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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 609 Introduced in Senate (IS)]

104th CONGRESS
  1st Session
                                 S. 609

 To assure fairness and choice to patients and health care providers, 
                        and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 23, 1995

 Mr. Wellstone introduced the following bill; which was read twice and 
         referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
 To assure fairness and choice to patients and health care providers, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Quality and Fairness Act of 1995.''
    (b) Table of Contents.--The table of contents for this Act are as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
                 TITLE I--PROTECTION OF CONSUMER CHOICE

Sec. 101. Protection of consumer choice.
Sec. 102. Enrollment.
  TITLE II--OFFICE FOR CONSUMER INFORMATION, COUNSELING AND ASSISTANCE

Sec. 201. Establishment.
                   TITLE III--UTILIZATION MANAGEMENT

Sec. 301. Definitions.
Sec. 302. Requirement for utilization review program.
Sec. 303. Standards for utilization review.
                    TITLE IV--HEALTH PLAN STANDARDS

Sec. 401. Health plan standards.
Sec. 402. Minimum solvency requirements.
Sec. 403. Information on terms of plan.
Sec. 404. Access.
Sec. 405. Credentialing for health professionals.
Sec. 406. Grievance procedures.
Sec. 407. Confidentiality standards.
Sec. 408. Discrimination.
Sec. 409. Prohibition on selective marketing.
                TITLE V--HEALTH INSURANCE MARKET REFORM

Sec. 501. Guaranteed issue and renewability.
Sec. 502. Nondiscrimination based on health status.
Sec. 503. Adjustments based on age, geography and family size.
Sec. 504. Risk adjustment.
Sec. 505. Lifetime limits.
Sec. 506. Patient's right to self-determination.
Sec. 507. Affect on State law.
Sec. 508. Association plans.
                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Enforcement.
Sec. 602. Effective date.

SEC. 2. DEFINITIONS.

    Unless specifically provided otherwise, as used in this Act:
            (1) Carrier.--The term ``carrier'' means a licensed 
        insurance company, a hospital or medical service corporation 
        (including an existing Blue Cross or Blue Shield organization, 
        within the meaning of section 833(c)(2) of Internal Revenue 
        Code of 1986 as in effect before the date of the enactment of 
        this Act), a health maintenance organization, or other entity 
        licensed or certified by the State to provide health insurance 
        or health benefits.
            (2) Covered individual.--The term ``covered individual'' 
        means a member, enrollee, subscriber, covered life, patient or 
        other individual eligible to receive benefits under a health 
        plan.
            (3) Dependent.--The term ``dependent'' means a spouse or 
        child (including an adopted child) of an enrollee in a health 
        plan who is financially dependent upon the enrollee.
            (4) Emergency services.--The term ``emergency services'' 
        means those health care services that are provided to a patient 
        after the sudden onset of a medical condition that manifests 
        itself by symptoms of sufficient severity, including severe 
        pain, and the absence of such immediate medical attention could 
        reasonably be expected, to result in--
                    (A) placing the patient's health in serious 
                jeopardy;
                    (B) serious impairment to bodily function; or
                    (C) serious dysfunction of any bodily organ or 
                part.
            (5) Health plan.--The term ``health plan'' includes any 
        organization that seeks to arrange for, or provide for the 
        financing and coordinated delivery of, health care services 
        directly or through a contracted health professional panel, and 
        shall include health maintenance organizations, preferred 
        provider organizations, single service health maintenance 
        organizations, single service preferred provider organizations, 
        other entities such as physician-hospital or hospital-physician 
        organizations, employee welfare benefit plans (as defined in 
        section 3(1) of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1002(1)), and multiple employer welfare plans 
        or other association plans, as well as carriers.
            (6) Health professional.--The term ``health professional'' 
        means individuals who are licensed, certified, accredited, or 
        otherwise credentialed to provide health care items and 
        services as authorized under State law.
            (7) Managed care plan.--
                    (A) In general.--The term ``managed care plan'' 
                means a plan operated by a managed care entity (as 
                defined in subparagraph (B)), that provides for the 
                financing and delivery of health care services to 
                persons enrolled in such plan through--
                            (i) arrangements with selected providers to 
                        furnish health care services;
                            (ii) explicit standards for the selection 
                        of participating providers;
                            (iii) organizational arrangements for 
                        ongoing quality assurance, utilization review 
                        programs, and dispute resolution; and
                            (iv) financial incentives for persons 
                        enrolled in the plan to use the participating 
                        providers and procedures provided for by the 
                        plan.
                    (B) Managed care entity.--The term ``managed care 
                entity'' includes a licensed insurance company, 
                hospital or medical service plan (including physician 
                and physician-hospital networks), health maintenance 
                organization, an employer or employee organization, or 
                a managed care contractor (as defined in subparagraph 
                (C)), that operates a managed care plan.
                    (C) Managed care contractor.--The term ``managed 
                care contractor'' means a person that--
                            (i) establishes, operates, or maintains a 
                        network of participating providers;
                            (ii) conducts or arranges for utilization 
                        review activities; and
                            (iii) contracts with an insurance company, 
                        a hospital or medical service plan, an 
                        employer, an employee organization, or any 
                        other entity providing coverage for health care 
                        services to operate a managed care plan.
            (8) Physician.--The term ``physician'' means a doctor of 
        medicine, a doctor of osteopathy, or a doctor of allopathy.
            (9) Provider.--The term ``provider'' means a physician, an 
        organized group of physicians, a facility or any other health 
        care professional licensed or certified by the State, where 
        licensure or certification is required.
            (10) Provider network.--The term ``provider network'' 
        means, with respect to a health plan that restricts access, 
        those providers who have entered into a contract or agreement 
        with the plan under which such providers are obligated to 
        provide items and services under the plan to eligible 
        individuals enrolled in the plan, or have an agreement to 
        provide services on a fee-for-service basis.
            (11) Point-of-service plan.--The term ``point-of-service 
        plan'' means a plan that offers services to enrollees through a 
        provider network and also offers additional services or access 
        to care by network or non-network providers.
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (13) Small group market.--
                    (A) In general.--The term ``small group market'' 
                means, with respect to a calendar year, employers 
                (including sole proprietorships, firms, corporations, 
                partnerships, or associations actively engaged in 
                business) that, on at least 50 percent of its business 
                days, employ at least one but not more than 50 
                employees. In determining the number of employees for 
                purposes of this paragraph, entities that are 
                affiliated, or that are eligible to file a combined tax 
                return, shall be considered as a single employer.
                    (B) Application of provisions.--Except as 
                specifically provided otherwise, the requirements of 
                this Act that apply to an employer in the small group 
                market shall continue to apply to such employer through 
the end of the rating period in which the employer has failed to meet 
the requirements of subparagraph (A).
            (14) Specialized treatment expertise.--The term 
        ``specialized treatment expertise'' means expertise in 
        diagnosing and treating unusual diseases and condition, 
        diagnosing and treating diseases and conditions that are 
        usually difficult to diagnose or treat, and providing other 
        specialized health care.
            (15) Sponsor.--The term ``sponsor'' means a carrier or 
        employer that provides a health plan.
            (16) Traditional insurance plan.--The term ``traditional 
        insurance plan'' includes plans that offer a health benefits 
        package and that pay for medical services on a fee-for-service 
        basis using a usual, customary, or reasonable payment 
        methodology or a resource based relative value schedule, 
        usually linked to an annual deductible and/or coinsurance 
        payment on each allowed amount.
            (17) Utilization review.--The term ``utilization review'' 
        means a set of formal techniques designed to monitor and 
        evaluate the clinical necessity, appropriateness and efficiency 
        of health care services, procedures, providers and facilities. 
        Techniques may include ambulatory review, prospective review, 
        second opinion, certification, concurrent review, case 
        management, discharge planning and retrospective review.

                 TITLE I--PROTECTION OF CONSUMER CHOICE

SEC. 101. PROTECTION OF CONSUMER CHOICE.

    (a) In General.--Each employer, including a self-insured employer, 
who offers, provides, or makes available to employees a health plan 
must provide to each such employee a choice of health plans as required 
under subsection (b).
    (b) Offering of Plans.--Each employer referred to in subsection (a) 
shall include among its health plan offerings at least one of each of 
the following types of health plans, where available:
            (1) A managed care plan, including a health maintenance 
        organization or preferred provider organization.
            (2) A point-of-service plan.
            (3) A traditional insurance plan (as defined in section 2).

SEC. 102. ENROLLMENT.

    Each employer including a self-insured employer, who offers, 
provides, or makes available a health plan shall establish a process 
for enrollment in such plan which consists of--
            (1) a general annual open enrollment period of at least 30 
        days; and
            (2) special open enrollment periods for changes in 
        enrollment as required by the Secretary.

 TITLE II--OFFICE FOR CON- SUMER INFORMATION, COUNSELING AND ASSISTANCE

SEC. 201. ESTABLISHMENT.

    (a) In General.--The Secretary shall award a grant to each State 
for the establishment of an Office for Consumer Information, Counseling 
and Assistance (hereafter referred to in this section as the 
``Office'') in each such State. Each such Office shall perform public 
outreach and provide education and assistance concerning consumer 
rights with respect to health insurance as provided for in subsection 
(d).
    (b) Use of Grant.--
            (1) In general.--A State shall use a grant under this 
        section--
                    (A) to administer the Office and carry out the 
                duties described in subsection (d);
                    (B) to solicit and award contracts to private, 
                nonprofit organizations applying to the State to 
                administer the Office and carry out the duties 
                described in subsection (d); or
                    (C) in the case of a State operating a consumer 
                information counseling and assistance program on the 
                date of enactment of this Act, to expand and improve 
                such program.
            (2) Contracts.--With respect to the contract described in 
        paragraph (1)(B), the contract period shall be not less than 2 
        years and not more than 4 years.
    (c) Staff.--A State shall ensure that the Office has sufficient 
staff (including volunteers) and local offices throughout the State to 
carry out its duties under this section and a demonstrated ability to 
represent and work with a broad spectrum of consumers, including 
vulnerable and underserved populations.
    (d) Duties.--An Office established under this section shall--
            (1) establish a State-wide toll-free hotline to enable 
        consumers to contact the Office;
            (2) have the ability to provide appropriate assistance 
        under this subsection to individuals with limited English 
        language ability;
            (3) develop outreach programs to provide health insurance 
        information, counseling, and assistance;
            (4) provide outreach and education relating to consumer 
        rights and responsibilities under this Act, including the 
        rights and services available through the Office;
            (5) provide individuals with assistance in enrolling in 
        health plans (including providing plan comparisons) or in 
        obtaining services or reimbursements from health plans;
            (6) provide individuals with assistance in filing 
        applications for appropriate State health plan premium 
        assistance programs;
            (7) provide individuals with information concerning 
        existing grievance procedures and institute systems of referral 
        to appropriate Federal or State departments or agencies for 
        assistance with problems related to insurance coverage 
        (including legal problems);
            (8) ensure that regular and timely access is provided to 
        the services available through the Office;
            (9) implement training programs for staff members 
        (including volunteer staff members) and collect and disseminate 
        timely and accurate health care information to staff members;
            (10) not less than once each year, conduct public hearings 
        to identify and address community health care needs;
            (11) coordinate its activities with the staff of the 
        appropriate departments and agencies of the State government 
        and other appropriate entities within the State; and
            (12) carry out any other activities determined appropriate 
        by the Secretary.
    (e) State Duties.--
            (1) Access to information.--The State shall ensure that, 
        for purposes of carrying out the duties of the Office, the 
        Office has appropriate access to relevant information, subject 
        to the application of procedures to ensure confidentiality of 
        enrollee and proprietary health plan information.
            (2) Reporting and evaluation requirements.--
                    (A) Report.--The Office shall annually prepare and 
                submit to the State a report on the nature and patterns 
                of consumer complaints received by the Office during 
                the year for which the report is prepared. Such report 
                shall contain any policy, regulatory, and legislative 
                recommendations for improvements in the activities of 
                the Office together with a record of the activities of 
                the Office.
                    (B) Evaluation.--The State shall annually evaluate 
                the quality and effectiveness of the Office in carrying 
                out the activities described in subsection (d).
            (3) Conflicts of interest.--The State shall ensure that no 
        individual involved in selecting the entity with which to enter 
        into a contract under subsection (b)(1)(B), or involved in the 
        operation of the Office, or any delegate of the Office, is 
        subject to a conflict of interest.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

                   TITLE III--UTILIZATION MANAGEMENT

SEC. 301. DEFINITIONS.

    As used in this title:
            (1) Adverse determination.--The term ``adverse 
        determination'' means a determination that an admission to or 
        continued stay at a hospital or that another health care 
        service that is required has been reviewed and, based upon the 
        information provided, does not meet the clinical requirements 
        for medical necessity, appropriateness, level of care, or 
        effectiveness.
            (2) Ambulatory review.--The term ``ambulatory review'' 
        means utilization review of health care services performed or 
        provided in an outpatient setting.
            (3) Appeals procedure.--The term ``appeals procedure'' 
        means a formal process under which a covered individual (or an 
        individual acting on behalf of a covered individual), attending 
        physician, facility or applicable health care provider may 
        appeal an adverse utilization review decision rendered by the 
        health plan or its designee utilization review organization.
            (4) Case management.--The term ``case management'' means a 
        coordinated set of activities conducted for the individual 
        patient management of serious, complicated, protracted or 
        chronic health conditions that provides cost-effective and 
        benefit-maximizing treatments for extremely resource-intensive 
        conditions.
            (5) Clinical review criteria.--The term ``clinical review 
        criteria'' means the recorded (written or otherwise) screening 
        procedures, decision abstracts, clinical protocols and practice 
        guidelines used by the health plan to determine necessity and 
        appropriateness of health care services.
            (6) Concurrent review.--The term ``concurrent review'' 
        means utilization review conducted during a patient's hospital 
        stay or course of treatment.
            (7) Discharge planning.--The term ``discharge planning'' 
        means the formal process for determining, coordinating and 
        managing the care a patient receives following the discharge of 
        the patient from a facility.
            (8) Facility.--The term ``facility'' means an institution 
        or health care setting providing the prescribed health care 
        services under review. Such term includes hospitals and other 
        licensed inpatient facilities, ambulatory surgical or treatment 
        centers, skilled nursing facilities, residential treatment 
        centers, diagnostic, laboratory and imaging centers and 
        rehabilitation and other therapeutic health care settings.
            (9) Prospective review.--The term ``prospective review'' 
        means utilization review conducted prior to an admission or a 
        course of treatment.
            (10) Retrospective review.--The term ``retrospective 
        review'' means utilization review conducted after health care 
        services have been provided to a patient. Such term does not 
        include the retrospective review of a claim that is limited to 
        an evaluation of reimbursement levels, veracity of 
        documentation, accuracy of coding and adjudication for payment.
            (11) Second opinion.--The term ``second opinion'' means an 
        opportunity or requirement to obtain a clinical evaluation by a 
        provider other than the provider originally making a 
        recommendation for a proposed health service to assess the 
        clinical necessity and appropriateness of the initial proposed 
        health service.
            (12) Utilization review organization.--The term 
        ``utilization review organization'' means an entity that 
        conducts utilization review.

SEC. 302. REQUIREMENT FOR UTILIZATION REVIEW PROGRAM.

    A health plan shall have in place a utilization review program that 
meets the requirements of this title and that is certified by the 
State.

SEC. 303. STANDARDS FOR UTILIZATION REVIEW.

    (a) Establishment.--The Secretary shall establish standards for the 
establishment, operation, and certification and periodic 
recertification of health plan utilization review programs.
    (b) Alternative Standards.--
            (1) In general.--A State may certify a health plan as 
        meeting the standards established under subsection (a) if the 
        State determines that the health plan has met the utilization 
        standards required for accreditation as applied by a nationally 
        recognized, independent, nonprofit accreditation entity.
            (2) Review by state.--A State that makes a determination 
        under paragraph (1) shall periodically review the standards 
        used by the private accreditation entity to ensure that such 
        standards meet or exceed the standards established by the 
        Secretary under this title.
    (c) Utilization Review Program Requirements.--The standards 
developed by the Secretary under subsection (a) shall require that 
utilization review programs comply with the following:
            (1) Documentation.--A health plan shall provide a written 
        description of the utilization review program of the plan, 
        including a description of--
                    (A) the delegated and nondelegated activities under 
                the program;
                    (B) the policies and procedures used under the 
                program to evaluate medical necessity; and
                    (C) the clinical review criteria, information 
                sources, and the process used to review and approve the 
                provision of medical services under the program.
            (2) Prohibition.--With respect to the administration of the 
        utilization review program, a health plan may not employ 
        utilization reviewers or contract with a utilization management 
        organization if the conditions of employment or the contract 
        terms include financial incentives to reduce or limit the 
        medically necessary or appropriate services provided to covered 
        individuals.
            (3) Review and modification.--A health plan shall develop 
        procedures for periodically reviewing and modifying the 
        utilization review of the plan. Such procedures shall provide 
        for the participation of providers in the health plan in the 
        development and review of utilization review policies and 
        procedures.
            (4) Decision protocols.--
                    (A) In general.--A utilization review program shall 
                develop and apply recorded (written or otherwise) 
                utilization review decision protocols. Such protocols 
                shall be based on sound medical evidence.
                    (B) Protocol criteria.--The clinical review 
                criteria used under the utilization review decision 
                protocols to assess the appropriateness of medical 
                services shall be clearly documented and available to 
                participating health professionals upon request. Such 
                protocols shall include a mechanism for assessing the 
                consistency of the application of the criteria used 
                under the protocols across reviewers, and a mechanism 
                for periodically updating such criteria.
            (5) Review and decisions.--
                    (A) Review.--The procedures applied under a 
                utilization review program with respect to the 
                preauthorization and concurrent review of the necessity 
                and appropriateness of medical items, services or 
                procedures, shall require that qualified medical 
                professionals supervise review decisions. With respect 
                to a decision to deny the provision of medical items, 
                services or procedures, a physician shall conduct a 
                subsequent review to determine the medical 
                appropriateness of such a denial. Board certified 
                physicians from the appropriate specialty areas of 
                medicine and surgery shall be utilized in the review 
                process as needed.
                    (B) Decisions.--All utilization review decisions 
                shall be made in a timely manner, as determined 
                appropriate when considering the urgency of the 
                situation.
                    (C) Adverse determinations.--With respect to 
                utilization review, an adverse determination or 
                noncertification of an admission, continued stay, or 
                service shall be clearly documented, including the 
                specific clinical or other reason for the adverse 
                determination or noncertification, and be available to 
                the covered individual and the affected provider or 
                facility. A health plan may not deny or limit coverage 
                with respect to a service that the enrollee has already 
                received solely on the basis of lack of prior 
                authorization or second opinion, to the extent that the 
                service would have otherwise been covered by the plan 
                had such prior authorization or a second opinion been 
                obtained.
                    (D) Notification of denial.--A health plan shall 
                provide a covered individual with timely notice of an 
                adverse determination or noncertification of an 
                admission, continued stay, or service. Such a 
                notification shall include information concerning the 
                utilization review program appeals procedure.
            (6) Requests for authorization.--A health plan utilization 
        review program shall ensure that requests by covered 
        individuals or physicians for prior authorization of a 
        nonemergency service shall be answered in a timely manner after 
        such request is received. If utilization review personnel are 
        not available in a timely fashion, any medical services 
        provided shall be considered approved.
            (7) New technologies.--A utilization review program shall 
        implement policies and procedures to evaluate the appropriate 
        use of new medical technologies or new applications of 
        established technologies, including medical procedures, drugs, 
        and devices. The program shall ensure that appropriate 
        professionals participate in the development of technology 
        evaluation criteria.
            (8) Special rule.--Where prior authorization for a service 
        or other covered item is obtained under a program under this 
        section, the service shall be considered to be covered unless 
        there was fraud or incorrect information provided at the time 
        such prior authorization was obtained. If a provider supplied 
        the incorrect information that led to the authorization of 
        medically unnecessary care, the provider shall be prohibited 
        from collecting payment directly from the enrollee, and shall 
        reimburse the plan and subscriber for any payments or 
        copayments the provider may have received.
    (d) Health Plan Requirements.--
            (1) Disclosure of information.--
                    (A) Prospective covered individuals.--A health plan 
                shall, with respect to any materials distributed to 
                prospective covered individuals, include a summary of 
                the utilization review procedures of the plan.
                    (B) Covered individuals.--A health plan shall, with 
                respect to any materials distributed to newly covered 
                individuals, include a clear and comprehensive 
                description of utilization review procedures of the 
                plan and a statement of patient rights and 
                responsibilities with respect to such procedures.
                    (C) State officials.--
                            (i) In general.--A health plan shall 
                        disclose to the State insurance commissioner, 
                        or other designated State official, the health 
                        plan utilization review program policies, 
procedures, and reports required by the State for certification.
                            (ii) Streamlining of procedures.--To the 
                        extent practicable, a State shall implement 
                        procedures to streamline the process by which a 
                        health plan documents compliance with the 
                        requirements of this Act, including procedures 
                        to condense the number of documents filed with 
                        the State concerning such compliance.
            (2) Toll-free number.--A health plan shall have a 
        membership card which shall have printed on the card the toll-
        free telephone number that a covered individual should call to 
        receive precertification utilization review decisions.
            (3) Evaluation.--A health plan shall establish mechanisms 
        to evaluate the effects of the utilization review program of 
        the plan through the use of member satisfaction data or through 
        other appropriate means.
    (e) Emergency Care.--
            (1) In general.--A health plan shall provide coverage for 
        emergency services provided to an enrollee without regard to 
        whether the health professional or provider furnishing such 
        services has a contractual (or other arrangement) with the 
        plan.
            (2) Preauthorization.--With respect to emergency services 
        furnished in a hospital emergency department, a health plan 
        shall not require prior authorization for the provision of such 
        services if the enrollee arrived at the emergency department 
        with symptoms that reasonably suggested an emergency medical 
        condition, regardless of whether the hospital was affiliated 
        with the health plan. All procedures performed during the 
        evaluation and treatment of an emergency condition shall be 
        covered under the health plan.

                    TITLE IV--HEALTH PLAN STANDARDS

SEC. 401. HEALTH PLAN STANDARDS.

    (a) Establishment.--The Secretary shall establish standards for the 
certification and periodic recertification of health plans, including 
standards which require plans to meet the requirements of this title.
    (b) State Certification.--
            (1) In general.--A State shall provide for the 
        certification of health plans if the certifying authority 
        designated by the State determines that the plan meets the 
        applicable requirements of this Act.
            (2) Requirement.--Effective on January 1, 1997, a health 
        plan sponsor may only offer a health plan in a State if such 
        plan is certified by the State under paragraph (1).
    (c) Construction.--Whenever in this title a requirement or standard 
is imposed on a health plan, the requirement or standard is deemed to 
have been imposed on the sponsor of the plan in relation to that plan.

SEC. 402. MINIMUM SOLVENCY REQUIREMENTS.

    (a) In General.--Except as provided in subsection (b), each State 
shall apply minimum solvency requirements to all health plans offered 
or operating with the State. A health plan shall meet the financial 
reserve requirements that are established by the State to assure proper 
payment for health care services provided under the plan.
    (b) Federal Standards.--The Secretary shall establish minimum 
solvency standards that shall apply to all self-insured health plans. 
Such standards shall at least meet the solvency requirements 
established by the National Association of Insurance Commissioners.

SEC. 403. INFORMATION ON TERMS OF PLAN.

    (a) In General.--A health plan shall provide prospective covered 
individuals with written information concerning the terms and 
conditions of the health plan to enable such individuals to make 
informed decisions with respect to a certain system of health care 
delivery. Such information shall be standardized so that prospective 
covered individuals may compare the attributes of all such plans 
offered within the coverage area.
    (b) Understandability.--Information provided under this section, 
whether written or oral shall be easily understandable, truthful, 
linguistically appropriate and objective with respect to the terms 
used. Descriptions provided in such information shall be consistent 
with standards developed for supplemental insurance coverage under 
title XVIII of the Social Security Act.
    (c) Required Information.--Information required under this section 
shall include information concerning--
            (1) coverage provisions, benefits, and any exclusions by 
        category of service or product;
            (2) plan loss ratios with an explanation that such ratios 
        reflect the percentage of the premiums expended for health 
        services;
            (3) prior authorization or other review requirements 
        including preauthorization review, concurrent review, post-
        service review, post-payment review and procedures that may 
        lead the patient to be denied coverage for, or not be provided, 
        a particular service or product;
            (4) an explanation of how plan design impacts enrollees, 
        including information on the financial responsibility of 
        covered individuals for payment for coinsurance or other out-
        of-plan services;
            (5) covered individual satisfaction statistics, including 
        disenrollment statistics;
            (6) advance directives and organ donation;
            (7) the characteristics and availability of health care 
        professionals and institutions participating in the plan, 
        including descriptions of the financial arrangements or 
        contractual provisions with hospitals, utilization review 
        organizations, physicians, or any other provider of health care 
        services that would affect the services offered, referral or 
        treatment options, or physician's fiduciary responsibility to 
        patients, including financial incentives regarding the 
        provision of medical or other services; and
            (8) quality indicators for the plan and for participating 
        health professionals and providers under the plan, including 
        population-based statistics such as immunization rates and 
        performance measures such as survival after surgery, adjusted 
        for case mix.

SEC. 404. ACCESS.

    (a) In General.--A health plan shall demonstrate that the plan has 
a sufficient number, distribution, and variety of qualified health care 
providers to ensure that all covered health care services will be 
available and accessible in a timely manner to adults, infants, 
children, and individuals with disabilities enrolled in the plan.
    (b) Availability of Services.--A health plan shall ensure that 
services covered under the plan are available in a timely manner that 
ensures a continuity of care, are accessible within a reasonable 
proximity to the residences of the enrollees, are available within 
reasonable hours of operation, and include emergency and urgent care 
services when medically necessary and available which shall be 
accessible within the service area 24-hours a day, seven days a week.
    (c) Specialized Treatment.--A health plan shall demonstrate that 
plan enrollees have access, when medically or clinically indicated in 
the judgment of the treating health professional, to specialized 
treatment expertise.
    (d) Chronic Conditions.--
            (1) In general.--Any process established by a health plan 
        to coordinate care and control costs may not impose an undue 
        burden on enrollees with chronic health conditions. The plan 
        shall ensure a continuity of care and shall, when medically or 
        clinically indicated in the judgment of the treating health 
        professional, ensure direct access to relevant specialists for 
        continued care.
            (2) Care coordinator.--In the case of an enrollee who has a 
        severe, complex, or chronic condition, the health plan shall 
        determine, based on the judgment of the treating health 
        professional, whether it is medically or clinically necessary 
        or appropriate to use a care coordinator from an 
        interdisciplinary team or a specialist to ensure continuity of 
        care.
    (e) Requirement.--
            (1) In general.--The requirements of this section may not 
        be waived and shall be met in all areas where the health plan 
        has enrollees, including rural areas. With respect to children, 
        such services shall include pediatric services.
            (2) Out-of-network services.--If a health plan fails to 
        meet the requirements of this section, the plan shall arrange 
        for the provision of out-of-network services to enrollees in a 
        manner that provides enrollees with access to services in 
        accordance with this section.

SEC. 405. CREDENTIALING FOR HEALTH PROFESSIONALS.

    (a) In General.--A health plan shall credential health 
professionals furnishing health care services under the plan.
    (b) Credentialing Process.--
            (1) In general.--A health plan shall establish a 
        credentialing process. Such process shall ensure that a health 
        professional is credentialed prior to that professional being 
        listed as a health professional in the health plan's marketing 
        materials, in accordance with recorded (written or otherwise) 
        policies and procedures.
            (2) Responsibility of medical director.--The medical 
        director of the health plan, or another designated health 
        professional, shall have responsibility for the credentialing 
        of health professionals under the plan.
            (3) Uniform applications.--A State shall develop a basic 
        uniform application that shall be used by all health plans in 
        the State for credentialing purposes.
            (4) Credentialing committee.--
                    (A) Establishment.--The health plan shall establish 
                a credentialing committee that shall be composed of 
                licensed physicians and other health professionals to 
                review credentialing information and supporting 
documents.
                    (B) Requirement.--The credentialing process shall 
                provide for the review of an application for 
                credentialing by a credentialing committee with 
                appropriate representation of the applicant's medical 
                specialty.
            (5) Standards.--
                    (A) In general.--Credentialing decisions under a 
                health plan shall be based on objective standards with 
                input from health professionals credentialed under the 
                plan. Information concerning all application and 
                credentialing policies and procedures shall be made 
                available for review by the health professional 
                involved upon written request.
                    (B) Requirement.--The standards referred to in 
                subparagraph (A) shall include determinations as to--
                            (i) whether the health professional has a 
                        current valid license to practice the 
                        particular health profession involved;
                            (ii) whether the health professional has 
                        clinical privileges in good standing at the 
                        hospital designated by the practitioner and the 
                        primary admitting facility, as applicable;
                            (iii) whether the health professional has a 
                        valid DEA or CDS certificate, as applicable;
                            (iv) whether the health professional has 
                        graduated from medical school and completed a 
                        residency, or received Board certification, as 
                        applicable;
                            (v) the work history of the health 
                        professional;
                            (vi) whether the health professional has 
                        current, adequate malpractice insurance in 
                        accordance with the policy of the health plan; 
                        and
                            (vii) the professional liability claims 
                        history of the health professional.
                    (C) Right to review information.--A health 
                professional who undergoes the credentialing process 
                shall have the right to review the basis information, 
                including the sources of that information, that was 
                used to meet the designated credentialing criteria.

SEC. 406. GRIEVANCE PROCEDURES.

    (a) In General.--A health plan shall adopt a timely and organized 
system for resolving complaints and formal grievances filed by covered 
individuals. Such system shall include--
            (1) recorded (written or otherwise) procedures for 
        registering and responding to complaints and grievances in a 
        timely manner;
            (2) documentation concerning the substance of complaints, 
        grievances, and actions taken concerning such complaints and 
        grievances, which shall be in writing, and be available upon 
        request to the Office for Consumer Information, Counseling and 
        Assistance;
            (3) procedures to ensure a resolution of a complaint or 
        grievance;
            (4) the compilation and analysis of complaint and grievance 
        data;
            (5) procedures to expedite the complaint process if the 
        complaint involves a dispute about the coverage of an 
        immediately and urgently needed service; and
            (6) procedures to ensure that if an enrollee orally 
        notifies a health plan about a complaint, the plan (if 
        requested) must send the enrollee a complaint form that 
        includes the telephone numbers and addresses of member 
services, a description of the plan's grievance procedure, and the 
telephone number of the Officer for Consumer Information, Counseling 
and Assistance where enrollees may register complaints.
    (b) Appeal Process.--A health plan shall adopt an appeals process 
to enable covered individuals to appeal decisions that are adverse to 
the individuals. Such a process shall include--
            (1) the right to a review by a grievance panel;
            (2) the right to a second review with a different panel, 
        independent from the health plan, or to a review through an 
        impartial arbitration process which shall be described in 
        writing by the plan; and
            (3) an expedited process for review in emergency cases.
The Secretary shall develop guidelines for the structure and 
requirements applicable to the independent review panel and impartial 
arbitration process described in paragraph (2).
    (c) Notification.--With respect to the complaint, grievance, and 
appeals processes required under this section, a health plan shall, 
upon the request of a covered individual, provide the individual a 
written decision concerning a complaint, grievance, or appeal in a 
timely fashion.
    (d) Non-Impediment to Benefits.--The complaint, grievance, and 
appeals processes established in accordance with this section may not 
be used in any fashion to discourage or prevent a covered individual 
from receiving medically necessary care in a timely manner.
    (e) Due Process With Respect to Credentialing.--
            (1) Receipt of information.--A health professional who is 
        subject to credentialing under section 405 shall, upon written 
        request, receive from the health plan any information obtained 
        by the plan during the credentialing process that, as 
        determined by the credentialing committee, does not meet the 
        credentialing standards of the plan, or that varies 
        substantially from the information provided to the health plan 
        by the health professional.
            (2) Submission of corrections.--A health plan shall have a 
        formal, recorded (written or otherwise) process by which a 
        health professional may submit supplemental information to the 
        credentialing committee if the health professional determines 
        that erroneous or misleading information has been previously 
        submitted. The health professional may request that such 
        information be reconsidered in the evaluation for credentialing 
        purposes.
            (3) No entitlement.--
                    (A) In general.--A health professional is not 
                entitled to be selected or retained by a health plan as 
                a participating or contracting provider whether or not 
                such professional meets the credentialing standards 
                established under section 405.
                    (B) Economic considerations.--If economic 
                considerations, including the health care 
                professional's patterns of expenditure per patient, are 
                part of a selection decision, objective criteria shall 
                be used in examining such considerations and a written 
                description of such criteria shall be provided to 
                applicants, participating health professionals, and 
                enrollees. Any economic profiling of health 
                professionals must be adjusted to recognize case mix, 
                severity of illness, and the age of patients of a 
                health professional's practice that may account for 
                higher or lower than expected costs, to the extent 
                appropriate data in this regard is available to the 
                health plan.
            (4) Termination, reduction or withdrawal.--
                    (A) Procedures.--A health plan shall develop and 
                implement procedures for the reporting, to appropriate 
                authorities, of serious quality deficiencies that 
                result in the suspension or termination of a contract 
                with a health professional.
                    (B) Review.--A health plan shall develop and 
                implement policies and procedures under which the plan 
                reviews the contract privileges of health professionals 
                who--
                            (i) have seriously violated policies and 
                        procedures of the health plan;
                            (ii) have lost their privilege to practice 
                        with a contracting institutional provider; or
                            (iii) otherwise pose a threat to the 
                        quality of service and care provided to the 
                        enrollees of the health plan.
                At a minimum, the policies and procedures implemented 
                under this subparagraph shall meet the requirements of 
                the Health Care Quality Improvement Act of 1986.
                    (C) Due process.--The policies and procedures 
                implemented under subparagraph (B) shall include 
                requirements for the timely notification of the 
                affected health professional of the reasons for the 
                reduction, withdrawal, or termination of privileges, 
                and provide the health professional with the right to 
                appeal the determination of reduction, withdrawal, or 
                termination.
                    (D) Availability.--A written copy of the policies 
                and procedures implemented under this paragraph shall 
                be made available to a health professional on request 
                prior to the time at which the health professional 
                contracts to provide services under the plan.

SEC. 407. CONFIDENTIALITY STANDARDS.

    (a) In General.--A health plan shall ensure that the 
confidentiality of specified enrollee patient information and records 
is protected.
    (b) Policies and Procedures.--A health plan shall have written 
confidentiality policies and procedures. Such policies and procedures 
shall, at a minimum--
            (1) maintain the confidentiality of enrollee patient 
        information within the administrative structure of the health 
        plan;
            (2) protect medical record information;
            (3) protect claim information;
            (4) establish requirements for the release of information; 
        and
            (5) inform employees of the confidentiality policies and 
        procedures.
    (c) Patient Care Providers and Facilities.--A health plan shall 
ensure that providers, offices and facilities responsible for providing 
covered items or services to plan enrollees have implemented policies 
and procedures to prevent the unauthorized or inadvertent disclosure of 
confidential patient information to individuals who should not have 
access to such information.
    (d) Release of Information.--An enrollee in a health plan shall 
have the opportunity to approve or disapprove the release of 
identifiable personal patient information by the health plan, except 
where such release is required under applicable law.

SEC. 408. DISCRIMINATION.

    (a) Enrollees.--A health plan (network or non-network) may not 
discriminate or engage (directly or through contractual arrangements) 
in any activity, including the selection of service area, that has the 
effect of discriminating against an individual on the basis of race, 
national origin, gender, language, socio-economic status, age, 
disability, health status, or anticipated need for health services.
    (b) Providers.--A health plan may not discriminate in the selection 
of members of the health professional or provider network (and in 
establishing the terms and conditions for membership in the network) of 
the plan based on--
            (1) the race, national origin, or disability of the health 
        professional;
            (2) the socio-economic status, disability, health status, 
        or anticipated need for health services of the patients of the 
        health professional or provider; or
            (3) the health professional or provider's lack of 
        affiliation with, or admitting privileges at, a hospital.
    (c) License or Certification.--A health plan may not discriminate 
in participation, reimbursement, or indemnification against a health 
professional who is acting within the scope of the license or 
certification of the professional under applicable State law solely on 
the basis of the license or certification of the health professional. A 
health plan may not discriminate in participation, reimbursement, or 
indemnification against a health provider that is providing services 
within the scope of services that it is authorized to perform under 
State law.

SEC. 409. PROHIBITION ON SELECTIVE MARKETING.

    A health plan may not engage in marketing or other practices 
intended to discourage or limit the issuance of health plans to 
individuals on the basis of health condition, geographic area, 
industry, or other risk factors.

                TITLE V--HEALTH INSURANCE MARKET REFORM

SEC. 501. GUARANTEED ISSUE AND RENEWABILITY.

    (a) Guaranteed Issue.--Except as otherwise provided in this 
section, a health plan sponsor offering a health plan to a class of 
individuals shall offer such plan to any individual within such class 
who applies for coverage (either directly with the plan or through an 
employer) under such plan. A health plan may not engage in any practice 
that has the effect of attracting or limiting enrollees on the basis of 
personal characteristics, such as occupation or affiliation with any 
person or entity.
    (b) Renewability.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), a health plan sponsor may not refuse to renew, or may not 
        terminate, coverage under a health plan with respect to any 
        individual or family.
            (2) Grounds for refusal to renew or terminate.--Paragraph 
        (1) shall not apply in the case of--
                    (A) nonpayment of premiums;
                    (B) fraud on the part of the individual relating to 
                such plan;
                    (C) misrepresentation of material facts on the part 
                of the individual relating to an application for 
                coverage or claim for benefits; or
                    (D) the occurrence of other acts as prescribed in 
                standards developed by the National Association of 
                Insurance Commissioners.
            (3) Termination of plans.--The Secretary, in consultation 
        with the National Association of Insurance Commissioners, shall 
        develop standards under which a health plan sponsor may 
        terminate a health plan.

SEC. 502. NONDISCRIMINATION BASED ON HEALTH STATUS.

    (a) No Limits on Coverage; No Pre-Existing Condition Limits.--
Except as provided in subsection (b), a health plan may not--
            (1) terminate, restrict, or limit coverage or establish 
        premiums based on the health status, medical condition, claims 
        experience, receipt of health care, medical history, 
        anticipated need for health care services, disability, genetic 
        predisposition to medical conditions, or lack of evidence of 
        insurability of an individual;
            (2) terminate, restrict, or limit coverage in any portion 
        of the plan's coverage area;
            (3) except as provided in section 501(b)(2), cancel 
        coverage for any individual until that individual is enrolled 
        in another applicable health plan;
            (4) impose waiting periods before coverage begins; or
            (5) impose a rider that serves to exclude coverage of 
        particular individuals or particular health conditions.
    (b) Treatment of Preexisting Condition Exclusions.--
            (1) In general.--A health plan may impose a limitation or 
        exclusion of benefits relating to treatment of a condition 
        based on the fact that the condition preexisted the effective 
        date of the plan with respect to an individual if--
                    (A) the condition was diagnosed or treated during 
                the 3-month period ending on the day before the date of 
                enrollment under the plan;
                    (B) the limitation or exclusion extends for a 
                period not more than 6 months after the date of 
                enrollment under the plan;
                    (C) the limitation or exclusion does not apply to 
                an individual who, as of the date of birth, was covered 
                under the plan; or
                    (D) the limitation or exclusion does not relate to 
                pregnancy.
            (2) Continuous coverage.--A health plan shall provide that 
        if an individual under such plan is in a period of continuous 
        coverage with respect to particular services as of the date of 
        enrollment under such plan, any period of exclusion of coverage 
        with respect to a preexisting condition as permitted under 
        paragraph (1) shall be reduced by 1 month for each month in the 
        period of continuous coverage.
            (3) Definitions.--As used in this subsection:
                    (A) Period of continuous coverage.--The term 
                ``period of continuous coverage'' means the period 
                beginning on the date an individual is enrolled under a 
                health plan or health care program which provides 
                benefits equivalent to those provided by the plan in 
                which the individual is seeking to enroll with respect 
                to coverage of a preexisting condition and ends on the 
                date the individual is not so enrolled for a continuous 
                period of more than 3 months.
                    (B) Preexisting condition.--The term ``preexisting 
                condition'' means, with respect to coverage under a 
                health plan, a condition which was diagnosed, or which 
                was treated, within the 3-month period ending on the 
                day before the first date of such coverage (without 
                regard to any waiting period).

SEC. 503. ADJUSTMENTS BASED ON AGE, GEOGRAPHY AND FAMILY SIZE.

    (a) In General.--With respect to health plan premiums, the 
Secretary, in consultation with the NAIC, shall specify uniform age, 
geography, and family size categories and maximum rating increments for 
age, geography, and family size adjustment factors that reflect the 
relative actuarial costs of benefit packages among enrollees.
    (b) Age Factors.--With respect to age adjustment factors 
established under subsection (a), for individuals who have attained age 
18 but not age 65, the highest age adjustment factor may not exceed 
twice the lowest age adjustment factor.
    (c) Phase-In Period.--The Secretary, in consultation with the NAIC, 
shall establish a schedule for the phase-in of age-adjusted community 
rates so as to minimize disruption of the insurance market.
    (d) Application.--A health plan shall ensure that the factors 
developed under this section are applied uniformly across each of the 
small group and individual markets.

SEC. 504. RISK ADJUSTMENT.

    (a) In General.--A health plan shall participate in a risk 
adjustment program developed by the State involved under standards 
established by the Secretary in consultation with the National 
Association of Insurance Commissioners. Such a risk adjustment program 
shall--
            (1) with respect to a plan offered within the small group 
        market; or
            (2) with respect to a plan offered within the individual 
        market,
provide for adjustments based on risk within the market in which the 
plan is marketed.
    (b) Process.--A program developed under subsection (a) shall 
include a process designed to share the risk associated with, or to 
equalize, high cost claims, claims of high cost individuals, costs of 
variations among carriers based on demographic factors associated with 
the individuals insured which correlate with such cost variations, to 
protect health plans from the disproportionate adverse risks of 
offering coverage to all applicants. Risk adjustment mechanisms under 
the program shall, to the maximum extent practicable, be prospective to 
minimize the uncertainty associated with the setting of premiums by 
health plans to maintain consumer choice from among multiple health 
plans based on rates that reflect the relative medical and 
administrative efficiencies of health plans.

SEC. 505. LIFETIME LIMITS.

    A health plan may not impose a lifetime limitation on the amount or 
provision of benefits under the plan.

SEC. 506. PATIENT'S RIGHT TO SELF-DETERMINATION.

    A health plan shall be considered to be an eligible organization 
under title XVIII of the Social Security Act for purposes of applying 
the rules under section 1866(f) of such Act (42 U.S.C. 1395cc(f)).

SEC. 507. AFFECT ON STATE LAW.

    (a) Preemption.--The requirements of this title do not preempt any 
State law unless such State law directly conflicts with such 
requirements. The provision of additional consumer protections under 
State law shall not be considered to directly conflict with such 
requirements. Such State consumer protection laws which are not 
preempted under this title include--
            (1) laws that limit the exclusions for preexisting medical 
        conditions to periods that are less than those provided for in 
        section 502;
            (2) laws that limit variations in premium rates beyond the 
        variations permitted under section 503; and
            (3) laws that would expand the small group market.
    (b) State Reform Measures.--Nothing in this title shall be 
construed as prohibiting a State from enacting health care reform 
measures that exceed the measures established under this title, 
including reforms that expand access to health care services, control 
health care costs, and enhance the quality of care.

SEC. 508. ASSOCIATION PLANS.

    With respect to health plans offered to small employers and 
individuals through associations or other intermediaries, such plans 
shall meet the requirements of this title.

                   TITLE VI--MISCELLANEOUS PROVISIONS

SEC. 601. ENFORCEMENT.

    (a) In General.--A State shall prohibit the offering or issuance of 
any health plan in such State if such plan does not--
            (1) have in place a utilization review program that is 
        certified by the State as meeting the requirements of title 
        III;
            (2) comply with the standards developed under title IV;
            (3) have in place a credentialing program that meets the 
        requirements of section 405;
            (4) comply with the requirements of title V; and
            (5) meet any other requirements determined appropriate by 
        the Secretary.
    (b) Self-Insured Plans.--The Secretary of Labor shall develop 
health plan standards, consistent with this Act, that are applicable to 
self-insured plans. The Secretary of Labor may take corrective action 
to terminate or disqualify a self-insured plan that does not meet the 
standards developed under this subsection.

SEC. 602. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this section, this 
Act shall take effect on the date of enactment of this Act.
    (b) Standards.--The standards and programs required under this Act 
shall apply to health plans beginning on January 1, 1997.
    (c) Office for Consumer Information, Counseling and Assistance.--A 
State shall have in place the Office required under section 201 on 
January 1, 1997. The Secretary may award grants for the establishment 
of such Offices beginning on the date of enactment of this Act.
    (d) Other Requirements.--The requirements of titles I and V shall 
apply to health plans beginning on January 1, 1997.
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