II

★(Star Print)

106TH CONGRESS

1ST SESSION S. 6

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

JANUARY 19, 1999

Mr. DASCHLE (for himself, Mr. KENNEDY, Mrs. BOXER, Mr. DODD, Mr. DORGAN, Mr. EDWARDS, Mr. CLELAND, Mr. REID, Mr. DURBIN, Mrs. MURRAY, Mr. AKAKA, Mr. WYDEN, Mr. HARKIN, Ms. MIKULSKI, Mr. LEAHY,

Mr. REED, Mr. SARBANES, Mr. WELLSTONE, Mrs. FEINSTEIN, Mr.

BYRD, Mr. ROCKEFELLER, Mr. KERRY, Mr. TORRICELLI, Mr. BINGAMAN, Mr. BRYAN, Mr. JOHNSON, Mr. LAUTENBERG, Mr. SCHUMER, and

Mr. INOUYE) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

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 of 1999’’.
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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—HEALTH INSURANCE BILL OF RIGHTS

Subtitle A—Access to Care

Sec. 101. Access to emergency care.

Sec. 102. Offering of choice of coverage options under group health plans.

Sec. 103. Choice of providers.

Sec. 104. Access to specialty care.

Sec. 105. Continuity of care.

Sec. 106. Coverage for individuals participating in approved clinical trials.

Sec. 107. Access to needed prescription drugs.

Sec. 108. Adequacy of provider network.

Sec. 109. Nondiscrimination in delivery of services.

Subtitle B—Quality Assurance

Sec. 111. Internal quality assurance program.

Sec. 112. Collection of standardized data.

Sec. 113. Process for selection of providers.

Sec. 114. Drug utilization program.

Sec. 115. Standards for utilization review activities.

Sec. 116. Health Care Quality Advisory Board.

Subtitle C—Patient Information

Sec. 121. Patient information.

Sec. 122. Protection of patient confidentiality.

Sec. 123. Health insurance ombudsmen.

Subtitle D—Grievance and Appeals Procedures

Sec. 131. Establishment of grievance process.

Sec. 132. Internal appeals of adverse determinations.

Sec. 133. External appeals of adverse determinations.

Subtitle E—Protecting the Doctor-Patient Relationship

Sec. 141. Prohibition of interference with certain medical communications.

Sec. 142. Prohibition against transfer of indemnification or improper incentive

arrangements.

Sec. 143. Additional rules regarding participation of health care professionals.

Sec. 144. Protection for patient advocacy.

Subtitle F—Promoting Good Medical Practice

Sec. 151. Promoting good medical practice.

Sec. 152. Standards relating to benefits for certain breast cancer treatment.

Subtitle G—Definitions

Sec. 191. Definitions.

Sec. 192. Preemption; State flexibility; construction.
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Sec. 193. Regulations.

TITLE II—APPLICATION OF PATIENT PROTECTION STANDARDS

TO GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE UNDER 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

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.

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 and related rules.

Sec. 502. Coordination in implementation.

1 TITLE I—HEALTH INSURANCE

2 BILL OF RIGHTS

3 Subtitle A—Access to Care

4 SEC. 101. ACCESS TO EMERGENCY CARE.

5 (a) COVERAGE OF EMERGENCY SERVICES.—

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

7 health insurance coverage offered by a health insur8 ance issuer, provides any benefits with respect to

9 emergency services (as defined in paragraph (2)(B)),

10 the plan or issuer shall cover emergency services fur11 nished under the plan or coverage—

12 (A) without the need for any prior author13 ization determination;
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1 (B) whether or not the health care pro2 vider furnishing such services is a participating

3 provider with respect to such services;

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

5 are provided to a participant, beneficiary, or en6 rollee by a nonparticipating health care provider

7 without prior authorization by the plan or

8 issuer, the participant, beneficiary, or enrollee

9 is not liable for amounts that exceed the

10 amounts of liability that would be incurred if

11 the services were provided by a participating

12 health care provider with prior authorization by

13 the plan or issuer; and

14 (D) without regard to any other term or

15 condition of such coverage (other than exclusion

16 or coordination of benefits, or an affiliation or

17 waiting period, permitted under section 2701 of

18 the Public Health Service Act, section 701 of

19 the Employee Retirement Income Security Act

20 of 1974, or section 9801 of the Internal Reve21 nue Code of 1986, and other than applicable

22 cost-sharing).

23 (2) DEFINITIONS.—In this section:

24 (A) EMERGENCY MEDICAL CONDITION

25 BASED ON PRUDENT LAYPERSON STANDARD.—
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1 The term ‘‘emergency medical condition’’ means

2 a medical condition manifesting itself by acute

3 symptoms of sufficient severity (including se4 vere pain) such that a prudent layperson, who

5 possesses an average knowledge of health and

6 medicine, could reasonably expect the absence

7 of immediate medical attention to result in a

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

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

10 Act.

11 (B) EMERGENCY SERVICES.—The term

12 ‘‘emergency services’’ means—

13 (i) a medical screening examination

14 (as required under section 1867 of the So15 cial Security Act) that is within the capa16 bility of the emergency department of a

17 hospital, including ancillary services rou18 tinely available to the emergency depart19 ment to evaluate an emergency medical

20 condition (as defined in subparagraph

21 (A)), and

22 (ii) within the capabilities of the staff

23 and facilities available at the hospital, such

24 further medical examination and treatment
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1 as are required under section 1867 of such

2 Act to stabilize the patient.

3 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

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

5 (other than emergency services) for which benefits are

6 available under a group health plan, or under health insur7 ance coverage offered by a health insurance issuer, the

8 plan or issuer shall provide for reimbursement with re9 spect to such services provided to a participant, bene10 ficiary, or enrollee other than through a participating

11 health care provider in a manner consistent with sub12 section (a)(1)(C) (and shall otherwise comply with the

13 guidelines established under section 1852(d)(2) of the So14 cial Security Act (relating to promoting efficient and time15 ly coordination of appropriate maintenance and post-sta16 bilization care of an enrollee after an enrollee has been

17 determined to be stable), or, in the absence of guidelines

18 under such section, such guidelines as the Secretary shall

19 establish to carry out this subsection), if the services are

20 maintenance care or post-stabilization care covered under

21 such guidelines.

22 SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS

23 UNDER GROUP HEALTH PLANS.

24 (a) REQUIREMENT.—
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1 (1) OFFERING OF POINT-OF-SERVICE COV2 ERAGE OPTION.—Except as provided in paragraph

3 (2), if a group health plan (or health insurance cov4 erage offered by a health insurance issuer in connec5 tion with a group health plan) provides benefits only

6 through participating health care providers, the plan

7 or issuer shall offer the participant the option to

8 purchase point-of-service coverage (as defined in

9 subsection (b)) for all such benefits for which cov10 erage is otherwise so limited. Such option shall be

11 made available to the participant at the time of en12 rollment under the plan or coverage and at such

13 other times as the plan or issuer offers the partici14 pant a choice of coverage options.

15 (2) EXCEPTION.—Paragraph (1) shall not

16 apply with respect to a participant in a group health

17 plan if the plan offers the participant—

18 (A) a choice of health insurance coverage;

19 and

20 (B) one or more coverage options that do

21 not provide benefits only through participating

22 health care providers.

23 (b) POINT-OF-SERVICE COVERAGE DEFINED.—In

24 this section, the term ‘‘point-of-service coverage’’ means,

25 with respect to benefits covered under a group health plan
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1 or health insurance issuer, coverage of such benefits when

2 provided by a nonparticipating health care provider. Such

3 coverage need not include coverage of providers that the

4 plan or issuer excludes because of fraud, quality, or similar

5 reasons.

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

7 construed—

8 (1) as requiring coverage for benefits for a par9 ticular type of health care provider;

10 (2) as requiring an employer to pay any costs

11 as a result of this section or to make equal contribu12 tions with respect to different health coverage op13 tions; or

14 (3) as preventing a group health plan or health

15 insurance issuer from imposing higher premiums or

16 cost-sharing on a participant for the exercise of a

17 point-of-service coverage option.

18 (d) NO REQUIREMENT FOR GUARANTEED AVAIL19 ABILITY.—If a health insurance issuer offers health insur20 ance coverage that includes point-of-service coverage with

21 respect to an employer solely in order to meet the require22 ment of subsection (a), nothing in section 2711(a)(1)(A)

23 of the Public Health Service Act shall be construed as re24 quiring the offering of such coverage with respect to an25 other employer.
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1 SEC. 103. CHOICE OF PROVIDERS.

2 (a) PRIMARY CARE.—A group health plan, and a

3 health insurance issuer that offers health insurance cov4 erage, shall permit each participant, beneficiary, and en5 rollee to receive primary care from any participating pri6 mary care provider who is available to accept such individ7 ual.

8 (b) SPECIALISTS.—

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

10 group health plan and a health insurance issuer that

11 offers health insurance coverage shall permit each

12 participant, beneficiary, or enrollee to receive medi13 cally necessary or appropriate specialty care, pursu14 ant to appropriate referral procedures, from any

15 qualified participating health care provider who is

16 available to accept such individual for such care.

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

18 apply to specialty care if the plan or issuer clearly

19 informs participants, beneficiaries, and enrollees of

20 the limitations on choice of participating providers

21 with respect to such care.

22 SEC. 104. ACCESS TO SPECIALTY CARE.

23 (a) OBSTETRICAL AND GYNECOLOGICAL CARE.—

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

25 health insurance issuer in connection with the provi26 sion of health insurance coverage, requires or pro-
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1 vides for a participant, beneficiary, or enrollee to

2 designate a participating primary care provider—

3 (A) the plan or issuer shall permit such an

4 individual who is a female to designate a par5 ticipating physician who specializes in obstetrics

6 and gynecology as the individual’s primary care

7 provider; and

8 (B) if such an individual has not des9 ignated such a provider as a primary care pro10 vider, the plan or issuer—

11 (i) may not require authorization or a

12 referral by the individual’s primary care

13 provider or otherwise for coverage of rou14 tine gynecological care (such as preventive

15 women’s health examinations) and preg16 nancy-related services provided by a par17 ticipating health care professional who spe18 cializes in obstetrics and gynecology to the

19 extent such care is otherwise covered, and

20 (ii) may treat the ordering of other

21 gynecological care by such a participating

22 health professional as the authorization of

23 the primary care provider with respect to

24 such care under the plan or coverage.
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1 (2) CONSTRUCTION.—Nothing in paragraph

2 (1)(B)(ii) shall waive any requirements of coverage

3 relating to medical necessity or appropriateness with

4 respect to coverage of gynecological care so ordered.

5 (b) SPECIALTY CARE.—

6 (1) SPECIALTY CARE FOR COVERED SERV7 ICES.—

8 (A) IN GENERAL.—If—

9 (i) an individual is a participant or

10 beneficiary under a group health plan or

11 an enrollee who is covered under health in12 surance coverage offered by a health insur13 ance issuer,

14 (ii) the individual has a condition or

15 disease of sufficient seriousness and com16 plexity to require treatment by a specialist,

17 and

18 (iii) benefits for such treatment are

19 provided under the plan or coverage,

20 the plan or issuer shall make or provide for a

21 referral to a specialist who is available and ac22 cessible to provide the treatment for such condi23 tion or disease.

24 (B) SPECIALIST DEFINED.—For purposes

25 of this subsection, the term ‘‘specialist’’ means,
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1 with respect to a condition, a health care practi2 tioner, facility, or center (such as a center of

3 excellence) that has adequate expertise through

4 appropriate training and experience (including,

5 in the case of a child, appropriate pediatric ex6 pertise) to provide high quality care in treating

7 the condition.

8 (C) CARE UNDER REFERRAL.—A group

9 health plan or health insurance issuer may re10 quire that the care provided to an individual

11 pursuant to such referral under subparagraph

12 (A) be—

13 (i) pursuant to a treatment plan, only

14 if the treatment plan is developed by the

15 specialist and approved by the plan or

16 issuer, in consultation with the designated

17 primary care provider or specialist and the

18 individual (or the individual’s designee),

19 and

20 (ii) in accordance with applicable

21 quality assurance and utilization review

22 standards of the plan or issuer.

23 Nothing in this subsection shall be construed as

24 preventing such a treatment plan for an individ25 ual from requiring a specialist to provide the
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1 primary care provider with regular updates on

2 the specialty care provided, as well as all nec3 essary medical information.

4 (D) REFERRALS TO PARTICIPATING PRO5 VIDERS.—A group health plan or health insur6 ance issuer is not required under subparagraph

7 (A) to provide for a referral to a specialist that

8 is not a participating provider, unless the plan

9 or issuer does not have an appropriate specialist

10 that is available and accessible to treat the indi11 vidual’s condition and that is a participating

12 provider with respect to such treatment.

13 (E) TREATMENT OF NONPARTICIPATING

14 PROVIDERS.—If a plan or issuer refers an indi15 vidual to a nonparticipating specialist pursuant

16 to subparagraph (A), services provided pursu17 ant to the approved treatment plan (if any)

18 shall be provided at no additional cost to the in19 dividual beyond what the individual would oth20 erwise pay for services received by such a spe21 cialist that is a participating provider.

22 (2) SPECIALISTS AS PRIMARY CARE PROVID23 ERS.—

24 (A) IN GENERAL.—A group health plan, or

25 a health insurance issuer, in connection with
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1 the provision of health insurance coverage, shall

2 have a procedure by which an individual who is

3 a participant, beneficiary, or enrollee and who

4 has an ongoing special condition (as defined in

5 subparagraph (C)) may receive a referral to a

6 specialist for such condition who shall be re7 sponsible for and capable of providing and co8 ordinating the individual’s primary and spe9 cialty care. If such an individual’s care would

10 most appropriately be coordinated by such a

11 specialist, such plan or issuer shall refer the in12 dividual to such specialist.

13 (B) TREATMENT AS PRIMARY CARE PRO14 VIDER.—Such specialist shall be permitted to

15 treat the individual without a referral from the

16 individual’s primary care provider and may au17 thorize such referrals, procedures, tests, and

18 other medical services as the individual’s pri19 mary care provider would otherwise be per20 mitted to provide or authorize, subject to the

21 terms of the treatment plan (referred to in

22 paragraph (1)(C)(i)).

23 (C) ONGOING SPECIAL CONDITION DE24 FINED.—In this paragraph, the term ‘‘special

25 condition’’ means a condition or disease that—
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1 (i) is life-threatening, degenerative, or

2 disabling, and

3 (ii) requires specialized medical care

4 over a prolonged period of time.

5 (D) TERMS OF REFERRAL.—The provi6 sions of subparagraphs (C) through (E) of

7 paragraph (1) apply with respect to referrals

8 under subparagraph (A) of this paragraph in

9 the same manner as they apply to referrals

10 under paragraph (1)(A).

11 (3) STANDING REFERRALS.—

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

13 and a health insurance issuer in connection

14 with the provision of health insurance coverage,

15 shall have a procedure by which an individual

16 who is a participant, beneficiary, or enrollee

17 and who has a condition that requires ongoing

18 care from a specialist may receive a standing

19 referral to such specialist for treatment of such

20 condition. If the plan or issuer, or if the pri21 mary care provider in consultation with the

22 medical director of the plan or issuer and the

23 specialist (if any), determines that such a

24 standing referral is appropriate, the plan or
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1 issuer shall make such a referral to such a spe2 cialist.

3 (B) TERMS OF REFERRAL.—The provi4 sions of subparagraphs (C) through (E) of

5 paragraph (1) apply with respect to referrals

6 under subparagraph (A) of this paragraph in

7 the same manner as they apply to referrals

8 under paragraph (1)(A).

9 SEC. 105. CONTINUITY OF CARE.

10 (a) IN GENERAL.—

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

12 between a group health plan, or a health insurance

13 issuer in connection with the provision of health in14 surance coverage, and a health care provider is ter15 minated (as defined in paragraph (3)), or benefits or

16 coverage provided by a health care provider are ter17 minated because of a change in the terms of pro18 vider participation in a group health plan, and an in19 dividual who is a participant, beneficiary, or enrollee

20 in the plan or coverage is undergoing a course of

21 treatment from the provider at the time of such ter22 mination, the plan or issuer shall—

23 (A) notify the individual on a timely basis

24 of such termination, and
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1 (B) subject to subsection (c), permit the

2 individual to continue or be covered with re3 spect to the course of treatment with the pro4 vider during a transitional period (provided

5 under subsection (b)).

6 (2) TREATMENT OF TERMINATION OF CON7 TRACT WITH HEALTH INSURANCE ISSUER.—If a

8 contract for the provision of health insurance cov9 erage between a group health plan and a health in10 surance issuer is terminated and, as a result of such

11 termination, coverage of services of a health care

12 provider is terminated with respect to an individual,

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

14 provisions of this section) shall apply under the plan

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

16 between the plan and the provider that had been ter17 minated, but only with respect to benefits that are

18 covered under the plan after the contract termi19 nation.

20 (3) TERMINATION.—In this section, the term

21 ‘‘terminated’’ includes, with respect to a contract,

22 the expiration or nonrenewal of the contract, but

23 does not include a termination of the contract by the

24 plan or issuer for failure to meet applicable quality

25 standards or for fraud.
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1 (b) TRANSITIONAL PERIOD.—

2 (1) IN GENERAL.—Except as provided in para3 graphs (2) through (4), the transitional period under

4 this subsection shall extend for at least 90 days from

5 the date of the notice described in subsection

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

7 (2) INSTITUTIONAL CARE.—The transitional pe8 riod under this subsection for institutional or inpa9 tient care from a provider shall extend until the dis10 charge or termination of the period of institutional11 ization and also shall include institutional care pro12 vided within a reasonable time of the date of termi13 nation of the provider status if the care was sched14 uled before the date of the announcement of the ter15 mination of the provider status under subsection

16 (a)(1)(A) or if the individual on such date was on

17 an established waiting list or otherwise scheduled to

18 have such care.

19 (3) PREGNANCY.—If—

20 (A) a participant, beneficiary, or enrollee

21 has entered the second trimester of pregnancy

22 at the time of a provider’s termination of par23 ticipation, and

24 (B) the provider was treating the preg25 nancy before date of the termination,
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1 the transitional period under this subsection with re2 spect to provider’s treatment of the pregnancy shall

3 extend through the provision of post-partum care di4 rectly related to the delivery.

5 (4) TERMINAL ILLNESS.—If—

6 (A) a participant, beneficiary, or enrollee

7 was determined to be terminally ill (as deter8 mined under section 1861(dd)(3)(A) of the So9 cial Security Act) at the time of a provider’s

10 termination of participation, and

11 (B) the provider was treating the terminal

12 illness before the date of termination,

13 the transitional period under this subsection shall

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

15 care directly related to the treatment of the terminal

16 illness.

17 (c) PERMISSIBLE TERMS AND CONDITIONS.—A

18 group health plan or health insurance issuer may condi19 tion coverage of continued treatment by a provider under

20 subsection (a)(1)(B) upon the provider agreeing to the fol21 lowing terms and conditions:

22 (1) The provider agrees to accept reimburse23 ment from the plan or issuer and individual involved

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

25 prior to the start of the transitional period as pay-
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1 ment in full (or, in the case described in subsection

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

3 plan or issuer after the date of the termination of

4 the contract with the health insurance issuer) and

5 not to impose cost-sharing with respect to the indi6 vidual in an amount that would exceed the cost-shar7 ing that could have been imposed if the contract re8 ferred to in subsection (a)(1) had not been termi9 nated.

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

11 assurance standards of the plan or issuer responsible

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

13 such plan or issuer necessary medical information

14 related to the care provided.

15 (3) The provider agrees otherwise to adhere to

16 such plan’s or issuer’s policies and procedures, in17 cluding procedures regarding referrals and obtaining

18 prior authorization and providing services pursuant

19 to a treatment plan (if any) approved by the plan or

20 issuer.

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

22 construed to require the coverage of benefits which would

23 not have been covered if the provider involved remained

24 a participating provider.
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1 SEC. 106. 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 participat24 ing health care professional and has concluded

25 that the individual’s participation in such trial
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1 would be appropriate based upon the individual

2 meeting the conditions described in paragraph

3 (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 SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.

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

9 insurance issuer that offers health insurance coverage,

10 provides benefits with respect to prescription drugs but

11 the coverage limits such benefits to drugs included in a

12 formulary, the plan or 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)(6) 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 115, provide for

22 exceptions from the formulary limitation when a

23 non-formulary alternative is medically indicated.

24 (b) COVERAGE OF APPROVED DRUGS AND MEDICAL

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

2 health insurance coverage offered in connection with

3 such a plan) that provides any coverage of prescrip4 tion drugs or medical devices shall not deny coverage

5 of such a drug or device on the basis that the use

6 is investigational, if the use—

7 (A) in the case of a prescription drug—

8 (i) is included in the labeling author9 ized by the application in effect for the

10 drug pursuant to subsection (b) or (j) of

11 section 505 of the Federal Food, Drug,

12 and Cosmetic Act, without regard to any

13 postmarketing requirements that may

14 apply under such Act; or

15 (ii) is included in the labeling author16 ized by the application in effect for the

17 drug under section 351 of the Public

18 Health Service Act, without regard to any

19 postmarketing requirements that may

20 apply pursuant to such section; or

21 (B) in the case of a medical device, is in22 cluded in the labeling authorized by a regula23 tion under subsection (d) or (3) of section 513

24 of the Federal Food, Drug, and Cosmetic Act,

25 an order under subsection (f) of such section, or
27

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1 an application approved under section 515 of

2 such Act, without regard to any postmarketing

3 requirements that may apply under such Act.

4 (2) CONSTRUCTION.—Nothing in this sub5 section shall be construed as requiring a group

6 health plan (or health insurance coverage offered in

7 connection with such a plan) to provide any coverage

8 of prescription drugs or medical devices.

9 SEC. 108. ADEQUACY OF PROVIDER NETWORK.

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

11 health insurance issuer offering health insurance coverage,

12 that provides benefits, in whole or in part, through partici13 pating health care providers shall have (in relation to the

14 coverage) a sufficient number, distribution, and variety of

15 qualified participating health care providers to ensure that

16 all covered health care services, including specialty serv17 ices, will be available and accessible in a timely manner

18 to all participants, beneficiaries, and enrollees under the

19 plan or coverage. This subsection shall only apply to a

20 plan’s or issuer’s application of restrictions on the partici21 pation of health care providers in a network and shall not

22 be construed as requiring a plan or issuer to create or

23 establish new health care providers in an area.

24 (b) TREATMENT OF CERTAIN PROVIDERS.—The

25 qualified health care providers under subsection (a) may
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1 include Federally qualified health centers, rural health

2 clinics, migrant health centers, and other essential com3 munity providers located in the service area of the plan

4 or issuer and shall include such providers if necessary to

5 meet the standards established to carry out such sub6 section.

7 SEC. 109. NONDISCRIMINATION IN DELIVERY OF SERVICES.

8 (a) APPLICATION TO DELIVERY OF SERVICES.—Sub9 ject to subsection (b), a group health plan, and health in10 surance issuer in relation to health insurance coverage,

11 may not discriminate against a participant, beneficiary, or

12 enrollee in the delivery of health care services consistent

13 with the benefits covered under the plan or coverage or

14 as required by law based on race, color, ethnicity, national

15 origin, religion, sex, age, mental or physical disability, sex16 ual orientation, genetic information, or source of payment.

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

18 be construed as relating to the eligibility to be covered,

19 or the offering (or guaranteeing the offer) of coverage,

20 under a plan or health insurance coverage, the application

21 of any pre-existing condition exclusion consistent with ap22 plicable law, or premiums charged under such plan or cov23 erage. Pursuant to section 192(b), except as provided in

24 section 152, nothing in this title shall be construed as re25 quiring a group health plan or health insurance issuer to
29

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1 provide specific benefits under the terms of such plan or

2 coverage.

3 Subtitle B—Quality Assurance

4 SEC. 111. INTERNAL QUALITY ASSURANCE PROGRAM.

5 (a) REQUIREMENT.—A group health plan, and a

6 health insurance issuer that offers health insurance cov7 erage, shall establish and maintain an ongoing, internal

8 quality assurance and continuous quality improvement

9 program that meets the requirements of subsection (b).

10 (b) PROGRAM REQUIREMENTS.—The requirements of

11 this subsection for a quality improvement program of a

12 plan or issuer are as follows:

13 (1) ADMINISTRATION.—The plan or issuer has

14 a separate identifiable unit with responsibility for

15 administration of the program.

16 (2) WRITTEN PLAN.—The plan or issuer has a

17 written plan for the program that is updated annu18 ally and that specifies at least the following:

19 (A) The activities to be conducted.

20 (B) The organizational structure.

21 (C) The duties of the medical director.

22 (D) Criteria and procedures for the assess23 ment of quality.

24 (3) SYSTEMATIC REVIEW.—The program pro25 vides for systematic review of the type of health
30

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1 services provided, consistency of services provided

2 with good medical practice, and patient outcomes.

3 (4) QUALITY CRITERIA.—The program—

4 (A) uses criteria that are based on per5 formance and patient outcomes where feasible

6 and appropriate;

7 (B) includes criteria that are directed spe8 cifically at meeting the needs of at-risk popu9 lations and covered individuals with chronic

10 conditions or severe illnesses, including gender11 specific criteria and pediatric-specific criteria

12 where available and appropriate;

13 (C) includes methods for informing covered

14 individuals of the benefit of preventive care and

15 what specific benefits with respect to preventive

16 care are covered under the plan or coverage;

17 and

18 (D) makes available to the public a de19 scription of the criteria used under subpara20 graph (A).

21 (5) SYSTEM FOR REPORTING.—The program

22 has procedures for reporting of possible quality con23 cerns by providers and enrollees and for remedial ac24 tions to correct quality problems, including written
31

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1 procedures for responding to concerns and taking

2 appropriate corrective action.

3 (6) DATA ANALYSIS.—The program provides,

4 using data that include the data collected under sec5 tion 112, for an analysis of the plan’s or issuer’s

6 performance on quality measures.

7 (7) DRUG UTILIZATION REVIEW.—The program

8 provides for a drug utilization review program in ac9 cordance with section 114.

10 (c) DEEMING.—For purposes of subsection (a), the

11 requirements of—

12 (1) subsection (b) (other than paragraph (5))

13 are deemed to be met with respect to a health insur14 ance issuer that is a qualified health maintenance

15 organization (as defined in section 1310(c) of the

16 Public Health Service Act); or

17 (2) subsection (b) are deemed to be met with

18 respect to a health insurance issuer that is accred19 ited by a national accreditation organization that the

20 Secretary certifies as applying, as a condition of cer21 tification, standards at least a stringent as those re22 quired for a quality improvement program under

23 subsection (b).

24 (d) VARIATION PERMITTED.—The Secretary may

25 provide for variations in the application of the require-
32

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1 ments of this section to group health plans and health in2 surance issuers based upon differences in the delivery sys3 tem among such plans and issuers as the Secretary deems

4 appropriate.

5 SEC. 112. COLLECTION OF STANDARDIZED DATA.

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

7 insurance issuer that offers health insurance coverage

8 shall collect uniform quality data that include a minimum

9 uniform data set described in subsection (b).

10 (b) MINIMUM UNIFORM DATA SET.—The Secretary

11 shall specify (and may from time to time update) the data

12 required to be included in the minimum uniform data set

13 under subsection (a) and the standard format for such

14 data. Such data shall include at least—

15 (1) aggregate utilization data;

16 (2) data on the demographic characteristics of

17 participants, beneficiaries, and enrollees;

18 (3) data on disease-specific and age-specific

19 mortality rates and (to the extent feasible) morbidity

20 rates of such individuals;

21 (4) data on satisfaction (including satisfaction

22 with respect to services to children) of such individ23 uals, including data on voluntary disenrollment and

24 grievances; and
33

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1 (5) data on quality indicators and health out2 comes, including, to the extent feasible and appro3 priate, data on pediatric cases and on a gender-spe4 cific basis.

5 (c) AVAILABILITY.—A summary of the data collected

6 under subsection (a) shall be disclosed under section

7 121(b)(9). The Secretary shall be provided access to all

8 the data so collected.

9 (d) VARIATION PERMITTED.—The Secretary may

10 provide for variations in the application of the require11 ments of this section to group health plans and health in12 surance issuers based upon differences in the delivery sys13 tem among such plans and issuers as the Secretary deems

14 appropriate.

15 (e) EXCEPTION FOR NON-MEDICAL, RELIGIOUS

16 CARE PROVIDERS.—The requirements of subsection (a),

17 insofar as they may apply to a provider of health care,

18 do not apply to a provider that provides no medical care

19 and that provides only a religious method of healing or

20 religious nonmedical nursing care.

21 SEC. 113. PROCESS FOR SELECTION OF PROVIDERS.

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

23 insurance issuer that offers health insurance coverage

24 shall, if it provides benefits through participating health

25 care professionals, have a written process for the selection
34

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1 of participating health care professionals, including mini2 mum professional requirements.

3 (b) VERIFICATION OF BACKGROUND.—Such process

4 shall include verification of a health care provider’s license

5 and a history of suspension or revocation.

6 (c) RESTRICTION.—Such process shall not use a

7 high-risk patient base or location of a provider in an area

8 with residents with poorer health status as a basis for ex9 cluding providers from participation.

10 (d) NONDISCRIMINATION BASED ON LICENSURE.—

11 (1) IN GENERAL.—Such process shall not dis12 criminate with respect to participation or indem13 nification as to any provider who is acting within the

14 scope of the provider’s license or certification under

15 applicable State law, solely on the basis of such li16 cense or certification.

17 (2) CONSTRUCTION.—Paragraph (1) shall not

18 be construed—

19 (A) as requiring the coverage under a plan

20 or coverage of particular benefits or services or

21 to prohibit a plan or issuer from including pro22 viders only to the extent necessary to meet the

23 needs of the plan’s or issuer’s participants,

24 beneficiaries, or enrollees or from establishing

25 any measure designed to maintain quality and
35

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1 control costs consistent with the responsibilities

2 of the plan or issuer; or

3 (B) to override any State licensure or

4 scope-of-practice law.

5 (e) GENERAL NONDISCRIMINATION.—

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

7 such process shall not discriminate with respect to

8 selection of a health care professional to be a partici9 pating health care provider, or with respect to the

10 terms and conditions of such participation, based on

11 the professional’s race, color, religion, sex, national

12 origin, age, sexual orientation, or disability (consist13 ent with the Americans with Disabilities Act of

14 1990).

15 (2) RULES.—The appropriate Secretary may

16 establish such definitions, rules, and exceptions as

17 may be appropriate to carry out paragraph (1), tak18 ing into account comparable definitions, rules, and

19 exceptions in effect under employment-based non20 discrimination laws and regulations that relate to

21 each of the particular bases for discrimination de22 scribed in such paragraph.

23 SEC. 114. DRUG UTILIZATION PROGRAM.

24 A group health plan, and a health insurance issuer

25 that provides health insurance coverage, that includes ben-
36

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1 efits for prescription drugs shall establish and maintain,

2 as part of its internal quality assurance and continuous

3 quality improvement program under section 111, a drug

4 utilization program which—

5 (1) encourages appropriate use of prescription

6 drugs by participants, beneficiaries, and enrollees

7 and providers, and

8 (2) takes appropriate action to reduce the inci9 dence of improper drug use and adverse drug reac10 tions and interactions.

11 SEC. 115. STANDARDS FOR UTILIZATION REVIEW ACTIVI12 TIES.

13 (a) COMPLIANCE WITH REQUIREMENTS.—

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

15 health insurance issuer that provides health insur16 ance coverage, shall conduct utilization review activi17 ties in connection with the provision of benefits

18 under such plan or coverage only in accordance with

19 a utilization review program that meets the require20 ments of this section.

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

22 section shall be construed as preventing a group

23 health plan or health insurance issuer from arrang24 ing through a contract or otherwise for persons or

25 entities to conduct utilization review activities on be-
37

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1 half of the plan or issuer, so long as such activities

2 are conducted in accordance with a utilization review

3 program that meets the requirements of this section.

4 (3) UTILIZATION REVIEW DEFINED.—For pur5 poses of this section, the terms ‘‘utilization review’’

6 and ‘‘utilization review activities’’ mean procedures

7 used to monitor or evaluate the clinical necessity,

8 appropriateness, efficacy, or efficiency of health care

9 services, procedures or settings, and includes pro10 spective review, concurrent review, second opinions,

11 case management, discharge planning, or retrospec12 tive review.

13 (b) WRITTEN POLICIES AND CRITERIA.—

14 (1) WRITTEN POLICIES.—A utilization review

15 program shall be conducted consistent with written

16 policies and procedures that govern all aspects of the

17 program.

18 (2) USE OF WRITTEN CRITERIA.—

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

20 utilize written clinical review criteria developed

21 pursuant to the program with the input of ap22 propriate physicians. Such criteria shall include

23 written clinical review criteria described in sec24 tion 111(b)(4)(B).
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1 (B) CONTINUING USE OF STANDARDS IN

2 RETROSPECTIVE REVIEW.—If a health care

3 service has been specifically pre-authorized or

4 approved for an enrollee under such a program,

5 the program shall not, pursuant to retrospective

6 review, revise or modify the specific standards,

7 criteria, or procedures used for the utilization

8 review for procedures, treatment, and services

9 delivered to the enrollee during the same course

10 of treatment.

11 (c) CONDUCT OF PROGRAM ACTIVITIES.—

12 (1) ADMINISTRATION BY HEALTH CARE PRO13 FESSIONALS.—A utilization review program shall be

14 administered by qualified health care professionals

15 who shall oversee review decisions. In this sub16 section, the term ‘‘health care professional’’ means a

17 physician or other health care practitioner licensed,

18 accredited, or certified to perform specified health

19 services consistent with State law.

20 (2) USE OF QUALIFIED, INDEPENDENT PER21 SONNEL.—

22 (A) IN GENERAL.—A utilization review

23 program shall provide for the conduct of utiliza24 tion review activities only through personnel

25 who are qualified and, to the extent required,
39

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1 who have received appropriate training in the

2 conduct of such activities under the program.

3 (B) PEER REVIEW OF SAMPLE OF AD4 VERSE CLINICAL DETERMINATIONS.—Such a

5 program shall provide that clinical peers (as de6 fined in section 191(c)(2)) shall evaluate the

7 clinical appropriateness of at least a sample of

8 adverse clinical determinations.

9 (C) PROHIBITION OF CONTINGENT COM10 PENSATION ARRANGEMENTS.—Such a program

11 shall not, with respect to utilization review ac12 tivities, permit or provide compensation or any13 thing of value to its employees, agents, or con14 tractors in a manner that—

15 (i) provides incentives, direct or indi16 rect, for such persons to make inappropri17 ate review decisions, or

18 (ii) is based, directly or indirectly, on

19 the quantity or type of adverse determina20 tions rendered.

21 (D) PROHIBITION OF CONFLICTS.—Such a

22 program shall not permit a health care profes23 sional who provides health care services to an

24 individual to perform utilization review activi-
40

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1 ties in connection with the health care services

2 being provided to the individual.

3 (3) ACCESSIBILITY OF REVIEW.—Such a pro4 gram shall provide that appropriate personnel per5 forming utilization review activities under the pro6 gram are reasonably accessible by toll-free telephone

7 during normal business hours to discuss patient care

8 and allow response to telephone requests, and that

9 appropriate provision is made to receive and respond

10 promptly to calls received during other hours.

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

12 shall not provide for the performance of utilization

13 review activities with respect to a class of services

14 furnished to an individual more frequently than is

15 reasonably required to assess whether the services

16 under review are medically necessary or appropriate.

17 (5) LIMITATION ON INFORMATION REQUESTS.—

18 Under such a program, information shall be required

19 to be provided by health care providers only to the

20 extent it is necessary to perform the utilization re21 view activity involved.

22 (d) DEADLINE FOR DETERMINATIONS.—

23 (1) PRIOR AUTHORIZATION SERVICES.—Except

24 as provided in paragraph (2), in the case of a utili25 zation review activity involving the prior authoriza-
41

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1 tion of health care items and services for an individ2 ual, the utilization review program shall make a de3 termination concerning such authorization, and pro4 vide notice of the determination to the individual or

5 the individual’s designee and the individual’s health

6 care provider by telephone and in printed form, as

7 soon as possible in accordance with the medical ex8 igencies of the cases, and in no event later than 3

9 business days after the date of receipt of information

10 that is reasonably necessary to make such deter11 mination.

12 (2) CONTINUED CARE.—In the case of a utiliza13 tion review activity involving authorization for con14 tinued or extended health care services for an indi15 vidual, or additional services for an individual under16 going a course of continued treatment prescribed by

17 a health care provider, the utilization review pro18 gram shall make a determination concerning such

19 authorization, and provide notice of the determina20 tion to the individual or the individual’s designee

21 and the individual’s health care provider by tele22 phone and in printed form, as soon as possible in ac23 cordance with the medical exigencies of the cases,

24 and in no event later than 1 business day after the

25 date of receipt of information that is reasonably nec-
42

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1 essary to make such determination. Such notice shall

2 include, with respect to continued or extended health

3 care services, the number of extended services ap4 proved, the new total of approved services, the date

5 of onset of services, and the next review date, if any.

6 (3) PREVIOUSLY PROVIDED SERVICES.—In the

7 case of a utilization review activity involving retro8 spective review of health care services previously pro9 vided for an individual, the utilization review pro10 gram shall make a determination concerning such

11 services, and provide notice of the determination to

12 the individual or the individual’s designee and the

13 individual’s health care provider by telephone and in

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

15 of information that is reasonably necessary to make

16 such determination.

17 (4) REFERENCE TO SPECIAL RULES FOR EMER18 GENCY SERVICES, MAINTENANCE CARE, AND POST19 STABILIZATION CARE.—For waiver of prior author20 ization requirements in certain cases involving emer21 gency services and maintenance care and post-sta22 bilization care, see subsections (a)(1) and (b) of sec23 tion 101, respectively.

24 (e) NOTICE OF ADVERSE DETERMINATIONS.—
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1 (1) IN GENERAL.—Notice of an adverse deter2 mination under a utilization review program shall be

3 provided in printed form and shall include—

4 (A) the reasons for the determination (in5 cluding the clinical rationale);

6 (B) instructions on how to initiate an ap7 peal under section 132; 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 determination.

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 termination in order to make a decision on such an

17 appeal.

18 SEC. 116. HEALTH CARE QUALITY ADVISORY BOARD.

19 (a) ESTABLISHMENT.—The President shall establish

20 an advisory board to provide information to Congress and

21 the administration on issues relating to quality monitoring

22 and improvement in the health care provided under group

23 health plans and health insurance coverage.

24 (b) NUMBER AND APPOINTMENT.—The advisory

25 board shall be composed of the Secretary of Health and
44

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1 Human Services (or the Secretary’s designee), the Sec2 retary of Labor (or the Secretary’s designee), and 20 addi3 tional members appointed by the President, in consulta4 tion with the Majority and Minority Leaders of the Senate

5 and House of Representatives. The members so appointed

6 shall include individuals with expertise in—

7 (1) consumer needs;

8 (2) education and training of health profes9 sionals;

10 (3) health care services;

11 (4) health plan management;

12 (5) health care accreditation, quality assurance,

13 improvement, measurement, and oversight;

14 (6) medical practice, including practicing physi15 cians;

16 (7) prevention and public health; and

17 (8) public and private group purchasing for

18 small and large employers or groups.

19 (c) DUTIES.—The advisory board shall—

20 (1) identify, update, and disseminate measures

21 of health care quality for group health plans and

22 health insurance issuers, including network and non23 network plans;
45

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1 (2) advise the Secretary on the development

2 and maintenance of the minimum data set in section

3 112(b); and

4 (3) advise the Secretary on standardized for5 mats for information on group health plans and

6 health insurance coverage.

7 The measures identified under paragraph (1) may be used

8 on a voluntary basis by such plans and issuers. In carrying

9 out paragraph (1), the advisory board shall consult and

10 cooperate with national health care standard setting bod11 ies which define quality indicators, the Agency for Health

12 Care Policy and Research, the Institute of Medicine, and

13 other public and private entities that have expertise in

14 health care quality.

15 (d) REPORT.—The advisory board shall provide an

16 annual report to Congress and the President on the qual17 ity of the health care in the United States and national

18 and regional trends in health care quality. Such report

19 shall include a description of determinants of health care

20 quality and measurements of practice and quality varia21 bility within the United States.

22 (e) SECRETARIAL CONSULTATION.—In serving on

23 the advisory board, the Secretaries of Health and Human

24 Services and Labor (or their designees) shall consult with
46

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1 the Secretaries responsible for other Federal health insur2 ance and health care programs.

3 (f) VACANCIES.—Any vacancy on the board shall be

4 filled in such manner as the original appointment. Mem5 bers of the board shall serve without compensation but

6 shall be reimbursed for travel, subsistence, and other nec7 essary expenses incurred by them in the performance of

8 their duties. Administrative support, scientific support,

9 and technical assistance for the advisory board shall be

10 provided by the Secretary of Health and Human Services.

11 (g) CONTINUATION.—Section 14(a)(2)(B) of the

12 Federal Advisory Committee Act (5 U.S.C. App.; relating

13 to the termination of advisory committees) shall not apply

14 to the advisory board.

15 Subtitle C—Patient Information

16 SEC. 121. PATIENT INFORMATION.

17 (a) DISCLOSURE REQUIREMENT.—

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

19 plan shall—

20 (A) provide to participants and bene21 ficiaries at the time of initial coverage under

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

23 the case of individuals who are participants or

24 beneficiaries as of such date), and at least an-
47

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1 nually thereafter, the information described in

2 subsection (b) in printed form;

3 (B) provide to participants and bene4 ficiaries, within a reasonable period (as speci5 fied by the appropriate Secretary) before or

6 after the date of significant changes in the in7 formation described in subsection (b), informa8 tion in printed form on such significant

9 changes; and

10 (C) upon request, make available to par11 ticipants and beneficiaries, the applicable au12 thority, and prospective participants and bene13 ficiaries, the information described in sub14 section (b) or (c) in printed form.

15 (2) HEALTH INSURANCE ISSUERS.—A health

16 insurance issuer in connection with the provision of

17 health insurance coverage shall—

18 (A) provide to individuals enrolled under

19 such coverage at the time of enrollment, and at

20 least annually thereafter, the information de21 scribed in subsection (b) in printed form;

22 (B) provide to enrollees, within a reason23 able period (as specified by the appropriate Sec24 retary) before or after the date of significant

25 changes in the information described in sub-
48

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1 section (b), information in printed form on such

2 significant changes; and

3 (C) upon request, make available to the

4 applicable authority, to individuals who are pro5 spective enrollees, and to the public the infor6 mation described in subsection (b) or (c) in

7 printed form.

8 (b) INFORMATION PROVIDED.—The information de9 scribed in this subsection with respect to a group health

10 plan or health insurance coverage offered by a health in11 surance issuer includes the following:

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

13 plan or issuer.

14 (2) BENEFITS.—Benefits offered under the

15 plan or coverage, including—

16 (A) covered benefits, including benefit lim17 its and coverage exclusions;

18 (B) cost sharing, such as deductibles, coin19 surance, and copayment amounts, including any

20 liability for balance billing, any maximum limi21 tations on out of pocket expenses, and the max22 imum out of pocket costs for services that are

23 provided by non participating providers or that

24 are furnished without meeting the applicable

25 utilization review requirements;
49

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1 (C) the extent to which benefits may be ob2 tained from nonparticipating providers;

3 (D) the extent to which a participant, ben4 eficiary, or enrollee may select from among par5 ticipating providers and the types of providers

6 participating in the plan or issuer network;

7 (E) process for determining experimental

8 coverage; and

9 (F) use of a prescription drug formulary.

10 (3) ACCESS.—A description of the following:

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

12 providers under the plan or coverage.

13 (B) Out-of-network coverage (if any) pro14 vided by the plan or coverage.

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

16 any supplemental premium or cost-sharing for

17 such option).

18 (D) The procedures for participants, bene19 ficiaries, and enrollees to select, access, and

20 change participating primary and specialty pro21 viders.

22 (E) The rights and procedures for obtain23 ing referrals (including standing referrals) to

24 participating and nonparticipating providers.
50

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1 (F) The name, address, and telephone

2 number of participating health care providers

3 and an indication of whether each such provider

4 is available to accept new patients.

5 (G) Any limitations imposed on the selec6 tion of qualifying participating health care pro7 viders, including any limitations imposed under

8 section 103(b)(2).

9 (H) How the plan or issuer addresses the

10 needs of participants, beneficiaries, and enroll11 ees and others who do not speak English or

12 who have other special communications needs in

13 accessing providers under the plan or coverage,

14 including the provision of information described

15 in this subsection and subsection (c) to such in16 dividuals and including the provision of infor17 mation in a language other than English if 5

18 percent of the number of participants, bene19 ficiaries, and enrollees communicate in that lan20 guage instead of English.

21 (4) OUT-OF-AREA COVERAGE.—Out-of-area cov22 erage provided by the plan or issuer.

23 (5) EMERGENCY COVERAGE.—Coverage of

24 emergency services, including—
51

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1 (A) the appropriate use of emergency serv2 ices, including use of the 911 telephone system

3 or its local equivalent in emergency situations

4 and an explanation of what constitutes an

5 emergency situation;

6 (B) the process and procedures of the plan

7 or issuer for obtaining emergency services; and

8 (C) the locations of (i) emergency depart9 ments, and (ii) other settings, in which plan

10 physicians and hospitals provide emergency

11 services and post-stabilization care.

12 (6) PERCENTAGE OF PREMIUMS USED FOR

13 BENEFITS (LOSS-RATIOS).—In the case of health in14 surance coverage only (and not with respect to group

15 health plans that do not provide coverage through

16 health insurance coverage), a description of the over17 all loss-ratio for the coverage (as defined in accord18 ance with rules established or recognized by the Sec19 retary of Health and Human Services).

20 (7) PRIOR AUTHORIZATION RULES.—Rules re21 garding prior authorization or other review require22 ments that could result in noncoverage or non23 payment.

24 (8) GRIEVANCE AND APPEALS PROCEDURES.—

25 All appeal or grievance rights and procedures under
52

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1 the plan or coverage, including the method for filing

2 grievances and the time frames and circumstances

3 for acting on grievances and appeals, who is the ap4 plicable authority with respect to the plan or issuer,

5 and the availability of assistance through an om6 budsman to individuals in relation to group health

7 plans and health insurance coverage.

8 (9) QUALITY ASSURANCE.—A summary descrip9 tion of the data on quality collected under section

10 112(a), including a summary description of the data

11 on satisfaction of participants, beneficiaries, and en12 rollees (including data on individual voluntary

13 disenrollment and grievances and appeals) described

14 in section 112(b)(4).

15 (10) SUMMARY OF PROVIDER FINANCIAL IN16 CENTIVES.—A summary description of the informa17 tion on the types of financial payment incentives

18 (described in section 1852(j)(4) of the Social Secu19 rity Act) provided by the plan or issuer under the

20 coverage.

21 (11) INFORMATION ON ISSUER.—Notice of ap22 propriate mailing addresses and telephone numbers

23 to be used by participants, beneficiaries, and enroll24 ees in seeking information or authorization for treat25 ment.
53

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1 (12) AVAILABILITY OF INFORMATION ON RE2 QUEST.—Notice that the information described in

3 subsection (c) is available upon request.

4 (c) INFORMATION MADE AVAILABLE UPON RE5 QUEST.—The information described in this subsection is

6 the following:

7 (1) UTILIZATION REVIEW ACTIVITIES.—A de8 scription of procedures used and requirements (in9 cluding circumstances, time frames, and appeal

10 rights) under any utilization review program under

11 section 115, including under any drug formulary

12 program under section 107.

13 (2) GRIEVANCE AND APPEALS INFORMATION.—

14 Information on the number of grievances and ap15 peals and on the disposition in the aggregate of such

16 matters.

17 (3) METHOD OF PHYSICIAN COMPENSATION.—

18 An overall summary description as to the method of

19 compensation of participating physicians, including

20 information on the types of financial payment incen21 tives (described in section 1852(j)(4) of the Social

22 Security Act) provided by the plan or issuer under

23 the coverage.

24 (4) SPECIFIC INFORMATION ON CREDENTIALS

25 OF PARTICIPATING PROVIDERS.—In the case of each
54

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1 participating provider, a description of the creden2 tials of the provider.

3 (5) CONFIDENTIALITY POLICIES AND PROCE4 DURES.—A description of the policies and proce5 dures established to carry out section 122.

6 (6) FORMULARY RESTRICTIONS.—A description

7 of the nature of any drug formula restrictions.

8 (7) PARTICIPATING PROVIDER LIST.—A list of

9 current participating health care providers.

10 (d) FORM OF DISCLOSURE.—

11 (1) UNIFORMITY.—Information required to be

12 disclosed under this section shall be provided in ac13 cordance with uniform, national reporting standards

14 specified by the Secretary, after consultation with

15 applicable State authorities, so that prospective en16 rollees may compare the attributes of different

17 issuers and coverage offered within an area.

18 (2) INFORMATION INTO HANDBOOK.—Nothing

19 in this section shall be construed as preventing a

20 group health plan or health insurance issuer from

21 making the information under subsections (b) and

22 (c) available to participants, beneficiaries, and en23 rollees through an enrollee handbook or similar pub24 lication.
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1 (3) UPDATING PARTICIPATING PROVIDER IN2 FORMATION.—The information on participating

3 health care providers described in subsection

4 (b)(3)(C) shall be updated within such reasonable

5 period as determined appropriate by the Secretary.

6 Nothing in this section shall prevent an issuer from

7 changing or updating other information made avail8 able under this section.

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

10 construed as requiring public disclosure of individual con11 tracts or financial arrangements between a group health

12 plan or health insurance issuer and any provider.

13 SEC. 122. PROTECTION OF PATIENT CONFIDENTIALITY.

14 Insofar as a group health plan, or a health insurance

15 issuer that offers health insurance coverage, maintains

16 medical records or other health information regarding par17 ticipants, beneficiaries, and enrollees, the plan or issuer

18 shall establish procedures—

19 (1) to safeguard the privacy of any individually

20 identifiable enrollee information;

21 (2) to maintain such records and information in

22 a manner that is accurate and timely, and

23 (3) to assure timely access of such individuals

24 to such records and information.
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1 SEC. 123. HEALTH INSURANCE OMBUDSMEN.

2 (a) IN GENERAL.—Each State that obtains a grant

3 under subsection (c) shall provide for creation and oper4 ation of a Health Insurance Ombudsman through a con5 tract with a not-for-profit organization that operates inde6 pendent of group health plans and health insurance

7 issuers. Such Ombudsman shall be responsible for at least

8 the following:

9 (1) To assist consumers in the State in choos10 ing among health insurance coverage or among cov11 erage options offered within group health plans.

12 (2) To provide counseling and assistance to en13 rollees dissatisfied with their treatment by health in14 surance issuers and group health plans in regard to

15 such coverage or plans and with respect to griev16 ances and appeals regarding determinations under

17 such coverage or plans.

18 (b) FEDERAL ROLE.—In the case of any State that

19 does not provide for such an Ombudsman under sub20 section (a), the Secretary shall provide for the creation

21 and operation of a Health Insurance Ombudsman through

22 a contract with a not-for-profit organization that operates

23 independent of group health plans and health insurance

24 issuers and that is responsible for carrying out with re25 spect to that State the functions otherwise provided under

26 subsection (a) by a Health Insurance Ombudsman.
57

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1 (c) AUTHORIZATION OF APPROPRIATIONS.—There

2 are authorized to be appropriated to the Secretary of

3 Health and Human Services such amounts as may be nec4 essary to provide for grants to States for contracts for

5 Health Insurance Ombudsmen under subsection (a) or

6 contracts for such Ombudsmen under subsection (b).

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

8 construed to prevent the use of other forms of enrollee

9 assistance.

10 Subtitle D—Grievance and Appeals

11 Procedures

12 SEC. 131. ESTABLISHMENT OF GRIEVANCE PROCESS.

13 (a) ESTABLISHMENT OF GRIEVANCE SYSTEM.—

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

15 health insurance issuer in connection with the provi16 sion of health insurance coverage, shall establish and

17 maintain a system to provide for the presentation

18 and resolution of oral and written grievances

19 brought by individuals who are participants, bene20 ficiaries, or enrollees, or health care providers or

21 other individuals acting on behalf of an individual

22 and with the individual’s consent, regarding any as23 pect of the plan’s or issuer’s services.

24 (2) SCOPE.—The system shall include griev25 ances regarding access to and availability of services,
58

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1 quality of care, choice and accessibility of providers,

2 network adequacy, and compliance with the require3 ments of this title.

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

5 the following components with respect to individuals who

6 are participants, beneficiaries, or enrollees:

7 (1) Written notification to all such individuals

8 and providers of the telephone numbers and business

9 addresses of the plan or issuer personnel responsible

10 for resolution of grievances and appeals.

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

12 period of at least 3 previous years, all grievances

13 and appeals made and their status.

14 (3) A process providing for timely processing

15 and resolution of grievances.

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

17 the methods to inform the person making the griev18 ance of the resolution of the grievance.

19 (5) Notification to the continuous quality im20 provement program under section 111(a) of all

21 grievances and appeals relating to quality of care.

22 SEC. 132. INTERNAL APPEALS OF ADVERSE DETERMINA23 TIONS.

24 (a) RIGHT OF APPEAL.—
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1 (1) IN GENERAL.—A participant or beneficiary

2 in a group health plan, and an enrollee in health in3 surance coverage offered by a health insurance

4 issuer, and any provider or other person acting on

5 behalf of such an individual with the individual’s

6 consent, may appeal any appealable decision (as de7 fined in paragraph (2)) under the procedures de8 scribed in this section and (to the extent applicable)

9 section 133. Such individuals and providers shall be

10 provided with a written explanation of the appeal

11 process and the determination upon the conclusion

12 of the appeals process and as provided in section

13 121(b)(8).

14 (2) APPEALABLE DECISION DEFINED.—In this

15 section, the term ‘‘appealable decision’’ means any of

16 the following:

17 (A) Denial, reduction, or termination of, or

18 failure to provide or make payment (in whole or

19 in part) for a benefit, including a failure to

20 cover an item or service for which benefits are

21 otherwise provided because it is determined to

22 be experimental or investigational or not medi23 cally necessary or appropriate.

24 (B) Failure to provide coverage of emer25 gency services or reimbursement of mainte-
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1 nance care or post-stabilization care under sec2 tion 101.

3 (C) Failure to provide a choice of provider

4 under section 103.

5 (D) Failure to provide qualified health care

6 providers under section 103.

7 (E) Failure to provide access to specialty

8 and other care under section 104.

9 (F) Failure to provide continuation of care

10 under section 105.

11 (G) Failure to provide coverage of routine

12 patient costs in connection with an approval

13 clinical trial under section 106.

14 (H) Failure to provide access to needed

15 drugs under section 107(a)(3) or 107(b).

16 (I) Discrimination in delivery of services in

17 violation of section 109.

18 (J) An adverse determination under a utili19 zation review program under section 115.

20 (K) The imposition of a limitation that is

21 prohibited under section 151.

22 (b) INTERNAL APPEAL PROCESS.—

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

24 health insurance issuer shall establish and maintain

25 an internal appeal process under which any partici-
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1 pant, beneficiary, or enrollee, or any provider or

2 other person acting on behalf of such an individual

3 with the individual’s consent, who is dissatisfied with

4 any appealable decision has the opportunity to ap5 peal the decision through an internal appeal process.

6 The appeal may be communicated orally.

7 (2) CONDUCT OF REVIEW.—

8 (A) IN GENERAL.—The process shall in9 clude a review of the decision by a physician or

10 other health care professional (or professionals)

11 who has been selected by the plan or issuer and

12 who has not been involved in the appealable de13 cision at issue in the appeal.

14 (B) AVAILABILITY AND PARTICIPATION OF

15 CLINICAL PEERS.—The individuals conducting

16 such review shall include one or more clinical

17 peers (as defined in section 191(c)(2)) who have

18 not been involved in the appealable decision at

19 issue in the appeal.

20 (3) DEADLINE.—

21 (A) IN GENERAL.—Subject to subsection

22 (c), the plan or issuer shall conclude each ap23 peal as soon as possible after the time of the re24 ceipt of the appeal in accordance with medical
62

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1 exigencies of the case involved, but in no event

2 later than—

3 (i) 72 hours after the time of receipt

4 of an expedited appeal, and

5 (ii) except as provided in subpara6 graph (B), 30 business days after such

7 time (or, if the participant, beneficiary, or

8 enrollee supplies additional information

9 that was not available to the plan or issuer

10 at the time of the receipt of the appeal,

11 after the date of supplying such additional

12 information) in the case of all other ap13 peals.

14 (B) EXTENSION.—In the case of an appeal

15 that does not relate to a decision regarding an

16 expedited appeal and that does not involve med17 ical exigencies, if a group health plan or health

18 insurance issuer is unable to conclude the ap19 peal within the time period provided under sub20 paragraph (A)(ii) due to circumstances beyond

21 the control of the plan or issuer, the deadline

22 shall be extended for up to an additional 10

23 business days if the plan or issuer provides, on

24 or before 10 days before the deadline otherwise

25 applicable, written notice to the participant,
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1 beneficiary, or enrollee and the provider in2 volved of the extension and the reasons for the

3 extension.

4 (4) NOTICE.—If a plan or issuer denies an ap5 peal, the plan or issuer shall provide the participant,

6 beneficiary, or enrollee and provider involved with

7 notice in printed form of the denial and the reasons

8 therefore, together with a notice in printed form of

9 rights to any further appeal.

10 (c) EXPEDITED REVIEW PROCESS.—

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

12 health insurance issuer, shall establish procedures in

13 writing for the expedited consideration of appeals

14 under subsection (b) in situations in which the appli15 cation of the normal timeframe for making a deter16 mination could seriously jeopardize the life or health

17 of the participant, beneficiary, or enrollee (including

18 in the case of a child, development) or such an indi19 vidual’s ability to regain maximum function.

20 (2) PROCESS.—Under such procedures—

21 (A) the request for expedited appeal may

22 be submitted orally or in writing by an individ23 ual or provider who is otherwise entitled to re24 quest the appeal;
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1 (B) all necessary information, including

2 the plan’s or issuer’s decision, shall be trans3 mitted between the plan or issuer and the re4 quester by telephone, facsimile, or other simi5 larly expeditious available method; and

6 (C) the plan or issuer shall expedite the

7 appeal if the request for an expedited appeal is

8 submitted under subparagraph (A) by a physi9 cian and the request indicates that the situation

10 described in paragraph (1) exists.

11 (d) DIRECT USE OF FURTHER APPEALS.—In the

12 event that the plan or issuer fails to comply with any of

13 the deadlines for completion of appeals under this section

14 or in the event that the plan or issuer for any reason ex15 pressly waives its rights to an internal review of an appeal

16 under subsection (b), the participant, beneficiary, or en17 rollee involved and the provider involved shall be relieved

18 of any obligation to complete the appeal involved and may,

19 at such an individual’s or provider’s option, proceed di20 rectly to seek further appeal through any applicable exter21 nal appeals process.

22 SEC. 133. EXTERNAL APPEALS OF ADVERSE DETERMINA23 TIONS.

24 (a) RIGHT TO EXTERNAL APPEAL.—
65

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

2 health insurance issuer offering group health insur3 ance coverage, shall provide for an external appeals

4 process that meets the requirements of this section

5 in the case of an externally appealable decision de6 scribed in paragraph (2). The appropriate Secretary

7 shall establish standards to carry out such require8 ments.

9 (2) EXTERNALLY APPEALABLE DECISION DE10 FINED.—For purposes of this section, the term ‘‘ex11 ternally appealable decision’’ means an appealable

12 decision (as defined in section 132(a)(2)) if—

13 (A) the amount involved exceeds a signifi14 cant threshold; or

15 (B) the patient’s life or health is jeopard16 ized (including, in the case of a child, develop17 ment) as a consequence of the decision.

18 Such term does not include a denial of coverage for

19 services that are specifically listed in plan or cov20 erage documents as excluded from coverage.

21 (3) EXHAUSTION OF INTERNAL APPEALS PROC22 ESS.—A plan or issuer may condition the use of an

23 external appeal process in the case of an externally

24 appealable decision upon completion of the internal

25 review process provided under section 132, but only
66

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1 if the decision is made in a timely basis consistent

2 with the deadlines provided under this subtitle.

3 (b) GENERAL ELEMENTS OF EXTERNAL APPEALS

4 PROCESS.—

5 (1) CONTRACT WITH QUALIFIED EXTERNAL AP6 PEAL ENTITY.—

7 (A) CONTRACT REQUIREMENT.—Subject to

8 subparagraph (B), the external appeal process

9 under this section of a plan or issuer shall be

10 conducted under a contract between the plan or

11 issuer and one or more qualified external appeal

12 entities (as defined in subsection (c)).

13 (B) RESTRICTIONS ON QUALIFIED EXTER14 NAL APPEAL ENTITY.—

15 (i) BY STATE FOR HEALTH INSUR16 ANCE ISSUERS.—With respect to health in17 surance issuers in a State, the State may

18 provide for external review activities to be

19 conducted by a qualified external appeal

20 entity that is designated by the State or

21 that is selected by the State in such a

22 manner as to assure an unbiased deter23 mination.

24 (ii) BY FEDERAL GOVERNMENT FOR

25 GROUP HEALTH PLANS.—With respect to
67

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1 group health plans, the appropriate Sec2 retary may exercise the same authority as

3 a State may exercise with respect to health

4 insurance issuers under clause (i). Such

5 authority may include requiring the use of

6 the qualified external appeal entity des7 ignated or selected under such clause.

8 (iii) LIMITATION ON PLAN OR ISSUER

9 SELECTION.—If an applicable authority

10 permits more than one entity to qualify as

11 a qualified external appeal entity with re12 spect to a group health plan or health in13 surance issuer and the plan or issuer may

14 select among such qualified entities, the

15 applicable authority—

16 (I) shall assure that the selection

17 process will not create any incentives

18 for external appeal entities to make a

19 decision in a biased manner, and

20 (II) shall implement procedures

21 for auditing a sample of decisions by

22 such entities to assure that no such

23 decisions are made in a biased man24 ner.
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1 (C) OTHER TERMS AND CONDITIONS.—

2 The terms and conditions of a contract under

3 this paragraph shall be consistent with the

4 standards the appropriate Secretary shall estab5 lish to assure there is no real or apparent con6 flict of interest in the conduct of external ap7 peal activities. Such contract shall provide that

8 the direct costs of the process (not including

9 costs of representation of a participant, bene10 ficiary, or enrollee) shall be paid by the plan or

11 issuer, and not by the participant, beneficiary,

12 or enrollee.

13 (2) ELEMENTS OF PROCESS.—An external ap14 peal process shall be conducted consistent with

15 standards established by the appropriate Secretary

16 that include at least the following:

17 (A) FAIR PROCESS; DE NOVO DETERMINA18 TION.—The process shall provide for a fair, de

19 novo determination.

20 (B) DETERMINATION CONCERNING EXTER21 NALLY APPEALABLE DECISIONS.—A qualified

22 external appeal entity shall determine whether a

23 decision is an externally appealable decision and

24 related decisions, including—
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1 (i) whether such a decision involves an

2 expedited appeal;

3 (ii) the appropriate deadlines for in4 ternal review process required due to medi5 cal exigencies in a case; and

6 (iii) whether such a process has been

7 completed.

8 (C) OPPORTUNITY TO SUBMIT EVIDENCE,

9 HAVE REPRESENTATION, AND MAKE ORAL

10 PRESENTATION.—Each party to an externally

11 appealable decision—

12 (i) may submit and review evidence

13 related to the issues in dispute,

14 (ii) may use the assistance or rep15 resentation of one or more individuals (any

16 of whom may be an attorney), and

17 (iii) may make an oral presentation.

18 (D) PROVISION OF INFORMATION.—The

19 plan or issuer involved shall provide timely ac20 cess to all its records relating to the matter of

21 the externally appealable decision and to all

22 provisions of the plan or health insurance cov23 erage (including any coverage manual) relating

24 to the matter.
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1 (E) TIMELY DECISIONS.—A determination

2 by the external appeal entity on the decision

3 shall—

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

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

6 parties in writing as soon as possible;

7 (ii) be binding on the plan or issuer;

8 (iii) be made in accordance with the

9 medical exigencies of the case involved, but

10 in no event later than 60 days (or 72

11 hours in the case of an expedited appeal)

12 from the date of completion of the filing of

13 notice of external appeal of the decision;

14 (iv) state, in layperson’s language, the

15 basis for the determination, including, if

16 relevant, any basis in the terms or condi17 tions of the plan or coverage; and

18 (v) inform the participant, beneficiary,

19 or enrollee of the individual’s rights to seek

20 further review by the courts (or other proc21 ess) of the external appeal determination.

22 (c) QUALIFICATIONS OF EXTERNAL APPEAL ENTI23 TIES.—

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

25 the term ‘‘qualified external appeal entity’’ means,
71

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1 in relation to a plan or issuer, an entity (which may

2 be a governmental entity) that is certified under

3 paragraph (2) as meeting the following require4 ments:

5 (A) There is no real or apparent conflict of

6 interest that would impede the entity conduct7 ing external appeal activities independent of the

8 plan or issuer.

9 (B) The entity conducts external appeal

10 activities through clinical peers.

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

12 and other expertise and sufficient staffing to

13 conduct external appeal activities for the plan

14 or issuer on a timely basis consistent with sub15 section (b)(3)(E).

16 (D) The entity meets such other require17 ments as the appropriate Secretary may im18 pose.

19 (2) CERTIFICATION OF EXTERNAL APPEAL EN20 TITIES.—

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

22 as a qualified external appeal entity with re23 spect to—

24 (i) a group health plan, the entity

25 must be certified (and, in accordance with
72

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1 subparagraph (B), periodically recertified)

2 as meeting the requirements of paragraph

3 (1) by the Secretary of Labor (or under a

4 process recognized or approved by the Sec5 retary of Labor); or

6 (ii) a health insurance issuer operat7 ing in a State, the entity must be certified

8 (and, in accordance with subparagraph

9 (B), periodically recertified) as meeting

10 such requirements by the applicable State

11 authority (or, if the State has not estab12 lished an adequate certification and recer13 tification process, by the Secretary of

14 Health and Human Services, or under a

15 process recognized or approved by such

16 Secretary).

17 (B) RECERTIFICATION PROCESS.—The ap18 propriate Secretary shall develop standards for

19 the recertification of external appeal entities.

20 Such standards shall include a specification

21 of—

22 (i) the information required to be sub23 mitted as a condition of recertification on

24 the entity’s performance of external appeal

25 activities, which information shall include
73

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1 the number of cases reviewed, a summary

2 of the disposition of those cases, the length

3 of time in making determinations on those

4 cases, and such information as may be nec5 essary to assure the independence of the

6 entity from the plans or issuers for which

7 external appeal activities are being con8 ducted; and

9 (ii) the periodicity which recertifi10 cation will be required.

11 (d) CONTINUING LEGAL RIGHTS OF ENROLLEES.—

12 Nothing in this title shall be construed as removing any

13 legal rights of participants, beneficiaries, enrollees, and

14 others under State or Federal law, including the right to

15 file judicial actions to enforce rights.

16 Subtitle E—Protecting the Doctor17 Patient Relationship

18 SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN

19 MEDICAL COMMUNICATIONS.

20 (a) PROHIBITION.—

21 (1) GENERAL RULE.—The provisions of any

22 contract or agreement, or the operation of any con23 tract or agreement, between a group health plan or

24 health insurance issuer in relation to health insur25 ance coverage (including any partnership, associa-
74

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1 tion, or other organization that enters into or ad2 ministers such a contract or agreement) and a

3 health care provider (or group of health care provid4 ers) shall not prohibit or restrict the provider from

5 engaging in medical communications with the pro6 vider’s patient.

7 (2) NULLIFICATION.—Any contract provision or

8 agreement that restricts or prohibits medical com9 munications in violation of paragraph (1) shall be

10 null and void.

11 (b) RULES OF CONSTRUCTION.—Nothing in this sec12 tion shall be construed—

13 (1) to prohibit the enforcement, as part of a

14 contract or agreement to which a health care pro15 vider is a party, of any mutually agreed upon terms

16 and conditions, including terms and conditions re17 quiring a health care provider to participate in, and

18 cooperate with, all programs, policies, and proce19 dures developed or operated by a group health plan

20 or health insurance issuer to assure, review, or im21 prove the quality and effective utilization of health

22 care services (if such utilization is according to

23 guidelines or protocols that are based on clinical or

24 scientific evidence and the professional judgment of

25 the provider) but only if the guidelines or protocols
75

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1 under such utilization do not prohibit or restrict

2 medical communications between providers and their

3 patients; or

4 (2) to permit a health care provider to mis5 represent the scope of benefits covered under the

6 group health plan or health insurance coverage or to

7 otherwise require a group health plan health insur8 ance issuer to reimburse providers for benefits not

9 covered under the plan or coverage.

10 (c) MEDICAL COMMUNICATION DEFINED.—In this

11 section:

12 (1) IN GENERAL.—The term ‘‘medical commu13 nication’’ means any communication made by a

14 health care provider with a patient of the health care

15 provider (or the guardian or legal representative of

16 such patient) with respect to—

17 (A) the patient’s health status, medical

18 care, or treatment options;

19 (B) any utilization review requirements

20 that may affect treatment options for the pa21 tient; or

22 (C) any financial incentives that may af23 fect the treatment of the patient.

24 (2) MISREPRESENTATION.—The term ‘‘medical

25 communication’’ does not include a communication
76

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1 by a health care provider with a patient of the

2 health care provider (or the guardian or legal rep3 resentative of such patient) if the communication in4 volves a knowing or willful misrepresentation by

5 such provider.

6 SEC. 142. PROHIBITION AGAINST TRANSFER OF INDEM7 NIFICATION OR IMPROPER INCENTIVE AR8 RANGEMENTS.

9 (a) PROHIBITION OF TRANSFER OF INDEMNIFICA10 TION.—

11 (1) IN GENERAL.—No contract or agreement

12 between a group health plan or health insurance

13 issuer (or any agent acting on behalf of such a plan

14 or issuer) and a health care provider shall contain

15 any provision purporting to transfer to the health

16 care provider by indemnification or otherwise any li17 ability relating to activities, actions, or omissions of

18 the plan, issuer, or agent (as opposed to the pro19 vider).

20 (2) NULLIFICATION.—Any contract or agree21 ment provision described in paragraph (1) shall be

22 null and void.

23 (b) PROHIBITION OF IMPROPER PHYSICIAN INCEN24 TIVE PLANS.—
77

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

2 health insurance issuer offering health insurance

3 coverage may not operate any physician incentive

4 plan (as defined in subparagraph (B) of section

5 1876(i)(8) of the Social Security Act) unless the re6 quirements described in subparagraph (A) of such

7 section are met with respect to such a plan.

8 (2) APPLICATION.—For purposes of carrying

9 out paragraph (1), any reference in section

10 1876(i)(8) of the Social Security Act to the Sec11 retary, an eligible organization, or an individual en12 rolled with the organization shall be treated as a ref13 erence to the applicable authority, a group health

14 plan or health insurance issuer, respectively, and a

15 participant, beneficiary, or enrollee with the plan or

16 organization, respectively.

17 SEC. 143. ADDITIONAL RULES REGARDING PARTICIPATION

18 OF HEALTH CARE PROFESSIONALS.

19 (a) PROCEDURES.—Insofar as a group health plan,

20 or health insurance issuer that offers health insurance cov21 erage, provides benefits through participating health care

22 professionals, the plan or issuer shall establish reasonable

23 procedures relating to the participation (under an agree24 ment between a professional and the plan or issuer) of
78

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1 such professionals under the plan or coverage. Such proce2 dures shall include—

3 (1) providing notice of the rules regarding par4 ticipation;

5 (2) providing written notice of participation de6 cisions that are adverse to professionals; and

7 (3) providing a process within the plan or issuer

8 for appealing such adverse decisions, including the

9 presentation of information and views of the profes10 sional regarding such decision.

11 (b) CONSULTATION IN MEDICAL POLICIES.—A group

12 health plan, and health insurance issuer that offers health

13 insurance coverage, shall consult with participating physi14 cians (if any) regarding the plan’s or issuer’s medical pol15 icy, quality, and medical management procedures.

16 SEC. 144. PROTECTION FOR PATIENT ADVOCACY.

17 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

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

19 health insurance issuer with respect to the provision of

20 health insurance coverage, may not retaliate against a par21 ticipant, beneficiary, enrollee, or health care provider

22 based on the participant’s, beneficiary’s, enrollee’s or pro23 vider’s use of, or participation in, a utilization review proc24 ess or a grievance process of the plan or issuer (including
79

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1 an internal or external review or appeal process) under

2 this title.

3 (b) PROTECTION FOR QUALITY ADVOCACY BY

4 HEALTH CARE PROFESSIONALS.—

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

6 health insurance issuer may not retaliate or dis7 criminate against a protected health care profes8 sional because the professional in good faith—

9 (A) discloses information relating to the

10 care, services, or conditions affecting one or

11 more participants, beneficiaries, or enrollees of

12 the plan or issuer to an appropriate public reg13 ulatory agency, an appropriate private accredi14 tation body, or appropriate management per15 sonnel of the plan or issuer; or

16 (B) initiates, cooperates, or otherwise par17 ticipates in an investigation or proceeding by

18 such an agency with respect to such care, serv19 ices, or conditions.

20 If an institutional health care provider is a partici21 pating provider with such a plan or issuer or other22 wise receives payments for benefits provided by such

23 a plan or issuer, the provisions of the previous sen24 tence shall apply to the provider in relation to care,

25 services, or conditions affecting one or more patients
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1 within an institutional health care provider in the

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

3 relation to care, services, or conditions provided to

4 one or more participants, beneficiaries, or enrollees;

5 and for purposes of applying this sentence, any ref6 erence to a plan or issuer is deemed a reference to

7 the institutional health care provider.

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

9 paragraph (1), a protected health care professional

10 is considered to be acting in good faith with respect

11 to disclosure of information or participation if, with

12 respect to the information disclosed as part of the

13 action—

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

15 personal knowledge and is consistent with that

16 degree of learning and skill ordinarily possessed

17 by health care professionals with the same li18 censure or certification and the same experi19 ence;

20 (B) the professional reasonably believes the

21 information to be true;

22 (C) the information evidences either a vio23 lation of a law, rule, or regulation, of an appli24 cable accreditation standard, or of a generally

25 recognized professional or clinical standard or
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1 that a patient is in imminent hazard of loss of

2 life or serious injury; and

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

4 of paragraph (3), the professional has followed

5 reasonable internal procedures of the plan,

6 issuer, or institutional health care provider es7 tablished for the purpose of addressing quality

8 concerns before making the disclosure.

9 (3) EXCEPTION AND SPECIAL RULE.—

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

11 does not protect disclosures that would violate

12 Federal or State law or diminish or impair the

13 rights of any person to the continued protection

14 of confidentiality of communications provided

15 by such law.

16 (B) NOTICE OF INTERNAL PROCEDURES.—

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

18 apply unless the internal procedures involved

19 are reasonably expected to be known to the

20 health care professional involved. For purposes

21 of this subparagraph, a health care professional

22 is reasonably expected to know of internal pro23 cedures if those procedures have been made

24 available to the professional through distribu25 tion or posting.
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1 (C) INTERNAL PROCEDURE EXCEPTION.—

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

3 not apply if—

4 (i) the disclosure relates to an immi5 nent hazard of loss of life or serious injury

6 to a patient;

7 (ii) the disclosure is made to an ap8 propriate private accreditation body pursu9 ant to disclosure procedures established by

10 the body; or

11 (iii) the disclosure is in response to an

12 inquiry made in an investigation or pro13 ceeding of an appropriate public regulatory

14 agency and the information disclosed is

15 limited to the scope of the investigation or

16 proceeding.

17 (4) ADDITIONAL CONSIDERATIONS.—It shall

18 not be a violation of paragraph (1) to take an ad19 verse action against a protected health care profes20 sional if the plan, issuer, or provider taking the ad21 verse action involved demonstrates that it would

22 have taken the same adverse action even in the ab23 sence of the activities protected under such para24 graph.
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1 (5) NOTICE.—A group health plan, health in2 surance issuer, and institutional health care provider

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

4 the Secretary of Labor, setting forth excerpts from,

5 or summaries of, the pertinent provisions of this

6 subsection and information pertaining to enforce7 ment of such provisions.

8 (6) CONSTRUCTIONS.—

9 (A) DETERMINATIONS OF COVERAGE.—

10 Nothing in this subsection shall be construed to

11 prohibit a plan or issuer from making a deter12 mination not to pay for a particular medical

13 treatment or service or the services of a type of

14 health care professional.

15 (B) ENFORCEMENT OF PEER REVIEW PRO16 TOCOLS AND INTERNAL PROCEDURES.—Noth17 ing in this subsection shall be construed to pro18 hibit a plan, issuer, or provider from establish19 ing and enforcing reasonable peer review or uti20 lization review protocols or determining whether

21 a protected health care professional has com22 plied with those protocols or from establishing

23 and enforcing internal procedures for the pur24 pose of addressing quality concerns.
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1 (C) RELATION TO OTHER RIGHTS.—Noth2 ing in this subsection shall be construed to

3 abridge rights of participants, beneficiaries, en4 rollees, and protected health care professionals

5 under other applicable Federal or State laws.

6 (7) PROTECTED HEALTH CARE PROFESSIONAL

7 DEFINED.—For purposes of this subsection, the

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

9 individual who is a licensed or certified health care

10 professional and who—

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

12 health insurance issuer, is an employee of the

13 plan or issuer or has a contract with the plan

14 or issuer for provision of services for which ben15 efits are available under the plan or issuer; or

16 (B) with respect to an institutional health

17 care provider, is an employee of the provider or

18 has a contract or other arrangement with the

19 provider respecting the provision of health care

20 services.

21 Subtitle F—Promoting Good

22 Medical Practice

23 SEC. 151. PROMOTING GOOD MEDICAL PRACTICE.

24 (a) PROHIBITING ARBITRARY LIMITATIONS OR CON25 DITIONS FOR THE PROVISION OF SERVICES.—
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1 (1) IN GENERAL.—A group health plan, and a

2 health insurance issuer in connection with the provi3 sion of health insurance coverage, may not arbitrar4 ily interfere with or alter the decision of the treating

5 physician regarding the manner or setting in which

6 particular services are delivered if the services are

7 medically necessary or appropriate for treatment or

8 diagnosis to the extent that such treatment or diag9 nosis is otherwise a covered benefit.

10 (2) CONSTRUCTION.—Paragraph (1) shall not

11 be construed as prohibiting a plan or issuer from

12 limiting the delivery of services to one or more

13 health care providers within a network of such pro14 viders.

15 (3) MANNER OR SETTING DEFINED.—In para16 graph (1), the term ‘‘manner or setting’’ means the

17 location of treatment, such as whether treatment is

18 provided on an inpatient or outpatient basis, and the

19 duration of treatment, such as the number of days

20 in a hospital. Such term does not include the cov21 erage of a particular service or treatment.

22 (b) NO CHANGE IN COVERAGE.—Subsection (a) shall

23 not be construed as requiring coverage of particular serv24 ices the coverage of which is otherwise not covered under
86

S 6 IS1S

1 the terms of the plan or coverage or from conducting utili2 zation review activities consistent with this subsection.

3 (c) MEDICAL NECESSITY OR APPROPRIATENESS DE4 FINED.—In subsection (a), the term ‘‘medically necessary

5 or appropriate’’ means, with respect to a service or benefit,

6 a service or benefit which is consistent with generally ac7 cepted principles of professional medical practice.

8 SEC. 152. STANDARDS RELATING TO BENEFITS FOR CER9 TAIN BREAST CANCER TREATMENT.

10 (a) INPATIENT CARE.—

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

12 health insurance issuer offering group health insur13 ance coverage, that provides medical and surgical

14 benefits shall ensure that inpatient coverage with re15 spect to the treatment of breast cancer is provided

16 for a period of time as is determined by the attend17 ing physician, in his or her professional judgment

18 consistent with generally accepted medical stand19 ards, in consultation with the patient, to be medi20 cally appropriate following—

21 (A) a mastectomy;

22 (B) a lumpectomy; or

23 (C) a lymph node dissection for the treat24 ment of breast cancer.
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1 (2) EXCEPTION.—Nothing in this section shall

2 be construed as requiring the provision of inpatient

3 coverage if the attending physician and patient de4 termine that a shorter period of hospital stay is

5 medically appropriate.

6 (b) PROHIBITIONS.—A group health plan, and a

7 health insurance issuer offering group health insurance

8 coverage in connection with a group health plan, may

9 not—

10 (1) deny to a woman eligibility, or continued

11 eligibility, to enroll or to renew coverage under the

12 terms of the plan, solely for the purpose of avoiding

13 the requirements of this section;

14 (2) provide monetary payments or rebates to

15 women to encourage such women to accept less than

16 the minimum protections available under this sec17 tion;

18 (3) penalize or otherwise reduce or limit the re19 imbursement of an attending provider because such

20 provider provided care to an individual participant

21 or beneficiary in accordance with this section;

22 (4) provide incentives (monetary or otherwise)

23 to an attending provider to induce such provider to

24 provide care to an individual participant or bene25 ficiary in a manner inconsistent with this section; or
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1 (5) subject to subsection (c)(3), restrict benefits

2 for any portion of a period within a hospital length

3 of stay required under subsection (a) in a manner

4 which is less favorable than the benefits provided for

5 any preceding portion of such stay.

6 (c) RULES OF CONSTRUCTION.—

7 (1) Nothing in this section shall be construed to

8 require a woman who is a participant or

9 beneficiary—

10 (A) to undergo a mastectomy or lymph

11 node dissection in a hospital; or

12 (B) to stay in the hospital for a fixed pe13 riod of time following a mastectomy or lymph

14 node dissection.

15 (2) This section shall not apply with respect to

16 any group health plan, or any group health insur17 ance coverage offered by a health insurance issuer,

18 which does not provide benefits for hospital lengths

19 of stay in connection with a mastectomy or lymph

20 node dissection for the treatment of breast cancer.

21 (3) Nothing in this section shall be construed as

22 preventing a group health plan or issuer from impos23 ing deductibles, coinsurance, or other cost-sharing in

24 relation to benefits for hospital lengths of stay in

25 connection with a mastectomy or lymph node dissec-
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1 tion for the treatment of breast cancer under the

2 plan (or under health insurance coverage offered in

3 connection with a group health plan), except that

4 such coinsurance or other cost-sharing for any por5 tion of a period within a hospital length of stay re6 quired under subsection (a) may not be greater than

7 such coinsurance or cost-sharing for any preceding

8 portion of such stay.

9 (d) LEVEL AND TYPE OF REIMBURSEMENTS.—Noth10 ing in this section shall be construed to prevent a group

11 health plan or a health insurance issuer offering group

12 health insurance coverage from negotiating the level and

13 type of reimbursement with a provider for care provided

14 in accordance with this section.

15 (e) EXCEPTION FOR HEALTH INSURANCE COVERAGE

16 IN CERTAIN STATES.—

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

18 section shall not apply with respect to health insur19 ance coverage if there is a State law (as defined in

20 section 2723(d)(1) of the Public Health Service Act)

21 for a State that regulates such coverage that is de22 scribed in any of the following subparagraphs:

23 (A) Such State law requires such coverage

24 to provide for at least a 48-hour hospital length

25 of stay following a mastectomy performed for
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1 treatment of breast cancer and at least a 24-

2 hour hospital length of stay following a lymph

3 node dissection for treatment of breast cancer.

4 (B) Such State law requires, in connection

5 with such coverage for surgical treatment of

6 breast cancer, that the hospital length of stay

7 for such care is left to the decision of (or re8 quired to be made by) the attending provider in

9 consultation with the woman involved.

10 (2) CONSTRUCTION.—Section 2723(a)(1) of the

11 Public Health Service Act and section 731(a)(1) of

12 the Employee Retirement Income Security Act of

13 1974 shall not be construed as superseding a State

14 law described in paragraph (1).

15 Subtitle G—Definitions

16 SEC. 191. DEFINITIONS.

17 (a) INCORPORATION OF GENERAL DEFINITIONS.—

18 The provisions of section 2971 of the Public Health Serv19 ice Act shall apply for purposes of this title in the same

20 manner as they apply for purposes of title XXVII of such

21 Act.

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

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

24 Human Services, in consultation with the Secretary of

25 Labor and the Secretary of the Treasury and the term
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1 ‘‘appropriate Secretary’’ means the Secretary of Health

2 and Human Services in relation to carrying out this title

3 under sections 2707 and 2753 of the Public Health Serv4 ice Act, the Secretary of Labor in relation to carrying out

5 this title under section 714 of the Employee Retirement

6 Income Security Act of 1974, and the Secretary of the

7 Treasury in relation to carrying out this title under chap8 ter 100 and section 4980D of the Internal Revenue Code

9 of 1986.

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

11 title:

12 (1) APPLICABLE AUTHORITY.—The term ‘‘ap13 plicable authority’’ means—

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

15 Secretary of Health and Human Services and

16 the Secretary of Labor; and

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

18 with respect to a specific provision of this title,

19 the applicable State authority (as defined in

20 section 2791(d) of the Public Health Service

21 Act), or the Secretary of Health and Human

22 Services, if such Secretary is enforcing such

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

24 2761(a)(2) of the Public Health Service Act.
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1 (2) CLINICAL PEER.—The term ‘‘clinical peer’’

2 means, with respect to a review or appeal, a physi3 cian (allopathic or osteopathic) or other health care

4 professional who holds a non-restricted license in a

5 State and who is appropriately credentialed in the

6 same or similar specialty as typically manages the

7 medical condition, procedure, or treatment under re8 view or appeal and includes a pediatric specialist

9 where appropriate; except that only a physician may

10 be a clinical peer with respect to the review or ap11 peal of treatment rendered by a physician.

12 (3) HEALTH CARE PROVIDER.—The term

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

14 health care professional, as well as an institutional

15 provider of health care services.

16 (4) NONPARTICIPATING.—The term ‘‘non17 participating’’ means, with respect to a health care

18 provider that provides health care items and services

19 to a participant, beneficiary, or enrollee under group

20 health plan or health insurance coverage, a health

21 care provider that is not a participating health care

22 provider with respect to such items and services.

23 (5) PARTICIPATING.—The term ‘‘participating’’

24 means, with respect to a health care provider that

25 provides health care items and services to a partici-
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1 pant, beneficiary, or enrollee under group health

2 plan or health insurance coverage offered by a

3 health insurance issuer, a health care provider that

4 furnishes such items and services under a contract

5 or other arrangement with the plan or issuer.

6 SEC. 192. PREEMPTION; STATE FLEXIBILITY; CONSTRUC7 TION.

8 (a) CONTINUED APPLICABILITY OF STATE LAW

9 WITH RESPECT TO HEALTH INSURANCE ISSUERS.—

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

11 this title shall not be construed to supersede any

12 provision of State law which establishes, implements,

13 or continues in effect any standard or requirement

14 solely relating to health insurance issuers in connec15 tion with group health insurance coverage except to

16 the extent that such standard or requirement pre17 vents the application of a requirement of this title.

18 (2) CONTINUED PREEMPTION WITH RESPECT

19 TO GROUP HEALTH PLANS.—Nothing in this title

20 shall be construed to affect or modify the provisions

21 of section 514 of the Employee Retirement Income

22 Security Act of 1974 with respect to group health

23 plans.

24 (b) RULES OF CONSTRUCTION.—Except as provided

25 in section 152, nothing in this title shall be construed as
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1 requiring a group health plan or health insurance coverage

2 to provide specific benefits under the terms of such plan

3 or coverage.

4 (c) DEFINITIONS.—For purposes of this section:

5 (1) STATE LAW.—The term ‘‘State law’’ in6 cludes all laws, decisions, rules, regulations, or other

7 State action having the effect of law, of any State.

8 A law of the United States applicable only to the

9 District of Columbia shall be treated as a State law

10 rather than a law of the United States.

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

12 State, the Northern Mariana Islands, any political

13 subdivisions of a State or such Islands, or any agen14 cy or instrumentality of either.

15 SEC. 193. REGULATIONS.

16 The Secretaries of Health and Human Services,

17 Labor, and the Treasury shall issue such regulations as

18 may be necessary or appropriate to carry out this title.

19 Such regulations shall be issued consistent with section

20 104 of Health Insurance Portability and Accountability

21 Act of 1996. Such Secretaries may promulgate any in22 terim final rules as the Secretaries determine are appro23 priate to carry out this title.
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1 TITLE II—APPLICATION OF PA2 TIENT PROTECTION STAND3 ARDS TO GROUP HEALTH

4 PLANS AND HEALTH INSUR5 ANCE COVERAGE UNDER

6 PUBLIC HEALTH SERVICE

7 ACT

8 SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND

9 GROUP HEALTH INSURANCE COVERAGE.

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

11 XXVII of the Public Health Service Act, as amended by

12 the Omnibus Consolidated and Emergency Supplemental

13 Appropriations Act, 1999 (Public Law 105-277), is

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

15 ‘‘SEC. 2707. PATIENT PROTECTION STANDARDS.

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

17 comply with patient protection requirements under title I

18 of the Patients’ Bill of Rights Act of 1999, and each

19 health insurance issuer shall comply with patient protec20 tion requirements under such title with respect to group

21 health insurance coverage it offers, and such requirements

22 shall be deemed to be incorporated into this subsection.

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

24 the notice requirement under section 711(d) of the Em25 ployee Retirement Income Security Act of 1974 with re-
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1 spect to the requirements referred to in subsection (a) and

2 a health insurance issuer shall comply with such notice

3 requirement as if such section applied to such issuer and

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

5 (b) CONFORMING AMENDMENT.—Section

6 2721(b)(2)(A) of the Public Health Service Act (42

7 U.S.C. 300gg–21(b)(2)(A)) is amended by inserting

8 ‘‘(other than section 2707)’’ after ‘‘requirements of such

9 subparts’’.

10 SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR11 ANCE COVERAGE.

12 Subpart 3 of part B of title XXVII of the Public

13 Health Service Act, as amended by the Omnibus Consoli14 dated and Emergency Supplemental Appropriations Act,

15 1999 (Public Law 105-277), is amended by adding at the

16 end the following new section:

17 ‘‘SEC. 2753. PATIENT PROTECTION STANDARDS.

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

19 shall comply with patient protection requirements under

20 title I of the Patients’ Bill of Rights Act of 1999 with

21 respect to individual health insurance coverage it offers,

22 and such requirements shall be deemed to be incorporated

23 into this subsection.

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

25 part shall comply with the notice requirement under sec-
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1 tion 711(d) of the Employee Retirement Income Security

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

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

4 were a group health plan.’’.

5 TITLE III—AMENDMENTS TO

6 THE EMPLOYEE RETIREMENT

7 INCOME SECURITY ACT OF

8 1974

9 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND10 ARDS TO GROUP HEALTH PLANS AND GROUP

11 HEALTH INSURANCE COVERAGE UNDER THE

12 EMPLOYEE RETIREMENT INCOME SECURITY

13 ACT OF 1974.

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

15 B of title I of the Employee Retirement Income Security

16 Act of 1974, as amended by the Omnibus Consolidated

17 and Emergency Supplemental Appropriations Act, 1999

18 (Public Law 105-277), is amended by adding at the end

19 the following:

20 ‘‘SEC. 714. PATIENT PROTECTION STANDARDS.

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

22 group health plan (and a health insurance issuer offering

23 group health insurance coverage in connection with such

24 a plan) shall comply with the requirements of title I of

25 the Patients’ Bill of Rights Act of 1999 (as in effect as
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1 of the date of the enactment of such Act), and such re2 quirements shall be deemed to be incorporated into this

3 subsection.

4 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE5 MENTS.—

6 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE7 MENTS THROUGH INSURANCE.—For purposes of

8 subsection (a), insofar as a group health plan pro9 vides benefits in the form of health insurance cov10 erage through a health insurance issuer, the plan

11 shall be treated as meeting the following require12 ments of title I of the Patients’ Bill of Rights Act

13 of 1999 with respect to such benefits and not be

14 considered as failing to meet such requirements be15 cause of a failure of the issuer to meet such require16 ments so long as the plan sponsor or its representa17 tives did not cause such failure by the issuer:

18 ‘‘(A) Section 101 (relating to access to

19 emergency care).

20 ‘‘(B) Section 102(a)(1) (relating to offer21 ing option to purchase point-of-service cov22 erage), but only insofar as the plan is meeting

23 such requirement through an agreement with

24 the issuer to offer the option to purchase point25 of-service coverage under such section.
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1 ‘‘(C) Section 103 (relating to choice of pro2 viders).

3 ‘‘(D) Section 104 (relating to access to

4 specialty care).

5 ‘‘(E) Section 105(a)(1) (relating to con6 tinuity in case of termination of provider con7 tract) and section 105(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 ‘‘(F) Section 106 (relating to coverage for

12 individuals participating in approved clinical

13 trials.)

14 ‘‘(G) Section 107 (relating to access to

15 needed prescription drugs).

16 ‘‘(H) Section 108 (relating to adequacy of

17 provider network).

18 ‘‘(I) Subtitle B (relating to quality assur19 ance).

20 ‘‘(J) Section 143 (relating to additional

21 rules regarding participation of health care pro22 fessionals).

23 ‘‘(K) Section 152 (relating to standards re24 lating to benefits for certain breast cancer

25 treatment).
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1 ‘‘(2) INFORMATION.—With respect to informa2 tion required to be provided or made available under

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

4 provides benefits in the form of health insurance

5 coverage through a health insurance issuer, the Sec6 retary shall determine the circumstances under

7 which the plan is not required to provide or make

8 available the information (and is not liable for the

9 issuer’s failure to provide or make available the in10 formation), if the issuer is obligated to provide and

11 make available (or provides and makes available)

12 such information.

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

14 With respect to the grievance system and internal

15 appeals process required to be established under sec16 tions 131 and 132, in the case of a group health

17 plan that provides benefits in the form of health in18 surance coverage through a health insurance issuer,

19 the Secretary shall determine the circumstances

20 under which the plan is not required to provide for

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

22 issuer’s failure to provide for such system and proc23 ess), if the issuer is obligated to provide for (and

24 provides for) such system and process.
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1 ‘‘(4) EXTERNAL APPEALS.—Pursuant to rules

2 of the Secretary, insofar as a group health plan en3 ters into a contract with a qualified external appeal

4 entity for the conduct of external appeal activities in

5 accordance with section 133, the plan shall be treat6 ed as meeting the requirement of such section and

7 is not liable for the entity’s failure to meet any re8 quirements under such section.

9 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu10 ant to rules of the Secretary, if a health insurance

11 issuer offers health insurance coverage in connection

12 with a group health plan and takes an action in vio13 lation of any of the following sections, the group

14 health plan shall not be liable for such violation un15 less the plan caused such violation:

16 ‘‘(A) Section 109 (relating to non17 discrimination in delivery of services).

18 ‘‘(B) Section 141 (relating to prohibition

19 of interference with certain medical communica20 tions).

21 ‘‘(C) Section 142 (relating to prohibition

22 against transfer of indemnification or improper

23 incentive arrangements).

24 ‘‘(D) Section 144 (relating to prohibition

25 on retaliation).
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1 ‘‘(E) Section 151 (relating to promoting

2 good medical practice).

3 ‘‘(6) CONSTRUCTION.—Nothing in this sub4 section shall be construed to affect or modify the re5 sponsibilities of the fiduciaries of a group health

6 plan under part 4 of subtitle B.

7 ‘‘(7) APPLICATION TO CERTAIN PROHIBITIONS

8 AGAINST RETALIATION.—With respect to compliance

9 with the requirements of section 144(b)(1) of the

10 Patients’ Bill of Rights Act of 1999, for purposes of

11 this subtitle the term ‘group health plan’ is deemed

12 to include a reference to an institutional health care

13 provider.

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

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

16 professional who believes that the professional has

17 been retaliated or discriminated against in violation

18 of section 144(b)(1) of the Patients’ Bill of Rights

19 Act of 1999 may file with the Secretary a complaint

20 within 180 days of the date of the alleged retaliation

21 or discrimination.

22 ‘‘(2) INVESTIGATION.—The Secretary shall in23 vestigate such complaints and shall determine if a

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

25 shall issue an order to ensure that the protected
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1 health care professional does not suffer any loss of

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

3 issuer, or provider involved, as a result of the viola4 tion found by the Secretary.

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

6 may issue regulations to coordinate the requirements on

7 group health plans under this section with the require8 ments imposed under the other provisions of this title.’’.

9 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

10 REQUIREMENT.—Section 503 of the Employee Retirement

11 Income Security Act of 1974 (29 U.S.C. 1133) is amended

12 by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’ and by adding at

13 the end the following new subsection:

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

15 in section 733) compliance with the requirements of sub16 title D (and section 115) of title I of the Patients’ Bill

17 of Rights Act of 1999 in the case of a claims denial shall

18 be deemed compliance with subsection (a) with respect to

19 such claims denial.’’.

20 (c) CONFORMING AMENDMENTS.—

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

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

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

24 ‘‘sections 711 and 714’’.
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1 (2) The table of contents in section 1 of the

2 Employee Retirement Income Security Act of 1974,

3 as amended by the Omnibus Consolidated and

4 Emergency Supplemental Appropriations Act, 1999

5 (Public Law 105–277), is amended by inserting

6 after the item relating to section 713 the following

7 new item:

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

8 (3) Section 502(b)(3) of the Employee Retire9 ment Income Security Act of 1974 (29 U.S.C.

10 1132(b)(3)) is amended by inserting ‘‘(other than

11 section 144(b))’’ after ‘‘part 7’’.

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

13 ACTIONS INVOLVING HEALTH INSURANCE

14 POLICYHOLDERS.

15 (a) IN GENERAL.—Section 514 of the Employee Re16 tirement Income Security Act of 1974 (29 U.S.C. 1144)

17 is amended by adding at the end the following subsection:

18 ‘‘(e) PREEMPTION NOT TO APPLY TO CERTAIN AC19 TIONS ARISING OUT OF PROVISION OF HEALTH BENE20 FITS.—

21 ‘‘(1) IN GENERAL.—Except as provided in this

22 subsection, nothing in this title shall be construed to

23 invalidate, impair, or supersede any cause of action

24 brought by a plan participant or beneficiary (or the

25 estate of a plan participant or beneficiary) under
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1 State law to recover damages resulting from per2 sonal injury or for wrongful death against any

3 person—

4 ‘‘(A) in connection with the provision of in5 surance, administrative services, or medical

6 services by such person to or for a group health

7 plan (as defined in section 733), or

8 ‘‘(B) that arises out of the arrangement by

9 such person for the provision of such insurance,

10 administrative services, or medical services by

11 other persons.

12 ‘‘(2) EXCEPTION FOR EMPLOYERS AND OTHER

13 PLAN SPONSORS.—

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), paragraph (1) does not authorize—

16 ‘‘(i) any cause of action against an

17 employer or other plan sponsor maintain18 ing the group health plan or against an

19 employee of such an employer or sponsor

20 acting within the scope of employment, or

21 ‘‘(ii) a right of recovery or indemnity

22 by a person against an employer or other

23 plan sponsor (or such an employee) for

24 damages assessed against the person pur-
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1 suant to a cause of action under paragraph

2 (1).

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

4 shall not preclude any cause of action described

5 in paragraph (1) against an employer or other

6 plan sponsor (or against an employee of such

7 an employer or sponsor acting within the scope

8 of employment) if—

9 ‘‘(i) such action is based on the em10 ployer’s or other plan sponsor’s (or em11 ployee’s) exercise of discretionary authority

12 to make a decision on a claim for benefits

13 covered under the plan or health insurance

14 coverage in the case at issue; and

15 ‘‘(ii) the exercise by such employer or

16 other plan sponsor (or employee of such

17 authority) resulted in personal injury or

18 wrongful death.

19 ‘‘(3) CONSTRUCTION.—Nothing in this sub20 section shall be construed as permitting a cause of

21 action under State law for the failure to provide an

22 item or service which is not covered under the group

23 health plan involved.

24 ‘‘(4) PERSONAL INJURY DEFINED.—For pur25 poses of this subsection, the term ‘personal injury’
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1 means a physical injury and includes an injury aris2 ing out of the treatment (or failure to treat) a men3 tal illness or disease.’’.

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

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

6 on or after the date of the enactment of this Act from

7 which a cause of action arises.

8 TITLE IV—APPLICATION TO

9 GROUP HEALTH PLANS

10 UNDER THE INTERNAL REVE11 NUE CODE OF 1986

12 SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE

13 OF 1986.

14 Subchapter B of chapter 100 of the Internal Revenue

15 Code of 1986 (as amended by section 1531(a) of the Tax16 payer Relief Act of 1997) is amended—

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

18 the item relating to section 9812 the following new

19 item:

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

and

20 (2) by inserting after section 9812 the follow21 ing:
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1 ‘‘SEC. 9813. STANDARD RELATING TO PATIENTS’ BILL OF

2 RIGHTS.

3 ‘‘A group health plan shall comply with the require4 ments of title I of the Patients’ Bill of Rights Act of 1999

5 (as in effect as of the date of the enactment of such Act),

6 and such requirements shall be deemed to be incorporated

7 into this section.’’.

8 TITLE V—EFFECTIVE DATES; CO9 ORDINATION IN IMPLEMEN10 TATION

11 SEC. 501. EFFECTIVE DATES AND RELATED RULES.

12 (a) GROUP HEALTH COVERAGE.—

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

14 the amendments made by sections 201(a), 301, and

15 401 (and title I insofar as it relates to such sections)

16 shall apply with respect to group health plans, and

17 health insurance coverage offered in connection with

18 group health plans, for plan years beginning on or

19 after January 1, 2000 (in this section referred to as

20 the ‘‘general effective date’’).

21 (2) TREATMENT OF COLLECTIVE BARGAINING

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

23 maintained pursuant to 1 or more collective bargain24 ing agreements between employee representatives

25 and 1 or more employers ratified before the date of

26 enactment of this Act, the amendments made by sec-
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1 tions 201(a), 301, and 401 (and title I insofar as it

2 relates to such sections) shall not apply to plan

3 years beginning before the later of—

4 (A) the date on which the last collective

5 bargaining agreements relating to the plan ter6 minates (determined without regard to any ex7 tension thereof agreed to after the date of en8 actment of this Act), or

9 (B) the general effective date.

10 For purposes of subparagraph (A), any plan amend11 ment made pursuant to a collective bargaining

12 agreement relating to the plan which amends the

13 plan solely to conform to any requirement added by

14 this Act shall not be treated as a termination of

15 such collective bargaining agreement.

16 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—

17 The amendments made by section 202 shall apply with

18 respect to individual health insurance coverage offered,

19 sold, issued, renewed, in effect, or operated in the individ20 ual market on or after the general effective date.

21 (c) TREATMENT OF RELIGIOUS NONMEDICAL PRO22 VIDERS.—

23 (1) IN GENERAL.—Nothing in this Act (or the

24 amendments made thereby) shall be construed to—
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1 (A) restrict or limit the right of group

2 health plans, and of health insurance issuers of3 fering health insurance coverage, to include as

4 providers religious nonmedical providers;

5 (B) require such plans or issuers to—

6 (i) utilize medically based eligibility

7 standards or criteria in deciding provider

8 status of religious nonmedical providers;

9 (ii) use medical professionals or cri10 teria to decide patient access to religious

11 nonmedical providers;

12 (iii) utilize medical professionals or

13 criteria in making decisions in internal or

14 external appeals regarding coverage for

15 care by religious nonmedical providers; or

16 (iv) compel a participant or bene17 ficiary to undergo a medical examination

18 or test as a condition of receiving health

19 insurance coverage for treatment by a reli20 gious nonmedical provider; or

21 (C) require such plans or issuers to ex22 clude religious nonmedical providers because

23 they do not provide medical or other required

24 data, if such data is inconsistent with the reli-
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1 gious nonmedical treatment or nursing care

2 provided by the provider.

3 (2) RELIGIOUS NONMEDICAL PROVIDER.—For

4 purposes of this subsection, the term ‘‘religious non5 medical provider’’ means a provider who provides no

6 medical care but who provides only religious non7 medical treatment or religious nonmedical nursing

8 care.

9 SEC. 502. COORDINATION IN IMPLEMENTATION.

10 Section 104(1) of Health Insurance Portability and

11 Accountability Act of 1996 is amended by striking ‘‘this

12 subtitle (and the amendments made by this subtitle and

13 section 401)’’ and inserting ‘‘the provisions of part 7 of

14 subtitle B of title I of the Employee Retirement Income

15 Security Act of 1974, the provisions of parts A and C of

16 title XXVII of the Public Health Service Act, chapter 100

17 of the Internal Revenue Code of 1986, and title I of the

18 Patients’ Bill of Rights Act of 1999’’.

Æ