II

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Health Care Quality and Fairness Act of 1995.’’

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

7 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.
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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.

1 SEC. 2. DEFINITIONS.

2 Unless specifically provided otherwise, as used in this

3 Act:

4 (1) CARRIER.—The term ‘‘carrier’’ means a li5 censed insurance company, a hospital or medical

6 service corporation (including an existing Blue Cross

7 or Blue Shield organization, within the meaning of

8 section 833(c)(2) of Internal Revenue Code of 1986

9 as in effect before the date of the enactment of this
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1 Act), a health maintenance organization, or other

2 entity licensed or certified by the State to provide

3 health insurance or health benefits.

4 (2) COVERED INDIVIDUAL.—The term ‘‘covered

5 individual’’ means a member, enrollee, subscriber,

6 covered life, patient or other individual eligible to re7 ceive benefits under a health plan.

8 (3) DEPENDENT.—The term ‘‘dependent’’

9 means a spouse or child (including an adopted child)

10 of an enrollee in a health plan who is financially de11 pendent upon the enrollee.

12 (4) EMERGENCY SERVICES.—The term ‘‘emer13 gency services’’ means those health care services

14 that are provided to a patient after the sudden onset

15 of a medical condition that manifests itself by symp16 toms of sufficient severity, including severe pain,

17 and the absence of such immediate medical attention

18 could reasonably be expected, to result in—

19 (A) placing the patient’s health in serious

20 jeopardy;

21 (B) serious impairment to bodily function;

22 or

23 (C) serious dysfunction of any bodily organ

24 or part.
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1 (5) HEALTH PLAN.—The term ‘‘health plan’’

2 includes any organization that seeks to arrange for,

3 or provide for the financing and coordinated delivery

4 of, health care services directly or through a con5 tracted health professional panel, and shall include

6 health maintenance organizations, preferred provider

7 organizations, single service health maintenance or8 ganizations, single service preferred provider organi9 zations, other entities such as physician-hospital or

10 hospital-physician organizations, employee welfare

11 benefit plans (as defined in section 3(1) of the Em12 ployee Retirement Income Security Act of 1974 (29

13 U.S.C. 1002(1)), and multiple employer welfare

14 plans or other association plans, as well as carriers.

15 (6) HEALTH PROFESSIONAL.—The term

16 ‘‘health professional’’ means individuals who are li17 censed, certified, accredited, or otherwise

18 credentialed to provide health care items and serv19 ices as authorized under State law.

20 (7) MANAGED CARE PLAN.—

21 (A) IN GENERAL.—The term ‘‘managed

22 care plan’’ means a plan operated by a man23 aged care entity (as defined in subparagraph

24 (B)), that provides for the financing and deliv-
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1 ery of health care services to persons enrolled in

2 such plan through—

3 (i) arrangements with selected provid4 ers to furnish health care services;

5 (ii) explicit standards for the selection

6 of participating providers;

7 (iii) organizational arrangements for

8 ongoing quality assurance, utilization re9 view programs, and dispute resolution; and

10 (iv) financial incentives for persons

11 enrolled in the plan to use the participat12 ing providers and procedures provided for

13 by the plan.

14 (B) MANAGED CARE ENTITY.—The term

15 ‘‘managed care entity’’ includes a licensed in16 surance company, hospital or medical service

17 plan (including physician and physician-hospital

18 networks), health maintenance organization, an

19 employer or employee organization, or a man20 aged care contractor (as defined in subpara21 graph (C)), that operates a managed care plan.

22 (C) MANAGED CARE CONTRACTOR.—The

23 term ‘‘managed care contractor’’ means a per24 son that—
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1 (i) establishes, operates, or maintains

2 a network of participating providers;

3 (ii) conducts or arranges for utiliza4 tion review activities; and

5 (iii) contracts with an insurance com6 pany, a hospital or medical service plan, an

7 employer, an employee organization, or any

8 other entity providing coverage for health

9 care services to operate a managed care

10 plan.

11 (8) PHYSICIAN.—The term ‘‘physician’’ means

12 a doctor of medicine, a doctor of osteopathy, or a

13 doctor of allopathy.

14 (9) PROVIDER.—The term ‘‘provider’’ means a

15 physician, an organized group of physicians, a facil16 ity or any other health care professional licensed or

17 certified by the State, where licensure or certifi18 cation is required.

19 (10) PROVIDER NETWORK.—The term ‘‘pro20 vider network’’ means, with respect to a health plan

21 that restricts access, those providers who have en22 tered into a contract or agreement with the plan

23 under which such providers are obligated to provide

24 items and services under the plan to eligible individ-
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1 uals enrolled in the plan, or have an agreement to

2 provide services on a fee-for-service basis.

3 (11) POINT-OF-SERVICE PLAN.—The term

4 ‘‘point-of-service plan’’ means a plan that offers

5 services to enrollees through a provider network and

6 also offers additional services or access to care by

7 network or non-network providers.

8 (12) SECRETARY.—The term ‘‘Secretary’’

9 means the Secretary of Health and Human Services.

10 (13) SMALL GROUP MARKET.—

11 (A) IN GENERAL.—The term ‘‘small group

12 market’’ means, with respect to a calendar year,

13 employers (including sole proprietorships, firms,

14 corporations, partnerships, or associations ac15 tively engaged in business) that, on at least 50

16 percent of its business days, employ at least one

17 but not more than 50 employees. In determin18 ing the number of employees for purposes of

19 this paragraph, entities that are affiliated, or

20 that are eligible to file a combined tax return,

21 shall be considered as a single employer.

22 (B) APPLICATION OF PROVISIONS.—Except

23 as specifically provided otherwise, the require24 ments of this Act that apply to an employer in

25 the small group market shall continue to apply
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1 to such employer through the end of the rating

2 period in which the employer has failed to meet

3 the requirements of subparagraph (A).

4 (14) SPECIALIZED TREATMENT EXPERTISE.—

5 The term ‘‘specialized treatment expertise’’ means

6 expertise in diagnosing and treating unusual dis7 eases and condition, diagnosing and treating dis8 eases and conditions that are usually difficult to di9 agnose or treat, and providing other specialized

10 health care.

11 (15) SPONSOR.—The term ‘‘sponsor’’ means a

12 carrier or employer that provides a health plan.

13 (16) TRADITIONAL INSURANCE PLAN.—The

14 term ‘‘traditional insurance plan’’ includes plans

15 that offer a health benefits package and that pay for

16 medical services on a fee-for-service basis using a

17 usual, customary, or reasonable payment methodol18 ogy or a resource based relative value schedule, usu19 ally linked to an annual deductible and/or coinsur20 ance payment on each allowed amount.

21 (17) UTILIZATION REVIEW.—The term ‘‘utiliza22 tion review’’ means a set of formal techniques de23 signed to monitor and evaluate the clinical necessity,

24 appropriateness and efficiency of health care serv25 ices, procedures, providers and facilities. Techniques
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1 may include ambulatory review, prospective review,

2 second opinion, certification, concurrent review, case

3 management, discharge planning and retrospective

4 review.

5 TITLE I—PROTECTION OF

6 CONSUMER CHOICE

7 SEC. 101. PROTECTION OF CONSUMER CHOICE.

8 (a) IN GENERAL.—Each employer, including a self9 insured employer, who offers, provides, or makes available

10 to employees a health plan must provide to each such em11 ployee a choice of health plans as required under sub12 section (b).

13 (b) OFFERING OF PLANS.—Each employer referred

14 to in subsection (a) shall include among its health plan

15 offerings at least one of each of the following types of

16 health plans, where available:

17 (1) A managed care plan, including a health

18 maintenance organization or preferred provider or19 ganization.

20 (2) A point-of-service plan.

21 (3) A traditional insurance plan (as defined in

22 section 2).

23 SEC. 102. ENROLLMENT.

24 Each employer including a self-insured employer, who

25 offers, provides, or makes available a health plan shall es-
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1 tablish a process for enrollment in such plan which con2 sists of—

3 (1) a general annual open enrollment period of

4 at least 30 days; and

5 (2) special open enrollment periods for changes

6 in enrollment as required by the Secretary.

7 TITLE II—OFFICE FOR CON8 SUMER INFORMATION, COUN9 SELING AND ASSISTANCE

10 SEC. 201. ESTABLISHMENT.

11 (a) IN GENERAL.—The Secretary shall award a grant

12 to each State for the establishment of an Office for

13 Consumer Information, Counseling and Assistance (here14 after referred to in this section as the ‘‘Office’’) in each

15 such State. Each such Office shall perform public out16 reach and provide education and assistance concerning

17 consumer rights with respect to health insurance as pro18 vided for in subsection (d).

19 (b) USE OF GRANT.—

20 (1) IN GENERAL.—A State shall use a grant

21 under this section—

22 (A) to administer the Office and carry out

23 the duties described in subsection (d);

24 (B) to solicit and award contracts to pri25 vate, nonprofit organizations applying to the
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1 State to administer the Office and carry out the

2 duties described in subsection (d); or

3 (C) in the case of a State operating a

4 consumer information counseling and assistance

5 program on the date of enactment of this Act,

6 to expand and improve such program.

7 (2) CONTRACTS.—With respect to the contract

8 described in paragraph (1)(B), the contract period

9 shall be not less than 2 years and not more than 4

10 years.

11 (c) STAFF.—A State shall ensure that the Office has

12 sufficient staff (including volunteers) and local offices

13 throughout the State to carry out its duties under this

14 section and a demonstrated ability to represent and work

15 with a broad spectrum of consumers, including vulnerable

16 and underserved populations.

17 (d) DUTIES.—An Office established under this sec18 tion shall—

19 (1) establish a State-wide toll-free hotline to en20 able consumers to contact the Office;

21 (2) have the ability to provide appropriate as22 sistance under this subsection to individuals with

23 limited English language ability;

24 (3) develop outreach programs to provide health

25 insurance information, counseling, and assistance;
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1 (4) provide outreach and education relating to

2 consumer rights and responsibilities under this Act,

3 including the rights and services available through

4 the Office;

5 (5) provide individuals with assistance in enroll6 ing in health plans (including providing plan com7 parisons) or in obtaining services or reimbursements

8 from health plans;

9 (6) provide individuals with assistance in filing

10 applications for appropriate State health plan pre11 mium assistance programs;

12 (7) provide individuals with information con13 cerning existing grievance procedures and institute

14 systems of referral to appropriate Federal or State

15 departments or agencies for assistance with prob16 lems related to insurance coverage (including legal

17 problems);

18 (8) ensure that regular and timely access is

19 provided to the services available through the Office;

20 (9) implement training programs for staff mem21 bers (including volunteer staff members) and collect

22 and disseminate timely and accurate health care in23 formation to staff members;
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1 (10) not less than once each year, conduct pub2 lic hearings to identify and address community

3 health care needs;

4 (11) coordinate its activities with the staff of

5 the appropriate departments and agencies of the

6 State government and other appropriate entities

7 within the State; and

8 (12) carry out any other activities determined

9 appropriate by the Secretary.

10 (e) STATE DUTIES.—

11 (1) ACCESS TO INFORMATION.—The State shall

12 ensure that, for purposes of carrying out the duties

13 of the Office, the Office has appropriate access to

14 relevant information, subject to the application of

15 procedures to ensure confidentiality of enrollee and

16 proprietary health plan information.

17 (2) REPORTING AND EVALUATION REQUIRE18 MENTS.—

19 (A) REPORT.—The Office shall annually

20 prepare and submit to the State a report on the

21 nature and patterns of consumer complaints re22 ceived by the Office during the year for which

23 the report is prepared. Such report shall con24 tain any policy, regulatory, and legislative rec25 ommendations for improvements in the activi-
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1 ties of the Office together with a record of the

2 activities of the Office.

3 (B) EVALUATION.—The State shall annu4 ally evaluate the quality and effectiveness of the

5 Office in carrying out the activities described in

6 subsection (d).

7 (3) CONFLICTS OF INTEREST.—The State shall

8 ensure that no individual involved in selecting the

9 entity with which to enter into a contract under sub10 section (b)(1)(B), or involved in the operation of the

11 Office, or any delegate of the Office, is subject to a

12 conflict of interest.

13 (f) AUTHORIZATION OF APPROPRIATIONS.—There

14 are authorized to be appropriated such sums as may be

15 necessary to carry out this section.

16 TITLE III—UTILIZATION

17 MANAGEMENT

18 SEC. 301. DEFINITIONS.

19 As used in this title:

20 (1) ADVERSE DETERMINATION.—The term ‘‘ad21 verse determination’’ means a determination that an

22 admission to or continued stay at a hospital or that

23 another health care service that is required has been

24 reviewed and, based upon the information provided,

25 does not meet the clinical requirements for medical
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1 necessity, appropriateness, level of care, or effective2 ness.

3 (2) AMBULATORY REVIEW.—The term ‘‘ambu4 latory review’’ means utilization review of health

5 care services performed or provided in an outpatient

6 setting.

7 (3) APPEALS PROCEDURE.—The term ‘‘appeals

8 procedure’’ means a formal process under which a

9 covered individual (or an individual acting on behalf

10 of a covered individual), attending physician, facility

11 or applicable health care provider may appeal an ad12 verse utilization review decision rendered by the

13 health plan or its designee utilization review organi14 zation.

15 (4) CASE MANAGEMENT.—The term ‘‘case man16 agement’’ means a coordinated set of activities con17 ducted for the individual patient management of se18 rious, complicated, protracted or chronic health con19 ditions that provides cost-effective and benefit-maxi20 mizing treatments for extremely resource-intensive

21 conditions.

22 (5) CLINICAL REVIEW CRITERIA.—The term

23 ‘‘clinical review criteria’’ means the recorded (writ24 ten or otherwise) screening procedures, decision ab25 stracts, clinical protocols and practice guidelines
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1 used by the health plan to determine necessity and

2 appropriateness of health care services.

3 (6) CONCURRENT REVIEW.—The term ‘‘concur4 rent review’’ means utilization review conducted dur5 ing a patient’s hospital stay or course of treatment.

6 (7) DISCHARGE PLANNING.—The term ‘‘dis7 charge planning’’ means the formal process for de8 termining, coordinating and managing the care a pa9 tient receives following the discharge of the patient

10 from a facility.

11 (8) FACILITY.—The term ‘‘facility’’ means an

12 institution or health care setting providing the pre13 scribed health care services under review. Such term

14 includes hospitals and other licensed inpatient facili15 ties, ambulatory surgical or treatment centers,

16 skilled nursing facilities, residential treatment cen17 ters, diagnostic, laboratory and imaging centers and

18 rehabilitation and other therapeutic health care set19 tings.

20 (9) PROSPECTIVE REVIEW.—The term ‘‘pro21 spective review’’ means utilization review conducted

22 prior to an admission or a course of treatment.

23 (10) RETROSPECTIVE REVIEW.—The term ‘‘ret24 rospective review’’ means utilization review con25 ducted after health care services have been provided
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1 to a patient. Such term does not include the retro2 spective review of a claim that is limited to an eval3 uation of reimbursement levels, veracity of docu4 mentation, accuracy of coding and adjudication for

5 payment.

6 (11) SECOND OPINION.—The term ‘‘second

7 opinion’’ means an opportunity or requirement to

8 obtain a clinical evaluation by a provider other than

9 the provider originally making a recommendation for

10 a proposed health service to assess the clinical neces11 sity and appropriateness of the initial proposed

12 health service.

13 (12) UTILIZATION REVIEW ORGANIZATION.—

14 The term ‘‘utilization review organization’’ means an

15 entity that conducts utilization review.

16 SEC. 302. REQUIREMENT FOR UTILIZATION REVIEW PRO17 GRAM.

18 A health plan shall have in place a utilization review

19 program that meets the requirements of this title and that

20 is certified by the State.

21 SEC. 303. STANDARDS FOR UTILIZATION REVIEW.

22 (a) ESTABLISHMENT.—The Secretary shall establish

23 standards for the establishment, operation, and certifi24 cation and periodic recertification of health plan utiliza25 tion review programs.
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1 (b) ALTERNATIVE STANDARDS.—

2 (1) IN GENERAL.—A State may certify a health

3 plan as meeting the standards established under

4 subsection (a) if the State determines that the

5 health plan has met the utilization standards re6 quired for accreditation as applied by a nationally

7 recognized, independent, nonprofit accreditation en8 tity.

9 (2) REVIEW BY STATE.—A State that makes a

10 determination under paragraph (1) shall periodically

11 review the standards used by the private accredita12 tion entity to ensure that such standards meet or ex13 ceed the standards established by the Secretary

14 under this title.

15 (c) UTILIZATION REVIEW PROGRAM REQUIRE16 MENTS.—The standards developed by the Secretary under

17 subsection (a) shall require that utilization review pro18 grams comply with the following:

19 (1) DOCUMENTATION.—A health plan shall pro20 vide a written description of the utilization review

21 program of the plan, including a description of—

22 (A) the delegated and nondelegated activi23 ties under the program;

24 (B) the policies and procedures used under

25 the program to evaluate medical necessity; and
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1 (C) the clinical review criteria, information

2 sources, and the process used to review and ap3 prove the provision of medical services under

4 the program.

5 (2) PROHIBITION.—With respect to the admin6 istration of the utilization review program, a health

7 plan may not employ utilization reviewers or con8 tract with a utilization management organization if

9 the conditions of employment or the contract terms

10 include financial incentives to reduce or limit the

11 medically necessary or appropriate services provided

12 to covered individuals.

13 (3) REVIEW AND MODIFICATION.—A health

14 plan shall develop procedures for periodically review15 ing and modifying the utilization review of the plan.

16 Such procedures shall provide for the participation

17 of providers in the health plan in the development

18 and review of utilization review policies and proce19 dures.

20 (4) DECISION PROTOCOLS.—

21 (A) IN GENERAL.—A utilization review

22 program shall develop and apply recorded (writ23 ten or otherwise) utilization review decision pro24 tocols. Such protocols shall be based on sound

25 medical evidence.
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1 (B) PROTOCOL CRITERIA.—The clinical re2 view criteria used under the utilization review

3 decision protocols to assess the appropriateness

4 of medical services shall be clearly documented

5 and available to participating health profes6 sionals upon request. Such protocols shall in7 clude a mechanism for assessing the consistency

8 of the application of the criteria used under the

9 protocols across reviewers, and a mechanism for

10 periodically updating such criteria.

11 (5) REVIEW AND DECISIONS.—

12 (A) REVIEW.—The procedures applied

13 under a utilization review program with respect

14 to the preauthorization and concurrent review

15 of the necessity and appropriateness of medical

16 items, services or procedures, shall require that

17 qualified medical professionals supervise review

18 decisions. With respect to a decision to deny the

19 provision of medical items, services or proce20 dures, a physician shall conduct a subsequent

21 review to determine the medical appropriateness

22 of such a denial. Board certified physicians

23 from the appropriate specialty areas of medicine

24 and surgery shall be utilized in the review proc25 ess as needed.
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1 (B) DECISIONS.—All utilization review de2 cisions shall be made in a timely manner, as de3 termined appropriate when considering the ur4 gency of the situation.

5 (C) ADVERSE DETERMINATIONS.—With re6 spect to utilization review, an adverse deter7 mination or noncertification of an admission,

8 continued stay, or service shall be clearly docu9 mented, including the specific clinical or other

10 reason for the adverse determination or

11 noncertification, and be available to the covered

12 individual and the affected provider or facility.

13 A health plan may not deny or limit coverage

14 with respect to a service that the enrollee has

15 already received solely on the basis of lack of

16 prior authorization or second opinion, to the ex17 tent that the service would have otherwise been

18 covered by the plan had such prior authoriza19 tion or a second opinion been obtained.

20 (D) NOTIFICATION OF DENIAL.—A health

21 plan shall provide a covered individual with

22 timely notice of an adverse determination or

23 noncertification of an admission, continued

24 stay, or service. Such a notification shall in-
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1 clude information concerning the utilization re2 view program appeals procedure.

3 (6) REQUESTS FOR AUTHORIZATION.—A health

4 plan utilization review program shall ensure that re5 quests by covered individuals or physicians for prior

6 authorization of a nonemergency service shall be an7 swered in a timely manner after such request is re8 ceived. If utilization review personnel are not avail9 able in a timely fashion, any medical services pro10 vided shall be considered approved.

11 (7) NEW TECHNOLOGIES.—A utilization review

12 program shall implement policies and procedures to

13 evaluate the appropriate use of new medical tech14 nologies or new applications of established tech15 nologies, including medical procedures, drugs, and

16 devices. The program shall ensure that appropriate

17 professionals participate in the development of tech18 nology evaluation criteria.

19 (8) SPECIAL RULE.—Where prior authorization

20 for a service or other covered item is obtained under

21 a program under this section, the service shall be

22 considered to be covered unless there was fraud or

23 incorrect information provided at the time such prior

24 authorization was obtained. If a provider supplied

25 the incorrect information that led to the authoriza-
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1 tion of medically unnecessary care, the provider shall

2 be prohibited from collecting payment directly from

3 the enrollee, and shall reimburse the plan and sub4 scriber for any payments or copayments the provider

5 may have received.

6 (d) HEALTH PLAN REQUIREMENTS.—

7 (1) DISCLOSURE OF INFORMATION.—

8 (A) PROSPECTIVE COVERED INDIVID9 UALS.—A health plan shall, with respect to any

10 materials distributed to prospective covered in11 dividuals, include a summary of the utilization

12 review procedures of the plan.

13 (B) COVERED INDIVIDUALS.—A health

14 plan shall, with respect to any materials distrib15 uted to newly covered individuals, include a

16 clear and comprehensive description of utiliza17 tion review procedures of the plan and a state18 ment of patient rights and responsibilities with

19 respect to such procedures.

20 (C) STATE OFFICIALS.—

21 (i) IN GENERAL.—A health plan shall

22 disclose to the State insurance commis23 sioner, or other designated State official,

24 the health plan utilization review program
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1 policies, procedures, and reports required

2 by the State for certification.

3 (ii) STREAMLINING OF PROCE4 DURES.—To the extent practicable, a State

5 shall implement procedures to streamline

6 the process by which a health plan docu7 ments compliance with the requirements of

8 this Act, including procedures to condense

9 the number of documents filed with the

10 State concerning such compliance.

11 (2) TOLL-FREE NUMBER.—A health plan shall

12 have a membership card which shall have printed on

13 the card the toll-free telephone number that a cov14 ered individual should call to receive precertification

15 utilization review decisions.

16 (3) EVALUATION.—A health plan shall establish

17 mechanisms to evaluate the effects of the utilization

18 review program of the plan through the use of mem19 ber satisfaction data or through other appropriate

20 means.

21 (e) EMERGENCY CARE.—

22 (1) IN GENERAL.—A health plan shall provide

23 coverage for emergency services provided to an en24 rollee without regard to whether the health profes-
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1 sional or provider furnishing such services has a con2 tractual (or other arrangement) with the plan.

3 (2) PREAUTHORIZATION.—With respect to

4 emergency services furnished in a hospital emer5 gency department, a health plan shall not require

6 prior authorization for the provision of such services

7 if the enrollee arrived at the emergency department

8 with symptoms that reasonably suggested an emer9 gency medical condition, regardless of whether the

10 hospital was affiliated with the health plan. All pro11 cedures performed during the evaluation and treat12 ment of an emergency condition shall be covered

13 under the health plan.

14 TITLE IV—HEALTH PLAN

15 STANDARDS

16 SEC. 401. HEALTH PLAN STANDARDS.

17 (a) ESTABLISHMENT.—The Secretary shall establish

18 standards for the certification and periodic recertification

19 of health plans, including standards which require plans

20 to meet the requirements of this title.

21 (b) STATE CERTIFICATION.—

22 (1) IN GENERAL.—A State shall provide for the

23 certification of health plans if the certifying author24 ity designated by the State determines that the plan

25 meets the applicable requirements of this Act.
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1 (2) REQUIREMENT.—Effective on January 1,

2 1997, a health plan sponsor may only offer a health

3 plan in a State if such plan is certified by the State

4 under paragraph (1).

5 (c) CONSTRUCTION.—Whenever in this title a re6 quirement or standard is imposed on a health plan, the

7 requirement or standard is deemed to have been imposed

8 on the sponsor of the plan in relation to that plan.

9 SEC. 402. MINIMUM SOLVENCY REQUIREMENTS.

10 (a) IN GENERAL.—Except as provided in subsection

11 (b), each State shall apply minimum solvency require12 ments to all health plans offered or operating with the

13 State. A health plan shall meet the financial reserve re14 quirements that are established by the State to assure

15 proper payment for health care services provided under

16 the plan.

17 (b) FEDERAL STANDARDS.—The Secretary shall es18 tablish minimum solvency standards that shall apply to

19 all self-insured health plans. Such standards shall at least

20 meet the solvency requirements established by the Na21 tional Association of Insurance Commissioners.

22 SEC. 403. INFORMATION ON TERMS OF PLAN.

23 (a) IN GENERAL.—A health plan shall provide pro24 spective covered individuals with written information con25 cerning the terms and conditions of the health plan to en-
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1 able such individuals to make informed decisions with re2 spect to a certain system of health care delivery. Such in3 formation shall be standardized so that prospective cov4 ered individuals may compare the attributes of all such

5 plans offered within the coverage area.

6 (b) UNDERSTANDABILITY.—Information provided

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

8 understandable, truthful, linguistically appropriate and

9 objective with respect to the terms used. Descriptions pro10 vided in such information shall be consistent with stand11 ards developed for supplemental insurance coverage under

12 title XVIII of the Social Security Act.

13 (c) REQUIRED INFORMATION.—Information required

14 under this section shall include information concerning—

15 (1) coverage provisions, benefits, and any exclu16 sions by category of service or product;

17 (2) plan loss ratios with an explanation that

18 such ratios reflect the percentage of the premiums

19 expended for health services;

20 (3) prior authorization or other review require21 ments including preauthorization review, concurrent

22 review, post-service review, post-payment review and

23 procedures that may lead the patient to be denied

24 coverage for, or not be provided, a particular service

25 or product;
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1 (4) an explanation of how plan design impacts

2 enrollees, including information on the financial re3 sponsibility of covered individuals for payment for

4 coinsurance or other out-of-plan services;

5 (5) covered individual satisfaction statistics, in6 cluding disenrollment statistics;

7 (6) advance directives and organ donation;

8 (7) the characteristics and availability of health

9 care professionals and institutions participating in

10 the plan, including descriptions of the financial ar11 rangements or contractual provisions with hospitals,

12 utilization review organizations, physicians, or any

13 other provider of health care services that would af14 fect the services offered, referral or treatment op15 tions, or physician’s fiduciary responsibility to pa16 tients, including financial incentives regarding the

17 provision of medical or other services; and

18 (8) quality indicators for the plan and for par19 ticipating health professionals and providers under

20 the plan, including population-based statistics such

21 as immunization rates and performance measures

22 such as survival after surgery, adjusted for case mix.

23 SEC. 404. ACCESS.

24 (a) IN GENERAL.—A health plan shall demonstrate

25 that the plan has a sufficient number, distribution, and
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1 variety of qualified health care providers to ensure that

2 all covered health care services will be available and acces3 sible in a timely manner to adults, infants, children, and

4 individuals with disabilities enrolled in the plan.

5 (b) AVAILABILITY OF SERVICES.—A health plan shall

6 ensure that services covered under the plan are available

7 in a timely manner that ensures a continuity of care, are

8 accessible within a reasonable proximity to the residences

9 of the enrollees, are available within reasonable hours of

10 operation, and include emergency and urgent care services

11 when medically necessary and available which shall be ac12 cessible within the service area 24-hours a day, seven days

13 a week.

14 (c) SPECIALIZED TREATMENT.—A health plan shall

15 demonstrate that plan enrollees have access, when medi16 cally or clinically indicated in the judgment of the treating

17 health professional, to specialized treatment expertise.

18 (d) CHRONIC CONDITIONS.—

19 (1) IN GENERAL.—Any process established by a

20 health plan to coordinate care and control costs may

21 not impose an undue burden on enrollees with

22 chronic health conditions. The plan shall ensure a

23 continuity of care and shall, when medically or clini24 cally indicated in the judgment of the treating health
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1 professional, ensure direct access to relevant special2 ists for continued care.

3 (2) CARE COORDINATOR.—In the case of an en4 rollee who has a severe, complex, or chronic condi5 tion, the health plan shall determine, based on the

6 judgment of the treating health professional, wheth7 er it is medically or clinically necessary or appro8 priate to use a care coordinator from an inter9 disciplinary team or a specialist to ensure continuity

10 of care.

11 (e) REQUIREMENT.—

12 (1) IN GENERAL.—The requirements of this

13 section may not be waived and shall be met in all

14 areas where the health plan has enrollees, including

15 rural areas. With respect to children, such services

16 shall include pediatric services.

17 (2) OUT-OF-NETWORK SERVICES.—If a health

18 plan fails to meet the requirements of this section,

19 the plan shall arrange for the provision of out-of20 network services to enrollees in a manner that pro21 vides enrollees with access to services in accordance

22 with this section.
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1 SEC. 405. CREDENTIALING FOR HEALTH PROFESSIONALS.

2 (a) IN GENERAL.—A health plan shall credential

3 health professionals furnishing health care services under

4 the plan.

5 (b) CREDENTIALING PROCESS.—

6 (1) IN GENERAL.—A health plan shall establish

7 a credentialing process. Such process shall ensure

8 that a health professional is credentialed prior to

9 that professional being listed as a health professional

10 in the health plan’s marketing materials, in accord11 ance with recorded (written or otherwise) policies

12 and procedures.

13 (2) RESPONSIBILITY OF MEDICAL DIRECTOR.—

14 The medical director of the health plan, or another

15 designated health professional, shall have respon16 sibility for the credentialing of health professionals

17 under the plan.

18 (3) UNIFORM APPLICATIONS.—A State shall de19 velop a basic uniform application that shall be used

20 by all health plans in the State for credentialing

21 purposes.

22 (4) CREDENTIALING COMMITTEE.—

23 (A) ESTABLISHMENT.—The health plan

24 shall establish a credentialing committee that

25 shall be composed of licensed physicians and

26 other health professionals to review
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1 credentialing information and supporting docu2 ments.

3 (B) REQUIREMENT.—The credentialing

4 process shall provide for the review of an appli5 cation for credentialing by a credentialing com6 mittee with appropriate representation of the

7 applicant’s medical specialty.

8 (5) STANDARDS.—

9 (A) IN GENERAL.—Credentialing decisions

10 under a health plan shall be based on objective

11 standards with input from health professionals

12 credentialed under the plan. Information con13 cerning all application and credentialing policies

14 and procedures shall be made available for re15 view by the health professional involved upon

16 written request.

17 (B) REQUIREMENT.—The standards re18 ferred to in subparagraph (A) shall include de19 terminations as to—

20 (i) whether the health professional has

21 a current valid license to practice the par22 ticular health profession involved;

23 (ii) whether the health professional

24 has clinical privileges in good standing at

25 the hospital designated by the practitioner
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1 and the primary admitting facility, as ap2 plicable;

3 (iii) whether the health professional

4 has a valid DEA or CDS certificate, as ap5 plicable;

6 (iv) whether the health professional

7 has graduated from medical school and

8 completed a residency, or received Board

9 certification, as applicable;

10 (v) the work history of the health pro11 fessional;

12 (vi) whether the health professional

13 has current, adequate malpractice insur14 ance in accordance with the policy of the

15 health plan; and

16 (vii) the professional liability claims

17 history of the health professional.

18 (C) RIGHT TO REVIEW INFORMATION.—A

19 health professional who undergoes the

20 credentialing process shall have the right to re21 view the basis information, including the

22 sources of that information, that was used to

23 meet the designated credentialing criteria.
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1 SEC. 406. GRIEVANCE PROCEDURES.

2 (a) IN GENERAL.—A health plan shall adopt a timely

3 and organized system for resolving complaints and formal

4 grievances filed by covered individuals. Such system shall

5 include—

6 (1) recorded (written or otherwise) procedures

7 for registering and responding to complaints and

8 grievances in a timely manner;

9 (2) documentation concerning the substance of

10 complaints, grievances, and actions taken concerning

11 such complaints and grievances, which shall be in

12 writing, and be available upon request to the Office

13 for Consumer Information, Counseling and Assist14 ance;

15 (3) procedures to ensure a resolution of a com16 plaint or grievance;

17 (4) the compilation and analysis of complaint

18 and grievance data;

19 (5) procedures to expedite the complaint proc20 ess if the complaint involves a dispute about the cov21 erage of an immediately and urgently needed service;

22 and

23 (6) procedures to ensure that if an enrollee

24 orally notifies a health plan about a complaint, the

25 plan (if requested) must send the enrollee a com26 plaint form that includes the telephone numbers and
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1 addresses of member services, a description of the

2 plan’s grievance procedure, and the telephone num3 ber of the Officer for Consumer Information, Coun4 seling and Assistance where enrollees may register

5 complaints.

6 (b) APPEAL PROCESS.—A health plan shall adopt an

7 appeals process to enable covered individuals to appeal de8 cisions that are adverse to the individuals. Such a process

9 shall include—

10 (1) the right to a review by a grievance panel;

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

12 panel, independent from the health plan, or to a re13 view through an impartial arbitration process which

14 shall be described in writing by the plan; and

15 (3) an expedited process for review in emer16 gency cases.

17 The Secretary shall develop guidelines for the structure

18 and requirements applicable to the independent review

19 panel and impartial arbitration process described in para20 graph (2).

21 (c) NOTIFICATION.—With respect to the complaint,

22 grievance, and appeals processes required under this sec23 tion, a health plan shall, upon the request of a covered

24 individual, provide the individual a written decision con-
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1 cerning a complaint, grievance, or appeal in a timely fash2 ion.

3 (d) NON-IMPEDIMENT TO BENEFITS.—The com4 plaint, grievance, and appeals processes established in ac5 cordance with this section may not be used in any fashion

6 to discourage or prevent a covered individual from receiv7 ing medically necessary care in a timely manner.

8 (e) DUE PROCESS WITH RESPECT TO

9 CREDENTIALING.—

10 (1) RECEIPT OF INFORMATION.—A health pro11 fessional who is subject to credentialing under sec12 tion 405 shall, upon written request, receive from

13 the health plan any information obtained by the plan

14 during the credentialing process that, as determined

15 by the credentialing committee, does not meet the

16 credentialing standards of the plan, or that varies

17 substantially from the information provided to the

18 health plan by the health professional.

19 (2) SUBMISSION OF CORRECTIONS.—A health

20 plan shall have a formal, recorded (written or other21 wise) process by which a health professional may

22 submit supplemental information to the

23 credentialing committee if the health professional de24 termines that erroneous or misleading information

25 has been previously submitted. The health profes-
37

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1 sional may request that such information be recon2 sidered in the evaluation for credentialing purposes.

3 (3) NO ENTITLEMENT.—

4 (A) IN GENERAL.—A health professional is

5 not entitled to be selected or retained by a

6 health plan as a participating or contracting

7 provider whether or not such professional meets

8 the credentialing standards established under

9 section 405.

10 (B) ECONOMIC CONSIDERATIONS.—If eco11 nomic considerations, including the health care

12 professional’s patterns of expenditure per pa13 tient, are part of a selection decision, objective

14 criteria shall be used in examining such consid15 erations and a written description of such cri16 teria shall be provided to applicants, participat17 ing health professionals, and enrollees. Any eco18 nomic profiling of health professionals must be

19 adjusted to recognize case mix, severity of ill20 ness, and the age of patients of a health profes21 sional’s practice that may account for higher or

22 lower than expected costs, to the extent appro23 priate data in this regard is available to the

24 health plan.
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1 (4) TERMINATION, REDUCTION OR WITH2 DRAWAL.—

3 (A) PROCEDURES.—A health plan shall de4 velop and implement procedures for the report5 ing, to appropriate authorities, of serious qual6 ity deficiencies that result in the suspension or

7 termination of a contract with a health profes8 sional.

9 (B) REVIEW.—A health plan shall develop

10 and implement policies and procedures under

11 which the plan reviews the contract privileges of

12 health professionals who—

13 (i) have seriously violated policies and

14 procedures of the health plan;

15 (ii) have lost their privilege to practice

16 with a contracting institutional provider; or

17 (iii) otherwise pose a threat to the

18 quality of service and care provided to the

19 enrollees of the health plan.

20 At a minimum, the policies and procedures im21 plemented under this subparagraph shall meet

22 the requirements of the Health Care Quality

23 Improvement Act of 1986.

24 (C) DUE PROCESS.—The policies and pro25 cedures implemented under subparagraph (B)
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1 shall include requirements for the timely notifi2 cation of the affected health professional of the

3 reasons for the reduction, withdrawal, or termi4 nation of privileges, and provide the health pro5 fessional with the right to appeal the deter6 mination of reduction, withdrawal, or termi7 nation.

8 (D) AVAILABILITY.—A written copy of the

9 policies and procedures implemented under this

10 paragraph shall be made available to a health

11 professional on request prior to the time at

12 which the health professional contracts to pro13 vide services under the plan.

14 SEC. 407. CONFIDENTIALITY STANDARDS.

15 (a) IN GENERAL.—A health plan shall ensure that

16 the confidentiality of specified enrollee patient information

17 and records is protected.

18 (b) POLICIES AND PROCEDURES.—A health plan

19 shall have written confidentiality policies and procedures.

20 Such policies and procedures shall, at a minimum—

21 (1) maintain the confidentiality of enrollee pa22 tient information within the administrative structure

23 of the health plan;

24 (2) protect medical record information;

25 (3) protect claim information;
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1 (4) establish requirements for the release of in2 formation; and

3 (5) inform employees of the confidentiality poli4 cies and procedures.

5 (c) PATIENT CARE PROVIDERS AND FACILITIES.—

6 A health plan shall ensure that providers, offices and fa7 cilities responsible for providing covered items or services

8 to plan enrollees have implemented policies and procedures

9 to prevent the unauthorized or inadvertent disclosure of

10 confidential patient information to individuals who should

11 not have access to such information.

12 (d) RELEASE OF INFORMATION.—An enrollee in a

13 health plan shall have the opportunity to approve or dis14 approve the release of identifiable personal patient infor15 mation by the health plan, except where such release is

16 required under applicable law.

17 SEC. 408. DISCRIMINATION.

18 (a) ENROLLEES.—A health plan (network or non-net19 work) may not discriminate or engage (directly or through

20 contractual arrangements) in any activity, including the

21 selection of service area, that has the effect of discriminat22 ing against an individual on the basis of race, national

23 origin, gender, language, socio-economic status, age, dis24 ability, health status, or anticipated need for health serv25 ices.
41

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1 (b) PROVIDERS.—A health plan may not discriminate

2 in the selection of members of the health professional or

3 provider network (and in establishing the terms and condi4 tions for membership in the network) of the plan based

5 on—

6 (1) the race, national origin, or disability of the

7 health professional;

8 (2) the socio-economic status, disability, health

9 status, or anticipated need for health services of the

10 patients of the health professional or provider; or

11 (3) the health professional or provider’s lack of

12 affiliation with, or admitting privileges at, a hospital.

13 (c) LICENSE OR CERTIFICATION.—A health plan may

14 not discriminate in participation, reimbursement, or in15 demnification against a health professional who is acting

16 within the scope of the license or certification of the pro17 fessional under applicable State law solely on the basis of

18 the license or certification of the health professional. A

19 health plan may not discriminate in participation, reim20 bursement, or indemnification against a health provider

21 that is providing services within the scope of services that

22 it is authorized to perform under State law.

23 SEC. 409. PROHIBITION ON SELECTIVE MARKETING.

24 A health plan may not engage in marketing or other

25 practices intended to discourage or limit the issuance of
42

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1 health plans to individuals on the basis of health condition,

2 geographic area, industry, or other risk factors.

3 TITLE V—HEALTH INSURANCE

4 MARKET REFORM

5 SEC. 501. GUARANTEED ISSUE AND RENEWABILITY.

6 (a) GUARANTEED ISSUE.—Except as otherwise pro7 vided in this section, a health plan sponsor offering a

8 health plan to a class of individuals shall offer such plan

9 to any individual within such class who applies for cov10 erage (either directly with the plan or through an em11 ployer) under such plan. A health plan may not engage

12 in any practice that has the effect of attracting or limiting

13 enrollees on the basis of personal characteristics, such as

14 occupation or affiliation with any person or entity.

15 (b) RENEWABILITY.—

16 (1) IN GENERAL.—Except as provided in para17 graphs (2) and (3), a health plan sponsor may not

18 refuse to renew, or may not terminate, coverage

19 under a health plan with respect to any individual

20 or family.

21 (2) GROUNDS FOR REFUSAL TO RENEW OR

22 TERMINATE.—Paragraph (1) shall not apply in the

23 case of—

24 (A) nonpayment of premiums;
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1 (B) fraud on the part of the individual re2 lating to such plan;

3 (C) misrepresentation of material facts on

4 the part of the individual relating to an applica5 tion for coverage or claim for benefits; or

6 (D) the occurrence of other acts as pre7 scribed in standards developed by the National

8 Association of Insurance Commissioners.

9 (3) TERMINATION OF PLANS.—The Secretary,

10 in consultation with the National Association of In11 surance Commissioners, shall develop standards

12 under which a health plan sponsor may terminate a

13 health plan.

14 SEC. 502. NONDISCRIMINATION BASED ON HEALTH

15 STATUS.

16 (a) NO LIMITS ON COVERAGE; NO PRE-EXISTING

17 CONDITION LIMITS.—Except as provided in subsection

18 (b), a health plan may not—

19 (1) terminate, restrict, or limit coverage or es20 tablish premiums based on the health status, medi21 cal condition, claims experience, receipt of health

22 care, medical history, anticipated need for health

23 care services, disability, genetic predisposition to

24 medical conditions, or lack of evidence of insurability

25 of an individual;
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1 (2) terminate, restrict, or limit coverage in any

2 portion of the plan’s coverage area;

3 (3) except as provided in section 501(b)(2),

4 cancel coverage for any individual until that individ5 ual is enrolled in another applicable health plan;

6 (4) impose waiting periods before coverage be7 gins; or

8 (5) impose a rider that serves to exclude cov9 erage of particular individuals or particular health

10 conditions.

11 (b) TREATMENT OF PREEXISTING CONDITION EX12 CLUSIONS.—

13 (1) IN GENERAL.—A health plan may impose a

14 limitation or exclusion of benefits relating to treat15 ment of a condition based on the fact that the condi16 tion preexisted the effective date of the plan with re17 spect to an individual if—

18 (A) the condition was diagnosed or treated

19 during the 3-month period ending on the day

20 before the date of enrollment under the plan;

21 (B) the limitation or exclusion extends for

22 a period not more than 6 months after the date

23 of enrollment under the plan;
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1 (C) the limitation or exclusion does not

2 apply to an individual who, as of the date of

3 birth, was covered under the plan; or

4 (D) the limitation or exclusion does not re5 late to pregnancy.

6 (2) CONTINUOUS COVERAGE.—A health plan

7 shall provide that if an individual under such plan

8 is in a period of continuous coverage with respect to

9 particular services as of the date of enrollment

10 under such plan, any period of exclusion of coverage

11 with respect to a preexisting condition as permitted

12 under paragraph (1) shall be reduced by 1 month

13 for each month in the period of continuous coverage.

14 (3) DEFINITIONS.—As used in this subsection:

15 (A) PERIOD OF CONTINUOUS COVERAGE.—

16 The term ‘‘period of continuous coverage’’

17 means the period beginning on the date an indi18 vidual is enrolled under a health plan or health

19 care program which provides benefits equivalent

20 to those provided by the plan in which the indi21 vidual is seeking to enroll with respect to cov22 erage of a preexisting condition and ends on the

23 date the individual is not so enrolled for a con24 tinuous period of more than 3 months.
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1 (B) PREEXISTING CONDITION.—The term

2 ‘‘preexisting condition’’ means, with respect to

3 coverage under a health plan, a condition which

4 was diagnosed, or which was treated, within the

5 3-month period ending on the day before the

6 first date of such coverage (without regard to

7 any waiting period).

8 SEC. 503. ADJUSTMENTS BASED ON AGE, GEOGRAPHY AND

9 FAMILY SIZE.

10 (a) IN GENERAL.—With respect to health plan pre11 miums, the Secretary, in consultation with the NAIC,

12 shall specify uniform age, geography, and family size cat13 egories and maximum rating increments for age, geog14 raphy, and family size adjustment factors that reflect the

15 relative actuarial costs of benefit packages among enroll16 ees.

17 (b) AGE FACTORS.—With respect to age adjustment

18 factors established under subsection (a), for individuals

19 who have attained age 18 but not age 65, the highest age

20 adjustment factor may not exceed twice the lowest age ad21 justment factor.

22 (c) PHASE-IN PERIOD.—The Secretary, in consulta23 tion with the NAIC, shall establish a schedule for the

24 phase-in of age-adjusted community rates so as to mini25 mize disruption of the insurance market.
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1 (d) APPLICATION.—A health plan shall ensure that

2 the factors developed under this section are applied uni3 formly across each of the small group and individual mar4 kets.

5 SEC. 504. RISK ADJUSTMENT.

6 (a) IN GENERAL.—A health plan shall participate in

7 a risk adjustment program developed by the State involved

8 under standards established by the Secretary in consulta9 tion with the National Association of Insurance Commis10 sioners. Such a risk adjustment program shall—

11 (1) with respect to a plan offered within the

12 small group market; or

13 (2) with respect to a plan offered within the in14 dividual market,

15 provide for adjustments based on risk within the market

16 in which the plan is marketed.

17 (b) PROCESS.—A program developed under sub18 section (a) shall include a process designed to share the

19 risk associated with, or to equalize, high cost claims,

20 claims of high cost individuals, costs of variations among

21 carriers based on demographic factors associated with the

22 individuals insured which correlate with such cost vari23 ations, to protect health plans from the disproportionate

24 adverse risks of offering coverage to all applicants. Risk

25 adjustment mechanisms under the program shall, to the
48

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1 maximum extent practicable, be prospective to minimize

2 the uncertainty associated with the setting of premiums

3 by health plans to maintain consumer choice from among

4 multiple health plans based on rates that reflect the rel5 ative medical and administrative efficiencies of health

6 plans.

7 SEC. 505. LIFETIME LIMITS.

8 A health plan may not impose a lifetime limitation

9 on the amount or provision of benefits under the plan.

10 SEC. 506. PATIENT’S RIGHT TO SELF-DETERMINATION.

11 A health plan shall be considered to be an eligible

12 organization under title XVIII of the Social Security Act

13 for purposes of applying the rules under section 1866(f)

14 of such Act (42 U.S.C. 1395cc(f)).

15 SEC. 507. AFFECT ON STATE LAW.

16 (a) PREEMPTION.—The requirements of this title do

17 not preempt any State law unless such State law directly

18 conflicts with such requirements. The provision of addi19 tional consumer protections under State law shall not be

20 considered to directly conflict with such requirements.

21 Such State consumer protection laws which are not pre22 empted under this title include—

23 (1) laws that limit the exclusions for preexisting

24 medical conditions to periods that are less than

25 those provided for in section 502;
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1 (2) laws that limit variations in premium rates

2 beyond the variations permitted under section 503;

3 and

4 (3) laws that would expand the small group

5 market.

6 (b) STATE REFORM MEASURES.—Nothing in this

7 title shall be construed as prohibiting a State from enact8 ing health care reform measures that exceed the measures

9 established under this title, including reforms that expand

10 access to health care services, control health care costs,

11 and enhance the quality of care.

12 SEC. 508. ASSOCIATION PLANS.

13 With respect to health plans offered to small employ14 ers and individuals through associations or other

15 intermediaries, such plans shall meet the requirements of

16 this title.

17 TITLE VI—MISCELLANEOUS

18 PROVISIONS

19 SEC. 601. ENFORCEMENT.

20 (a) IN GENERAL.—A State shall prohibit the offering

21 or issuance of any health plan in such State if such plan

22 does not—

23 (1) have in place a utilization review program

24 that is certified by the State as meeting the require25 ments of title III;
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1 (2) comply with the standards developed under

2 title IV;

3 (3) have in place a credentialing program that

4 meets the requirements of section 405;

5 (4) comply with the requirements of title V; and

6 (5) meet any other requirements determined ap7 propriate by the Secretary.

8 (b) SELF-INSURED PLANS.—The Secretary of Labor

9 shall develop health plan standards, consistent with this

10 Act, that are applicable to self-insured plans. The Sec11 retary of Labor may take corrective action to terminate

12 or disqualify a self-insured plan that does not meet the

13 standards developed under this subsection.

14 SEC. 602. EFFECTIVE DATE.

15 (a) IN GENERAL.—Except as otherwise provided in

16 this section, this Act shall take effect on the date of enact17 ment of this Act.

18 (b) STANDARDS.—The standards and programs re19 quired under this Act shall apply to health plans beginning

20 on January 1, 1997.

21 (c) OFFICE FOR CONSUMER INFORMATION, COUN22 SELING AND ASSISTANCE.—A State shall have in place the

23 Office required under section 201 on January 1, 1997.

24 The Secretary may award grants for the establishment of
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1 such Offices beginning on the date of enactment of this

2 Act.

3 (d) OTHER REQUIREMENTS.—The requirements of

4 titles I and V shall apply to health plans beginning on

5 January 1, 1997.

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