II

106TH CONGRESS

1ST SESSION S. 479

To amend the title XXVII of the Public Health Service Act and other

laws to assure the rights of enrollees under managed care plans.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 25, 1999

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

to the Committee on Health, Education, Labor, and Pensions

A BILL

To amend the title XXVII of the Public Health Service

Act and other laws to assure the rights of enrollees

under managed care plans.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Equity in Womens

5 Health Act’’.

6 SEC. 2. HEALTH INSURANCE BILL OF RIGHTS.

7 Title XXVII of the Public Health Service Act (42

8 U.S.C. 300gg et seq.) is amended—

9 (1) by redesignating part C as part D; and
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1 (2) by inserting after part B the following new

2 part:

3 ‘‘PART C—NONDISCRIMINATION AND HEALTH

4 PROSPECTUS

5 ‘‘SEC. 2770. NONDISCRIMINATION.

6 ‘‘(a) ENROLLEES.—A group health plan or health in7 surance issuer offering health insurance coverage (whether

8 or not a managed care plan or coverage) may not discrimi9 nate or engage (directly or through contractual arrange10 ments) in any activity, including the selection of service

11 area, that has the effect of discriminating against an indi12 vidual on the basis of race, culture, national origin, gen13 der, sexual orientation, language, socio-economic status,

14 age, disability, genetic makeup, health status, anticipated

15 need for health care services, or payer source.

16 ‘‘(b) PROVIDERS.—Such a plan or issuer may not dis17 criminate in the selection of members of the health pro18 vider or provider network (and in establishing the terms

19 and conditions for membership in the network) of the plan

20 or coverage based on any of the factors described in sub21 section (a).

22 ‘‘(c) SERVICES.—Such a plan or issuer may not ex23 clude coverage (including procedures and drugs) if the ef24 fect is to discriminate in violation of subsection (a) or (b).
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1 ‘‘SEC. 2771. HEALTH PROSPECTUS; DISCLOSURE OF INFOR2 MATION.

3 ‘‘(a) DISCLOSURE.—Each group health plan, and

4 each health insurance issuer providing health insurance

5 coverage, shall provide to each enrollee at the time of en6 rollment and on an annual basis, and shall make available

7 to each prospective enrollee upon request—

8 ‘‘(1) a prospectus that relates to the plan or

9 coverage offered and that meets the requirements of

10 subsection (b); and

11 ‘‘(2) additional information described in sub12 section (c).

13 ‘‘(b) PROSPECTUS.—

14 ‘‘(1) IN GENERAL.—Each prospectus under this

15 subsection for a plan or coverage—

16 ‘‘(A) shall contain the information de17 scribed in paragraphs (2) through (4) concern18 ing the plan or coverage,

19 ‘‘(B) shall contain such additional informa20 tion as the Secretary deems appropriate, and

21 ‘‘(C) shall be no longer than 3 pages in

22 length and in a format specified by the Sec23 retary for purposes of comparison by prospec24 tive enrollees.

25 ‘‘(2) QUALITATIVE INFORMATION.—The infor26 mation described in this paragraph is a summary of
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1 the quality assessment data on the plan or coverage.

2 The data shall—

3 ‘‘(A) be the similar to the types of data as

4 are collected for managed care plans under title

5 XVIII of the Social Security Act, as determined

6 by the Secretary and taking into account dif7 ferences between the populations covered under

8 such title and the populations covered under

9 this title;

10 ‘‘(B) be collected by independent, auditing

11 agencies;

12 ‘‘(C) include—

13 ‘‘(i) a description of the types of

14 methodologies (including capitation, finan15 cial incentive or bonuses, fee-for-service,

16 salary, and withholds) used by the plan or

17 issuer to reimburse physicians, including

18 the proportions of physicians who have

19 each of these types of arrangements; and

20 ‘‘(ii) cost-sharing requirements for en21 rollees.

22 The information under subparagraph (C) shall in23 clude, upon request, information on the reimburse24 ment methodology used by the plan or issuer or

25 medical groups for individual physicians, but do not
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1 require the disclosure of specific reimbursement

2 rates.

3 ‘‘(3) QUANTITATIVE INFORMATION.—The infor4 mation described in this paragraph is measures of

5 performance of the plan or issuer (in relation to cov6 erage offered) with respect to each of the following

7 and such other salient data as the Secretary may

8 specify:

9 ‘‘(A) The ratio of physicians to enrollees,

10 including the ratio of physicians who are obste11 trician/gynecologists to adult, female enrollees.

12 ‘‘(B) The ratio of specialists to enrollees.

13 ‘‘(C) The incentive structure used for pay14 ment of primary care physicians and specialists.

15 ‘‘(D) Patient outcomes for procedures, in16 cluding procedures specific to female enrollees.

17 ‘‘(E) The number of grievances filed under

18 the plan or coverage.

19 ‘‘(F) The number of requests for proce20 dures for which utilization review board review

21 or approval is required and the number (and

22 percentage) of such requests that are denied.

23 ‘‘(G) The number of appeals filed from de24 nial of such requests and the number (and per25 centage) of such appeals that are approved,
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1 such numbers and percentages broken down by

2 gender of the enrollee involved.

3 ‘‘(H) Disenrollment data.

4 ‘‘(4) DESCRIPTION OF BENEFITS.—The infor5 mation described in this paragraph is a description

6 of the benefits provided under the plan or coverage,

7 as well as explicit exclusions, including a description

8 of the following:

9 ‘‘(A) Coverage policy with respect to cov10 erage for female-specific benefits, including

11 screening mammography, hormone replacement

12 therapy, bone density testing, osteoporosis

13 screening, maternity care, and reconstructive

14 surgery following a mastectomy.

15 ‘‘(B) The costs of copayments for treat16 ments, including any exceptions.

17 ‘‘(c) ADDITIONAL INFORMATION.—The additional in18 formation described in this subsection is information

19 about each of the following:

20 ‘‘(1) The plan’s or issuer’s structure and pro21 vider network, including the names and credentials

22 of physicians in the network.

23 ‘‘(2) Coverage provided and excluded, including

24 out-of-area coverage.

25 ‘‘(3) Procedures for utilization management.
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1 ‘‘(4) Procedures for determining coverage for

2 investigational or experimental treatments, as well

3 as definitions for coverage terms.

4 ‘‘(5) Any restrictive formularies or prior ap5 proval requirements for obtaining prescription drugs,

6 including, upon request, information on whether or

7 not specific drugs are covered.

8 ‘‘(6) Use of voluntary or mandatory arbitration.

9 ‘‘(7) Procedures for receiving emergency care

10 and out-of-network services when those services are

11 not available in the network and information on the

12 coverage of emergency services, including—

13 ‘‘(A) the appropriate use of emergency

14 services, including use of the 911 telephone sys15 tem or its local equivalent in emergency situa16 tions and an explanation of what constitutes an

17 emergency situation;

18 ‘‘(B) the process and procedures for ob19 taining emergency services; and

20 ‘‘(C) the locations of (i) emergency depart21 ments, and (ii) other settings, in which physi22 cians and hospitals provide emergency services

23 and post-stabilization care.

24 ‘‘(8) How to contact agencies that regulate the

25 plan or issuer.
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1 ‘‘(9) How to contact consumer assistance agen2 cies, such as ombudsmen programs.

3 ‘‘(10) How to obtain covered services.

4 ‘‘(11) How to receive preventive health services

5 and health education.

6 ‘‘(12) How to select providers and obtain refer7 rals.

8 ‘‘(13) How to appeal health plan decisions and

9 file grievances.

10 ‘‘(d) STATE AUTHORITY TO REQUIRE ADDITIONAL

11 INFORMATION.—

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

13 this section shall not be construed as preventing a

14 State from requiring health insurance issuers, in re15 lation to their offering of health insurance coverage,

16 to disclose separately information (including com17 parative ratings of health insurance coverage) in ad18 dition to the information required to be disclosed

19 under this section.

20 ‘‘(2) CONTINUED PREEMPTION WITH RESPECT

21 TO GROUP HEALTH PLANS.—Nothing in this part

22 shall be construed to affect or modify the provisions

23 of section 514 with respect to group health plans.’’.
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1 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE

2 ACT.

3 (a) APPLICATION TO GROUP HEALTH INSURANCE

4 COVERAGE.—Subpart 2 of part A of title XXVII of the

5 Public Health Service Act, as amended by the Omnibus

6 Consolidated and Emergency Supplemental Appropria7 tions Act, 1999 (Public Law 105–277), is amended by

8 adding at the end the following new section:

9 ‘‘SEC. 2707. MANAGED CARE REQUIREMENTS.

10 ‘‘Each health insurance issuer shall comply with the

11 applicable requirements under part C with respect to

12 group health insurance coverage it offers.’’.

13 (b) APPLICATION TO INDIVIDUAL HEALTH INSUR14 ANCE COVERAGE.—Subpart 3 of part B of title XXVII

15 of the Public Health Service Act, as amended by the Om16 nibus Consolidated and Emergency Supplemental Appro17 priations Act, 1999 (Public Law 105–277), is amended

18 by adding at the end the following new section:

19 ‘‘SEC. 2753. MANAGED CARE REQUIREMENTS.

20 ‘‘Each health insurance issuer shall comply with the

21 applicable requirements under part C with respect to indi22 vidual health insurance coverage it offers, in the same

23 manner as such requirements apply to group health insur24 ance coverage.’’.

25 (c) MODIFICATION OF PREEMPTION STANDARDS.—
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1 (1) GROUP HEALTH INSURANCE COVERAGE.—

2 Section 2723 of such Act (42 U.S.C. 300gg–23) is

3 amended—

4 (A) in subsection (a)(1), by striking ‘‘sub5 section (b)’’ and inserting ‘‘subsections (b) and

6 (c)’’;

7 (B) by redesignating subsections (c) and

8 (d) as subsections (d) and (e), respectively; and

9 (C) by inserting after subsection (b) the

10 following new subsection:

11 ‘‘(c) SPECIAL RULES IN CASE OF MANAGED CARE

12 REQUIREMENTS.—Subject to subsection (a)(2), the provi13 sions of section 2707 and part C, and part D insofar as

14 it applies to section 2707 or part C, shall not prevent a

15 State from establishing requirements relating to the sub16 ject matter of such provisions so long as such require17 ments are at least as stringent on health insurance issuers

18 as the requirements imposed under such provisions.’’.

19 (2) INDIVIDUAL HEALTH INSURANCE COV20 ERAGE.—Section 2762 of the Public Health Service

21 Act (42 U.S.C. 300gg–62) is amended—

22 (A) in subsection (a), by striking ‘‘sub23 section (b), nothing in this part’’ and inserting

24 ‘‘subsections (b) and (c)’’, and
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1 (B) by adding at the end the following new

2 subsection:

3 ‘‘(c) SPECIAL RULES IN CASE OF MANAGED CARE

4 REQUIREMENTS.—Subject to subsection (b), the provi5 sions of section 2753 and part C, and part D insofar as

6 it applies to section 2753 or part C, shall not prevent a

7 State from establishing requirements relating to the sub8 ject matter of such provisions so long as such require9 ments are at least as stringent on health insurance issuers

10 as the requirements imposed under such section.’’.

11 (d) ADDITIONAL CONFORMING AMENDMENTS.—

12 (1) Section 2723(a)(1) of the Public Health

13 Service Act (42 U.S.C. 300gg–23(a)(1)) is amended

14 by striking ‘‘part C’’ and inserting ‘‘parts C and D’’.

15 (2) Section 2762(b)(1) of the Public Health

16 Service Act (42 U.S.C. 300gg–62(b)(1)) is amended

17 by striking ‘‘part C’’ and inserting ‘‘part D’’.

18 (e) ASSURING COORDINATION.—Section 104(1) of

19 the Health Insurance Portability and Accountability Act

20 of 1996 (Public Law 104–191) is amended by striking

21 ‘‘under this subtitle (and the amendments made by this

22 subtitle and section 401)’’ and inserting ‘‘title XXVII of

23 the Public Health Service Act, under part 7 of subtitle

24 B of title I of the Employee Retirement Income Security
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1 Act of 1974, and chapter 100 of the Internal Revenue

2 Code of 1986’’.

3 SEC. 4. MANAGED CARE REQUIREMENTS UNDER THE EM4 PLOYEE RETIREMENT INCOME SECURITY

5 ACT OF 1974.

6 (a) IN GENERAL.—Subpart B of part 7 of subtitle

7 B of title I of the Employee Retirement Income Security

8 Act of 1974, as amended by the Omnibus Consolidated

9 and Emergency Supplemental Appropriations Act, 1999

10 (Public Law 105–277), is amended by adding at the end

11 the following:

12 ‘‘SEC. 714. MANAGED CARE REQUIREMENTS.

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

14 group health plan (and a health insurance issuer offering

15 group health insurance coverage in connection with such

16 a plan) shall comply with the applicable requirements of

17 part C of title XXVII of the Public Health Service Act.

18 ‘‘(b) REFERENCES IN APPLICATION.—In applying

19 subsection (a) under this part, any reference in such part

20 C—

21 ‘‘(1) to a health insurance issuer and health in22 surance coverage offered by such an issuer is

23 deemed to include a reference to a group health plan

24 and coverage under such plan, respectively;
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1 ‘‘(2) to the Secretary is deemed a reference to

2 the Secretary of Labor;

3 ‘‘(3) to an applicable State authority is deemed

4 a reference to the Secretary of Labor; and

5 ‘‘(4) to an enrollee with respect to health insur6 ance coverage is deemed to include a reference to a

7 participant or beneficiary with respect to a group

8 health plan.’’.

9 (b) MODIFICATION OF PREEMPTION STANDARDS.—

10 Section 731 of the Employee Retirement Income Security

11 Act of 1974 (42 U.S.C. 1191) is amended—

12 (1) in subsection (a)(1), by striking ‘‘subsection

13 (b)’’ and inserting ‘‘subsections (b) and (c)’’;

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

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

16 (3) by inserting after subsection (b) the follow17 ing new subsection:

18 ‘‘(c) SPECIAL RULES IN CASE OF MANAGED CARE

19 REQUIREMENTS.—Subject to subsection (a)(2), the provi20 sions of section 714 and part C of title XXVII of the Pub21 lic Health Service Act, and subpart C insofar as it applies

22 to section 714 or such part, shall not be construed to pre23 empt any State law, or the enactment or implementation

24 of such a State law, that provides protections for individ-
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1 uals that are equivalent to or stricter than the protections

2 provided under such provisions.’’.

3 (c) CONFORMING AMENDMENTS.—

4 (1) Section 732(a) of the Employee Retirement

5 Income Security Act of 1974 (29 U.S.C. 1185(a)) is

6 amended by striking ‘‘section 711’’ and inserting

7 ‘‘sections 711 and 713’’.

8 (2) The table of contents in section 1 of the

9 Employee Retirement Income Security Act of 1974

10 is amended by inserting after the item relating to

11 section 713 the following new item:

‘‘Sec. 714. Managed care requirements.’’.

12 SEC. 5. MANAGED CARE REQUIREMENTS UNDER THE IN13 TERNAL REVENUE CODE OF 1986.

14 (a) IN GENERAL.—Subchapter B of part B of part

15 7 of subtitle B of title I of the Internal Revenue Code

16 of 1986 is amended by adding at the end the following

17 new section:

18 ‘‘SEC. 9813. MANAGED CARE REQUIREMENTS.

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

20 group health plan shall comply with the applicable require21 ments of part C of title XXVII of the Public Health Serv22 ice Act.

23 ‘‘(b) REFERENCES IN APPLICATION.—In applying

24 subsection (a) under this subchapter, any reference in

25 such part C—
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1 ‘‘(1) to the Secretary is deemed a reference to

2 the Secretary of the Treasury; and

3 ‘‘(2) to an applicable State authority is deemed

4 a reference to the Secretary.’’.

5 (b) CLERICAL AMENDMENT.—The table of sections

6 in subchapter B of chapter 100 of such Code is amended

7 by inserting after the item relating to section 9812 the

8 following new item:

‘‘Sec. 9813. Managed care requirements.’’.

9 SEC. 6. MANAGED CARE REQUIREMENTS UNDER MEDI10 CARE, MEDICAID, AND THE FEDERAL EM11 PLOYEES HEALTH BENEFITS PROGRAM

12 (FEHBP).

13 (a) MEDICARE.—Section 1852 of the Social Security

14 Act (42 U.S.C. 1395w–22) is amended by adding at the

15 end the following new subsection:

16 ‘‘(l) MANAGED CARE REQUIREMENTS.—Each

17 Medicare+Choice organization that offers a

18 Medicare+Choice plan described in section 1851(a)(1)(A)

19 shall comply with the applicable requirements of part C

20 of title XXVII of the Public Health Service Act in the

21 same manner as such requirements apply with respect to

22 health insurance coverage offered by a health insurance

23 issuer, except to the extent such requirements are less pro24 tective of enrollees than the requirements established

25 under this part.’’.
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1 (b) MEDICAID.—Section 1932(b)(8) of the Social Se2 curity Act (42 U.S.C. 1396u-2(b)(8))—

3 (1) by striking ‘‘AND MENTAL HEALTH’’ and in4 serting ‘‘, MENTAL HEALTH, AND MANAGED CARE’’,

5 (2) by inserting ‘‘and of part C’’ after ‘‘of part

6 A’’, and

7 (3) by inserting before the period at the end the

8 following: ‘‘, except to the extent such requirements

9 are less protective of enrollees than the requirements

10 established under this title’’.

11 (c) FEDERAL EMPLOYEES’ HEALTH BENEFITS PRO12 GRAM (FEHBP).—Chapter 89 of title 5, United States

13 Code, is amended—

14 (1) by inserting after the item relating to sec15 tion 8905a the following new section:

16 ‘‘§ 8905b. Application of managed care requirements

17 ‘‘Each health benefit plan offered under this chapter

18 shall comply with the applicable requirements of part C

19 of title XXVII of the Public Health Service Act in the

20 same manner as such requirements apply with respect to

21 health insurance coverage offered by a health insurance

22 issuer, except to the extent such requirements are less pro23 tective of enrollees than the requirements established

24 under this chapter.’’; and
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1 (2) in the table of sections, by inserting the fol2 lowing item after the item relating to section 8905a:

‘‘8905b. Application of managed care requirements.’’.

3 SEC. 7. EFFECTIVE DATES.

4 (a) GENERAL EFFECTIVE DATE FOR GROUP

5 HEALTH PLANS.—

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

7 the amendments made by section 2, subsections (a),

8 (c)(1), and (d) of section 3, and sections 5 and 6

9 shall apply with respect to group health insurance

10 coverage for group health plan years beginning on or

11 after July 1, 2000 (in this section referred to as the

12 ‘‘general effective date’’) and also shall apply to por13 tions of plan years occurring on and after January

14 1, 2001.

15 (2) TREATMENT OF GROUP HEALTH PLANS

16 MAINTAINED PURSUANT TO CERTAIN COLLECTIVE

17 BARGAINING AGREEMENTS.—In the case of a group

18 health plan, or group health insurance coverage pro19 vided pursuant to a group health plan, maintained

20 pursuant to 1 or more collective bargaining agree21 ments between employee representatives and 1 or

22 more employers ratified before the date of enactment

23 of this Act, the amendments described in paragraph

24 (1) shall not apply to plan years beginning before

25 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 en5 actment 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 such amendments shall not be treated as a termi12 nation of such collective bargaining agreement.

13 (b) GENERAL EFFECTIVE DATE FOR HEALTH IN14 SURANCE COVERAGE.—The amendments made by section

15 2 and subsections (b), (c)(2), and (d) of section 3 shall

16 apply with respect to individual health insurance coverage

17 offered, sold, issued, renewed, in effect, or operated in the

18 individual market on or after the general effective date.

19 (c) EFFECTIVE DATE FOR COORDINATION.—The

20 amendment made by section 3(e) shall take effect on the

21 date of the enactment of this Act.

22 (d) FEDERAL PROGRAMS.—The amendments made

23 by section 6 shall take effect on January 1, 2001.

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