‘‘(K) Attempting to cancel a policy in less 

2 time than that prescribed in the policy or by the 

3 law of the primary State. 

4 ‘‘(10) FRAUD AND ABUSE.—The term ‘fraud 

5 and abuse’ means an act or omission committed by 

6 a person who, knowingly and with intent to defraud, 

7 commits, or conceals any material information con8 cerning, one or more of the following: 

9 ‘‘(A) Presenting, causing to be presented 

10 or preparing with knowledge or belief that it 

11 will be presented to or by an insurer, a rein12 surer, broker or its agent, false information as 

13 part of, in support of or concerning a fact ma14 terial to one or more of the following: 

15 ‘‘(i) An application for the issuance or 

16 renewal of an insurance policy or reinsur17 ance contract. 

18 ‘‘(ii) The rating of an insurance policy 

19 or reinsurance contract. 

20 ‘‘(iii) A claim for payment or benefit 

21 pursuant to an insurance policy or reinsur22 ance contract. 

23 ‘‘(iv) Premiums paid on an insurance 

24 policy or reinsurance contract. 


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•S 1860 IS

1 ‘‘(v) Payments made in accordance 

2 with the terms of an insurance policy or 

3 reinsurance contract. 

4 ‘‘(vi) A document filed with the com5 missioner or the chief insurance regulatory 

6 official of another jurisdiction. 

7 ‘‘(vii) The financial condition of an in8 surer or reinsurer. 

9 ‘‘(viii) The formation, acquisition, 

10 merger, reconsolidation, dissolution or 

11 withdrawal from one or more lines of in12 surance or reinsurance in all or part of a 

13 State by an insurer or reinsurer. 

14 ‘‘(ix) The issuance of written evidence 

15 of insurance. 

16 ‘‘(x) The reinstatement of an insur17 ance policy. 

18 ‘‘(B) Solicitation or acceptance of new or 

19 renewal insurance risks on behalf of an insurer 

20 reinsurer or other person engaged in the busi21 ness of insurance by a person who knows or 

22 should know that the insurer or other person 

23 responsible for the risk is insolvent at the time 

24 of the transaction. 


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1 ‘‘(C) Transaction of the business of insur2 ance in violation of laws requiring a license, cer3 tificate of authority or other legal authority for 

4 the transaction of the business of insurance. 

5 ‘‘(D) Attempt to commit, aiding or abet6 ting in the commission of, or conspiracy to com7 mit the acts or omissions specified in this para8 graph. 

9 ‘‘SEC. 2796. APPLICATION OF LAW. 

10 ‘‘(a) IN GENERAL.—The covered laws of the primary 

11 State shall apply to individual health insurance coverage 

12 offered by a health insurance issuer in the primary State 

13 and in any secondary State, but only if the coverage and 

14 issuer comply with the conditions of this section with re15 spect to the offering of coverage in any secondary State. 

16 ‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC17 ONDARY STATE.—Except as provided in this section, a 

18 health insurance issuer with respect to its offer, sale, rat19 ing (including medical underwriting), renewal, and 

20 issuance of individual health insurance coverage in any 

21 secondary State is exempt from any covered laws of the 

22 secondary State (and any rules, regulations, agreements, 

23 or orders sought or issued by such State under or related 

24 to such covered laws) to the extent that such laws would— 


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•S 1860 IS

1 ‘‘(1) make unlawful, or regulate, directly or in2 directly, the operation of the health insurance issuer 

3 operating in the secondary State, except that any 

4 secondary State may require such an issuer— 

5 ‘‘(A) to pay, on a nondiscriminatory basis, 

6 applicable premium and other taxes (including 

7 high risk pool assessments) which are levied on 

8 insurers and surplus lines insurers, brokers, or 

9 policyholders under the laws of the State; 

10 ‘‘(B) to register with and designate the 

11 State insurance commissioner as its agent solely 

12 for the purpose of receiving service of legal doc13 uments or process; 

14 ‘‘(C) to submit to an examination of its fi15 nancial condition by the State insurance com16 missioner in any State in which the issuer is 

17 doing business to determine the issuer’s finan18 cial condition, if— 

19 ‘‘(i) the State insurance commissioner 

20 of the primary State has not done an ex21 amination within the period recommended 

22 by the National Association of Insurance 

23 Commissioners; and 

24 ‘‘(ii) any such examination is con25 ducted in accordance with the examiners’ 


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•S 1860 IS

1 handbook of the National Association of 

2 Insurance Commissioners and is coordi3 nated to avoid unjustified duplication and 

4 unjustified repetition; 

5 ‘‘(D) to comply with a lawful order 

6 issued— 

7 ‘‘(i) in a delinquency proceeding com8 menced by the State insurance commis9 sioner if there has been a finding of finan10 cial impairment under subparagraph (C); 

11 or 

12 ‘‘(ii) in a voluntary dissolution pro13 ceeding; 

14 ‘‘(E) to comply with an injunction issued 

15 by a court of competent jurisdiction, upon a pe16 tition by the State insurance commissioner al17 leging that the issuer is in hazardous financial 

18 condition; 

19 ‘‘(F) to participate, on a nondiscriminatory 

20 basis, in any insurance insolvency guaranty as21 sociation or similar association to which a 

22 health insurance issuer in the State is required 

23 to belong; 

24 ‘‘(G) to comply with any State law regard25 ing fraud and abuse (as defined in section 


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•S 1860 IS

1 2795(10)), except that if the State seeks an in2 junction regarding the conduct described in this 

3 subparagraph, such injunction must be obtained 

4 from a court of competent jurisdiction; 

5 ‘‘(H) to comply with any State law regard6 ing unfair claims settlement practices (as de7 fined in section 2795(9)); or 

8 ‘‘(I) to comply with the applicable require9 ments for independent review under section 

10 2798 with respect to coverage offered in the 

11 State; 

12 ‘‘(2) require any individual health insurance 

13 coverage issued by the issuer to be countersigned by 

14 an insurance agent or broker residing in that Sec15 ondary State; or 

16 ‘‘(3) otherwise discriminate against the issuer 

17 issuing insurance in both the primary State and in 

18 any secondary State. 

19 ‘‘(c) CLEAR AND CONSPICUOUS DISCLOSURE.—A 

20 health insurance issuer shall provide the following notice, 

21 in 12-point bold type, in any insurance coverage offered 

22 in a secondary State under this part by such a health in23 surance issuer and at renewal of the policy, with the 5 

24 blank spaces therein being appropriately filled with the 

25 name of the health insurance issuer, the name of primary 


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•S 1860 IS

1 State, the name of the secondary State, the name of the 

2 secondary State, and the name of the secondary State, re3 spectively, for the coverage concerned: 

4 THIS POLICY IS ISSUED BY lllll AND 

5 IS GOVERNED BY THE LAWS AND REGULA6 TIONS OF THE STATE OF lllll, AND IT 

7 HAS MET ALL THE LAWS OF THAT STATE 

8 AS DETERMINED BY THAT STATE’S DE9 PARTMENT OF INSURANCE. THIS POLICY 

10 MAY BE LESS EXPENSIVE THAN OTHERS 

11 BECAUSE IT IS NOT SUBJECT TO ALL OF 

12 THE INSURANCE LAWS AND REGULATIONS 

13 OF THE STATE OF lllll, INCLUDING 

14 COVERAGE OF SOME SERVICES OR BENE15 FITS MANDATED BY THE LAW OF THE 

16 STATE OF lllll. ADDITIONALLY, THIS 

17 POLICY IS NOT SUBJECT TO ALL OF THE 

18 CONSUMER PROTECTION LAWS OR RE19 STRICTIONS ON RATE CHANGES OF THE 

20 STATE OF lllll. AS WITH ALL INSUR21 ANCE PRODUCTS, BEFORE PURCHASING 

22 THIS POLICY, YOU SHOULD CAREFULLY 

23 REVIEW THE POLICY AND DETERMINE 

24 WHAT HEALTH CARE SERVICES THE POL25 ICY COVERS AND WHAT BENEFITS IT PROVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 VIDES, INCLUDING ANY EXCLUSIONS, LIM2 ITATIONS, OR CONDITIONS FOR SUCH 

3 SERVICES OR BENEFITS. 

4 ‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS

5 AND PREMIUM INCREASES.— 

6 ‘‘(1) IN GENERAL.—For purposes of this sec7 tion, a health insurance issuer that provides indi8 vidual health insurance coverage to an individual 

9 under this part in a primary or secondary State may 

10 not upon renewal— 

11 ‘‘(A) move or reclassify the individual in12 sured under the health insurance coverage from 

13 the class such individual is in at the time of 

14 issue of the contract based on the health-status 

15 related factors of the individual; or 

16 ‘‘(B) increase the premiums assessed the 

17 individual for such coverage based on a health 

18 status-related factor or change of a health sta19 tus-related factor or the past or prospective 

20 claim experience of the insured individual. 

21 ‘‘(2) CONSTRUCTION.—Nothing in paragraph 

22 (1) shall be construed to prohibit a health insurance 

23 issuer— 


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•S 1860 IS

1 ‘‘(A) from terminating or discontinuing 

2 coverage or a class of coverage in accordance 

3 with subsections (b) and (c) of section 2742; 

4 ‘‘(B) from raising premium rates for all 

5 policy holders within a class based on claims ex6 perience; 

7 ‘‘(C) from changing premiums or offering 

8 discounted premiums to individuals who engage 

9 in wellness activities at intervals prescribed by 

10 the issuer, if such premium changes or incen11 tives— 

12 ‘‘(i) are disclosed to the consumer in 

13 the insurance contract; 

14 ‘‘(ii) are based on specific wellness ac15 tivities that are not applicable to all indi16 viduals; and 

17 ‘‘(iii) are not obtainable by all individ18 uals to whom coverage is offered; 

19 ‘‘(D) from reinstating lapsed coverage; or 

20 ‘‘(E) from retroactively adjusting the rates 

21 charged an insured individual if the initial rates 

22 were set based on material misrepresentation by 

23 the individual at the time of issue. 

24 ‘‘(e) PRIOR OFFERING OF POLICY IN PRIMARY

25 STATE.—A health insurance issuer may not offer for sale 


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•S 1860 IS

1 individual health insurance coverage in a secondary State 

2 unless that coverage is currently offered for sale in the 

3 primary State. 

4 ‘‘(f) LICENSING OF AGENTS OR BROKERS FOR

5 HEALTH INSURANCE ISSUERS.—Any State may require 

6 that a person acting, or offering to act, as an agent or 

7 broker for a health insurance issuer with respect to the 

8 offering of individual health insurance coverage obtain a 

9 license from that State, with commissions or other com10 pensation subject to the provisions of the laws of that 

11 State, except that a State may not impose any qualifica12 tion or requirement which discriminates against a non13 resident agent or broker. 

14 ‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN15 SURANCE COMMISSIONER.—Each health insurance issuer 

16 issuing individual health insurance coverage in both pri17 mary and secondary States shall submit— 

18 ‘‘(1) to the insurance commissioner of each 

19 State in which it intends to offer such coverage, be20 fore it may offer individual health insurance cov21 erage in such State— 

22 ‘‘(A) a copy of the plan of operation or fea23 sibility study or any similar statement of the 

24 policy being offered and its coverage (which 


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•S 1860 IS

1 shall include the name of its primary State and 

2 its principal place of business); 

3 ‘‘(B) written notice of any change in its 

4 designation of its primary State; and 

5 ‘‘(C) written notice from the issuer of the 

6 issuer’s compliance with all the laws of the pri7 mary State; and 

8 ‘‘(2) to the insurance commissioner of each sec9 ondary State in which it offers individual health in10 surance coverage, a copy of the issuer’s quarterly fi11 nancial statement submitted to the primary State, 

12 which statement shall be certified by an independent 

13 public accountant and contain a statement of opin14 ion on loss and loss adjustment expense reserves 

15 made by— 

16 ‘‘(A) a member of the American Academy 

17 of Actuaries; or 

18 ‘‘(B) a qualified loss reserve specialist. 

19 ‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 

20 Nothing in this section shall be construed to affect the 

21 authority of any Federal or State court to enjoin— 

22 ‘‘(1) the solicitation or sale of individual health 

23 insurance coverage by a health insurance issuer to 

24 any person or group who is not eligible for such in25 surance; or 


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•S 1860 IS

1 ‘‘(2) the solicitation or sale of individual health 

2 insurance coverage that violates the requirements of 

3 the law of a secondary State which are described in 

4 subparagraphs (A) through (H) of section 

5 2796(b)(1). 

6 ‘‘(i) POWER OF SECONDARY STATES TO TAKE AD7 MINISTRATIVE ACTION.—Nothing in this section shall be 

8 construed to affect the authority of any State to enjoin 

9 conduct in violation of that State’s laws described in sec10 tion 2796(b)(1). 

11 ‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 

12 ‘‘(1) IN GENERAL.—Subject to the provisions of 

13 subsection (b)(1)(G) (relating to injunctions) and 

14 paragraph (2), nothing in this section shall be con15 strued to affect the authority of any State to make 

16 use of any of its powers to enforce the laws of such 

17 State with respect to which a health insurance issuer 

18 is not exempt under subsection (b). 

19 ‘‘(2) COURTS OF COMPETENT JURISDICTION.— 

20 If a State seeks an injunction regarding the conduct 

21 described in paragraphs (1) and (2) of subsection 

22 (h), such injunction must be obtained from a Fed23 eral or State court of competent jurisdiction. 


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1 ‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 

2 section shall affect the authority of any State to bring ac3 tion in any Federal or State court. 

4 ‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 

5 this section shall be construed to affect the applicability 

6 of State laws generally applicable to persons or corpora7 tions. 

8 ‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO

9 HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 

10 health insurance issuer is offering coverage in a primary 

11 State that does not accommodate residents of secondary 

12 States or does not provide a working mechanism for resi13 dents of a secondary State, and the issuer is offering cov14 erage under this part in such secondary State which has 

15 not adopted a qualified high risk pool as its acceptable 

16 alternative mechanism (as defined in section 2744(c)(2)), 

17 the issuer shall, with respect to any individual health in18 surance coverage offered in a secondary State under this 

19 part, comply with the guaranteed availability requirements 

20 for eligible individuals in section 2741. 

21 ‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 

22 BEFORE ISSUER MAY SELL INTO SECONDARY 

23 STATES. 

24 ‘‘A health insurance issuer may not offer, sell, or 

25 issue individual health insurance coverage in a secondary 


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•S 1860 IS

1 State if the State insurance commissioner does not use 

2 a risk-based capital formula for the determination of cap3 ital and surplus requirements for all health insurance 

4 issuers. 

5 ‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE6 DURES. 

7 ‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur8 ance issuer may not offer, sell, or issue individual health 

9 insurance coverage in a secondary State under the provi10 sions of this title unless— 

11 ‘‘(1) both the secondary State and the primary 

12 State have legislation or regulations in place estab13 lishing an independent review process for individuals 

14 who are covered by individual health insurance cov15 erage, or 

16 ‘‘(2) in any case in which the requirements of 

17 subparagraph (A) are not met with respect to the ei18 ther of such States, the issuer provides an inde19 pendent review mechanism substantially identical (as 

20 determined by the applicable State authority of such 

21 State) to that prescribed in the ‘Health Carrier Ex22 ternal Review Model Act’ of the National Association 

23 of Insurance Commissioners for all individuals who 

24 purchase insurance coverage under the terms of this 

25 part, except that, under such mechanism, the review 


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1 is conducted by an independent medical reviewer, or 

2 a panel of such reviewers, with respect to whom the 

3 requirements of subsection (b) are met. 

4 ‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL

5 REVIEWERS.—In the case of any independent review 

6 mechanism referred to in subsection (a)(2)— 

7 ‘‘(1) IN GENERAL.—In referring a denial of a 

8 claim to an independent medical reviewer, or to any 

9 panel of such reviewers, to conduct independent 

10 medical review, the issuer shall ensure that— 

11 ‘‘(A) each independent medical reviewer 

12 meets the qualifications described in paragraphs 

13 (2) and (3); 

14 ‘‘(B) with respect to each review, each re15 viewer meets the requirements of paragraph (4) 

16 and the reviewer, or at least 1 reviewer on the 

17 panel, meets the requirements described in 

18 paragraph (5); and 

19 ‘‘(C) compensation provided by the issuer 

20 to each reviewer is consistent with paragraph 

21 (6). 

22 ‘‘(2) LICENSURE AND EXPERTISE.—Each inde23 pendent medical reviewer shall be a physician 

24 (allopathic or osteopathic) or health care profes25 sional who— 


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1 ‘‘(A) is appropriately credentialed or li2 censed in 1 or more States to deliver health 

3 care services; and 

4 ‘‘(B) typically treats the condition, makes 

5 the diagnosis, or provides the type of treatment 

6 under review. 

7 ‘‘(3) INDEPENDENCE.— 

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), each independent medical reviewer 

10 in a case shall— 

11 ‘‘(i) not be a related party (as defined 

12 in paragraph (7)); 

13 ‘‘(ii) not have a material familial, fi14 nancial, or professional relationship with 

15 such a party; and 

16 ‘‘(iii) not otherwise have a conflict of 

17 interest with such a party (as determined 

18 under regulations). 

19 ‘‘(B) EXCEPTION.—Nothing in subpara20 graph (A) shall be construed to— 

21 ‘‘(i) prohibit an individual, solely on 

22 the basis of affiliation with the issuer, 

23 from serving as an independent medical re24 viewer if— 


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1 ‘‘(I) a non-affiliated individual is 

2 not reasonably available; 

3 ‘‘(II) the affiliated individual is 

4 not involved in the provision of items 

5 or services in the case under review; 

6 ‘‘(III) the fact of such an affili7 ation is disclosed to the issuer and the 

8 enrollee (or authorized representative) 

9 and neither party objects; and 

10 ‘‘(IV) the affiliated individual is 

11 not an employee of the issuer and 

12 does not provide services exclusively or 

13 primarily to or on behalf of the issuer; 

14 ‘‘(ii) prohibit an individual who has 

15 staff privileges at the institution where the 

16 treatment involved takes place from serv17 ing as an independent medical reviewer 

18 merely on the basis of such affiliation if 

19 the affiliation is disclosed to the issuer and 

20 the enrollee (or authorized representative), 

21 and neither party objects; or 

22 ‘‘(iii) prohibit receipt of compensation 

23 by an independent medical reviewer from 

24 an entity if the compensation is provided 

25 consistent with paragraph (6). 


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1 ‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL

2 IN SAME FIELD.— 

3 ‘‘(A) IN GENERAL.—In a case involving 

4 treatment, or the provision of items or serv5 ices— 

6 ‘‘(i) by a physician, a reviewer shall be 

7 a practicing physician (allopathic or osteo8 pathic) of the same or similar specialty, as 

9 a physician who, acting within the appro10 priate scope of practice within the State in 

11 which the service is provided or rendered, 

12 typically treats the condition, makes the 

13 diagnosis, or provides the type of treat14 ment under review; or 

15 ‘‘(ii) by a non-physician health care 

16 professional, the reviewer, or at least 1 

17 member of the review panel, shall be a 

18 practicing non-physician health care pro19 fessional of the same or similar specialty 

20 as the non-physician health care profes21 sional who, acting within the appropriate 

22 scope of practice within the State in which 

23 the service is provided or rendered, typi24 cally treats the condition, makes the diagVerDate Mar 15 2010 03:21 Dec 24, 2013 Jkt 039200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\S1860.IS S1860

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1 nosis, or provides the type of treatment 

2 under review. 

3 ‘‘(B) PRACTICING DEFINED.—For pur4 poses of this paragraph, the term ‘practicing’ 

5 means, with respect to an individual who is a 

6 physician or other health care professional, that 

7 the individual provides health care services to 

8 individual patients on average at least 2 days 

9 per week. 

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

11 external review relating to a child, a reviewer shall 

12 have expertise under paragraph (2) in pediatrics. 

13 ‘‘(6) LIMITATIONS ON REVIEWER COMPENSA14 TION.—Compensation provided by the issuer to an 

15 independent medical reviewer in connection with a 

16 review under this section shall— 

17 ‘‘(A) not exceed a reasonable level; and 

18 ‘‘(B) not be contingent on the decision ren19 dered by the reviewer. 

20 ‘‘(7) RELATED PARTY DEFINED.—For purposes 

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

22 respect to a denial of a claim under a coverage relat23 ing to an enrollee, any of the following: 

24 ‘‘(A) The issuer involved, or any fiduciary, 

25 officer, director, or employee of the issuer. 


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1 ‘‘(B) The enrollee (or authorized represent2 ative). 

3 ‘‘(C) The health care professional that pro4 vides the items or services involved in the de5 nial. 

6 ‘‘(D) The institution at which the items or 

7 services (or treatment) involved in the denial 

8 are provided. 

9 ‘‘(E) The manufacturer of any drug or 

10 other item that is included in the items or serv11 ices involved in the denial. 

12 ‘‘(F) Any other party determined under 

13 any regulations to have a substantial interest in 

14 the denial involved. 

15 ‘‘(8) DEFINITIONS.—For purposes of this sub16 section: 

17 ‘‘(A) ENROLLEE.—The term ‘enrollee’ 

18 means, with respect to health insurance cov19 erage offered by a health insurance issuer, an 

20 individual enrolled with the issuer to receive 

21 such coverage. 

22 ‘‘(B) HEALTH CARE PROFESSIONAL.—The 

23 term ‘health care professional’ means an indi24 vidual who is licensed, accredited, or certified 

25 under State law to provide specified health care 


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1 services and who is operating within the scope 

2 of such licensure, accreditation, or certification. 

3 ‘‘SEC. 2799. ENFORCEMENT. 

4 ‘‘(a) IN GENERAL.—Subject to subsection (b), with 

5 respect to specific individual health insurance coverage the 

6 primary State for such coverage has sole jurisdiction to 

7 enforce the primary State’s covered laws in the primary 

8 State and any secondary State. 

9 ‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 

10 subsection (a) shall be construed to affect the authority 

11 of a secondary State to enforce its laws as set forth in 

12 the exception specified in section 2796(b)(1). 

13 ‘‘(c) COURT INTERPRETATION.—In reviewing action 

14 initiated by the applicable secondary State authority, the 

15 court of competent jurisdiction shall apply the covered 

16 laws of the primary State. 

17 ‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 

18 of individual health insurance coverage offered in a sec19 ondary State that fails to comply with the covered laws 

20 of the primary State, the applicable State authority of the 

21 secondary State may notify the applicable State authority 

22 of the primary State.’’. 

23 (b) EFFECTIVE DATE.—The amendment made by 

24 subsection (a) shall apply to individual health insurance 


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1 coverage offered, issued, or sold after the date that is one 

2 year after the date of the enactment of this Act. 

3 (c) GAO ONGOING STUDY AND REPORTS.— 

4 (1) STUDY.—The Comptroller General of the 

5 United States shall conduct an ongoing study con6 cerning the effect of the amendment made by sub7 section (a) on— 

8 (A) the number of uninsured and under-in9 sured; 

10 (B) the availability and cost of health in11 surance policies for individuals with preexisting 

12 medical conditions; 

13 (C) the availability and cost of health in14 surance policies generally; 

15 (D) the elimination or reduction of dif16 ferent types of benefits under health insurance 

17 policies offered in different States; and 

18 (E) cases of fraud or abuse relating to 

19 health insurance coverage offered under such 

20 amendment and the resolution of such cases. 

21 (2) ANNUAL REPORTS.—The Comptroller Gen22 eral shall submit to Congress an annual report, after 

23 the end of each of the 5 years following the effective 


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1 date of the amendment made by subsection (a), on 

2 the ongoing study conducted under paragraph (1). 

Æ 


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