II

103D CONGRESS

2D SESSION S. 1796

To ensure that health coverage is portable and renewable, to enhance the

ability of small businesses to purchase health care, to enhance efficiency

through paperwork reduction, to provide antitrust reforms, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 25, 1994

Mr. GRAMM (for himself, Mr. MCCAIN, Mr. COATS, Mr. COVERDELL, Mrs.

HUTCHISON, Mr. HELMS, Mr. LOTT, Mr. FAIRCLOTH, Mr. WALLOP, Mr.

BENNETT, and Mr. BROWN) introduced the following bill; which was read

twice and referred to the Committee on Labor and Human Resources

A BILL

To ensure that health coverage is portable and renewable,

to enhance the ability of small businesses to purchase

health care, to enhance efficiency through paperwork reduction, to provide antitrust reforms, and for other purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Consensus Interim Health Act’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—PORTABLE AND PERMANENT PRIVATE HEALTH

INSURANCE

Subtitle A—Portability

Sec. 101. Amendments to COBRA

Sec. 102. Penalty-free withdrawals from qualified retirement plans for COBRA

coverage.

Subtitle B—Permanence

Sec. 111. General renewability requirements.

Sec. 112. Individual health insurance plans.

Sec. 113. Group health plans.

Sec. 114. Definitions.

Sec. 115. Failure of health plans to meet portability and permanence requirements.

TITLE II—SMALL BUSINESS HEALTH INSURANCE POOLS

Sec. 201. Prohibition of restrictions on groups purchasing health insurance.

Sec. 202. Prohibition of State benefit mandates for group health plans.

Sec. 203. Prohibition of restrictions on managed care.

Sec. 204. Definitions.

TITLE III—ENHANCED EFFICIENCY THROUGH PAPERWORK

REDUCTION

Sec. 301. Federal paperwork reduction and efficiency requirements.

Sec. 302. State paperwork reduction and efficiency requirements.

Sec. 303. Standardized Forms Commission.

TITLE IV—ANTITRUST REFORMS

Sec. 401. Establishment of limited exemption program for health care joint

ventures.

Sec. 402. Issuance of health care certificates of public advantage.

Sec. 403. Interagency Advisory Committee on Competition, Antitrust Policy,

and Health Care.

Sec. 404. Definitions.
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1 TITLE I—PORTABLE AND PER2 MANENT PRIVATE HEALTH

3 INSURANCE

4 Subtitle A—Portability

5 SEC. 101. AMENDMENTS TO COBRA

6 (a) LOWER COST COVERAGE OPTIONS.—Subpara7 graph (A) of section 4980B(f)(2) of the Internal Revenue

8 Code of 1986 (relating to continuation coverage require9 ments of group health plans) is amended to read as

10 follows:

11 ‘‘(A) TYPE OF BENEFIT COVERAGE.—The

12 coverage must consist of coverage which, as of

13 the time the coverage is being provided—

14 ‘‘(i) is identical to the coverage pro15 vided under the plan to similarly situated

16 beneficiaries under the plan with respect to

17 whom a qualifying event has not occurred,

18 ‘‘(ii) is so identical, except such cov19 erage is offered with an annual $1,000 de20 ductible, and

21 ‘‘(iii) is so identical, except such cov22 erage is offered with an annual $3,000

23 deductible.

24 If coverage under the plan is modified for any

25 group of similarly situated beneficiaries, the
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•S 1796 IS

1 coverage shall also be modified in the same

2 manner for all individuals who are qualified

3 beneficiaries under the plan pursuant to this

4 subsection in connection with such group.’’.

5 (b) TERMINATION OF COBRA COVERAGE AFTER

6 ELIGIBLE FOR EMPLOYER-BASED COVERAGE FOR 90

7 DAYS.—Clause (iv) of section 4980B(f)(2)(B) of the In8 ternal Revenue Code of 1986 (relating to period of cov9 erage) is amended—

10 (1) by striking ‘‘or’’ at the end of subclause (I),

11 (2) by redesignating subclause (II) as subclause

12 (III), and

13 (3) by inserting after subclause (I) the follow14 ing new subclause:

15 ‘‘(II) eligible for such employer16 based coverage for more than 90 days,

17 or’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to qualifying events occurring after

20 the date of the enactment of this Act.

21 SEC. 102. PENALTY-FREE WITHDRAWALS FROM QUALIFIED

22 RETIREMENT PLANS FOR COBRA COVERAGE.

23 (a) IN GENERAL.—Subparagraph (A) of section

24 72(t)(2) of the Internal Revenue Code of 1986 (relating
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1 to additional tax not to apply to certain distributions) is

2 amended—

3 (1) by striking ‘‘or’’ at the end of clauses (iv)

4 and (v),

5 (2) by striking the period at the end of clause

6 (vi) and inserting ‘‘, or’’, and

7 (3) by adding at the end the following new

8 clause:

9 ‘‘(vii) made to an employee who is a

10 qualified beneficiary during the period of

11 continuation coverage under section

12 4980B(f).’’

13 (b) EFFECTIVE DATE.—The amendments made by

14 subsection (a) shall apply to distributions made after the

15 date of the enactment of this Act.

16 Subtitle B—Permanence

17 SEC. 111. GENERAL RENEWABILITY REQUIREMENTS.

18 (a) INSURERS.—

19 (1) IN GENERAL.—An insurer may not cancel

20 an individual health insurance plan or group health

21 plan or deny renewal of coverage under such a plan

22 other than—

23 (A) for nonpayment of premiums,

24 (B) for fraud or other misrepresentation

25 by the insured,
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1 (C) for noncompliance with plan provi2 sions, or

3 (D) because the insurer is ceasing to pro4 vide any health insurance plan in a State, or,

5 in the case of a health maintenance organiza6 tion, in a geographic area.

7 (2) LIMITATION ON MARKET REENTRY.—If an

8 insurer terminates the offering of health insurance

9 plans or group health plans in an area, the insurer

10 may not offer such a plan in the area until 5 years

11 after the date of the termination.

12 (b) EMPLOYERS.—An employer may not cancel a

13 self-insured group health plan or deny renewal of coverage

14 under such a plan other than—

15 (1) for nonpayment of premiums,

16 (2) for fraud or other misrepresentation by the

17 insured,

18 (3) for noncompliance with plan provisions,

19 (4) because the plan is ceasing to provide any

20 coverage in a geographic area.

21 (c) EFFECTIVE DATE.—The provisions of this section

22 shall apply to any plan on or after the date of the enact23 ment of this Act.
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1 SEC. 112. INDIVIDUAL HEALTH INSURANCE PLANS.

2 (a) EXISTING PLANS.—With respect to any individ3 ual health insurance plan in effect on the date of the en4 actment of this Act, the insurer shall offer the insured

5 the option to purchase a new individual health insurance

6 described in subsection (b).

7 (b) NEW PLANS.—With respect to any individual

8 health insurance plan, the effective date of which with re9 spect to the insured occurs after the date of the enactment

10 of this Act, the insurer may not increase the premium for

11 such a plan based on the health of the insured.

12 SEC. 113. GROUP HEALTH PLANS.

13 (a) EXISTING PLANS.—With respect to any group

14 health plan (other than a self-insured group health plan)

15 in effect on the date of the enactment of this Act, the

16 insurer shall offer—

17 (1) any insured of such plan the option to pur18 chase upon leaving the group a new individual health

19 insurance, the premium of which shall be rated

20 based on actuarial data, may be based on any pre21 existing condition of the insured, and may be in22 creased based on the health of such insured, and

23 (2) the employer or group sponsor of such plan

24 the option to purchase a new group health plan de25 scribed in subsection (b).
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1 (b) NEW PLANS.—With respect to any group health

2 plan (other than a self-insured group health plan), the ef3 fective date of which with respect to the employer or group

4 sponsor occurs after the date of the enactment of this Act,

5 the insurer—

6 (1) may not increase the premium for such a

7 plan based on the health of the group’s insured, and

8 (2) shall offer any insured of such plan the op9 tion to purchase upon leaving the group a new indi10 vidual health insurance, the premium of which shall

11 be rated based on actuarial data, may not be based

12 on any preexisting condition of the insured, and may

13 not be increased based on the health of such in14 sured.

15 (c) SELF-INSURED GROUP HEALTH PLANS.—With

16 respect to a self-insured group health plan—

17 (1) in effect on the date of the enactment of

18 this Act—

19 (A) subsection (a)(1) shall apply through 1

20 or more insurers contracted with by such plan,

21 and

22 (B) subsection (a)(2) shall not apply, and

23 (2) the effective date of which with respect to

24 the employer or group sponsor occurs after the date

25 of the enactment of this Act, subsection (b) shall
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•S 1796 IS

1 apply through 1 or more insurers contracted with by

2 such plan.

3 SEC. 114. DEFINITIONS.

4 For purposes of this subtitle:

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

6 health plan’’ has the meaning given such term by

7 section 5000(b)(1) of the Internal Revenue Code of

8 1986, but does not include any type of coverage ex9 cluded from the definition of a health insurance plan

10 under paragraph (2).

11 (2) HEALTH INSURANCE PLAN.—

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

13 subparagraph (B), the term ‘‘health insurance

14 plan’’ means any hospital or medical service

15 policy or certificate, hospital or medical service

16 plan contract, or health maintenance organiza17 tion group contract offered by an insurer.

18 (B) EXCEPTION.—Such term does not in19 clude any of the following—

20 (i) coverage only for accident, dental,

21 vision, disability income, or long-term care

22 insurance, or any combination thereof,

23 (ii) medicare supplemental health in24 surance,
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1 (iii) coverage issued as a supplement

2 to liability insurance,

3 (iv) worker’s compensation or similar

4 insurance, or

5 (v) automobile medical-payment insur6 ance,

7 or any combination thereof.

8 (3) HEALTH MAINTENANCE ORGANIZATION.—

9 The term ‘‘health maintenance organization’’ in10 cludes a health insurance plan that offers to provide

11 health services on a prepaid, at-risk basis primarily

12 through a defined set of providers.

13 (4) INSURER.—The term ‘‘insurer’’ means a li14 censed insurance company, a prepaid hospital or

15 medical service plan, and a health maintenance orga16 nization offering such a plan to an employer, and in17 cludes a similar organization regulated under State

18 law for solvency.

19 SEC. 115. FAILURE OF HEALTH PLANS TO MEET PORT20 ABILITY AND PERMANENCE REQUIREMENTS.

21 (a) DEDUCTION FOR INDIVIDUAL HEALTH INSUR22 ANCE PLANS.—Paragraph (1) of section 213(d) of the In23 ternal Revenue Code of 1986 (defining medical care) is

24 amended—
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1 (1) by striking ‘‘or’’ at the end of subparagraph

2 (B), and

3 (2) by striking subparagraph (C) and inserting

4 the following new subparagraphs:

5 ‘‘(C) for insurance—

6 ‘‘(i) meeting the requirements of sec7 tion 112 of the Consensus Interim Health

8 Act, and

9 ‘‘(ii) covering medical care referred to

10 in subparagraphs (A) and (B), or

11 ‘‘(D) as premiums under part B of title

12 XVIII of the Social Security Act, relating to

13 supplementary medical insurance for the

14 aged.’’.

15 (b) TAX EXCLUSIONS FOR EMPLOYER-PROVIDED

16 HEALTH INSURANCE.—Section 106 of the Internal Reve17 nue Code of 1986 (relating to contributions by employer

18 to accident and health plans) is amended by striking ‘‘an

19 accident or health plan’’ and inserting ‘‘an accident or

20 health plan meeting the requirements of section 113 of

21 the Consensus Interim Health Act’’.

22 (c) BUSINESS EXPENSE DEDUCTION FOR HEALTH

23 INSURANCE.—Section 162 of the Internal Revenue Code

24 of 1986 (relating to trade or business expenses) is amend25 ed by redesignating subsection (o) as subsection (p) and
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1 by inserting after subsection (n) the following new sub2 section:

3 ‘‘(o) GROUP HEALTH PLANS.—The expenses paid or

4 incurred by an employer for a group health plan shall not

5 be allowed as a deduction under this section unless such

6 plan meets the requirements of section 113 of the Consen7 sus Interim Health Act.’’.

8 (d) PAYROLL TAX EXCLUSION FOR EMPLOYER-PRO9 VIDED HEALTH INSURANCE.—Section 209(a)(2) of the

10 Social Security Act (42 U.S.C. 409(a)(2)) is amended by

11 inserting ‘‘or group health insurance’’ after ‘‘group-term

12 life insurance’’.

13 (e) EFFECTIVE DATE.—The amendments made by

14 this section shall take effect on the date of the enactment

15 of this Act.

16 TITLE II—SMALL BUSINESS

17 HEALTH INSURANCE POOLS

18 SEC. 201. PROHIBITION OF RESTRICTIONS ON GROUPS

19 PURCHASING HEALTH INSURANCE.

20 No provision of State or local law shall apply that

21 prohibits 2 or more employers or groups from obtaining

22 coverage under a multiple employer health plan.
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1 SEC. 202. PROHIBITION OF STATE BENEFIT MANDATES FOR

2 GROUP HEALTH PLANS.

3 In the case of a group health plan, no provision of

4 State or local law shall apply that requires the coverage

5 of one or more specific benefits, services, or categories of

6 health care, or services of any class or type of provider

7 of health care.

8 SEC. 203. PROHIBITION OF RESTRICTIONS ON MANAGED

9 CARE.

10 (a) PREEMPTION OF STATE LAW PROVISIONS.—Sub11 ject to subsection (c), the following provisions of State law

12 are preempted and may not be enforced:

13 (1) RESTRICTIONS ON REIMBURSEMENT RATES

14 OR SELECTIVE CONTRACTING.—Any law that re15 stricts the ability of a group health plan to negotiate

16 reimbursement rates with providers or to contract

17 selectively with one provider or a limited number of

18 providers.

19 (2) RESTRICTIONS ON DIFFERENTIAL FINAN20 CIAL INCENTIVES.—Any law that limits the financial

21 incentives that a group health plan may require a

22 beneficiary to pay when a non-plan provider is used

23 on a non-emergency basis.

24 (3) RESTRICTIONS ON UTILIZATION REVIEW

25 METHODS.—Any law that—
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1 (A) prohibits utilization review of any or

2 all treatments and conditions,

3 (B) requires that such review be made (i)

4 by a resident of the State in which the treat5 ment is to be offered or by an individual li6 censed in such State, or (ii) by a physician in

7 any particular specialty or with any board cer8 tified specialty of the same medical specialty as

9 the provider whose services are being reviewed,

10 (C) requires the use of specified standards

11 of health care practice in such reviews or re12 quires the disclosure of the specific criteria used

13 in such reviews,

14 (D) requires payments to providers for the

15 expenses of responding to utilization review re16 quests, or

17 (E) imposes liability for delays in perform18 ing such review.

19 Nothing in subparagraph (B) shall be construed as

20 prohibiting a State from (i) requiring a licensed phy21 sician or other health care professional be available

22 at some time in the review or appeal process, or (ii)

23 requiring that any decision in an appeal from such

24 a review be made by a licensed physician.

25 (b) GAO STUDY.—
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1 (1) IN GENERAL.—The Comptroller General of

2 the United States shall conduct a study of the regu3 latory and legal impediments at the Federal, State,

4 and local levels of government that restrict the abil5 ity of small businesses and other organizations to

6 group together voluntarily to allow their employees

7 or members to pool their health insurance purchases.

8 (2) REPORT.—By not later than 2 years after

9 the date of the enactment of this Act, the Comptrol10 ler General shall submit a report to Congress on the

11 study conducted under paragraph (1) and shall in12 clude in the report such recommendations (including

13 whether the provisions of subsection (a) should be

14 extended) as may be appropriate.

15 (c) SUNSET.—Unless otherwise provided, subsection

16 (a) shall not apply 5 years after the date of the enactment

17 of this Act.

18 SEC. 204. DEFINITIONS.

19 For purposes of this title—

20 (1) EMPLOYER.—The term ‘‘employer’’ shall

21 have the meaning applicable under section 3(5) of

22 the Employee Retirement Income Security Act of

23 1974.
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1 (2) GROUP HEALTH PLAN.—The term ‘‘group

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

3 section 114(1).

4 (3) MULTIPLE EMPLOYER HEALTH PLAN.—The

5 term ‘‘multiple employer health plan’’ means a mul6 tiple employer welfare arrangement (as defined in

7 section 3(40) of the Employee Retirement Income

8 Security Act of 1974.

9 (4) STATE.—The term ‘‘State’’ means each of

10 the several States of the United States, the District

11 of Columbia, the Commonwealth of Puerto Rico, the

12 United States Virgin Islands, Guam, America

13 Samoa, and the Commonwealth of the Northern

14 Mariana Islands.

15 TITLE III—ENHANCED EFFI16 CIENCY THROUGH PAPER17 WORK REDUCTION

18 SEC. 301. FEDERAL PAPERWORK REDUCTION AND EFFI19 CIENCY REQUIREMENTS.

20 (a) IN GENERAL.—The Secretary of Health and

21 Human Services (hereafter referred to in this title as the

22 ‘‘Secretary’’) shall, in consultation with the Director of the

23 Office of Management and Budget, the Secretary of Veter24 ans Affairs, the Secretary of Defense, the Director of Per25 sonnel Management, and other appropriate Federal offi-
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1 cials, adopt standards to reduce the administrative and

2 paperwork burdens of all Federal health care programs

3 by—

4 (1) 50 percent within the 2-year period follow5 ing the date of the enactment of this Act, and

6 (2) an additional 50 percent over a subsequent

7 3-year period,

8 for a total reduction of 75 percent over the 5-year period

9 following the date of the enactment of this Act.

10 (b) INITIAL REDUCTION.—In order to achieve a pa11 perwork reduction described in subsection (a)(1), the Sec12 retary, shall adopt standards for Federal health care pro13 grams relating to each of the following:

14 (1) Data elements for use in paper and elec15 tronic claims processing under health insurance

16 plans, as well as for use in utilization review and

17 management of care (including data fields, formats,

18 and medical nomenclature, and including plan bene19 fit and insurance information).

20 (2) Uniform claims forms (including uniform

21 procedure and bill codes for use with such forms and

22 including information on other health insurance

23 plans that may be liable for benefits).
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1 (3) Uniform electronic transmission of the data

2 elements (for purposes of billing and utilization re3 view).

4 Standards under paragraph (3) relating to electronic

5 transmission of data elements for claims for services shall

6 supersede (to the extent specified in such standards) the

7 standards adopted under paragraph (2) relating to the

8 submission of paper claims for such services. Standards

9 under paragraph (3) shall include protections to assure

10 the confidentiality of patient-specific information and to

11 protect against the unauthorized use and disclosure of in12 formation.

13 (c) SUBSEQUENT REDUCTION.—In order to achieve

14 a further paperwork reduction described in subsection

15 (a)(2), the Secretary shall modify by regulation the stand16 ards adopted under subsection (b). The modification of the

17 standards may include such recommendations as reported

18 by the Standardized Form Commission in section 303, or

19 any other provisions necessary to meet the goals for reduc20 tion in the paperwork burden of Federal health care pro21 grams.

22 (d) DEFINITION.—For purposes of this section, the

23 term ‘‘Federal health care program’’ means all Federal

24 programs related to health care, including programs de25 scribed in—
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1 (1) title XVIII or XIX of the Social Security

2 Act,

3 (2) the Public Health Service Act,

4 (3) chapter 55 of title 10, United States Code,

5 (4) chapter 17 of title 38, United States Code,

6 (5) chapter 89 of title 5, United States Code,

7 or

8 (6) the Indian Health Care Improvement Act.

9 SEC. 302. STATE PAPERWORK REDUCTION AND EFFI10 CIENCY REQUIREMENTS.

11 (a) IN GENERAL.—In order to be eligible for Federal

12 funds in connection with any State-administered health

13 care program, each State shall standardize the processing

14 of paper and electronic claims to reduce the administrative

15 and paperwork burdens on such programs by 75 percent

16 during the 5-year period following the date of the enact17 ment of this Act.

18 (b) ENFORCEMENT.—

19 (1) INTERIM EVALUATION.—If at the end of the

20 4-year period following the date of the enactment of

21 this Act the Secretary determines that a State has

22 not achieved substantial progress toward the reduc23 tions required under subsection (a), the Secretary

24 shall notify such State regarding the proportion of

25 required reductions achieved and the further reduc-
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1 tion necessary to achieve compliance with subsection

2 (a).

3 (2) FINAL COMPLIANCE.—If at the end of the

4 5-year period following the date of the enactment of

5 this Act the Secretary determines that a State has

6 not achieved the reductions required under sub7 section (a), the Secretary shall reduce Federal pay8 ments for health care programs administered by

9 such State by 10 percent. For each year that such

10 State fails to comply with the requirements of sub11 section (a), Federal payments for health care pro12 grams administered by the State shall be reduced by

13 an additional 10 percent.

14 (3) WAIVERS OF PAYMENT REDUCTIONS.—Any

15 State subject to a reduction in Federal payments

16 under paragraph (2) may appeal to the Secretary for

17 a 1-year waiver of such reduction. In granting such

18 a waiver, the Secretary shall make a determination

19 of the good faith effort of such State to comply with

20 the requirements of subsection (a), taking into ac21 count the technical, practical, and financial capabili22 ties of the State in meeting such requirements.

23 (c) DEFINITION.—For purposes of this section, the

24 term ‘‘State’’ means any of the States, territories, dis25 tricts, or possessions of the United States.
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1 SEC. 303. STANDARDIZED FORMS COMMISSION.

2 (a) IN GENERAL.—

3 (1) ESTABLISHMENT.—Not later than 12

4 months after the date of the enactment of this Act,

5 the Secretary shall establish a Standardized Forms

6 Commission (hereafter referred to in this section as

7 the ‘‘Commission’’) which shall make recommenda8 tions on the standardization of paper and electronic

9 claims processing so as to reduce the paperwork bur10 den associated with, and enhance the efficiency and

11 productivity of, such claims processing.

12 (2) MEMBERSHIP.—

13 (A) IN GENERAL.—The Commission shall

14 be composed of at least 12 but not more than

15 20 representatives of private health care provid16 ers and private insurers.

17 (B) CHAIR.—The Secretary shall appoint a

18 Chair of the Commission.

19 (3) REPORT ON FINDINGS AND RECOMMENDA20 TIONS.—Not later than 24 months after the date of

21 the enactment of this Act, the Chair of the Commis22 sion shall report to the Secretary on the findings

23 and recommendations of the Commission.

24 (4) PROHIBITION OF COMPENSATION.—Mem25 bers of the Commission shall serve without pay ex26 cept for reimbursement for travel expenses, includ-
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1 ing per diem in lieu of subsistence, in accordance

2 with sections 5702 and 5703 of title 5, United

3 States Code.

4 (5) STAFF OF FEDERAL AGENCIES.—Upon re5 quest of the Chair, the head of any Federal depart6 ment or agency shall detail any of the personnel of

7 that department or agency to the Commission to as8 sist it in carrying out its duties under this section.

9 (6) OBTAINING OFFICIAL DATA.—The Commis10 sion may secure directly from any department or

11 agency of the United States information necessary

12 to enable it to carry out this section.

13 (7) ADMINISTRATIVE SUPPORT SERVICES.—

14 Upon request of the Chair, the Administrator of

15 General Services shall provide to the Commission the

16 administrative support services necessary for the

17 Commission to carry out its responsibilities under

18 this section.

19 (b) LEGISLATIVE PROPOSAL.—

20 (1) IN GENERAL.—

21 (A) DEVELOPMENT OF IMPLEMENTING

22 BILL.—Not later than 3 months after the Com23 mission has submitted its findings and rec24 ommendations to the Secretary, the Secretary

25 shall take such recommendations and submit
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1 them to Congress in the form of an implement2 ing bill which contains the provisions necessary

3 or appropriate to implement the recommenda4 tions by either repealing or amending existing

5 laws or providing new statutory authority.

6 (B) CONSIDERATION OF IMPLEMENTING

7 BILL.—The implementing bill described in sub8 paragraph (A) shall be considered by Congress

9 under the procedures for consideration de10 scribed in paragraph (2).

11 (2) CONGRESSIONAL CONSIDERATION.—

12 (A) RULES OF HOUSE OF REPRESENTA13 TIVES AND SENATE.—This paragraph is en14 acted by Congress—

15 (i) as an exercise of the rulemaking

16 power of the House of Representatives and

17 the Senate, respectively, and as such is

18 deemed a part of the rules of each House,

19 respectively, but applicable only with re20 spect to the procedure to be followed in

21 that House in the case of an implementing

22 bill described in paragraph (1)(A), and su23 persedes other rules only to the extent that

24 such rules are inconsistent therewith; and
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•S 1796 IS

1 (ii) with full recognition of the con2 stitutional right of either House to change

3 the rules (so far as relating to the proce4 dure of that House) at any time, in the

5 same manner and to the same extent as in

6 the case of any other rule of that House.

7 (B) INTRODUCTION AND REFERRAL.—On

8 the day on which the implementing bill de9 scribed in paragraph (1)(A) is transmitted to

10 the House of Representatives and the Senate,

11 such bill shall be introduced (by request) in the

12 House of Representatives by the Majority Lead13 er of the House, for himself and the Minority

14 Leader of the House, or by Members of the

15 House designated by the Majority Leader and

16 Minority Leader of the House and shall be in17 troduced (by request) in the Senate by the Ma18 jority Leader of the Senate, for himself and the

19 Minority Leader of the Senate, or by Members

20 of the Senate designated by the Majority Lead21 er and Minority Leader of the Senate. If either

22 House is not in session on the day on which the

23 implementing bill is transmitted, the bill shall

24 be introduced in the House, as provided in the

25 preceding sentence, on the first day thereafter
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1 on which the House is in session. The imple2 menting bill introduced in the House of Rep3 resentatives and the Senate shall be referred to

4 the appropriate committees of each House.

5 (C) AMENDMENTS PROHIBITED.—No

6 amendment to an implementing bill shall be in

7 order in either the House of Representatives or

8 the Senate and no motion to suspend the appli9 cation of this paragraph shall be in order in ei10 ther House, nor shall it be in order in either

11 House for the Presiding Officer to entertain a

12 request to suspend the application of this para13 graph by unanimous consent.

14 (D) PERIOD FOR COMMITTEE AND FLOOR

15 CONSIDERATION.—

16 (i) IN GENERAL.—Except as provided

17 in clause (ii), if the committee or commit18 tees of either House to which an imple19 menting bill has been referred have not re20 ported it at the close of the 45th day after

21 its introduction, such committee or com22 mittees shall be automatically discharged

23 from further consideration of the imple24 menting bill and it shall be placed on the

25 appropriate calendar. A vote on final pas-
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•S 1796 IS

1 sage of the implementing bill shall be

2 taken in each House on or before the close

3 of the 45th day after the implementing bill

4 is reported by the committees or committee

5 of that House to which it was referred, or

6 after such committee or committees have

7 been discharged from further consideration

8 of the implementing bill. If prior to the

9 passage by 1 House of an implementing

10 bill of that House, that House receives the

11 same implementing bill from the other

12 House then—

13 (I) the procedure in that House

14 shall be the same as if no implement15 ing bill had been received from the

16 other House; but

17 (II) the vote on final passage

18 shall be on the implementing bill of

19 the other House.

20 (ii) COMPUTATION OF DAYS.—For

21 purposes of clause (i), in computing a

22 number of days in either House, there

23 shall be excluded—

24 (I) the days on which either

25 House is not in session because of an
27

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1 adjournment of more than 3 days to

2 a day certain, or an adjournment of

3 the Congress sine die, and

4 (II) any Saturday and Sunday

5 not excluded under subclause (I) when

6 either House is not in session.

7 (E) FLOOR CONSIDERATION IN THE

8 HOUSE OF REPRESENTATIVES.—

9 (i) MOTION TO PROCEED.—A motion

10 in the House of Representatives to proceed

11 to the consideration of an implementing

12 bill shall be highly privileged and not de13 batable. An amendment to the motion shall

14 not be in order, nor shall it be in order to

15 move to reconsider the vote by which the

16 motion is agreed to or disagreed to.

17 (ii) DEBATE.—Debate in the House of

18 Representatives on an implementing bill

19 shall be limited to not more than 20 hours,

20 which shall be divided equally between

21 those favoring and those opposing the bill.

22 A motion further to limit debate shall not

23 be debatable. It shall not be in order to

24 move to recommit an implementing bill or

25 to move to reconsider the vote by which an
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1 implementing bill is agreed to or disagreed

2 to.

3 (iii) MOTION TO POSTPONE.—Motions

4 to postpone, made in the House of Rep5 resentatives with respect to the consider6 ation of an implementing bill, and motions

7 to proceed to the consideration of other

8 business, shall be decided without debate.

9 (iv) APPEALS.—All appeals from the

10 decisions of the Chair relating to the appli11 cation of the Rules of the House of Rep12 resentatives to the procedure relating to an

13 implementing bill shall be decided without

14 debate.

15 (v) GENERAL RULES APPLY.—Except

16 to the extent specifically provided in the

17 preceding provisions of this subparagraph,

18 consideration of an implementing bill shall

19 be governed by the Rules of the House of

20 Representatives applicable to other bills

21 and resolutions in similar circumstances.

22 (F) FLOOR CONSIDERATION IN THE SEN23 ATE.—

24 (i) MOTION TO PROCEED.—A motion in

25 the Senate to proceed to the consideration
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1 of an implementing bill shall be privileged

2 and not debatable. An amendment to the

3 motion shall not be in order, nor shall it be

4 in order to move to reconsider the vote by

5 which the motion is agreed to or disagreed

6 to.

7 (ii) GENERAL DEBATE.—Debate in

8 the Senate on an implementing bill, and all

9 debatable motions and appeals in connec10 tion therewith, shall be limited to not more

11 than 20 hours. The time shall be equally

12 divided between, and controlled by, the

13 Majority Leader and the Minority Leader

14 or their designees.

15 (iii) DEBATE OF MOTIONS AND AP16 PEALS.—Debate in the Senate on any de17 batable motion or appeal in connection

18 with an implementing bill shall be limited

19 to not more than 1 hour, to be equally di20 vided between, and controlled by, the

21 mover and the manager of the implement22 ing bill, except that in the event the man23 ager of the implementing bill is in favor of

24 any such motion or appeal, the time in op25 position thereto, shall be controlled by the
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1 Minority Leader or his designee. Such

2 leaders, or either of them, may, from time

3 under their control on the passage of an

4 implementing bill, allot additional time to

5 any Senator during the consideration of

6 any debatable motion or appeal.

7 (iv) OTHER MOTIONS.—A motion in

8 the Senate to further limit debate is not

9 debatable. A motion to recommit an imple10 menting bill is not in order.

11 (c) FAILURE TO COMPLY WITH RECOMMENDATIONS

12 ENACTED.—A health care provider or health care insurer

13 that fails to comply with any recommendations of the

14 Commission that are enacted in accordance with sub15 section (b) and that are applicable to such provider or in16 surer shall be ineligible for payments of claims submitted

17 under any provision of the Social Security Act or the Pub18 lic Health Service Act.

19 TITLE IV—ANTITRUST REFORMS

20 SEC. 401. ESTABLISHMENT OF LIMITED EXEMPTION PRO21 GRAM FOR HEALTH CARE JOINT VENTURES.

22 (a) ESTABLISHMENT.—

23 (1) IN GENERAL.—Not later than 6 months

24 after the date of the enactment of this Act, the At25 torney General, after consultation with the Secretary
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1 of Health and Human Services and the Interagency

2 Advisory Committee on Competition, Antitrust Pol3 icy, and Health Care, shall promulgate specific

4 guidelines under which a health care joint venture

5 may submit an application requesting that the At6 torney General provide the entities participating in

7 the joint venture with an exemption under which

8 (notwithstanding any other provision of law)—

9 (A) monetary recovery on a claim under

10 the antitrust laws shall be limited to actual

11 damages if the claim results from conduct with12 in the scope of the joint venture that occurs

13 while the exemption is in effect; and

14 (B) the conduct of the entity in making or

15 performing a contract to carry out the joint

16 venture shall not be deemed illegal per se under

17 the antitrust laws but shall be judged on the

18 basis of its reasonableness, taking into account

19 all relevant factors affecting competition, in20 cluding (but not limited to) effects on competi21 tion in properly defined, relevant research, de22 velopment, product, process, and service mar23 kets (taking into consideration worldwide capac24 ity to the extent that it may be appropriate in

25 the circumstances).
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1 (2) DEADLINE FOR RESPONSE.—The Attorney

2 General, after consultation with the Secretary and

3 the Advisory Committee, shall approve or disapprove

4 the application of a health care joint venture for an

5 exemption under this subsection not later than 30

6 days after the Attorney General receives the joint

7 venture’s application.

8 (3) PROVIDING REASONS FOR DISAPPROVAL.—

9 If the Attorney General disapproves the application

10 of a health care joint venture for an exemption

11 under this subsection, the Attorney General shall

12 provide the joint venture with a statement explaining

13 the reasons for the Attorney General’s disapproval.

14 (b) REQUIREMENTS FOR APPROVAL.—For purposes

15 of subsection (a), the Attorney General shall approve the

16 application of a health care joint venture for an exemption

17 under subsection (a) if an entity participating in the joint

18 venture submits to the Attorney General an application

19 not later than 30 days after the entity has entered into

20 a written agreement to participate in the joint venture (or

21 not later than 30 days after the date of the enactment

22 of this Act in the case of a joint venture in effect as of

23 such date) that contains the following information and as24 surances:
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1 (1) The identities of the parties to the joint

2 venture.

3 (2) The nature, objectives, and planned activi4 ties of the joint venture.

5 (3) Assurances that the entities participating in

6 the joint venture shall notify the Attorney General

7 of any changes in the information described in para8 graphs (1) and (2) during the period for which the

9 exemption is in effect.

10 (c) REVOCATION OF EXEMPTION.—

11 (1) IN GENERAL.—The Attorney General, after

12 consultation with the Secretary, may revoke an ex13 emption provided to a health care joint venture

14 under this section if, at any time during which the

15 exemption is in effect, the Attorney General finds

16 that the joint venture no longer meets the applicable

17 requirements for approval under subsection (b), ex18 cept that the Attorney General may not revoke such

19 an exemption if the failure of the health care joint

20 venture to meet such requirements is merely tech21 nical in nature.

22 (2) TIMING.—The revocation of an exemption

23 under paragraph (1) shall apply only to conduct of

24 the health care joint venture occurring after the ex25 emption is no longer in effect.
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1 (d) WITHDRAWAL OF APPLICATION.—Any party that

2 submits an application under this section may withdraw

3 such application at any time before the Attorney General’s

4 response to the application.

5 (e) REQUIREMENTS RELATING TO NOTICE AND PUB6 LICATION OF EXEMPTIONS AND RELATED INFORMA7 TION.—

8 (1) PUBLICATION OF APPROVED APPLICATIONS

9 FOR EXEMPTIONS IN FEDERAL REGISTER.—

10 (A) IN GENERAL.—With respect to each

11 exemption for a health care joint venture pro12 vided under subsection (a), the Attorney Gen13 eral (acting jointly with the Secretary) shall—

14 (i) prepare a notice with respect to

15 the joint venture that identifies the parties

16 to the venture and that describes the

17 planned activities of the venture;

18 (ii) submit the notice to the entities

19 participating in the joint venture; and

20 (iii) after submitting the notice to

21 such entities (but not later than 30 days

22 after approving the application for the ex23 emption for the joint venture), publish the

24 notice in the Federal Register.
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1 (B) EFFECT OF PUBLICATION.—An ex2 emption provided by the Attorney General

3 under subsection (a) shall take effect as of the

4 date of the publication in the Federal Register

5 of the notice with respect to the exemption pur6 suant to subparagraph (A).

7 (2) WAIVER OF DISCLOSURE REQUIREMENTS

8 FOR INFORMATION RELATING TO APPLICATIONS FOR

9 EXEMPTIONS.—

10 (A) IN GENERAL.—All information and

11 documentary material submitted as part of an

12 application of a health care joint venture for an

13 exemption under subsection (a), together with

14 any other information obtained by the Attorney

15 General, the Secretary, or the Advisory Com16 mittee in the course of any investigation, ad17 ministrative proceeding, or case with respect to

18 a potential violation of the antitrust laws by the

19 joint venture with respect to which the exemp20 tion applies, shall be exempt from disclosure

21 under section 552 of title 5, United States

22 Code, and shall not be made publicly available

23 by any agency of the United States to which

24 such section applies, except as relevant to a law

25 enforcement investigation or in a judicial or ad-
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1 ministrative proceeding in which such informa2 tion and material is subject to any protective

3 order.

4 (B) EXCEPTION FOR INFORMATION IN5 CLUDED IN FEDERAL REGISTER NOTICE.—Sub6 paragraph (A) shall not apply with respect to

7 information contained in a notice published in

8 the Federal Register pursuant to paragraph

9 (1).

10 (3) USE OF INFORMATION TO SUPPORT OR AN11 SWER CLAIMS UNDER ANTITRUST LAWS.—

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

13 subparagraph (B), the fact of disclosure of con14 duct under an application for an exemption

15 under subsection (a) and the fact of publication

16 of a notice in the Federal Register under para17 graph (1) shall be admissible into evidence in

18 any judicial or administrative proceeding for the

19 sole purpose of establishing that a person is en20 titled to the protections provided by an exemp21 tion granted under subsection (a).

22 (B) EFFECT OF REJECTED APPLICA23 TION.—If the Attorney General denies, in whole

24 or in part, an application for an exemption

25 under subsection (a), or revokes an exemption
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1 under such section, neither the negative deter2 mination nor the statement of reasons therefor

3 shall be admissible into evidence in any admin4 istrative or judicial proceeding for the purpose

5 of supporting or answering any claim under the

6 antitrust laws.

7 SEC. 402. ISSUANCE OF HEALTH CARE CERTIFICATES OF

8 PUBLIC ADVANTAGE.

9 (a) ISSUANCE AND EFFECT OF CERTIFICATE.—The

10 Attorney General, after consultation with the Secretary

11 and the Advisory Committee, shall issue in accordance

12 with this section a certificate of public advantage to each

13 eligible health care joint venture that complies with the

14 requirements in effect under this section on or after the

15 expiration of the 1-year period that begins on the date

16 of the enactment of this Act (without regard to whether

17 or not the Attorney General has promulgated regulations

18 to carry out this section by such date). Such venture, and

19 the parties to such venture, shall not be liable under any

20 of the antitrust laws for conduct described in such certifi21 cate and engaged in by such venture if such conduct oc22 curs while such certificate is in effect.

23 (b) REQUIREMENTS APPLICABLE TO ISSUANCE OF

24 CERTIFICATES.—
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1 (1) STANDARDS TO BE MET.—The Attorney

2 General shall issue a certificate to an eligible health

3 care joint venture if the Attorney General finds

4 that—

5 (A) the benefits that are likely to result

6 from carrying out the venture outweigh the re7 duction in competition (if any) that is likely to

8 result from the venture, and

9 (B) such reduction in competition is rea10 sonably necessary to obtain such benefits.

11 (2) FACTORS TO BE CONSIDERED.—

12 (A) WEIGHING OF BENEFITS AGAINST RE13 DUCTION IN COMPETITION.—For purposes of

14 making the finding described in paragraph

15 (1)(A), the Attorney General shall consider

16 whether the venture is likely—

17 (i) to maintain or to increase the

18 quality of health care,

19 (ii) to increase access to health care,

20 (iii) to achieve cost efficiencies that

21 will be passed on to health care consumers,

22 such as economies of scale, reduced trans23 action costs, and reduced administrative

24 costs,
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1 (iv) to preserve the operation of

2 health care facilities located in underserved

3 geographical areas,

4 (v) to improve utilization of health

5 care resources, and

6 (vi) to reduce inefficient health care

7 resource duplication.

8 (B) NECESSITY OF REDUCTION IN COM9 PETITION.—For purposes of making the finding

10 described in paragraph (1)(B), the Attorney

11 General shall consider—

12 (i) the ability of the providers of

13 health care services that are (or likely to

14 be) affected by the health care joint ven15 ture and the entities responsible for mak16 ing payments to such providers to nego17 tiate societally optimal payment and serv18 ice arrangements,

19 (ii) the effects of the health care joint

20 venture on premiums and other charges

21 imposed by the entities described in clause

22 (i), and

23 (iii) the availability of equally effi24 cient, less restrictive alternatives to achieve
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1 the benefits that are intended to be

2 achieved by carrying out the venture.

3 (c) ESTABLISHMENT OF CRITERIA AND PROCE4 DURES.—Subject to subsections (d) and (e), not later than

5 1 year after the date of the enactment of this Act, the

6 Attorney General and the Secretary shall establish jointly

7 by rule the criteria and procedures applicable to the issu8 ance of certificates under subsection (a). The rules shall

9 specify the form and content of the application to be sub10 mitted to the Attorney General to request a certificate,

11 the information required to be submitted in support of

12 such application, the procedures applicable to denying and

13 to revoking a certificate, and the procedures applicable to

14 the administrative appeal (if such appeal is authorized by

15 rule) of the denial and the revocation of a certificate. Such

16 information may include the terms of the health care joint

17 venture (in the case of a venture in existence as of the

18 time of the application) and implementation plan for the

19 joint venture.

20 (d) ELIGIBLE HEALTH CARE JOINT VENTURE.—To

21 be an eligible health care joint venture for purposes of this

22 section, a health care joint venture shall submit to the At23 torney General an application that complies with the rules

24 in effect under subsection (c) and that includes—
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1 (1) an agreement by the parties to the venture

2 that the venture will not foreclose competition by en3 tering into contracts that prevent health care provid4 ers from providing health care in competition with

5 the venture,

6 (2) an agreement that the venture will submit

7 to the Attorney General annually a report that de8 scribes the operations of the venture and informa9 tion regarding the impact of the venture on health

10 care and on competition in health care, and

11 (3) an agreement that the parties to the ven12 ture will notify the Attorney General and the Sec13 retary of the termination of the venture not later

14 than 30 days after such termination occurs.

15 (e) REVIEW OF APPLICATIONS FOR CERTIFICATES.—

16 Not later than 30 days after an eligible health care joint

17 venture submits to the Attorney General an application

18 that complies with the rules in effect under subsection (c)

19 and with subsection (d), the Attorney General shall issue

20 or deny the issuance of such certificate. If, before the expi21 ration of such 30-day period, the Attorney General fails

22 to issue or deny the issuance of such certificate, the Attor23 ney General shall be deemed to have issued such certifi24 cate.
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1 (f) REVOCATION OF CERTIFICATE.—Whenever the

2 Attorney General finds that a health care joint venture

3 with respect to which a certificate is in effect does not

4 meet the standards specified in subsection (b), the Attor5 ney General shall revoke such certificate.

6 (g) WRITTEN REASONS; JUDICIAL REVIEW.—

7 (1) DENIAL AND REVOCATION OF CERTIFI8 CATES.—If the Attorney General denies an applica9 tion for a certificate or revokes a certificate, the At10 torney General shall include in the notice of denial

11 or revocation a statement of the reasons relied upon

12 for the denial or revocation of such certificate.

13 (2) JUDICIAL REVIEW.—

14 (A) AFTER ADMINISTRATIVE PROCEED15 ING.—(i) If the Attorney General denies an ap16 plication submitted or revokes a certificate is17 sued under this section after an opportunity for

18 hearing on the record, then any party to the

19 health care joint venture involved may com20 mence a civil action, not later than 60 days

21 after receiving notice of the denial or revoca22 tion, in an appropriate district court of the

23 United States for review of the record of such

24 denial or revocation.
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1 (ii) As part of the Attorney General’s an2 swer, the Attorney General shall file in such

3 court a certified copy of the record on which

4 such denial or revocation is based. The findings

5 of fact of the Attorney General may be set aside

6 only if found to be unsupported by substantial

7 evidence in such record taken as a whole.

8 (B) DENIAL OR REVOCATION WITHOUT AD9 MINISTRATIVE PROCEEDING.—If the Attorney

10 General denies an application submitted or re11 vokes a certificate issued under this section

12 without an opportunity for hearing on the

13 record, then any party to the health care joint

14 venture involved may commence a civil action,

15 not later than 60 days after receiving notice of

16 the denial or revocation, in an appropriate dis17 trict court of the United States for de novo re18 view of such denial or revocation.

19 (h) EXEMPTION.—A person shall not be liable under

20 any of the antitrust laws for conduct necessary—

21 (1) to prepare, agree to prepare, or attempt to

22 agree to prepare an application to request a certifi23 cate under this section, or
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1 (2) to attempt to enter into any health care

2 joint venture with respect to which such a certificate

3 is in effect.

4 SEC. 403. INTERAGENCY ADVISORY COMMITTEE ON COM5 PETITION, ANTITRUST POLICY, AND HEALTH

6 CARE.

7 (a) ESTABLISHMENT.—There is hereby established

8 the Interagency Advisory Committee on Competition,

9 Antitrust Policy, and Health Care. The Advisory Commit10 tee shall be composed of—

11 (1) the Secretary of Health and Human Serv12 ices (or the designee of the Secretary);

13 (2) the Attorney General (or the designee of the

14 Attorney General);

15 (3) the Director of the Office of Management

16 and Budget (or the designee of the Director); and

17 (4) a representative of the Federal Trade Com18 mission.

19 (b) DUTIES.—The duties of the Advisory Committee

20 are—

21 (1) to discuss and evaluate competition and

22 antitrust policy, and their implications with respect

23 to the performance of health care markets;

24 (2) to analyze the effectiveness of health care

25 joint ventures receiving exemptions under the pro-
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1 gram established under section 401(a) or certificates

2 under section 402 in reducing the costs of and ex3 panding access to the health care services that are

4 the subject of such ventures; and

5 (3) to make such recommendations to Congress

6 not later than 2 years after the date of the enact7 ment of this Act (and at such subsequent periods as

8 the Advisory Committee considers appropriate) re9 garding modifications to the program established

10 under section 401(a) or to section 402 as the Advi11 sory Committee considers appropriate, including

12 modifications relating to the costs to health care

13 providers of obtaining an exemption for a joint ven14 ture under such program.

15 SEC. 404. DEFINITIONS.

16 For purposes of this title:

17 (1) The term ‘‘Advisory Committee’’ means the

18 Interagency Advisory Committee on Competition,

19 Antitrust Policy, and Health Care established under

20 section 403.

21 (2) The term ‘‘antitrust laws’’—

22 (A) has the meaning given it in subsection

23 (a) of the first section of the Clayton Act (15

24 U.S.C. 12(a)), except that such term includes

25 section 5 of the Federal Trade Commission Act
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1 (15 U.S.C. 45) to the extent such section ap2 plies to unfair methods of competition; and

3 (B) includes any State law similar to the

4 laws referred to in subparagraph (A).

5 (3) The term ‘‘certificate’’ means a certificate

6 of public advantage authorized to be issued under

7 section 402(a).

8 (4) The term ‘‘health care joint venture’’ means

9 an agreement (whether existing or proposed) be10 tween 2 or more providers of health care services

11 that is entered into solely for the purpose of sharing

12 in the provision of health care services and that in13 volves substantial integration or financial risk-shar14 ing between the parties, but does not include the ex15 changing of information, the entering into of any

16 agreement, or the engagement in any other conduct

17 that is not reasonably required to carry out such

18 agreement.

19 (5) The term ‘‘health care services’’ includes

20 services related to the delivery or administration of

21 health care services.

22 (6) The term ‘‘liable’’ means liable for any civil

23 or criminal violation of the antitrust laws.

24 (7) The term ‘‘provider of health care services’’

25 means any individual or entity that is engaged in the
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1 delivery of health care services in a State and that

2 is required by State law or regulation to be licensed

3 or certified by the State to engage in the delivery of

4 such services in the State.

5 (8) The term ‘‘Secretary’’ means the Secretary

6 of Health and Human Services.

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