II

Calendar No. 808

106TH CONGRESS

2D SESSION S. 3057

To amend the Public Health Service Act, the Employee Retirement Income

Security Act of 1974, and the Internal Revenue Code of 1986 to protect

consumers in managed care plans and other health coverage.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 15, 2000

Mr. KENNEDY (for himself and Mr. DASCHLE) introduced the following bill;

which was read the first time

SEPTEMBER 18, 2000

Read the second time and placed on the calendar

A BILL

To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974, and the Internal

Revenue Code of 1986 to protect consumers in managed

care plans and other health coverage.

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 ‘‘Patients’ Bill of Rights Act’’.
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1 (b) TABLE OF CONTENTS.—The table of contents of

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—IMPROVING MANAGED CARE

Subtitle A—Grievance and Appeals

Sec. 101. Utilization review activities.

Sec. 102. Internal appeals procedures.

Sec. 103. External appeals procedures.

Sec. 104. Establishment of a grievance process.

Subtitle B—Access to Care

Sec. 111. Consumer choice option.

Sec. 112. Choice of health care professional.

Sec. 113. Access to emergency care.

Sec. 114. Access to specialty care.

Sec. 115. Access to obstetrical and gynecological care.

Sec. 116. Access to pediatric care.

Sec. 117. Continuity of care.

Sec. 118. Access to needed prescription drugs.

Sec. 119. Coverage for individuals participating in approved clinical trials.

Subtitle C—Access to Information

Sec. 121. Patient access to information.

Subtitle D—Protecting the Doctor-Patient Relationship

Sec. 131. Prohibition of interference with certain medical communications.

Sec. 132. Prohibition of discrimination against providers based on licensure.

Sec. 133. Prohibition against improper incentive arrangements.

Sec. 134. Payment of claims.

Sec. 135. Protection for patient advocacy.

Subtitle E—Definitions

Sec. 151. Definitions.

Sec. 152. Preemption; State flexibility; construction.

Sec. 153. Exclusions.

Sec. 154. Coverage of limited scope plans.

Sec. 155. Regulations.

TITLE II—APPLICATION OF QUALITY CARE STANDARDS TO

GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE

UNDER THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to group health plans and group health insurance coverage.

Sec. 202. Application to individual health insurance coverage.

TITLE III—AMENDMENTS TO THE EMPLOYEE RETIREMENT

INCOME SECURITY ACT OF 1974
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Sec. 301. Application of patient protection standards to group health plans and

group health insurance coverage under the Employee Retirement Income Security Act of 1974.

Sec. 302. ERISA preemption not to apply to certain actions involving health insurance policyholders.

Sec. 303. Limitations on actions.

TITLE IV—APPLICATION TO GROUP HEALTH PLANS UNDER THE

INTERNAL REVENUE CODE OF 1986

Sec. 401. Amendments to the Internal Revenue Code of 1986.

TITLE V—EFFECTIVE DATES; COORDINATION IN

IMPLEMENTATION

Sec. 501. Effective dates.

Sec. 502. Coordination in implementation.

TITLE VI—MISCELLANEOUS PROVISIONS

Sec. 601. Health care paperwork simplification.

Sec. 602. No impact on social security trust fund.

Sec. 603. FMAP reduction for other than substantial noncompliance with medicaid State plan requirements.

Sec. 604. Customs user fees.

1 TITLE I—IMPROVING MANAGED

2 CARE

3 Subtitle A—Grievance and Appeals

4 SEC. 101. UTILIZATION REVIEW ACTIVITIES.

5 (a) COMPLIANCE WITH REQUIREMENTS.—

6 (1) IN GENERAL.—A group health plan, and a

7 health insurance issuer that provides health insur8 ance coverage, shall conduct utilization review activi9 ties in connection with the provision of benefits

10 under such plan or coverage only in accordance with

11 a utilization review program that meets the require12 ments of this section.

13 (2) USE OF OUTSIDE AGENTS.—Nothing in this

14 section shall be construed as preventing a group
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1 health plan or health insurance issuer from arrang2 ing through a contract or otherwise for persons or

3 entities to conduct utilization review activities on be4 half of the plan or issuer, so long as such activities

5 are conducted in accordance with a utilization review

6 program that meets the requirements of this section.

7 (3) UTILIZATION REVIEW DEFINED.—For pur8 poses of this section, the terms ‘‘utilization review’’

9 and ‘‘utilization review activities’’ mean procedures

10 used to monitor or evaluate the use or coverage,

11 clinical necessity, appropriateness, efficacy, or effi12 ciency of health care services, procedures or settings,

13 and includes prospective review, concurrent review,

14 second opinions, case management, discharge plan15 ning, or retrospective review.

16 (b) WRITTEN POLICIES AND CRITERIA.—

17 (1) WRITTEN POLICIES.—A utilization review

18 program shall be conducted consistent with written

19 policies and procedures that govern all aspects of the

20 program.

21 (2) USE OF WRITTEN CRITERIA.—

22 (A) IN GENERAL.—Such a program shall

23 utilize written clinical review criteria developed

24 with input from a range of appropriate actively

25 practicing health care professionals, as deter-
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1 mined by the plan, pursuant to the program.

2 Such criteria shall include written clinical re3 view criteria that are based on valid clinical evi4 dence where available and that are directed spe5 cifically at meeting the needs of at-risk popu6 lations and covered individuals with chronic

7 conditions or severe illnesses, including gender8 specific criteria and pediatric-specific criteria

9 where available and appropriate.

10 (B) CONTINUING USE OF STANDARDS IN

11 RETROSPECTIVE REVIEW.—If a health care

12 service has been specifically pre-authorized or

13 approved for an enrollee under such a program,

14 the program shall not, pursuant to retrospective

15 review, revise or modify the specific standards,

16 criteria, or procedures used for the utilization

17 review for procedures, treatment, and services

18 delivered to the enrollee during the same course

19 of treatment.

20 (C) REVIEW OF SAMPLE OF CLAIMS DENI21 ALS.—Such a program shall provide for an

22 evaluation of the clinical appropriateness of at

23 least a sample of denials of claims for benefits.

24 (c) CONDUCT OF PROGRAM ACTIVITIES.—
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1 (1) ADMINISTRATION BY HEALTH CARE PRO2 FESSIONALS.—A utilization review program shall be

3 administered by qualified health care professionals

4 who shall oversee review decisions.

5 (2) USE OF QUALIFIED, INDEPENDENT PER6 SONNEL.—

7 (A) IN GENERAL.—A utilization review

8 program shall provide for the conduct of utiliza9 tion review activities only through personnel

10 who are qualified and have received appropriate

11 training in the conduct of such activities under

12 the program.

13 (B) PROHIBITION OF CONTINGENT COM14 PENSATION ARRANGEMENTS.—Such a program

15 shall not, with respect to utilization review ac16 tivities, permit or provide compensation or any17 thing of value to its employees, agents, or con18 tractors in a manner that encourages denials of

19 claims for benefits.

20 (C) PROHIBITION OF CONFLICTS.—Such a

21 program shall not permit a health care profes22 sional who is providing health care services to

23 an individual to perform utilization review ac24 tivities in connection with the health care serv25 ices being provided to the individual.
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1 (3) ACCESSIBILITY OF REVIEW.—Such a pro2 gram shall provide that appropriate personnel per3 forming utilization review activities under the pro4 gram, including the utilization review administrator,

5 are reasonably accessible by toll-free telephone dur6 ing normal business hours to discuss patient care

7 and allow response to telephone requests, and that

8 appropriate provision is made to receive and respond

9 promptly to calls received during other hours.

10 (4) LIMITS ON FREQUENCY.—Such a program

11 shall not provide for the performance of utilization

12 review activities with respect to a class of services

13 furnished to an individual more frequently than is

14 reasonably required to assess whether the services

15 under review are medically necessary or appropriate.

16 (d) DEADLINE FOR DETERMINATIONS.—

17 (1) PRIOR AUTHORIZATION SERVICES.—

18 (A) IN GENERAL.—Except as provided in

19 paragraph (2), in the case of a utilization re20 view activity involving the prior authorization of

21 health care items and services for an individual,

22 the utilization review program shall make a de23 termination concerning such authorization, and

24 provide notice of the determination to the indi25 vidual or the individual’s designee and the indi-
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1 vidual’s health care provider by telephone and

2 in printed form, as soon as possible in accord3 ance with the medical exigencies of the case,

4 and in no event later than the deadline specified

5 in subparagraph (B).

6 (B) DEADLINE.—

7 (i) IN GENERAL.—Subject to clauses

8 (ii) and (iii), the deadline specified in this

9 subparagraph is 14 days after the date of

10 receipt of the request for prior authoriza11 tion.

12 (ii) EXTENSION PERMITTED WHERE

13 NOTICE OF ADDITIONAL INFORMATION RE14 QUIRED.—If a utilization review

15 program—

16 (I) receives a request for a prior

17 authorization;

18 (II) determines that additional

19 information is necessary to complete

20 the review and make the determina21 tion on the request; and

22 (III) notifies the requester, not

23 later than five business days after the

24 date of receiving the request, of the
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1 need for such specified additional in2 formation,

3 the deadline specified in this subparagraph

4 is 14 days after the date the program re5 ceives the specified additional information,

6 but in no case later than 28 days after the

7 date of receipt of the request for the prior

8 authorization. This clause shall not apply

9 if the deadline is specified in clause (iii).

10 (iii) EXPEDITED CASES.—In the case

11 of a situation described in section

12 102(c)(1)(A), the deadline specified in this

13 subparagraph is 72 hours after the time of

14 the request for prior authorization.

15 (2) ONGOING CARE.—

16 (A) CONCURRENT REVIEW.—

17 (i) IN GENERAL.—Subject to subpara18 graph (B), in the case of a concurrent re19 view of ongoing care (including hospitaliza20 tion), which results in a termination or re21 duction of such care, the plan must provide

22 by telephone and in printed form notice of

23 the concurrent review determination to the

24 individual or the individual’s designee and

25 the individual’s health care provider as
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1 soon as possible in accordance with the

2 medical exigencies of the case, with suffi3 cient time prior to the termination or re4 duction to allow for an appeal under sec5 tion 102(c)(1)(A) to be completed before

6 the termination or reduction takes effect.

7 (ii) CONTENTS OF NOTICE.—Such no8 tice shall include, with respect to ongoing

9 health care items and services, the number

10 of ongoing services approved, the new total

11 of approved services, the date of onset of

12 services, and the next review date, if any,

13 as well as a statement of the individual’s

14 rights to further appeal.

15 (B) EXCEPTION.—Subparagraph (A) shall

16 not be interpreted as requiring plans or issuers

17 to provide coverage of care that would exceed

18 the coverage limitations for such care.

19 (3) PREVIOUSLY PROVIDED SERVICES.—In the

20 case of a utilization review activity involving retro21 spective review of health care services previously pro22 vided for an individual, the utilization review pro23 gram shall make a determination concerning such

24 services, and provide notice of the determination to

25 the individual or the individual’s designee and the
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1 individual’s health care provider by telephone and in

2 printed form, within 30 days of the date of receipt

3 of information that is reasonably necessary to make

4 such determination, but in no case later than 60

5 days after the date of receipt of the claim for bene6 fits.

7 (4) FAILURE TO MEET DEADLINE.—In a case

8 in which a group health plan or health insurance

9 issuer fails to make a determination on a claim for

10 benefit under paragraph (1), (2)(A), or (3) by the

11 applicable deadline established under the respective

12 paragraph, the failure shall be treated under this

13 subtitle as a denial of the claim as of the date of the

14 deadline.

15 (5) REFERENCE TO SPECIAL RULES FOR EMER16 GENCY SERVICES, MAINTENANCE CARE, AND POST17 STABILIZATION CARE.—For waiver of prior author18 ization requirements in certain cases involving emer19 gency services and maintenance care and post-sta20 bilization care, see subsections (a)(1) and (b) of sec21 tion 113, respectively.

22 (e) NOTICE OF DENIALS OF CLAIMS FOR BENE23 FITS.—

24 (1) IN GENERAL.—Notice of a denial of claims

25 for benefits under a utilization review program shall
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1 be provided in printed form and written in a manner

2 calculated to be understood by the participant, bene3 ficiary, or enrollee and shall include—

4 (A) the reasons for the denial (including

5 the clinical rationale);

6 (B) instructions on how to initiate an ap7 peal under section 102; and

8 (C) notice of the availability, upon request

9 of the individual (or the individual’s designee)

10 of the clinical review criteria relied upon to

11 make such denial.

12 (2) SPECIFICATION OF ANY ADDITIONAL INFOR13 MATION.—Such a notice shall also specify what (if

14 any) additional necessary information must be pro15 vided to, or obtained by, the person making the de16 nial in order to make a decision on such an appeal.

17 (f) CLAIM FOR BENEFITS AND DENIAL OF CLAIM

18 FOR BENEFITS DEFINED.—For purposes of this subtitle:

19 (1) CLAIM FOR BENEFITS.—The term ‘‘claim

20 for benefits’’ means any request for coverage (in21 cluding authorization of coverage), for eligibility, or

22 for payment in whole or in part, for an item or serv23 ice under a group health plan or health insurance

24 coverage.
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1 (2) DENIAL OF CLAIM FOR BENEFITS.—The

2 term ‘‘denial’’ means, with respect to a claim for

3 benefits, means a denial, or a failure to act on a

4 timely basis upon, in whole or in part, the claim for

5 benefits and includes a failure to provide benefits

6 (including items and services) required to be pro7 vided under this title.

8 SEC. 102. INTERNAL APPEALS PROCEDURES.

9 (a) RIGHT OF REVIEW.—

10 (1) IN GENERAL.—Each group health plan, and

11 each health insurance issuer offering health insur12 ance coverage—

13 (A) shall provide adequate notice in writ14 ing to any participant or beneficiary under such

15 plan, or enrollee under such coverage, whose

16 claim for benefits under the plan or coverage

17 has been denied (within the meaning of section

18 101(f)(2)), setting forth the specific reasons for

19 such denial of claim for benefits and rights to

20 any further review or appeal, written in a man21 ner calculated to be understood by the partici22 pant, beneficiary, or enrollee; and

23 (B) shall afford such a participant, bene24 ficiary, or enrollee (and any provider or other

25 person acting on behalf of such an individual
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1 with the individual’s consent or without such

2 consent if the individual is medically unable to

3 provide such consent) who is dissatisfied with

4 such a denial of claim for benefits a reasonable

5 opportunity (of not less than 180 days) to re6 quest and obtain a full and fair review by a

7 named fiduciary (with respect to such plan) or

8 named appropriate individual (with respect to

9 such coverage) of the decision denying the

10 claim.

11 (2) TREATMENT OF ORAL REQUESTS.—The re12 quest for review under paragraph (1)(B) may be

13 made orally, but, in the case of an oral request, shall

14 be followed by a request in writing.

15 (b) INTERNAL REVIEW PROCESS.—

16 (1) CONDUCT OF REVIEW.—

17 (A) IN GENERAL.—A review of a denial of

18 claim under this section shall be made by an in19 dividual who—

20 (i) in a case involving medical judg21 ment, shall be a physician or, in the case

22 of limited scope coverage (as defined in

23 subparagraph (B), shall be an appropriate

24 specialist;
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1 (ii) has been selected by the plan or

2 issuer; and

3 (iii) did not make the initial denial in

4 the internally appealable decision.

5 (B) LIMITED SCOPE COVERAGE DE6 FINED.—For purposes of subparagraph (A), the

7 term ‘‘limited scope coverage’’ means a group

8 health plan or health insurance coverage the

9 only benefits under which are for benefits de10 scribed in section 2791(c)(2)(A) of the Public

11 Health Service Act (42 U.S.C. 300gg–91(c)(2)).

12 (2) TIME LIMITS FOR INTERNAL REVIEWS.—

13 (A) IN GENERAL.—Having received such a

14 request for review of a denial of claim, the plan

15 or issuer shall, in accordance with the medical

16 exigencies of the case but not later than the

17 deadline specified in subparagraph (B), com18 plete the review on the denial and transmit to

19 the participant, beneficiary, enrollee, or other

20 person involved a decision that affirms, re21 verses, or modifies the denial. If the decision

22 does not reverse the denial, the plan or issuer

23 shall transmit, in printed form, a notice that

24 sets forth the grounds for such decision and

25 that includes a description of rights to any fur-
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1 ther appeal. Such decision shall be treated as

2 the final decision of the plan. Failure to issue

3 such a decision by such deadline shall be treat4 ed as a final decision affirming the denial of

5 claim.

6 (B) DEADLINE.—

7 (i) IN GENERAL.—Subject to clauses

8 (ii) and (iii), the deadline specified in this

9 subparagraph is 14 days after the date of

10 receipt of the request for internal review.

11 (ii) EXTENSION PERMITTED WHERE

12 NOTICE OF ADDITIONAL INFORMATION RE13 QUIRED.—If a group health plan or health

14 insurance issuer—

15 (I) receives a request for internal

16 review;

17 (II) determines that additional

18 information is necessary to complete

19 the review and make the determina20 tion on the request; and

21 (III) notifies the requester, not

22 later than five business days after the

23 date of receiving the request, of the

24 need for such specified additional in25 formation,
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1 the deadline specified in this subparagraph

2 is 14 days after the date the plan or issuer

3 receives the specified additional informa4 tion, but in no case later than 28 days

5 after the date of receipt of the request for

6 the internal review. This clause shall not

7 apply if the deadline is specified in clause

8 (iii).

9 (iii) EXPEDITED CASES.—In the case

10 of a situation described in subsection

11 (c)(1)(A), the deadline specified in this

12 subparagraph is 72 hours after the time of

13 the request for review.

14 (c) EXPEDITED REVIEW PROCESS.—

15 (1) IN GENERAL.—A group health plan, and a

16 health insurance issuer, shall establish procedures in

17 writing for the expedited consideration of requests

18 for review under subsection (b) in situations—

19 (A) in which the application of the normal

20 timeframe for making a determination could se21 riously jeopardize the life or health of the par22 ticipant, beneficiary, or enrollee or such an indi23 vidual’s ability to regain maximum function; or

24 (B) described in section 101(d)(2) (relat25 ing to requests for continuation of ongoing care
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1 which would otherwise be reduced or termi2 nated).

3 (2) PROCESS.—Under such procedures—

4 (A) the request for expedited review may

5 be submitted orally or in writing by an indi6 vidual or provider who is otherwise entitled to

7 request the review;

8 (B) all necessary information, including

9 the plan’s or issuer’s decision, shall be trans10 mitted between the plan or issuer and the re11 quester by telephone, facsimile, or other simi12 larly expeditious available method; and

13 (C) the plan or issuer shall expedite the re14 view in the case of any of the situations de15 scribed in subparagraph (A) or (B) of para16 graph (1).

17 (3) DEADLINE FOR DECISION.—The decision on

18 the expedited review must be made and commu19 nicated to the parties as soon as possible in accord20 ance with the medical exigencies of the case, and in

21 no event later than 72 hours after the time of re22 ceipt of the request for expedited review, except that

23 in a case described in paragraph (1)(B), the decision

24 must be made before the end of the approved period

25 of care.
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1 (d) WAIVER OF PROCESS.—A plan or issuer may

2 waive its rights for an internal review under subsection

3 (b). In such case the participant, beneficiary, or enrollee

4 involved (and any designee or provider involved) shall be

5 relieved of any obligation to complete the review involved

6 and may, at the option of such participant, beneficiary,

7 enrollee, designee, or provider, proceed directly to seek

8 further appeal through any applicable external appeals

9 process.

10 SEC. 103. EXTERNAL APPEALS PROCEDURES.

11 (a) RIGHT TO EXTERNAL APPEAL.—

12 (1) IN GENERAL.—A group health plan, and a

13 health insurance issuer offering health insurance

14 coverage, shall provide for an external appeals proc15 ess that meets the requirements of this section in

16 the case of an externally appealable decision de17 scribed in paragraph (2), for which a timely appeal

18 is made either by the plan or issuer or by the partic19 ipant, beneficiary, or enrollee (and any provider or

20 other person acting on behalf of such an individual

21 with the individual’s consent or without such consent

22 if such an individual is medically unable to provide

23 such consent). The appropriate Secretary shall es24 tablish standards to carry out such requirements.
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1 (2) EXTERNALLY APPEALABLE DECISION DE2 FINED.—

3 (A) IN GENERAL.—For purposes of this

4 section, the term ‘‘externally appealable deci5 sion’’ means a denial of claim for benefits (as

6 defined in section 101(f)(2))—

7 (i) that is based in whole or in part on

8 a decision that the item or service is not

9 medically necessary or appropriate or is in10 vestigational or experimental; or

11 (ii) in which the decision as to wheth12 er a benefit is covered involves a medical

13 judgment.

14 (B) INCLUSION.—Such term also includes

15 a failure to meet an applicable deadline for in16 ternal review under section 102.

17 (C) EXCLUSIONS.—Such term does not

18 include—

19 (i) specific exclusions or express limi20 tations on the amount, duration, or scope

21 of coverage that do not involve medical

22 judgment; or

23 (ii) a decision regarding whether an

24 individual is a participant, beneficiary, or

25 enrollee under the plan or coverage.
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1 (3) EXHAUSTION OF INTERNAL REVIEW PROC2 ESS.—Except as provided under section 102(d), a

3 plan or issuer may condition the use of an external

4 appeal process in the case of an externally appeal5 able decision upon a final decision in an internal re6 view under section 102, but only if the decision is

7 made in a timely basis consistent with the deadlines

8 provided under this subtitle.

9 (4) FILING FEE REQUIREMENT.—

10 (A) IN GENERAL.—Subject to subpara11 graph (B), a plan or issuer may condition the

12 use of an external appeal process upon payment

13 to the plan or issuer of a filing fee that does

14 not exceed $25.

15 (B) EXCEPTION FOR INDIGENCY.—The

16 plan or issuer may not require payment of the

17 filing fee in the case of an individual partici18 pant, beneficiary, or enrollee who certifies (in a

19 form and manner specified in guidelines estab20 lished by the Secretary of Health and Human

21 Services) that the individual is indigent (as de22 fined in such guidelines).

23 (C) REFUNDING FEE IN CASE OF SUCCESS24 FUL APPEALS.—The plan or issuer shall refund

25 payment of the filing fee under this paragraph
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1 if the recommendation of the external appeal

2 entity is to reverse or modify the denial of a

3 claim for benefits which is the subject of the

4 appeal.

5 (b) GENERAL ELEMENTS OF EXTERNAL APPEALS

6 PROCESS.—

7 (1) CONTRACT WITH QUALIFIED EXTERNAL AP8 PEAL ENTITY.—

9 (A) CONTRACT REQUIREMENT.—Except as

10 provided in subparagraph (D), the external ap11 peal process under this section of a plan or

12 issuer shall be conducted under a contract be13 tween the plan or issuer and one or more quali14 fied external appeal entities (as defined in sub15 section (c)).

16 (B) LIMITATION ON PLAN OR ISSUER SE17 LECTION.—The applicable authority shall im18 plement procedures—

19 (i) to assure that the selection process

20 among qualified external appeal entities

21 will not create any incentives for external

22 appeal entities to make a decision in a bi23 ased manner; and
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1 (ii) for auditing a sample of decisions

2 by such entities to assure that no such de3 cisions are made in a biased manner.

4 (C) OTHER TERMS AND CONDITIONS.—

5 The terms and conditions of a contract under

6 this paragraph shall be consistent with the

7 standards the appropriate Secretary shall estab8 lish to assure there is no real or apparent con9 flict of interest in the conduct of external ap10 peal activities. Such contract shall provide that

11 all costs of the process (except those incurred

12 by the participant, beneficiary, enrollee, or

13 treating professional in support of the appeal)

14 shall be paid by the plan or issuer, and not by

15 the participant, beneficiary, or enrollee. The

16 previous sentence shall not be construed as ap17 plying to the imposition of a filing fee under

18 subsection (a)(4).

19 (D) STATE AUTHORITY WITH RESPECT

20 QUALIFIED EXTERNAL APPEAL ENTITY FOR

21 HEALTH INSURANCE ISSUERS.—With respect to

22 health insurance issuers offering health insur23 ance coverage in a State, the State may provide

24 for external review activities to be conducted by

25 a qualified external appeal entity that is des-
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1 ignated by the State or that is selected by the

2 State in a manner determined by the State to

3 assure an unbiased determination.

4 (2) ELEMENTS OF PROCESS.—An external ap5 peal process shall be conducted consistent with

6 standards established by the appropriate Secretary

7 that include at least the following:

8 (A) FAIR AND DE NOVO DETERMINA9 TION.—The process shall provide for a fair, de

10 novo determination. However, nothing in this

11 paragraph shall be construed as providing for

12 coverage of items and services for which bene13 fits are specifically excluded under the plan or

14 coverage.

15 (B) STANDARD OF REVIEW.—An external

16 appeal entity shall determine whether the plan’s

17 or issuer’s decision is in accordance with the

18 medical needs of the patient involved (as deter19 mined by the entity) taking into account, as of

20 the time of the entity’s determination, the pa21 tient’s medical condition and any relevant and

22 reliable evidence the entity obtains under sub23 paragraph (D). If the entity determines the de24 cision is in accordance with such needs, the en25 tity shall affirm the decision and to the extent
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1 that the entity determines the decision is not in

2 accordance with such needs, the entity shall re3 verse or modify the decision.

4 (C) CONSIDERATION OF PLAN OR COV5 ERAGE DEFINITIONS.—In making such deter6 mination, the external appeal entity shall con7 sider (but not be bound by) any language in the

8 plan or coverage document relating to the defi9 nitions of the terms medical necessity, medically

10 necessary or appropriate, or experimental, in11 vestigational, or related terms.

12 (D) EVIDENCE.—

13 (i) IN GENERAL.—An external appeal

14 entity shall include, among the evidence

15 taken into consideration—

16 (I) the decision made by the plan

17 or issuer upon internal review under

18 section 102 and any guidelines or

19 standards used by the plan or issuer

20 in reaching such decision;

21 (II) any personal health and

22 medical information supplied with re23 spect to the individual whose denial of

24 claim for benefits has been appealed;

25 and
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1 (III) the opinion of the individ2 ual’s treating physician or health care

3 professional.

4 (ii) ADDITIONAL EVIDENCE.—Such

5 entity may also take into consideration but

6 not be limited to the following evidence (to

7 the extent available):

8 (I) The results of studies that

9 meet professionally recognized stand10 ards of validity and replicability or

11 that have been published in peer-re12 viewed journals.

13 (II) The results of professional

14 consensus conferences conducted or fi15 nanced in whole or in part by one or

16 more Government agencies.

17 (III) Practice and treatment

18 guidelines prepared or financed in

19 whole or in part by Government agen20 cies.

21 (IV) Government-issued coverage

22 and treatment policies.

23 (V) Community standard of care

24 and generally accepted principles of

25 professional medical practice.
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1 (VI) To the extent that the entity

2 determines it to be free of any conflict

3 of interest, the opinions of individuals

4 who are qualified as experts in one or

5 more fields of health care which are

6 directly related to the matters under

7 appeal.

8 (VII) To the extent that the enti9 ty determines it to be free of any con10 flict of interest, the results of peer re11 views conducted by the plan or issuer

12 involved.

13 (E) DETERMINATION CONCERNING EXTER14 NALLY APPEALABLE DECISIONS.—A qualified

15 external appeal entity shall determine—

16 (i) whether a denial of claim for bene17 fits is an externally appealable decision

18 (within the meaning of subsection (a)(2));

19 (ii) whether an externally appealable

20 decision involves an expedited appeal; and

21 (iii) for purposes of initiating an ex22 ternal review, whether the internal review

23 process has been completed.

24 (F) OPPORTUNITY TO SUBMIT EVI25 DENCE.—Each party to an externally appeal-
28

•S 3057 PCS

1 able decision may submit evidence related to the

2 issues in dispute.

3 (G) PROVISION OF INFORMATION.—The

4 plan or issuer involved shall provide timely ac5 cess to the external appeal entity to information

6 and to provisions of the plan or health insur7 ance coverage relating to the matter of the ex8 ternally appealable decision, as determined by

9 the entity.

10 (H) TIMELY DECISIONS.—A determination

11 by the external appeal entity on the decision

12 shall—

13 (i) be made orally or in writing and,

14 if it is made orally, shall be supplied to the

15 parties in writing as soon as possible;

16 (ii) be made in accordance with the

17 medical exigencies of the case involved, but

18 in no event later than 21 days after the

19 date (or, in the case of an expedited ap20 peal, 72 hours after the time) of requesting

21 an external appeal of the decision;

22 (iii) state, in layperson’s language, the

23 basis for the determination, including, if

24 relevant, any basis in the terms or condi25 tions of the plan or coverage; and
29

•S 3057 PCS

1 (iv) inform the participant, bene2 ficiary, or enrollee of the individual’s rights

3 (including any limitation on such rights) to

4 seek further review by the courts (or other

5 process) of the external appeal determina6 tion.

7 (I) COMPLIANCE WITH DETERMINATION.—

8 If the external appeal entity reverses or modi9 fies the denial of a claim for benefits, the plan

10 or issuer shall—

11 (i) upon the receipt of the determina12 tion, authorize benefits in accordance with

13 such determination;

14 (ii) take such actions as may be nec15 essary to provide benefits (including items

16 or services) in a timely manner consistent

17 with such determination; and

18 (iii) submit information to the entity

19 documenting compliance with the entity’s

20 determination and this subparagraph.

21 (c) QUALIFICATIONS OF EXTERNAL APPEAL ENTI22 TIES.—

23 (1) IN GENERAL.—For purposes of this section,

24 the term ‘‘qualified external appeal entity’’ means,

25 in relation to a plan or issuer, an entity that is cer-
30

•S 3057 PCS

1 tified under paragraph (2) as meeting the following

2 requirements:

3 (A) The entity meets the independence re4 quirements of paragraph (3).

5 (B) The entity conducts external appeal

6 activities through a panel of not fewer than

7 three clinical peers.

8 (C) The entity has sufficient medical, legal,

9 and other expertise and sufficient staffing to

10 conduct external appeal activities for the plan

11 or issuer on a timely basis consistent with sub12 section (b)(2)(G).

13 (D) The entity meets such other require14 ments as the appropriate Secretary may im15 pose.

16 (2) INITIAL CERTIFICATION OF EXTERNAL AP17 PEAL ENTITIES.—

18 (A) IN GENERAL.—In order to be treated

19 as a qualified external appeal entity with re20 spect to—

21 (i) a group health plan, the entity

22 must be certified (and, in accordance with

23 subparagraph (B), periodically recertified)

24 as meeting the requirements of paragraph

25 (1)—
31

•S 3057 PCS

1 (I) by the Secretary of Labor;

2 (II) under a process recognized

3 or approved by the Secretary of

4 Labor; or

5 (III) to the extent provided in

6 subparagraph (C)(i), by a qualified

7 private standard-setting organization

8 (certified under such subparagraph);

9 or

10 (ii) a health insurance issuer oper11 ating in a State, the entity must be cer12 tified (and, in accordance with subpara13 graph (B), periodically recertified) as

14 meeting such requirements—

15 (I) by the applicable State au16 thority (or under a process recognized

17 or approved by such authority); or

18 (II) if the State has not estab19 lished a certification and recertifi20 cation process for such entities, by the

21 Secretary of Health and Human Serv22 ices, under a process recognized or ap23 proved by such Secretary, or to the

24 extent provided in subparagraph

25 (C)(ii), by a qualified private stand-
32

•S 3057 PCS

1 ard-setting organization (certified

2 under such subparagraph).

3 (B) RECERTIFICATION PROCESS.—The ap4 propriate Secretary shall develop standards for

5 the recertification of external appeal entities.

6 Such standards shall include a review of—

7 (i) the number of cases reviewed;

8 (ii) a summary of the disposition of

9 those cases;

10 (iii) the length of time in making de11 terminations on those cases;

12 (iv) updated information of what was

13 required to be submitted as a condition of

14 certification for the entity’s performance of

15 external appeal activities; and

16 (v) such information as may be nec17 essary to assure the independence of the

18 entity from the plans or issuers for which

19 external appeal activities are being con20 ducted.

21 (C) CERTIFICATION OF QUALIFIED PRI22 VATE STANDARD-SETTING ORGANIZATIONS.—

23 (i) FOR EXTERNAL REVIEWS UNDER

24 GROUP HEALTH PLANS.—For purposes of

25 subparagraph (A)(i)(III), the Secretary of
33

•S 3057 PCS

1 Labor may provide for a process for certifi2 cation (and periodic recertification) of

3 qualified private standard-setting organiza4 tions which provide for certification of ex5 ternal review entities. Such an organization

6 shall only be certified if the organization

7 does not certify an external review entity

8 unless it meets standards required for cer9 tification of such an entity by such Sec10 retary under subparagraph (A)(i)(I).

11 (ii) FOR EXTERNAL REVIEWS OF

12 HEALTH INSURANCE ISSUERS.—For pur13 poses of subparagraph (A)(ii)(II), the Sec14 retary of Health and Human Services may

15 provide for a process for certification (and

16 periodic recertification) of qualified private

17 standard-setting organizations which pro18 vide for certification of external review en19 tities. Such an organization shall only be

20 certified if the organization does not certify

21 an external review entity unless it meets

22 standards required for certification of such

23 an entity by such Secretary under subpara24 graph (A)(ii)(II).

25 (3) INDEPENDENCE REQUIREMENTS.—
34

•S 3057 PCS

1 (A) IN GENERAL.—A clinical peer or other

2 entity meets the independence requirements of

3 this paragraph if—

4 (i) the peer or entity does not have a

5 familial, financial, or professional relation6 ship with any related party;

7 (ii) any compensation received by such

8 peer or entity in connection with the exter9 nal review is reasonable and not contingent

10 on any decision rendered by the peer or en11 tity;

12 (iii) except as provided in paragraph

13 (4), the plan and the issuer have no re14 course against the peer or entity in connec15 tion with the external review; and

16 (iv) the peer or entity does not other17 wise have a conflict of interest with a re18 lated party as determined under any regu19 lations which the Secretary may prescribe.

20 (B) RELATED PARTY.—For purposes of

21 this paragraph, the term ‘‘related party’’

22 means—

23 (i) with respect to—

24 (I) a group health plan or health

25 insurance coverage offered in connec-
35

•S 3057 PCS

1 tion with such a plan, the plan or the

2 health insurance issuer offering such

3 coverage; or

4 (II) individual health insurance

5 coverage, the health insurance issuer

6 offering such coverage,

7 or any plan sponsor, fiduciary, officer, di8 rector, or management employee of such

9 plan or issuer;

10 (ii) the health care professional that

11 provided the health care involved in the

12 coverage decision;

13 (iii) the institution at which the health

14 care involved in the coverage decision is

15 provided;

16 (iv) the manufacturer of any drug or

17 other item that was included in the health

18 care involved in the coverage decision; or

19 (v) any other party determined under

20 any regulations which the Secretary may

21 prescribe to have a substantial interest in

22 the coverage decision.

23 (4) LIMITATION ON LIABILITY OF REVIEW24 ERS.—No qualified external appeal entity having a

25 contract with a plan or issuer under this part and
36

•S 3057 PCS

1 no person who is employed by any such entity or

2 who furnishes professional services to such entity,

3 shall be held by reason of the performance of any

4 duty, function, or activity required or authorized

5 pursuant to this section, to have violated any crimi6 nal law, or to be civilly liable under any law of the

7 United States or of any State (or political subdivi8 sion thereof) if due care was exercised in the per9 formance of such duty, function, or activity and

10 there was no actual malice or gross misconduct in

11 the performance of such duty, function, or activity.

12 (d) EXTERNAL APPEAL DETERMINATION BINDING

13 ON PLAN.—The determination by an external appeal enti14 ty under this section is binding on the plan and issuer

15 involved in the determination.

16 (e) PENALTIES AGAINST AUTHORIZED OFFICIALS

17 FOR REFUSING TO AUTHORIZE THE DETERMINATION OF

18 AN EXTERNAL REVIEW ENTITY.—

19 (1) MONETARY PENALTIES.—In any case in

20 which the determination of an external review entity

21 is not followed by a group health plan, or by a

22 health insurance issuer offering health insurance

23 coverage, any person who, acting in the capacity of

24 authorizing the benefit, causes such refusal may, in

25 the discretion in a court of competent jurisdiction,
37

•S 3057 PCS

1 be liable to an aggrieved participant, beneficiary, or

2 enrollee for a civil penalty in an amount of up to

3 $1,000 a day from the date on which the determina4 tion was transmitted to the plan or issuer by the ex5 ternal review entity until the date the refusal to pro6 vide the benefit is corrected.

7 (2) CEASE AND DESIST ORDER AND ORDER OF

8 ATTORNEY’S FEES.—In any action described in

9 paragraph (1) brought by a participant, beneficiary,

10 or enrollee with respect to a group health plan, or

11 a health insurance issuer offering health insurance

12 coverage, in which a plaintiff alleges that a person

13 referred to in such paragraph has taken an action

14 resulting in a refusal of a benefit determined by an

15 external appeal entity in violation of such terms of

16 the plan, coverage, or this subtitle, or has failed to

17 take an action for which such person is responsible

18 under the plan, coverage, or this title and which is

19 necessary under the plan or coverage for authorizing

20 a benefit, the court shall cause to be served on the

21 defendant an order requiring the defendant—

22 (A) to cease and desist from the alleged

23 action or failure to act; and

24 (B) to pay to the plaintiff a reasonable at25 torney’s fee and other reasonable costs relating
38

•S 3057 PCS

1 to the prosecution of the action on the charges

2 on which the plaintiff prevails.

3 (3) ADDITIONAL CIVIL PENALTIES.—

4 (A) IN GENERAL.—In addition to any pen5 alty imposed under paragraph (1) or (2), the

6 appropriate Secretary may assess a civil penalty

7 against a person acting in the capacity of au8 thorizing a benefit determined by an external

9 review entity for one or more group health

10 plans, or health insurance issuers offering

11 health insurance coverage, for—

12 (i) any pattern or practice of repeated

13 refusal to authorize a benefit determined

14 by an external appeal entity in violation of

15 the terms of such a plan, coverage, or this

16 title; or

17 (ii) any pattern or practice of re18 peated violations of the requirements of

19 this section with respect to such plan or

20 plans or coverage.

21 (B) STANDARD OF PROOF AND AMOUNT OF

22 PENALTY.—Such penalty shall be payable only

23 upon proof by clear and convincing evidence of

24 such pattern or practice and shall be in an

25 amount not to exceed the lesser of—
39

•S 3057 PCS

1 (i) 25 percent of the aggregate value

2 of benefits shown by the appropriate Sec3 retary to have not been provided, or unlaw4 fully delayed, in violation of this section

5 under such pattern or practice; or

6 (ii) $500,000.

7 (4) REMOVAL AND DISQUALIFICATION.—Any

8 person acting in the capacity of authorizing benefits

9 who has engaged in any such pattern or practice de10 scribed in paragraph (3)(A) with respect to a plan

11 or coverage, upon the petition of the appropriate

12 Secretary, may be removed by the court from such

13 position, and from any other involvement, with re14 spect to such a plan or coverage, and may be pre15 cluded from returning to any such position or in16 volvement for a period determined by the court.

17 (f) PROTECTION OF LEGAL RIGHTS.—Nothing in

18 this subtitle shall be construed as altering or eliminating

19 any cause of action or legal rights or remedies of partici20 pants, beneficiaries, enrollees, and others under State or

21 Federal law (including sections 502 and 503 of the Em22 ployee Retirement Income Security Act of 1974), includ23 ing the right to file judicial actions to enforce rights.

24 SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.

25 (a) ESTABLISHMENT OF GRIEVANCE SYSTEM.—
40

•S 3057 PCS

1 (1) IN GENERAL.—A group health plan, and a

2 health insurance issuer in connection with the provi3 sion of health insurance coverage, shall establish and

4 maintain a system to provide for the presentation

5 and resolution of oral and written grievances

6 brought by individuals who are participants, bene7 ficiaries, or enrollees, or health care providers or

8 other individuals acting on behalf of an individual

9 and with the individual’s consent or without such

10 consent if the individual is medically unable to pro11 vide such consent, regarding any aspect of the plan’s

12 or issuer’s services.

13 (2) GRIEVANCE DEFINED.—In this section, the

14 term ‘‘grievance’’ means any question, complaint, or

15 concern brought by a participant, beneficiary or en16 rollee that is not a claim for benefits (as defined in

17 section 101(f)(1)).

18 (b) GRIEVANCE SYSTEM.—Such system shall include

19 the following components with respect to individuals who

20 are participants, beneficiaries, or enrollees:

21 (1) Written notification to all such individuals

22 and providers of the telephone numbers and business

23 addresses of the plan or issuer personnel responsible

24 for resolution of grievances and appeals.
41

•S 3057 PCS

1 (2) A system to record and document, over a

2 period of at least three previous years, all grievances

3 and appeals made and their status.

4 (3) A process providing for timely processing

5 and resolution of grievances.

6 (4) Procedures for follow-up action, including

7 the methods to inform the person making the griev8 ance of the resolution of the grievance.

9 Grievances are not subject to appeal under the previous

10 provisions of this subtitle.

11 Subtitle B—Access to Care

12 SEC. 111. CONSUMER CHOICE OPTION.

13 (a) IN GENERAL.—If—

14 (1) a health insurance issuer providing health

15 insurance coverage in connection with a group health

16 plan offers to enrollees health insurance coverage

17 which provides for coverage of services only if such

18 services are furnished through health care profes19 sionals and providers who are members of a network

20 of health care professionals and providers who have

21 entered into a contract with the issuer to provide

22 such services, or

23 (2) a group health plan offers to participants or

24 beneficiaries health benefits which provide for cov25 erage of services only if such services are furnished
42

•S 3057 PCS

1 through health care professionals and providers who

2 are members of a network of health care profes3 sionals and providers who have entered into a con4 tract with the plan to provide such services,

5 then the issuer or plan shall also offer or arrange to be

6 offered to such enrollees, participants, or beneficiaries (at

7 the time of enrollment and during an annual open season

8 as provided under subsection (c)) the option of health in9 surance coverage or health benefits which provide for cov10 erage of such services which are not furnished through

11 health care professionals and providers who are members

12 of such a network unless such enrollees, participants, or

13 beneficiaries are offered such non-network coverage

14 through another group health plan or through another

15 health insurance issuer in the group market.

16 (b) ADDITIONAL COSTS.—The amount of any addi17 tional premium charged by the health insurance issuer or

18 group health plan for the additional cost of the creation

19 and maintenance of the option described in subsection (a)

20 and the amount of any additional cost sharing imposed

21 under such option shall be borne by the enrollee, partici22 pant, or beneficiary unless it is paid by the health plan

23 sponsor or group health plan through agreement with the

24 health insurance issuer.
43

•S 3057 PCS

1 (c) OPEN SEASON.—An enrollee, participant, or ben2 eficiary, may change to the offering provided under this

3 section only during a time period determined by the health

4 insurance issuer or group health plan. Such time period

5 shall occur at least annually.

6 SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.

7 (a) PRIMARY CARE.—If a group health plan, or a

8 health insurance issuer that offers health insurance cov9 erage, requires or provides for designation by a partici10 pant, beneficiary, or enrollee of a participating primary

11 care provider, then the plan or issuer shall permit each

12 participant, beneficiary, and enrollee to designate any par13 ticipating primary care provider who is available to accept

14 such individual.

15 (b) SPECIALISTS.—

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

17 group health plan and a health insurance issuer that

18 offers health insurance coverage shall permit each

19 participant, beneficiary, or enrollee to receive medi20 cally necessary or appropriate specialty care, pursu21 ant to appropriate referral procedures, from any

22 qualified participating health care professional who

23 is available to accept such individual for such care.

24 (2) LIMITATION.—Paragraph (1) shall not

25 apply to specialty care if the plan or issuer clearly
44

•S 3057 PCS

1 informs participants, beneficiaries, and enrollees of

2 the limitations on choice of participating health care

3 professionals with respect to such care.

4 (3) CONSTRUCTION.—Nothing in this sub5 section shall be construed as affecting the applica6 tion of section 114 (relating to access to specialty

7 care).

8 SEC. 113. ACCESS TO EMERGENCY CARE.

9 (a) COVERAGE OF EMERGENCY SERVICES.—

10 (1) IN GENERAL.—If a group health plan, or

11 health insurance coverage offered by a health insur12 ance issuer, provides any benefits with respect to

13 services in an emergency department of a hospital,

14 the plan or issuer shall cover emergency services (as

15 defined in paragraph (2)(B))—

16 (A) without the need for any prior author17 ization determination;

18 (B) whether or not the health care pro19 vider furnishing such services is a participating

20 provider with respect to such services;

21 (C) in a manner so that, if such services

22 are provided to a participant, beneficiary, or

23 enrollee—
45

•S 3057 PCS

1 (i) by a nonparticipating health care

2 provider with or without prior authoriza3 tion; or

4 (ii) by a participating health care pro5 vider without prior authorization,

6 the participant, beneficiary, or enrollee is not

7 liable for amounts that exceed the amounts of

8 liability that would be incurred if the services

9 were provided by a participating health care

10 provider with prior authorization; and

11 (D) without regard to any other term or

12 condition of such coverage (other than exclusion

13 or coordination of benefits, or an affiliation or

14 waiting period, permitted under section 2701 of

15 the Public Health Service Act, section 701 of

16 the Employee Retirement Income Security Act

17 of 1974, or section 9801 of the Internal Rev18 enue Code of 1986, and other than applicable

19 cost-sharing).

20 (2) DEFINITIONS.—In this section:

21 (A) EMERGENCY MEDICAL CONDITION

22 BASED ON PRUDENT LAYPERSON STANDARD.—

23 The term ‘‘emergency medical condition’’ means

24 a medical condition manifesting itself by acute

25 symptoms of sufficient severity (including se-
46

•S 3057 PCS

1 vere pain) such that a prudent layperson, who

2 possesses an average knowledge of health and

3 medicine, could reasonably expect the absence

4 of immediate medical attention to result in a

5 condition described in clause (i), (ii), or (iii) of

6 section 1867(e)(1)(A) of the Social Security

7 Act.

8 (B) EMERGENCY SERVICES.—The term

9 ‘‘emergency services’’ means—

10 (i) a medical screening examination

11 (as required under section 1867 of the So12 cial Security Act) that is within the capa13 bility of the emergency department of a

14 hospital, including ancillary services rou15 tinely available to the emergency depart16 ment to evaluate an emergency medical

17 condition (as defined in subparagraph

18 (A)); and

19 (ii) within the capabilities of the staff

20 and facilities available at the hospital, such

21 further medical examination and treatment

22 as are required under section 1867 of such

23 Act to stabilize the patient.

24 (C) STABILIZE.—The term ‘‘to stabilize’’

25 means, with respect to an emergency medical
47

•S 3057 PCS

1 condition, to provide such medical treatment of

2 the condition as may be necessary to assure,

3 within reasonable medical probability, that no

4 material deterioration of the condition is likely

5 to result from or occur during the transfer of

6 the individual from a facility.

7 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

8 POST-STABILIZATION CARE.—In the case of services

9 (other than emergency services) for which benefits are

10 available under a group health plan, or under health insur11 ance coverage offered by a health insurance issuer, the

12 plan or issuer shall provide for reimbursement with re13 spect to such services provided to a participant, bene14 ficiary, or enrollee other than through a participating

15 health care provider in a manner consistent with sub16 section (a)(1)(C) (and shall otherwise comply with the

17 guidelines established under section 1852(d)(2) of the So18 cial Security Act), if the services are maintenance care or

19 post-stabilization care covered under such guidelines.

20 SEC. 114. ACCESS TO SPECIALTY CARE.

21 (a) SPECIALTY CARE FOR COVERED SERVICES.—

22 (1) IN GENERAL.—If—

23 (A) an individual is a participant or bene24 ficiary under a group health plan or an enrollee
48

•S 3057 PCS

1 who is covered under health insurance coverage

2 offered by a health insurance issuer;

3 (B) the individual has a condition or dis4 ease of sufficient seriousness and complexity to

5 require treatment by a specialist; and

6 (C) benefits for such treatment are pro7 vided under the plan or coverage,

8 the plan or issuer shall make or provide for a refer9 ral to a specialist who is available and accessible to

10 provide the treatment for such condition or disease.

11 (2) SPECIALIST DEFINED.—For purposes of

12 this subsection, the term ‘‘specialist’’ means, with

13 respect to a condition, a health care practitioner, fa14 cility, or center that has adequate expertise through

15 appropriate training and experience (including, in

16 the case of a child, appropriate pediatric expertise)

17 to provide high quality care in treating the condi18 tion.

19 (3) CARE UNDER REFERRAL.—A group health

20 plan or health insurance issuer may require that the

21 care provided to an individual pursuant to such re22 ferral under paragraph (1) be—

23 (A) pursuant to a treatment plan, only if

24 the treatment plan is developed by the specialist

25 and approved by the plan or issuer, in consulta-
49

•S 3057 PCS

1 tion with the designated primary care provider

2 or specialist and the individual (or the individ3 ual’s designee); and

4 (B) in accordance with applicable quality

5 assurance and utilization review standards of

6 the plan or issuer.

7 Nothing in this subsection shall be construed as pre8 venting such a treatment plan for an individual from

9 requiring a specialist to provide the primary care

10 provider with regular updates on the specialty care

11 provided, as well as all necessary medical informa12 tion.

13 (4) REFERRALS TO PARTICIPATING PRO14 VIDERS.—A group health plan or health insurance

15 issuer is not required under paragraph (1) to pro16 vide for a referral to a specialist that is not a par17 ticipating provider, unless the plan or issuer does

18 not have an appropriate specialist that is available

19 and accessible to treat the individual’s condition and

20 that is a participating provider with respect to such

21 treatment.

22 (5) TREATMENT OF NONPARTICIPATING PRO23 VIDERS.—If a plan or issuer refers an individual to

24 a nonparticipating specialist pursuant to paragraph

25 (1), services provided pursuant to the approved
50

•S 3057 PCS

1 treatment plan (if any) shall be provided at no addi2 tional cost to the individual beyond what the indi3 vidual would otherwise pay for services received by

4 such a specialist that is a participating provider.

5 (b) SPECIALISTS AS GATEKEEPER FOR TREATMENT

6 OF ONGOING SPECIAL CONDITIONS.—

7 (1) IN GENERAL.—A group health plan, or a

8 health insurance issuer, in connection with the provi9 sion of health insurance coverage, shall have a proce10 dure by which an individual who is a participant,

11 beneficiary, or enrollee and who has an ongoing spe12 cial condition (as defined in paragraph (3)) may re13 quest and receive a referral to a specialist for such

14 condition who shall be responsible for and capable of

15 providing and coordinating the individual’s care with

16 respect to the condition. Under such procedures if

17 such an individual’s care would most appropriately

18 be coordinated by such a specialist, such plan or

19 issuer shall refer the individual to such specialist.

20 (2) TREATMENT FOR RELATED REFERRALS.—

21 Such specialists shall be permitted to treat the indi22 vidual without a referral from the individual’s pri23 mary care provider and may authorize such refer24 rals, procedures, tests, and other medical services as

25 the individual’s primary care provider would other-
51

•S 3057 PCS

1 wise be permitted to provide or authorize, subject to

2 the terms of the treatment (referred to in subsection

3 (a)(3)(A)) with respect to the ongoing special condi4 tion.

5 (3) ONGOING SPECIAL CONDITION DEFINED.—

6 In this subsection, the term ‘‘ongoing special condi7 tion’’ means a condition or disease that—

8 (A) is life-threatening, degenerative, or dis9 abling; and

10 (B) requires specialized medical care over

11 a prolonged period of time.

12 (4) TERMS OF REFERRAL.—The provisions of

13 paragraphs (3) through (5) of subsection (a) apply

14 with respect to referrals under paragraph (1) of this

15 subsection in the same manner as they apply to re16 ferrals under subsection (a)(1).

17 (c) STANDING REFERRALS.—

18 (1) IN GENERAL.—A group health plan, and a

19 health insurance issuer in connection with the provi20 sion of health insurance coverage, shall have a proce21 dure by which an individual who is a participant,

22 beneficiary, or enrollee and who has a condition that

23 requires ongoing care from a specialist may receive

24 a standing referral to such specialist for treatment

25 of such condition. If the plan or issuer, or if the pri-
52

•S 3057 PCS

1 mary care provider in consultation with the medical

2 director of the plan or issuer and the specialist (if

3 any), determines that such a standing referral is ap4 propriate, the plan or issuer shall make such a refer5 ral to such a specialist if the individual so desires.

6 (2) TERMS OF REFERRAL.—The provisions of

7 paragraphs (3) through (5) of subsection (a) apply

8 with respect to referrals under paragraph (1) of this

9 subsection in the same manner as they apply to re10 ferrals under subsection (a)(1).

11 SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL

12 CARE.

13 (a) IN GENERAL.—If a group health plan, or a health

14 insurance issuer in connection with the provision of health

15 insurance coverage, requires or provides for a participant,

16 beneficiary, or enrollee to designate a participating pri17 mary care health care professional, the plan or issuer—

18 (1) may not require authorization or a referral

19 by the individual’s primary care health care profes20 sional or otherwise for coverage of gynecological care

21 (including preventive women’s health examinations)

22 and pregnancy-related services provided by a partici23 pating health care professional, including a physi24 cian, who specializes in obstetrics and gynecology to

25 the extent such care is otherwise covered; and
53

•S 3057 PCS

1 (2) shall treat the ordering of other obstetrical

2 or gynecological care by such a participating profes3 sional as the authorization of the primary care

4 health care professional with respect to such care

5 under the plan or coverage.

6 (b) CONSTRUCTION.—Nothing in subsection (a) shall

7 be construed to—

8 (1) waive any exclusions of coverage under the

9 terms of the plan or health insurance coverage with

10 respect to coverage of obstetrical or gynecological

11 care; or

12 (2) preclude the group health plan or health in13 surance issuer involved from requiring that the ob14 stetrical or gynecological provider notify the primary

15 care health care professional or the plan or issuer of

16 treatment decisions.

17 SEC. 116. ACCESS TO PEDIATRIC CARE.

18 (a) PEDIATRIC CARE.—If a group health plan, or a

19 health insurance issuer in connection with the provision

20 of health insurance coverage, requires or provides for an

21 enrollee to designate a participating primary care provider

22 for a child of such enrollee, the plan or issuer shall permit

23 the enrollee to designate a physician who specializes in pe24 diatrics as the child’s primary care provider.
54

•S 3057 PCS

1 (b) CONSTRUCTION.—Nothing in subsection (a) shall

2 be construed to waive any exclusions of coverage under

3 the terms of the plan or health insurance coverage with

4 respect to coverage of pediatric care.

5 SEC. 117. CONTINUITY OF CARE.

6 (a) IN GENERAL.—

7 (1) TERMINATION OF PROVIDER.—If a contract

8 between a group health plan, or a health insurance

9 issuer in connection with the provision of health in10 surance coverage, and a health care provider is ter11 minated (as defined in paragraph (3)(B)), or bene12 fits or coverage provided by a health care provider

13 are terminated because of a change in the terms of

14 provider participation in a group health plan, and an

15 individual who is a participant, beneficiary, or en16 rollee in the plan or coverage is undergoing treat17 ment from the provider for an ongoing special condi18 tion (as defined in paragraph (3)(A)) at the time of

19 such termination, the plan or issuer shall—

20 (A) notify the individual on a timely basis

21 of such termination and of the right to elect

22 continuation of coverage of treatment by the

23 provider under this section; and

24 (B) subject to subsection (c), permit the

25 individual to elect to continue to be covered
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1 with respect to treatment by the provider of

2 such condition during a transitional period

3 (provided under subsection (b)).

4 (2) TREATMENT OF TERMINATION OF CON5 TRACT WITH HEALTH INSURANCE ISSUER.—If a

6 contract for the provision of health insurance cov7 erage between a group health plan and a health in8 surance issuer is terminated and, as a result of such

9 termination, coverage of services of a health care

10 provider is terminated with respect to an individual,

11 the provisions of paragraph (1) (and the succeeding

12 provisions of this section) shall apply under the plan

13 in the same manner as if there had been a contract

14 between the plan and the provider that had been ter15 minated, but only with respect to benefits that are

16 covered under the plan after the contract termi17 nation.

18 (3) DEFINITIONS.—For purposes of this sec19 tion:

20 (A) ONGOING SPECIAL CONDITION.—The

21 term ‘‘ongoing special condition’’ has the mean22 ing given such term in section 114(b)(3), and

23 also includes pregnancy.

24 (B) TERMINATION.—The term ‘‘termi25 nated’’ includes, with respect to a contract, the
56

•S 3057 PCS

1 expiration or nonrenewal of the contract, but

2 does not include a termination of the contract

3 by the plan or issuer for failure to meet applica4 ble quality standards or for fraud.

5 (b) TRANSITIONAL PERIOD.—

6 (1) IN GENERAL.—Except as provided in para7 graphs (2) through (4), the transitional period under

8 this subsection shall extend up to 90 days (as deter9 mined by the treating health care professional) after

10 the date of the notice described in subsection

11 (a)(1)(A) of the provider’s termination.

12 (2) SCHEDULED SURGERY AND ORGAN TRANS13 PLANTATION.—If surgery or organ transplantation

14 was scheduled for an individual before the date of

15 the announcement of the termination of the provider

16 status under subsection (a)(1)(A) or if the individual

17 on such date was on an established waiting list or

18 otherwise scheduled to have such surgery or trans19 plantation, the transitional period under this sub20 section with respect to the surgery or transplan21 tation shall extend beyond the period under para22 graph (1) and until the date of discharge of the indi23 vidual after completion of the surgery or transplan24 tation.

25 (3) PREGNANCY.—If—
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1 (A) a participant, beneficiary, or enrollee

2 was determined to be pregnant at the time of

3 a provider’s termination of participation; and

4 (B) the provider was treating the preg5 nancy before date of the termination,

6 the transitional period under this subsection with re7 spect to provider’s treatment of the pregnancy shall

8 extend through the provision of post-partum care di9 rectly related to the delivery.

10 (4) TERMINAL ILLNESS.—If—

11 (A) a participant, beneficiary, or enrollee

12 was determined to be terminally ill (as deter13 mined under section 1861(dd)(3)(A) of the So14 cial Security Act) at the time of a provider’s

15 termination of participation; and

16 (B) the provider was treating the terminal

17 illness before the date of termination,

18 the transitional period under this subsection shall

19 extend for the remainder of the individual’s life for

20 care directly related to the treatment of the terminal

21 illness or its medical manifestations.

22 (c) PERMISSIBLE TERMS AND CONDITIONS.—A

23 group health plan or health insurance issuer may condi24 tion coverage of continued treatment by a provider under

25 subsection (a)(1)(B) upon the individual notifying the plan
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1 of the election of continued coverage and upon the pro2 vider agreeing to the following terms and conditions:

3 (1) The provider agrees to accept reimburse4 ment from the plan or issuer and individual involved

5 (with respect to cost-sharing) at the rates applicable

6 prior to the start of the transitional period as pay7 ment in full (or, in the case described in subsection

8 (a)(2), at the rates applicable under the replacement

9 plan or issuer after the date of the termination of

10 the contract with the health insurance issuer) and

11 not to impose cost-sharing with respect to the indi12 vidual in an amount that would exceed the cost-shar13 ing that could have been imposed if the contract re14 ferred to in subsection (a)(1) had not been termi15 nated.

16 (2) The provider agrees to adhere to the quality

17 assurance standards of the plan or issuer responsible

18 for payment under paragraph (1) and to provide to

19 such plan or issuer necessary medical information

20 related to the care provided.

21 (3) The provider agrees otherwise to adhere to

22 such plan’s or issuer’s policies and procedures, in23 cluding procedures regarding referrals and obtaining

24 prior authorization and providing services pursuant
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1 to a treatment plan (if any) approved by the plan or

2 issuer.

3 (d) CONSTRUCTION.—Nothing in this section shall be

4 construed to require the coverage of benefits which would

5 not have been covered if the provider involved remained

6 a participating provider.

7 SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

8 If a group health plan, or health insurance issuer that

9 offers health insurance coverage, provides benefits with re10 spect to prescription drugs but the coverage limits such

11 benefits to drugs included in a formulary, the plan or

12 issuer shall—

13 (1) ensure participation of participating physi14 cians and pharmacists in the development of the for15 mulary;

16 (2) disclose to providers and, disclose upon re17 quest under section 121(c)(5) to participants, bene18 ficiaries, and enrollees, the nature of the formulary

19 restrictions; and

20 (3) consistent with the standards for a utiliza21 tion review program under section 101, provide for

22 exceptions from the formulary limitation when a

23 non-formulary alternative is medically indicated.
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1 SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN

2 APPROVED CLINICAL TRIALS.

3 (a) COVERAGE.—

4 (1) IN GENERAL.—If a group health plan, or

5 health insurance issuer that is providing health in6 surance coverage, provides coverage to a qualified in7 dividual (as defined in subsection (b)), the plan or

8 issuer—

9 (A) may not deny the individual participa10 tion in the clinical trial referred to in subsection

11 (b)(2);

12 (B) subject to subsection (c), may not deny

13 (or limit or impose additional conditions on) the

14 coverage of routine patient costs for items and

15 services furnished in connection with participa16 tion in the trial; and

17 (C) may not discriminate against the indi18 vidual on the basis of the enrollee’s participa19 tion in such trial.

20 (2) EXCLUSION OF CERTAIN COSTS.—For pur21 poses of paragraph (1)(B), routine patient costs do

22 not include the cost of the tests or measurements

23 conducted primarily for the purpose of the clinical

24 trial involved.

25 (3) USE OF IN-NETWORK PROVIDERS.—If one

26 or more participating providers is participating in a
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1 clinical trial, nothing in paragraph (1) shall be con2 strued as preventing a plan or issuer from requiring

3 that a qualified individual participate in the trial

4 through such a participating provider if the provider

5 will accept the individual as a participant in the

6 trial.

7 (b) QUALIFIED INDIVIDUAL DEFINED.—For pur8 poses of subsection (a), the term ‘‘qualified individual’’

9 means an individual who is a participant or beneficiary

10 in a group health plan, or who is an enrollee under health

11 insurance coverage, and who meets the following condi12 tions:

13 (1)(A) The individual has a life-threatening or

14 serious illness for which no standard treatment is ef15 fective.

16 (B) The individual is eligible to participate in

17 an approved clinical trial according to the trial pro18 tocol with respect to treatment of such illness.

19 (C) The individual’s participation in the trial

20 offers meaningful potential for significant clinical

21 benefit for the individual.

22 (2) Either—

23 (A) the referring physician is a partici24 pating health care professional and has con25 cluded that the individual’s participation in
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1 such trial would be appropriate based upon the

2 individual meeting the conditions described in

3 paragraph (1); or

4 (B) the participant, beneficiary, or enrollee

5 provides medical and scientific information es6 tablishing that the individual’s participation in

7 such trial would be appropriate based upon the

8 individual meeting the conditions described in

9 paragraph (1).

10 (c) PAYMENT.—

11 (1) IN GENERAL.—Under this section a group

12 health plan or health insurance issuer shall provide

13 for payment for routine patient costs described in

14 subsection (a)(2) but is not required to pay for costs

15 of items and services that are reasonably expected

16 (as determined by the Secretary) to be paid for by

17 the sponsors of an approved clinical trial.

18 (2) PAYMENT RATE.—In the case of covered

19 items and services provided by—

20 (A) a participating provider, the payment

21 rate shall be at the agreed upon rate; or

22 (B) a nonparticipating provider, the pay23 ment rate shall be at the rate the plan or issuer

24 would normally pay for comparable services

25 under subparagraph (A).
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1 (d) APPROVED CLINICAL TRIAL DEFINED.—

2 (1) IN GENERAL.—In this section, the term

3 ‘‘approved clinical trial’’ means a clinical research

4 study or clinical investigation approved and funded

5 (which may include funding through in-kind con6 tributions) by one or more of the following:

7 (A) The National Institutes of Health.

8 (B) A cooperative group or center of the

9 National Institutes of Health.

10 (C) Either of the following if the condi11 tions described in paragraph (2) are met:

12 (i) The Department of Veterans Af13 fairs.

14 (ii) The Department of Defense.

15 (2) CONDITIONS FOR DEPARTMENTS.—The

16 conditions described in this paragraph, for a study

17 or investigation conducted by a Department, are

18 that the study or investigation has been reviewed

19 and approved through a system of peer review that

20 the Secretary determines—

21 (A) to be comparable to the system of peer

22 review of studies and investigations used by the

23 National Institutes of Health; and
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1 (B) assures unbiased review of the highest

2 scientific standards by qualified individuals who

3 have no interest in the outcome of the review.

4 (e) CONSTRUCTION.—Nothing in this section shall be

5 construed to limit a plan’s or issuer’s coverage with re6 spect to clinical trials.

7 Subtitle C—Access to Information

8 SEC. 121. PATIENT ACCESS TO INFORMATION.

9 (a) DISCLOSURE REQUIREMENT.—

10 (1) GROUP HEALTH PLANS.—A group health

11 plan shall—

12 (A) provide to participants and bene13 ficiaries at the time of initial coverage under

14 the plan (or the effective date of this section, in

15 the case of individuals who are participants or

16 beneficiaries as of such date), and at least an17 nually thereafter, the information described in

18 subsection (b) in printed form;

19 (B) provide to participants and bene20 ficiaries, within a reasonable period (as speci21 fied by the appropriate Secretary) before or

22 after the date of significant changes in the in23 formation described in subsection (b), informa24 tion in printed form on such significant

25 changes; and
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•S 3057 PCS

1 (C) upon request, make available to par2 ticipants and beneficiaries, the applicable au3 thority, and prospective participants and bene4 ficiaries, the information described in sub5 section (b) or (c) in printed form.

6 (2) HEALTH INSURANCE ISSUERS.—A health

7 insurance issuer in connection with the provision of

8 health insurance coverage shall—

9 (A) provide to individuals enrolled under

10 such coverage at the time of enrollment, and at

11 least annually thereafter, the information de12 scribed in subsection (b) in printed form;

13 (B) provide to enrollees, within a reason14 able period (as specified by the appropriate Sec15 retary) before or after the date of significant

16 changes in the information described in sub17 section (b), information in printed form on such

18 significant changes; and

19 (C) upon request, make available to the

20 applicable authority, to individuals who are pro21 spective enrollees, and to the public the infor22 mation described in subsection (b) or (c) in

23 printed form.

24 (b) INFORMATION PROVIDED.—The information de25 scribed in this subsection with respect to a group health
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•S 3057 PCS

1 plan or health insurance coverage offered by a health in2 surance issuer includes the following:

3 (1) SERVICE AREA.—The service area of the

4 plan or issuer.

5 (2) BENEFITS.—Benefits offered under the

6 plan or coverage, including—

7 (A) covered benefits, including benefit lim8 its and coverage exclusions;

9 (B) cost sharing, such as deductibles, coin10 surance, and copayment amounts, including any

11 liability for balance billing, any maximum limi12 tations on out of pocket expenses, and the max13 imum out of pocket costs for services that are

14 provided by nonparticipating providers or that

15 are furnished without meeting the applicable

16 utilization review requirements;

17 (C) the extent to which benefits may be ob18 tained from nonparticipating providers;

19 (D) the extent to which a participant, ben20 eficiary, or enrollee may select from among par21 ticipating providers and the types of providers

22 participating in the plan or issuer network;

23 (E) process for determining experimental

24 coverage; and

25 (F) use of a prescription drug formulary.
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1 (3) ACCESS.—A description of the following:

2 (A) The number, mix, and distribution of

3 providers under the plan or coverage.

4 (B) Out-of-network coverage (if any) pro5 vided by the plan or coverage.

6 (C) Any point-of-service option (including

7 any supplemental premium or cost-sharing for

8 such option).

9 (D) The procedures for participants, bene10 ficiaries, and enrollees to select, access, and

11 change participating primary and specialty pro12 viders.

13 (E) The rights and procedures for obtain14 ing referrals (including standing referrals) to

15 participating and nonparticipating providers.

16 (F) The name, address, and telephone

17 number of participating health care providers

18 and an indication of whether each such provider

19 is available to accept new patients.

20 (G) Any limitations imposed on the selec21 tion of qualifying participating health care pro22 viders, including any limitations imposed under

23 section 112(b)(2).

24 (H) How the plan or issuer addresses the

25 needs of participants, beneficiaries, and enroll-
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1 ees and others who do not speak English or

2 who have other special communications needs in

3 accessing providers under the plan or coverage,

4 including the provision of information described

5 in this subsection and subsection (c) to such in6 dividuals.

7 (4) OUT-OF-AREA COVERAGE.—Out-of-area cov8 erage provided by the plan or issuer.

9 (5) EMERGENCY COVERAGE.—Coverage of

10 emergency services, including—

11 (A) the appropriate use of emergency serv12 ices, including use of the 911 telephone system

13 or its local equivalent in emergency situations

14 and an explanation of what constitutes an

15 emergency situation;

16 (B) the process and procedures of the plan

17 or issuer for obtaining emergency services; and

18 (C) the locations of (i) emergency depart19 ments, and (ii) other settings, in which plan

20 physicians and hospitals provide emergency

21 services and post-stabilization care.

22 (6) PERCENTAGE OF PREMIUMS USED FOR

23 BENEFITS (LOSS-RATIOS).—In the case of health in24 surance coverage only (and not with respect to group

25 health plans that do not provide coverage through
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1 health insurance coverage), a description of the over2 all loss-ratio for the coverage (as defined in accord3 ance with rules established or recognized by the Sec4 retary of Health and Human Services).

5 (7) PRIOR AUTHORIZATION RULES.—Rules re6 garding prior authorization or other review require7 ments that could result in noncoverage or non8 payment.

9 (8) GRIEVANCE AND APPEALS PROCEDURES.—

10 All appeal or grievance rights and procedures under

11 the plan or coverage, including the method for filing

12 grievances and the time frames and circumstances

13 for acting on grievances and appeals, who is the ap14 plicable authority with respect to the plan or issuer.

15 (9) QUALITY ASSURANCE.—Any information

16 made public by an accrediting organization in the

17 process of accreditation of the plan or issuer or any

18 additional quality indicators the plan or issuer

19 makes available.

20 (10) INFORMATION ON ISSUER.—Notice of ap21 propriate mailing addresses and telephone numbers

22 to be used by participants, beneficiaries, and enroll23 ees in seeking information or authorization for treat24 ment.
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1 (11) NOTICE OF REQUIREMENTS.—Notice of

2 the requirements of this title.

3 (12) AVAILABILITY OF INFORMATION ON RE4 QUEST.—Notice that the information described in

5 subsection (c) is available upon request.

6 (c) INFORMATION MADE AVAILABLE UPON RE7 QUEST.—The information described in this subsection is

8 the following:

9 (1) UTILIZATION REVIEW ACTIVITIES.—A de10 scription of procedures used and requirements (in11 cluding circumstances, time frames, and appeal

12 rights) under any utilization review program under

13 section 101, including under any drug formulary

14 program under section 118.

15 (2) GRIEVANCE AND APPEALS INFORMATION.—

16 Information on the number of grievances and ap17 peals and on the disposition in the aggregate of such

18 matters.

19 (3) METHOD OF PHYSICIAN COMPENSATION.—

20 A general description by category (including salary,

21 fee-for-service, capitation, and such other categories

22 as may be specified in regulations of the Secretary)

23 of the applicable method by which a specified pro24 spective or treating health care professional is (or
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1 would be) compensated in connection with the provi2 sion of health care under the plan or coverage.

3 (4) SPECIFIC INFORMATION ON CREDENTIALS

4 OF PARTICIPATING PROVIDERS.—In the case of each

5 participating provider, a description of the creden6 tials of the provider.

7 (5) FORMULARY RESTRICTIONS.—A description

8 of the nature of any drug formula restrictions.

9 (6) PARTICIPATING PROVIDER LIST.—A list of

10 current participating health care providers.

11 (d) CONSTRUCTION.—Nothing in this section shall be

12 construed as requiring public disclosure of individual con13 tracts or financial arrangements between a group health

14 plan or health insurance issuer and any provider.

15 Subtitle D—Protecting the Doctor16 Patient Relationship

17 SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN

18 MEDICAL COMMUNICATIONS.

19 (a) GENERAL RULE.—The provisions of any contract

20 or agreement, or the operation of any contract or agree21 ment, between a group health plan or health insurance

22 issuer in relation to health insurance coverage (including

23 any partnership, association, or other organization that

24 enters into or administers such a contract or agreement)

25 and a health care provider (or group of health care pro-
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1 viders) shall not prohibit or otherwise restrict a health

2 care professional from advising such a participant, bene3 ficiary, or enrollee who is a patient of the professional

4 about the health status of the individual or medical care

5 or treatment for the individual’s condition or disease, re6 gardless of whether benefits for such care or treatment

7 are provided under the plan or coverage, if the professional

8 is acting within the lawful scope of practice.

9 (b) NULLIFICATION.—Any contract provision or

10 agreement that restricts or prohibits medical communica11 tions in violation of subsection (a) shall be null and void.

12 SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PRO13 VIDERS BASED ON LICENSURE.

14 (a) IN GENERAL.—A group health plan and a health

15 insurance issuer offering health insurance coverage shall

16 not discriminate with respect to participation or indem17 nification as to any provider who is acting within the scope

18 of the provider’s license or certification under applicable

19 State law, solely on the basis of such license or certifi20 cation.

21 (b) CONSTRUCTION.—Subsection (a) shall not be

22 construed—

23 (1) as requiring the coverage under a group

24 health plan or health insurance coverage of par25 ticular benefits or services or to prohibit a plan or
73

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1 issuer from including providers only to the extent

2 necessary to meet the needs of the plan’s or issuer’s

3 participants, beneficiaries, or enrollees or from es4 tablishing any measure designed to maintain quality

5 and control costs consistent with the responsibilities

6 of the plan or issuer;

7 (2) to override any State licensure or scope-of8 practice law; or

9 (3) as requiring a plan or issuer that offers net10 work coverage to include for participation every will11 ing provider who meets the terms and conditions of

12 the plan or issuer.

13 SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE

14 ARRANGEMENTS.

15 (a) IN GENERAL.—A group health plan and a health

16 insurance issuer offering health insurance coverage may

17 not operate any physician incentive plan (as defined in

18 subparagraph (B) of section 1876(i)(8) of the Social Secu19 rity Act) unless the requirements described in clauses (i),

20 (ii)(I), and (iii) of subparagraph (A) of such section are

21 met with respect to such a plan.

22 (b) APPLICATION.—For purposes of carrying out

23 paragraph (1), any reference in section 1876(i)(8) of the

24 Social Security Act to the Secretary, an eligible organiza25 tion, or an individual enrolled with the organization shall
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1 be treated as a reference to the applicable authority, a

2 group health plan or health insurance issuer, respectively,

3 and a participant, beneficiary, or enrollee with the plan

4 or organization, respectively.

5 (c) CONSTRUCTION.—Nothing in this section shall be

6 construed as prohibiting all capitation and similar ar7 rangements or all provider discount arrangements.

8 SEC. 134. PAYMENT OF CLAIMS.

9 A group health plan, and a health insurance issuer

10 offering group health insurance coverage, shall provide for

11 prompt payment of claims submitted for health care serv12 ices or supplies furnished to a participant, beneficiary, or

13 enrollee with respect to benefits covered by the plan or

14 issuer, in a manner consistent with the provisions of sec15 tions 1816(c)(2) and 1842(c)(2) of the Social Security Act

16 (42 U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), ex17 cept that for purposes of this section, subparagraph (C)

18 of section 1816(c)(2) of the Social Security Act shall be

19 treated as applying to claims received from a participant,

20 beneficiary, or enrollee as well as claims referred to in

21 such subparagraph.

22 SEC. 135. PROTECTION FOR PATIENT ADVOCACY.

23 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

24 AND GRIEVANCE PROCESS.—A group health plan, and a

25 health insurance issuer with respect to the provision of
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1 health insurance coverage, may not retaliate against a par2 ticipant, beneficiary, enrollee, or health care provider

3 based on the participant’s, beneficiary’s, enrollee’s or pro4 vider’s use of, or participation in, a utilization review proc5 ess or a grievance process of the plan or issuer (including

6 an internal or external review or appeal process) under

7 this title.

8 (b) PROTECTION FOR QUALITY ADVOCACY BY

9 HEALTH CARE PROFESSIONALS.—

10 (1) IN GENERAL.—A group health plan or

11 health insurance issuer may not retaliate or dis12 criminate against a protected health care profes13 sional because the professional in good faith—

14 (A) discloses information relating to the

15 care, services, or conditions affecting one or

16 more participants, beneficiaries, or enrollees of

17 the plan or issuer to an appropriate public reg18 ulatory agency, an appropriate private accredi19 tation body, or appropriate management per20 sonnel of the plan or issuer; or

21 (B) initiates, cooperates, or otherwise par22 ticipates in an investigation or proceeding by

23 such an agency with respect to such care, serv24 ices, or conditions.
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1 If an institutional health care provider is a partici2 pating provider with such a plan or issuer or other3 wise receives payments for benefits provided by such

4 a plan or issuer, the provisions of the previous sen5 tence shall apply to the provider in relation to care,

6 services, or conditions affecting one or more patients

7 within an institutional health care provider in the

8 same manner as they apply to the plan or issuer in

9 relation to care, services, or conditions provided to

10 one or more participants, beneficiaries, or enrollees;

11 and for purposes of applying this sentence, any ref12 erence to a plan or issuer is deemed a reference to

13 the institutional health care provider.

14 (2) GOOD FAITH ACTION.—For purposes of

15 paragraph (1), a protected health care professional

16 is considered to be acting in good faith with respect

17 to disclosure of information or participation if, with

18 respect to the information disclosed as part of the

19 action—

20 (A) the disclosure is made on the basis of

21 personal knowledge and is consistent with that

22 degree of learning and skill ordinarily possessed

23 by health care professionals with the same li24 censure or certification and the same experi25 ence;
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1 (B) the professional reasonably believes the

2 information to be true;

3 (C) the information evidences either a vio4 lation of a law, rule, or regulation, of an appli5 cable accreditation standard, or of a generally

6 recognized professional or clinical standard or

7 that a patient is in imminent hazard of loss of

8 life or serious injury; and

9 (D) subject to subparagraphs (B) and (C)

10 of paragraph (3), the professional has followed

11 reasonable internal procedures of the plan,

12 issuer, or institutional health care provider es13 tablished for the purpose of addressing quality

14 concerns before making the disclosure.

15 (3) EXCEPTION AND SPECIAL RULE.—

16 (A) GENERAL EXCEPTION.—Paragraph (1)

17 does not protect disclosures that would violate

18 Federal or State law or diminish or impair the

19 rights of any person to the continued protection

20 of confidentiality of communications provided

21 by such law.

22 (B) NOTICE OF INTERNAL PROCEDURES.—

23 Subparagraph (D) of paragraph (2) shall not

24 apply unless the internal procedures involved

25 are reasonably expected to be known to the
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1 health care professional involved. For purposes

2 of this subparagraph, a health care professional

3 is reasonably expected to know of internal pro4 cedures if those procedures have been made

5 available to the professional through distribu6 tion or posting.

7 (C) INTERNAL PROCEDURE EXCEPTION.—

8 Subparagraph (D) of paragraph (2) also shall

9 not apply if—

10 (i) the disclosure relates to an immi11 nent hazard of loss of life or serious injury

12 to a patient;

13 (ii) the disclosure is made to an ap14 propriate private accreditation body pursu15 ant to disclosure procedures established by

16 the body; or

17 (iii) the disclosure is in response to an

18 inquiry made in an investigation or pro19 ceeding of an appropriate public regulatory

20 agency and the information disclosed is

21 limited to the scope of the investigation or

22 proceeding.

23 (4) ADDITIONAL CONSIDERATIONS.—It shall

24 not be a violation of paragraph (1) to take an ad25 verse action against a protected health care profes-
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1 sional if the plan, issuer, or provider taking the ad2 verse action involved demonstrates that it would

3 have taken the same adverse action even in the ab4 sence of the activities protected under such para5 graph.

6 (5) NOTICE.—A group health plan, health in7 surance issuer, and institutional health care provider

8 shall post a notice, to be provided or approved by

9 the Secretary of Labor, setting forth excerpts from,

10 or summaries of, the pertinent provisions of this

11 subsection and information pertaining to enforce12 ment of such provisions.

13 (6) CONSTRUCTIONS.—

14 (A) DETERMINATIONS OF COVERAGE.—

15 Nothing in this subsection shall be construed to

16 prohibit a plan or issuer from making a deter17 mination not to pay for a particular medical

18 treatment or service or the services of a type of

19 health care professional.

20 (B) ENFORCEMENT OF PEER REVIEW PRO21 TOCOLS AND INTERNAL PROCEDURES.—Noth22 ing in this subsection shall be construed to pro23 hibit a plan, issuer, or provider from estab24 lishing and enforcing reasonable peer review or

25 utilization review protocols or determining
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1 whether a protected health care professional has

2 complied with those protocols or from estab3 lishing and enforcing internal procedures for

4 the purpose of addressing quality concerns.

5 (C) RELATION TO OTHER RIGHTS.—Noth6 ing in this subsection shall be construed to

7 abridge rights of participants, beneficiaries, en8 rollees, and protected health care professionals

9 under other applicable Federal or State laws.

10 (7) PROTECTED HEALTH CARE PROFESSIONAL

11 DEFINED.—For purposes of this subsection, the

12 term ‘‘protected health care professional’’ means an

13 individual who is a licensed or certified health care

14 professional and who—

15 (A) with respect to a group health plan or

16 health insurance issuer, is an employee of the

17 plan or issuer or has a contract with the plan

18 or issuer for provision of services for which ben19 efits are available under the plan or issuer; or

20 (B) with respect to an institutional health

21 care provider, is an employee of the provider or

22 has a contract or other arrangement with the

23 provider respecting the provision of health care

24 services.
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1 Subtitle E—Definitions

2 SEC. 151. DEFINITIONS.

3 (a) INCORPORATION OF GENERAL DEFINITIONS.—

4 Except as otherwise provided, the provisions of section

5 2791 of the Public Health Service Act shall apply for pur6 poses of this title in the same manner as they apply for

7 purposes of title XXVII of such Act.

8 (b) SECRETARY.—Except as otherwise provided, the

9 term ‘‘Secretary’’ means the Secretary of Health and

10 Human Services, in consultation with the Secretary of

11 Labor and the term ‘‘appropriate Secretary’’ means the

12 Secretary of Health and Human Services in relation to

13 carrying out this title under sections 2706 and 2751 of

14 the Public Health Service Act and the Secretary of Labor

15 in relation to carrying out this title under section 713 of

16 the Employee Retirement Income Security Act of 1974.

17 (c) ADDITIONAL DEFINITIONS.—For purposes of this

18 title:

19 (1) ACTIVELY PRACTICING.—The term ‘‘actively

20 practicing’’ means, with respect to a physician or

21 other health care professional, such a physician or

22 professional who provides professional services to in23 dividual patients on average at least two full days

24 per week.
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1 (2) APPLICABLE AUTHORITY.—The term ‘‘ap2 plicable authority’’ means—

3 (A) in the case of a group health plan, the

4 Secretary of Health and Human Services and

5 the Secretary of Labor; and

6 (B) in the case of a health insurance issuer

7 with respect to a specific provision of this title,

8 the applicable State authority (as defined in

9 section 2791(d) of the Public Health Service

10 Act), or the Secretary of Health and Human

11 Services, if such Secretary is enforcing such

12 provision under section 2722(a)(2) or

13 2761(a)(2) of the Public Health Service Act.

14 (3) CLINICAL PEER.—The term ‘‘clinical peer’’

15 means, with respect to a review or appeal, an ac16 tively practicing physician (allopathic or osteopathic)

17 or other actively practicing health care professional

18 who holds a nonrestricted license, and who is appro19 priately credentialed in the same or similar specialty

20 or subspecialty (as appropriate) as typically handles

21 the medical condition, procedure, or treatment under

22 review or appeal and includes a pediatric specialist

23 where appropriate; except that only a physician

24 (allopathic or osteopathic) may be a clinical peer
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1 with respect to the review or appeal of treatment

2 recommended or rendered by a physician.

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

4 with respect to health insurance coverage offered by

5 a health insurance issuer, an individual enrolled with

6 the issuer to receive such coverage.

7 (5) GROUP HEALTH PLAN.—The term ‘‘group

8 health plan’’ has the meaning given such term in

9 section 733(a) of the Employee Retirement Income

10 Security Act of 1974 and in section 2791(a)(1) of

11 the Public Health Service Act.

12 (6) HEALTH CARE PROFESSIONAL.—The term

13 ‘‘health care professional’’ means an individual who

14 is licensed, accredited, or certified under State law

15 to provide specified health care services and who is

16 operating within the scope of such licensure, accredi17 tation, or certification.

18 (7) HEALTH CARE PROVIDER.—The term

19 ‘‘health care provider’’ includes a physician or other

20 health care professional, as well as an institutional

21 or other facility or agency that provides health care

22 services and that is licensed, accredited, or certified

23 to provide health care items and services under ap24 plicable State law.
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1 (8) NETWORK.—The term ‘‘network’’ means,

2 with respect to a group health plan or health insur3 ance issuer offering health insurance coverage, the

4 participating health care professionals and providers

5 through whom the plan or issuer provides health

6 care items and services to participants, beneficiaries,

7 or enrollees.

8 (9) NONPARTICIPATING.—The term ‘‘non9 participating’’ means, with respect to a health care

10 provider that provides health care items and services

11 to a participant, beneficiary, or enrollee under group

12 health plan or health insurance coverage, a health

13 care provider that is not a participating health care

14 provider with respect to such items and services.

15 (10) PARTICIPATING.—The term ‘‘partici16 pating’’ means, with respect to a health care pro17 vider that provides health care items and services to

18 a participant, beneficiary, or enrollee under group

19 health plan or health insurance coverage offered by

20 a health insurance issuer, a health care provider that

21 furnishes such items and services under a contract

22 or other arrangement with the plan or issuer.

23 (11) PRIOR AUTHORIZATION.—The term ‘‘prior

24 authorization’’ means the process of obtaining prior

25 approval from a health insurance issuer or group
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1 health plan for the provision or coverage of medical

2 services.

3 SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUC4 TION.

5 (a) CONTINUED APPLICABILITY OF STATE LAW

6 WITH RESPECT TO HEALTH INSURANCE ISSUERS.—

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

8 this title shall not be construed to supersede any

9 provision of State law which establishes, implements,

10 or continues in effect any standard or requirement

11 solely relating to health insurance issuers (in connec12 tion with group health insurance coverage or other13 wise) except to the extent that such standard or re14 quirement prevents the application of a requirement

15 of this title.

16 (2) CONTINUED PREEMPTION WITH RESPECT

17 TO GROUP HEALTH PLANS.—Nothing in this title

18 shall be construed to affect or modify the provisions

19 of section 514 of the Employee Retirement Income

20 Security Act of 1974 with respect to group health

21 plans.

22 (b) DEFINITIONS.—For purposes of this section:

23 (1) STATE LAW.—The term ‘‘State law’’ in24 cludes all laws, decisions, rules, regulations, or other

25 State action having the effect of law, of any State.
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1 A law of the United States applicable only to the

2 District of Columbia shall be treated as a State law

3 rather than a law of the United States.

4 (2) STATE.—The term ‘‘State’’ includes a

5 State, the District of Columbia, Puerto Rico, the

6 Virgin Islands, Guam, American Samoa, the North7 ern Mariana Islands, any political subdivisions of

8 such, or any agency or instrumentality of such.

9 SEC. 153. EXCLUSIONS.

10 (a) NO BENEFIT REQUIREMENTS.—Nothing in this

11 title shall be construed to require a group health plan or

12 a health insurance issuer offering health insurance cov13 erage to include specific items and services under the

14 terms of such a plan or coverage, other than those that

15 are provided for under the terms of such plan or coverage.

16 (b) EXCLUSION FROM ACCESS TO CARE MANAGED

17 CARE PROVISIONS FOR FEE-FOR-SERVICE COVERAGE.—

18 (1) IN GENERAL.—The provisions of sections

19 111 through 117 shall not apply to a group health

20 plan or health insurance coverage if the only cov21 erage offered under the plan or coverage is fee-for22 service coverage (as defined in paragraph (2)).

23 (2) FEE-FOR-SERVICE COVERAGE DEFINED.—

24 For purposes of this subsection, the term ‘‘fee-for-
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1 service coverage’’ means coverage under a group

2 health plan or health insurance coverage that—

3 (A) reimburses hospitals, health profes4 sionals, and other providers on the basis of a

5 rate determined by the plan or issuer on a fee6 for-service basis without placing the provider at

7 financial risk;

8 (B) does not vary reimbursement for such

9 a provider based on an agreement to contract

10 terms and conditions or the utilization of health

11 care items or services relating to such provider;

12 (C) does not restrict the selection of pro13 viders among those who are lawfully authorized

14 to provide the covered services and agree to ac15 cept the terms and conditions of payment estab16 lished under the plan or by the issuer; and

17 (D) for which the plan or issuer does not

18 require prior authorization before providing cov19 erage for any services.

20 SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

21 Only for purposes of applying the requirements of

22 this title under sections 2707 and 2753 of the Public

23 Health Service Act and section 714 of the Employee Re24 tirement Income Security Act of 1974, section

25 2791(c)(2)(A), and section 733(c)(2)(A) of the Employee
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1 Retirement Income Security Act of 1974 shall be deemed

2 not to apply.

3 SEC. 155. REGULATIONS.

4 The Secretaries of Health and Human Services and

5 Labor shall issue such regulations as may be necessary

6 or appropriate to carry out this title. Such regulations

7 shall be issued consistent with section 104 of Health In8 surance Portability and Accountability Act of 1996. Such

9 Secretaries may promulgate any interim final rules as the

10 Secretaries determine are appropriate to carry out this

11 title.

12 TITLE II—APPLICATION OF

13 QUALITY CARE STANDARDS

14 TO GROUP HEALTH PLANS

15 AND HEALTH INSURANCE

16 COVERAGE UNDER THE PUB17 LIC HEALTH SERVICE ACT

18 SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND

19 GROUP HEALTH INSURANCE COVERAGE.

20 (a) IN GENERAL.—Subpart 2 of part A of title

21 XXVII of the Public Health Service Act is amended by

22 adding at the end the following new section:

23 ‘‘SEC. 2707. PATIENT PROTECTION STANDARDS.

24 ‘‘(a) IN GENERAL.—Each group health plan shall

25 comply with patient protection requirements under title I
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1 of the Patients’ Bill of Rights Act, and each health insur2 ance issuer shall comply with patient protection require3 ments under such title with respect to group health insur4 ance coverage it offers, and such requirements shall be

5 deemed to be incorporated into this subsection.

6 ‘‘(b) NOTICE.—A group health plan shall comply with

7 the notice requirement under section 711(d) of the Em8 ployee Retirement Income Security Act of 1974 with re9 spect to the requirements referred to in subsection (a) and

10 a health insurance issuer shall comply with such notice

11 requirement as if such section applied to such issuer and

12 such issuer were a group health plan.’’.

13 (b) CONFORMING AMENDMENT.—Section

14 2721(b)(2)(A) of such Act (42 U.S.C. 300gg–21(b)(2)(A))

15 is amended by inserting ‘‘(other than section 2707)’’ after

16 ‘‘requirements of such subparts’’.

17 SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR18 ANCE COVERAGE.

19 Part B of title XXVII of the Public Health Service

20 Act is amended by inserting after section 2752 the fol21 lowing new section:

22 ‘‘SEC. 2753. PATIENT PROTECTION STANDARDS.

23 ‘‘(a) IN GENERAL.—Each health insurance issuer

24 shall comply with patient protection requirements under

25 title I of the Patients’ Bill of Rights Act with respect to
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1 individual health insurance coverage it offers, and such re2 quirements shall be deemed to be incorporated into this

3 subsection.

4 ‘‘(b) NOTICE.—A health insurance issuer under this

5 part shall comply with the notice requirement under sec6 tion 711(d) of the Employee Retirement Income Security

7 Act of 1974 with respect to the requirements of such title

8 as if such section applied to such issuer and such issuer

9 were a group health plan.’’.

10 TITLE III—AMENDMENTS TO

11 THE EMPLOYEE RETIREMENT

12 INCOME SECURITY ACT OF

13 1974

14 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND15 ARDS TO GROUP HEALTH PLANS AND GROUP

16 HEALTH INSURANCE COVERAGE UNDER THE

17 EMPLOYEE RETIREMENT INCOME SECURITY

18 ACT OF 1974.

19 Subpart B of part 7 of subtitle B of title I of the

20 Employee Retirement Income Security Act of 1974 is

21 amended by adding at the end the following new section:

22 ‘‘SEC. 714. PATIENT PROTECTION STANDARDS.

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

24 group health plan (and a health insurance issuer offering

25 group health insurance coverage in connection with such
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1 a plan) shall comply with the requirements of title I of

2 the Patients’ Bill of Rights Act (as in effect as of the date

3 of the enactment of such Act), and such requirements

4 shall be deemed to be incorporated into this subsection.

5 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE6 MENTS.—

7 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE8 MENTS THROUGH INSURANCE.—For purposes of

9 subsection (a), insofar as a group health plan pro10 vides benefits in the form of health insurance cov11 erage through a health insurance issuer, the plan

12 shall be treated as meeting the following require13 ments of title I of the Patients’ Bill of Rights Act

14 with respect to such benefits and not be considered

15 as failing to meet such requirements because of a

16 failure of the issuer to meet such requirements so

17 long as the plan sponsor or its representatives did

18 not cause such failure by the issuer:

19 ‘‘(A) Section 112 (relating to choice of pro20 viders).

21 ‘‘(B) Section 113 (relating to access to

22 emergency care).

23 ‘‘(C) Section 114 (relating to access to

24 specialty care).
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1 ‘‘(D) Section 115 (relating to access to ob2 stetrical and gynecological care).

3 ‘‘(E) Section 116 (relating to access to pe4 diatric care).

5 ‘‘(F) Section 117(a)(1) (relating to con6 tinuity in case of termination of provider con7 tract) and section 117(a)(2) (relating to con8 tinuity in case of termination of issuer con9 tract), but only insofar as a replacement issuer

10 assumes the obligation for continuity of care.

11 ‘‘(G) Section 118 (relating to access to

12 needed prescription drugs).

13 ‘‘(H) Section 119 (relating to coverage for

14 individuals participating in approved clinical

15 trials.)

16 ‘‘(I) Section 134 (relating to payment of

17 claims).

18 ‘‘(2) INFORMATION.—With respect to informa19 tion required to be provided or made available under

20 section 121, in the case of a group health plan that

21 provides benefits in the form of health insurance

22 coverage through a health insurance issuer, the Sec23 retary shall determine the circumstances under

24 which the plan is not required to provide or make

25 available the information (and is not liable for the
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1 issuer’s failure to provide or make available the in2 formation), if the issuer is obligated to provide and

3 make available (or provides and makes available)

4 such information.

5 ‘‘(3) GRIEVANCE AND INTERNAL APPEALS.—

6 With respect to the internal appeals process and the

7 grievance system required to be established under

8 sections 102 and 104, in the case of a group health

9 plan that provides benefits in the form of health in10 surance coverage through a health insurance issuer,

11 the Secretary shall determine the circumstances

12 under which the plan is not required to provide for

13 such process and system (and is not liable for the

14 issuer’s failure to provide for such process and sys15 tem), if the issuer is obligated to provide for (and

16 provides for) such process and system.

17 ‘‘(4) EXTERNAL APPEALS.—Pursuant to rules

18 of the Secretary, insofar as a group health plan en19 ters into a contract with a qualified external appeal

20 entity for the conduct of external appeal activities in

21 accordance with section 103, the plan shall be treat22 ed as meeting the requirement of such section and

23 is not liable for the entity’s failure to meet any re24 quirements under such section.
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1 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu2 ant to rules of the Secretary, if a health insurance

3 issuer offers health insurance coverage in connection

4 with a group health plan and takes an action in vio5 lation of any of the following sections, the group

6 health plan shall not be liable for such violation un7 less the plan caused such violation:

8 ‘‘(A) Section 131 (relating to prohibition of

9 interference with certain medical communica10 tions).

11 ‘‘(B) Section 132 (relating to prohibition

12 of discrimination against providers based on li13 censure).

14 ‘‘(C) Section 133 (relating to prohibition

15 against improper incentive arrangements).

16 ‘‘(D) Section 135 (relating to protection

17 for patient advocacy).

18 ‘‘(6) CONSTRUCTION.—Nothing in this sub19 section shall be construed to affect or modify the re20 sponsibilities of the fiduciaries of a group health

21 plan under part 4 of subtitle B.

22 ‘‘(7) APPLICATION TO CERTAIN PROHIBITIONS

23 AGAINST RETALIATION.—With respect to compliance

24 with the requirements of section 135(b)(1) of the

25 Patients’ Bill of Rights Act, for purposes of this
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1 subtitle the term ‘group health plan’ is deemed to in2 clude a reference to an institutional health care pro3 vider.

4 ‘‘(c) ENFORCEMENT OF CERTAIN REQUIREMENTS.—

5 ‘‘(1) COMPLAINTS.—Any protected health care

6 professional who believes that the professional has

7 been retaliated or discriminated against in violation

8 of section 135(b)(1) of the Patients’ Bill of Rights

9 Act may file with the Secretary a complaint within

10 180 days of the date of the alleged retaliation or dis11 crimination.

12 ‘‘(2) INVESTIGATION.—The Secretary shall in13 vestigate such complaints and shall determine if a

14 violation of such section has occurred and, if so,

15 shall issue an order to ensure that the protected

16 health care professional does not suffer any loss of

17 position, pay, or benefits in relation to the plan,

18 issuer, or provider involved, as a result of the viola19 tion found by the Secretary.

20 ‘‘(d) CONFORMING REGULATIONS.—The Secretary

21 may issue regulations to coordinate the requirements on

22 group health plans under this section with the require23 ments imposed under the other provisions of this title.’’.

24 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

25 REQUIREMENT.—Section 503 of such Act (29 U.S.C.
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1 1133) is amended by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’

2 and by adding at the end the following new subsection:

3 ‘‘(b) In the case of a group health plan (as defined

4 in section 733) compliance with the requirements of sub5 title A of title I of the Patients Bill of Rights Act in the

6 case of a claims denial shall be deemed compliance with

7 subsection (a) with respect to such claims denial.’’.

8 (c) CONFORMING AMENDMENTS.—(1) Section 732(a)

9 of such Act (29 U.S.C. 1185(a)) is amended by striking

10 ‘‘section 711’’ and inserting ‘‘sections 711 and 714’’.

11 (2) The table of contents in section 1 of such Act

12 is amended by inserting after the item relating to section

13 713 the following new item:

‘‘Sec. 714. Patient protection standards.’’.

14 (3) Section 502(b)(3) of such Act (29 U.S.C.

15 1132(b)(3)) is amended by inserting ‘‘(other than section

16 135(b))’’ after ‘‘part 7’’.

17 SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN

18 ACTIONS INVOLVING HEALTH INSURANCE

19 POLICYHOLDERS.

20 (a) IN GENERAL.—Section 514 of the Employee Re21 tirement Income Security Act of 1974 (29 U.S.C. 1144)

22 (as amended by section 301(b)) is amended further by

23 adding at the end the following subsections:
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1 ‘‘(f) PREEMPTION NOT TO APPLY TO CERTAIN AC2 TIONS ARISING OUT OF PROVISION OF HEALTH BENE3 FITS.—

4 ‘‘(1) NON-PREEMPTION OF CERTAIN CAUSES OF

5 ACTION.—

6 ‘‘(A) IN GENERAL.—Except as provided in

7 this subsection, nothing in this title shall be

8 construed to invalidate, impair, or supersede

9 any cause of action by a participant or bene10 ficiary (or the estate of a participant or bene11 ficiary) under State law to recover damages re12 sulting from personal injury or for wrongful

13 death against any person—

14 ‘‘(i) in connection with the provision

15 of insurance, administrative services, or

16 medical services by such person to or for

17 a group health plan as defined in section

18 733), or

19 ‘‘(ii) that arises out of the arrange20 ment by such person for the provision of

21 such insurance, administrative services, or

22 medical services by other persons.

23 ‘‘(B) LIMITATION ON PUNITIVE DAM24 AGES.—
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1 ‘‘(i) IN GENERAL.—No person shall be

2 liable for any punitive, exemplary, or simi3 lar damages in the case of a cause of ac4 tion brought under subparagraph (A) if—

5 ‘‘(I) it relates to an externally

6 appealable decision (as defined in sub7 section (a)(2) of section 103 of the

8 Patients’ Bill of Rights Act);

9 ‘‘(II) an external appeal with re10 spect to such decision was completed

11 under such section 103;

12 ‘‘(III) in the case such external

13 appeal was initiated by the plan or

14 issuer filing the request for the exter15 nal appeal, the request was filed on a

16 timely basis before the date the action

17 was brought or, if later, within 30

18 days after the date the externally ap19 pealable decision was made; and

20 ‘‘(IV) the plan or issuer complied

21 with the determination of the external

22 appeal entity upon receipt of the de23 termination of the external appeal en24 tity.
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1 The provisions of this clause supersede any

2 State law or common law to the contrary.

3 ‘‘(ii) EXCEPTION.—Clause (i) shall

4 not apply with respect to damages in the

5 case of a cause of action for wrongful

6 death if the applicable State law provides

7 (or has been construed to provide) for

8 damages in such a cause of action which

9 are only punitive or exemplary in nature.

10 ‘‘(C) PERSONAL INJURY DEFINED.—For

11 purposes of this subsection, the term ‘personal

12 injury’ means a physical injury and includes an

13 injury arising out of the treatment (or failure

14 to treat) a mental illness or disease.

15 ‘‘(2) EXCEPTION FOR GROUP HEALTH PLANS,

16 EMPLOYERS, AND OTHER PLAN SPONSORS.—

17 ‘‘(A) IN GENERAL.—Subject to subpara18 graph (B), paragraph (1) does not authorize—

19 ‘‘(i) any cause of action against a

20 group health plan or an employer or other

21 plan sponsor maintaining the plan (or

22 against an employee of such a plan, em23 ployer, or sponsor acting within the scope

24 of employment), or
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1 ‘‘(ii) a right of recovery, indemnity, or

2 contribution by a person against a group

3 health plan or an employer or other plan

4 sponsor (or such an employee) for damages

5 assessed against the person pursuant to a

6 cause of action under paragraph (1).

7 ‘‘(B) SPECIAL RULE.—Subparagraph (A)

8 shall not preclude any cause of action described

9 in paragraph (1) against group health plan or

10 an employer or other plan sponsor (or against

11 an employee of such a plan, employer, or spon12 sor acting within the scope of employment) if—

13 ‘‘(i) such action is based on the exer14 cise by the plan, employer, or sponsor (or

15 employee) of discretionary authority to

16 make a decision on a claim for benefits

17 covered under the plan or health insurance

18 coverage in the case at issue; and

19 ‘‘(ii) the exercise by the plan, em20 ployer, or sponsor (or employee) of such

21 authority resulted in personal injury or

22 wrongful death.

23 ‘‘(C) EXCEPTION.—The exercise of discre24 tionary authority described in subparagraph

25 (B)(i) shall not be construed to include—
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1 ‘‘(i) the decision to include or exclude

2 from the plan any specific benefit;

3 ‘‘(ii) any decision to provide extra-con4 tractual benefits; or

5 ‘‘(iii) any decision not to consider the

6 provision of a benefit while internal or ex7 ternal review is being conducted.

8 ‘‘(3) FUTILITY OF EXHAUSTION.—An individual

9 bringing an action under this subsection is required

10 to exhaust administrative processes under sections

11 102 and 103 of the Patients’ Bill of Rights Act, un12 less the injury to or death of such individual has oc13 curred before the completion of such processes.

14 ‘‘(4) CONSTRUCTION.—Nothing in this sub15 section shall be construed as—

16 ‘‘(A) permitting a cause of action under

17 State law for the failure to provide an item or

18 service which is specifically excluded under the

19 group health plan involved;

20 ‘‘(B) as preempting a State law which re21 quires an affidavit or certificate of merit in a

22 civil action; or

23 ‘‘(C) permitting a cause of action or rem24 edy under State law in connection with the pro25 vision or arrangement of excepted benefits (as
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1 defined in section 733(c)), other than those de2 scribed in section 733(c)(2)(A).

3 ‘‘(g) RULES OF CONSTRUCTION RELATING TO

4 HEALTH CARE.—Nothing in this title shall be construed

5 as—

6 ‘‘(1) permitting the application of State laws

7 that are otherwise superseded by this title and that

8 mandate the provision of specific benefits by a group

9 health plan (as defined in section 733(a)) or a mul10 tiple employer welfare arrangement (as defined in

11 section 3(40)), or

12 ‘‘(2) affecting any State law which regulates the

13 practice of medicine or provision of medical care, or

14 affecting any action based upon such a State law.’’.

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

16 subsection (a) shall apply to acts and omissions occurring

17 on or after the date of enactment of this Act, from which

18 a cause of action arises.

19 SEC. 303. LIMITATIONS ON ACTIONS.

20 Section 502 of the Employee Retirement Income Se21 curity Act of 1974 (29 U.S.C. 1132) (as amended by sec22 tion 304(b)) is amended further by adding at the end the

23 following new subsection:

24 ‘‘(o)(1) Except as provided in this subsection, no ac25 tion may be brought under subsection (a)(1)(B), (a)(2),
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1 or (a)(3) by a participant or beneficiary seeking relief

2 based on the application of any provision in section 101,

3 subtitle B, or subtitle D of title I of the Patients’ Bill

4 of Rights Act (as incorporated under section 714).

5 ‘‘(2) An action may be brought under subsection

6 (a)(1)(B), (a)(2), or (a)(3) by a participant or beneficiary

7 seeking relief based on the application of section 101, 113,

8 114, 115, 116, 117, 119, or 118(3) of the Patients’ Bill

9 of Rights Act (as incorporated under section 714) to the

10 individual circumstances of that participant or beneficiary,

11 except that—

12 ‘‘(A) such an action may not be brought or

13 maintained as a class action; and

14 ‘‘(B) in such an action, relief may only provide

15 for the provision of (or payment of) benefits, items,

16 or services denied to the individual participant or

17 beneficiary involved (and for attorney’s fees and the

18 costs of the action, at the discretion of the court)

19 and shall not provide for any other relief to the par20 ticipant or beneficiary or for any relief to any other

21 person.

22 ‘‘(3) Nothing in this subsection shall be construed as

23 affecting any action brought by the Secretary.’’.
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1 TITLE IV—APPLICATION TO

2 GROUP HEALTH PLANS

3 UNDER THE INTERNAL REV4 ENUE CODE OF 1986

5 SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE

6 OF 1986.

7 Subchapter B of chapter 100 of the Internal Revenue

8 Code of 1986 is amended—

9 (1) in the table of sections, by inserting after

10 the item relating to section 9812 the following new

11 item:

‘‘Sec. 9813. Standard relating to patient freedom of choice.’’;

12 and

13 (2) by inserting after section 9812 the fol14 lowing:

15 ‘‘SEC. 9813. STANDARD RELATING TO PATIENTS’ BILL OF

16 RIGHTS.

17 ‘‘A group health plan shall comply with the require18 ments of title I of the Patients’ Bill of Rights Act (as

19 in effect as of the date of the enactment of such Act),

20 and such requirements shall be deemed to be incorporated

21 into this section.’’.
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1 TITLE V—EFFECTIVE DATES; CO2 ORDINATION IN IMPLEMEN3 TATION

4 SEC. 501. EFFECTIVE DATES.

5 (a) GROUP HEALTH COVERAGE.—

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

7 the amendments made by sections 201(a), 301, 303,

8 and 401 (and title I insofar as it relates to such sec9 tions) shall apply with respect to group health plans,

10 and health insurance coverage offered in connection

11 with group health plans, for plan years beginning on

12 or after January 1, 2002 (in this section referred to

13 as the ‘‘general effective date’’) and also shall apply

14 to portions of plan years occurring on and after such

15 date.

16 (2) TREATMENT OF COLLECTIVE BARGAINING

17 AGREEMENTS.—In the case of a group health plan

18 maintained pursuant to one or more collective bar19 gaining agreements between employee representa20 tives and one or more employers ratified before the

21 date of the enactment of this Act, the amendments

22 made by sections 201(a), 301, 303, and 401 (and

23 title I insofar as it relates to such sections) shall not

24 apply to plan years beginning before the later of—
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1 (A) the date on which the last collective

2 bargaining agreements relating to the plan ter3 minates (determined without regard to any ex4 tension thereof agreed to after the date of the

5 enactment of this Act); or

6 (B) the general effective date.

7 For purposes of subparagraph (A), any plan amend8 ment made pursuant to a collective bargaining

9 agreement relating to the plan which amends the

10 plan solely to conform to any requirement added by

11 this Act shall not be treated as a termination of

12 such collective bargaining agreement.

13 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—

14 The amendments made by section 202 shall apply with

15 respect to individual health insurance coverage offered,

16 sold, issued, renewed, in effect, or operated in the indi17 vidual market on or after the general effective date.

18 SEC. 502. COORDINATION IN IMPLEMENTATION.

19 The Secretary of Labor, the Secretary of Health and

20 Human Services, and the Secretary of the Treasury shall

21 ensure, through the execution of an interagency memo22 randum of understanding among such Secretaries, that—

23 (1) regulations, rulings, and interpretations

24 issued by such Secretaries relating to the same mat25 ter over which such Secretaries have responsibility
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1 under the provisions of this Act (and the amend2 ments made thereby) are administered so as to have

3 the same effect at all times; and

4 (2) coordination of policies relating to enforcing

5 the same requirements through such Secretaries in

6 order to have a coordinated enforcement strategy

7 that avoids duplication of enforcement efforts and

8 assigns priorities in enforcement.

9 TITLE VI—MISCELLANEOUS

10 PROVISIONS

11 SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.

12 (a) ESTABLISHMENT OF PANEL.—

13 (1) ESTABLISHMENT.—There is established a

14 panel to be known as the Health Care Panel to De15 vise a Uniform Explanation of Benefits (in this sec16 tion referred to as the ‘‘Panel’’).

17 (2) DUTIES OF PANEL.—

18 (A) IN GENERAL.—The Panel shall devise

19 a single form for use by third-party health care

20 payers for the remittance of claims to providers.

21 (B) DEFINITION.—For purposes of this

22 section, the term ‘‘third-party health care

23 payer’’ means any entity that contractually

24 pays health care bills for an individual.

25 (3) MEMBERSHIP.—
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1 (A) SIZE AND COMPOSITION.—The Sec2 retary of Health and Human Services shall de3 termine the number of members and the com4 position of the Panel. Such Panel shall include

5 equal numbers of representatives of private in6 surance organizations, consumer groups, State

7 insurance commissioners, State medical soci8 eties, State hospital associations, and State

9 medical specialty societies.

10 (B) TERMS OF APPOINTMENT.—The mem11 bers of the Panel shall serve for the life of the

12 Panel.

13 (C) VACANCIES.—A vacancy in the Panel

14 shall not affect the power of the remaining

15 members to execute the duties of the Panel, but

16 any such vacancy shall be filled in the same

17 manner in which the original appointment was

18 made.

19 (4) PROCEDURES.—

20 (A) MEETINGS.—The Panel shall meet at

21 the call of a majority of its members.

22 (B) FIRST MEETING.—The Panel shall

23 convene not later than 60 days after the date

24 of the enactment of the Bipartisan Consensus

25 Managed Care Improvement Act of 1999.
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1 (C) QUORUM.—A quorum shall consist of

2 a majority of the members of the Panel.

3 (D) HEARINGS.—For the purpose of car4 rying out its duties, the Panel may hold such

5 hearings and undertake such other activities as

6 the Panel determines to be necessary to carry

7 out its duties.

8 (5) ADMINISTRATION.—

9 (A) COMPENSATION.—Except as provided

10 in subparagraph (B), members of the Panel

11 shall receive no additional pay, allowances, or

12 benefits by reason of their service on the Panel.

13 (B) TRAVEL EXPENSES AND PER DIEM.—

14 Each member of the Panel who is not an officer

15 or employee of the Federal Government shall

16 receive travel expenses and per diem in lieu of

17 subsistence in accordance with sections 5702

18 and 5703 of title 5, United States Code.

19 (C) CONTRACT AUTHORITY.—The Panel

20 may contract with and compensate Government

21 and private agencies or persons for items and

22 services, without regard to section 3709 of the

23 Revised Statutes (41 U.S.C. 5).

24 (D) USE OF MAILS.—The Panel may use

25 the United States mails in the same manner
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1 and under the same conditions as Federal agen2 cies and shall, for purposes of the frank, be

3 considered a commission of Congress as de4 scribed in section 3215 of title 39, United

5 States Code.

6 (E) ADMINISTRATIVE SUPPORT SERV7 ICES.—Upon the request of the Panel, the Sec8 retary of Health and Human Services shall pro9 vide to the Panel on a reimbursable basis such

10 administrative support services as the Panel

11 may request.

12 (6) SUBMISSION OF FORM.—Not later than 2

13 years after the first meeting, the Panel shall submit

14 a form to the Secretary of Health and Human Serv15 ices for use by third-party health care payers.

16 (7) TERMINATION.—The Panel shall terminate

17 on the day after submitting the form under para18 graph (6).

19 (b) REQUIREMENT FOR USE OF FORM BY THIRD20 PARTY CARE PAYERS.—A third-party health care payer

21 shall be required to use the form devised under subsection

22 (a) for plan years beginning on or after 5 years following

23 the date of the enactment of this Act.
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1 SEC. 602. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

2 (a) IN GENERAL.—Nothing in this Act (or an amend3 ment made by this Act) shall be construed to alter or

4 amend the Social Security Act (or any regulation promul5 gated under that Act).

6 (b) TRANSFERS.—

7 (1) ESTIMATE OF SECRETARY.—The Secretary

8 of the Treasury shall annually estimate the impact

9 that the enactment of this Act has on the income

10 and balances of the trust funds established under

11 section 201 of the Social Security Act (42 U.S.C.

12 401).

13 (2) TRANSFER OF FUNDS.—If, under para14 graph (1), the Secretary of the Treasury estimates

15 that the enactment of this Act has a negative impact

16 on the income and balances of the trust funds estab17 lished under section 201 of the Social Security Act

18 (42 U.S.C. 401), the Secretary shall transfer, not

19 less frequently than quarterly, from the general reve20 nues of the Federal Government an amount suffi21 cient so as to ensure that the income and balances

22 of such trust funds are not reduced as a result of

23 the enactment of such Act.
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1 SEC. 603. FMAP REDUCTION FOR OTHER THAN SUBSTAN2 TIAL NONCOMPLIANCE WITH MEDICAID

3 STATE PLAN REQUIREMENTS.

4 (a) IN GENERAL.—Section 1904 of the Social Secu5 rity Act (42 U.S.C. 1396c) is amended—

6 (1) by striking all (including the heading) that

7 precedes ‘‘If the Secretary’’ and inserting the fol8 lowing:

9 ‘‘SANCTIONS FOR NON-COMPLIANCE OF STATE PLANS

10 SEC. 1904. (a) SANCTIONS FOR SUBSTANTIAL NON11 COMPLIANCE.—’’; and

12 (2) by adding at the end the following new sub13 section:

14 ‘‘(b) OTHER SANCTIONS.—

15 ‘‘(1) IN GENERAL.—If the Secertary, after af16 fording the State agency reasonable notice and op17 portunity for hearing, finds a failure of the State

18 plan to comply with section 1902, or a failure of

19 plan administration to comply with the plan, other

20 than a failure of the severity described in subsection

21 (a), the Secretary may reduce payments under sec22 tion 1903(a)(1) to that State by up to 0.5 percent

23 for each instance of such non-compliance.

24 ‘‘(2) CONTINUATION OF REDUCTIONS.—Reduc25 tions under paragraph (1) are authorized to con26 tinue until the Secretary is satisfied that the in-
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1 stance of non-compliance has ceased and will not

2 recur.’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Section 1903(a)(1) of such Act (42 U.S.C.

5 1396b(a)(1)) is amended by striking ‘‘and sub6 section 1923(f)’’ and inserting ‘‘sections 1904 and

7 1923(f)’’.

8 (2) Section 1905(b) of such Act (42 U.S.C.

9 1396d(b)) is amended by striking ‘‘section 1933(d)’’

10 and inserting ‘‘sections 1904 and 1933(d)’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section take effect on October 1, 2000.

13 SEC. 604. CUSTOMS USER FEES.

14 Section 13031(j)(3) of the Consolidated Omnibus

15 Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3))

16 is amended by striking ‘‘2003’’ and inserting ‘‘2010’’.
Calendar No. 808

106TH CONGRESS

2D SESSION S. 3057

A BILL

To amend the Public Health Service Act, the Employee Retirement Income Security Act of 1974,

and the Internal Revenue Code of 1986 to protect consumers in managed care plans and otherhealth coverage.

SEPTEMBER 18, 2000

Read the second time and placed on the calendar