II

104TH CONGRESS

2D SESSION S. 2004

To modify certain provisions of the Health Care Quality Improvement Act

of 1986.

IN THE SENATE OF THE UNITED STATES

JULY 31, 1996

Mr. WYDEN (for himself, Ms. SNOWE, and Mrs. BOXER) introduced the following bill; which was read twice and referred to the Committee on Labor

and Human Resources

A BILL

To modify certain provisions of the Health Care Quality

Improvement Act of 1986.

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.

4 This Act may be cited as the ‘‘Health Care Quality

5 Improvement Act Amendments of 1996’’.

6 SEC. 2. STANDARDS FOR PROFESSIONAL REVIEW ACTIONS.

7 Section 412(a) of the Health Care Quality Improve8 ment Act of 1986 (42 U.S.C. 11112(a)) is amended in

9 the matter after and below paragraph (4) by adding at

10 the end the following sentences: ‘‘A motion for a summary
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1 judgment that such standards have been met shall be

2 granted unless, considering the evidence in the light most

3 favorable to the opposing party, a reasonable finder of fact

4 could conclude that the presumption has been so rebutted.

5 The decision on such a motion may be appealed as of

6 right, without regard to whether the motion is granted or

7 denied, and the courts of appeals (other than the United

8 States Court of Appeals for the Federal Circuit) have ju9 risdiction of appeals from such decisions of the district

10 courts.’’.

11 SEC. 3. REQUIRING REPORTS ON MEDICAL MALPRACTICE

12 DATA.

13 (a) IN GENERAL.—Section 421 of the Health Care

14 Quality Improvement Act of 1986 (42 U.S.C. 11131) is

15 amended—

16 (1) by striking subsections (a) and (b);

17 (2) by redesignating subsections (c) and (d) as

18 subsections (d) and (e), respectively; and

19 (3) by inserting before subsection (d) (as so re20 designated) the following subsections:

21 ‘‘(a) IN GENERAL.—

22 ‘‘(1) REQUIREMENT OF REPORTING.—Subject

23 to the subsequent provisions of this subsection, each

24 person or entity which makes payment under a pol25 icy of insurance, self-insurance, or otherwise in set-
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1 tlement (or partial settlement) of, or in satisfaction

2 of a judgment in, a medical malpractice action or

3 claim shall report, in accordance with section 424,

4 information respecting the payment and cir5 cumstances thereof.

6 ‘‘(2) PAYMENTS BY PRACTITIONERS.—The per7 sons to whom the requirement of paragraph (1) ap8 plies include a physician or other licensed health

9 care practitioner who makes a payment described in

10 such paragraph and whose acts or omissions are the

11 basis of the action or claim involved. The preceding

12 sentence is subject to paragraph (3).

13 ‘‘(3) REFUND OF FEES.—With respect to a

14 physician or other licensed health care practitioner

15 whose acts or omissions are the basis of an action

16 or claim described in paragraph (1), the requirement

17 of such paragraph shall not apply to a payment de18 scribed in such paragraph if—

19 ‘‘(A) the payment is made by the physician

20 or practitioner as a refund of fees for the health

21 services involved, and

22 ‘‘(B) the payment does not exceed the

23 amount of the original charge for the health

24 services.
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1 ‘‘(4) DEFINITION OF ENTITY AND PERSON.—

2 For purposes of this section, the term ‘entity’ in3 cludes the Federal Government, any State or local

4 government, and any insurance company or other

5 private entity; and the term ‘person’ includes Fed6 eral officers and employees.

7 ‘‘(b) INFORMATION TO BE REPORTED.—The infor8 mation to be reported under subsection (a) by a person

9 or entity regarding a payment and an action or claim in10 cludes the following:

11 ‘‘(1)(A) The name of each physician or other li12 censed health care practitioner whose acts or omis13 sions were the basis of the action or claim; and (to

14 the extent authorized under title II of the Social Se15 curity Act) the Social Security account number as16 signed to the physician or practitioner.

17 ‘‘(B) The medical field of the physician or prac18 titioner, including as applicable the medical spe19 cialty.

20 ‘‘(C) The date on which the physician or practi21 tioner was first licensed in the medical field involved,

22 and the number of years the physician or practi23 tioner has been practicing in such field.

24 ‘‘(D) If the physician or practitioner could not

25 be identified for purposes of subparagraph (A)—
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1 ‘‘(i) a statement of such fact and an expla2 nation of the inability to make the identifica3 tion, and

4 ‘‘(ii) the name of the hospital or other

5 health services organization (as defined in sec6 tion 431) for whose benefit the payment was

7 made.

8 ‘‘(2) The amount of the payment.

9 ‘‘(3) The name (if known) of any hospital or

10 other health services organization with which the

11 physician or practitioner is affiliated or associated.

12 ‘‘(4)(A) A statement that describes the acts or

13 omissions and injuries or illnesses upon which the

14 action or claim was based, that specifies whether an

15 action was filed, and if an action was filed, that

16 specifies whether the action was a class action.

17 ‘‘(B) A statement by the physician or practi18 tioner regarding the action or claim, if the physician

19 or practitioner elects to make such a statement.

20 ‘‘(C) If the payment was made without the con21 sent of the physician or practitioner, a statement

22 specifying such fact and the reasons underlying the

23 decision to make the payment without such consent.
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1 ‘‘(5) Such other information as the Secretary

2 determines is required for appropriate interpretation

3 of information reported under this section.

4 ‘‘(c) CERTAIN REPORTING CRITERIA; NOTICE TO

5 PRACTITIONERS.—

6 ‘‘(1) REPORTING CRITERIA.—In establishing

7 criteria under section 424(a) for reports under this

8 section, the Secretary shall establish criteria regard9 ing statements under subsection (b)(4). Such criteria

10 shall include—

11 ‘‘(A) criteria regarding the length of each

12 of the statements,

13 ‘‘(B) criteria regarding the notice required

14 by paragraph (2) of this subsection, and

15 ‘‘(C) such other criteria as the Secretary

16 determines to be appropriate.

17 ‘‘(2) NOTICE OF OPPORTUNITY TO MAKE

18 STATEMENT.—In the case of an entity that prepares

19 a report under subsection (a)(1) regarding a pay20 ment and an action or claim, the entity shall notify

21 any physician or practitioner identified under sub22 section (b)(1)(A) of the opportunity to make a state23 ment under subsection (b)(4)(B). Criteria under

24 paragraph (1)(B) of this subsection shall include cri25 teria regarding the date by which the reporting en-
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1 tity is to provide the notice and the date by which

2 the physician or practitioner is to submit the state3 ment to the entity.’’.

4 (b) DEFINITION OF HEALTH SERVICES ORGANIZA5 TION.—Section 431 of the Health Care Quality Improve6 ment Act of 1986 (42 U.S.C. 11151) is amended—

7 (1) by redesignating paragraphs (5) through

8 (14) as paragraphs (6) through (15), respectively;

9 and

10 (2) by inserting after paragraph (4) the follow11 ing paragraph:

12 ‘‘(5) The term ‘health services organization’

13 means an entity, that, directly or through contracts,

14 provides health services. Such term includes hos15 pitals; health maintenance organizations and other

16 health plans; and health care entities (as defined in

17 paragraph (4)).’’.

18 (c) CONFORMING AMENDMENTS.—

19 (1) IN GENERAL.—The Health Care Quality

20 Improvement Act of 1986 (42 U.S.C. 11101 et seq.)

21 is amended—

22 (A) in section 411(a)(1), in the matter pre23 ceding subparagraph (A), by striking ‘‘431(9)’’

24 and inserting ‘‘431(10)’’;
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1 (B) in section 421(d) (as redesignated by

2 subsection (a)(2) of this section), by inserting

3 ‘‘person or’’ before ‘‘entity’’;

4 (C) in section 422(a)(2)(A), by inserting

5 before the comma at the end the following: ‘‘,

6 and (to the extent authorized under title II of

7 the Social Security Act) the social security ac8 count number assigned to the physician’’; and

9 (D) in section 423(a)(3)(A), by inserting

10 before the comma at the end the following: ‘‘,

11 and (to the extent authorized under title II of

12 the Social Security Act) the social security ac13 count number assigned to the physician or

14 practitioner’’.

15 (2) APPLICABILITY OF REQUIREMENTS TO FED16 ERAL ENTITIES.—

17 (A) Section 432 of the Health Care Qual18 ity Improvement Act of 1986 (42 U.S.C.

19 11152) is amended—

20 (i) by striking subsection (b); and

21 (ii) by redesignating subsection (c) as

22 subsection (b).

23 (B) Section 423 of the Health Care Qual24 ity Improvement Act of 1986 (42 U.S.C.
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1 11133) is amended by adding at the end the

2 following subsection:

3 ‘‘(e) APPLICABILITY TO FEDERAL FACILITIES AND

4 PHYSICIANS.—

5 ‘‘(1) IN GENERAL.—Subsection (a) applies to

6 Federal health facilities (including hospitals) and ac7 tions by such facilities regarding the competence or

8 professional conduct of Federal physicians to the

9 same extent and in the same manner as such sub10 section applies to health care entities and profes11 sional review actions.

12 ‘‘(2) RELEVANT BOARD OF MEDICAL EXAMIN13 ERS.—For purposes of paragraph (1), the Board of

14 Medical Examiners to which a Federal health facility

15 is to report is the Board of Medical Examiners of

16 the State within which the facility is located.’’.

17 (C) Section 425 of the Health Care Qual18 ity Improvement Act of 1986 (42 U.S.C.

19 11135) is amended by adding at the end the

20 following subsection:

21 ‘‘(d) APPLICABILITY TO FEDERAL HOSPITALS.—

22 This section applies to Federal hospitals to the same ex23 tent and in the same manner as such subsection applies

24 to other hospitals.’’.
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1 SEC. 4. REPORTING OF SANCTIONS TAKEN BY BOARDS OF

2 MEDICAL EXAMINERS.

3 Section 422(a) of the Health Care Quality Improve4 ment Act of 1986 (42 U.S.C. 11132(a)) is amended—

5 (1) in paragraph (1)(A), by striking ‘‘which re6 vokes or suspends’’ and inserting ‘‘which denies, re7 vokes, or suspends’’; and

8 (2) in paragraph (2)—

9 (A) in subparagraph (B), by striking ‘‘(if

10 known)’’ and all that follows and inserting ‘‘for

11 the action described in paragraph (1)(A) that

12 was taken with respect to the physician or, if

13 known, for the surrender of the license,’’;

14 (B) by redesignating subparagraph (C) as

15 subparagraph (E); and

16 (C) by inserting after subparagraph (B)

17 the following subparagraphs:

18 ‘‘(C) the medical field of the physician, if

19 known, including as applicable the medical spe20 cialty,

21 ‘‘(D) the date on which the physician was

22 first licensed in the medical field, and the num23 ber of years the physician has been practicing

24 in such field, if known, and’’.
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1 SEC. 5. REPORTING OF CERTAIN PROFESSIONAL REVIEW

2 ACTIONS TAKEN BY HEALTH CARE ENTITIES.

3 Section 423(a)(3) of the Health Care Quality Im4 provement Act of 1986 (42 U.S.C. 11133(a)(3)) is amend5 ed—

6 (1) in subparagraph (B), by striking ‘‘and’’

7 after ‘‘surrender,’’;

8 (2) by redesignating subparagraph (C) as sub9 paragraph (E); and

10 (3) by inserting after subparagraph (B) the fol11 lowing subparagraphs:

12 ‘‘(C) the medical field of the physician, if

13 known, including as applicable the medical spe14 cialty,

15 ‘‘(D) the date on which the physician was

16 first licensed in the medical field, and the num17 ber of years the physician has been practicing

18 in such field, if known, and’’.

19 SEC. 6. FORM OF REPORTING.

20 Section 424 of the Health Care Quality Improvement

21 Act of 1986 (42 U.S.C. 11134) is amended by adding at

22 the end the following subsection:

23 ‘‘(d) ADDITIONAL REQUIREMENTS.—Not later than

24 30 days after the effective date for this subsection under

25 section 11 of the Health Care Quality Improvement Act

26 Amendments of 1996, the information reported under sec-
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1 tions 421, 422(a), and 423(b) shall be available (to per2 sons and entities authorized in this Act to receive the in3 formation) in accordance with the following:

4 ‘‘(1) The methods of organizing the information

5 shall include organizing by medical field (and as ap6 plicable by medical specialty).

7 ‘‘(2) With respect to medical malpractice ac8 tions reported under section 421(b)(4)(A), the meth9 ods of organizing shall specify whether the action

10 was a class action.’’.

11 SEC. 7. DUTY TO OBTAIN INFORMATION.

12 Part B of the Health Care Quality Improvement Act

13 of 1986 (42 U.S.C. 11131 et seq.) is amended by inserting

14 after section 425 the following section:

15 ‘‘SEC. 425A. DUTY OF BOARDS OF MEDICAL EXAMINERS TO

16 OBTAIN INFORMATION.

17 ‘‘(a) IN GENERAL.—Effective 2 years after the date

18 of the enactment of the Health Care Quality Improvement

19 Act Amendments of 1996, it is the duty of each Board

20 of Medical Examiners to request from the Secretary (or

21 the agency designated under section 424(b)) information

22 reported under this part concerning a physician—

23 ‘‘(1) at the time the physician submits the ini24 tial application for a physician’s license in the State

25 involved, and
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1 ‘‘(2) at each time the physician submits an ap2 plication to continue in effect the license, subject to

3 subsection (d).

4 A Board of Medical Examiners may request information

5 reported under this part concerning a physician at other

6 times.

7 ‘‘(b) FAILURE TO OBTAIN INFORMATION.—With re8 spect to an action for mandamus or other cause of action

9 against a Board of Medical Examiners, a Board which

10 does not request information respecting a physician as re11 quired under subsection (a) is presumed to have knowl12 edge of any information reported under this part to the

13 Secretary with respect to the physician.

14 ‘‘(c) RELIANCE ON INFORMATION PROVIDED.—With

15 respect to a cause of action against a Board of Medical

16 Examiners, each Board of Medical Examiners may rely

17 upon information provided to the Board under this title,

18 unless the Board has knowledge that the information pro19 vided was false.

20 ‘‘(d) STATE OPTION REGARDING CONTINUATION OF

21 LICENSES.—

22 ‘‘(1) ESTABLISHMENT OF ELECTRONIC SYSTEM

23 FOR TRANSMISSION OF DATA.—After consultation

24 with the States, the Secretary shall establish a sys25 tem for electronically transmitting information under
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1 this part to States that elect to install equipment

2 necessary for participation in the system. The sys3 tem shall possess the capability to receive trans4 missions of data from such States.

5 ‘‘(2) STATE OPTION REGARDING ELECTRONIC

6 SYSTEM.—With respect to compliance with sub7 section (a)(2) (relating to applications to continue in

8 effect physicians’ licenses), if a State is participating

9 in the system under paragraph (1) and provides the

10 Board of Medical Examiners of the State with ac11 cess to the system, the Board may elect, in lieu of

12 complying with subsection (a)(2), to comply with

13 paragraph (3) of this subsection.

14 ‘‘(3) DESCRIPTION OF OPTION.—For purposes

15 of paragraph (2), a Board of Medical Examiners is

16 complying with this paragraph if—

17 ‘‘(A) through the system under paragraph

18 (1), the Board annually transmits to the Sec19 retary (or the agency designated under section

20 424(b)) data identifying all individuals who

21 hold a valid physician’s license issued by the

22 Board, without regard to whether the licenses

23 are expiring, and

24 ‘‘(B) after receiving from the Secretary (or

25 such agency) a list of physicians under para-
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1 graph (4)(B), the Board complies with para2 graph (5).

3 ‘‘(4) IDENTIFICATION BY SECRETARY OF REL4 EVANT PHYSICIANS.—After receiving data under

5 paragraph (3)(A) from a Board of Medical Examin6 ers, the Secretary (or the agency designated under

7 section 424(b)) shall—

8 ‘‘(A) from among the physicians identified

9 through the data, determine which of such phy10 sicians has been the subject of information re11 ported under this part, and the State in which

12 the incidents involved occurred, and

13 ‘‘(B) provide to the Board, through the

14 system under paragraph (1), a list of the physi15 cians who have been such subjects, which list

16 specifies for each physician the States in which

17 the incidents involved occurred.

18 ‘‘(5) REQUEST BY STATE OF INFORMATION ON

19 RELEVANT PHYSICIANS.—For purposes of paragraph

20 (3)(B), a Board of Medical Examiners of a State is

21 complying with this paragraph if, after receiving the

22 list of physicians under paragraph (4)(B), the Board

23 promptly—
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1 (A) identifies which of the physicians has

2 had, for purposes of paragraph (4), an incident

3 in another State, and

4 (B) requests from the Secretary (or the

5 agency) information reported under this part

6 concerning each of the physicians so identi7 fied.’’.

8 SEC. 8. ADDITIONAL PROVISIONS REGARDING ACCESS TO

9 INFORMATION; MISCELLANEOUS PROVI10 SIONS.

11 (a) ACCESS TO INFORMATION.—Section 427(a) of the

12 Health Care Quality Improvement Act of 1986 (42 U.S.C.

13 11137(a)) is amended to read as follows:

14 ‘‘(a) ACCESS REGARDING LICENSING, EMPLOYMENT,

15 AND CLINICAL PRIVILEGES.—The Secretary (or the agen16 cy designated under section 424(b)) shall, upon request,

17 provide information reported under this part concerning

18 a physician or other licensed health care practitioner to—

19 ‘‘(1) State licensing boards, and

20 ‘‘(2) hospitals and other health services organi21 zations—

22 ‘‘(A) that have entered (or may be enter23 ing) into an employment or affiliation relation24 ship with the physician or practitioner, or
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1 ‘‘(B) to which the physician or practitioner

2 has applied for clinical privileges or appoint3 ment to the medical staff.’’.

4 (b) FEES.—Section 427(b)(4) of the Health Care

5 Quality Improvement Act of 1986 (42 U.S.C.

6 11137(b)(4)) is amended to read as follows:

7 ‘‘(4) FEES.—In disclosing information under

8 subsection (a) or section 426, the Secretary may im9 pose fees in amounts reasonably related to the costs

10 of carrying out the duties of the Secretary regarding

11 the information reported under this part (including

12 the functions specified in section 424(b) with respect

13 to the information), except that a fee may not be im14 posed for providing a list under section

15 425(A)(d)(4)(B) to any Board of Medical Examin16 ers. Such fees are available to the Secretary (or, in

17 the Secretary’s discretion, to the agency designated

18 under section 424(b)) to cover such costs. Such fees

19 remain available until expended.’’.

20 (c) ADDITIONAL DISCLOSURES OF INFORMATION.—

21 Section 427 of the Health Care Quality Improvement Act

22 of 1986 (42 U.S.C. 11137) is amended by adding at the

23 end the following subsection:

24 ‘‘(e) AVAILABILITY OF INFORMATION TO PUBLIC.—
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1 ‘‘(1) IN GENERAL.—Not later than 30 days

2 after the effective date for this subsection under sec3 tion 11 of the Health Care Quality Improvement Act

4 Amendments of 1996, and every 3 months there5 after, the Secretary shall, except as provided in

6 paragraph (2), make available to the public all infor7 mation reported under sections 421, 422(a), and

8 423(b). For such purpose, the information shall be

9 published as a separate document whose principal

10 topic is such information, and in addition the infor11 mation shall be made available through the method

12 described in paragraph (3).

13 ‘‘(2) LIMITATIONS.—In the case of a physician

14 or other licensed health care practitioner with re15 spect to whom one or more incidents have been re16 ported under sections 421, 422(a), and 423(b), the

17 following applies:

18 ‘‘(A) Information may not be made avail19 able under paragraph (1) if, subject to subpara20 graph (B), the aggregate number of discrete in21 cidents reported under such sections is not

22 more than 2.

23 ‘‘(B) A discrete incident reported under

24 section 421 may not be counted under subpara25 graph (A) if the payment for the medical mal-
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1 practice action or claim involved was less than

2 $25,000.

3 ‘‘(C) If the number of discrete incidents

4 counted under subparagraph (A) is 3 or more,

5 the resulting availability of information under

6 paragraph (1) with respect to such practitioner

7 shall include information reported on all the

8 discrete incidents that were so counted. Such

9 availability may not include information on any

10 incident not counted by reason of subparagraph

11 (B).

12 ‘‘(D) Of the information reported under

13 section 421, the following information may not

14 be made available under paragraph (1) (regard15 less of the number of discrete incidents counted

16 under subparagraph (A) and regardless of the

17 amount of the payments involved):

18 ‘‘(i) The social security account num19 ber of the physician or practitioner.

20 ‘‘(ii) Information disclosing the iden21 tity of any patient involved in the incidents

22 involved.

23 ‘‘(iii) With respect to information that

24 the Secretary requires under section

25 421(b)(5) (if any)—
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1 ‘‘(I) the home address of the phy2 sician or practitioner, and

3 ‘‘(II) the number assigned to the

4 physician or practitioner by the Drug

5 Enforcement Administration.

6 ‘‘(iv) Information not required to be

7 reported under such section.

8 ‘‘(3) USE OF INTERNET.—For purposes of

9 paragraph (1), the method described in this para10 graph is to make the information involved available

11 to the public through the telecommunications me12 dium known as the World Wide Web of the Internet.

13 The Secretary, acting through the Administrator of

14 the Health Resources and Services Administration,

15 shall provide for the establishment of a site on such

16 medium, and shall update the information main17 tained through such medium not less frequently than

18 once every 3 months.

19 ‘‘(4) DISSEMINATION; FEES.—The Secretary

20 shall disseminate each publication under paragraph

21 (1) to public libraries without charge. In providing

22 the publication to other entities, and in making in23 formation available under paragraph (3), the Sec24 retary may impose a fee reasonably related to the

25 costs of the Secretary in carrying out this sub-
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1 section. Such fees are available to the Secretary (or,

2 in the Secretary’s discretion, to the agency des3 ignated under section 424(b)) to cover such costs.

4 Such fees remain available until expended.’’.

5 (d) CONFORMING AMENDMENTS.—Section 427 of the

6 Health Care Quality Improvement Act of 1986 (42 U.S.C.

7 11137) is amended—

8 (1) in subsection (b)(1), in the first sentence,

9 by striking ‘‘Information reported’’ and inserting the

10 following: ‘‘Except for information disclosed under

11 subsection (e), information reported’’; and

12 (2) in the heading for the section, by striking

13 ‘‘MISCELLANEOUS PROVISIONS’’ and inserting

14 the following: ‘‘ADDITIONAL PROVISIONS RE15 GARDING ACCESS TO INFORMATION; MIS16 CELLANEOUS PROVISIONS’’.

17 SEC. 9. OTHER MATTERS.

18 The Health Care Quality Improvement Act of 1986

19 (42 U.S.C. 11101 et seq.) is amended—

20 (1) by redesignating part C as part D; and

21 (2) by inserting after part B the following part:
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1 ‘‘PART C—OTHER MATTERS REGARDING

2 IMPROVEMENT OF HEALTH CARE QUALITY

3 ‘‘SEC. 428. PROHIBITION AGAINST SETTLEMENT WITHOUT

4 CONSENT OF PRACTITIONER.

5 ‘‘(a) PROHIBITION.—With respect to a physician or

6 other licensed health care practitioner whose acts or omis7 sions are the basis of a medical malpractice action or

8 claim, an entity may not make a payment described in

9 section 421(a)(1) without the written consent of the physi10 cian or practitioner, subject to subsection (b).

11 ‘‘(b) EXCEPTIONS.—Subsection (a) shall not apply

12 with respect to a payment by an entity regarding an action

13 or claim, subject to subsection (c)—

14 ‘‘(1) if the payment is made in satisfaction of

15 a judgment in a court of competent jurisdiction,

16 ‘‘(2) if, with respect to the action or claim, the

17 physician or other licensed health care practitioner

18 involved enters a process of alternative dispute reso19 lution, and the process has been concluded or any of

20 the individuals involved has terminated participation

21 in the process,

22 ‘‘(3)(A) the entity delivers directly, or makes a

23 reasonable effort to deliver through the mail, a writ24 ten notice to the physician or practitioner involved

25 providing the information specified in subsection (c),

26 and
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1 ‘‘(B) a 30-day period elapses, at the conclusion

2 of which the entity has a reasonable belief that the

3 physician or practitioner does not object to the pay4 ment.

5 ‘‘(c) CRITERIA REGARDING NOTICE.—For purposes

6 of subsection (b)(3) regarding a written notice to a physi7 cian or practitioner—

8 ‘‘(1) the notice shall be considered to have been

9 delivered if the notice was delivered to the home or

10 business address of the physician or practitioner,

11 and to the attorney (if any) representing the physi12 cian or practitioner in the action or claim involved,

13 ‘‘(2) the notice shall be considered to have been

14 delivered directly if the notice was delivered person15 ally by the entity involved or by an agent of the en16 tity,

17 ‘‘(3) the entity shall be considered to have made

18 a reasonable effort to deliver the notice through the

19 mail if the entity provided the notice through cer20 tified mail, with return receipt requested,

21 ‘‘(4) the information specified in this paragraph

22 for the notice is that the entity intends to make the

23 payment involved; that the physician or practitioner

24 has a legal right to prohibit the payment; and that
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1 such right expires in 30 days, with a specification of

2 the date on which the right expires, and

3 ‘‘(5) the 30-day period begins on the date on

4 which the notice is delivered directly to the physician

5 or practitioner, or on the seventh day after the date

6 on which the notice is posted, as the case may be.

7 ‘‘(d) CIVIL MONEY PENALTY.—Any entity that

8 makes a payment in violation of subsection (a) shall be

9 subject to a civil money penalty of not more than $10,000

10 for each such payment involved. Such penalty shall be im11 posed and collected in the same manner as civil money

12 penalties under subsection (a) of section 1128A of the So13 cial Security Act are imposed and collected under that sec14 tion.

15 ‘‘SEC. 429. EMPLOYMENT TERMINATION OF PHYSICIAN.

16 ‘‘(a) REQUIREMENT OF ADEQUATE NOTICE AND

17 HEARING.—

18 ‘‘(1) IN GENERAL.—A health services organiza19 tion may not terminate the employment of a physi20 cian, and may not terminate a contract with a physi21 cian for the provision of health services, unless ade22 quate notice and hearing procedures have been af23 forded the physician involved.

24 ‘‘(2) APPLICABILITY.—Section 412(a)(3) ap25 plies in lieu of paragraph (1) in the case of an em-
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1 ployment termination that is a professional review

2 action. (With respect to the preceding sentence,

3 paragraph (1) does apply to an employment termi4 nation that is an action described in subparagraph

5 (A) of section 431(10) or in the other subpara6 graphs of such section.)

7 ‘‘(b) SAFE HARBOR.—

8 ‘‘(1) IN GENERAL.—A health services organiza9 tion is deemed to have met the adequate notice and

10 hearing requirement of subsection (a) with respect

11 to the employment of, or a contract of, a physician

12 if the conditions described in paragraphs (2)

13 through (4) are met (or are waived voluntarily by

14 the physician).

15 ‘‘(2) NOTICE OF PROPOSED ACTION.—Condi16 tions under paragraph (1) are that the physician in17 volved has been given notice stating—

18 ‘‘(A)(i) that the health services organiza19 tion proposes to take action to terminate the

20 employment or contract,

21 ‘‘(ii) reasons for the proposed action,

22 ‘‘(B)(i) that the physician has the right to

23 request a hearing on the proposed action,
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1 ‘‘(ii) any time limit (of not less than 30

2 days) within which to request such a hearing,

3 and

4 ‘‘(C) a summary of the rights in the hear5 ing under paragraph (4).

6 ‘‘(3) NOTICE OF HEARING.—Conditions under

7 paragraph (1) are that, if a hearing is requested on

8 a timely basis under paragraph (2)(B), the physician

9 involved must be given notice stating—

10 ‘‘(A) the place, time, and date of the hear11 ing, which date shall not be less than 30 days

12 after the date of the notice, and

13 ‘‘(B) a list of the witnesses (if any) ex14 pected to testify at the hearing on behalf of the

15 health services organization.

16 ‘‘(4) CONDUCT OF HEARING AND NOTICE.—

17 Conditions under paragraph (1) are that, if a hear18 ing is requested on a timely basis under paragraph

19 (2)(B)—

20 ‘‘(A) subject to subparagraph (B), the

21 hearing shall be held (as determined by the

22 health services organization)—

23 ‘‘(i) before an arbitrator mutually ac24 ceptable to the physician involved and the

25 health services organization,
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1 ‘‘(ii) before a hearing officer who is

2 appointed by the organization and who is

3 not in direct economic competition with the

4 physician, or

5 ‘‘(iii) before a panel of individuals who

6 are appointed by the organization and are

7 not in direct economic competition with the

8 physician,

9 ‘‘(B) the right to the hearing may be for10 feited if the physician fails, without good cause,

11 to appear,

12 ‘‘(C) in the hearing the physician has the

13 right—

14 ‘‘(i) to representation by an attorney

15 or other person of the physician’s choice,

16 ‘‘(ii) to have a record made of the

17 proceedings, copies of which may be ob18 tained by the physician upon payment of

19 any reasonable charges associated with the

20 preparation thereof,

21 ‘‘(iii) to call, examine, and cross-ex22 amine witnesses,

23 ‘‘(iv) to present evidence determined

24 to be relevant by the hearing officer, re-
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1 gardless of its admissibility in a court of

2 law, and

3 ‘‘(v) to submit a written statement at

4 the close of the hearing, and

5 ‘‘(D) upon completion of the hearing, the

6 physician has the right—

7 ‘‘(i) to receive the written rec8 ommendation of the arbitrator, officer, or

9 panel, including a statement of the basis

10 for the recommendations, and

11 ‘‘(ii) to receive a written decision of

12 the health services organization, including

13 a statement of the basis for the decision.

14 ‘‘(c) RULE OF CONSTRUCTION.—A health services or15 ganization’s failure to meet the conditions described in

16 paragraphs (2) through (4) of subsection (b) shall not, in

17 itself, constitute failure to meet the standards of sub18 section (a).’’.

19 SEC. 10. DEFINITIONS.

20 Section 431(6) of the Health Care Quality Improve21 ment Act of 1986, as redesignated by section 3(b)(1) of

22 this Act, is amended by inserting before the period the

23 following: ‘‘(except that such term means an institution

24 described in such paragraph (1) (without regard to such

25 paragraph (7)) if, under applicable State or local law, the
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1 institution is permitted to operate without being licensed

2 or otherwise approved as a hospital)’’.

3 SEC. 11. EFFECTIVE DATES.

4 (a) INCORPORATION OF TEXT OF AMENDMENTS.—

5 The amendments described in this Act are made upon the

6 date of the enactment of this Act.

7 (b) SUBSTANTIVE EFFECT.—Except as provided in

8 subsection (c)(1) and subsection (d), and except as other9 wise provided in this Act—

10 (1) the amendments made by this Act take ef11 fect upon the expiration of the 1-year period begin12 ning on the date of the enactment of this Act; and

13 (2) prior to the expiration of such period, the

14 Health Care Quality Improvement Act of 1986, as

15 in effect on the day before such date of enactment,

16 continues in effect.

17 (c) REGULATIONS.—

18 (1) IN GENERAL.—With respect to the amend19 ments made by this Act, the Secretary of Health

20 and Human Services may issue regulations pursuant

21 to such amendments before the expiration of the pe22 riod specified in subsection (b)(1), and may other23 wise take appropriate action before the expiration of

24 such period to prepare for the responsibilities of the

25 Secretary pursuant to the amendments.
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1 (2) ABSENCE OF FINAL RULE.—The final rule

2 for purposes of paragraph (1) may not take effect

3 before the expiration of the period specified in sub4 section (b)(1), and the absence of such a rule upon

5 such expiration does not affect the provisions of sub6 section (b).

7 (d) TRANSITIONAL PROVISIONS REGARDING MAL8 PRACTICE PAYMENTS BY PERSONS.—With respect to the

9 reporting of information under section 421 of the Health

10 Care Quality Improvement Act of 1986, the following ap11 plies:

12 (1) The requirement of reporting by persons

13 under section 421(a)(1) of such Act (as amended by

14 section 3(a) of this Act) takes effect 180 days after

15 the date of the enactment of this Act.

16 (2) The requirement of reporting by persons

17 applies to payments under such section 421(a)(1)

18 made before, on, or after such date of enactment.

19 (3)(A) The information received by the Sec20 retary of Health and Human Services on or before

21 August 27, 1993, pursuant to regulations requiring

22 reports from persons (in addition to reports from en23 tities) shall be maintained in the same manner as

24 the information was maintained prior to such date,

25 and shall be available in accordance with the regula-
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1 tions in effect under such Act prior to such date

2 (which regulations remain in effect unless a provi3 sion of this Act takes effect pursuant to this section

4 and requires otherwise).

5 (B) Subparagraph (A) takes effect on the date

6 of the enactment of this Act.

Æ