II

105TH CONGRESS

1ST SESSION S. 1499

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

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

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 9, 1997

Mrs. BOXER introduced the following bill; which was referred to the

Committee on Labor and Human Resources

A BILL

To amend the title XXVII of the Public Health Service

Act and other laws to assure the rights of enrollees

under managed care plans.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Health Insurance Consumer’s Bill of Rights Act of

6 1997’’.

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

8 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—HEALTH INSURANCE BILL OF RIGHTS
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Sec. 101. Health insurance bill of rights.

‘‘PART C—HEALTH INSURANCE BILL OF RIGHTS

‘‘Sec. 2770. Notice; additional definitions.

‘‘SUBPART 1—ACCESS TO PRIMARY CARE PHYSICIANS, SPECIALISTS, OUT OF

NETWORK PROVIDERS, EMERGENCY ROOM SERVICES, PRESCRIPTION DRUGS

‘‘Sec. 2771. Access to personnel and facilities; assuring adequate choice of

health care professionals.

‘‘Sec. 2772. Access to specialty care.

‘‘Sec. 2773. Access to emergency care.

‘‘Sec. 2774. Coverage for individuals participating in approved clinical

trials.

‘‘Sec. 2775. Continuity of care.

‘‘Sec. 2776. Prohibition of interference with certain medical communications.

‘‘Sec. 2777. Access to needed prescription drugs.

‘‘SUBPART 2—UTILIZATION REVIEW, GRIEVANCE, APPEALS, AND QUALITY

IMPROVEMENT

‘‘Sec. 2779. Standards for utilization review activities, complaints, and appeals.

‘‘Sec. 2780. Quality improvement program.

‘‘SUBPART 3—NONDISCRIMINATION

‘‘Sec. 2784. Nondiscrimination.

‘‘SUBPART 4—CONFIDENTIALITY

‘‘Sec. 2785. Medical records and confidentiality.

‘‘SUBPART 5—DISCLOSURES

‘‘Sec. 2786. Health prospectus; disclosure of information.

‘‘SUBPART 6—PROMOTING GOOD MEDICAL PRACTICE AND PROTECTING THE

DOCTOR-PATIENT RELATIONSHIP

‘‘Sec. 2787. Promoting good medical practice.

TITLE II—APPLICATION OF BILL OF RIGHTS UNDER VARIOUS

LAWS

Sec. 201. Amendments to the Public Health Service Act.

Sec. 202. Managed care requirements under the Employee Retirement Income Security Act of 1974.

Sec. 203. Managed care requirements under the Internal Revenue Code of

1986.

Sec. 204. Managed care requirements under medicare, medicaid, and the

Federal employees health benefits program (FEHBP).

Sec. 205. Effective dates.
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1 TITLE I—HEALTH INSURANCE

2 BILL OF RIGHTS

3 SEC. 101. HEALTH INSURANCE BILL OF RIGHTS.

4 Title XXVII of the Public Health Service Act is

5 amended—

6 (1) by redesignating part C as part D, and

7 (2) by inserting after part B the following new

8 part:

9 ‘‘PART C—HEALTH INSURANCE BILL OF RIGHTS

10 ‘‘SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS.

11 ‘‘(a) NOTICE.—A health insurance issuer under this

12 part shall comply with the notice requirement under sec13 tion 711(d) of the Employee Retirement Income Security

14 Act of 1974 with respect to the requirements of this part

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

16 were a group health plan.

17 ‘‘(b) ADDITIONAL DEFINITIONS.—For purposes of

18 this part:

19 ‘‘(1) ENROLLEE.—The term ‘enrollee’ means

20 an individual who is entitled to benefits under a

21 group health plan or under health insurance cov22 erage.

23 ‘‘(2) HEALTH CARE PROFESSIONAL.—The term

24 ‘health care professional’ means a physician or other
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1 health care practitioner providing health care serv2 ices.

3 ‘‘(3) HEALTH CARE PROVIDER.—The term

4 ‘health care provider’ means a clinic, hospital physi5 cian organization, preferred provider organization,

6 independent practice association, community service

7 provider, family planning clinic, or other appro8 priately licensed provider of health care services or

9 supplies.

10 ‘‘(4) MANAGED CARE.—The term ‘managed

11 care’ means, with respect to a group health plan or

12 health insurance coverage, such a plan or coverage

13 that provides financial incentives for enrollees to ob14 tain benefits through participating health care pro15 viders or professionals.

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

18 provider or professional and a group health plan or

19 health insurance coverage, such a provider or profes20 sional that is not a participating provider or profes21 sional with respect to such services.

22 ‘‘(6) PARTICIPATING.—The term ‘participating’

23 means, with respect to a health care provider or pro24 fessional and a group health plan or health insur25 ance coverage offered by a health insurance issuer,
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1 such a provider or professional that has entered into

2 an agreement or arrangement with the plan or is3 suer with respect to the provision of health care

4 services to enrollees under the plan or coverage.

5 ‘‘(7) PRIMARY CARE PRACTITIONER.—The term

6 ‘primary care practitioner’ means, with respect to a

7 group health plan or health insurance coverage of8 fered by a health insurance issuer, a health care pro9 fessional (who may be trained in family practice,

10 general practice, internal medicine, obstetrics and

11 gynecology, or pediatrics and who is practicing with12 in the scope of practice authorized by State law)

13 designated by the plan or issuer to coordinate, su14 pervise, or provide ongoing care to enrollees.

15 ‘‘SUBPART 1—ACCESS TO PRIMARY CARE PHYSICIANS,

16 SPECIALISTS, OUT OF NETWORK PROVIDERS,

17 EMERGENCY ROOM SERVICES, PRESCRIPTION

18 DRUGS

19 ‘‘SEC. 2771. ACCESS TO PERSONNEL AND FACILITIES; AS20 SURING ADEQUATE CHOICE OF HEALTH

21 CARE PROFESSIONALS.

22 ‘‘A managed care group health plan (and a health

23 insurance issuer offering managed care group health in24 surance coverage) shall comply with regulations promul-
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1 gated by the Secretary that ensure that such plans and

2 issuers—

3 ‘‘(1) have a sufficient number and type of pri4 mary care practitioners and specialists, throughout

5 the service area to meet the needs of enrollees and

6 to provide meaningful choice;

7 ‘‘(2) maintain a mix of primary care practition8 ers that is adequate to meet the needs of the enroll9 ees’ varied characteristics, including age, gender,

10 race, and health status; and

11 ‘‘(3) include, to the extent possible, a variety of

12 primary care providers (including community health

13 centers, rural health clinics, and family planning

14 clinics).

15 ‘‘SEC. 2772. ACCESS TO SPECIALTY CARE.

16 ‘‘A managed care group health plan (and a health

17 insurance issuer offering managed care group health in18 surance coverage) shall comply with regulations promul19 gated by the Secretary that ensure that such plans and

20 issuers provide enrollees with—

21 ‘‘(1) access to specialty care;

22 ‘‘(2) standing referrals to specialists;

23 ‘‘(3) access to nonparticipating providers;
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1 ‘‘(4) direct access (without the need for a refer2 ral) to health care professionals trained in obstetrics

3 and gynecology; and

4 ‘‘(5) a process that permits a health care pro5 vider trained in obstetrics and gynecology to be des6 ignated and treated as a primary care practitioner.

7 ‘‘SEC. 2773. ACCESS TO EMERGENCY CARE.

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

9 insurance coverage provides any benefits with respect to

10 emergency services (as defined in subsection (b)(1)), the

11 plan or the health insurance issuer offering such coverage

12 shall—

13 ‘‘(1) provide for emergency services without re14 gard to prior authorization or the emergency care

15 provider’s contractual relationship with the organiza16 tion; and

17 ‘‘(2) comply with such guidelines as the Sec18 retary of Health and Human Services may prescribe

19 relating to promoting efficient and timely coordina20 tion of appropriate maintenance and post-stabiliza21 tion care of an enrollee after the enrollee has been

22 determined to be stable under section 1867 of the

23 Social Security Act.

24 ‘‘(b) DEFINITION OF EMERGENCY SERVICES.—In

25 this subsection—
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1 ‘‘(1) IN GENERAL.—The term ‘emergency serv2 ices’ means, with respect to an enrollee under a plan

3 or coverage, inpatient and outpatient services cov4 ered under the plan or coverage that—

5 ‘‘(A) are furnished by a provider that is

6 qualified to furnish such services under the plan

7 or coverage, and

8 ‘‘(B) are needed to evaluate or stabilize an

9 emergency medical condition (as defined in sub10 paragraph (B)).

11 ‘‘(2) EMERGENCY MEDICAL CONDITION BASED

12 ON PRUDENT LAYPERSON.—The term ‘emergency

13 medical condition’ means a medical condition mani14 festing itself by acute symptoms of sufficient sever15 ity (including severe pain) such that a prudent

16 layperson, who possesses an average knowledge of

17 health and medicine, could reasonably expect the ab18 sence of immediate medical attention to result in—

19 ‘‘(A) placing the health of the individual

20 (or, with respect to a pregnant woman, the

21 health of the woman or her unborn child) in se22 rious jeopardy,

23 ‘‘(B) serious impairment to bodily func24 tions, or
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1 ‘‘(C) serious dysfunction of any bodily

2 organ or part.

3 ‘‘SEC. 2774. COVERAGE FOR INDIVIDUALS PARTICIPATING

4 IN APPROVED CLINICAL TRIALS.

5 ‘‘(a) IN GENERAL.—If a group health plan provides

6 benefits, or a health insurance issuer offers health insur7 ance coverage to, a qualified enrollee (as defined in sub8 section (b)), the plan or issuer—

9 ‘‘(1) may not deny the enrollee participation in

10 the clinical trial referred to in subsection (b)(2);

11 ‘‘(2) subject to subsection (c), may not deny (or

12 limit or impose additional conditions on) the cov13 erage of routine patient costs for items and services

14 furnished in connection with participation in the

15 trial; and

16 ‘‘(3) may not discriminate against the enrollee

17 on the basis of the enrollee’s participation in such

18 trial.

19 ‘‘(b) QUALIFIED ENROLLEE DEFINED.—For pur20 poses of subsection (a), the term ‘qualified enrollee’ means

21 an enrollee who meets the following conditions:

22 ‘‘(1) The enrollee has a life-threatening or seri23 ous illness for which no standard treatment is effec24 tive.
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1 ‘‘(2) The enrollee is eligible to participate in an

2 approved clinical trial with respect to treatment of

3 such illness.

4 ‘‘(3) The enrollee and the referring physician

5 conclude that the enrollee’s participation in such

6 trial would be appropriate.

7 ‘‘(4) The enrollee’s participation in the trial of8 fers potential for significant clinical benefit for the

9 enrollee.

10 ‘‘(c) PAYMENT.—

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

12 or issuer shall provide for payment for routine pa13 tient costs described in subsection (a)(2) but is not

14 required to pay for costs of items and services that

15 are reasonably expected (as determined by the Sec16 retary) to be paid for by the sponsors of an ap17 proved 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.—In this

2 section, the term ‘approved clinical trial’ means a clinical

3 research study or clinical investigation approved by the

4 Food and Drug Administration or approved and funded

5 by one or more of the following:

6 ‘‘(1) The National Institutes of Health.

7 ‘‘(2) A cooperative group or center of the Na8 tional Institutes of Health.

9 ‘‘(3) The Department of Veterans Affairs.

10 ‘‘(4) The Department of Defense.

11 ‘‘SEC. 2775. CONTINUITY OF CARE.

12 ‘‘A managed care group health plan (and a health

13 insurance issuer offering managed care group health in14 surance coverage) shall comply with regulations promul15 gated by the Secretary that ensure that such plans and

16 issuers provide continuity of coverage in the case of the

17 terminated coverage where an enrollee is undergoing a

18 course of treatment with the provider at the time of such

19 termination.

20 ‘‘SEC. 2776. PROHIBITION OF INTERFERENCE WITH CER21 TAIN MEDICAL COMMUNICATIONS.

22 ‘‘(a) IN GENERAL.—The provisions of any contract

23 or agreement, or the operation of any contract or agree24 ment, between a group health plan or health insurance is25 suer (offering health insurance coverage in connection
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1 with a group health plan) and a health professional shall

2 not prohibit or restrict the health professional from engag3 ing in medical communications with his or her patient.

4 ‘‘(b) NULLIFICATION.—Any contract provision or

5 agreement described in subsection (a) shall be null and

6 void.

7 ‘‘(c) MEDICAL COMMUNICATION DEFINED.—For

8 purposes of this section, the term ‘medical communication’

9 has the meaning given such term by the Secretary.

10 ‘‘SEC. 2777. ACCESS TO NEEDED PRESCRIPTION DRUGS.

11 ‘‘If a group health plan, or health insurance issuer

12 offers health insurance coverage that, provides benefits

13 with respect to prescription drugs but the coverage limits

14 such benefits to drugs included in a formulary, the plan

15 or issuer shall ensure in accordance with regulations of

16 the Secretary that—

17 ‘‘(1) the nature of the formulary restrictions is

18 fully disclosed to enrollees; and

19 ‘‘(2) exceptions from the formulary restriction

20 are provided when medically necessary or appro21 priate.
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1 ‘‘SUBPART 2—UTILIZATION REVIEW, GRIEVANCE,

2 APPEALS, AND QUALITY IMPROVEMENT

3 ‘‘SEC. 2779. STANDARDS FOR UTILIZATION REVIEW ACTIVI4 TIES, COMPLAINTS, AND APPEALS.

5 ‘‘A group health plan and a health insurance issuer

6 offering health insurance coverage in connection with a

7 group health plan shall comply with standards established

8 by the Secretary relating to its conduct of utilization re9 view activities. Such standards shall include the following:

10 ‘‘(1) A requirement that a plan or issuer de11 velop written policies and criteria concerning utiliza12 tion review activities.

13 ‘‘(2) A requirement that a plan or issuer pro14 vide notice of such policies and criteria and the writ15 ten notice of adverse determinations.

16 ‘‘(3) A restriction on the use of contingent com17 pensation arrangements with providers.

18 ‘‘(4) A requirement establishing deadlines to

19 ensure timely utilization review determinations.

20 ‘‘(5) The establishment of an adequate process

21 for filing complaints, and appealing decisions, con22 cerning utilization review determinations, including

23 the mandatory use of an outside review panel to

24 make decisions on such appeals.
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1 ‘‘(6) A requirement that a plan or issuer that

2 utilizes clinial practice guidelines uniformly apply re3 view criteria that are based on sound scientific prin4 ciples and the most recent medical evidence.

5 ‘‘SEC. 2780. QUALITY IMPROVEMENT PROGRAM.

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

7 insurance issuer offering health insurance coverage shall

8 make arrangements for an ongoing quality improvement

9 program for health care services it provides to enrollees.

10 Such a program shall meet standards established by the

11 Secretary, including standards relating to—

12 ‘‘(1) the measurement of health outcomes rel13 evant to all populations, including women;

14 ‘‘(2) evaluation of high risk services;

15 ‘‘(3) monitoring utilization of services;

16 ‘‘(4) ensuring appropriate action to improve

17 quality of care; and

18 ‘‘(5) providing for an independent external re19 view of the program

20 ‘‘SUBPART 3—NONDISCRIMINATION

21 ‘‘SEC. 2784. NONDISCRIMINATION.

22 ‘‘(a) ENROLLEES.—A group health plan or health in23 surance issuer offering health insurance coverage (whether

24 or not a managed care plan or coverage) may not discrimi25 nate or engage (directly or through contractual arrange-
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1 ments) in any activity, including the selection of service

2 area, that has the effect of discriminating against an indi3 vidual on the basis of race, culture, national origin, gen4 der, sexual orientation, language, socioeconomic status,

5 age, disability, genetic makeup, health status, payer

6 source, or anticipated need for healthcare services.

7 ‘‘(b) PROVIDERS.—Such a plan or issuer may not dis8 criminate in the selection of members of the health pro9 vider or provider network (and in establishing the terms

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

11 or coverage based on any of the factors described in sub12 section (a).

13 ‘‘(c) SERVICES.—Such a plan or issuer may not ex14 clude coverage (including procedures and drugs) if the ef15 fect is to discriminate in violation of subsection (a) or (b).

16 ‘‘SUBPART 4—CONFIDENTIALITY

17 ‘‘SEC. 2785. MEDICAL RECORDS AND CONFIDENTIALITY.

18 ‘‘A managed care group health plan (and a health

19 insurance issuer offering managed care group health in20 surance) shall—

21 ‘‘(1) establish written policies and procedures

22 for the handling of medical records and enrollee

23 communications to ensure enrollee confidentiality;

24 ‘‘(2) ensure the confidentiality of specified en25 rollee information, including, prior medical history,
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1 medical record information and claims information,

2 except where disclosure of this information is re3 quired by law; and

4 ‘‘(3) not release any individual patient record

5 information, unless such a release is authorized in

6 writing by the enrollee or otherwise required by law.

7 ‘‘SUBPART 5—DISCLOSURES

8 ‘‘SEC. 2786. HEALTH PROSPECTUS; DISCLOSURE OF INFOR9 MATION.

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

11 each health insurance issuer providing health insurance

12 coverage, shall provide to each enrollee at the time of en13 rollment and on an annual basis, and shall make available

14 to each prospective enrollee upon request—

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

16 coverage offered and that meets the requirements of

17 subsection (b); and

18 ‘‘(2) additional information described in sub19 section (c).

20 ‘‘(b) PROSPECTUS.—

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

22 subsection for a plan or coverage—

23 ‘‘(A) shall contain the information de24 scribed in paragraphs (2) through (4) concern25 ing the plan or coverage,
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1 ‘‘(B) shall contain such additional informa2 tion as the Secretary deems appropriate, and

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

4 length and in a format specified by the Sec5 retary, for purposes of comparison by prospec6 tive enrollees.

7 ‘‘(2) QUALITATIVE INFORMATION.—The infor8 mation described in this paragraph is a summary of

9 the quality assessment data on the plan or coverage.

10 The data shall—

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

12 are collected for managed care plans under title

13 XVIII of the Social Security Act, as determined

14 by the Secretary and taking into account dif15 ferences between the populations covered under

16 such title and the populations covered under

17 this title;

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

19 agencies;

20 ‘‘(C) include—

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

22 methodologies (including capitation, finan23 cial incentive or bonuses, fee-for-service,

24 salary, and withholds) used by the plan or

25 issuer to reimburse physicians, including
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1 the proportions of physicians who have

2 each of these types of arrangements; and

3 ‘‘(ii) cost-sharing requirements for en4 rollees.

5 The information under subparagraph (C) shall in6 clude, upon request, information on the reimburse7 ment methodology used by the plan or issuer or

8 medical groups for individual physicians, but do not

9 require the disclosure of specific reimbursement

10 rates.

11 ‘‘(3) QUANTITATIVE INFORMATION.—The infor12 mation described in this paragraph is measures of

13 performance of the plan or issuer (in relation to cov14 erage offered) with respect to each of the following

15 and such other salient data as the Secretary may

16 specify:

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

18 including the ratio of physicians who are obste19 trician/gynecologists to adult, female enrollees.

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

21 ‘‘(C) The incentive structure used for pay22 ment of primary care physicians and specialists.

23 ‘‘(D) Patient outcomes for procedures, in24 cluding procedures specific to female enrollees.
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1 ‘‘(E) The number of grievances filed under

2 the plan or coverage.

3 ‘‘(F) The number of requests for proce4 dures for which utilization review board review

5 or approval is required and the number (and

6 percentage) of such requests that are denied.

7 ‘‘(G) The number of appeals filed from de8 nial of such requests and the number (and per9 centage) of such appeals that are approved,

10 such numbers and percentages broken down by

11 gender of the enrollee involved.

12 ‘‘(H) Disenrollment data.

13 ‘‘(3) DESCRIPTION OF BENEFITS.—The infor14 mation described in this paragraph is a description

15 of the benefits provided under the plan or coverage,

16 as well as explicit exclusions, including a description

17 of the following:

18 ‘‘(A) Coverage policy with respect to cov19 erage for female-specific benefits, including

20 screening mammography, hormone replacement

21 therapy, bone density testing, osteoporosis

22 screening, maternity care, and reconstructive

23 surgery following a mastectomy.

24 ‘‘(B) The costs of copayments for treat25 ments, including any exceptions.
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1 ‘‘(c) ADDITIONAL INFORMATION.—The additional in2 formation described in this subsection is information

3 about each of the following:

4 ‘‘(1) The plan’s or issuer’s structure and pro5 vider network, including the names and credentials

6 of physicians in the network.

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

8 out-of-area coverage.

9 ‘‘(3) Procedures for utilization management.

10 ‘‘(4) Procedures for determining coverage for

11 investigational or experimental treatments as well as

12 definitions for coverage terms.

13 ‘‘(5) Any restrictive formularies or prior ap14 proval requirements for obtaining prescription drugs,

15 including, upon request, information on whether or

16 not specific drugs are covered.

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

18 ‘‘(7) Procedures for receiving emergency care

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

20 not available in the network and information on the

21 coverage of emergency services, including—

22 ‘‘(A) the appropriate use of emergency

23 services, including use of the 911 telephone sys24 tem or its local equivalent in emergency situa-
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1 tions and an explanation of what constitutes an

2 emergency situation;

3 ‘‘(B) the process and procedures for ob4 taining emergency services; and

5 ‘‘(C) the locations of (i) emergency depart6 ments, and (ii) other settings, in which physi7 cians and hospitals provide emergency services

8 and post-stabilization care.

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

10 plan or issuer.

11 ‘‘(9) How to contact consumer assistance agen12 cies, such as ombudsmen programs.

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

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

15 and health education.

16 ‘‘(12) How to select providers and obtain refer17 rals.

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

19 file grievances.

20 ‘‘(d) STATE AUTHORITY TO REQUIRE ADDITIONAL

21 INFORMATION.—

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

23 this section shall not be construed as preventing a

24 State from requiring health insurance issuers, in re25 lation to their offering of health insurance coverage,
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1 to disclose separately information (including com2 parative ratings of health insurance coverage) in ad3 dition to the information required to be disclosed

4 under this section.

5 ‘‘(2) CONTINUED PREEMPTION WITH RESPECT

6 TO GROUP HEALTH PLANS.—Nothing in this part

7 shall be construed to affect or modify the provisions

8 of section 514 with respect to group health plans.

9 ‘‘SUBPART 6—PROMOTING GOOD MEDICAL PRACTICE

10 AND PROTECTING THE DOCTOR-PATIENT RELATIONSHIP

11 ‘‘SEC. 2787. PROMOTING GOOD MEDICAL PRACTICE.

12 ‘‘(a) PROHIBITING ARBITRARY LIMITATIONS OR

13 CONDITIONS FOR THE PROVISION OF SERVICES.—A

14 group health plan and a health insurance issuer, in con15 nection with the provision of health insurance coverage,

16 may not impose limits on the manner in which particular

17 services are delivered if the services are medically nec18 essary or appropriate to the extent that such procedure

19 or treatment is otherwise a covered benefit.

20 ‘‘(b) CONSTRUCTION.—Subsection (a) shall not be

21 construed as requiring coverage of particular services the

22 coverage of which is otherwise not covered under the terms

23 of the coverage.’’.
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1 TITLE II—APPLICATION OF BILL

2 OF RIGHTS UNDER VARIOUS

3 LAWS

4 SEC. 201. AMENDMENTS TO THE PUBLIC HEALTH SERVICE

5 ACT.

6 (a) APPLICATION TO GROUP HEALTH INSURANCE

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

8 Public Health Service Act is amended by adding at the

9 end the following new section:

10 ‘‘SEC. 2706. MANAGED CARE REQUIREMENTS.

11 ‘‘Each health insurance issuer shall comply with the

12 applicable requirements under part C with respect to

13 group health insurance coverage it offers.’’.

14 (b) APPLICATION TO INDIVIDUAL HEALTH INSUR15 ANCE COVERAGE.—Part B of title XXVII of the Public

16 Health Service Act is amended by inserting after section

17 2751 the following new section:

18 ‘‘SEC. 2752. MANAGED CARE REQUIREMENTS.

19 ‘‘Each health insurance issuer shall comply with the

20 applicable requirements under part C with respect to indi21 vidual health insurance coverage it offers, in the same

22 manner as such requirements apply to group health insur23 ance coverage.’’.

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

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

3 amended—

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

6 (c)’’;

7 (B) by redesignating subsections (c) and

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

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

10 following new subsection:

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

12 REQUIREMENTS.—Subject to subsection (a)(2), the provi13 sions of section 2706 and part C, and part D insofar as

14 it applies to section 2706 or part C, shall not prevent a

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

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

19 (2) INDIVIDUAL HEALTH INSURANCE COV20 ERAGE.—Section 2762 of such Act (42 U.S.C.

21 300gg–62), as added by section 605(b)(3)(B) of

22 Public Law 104–204, is amended—

23 (A) in subsection (a), by striking ‘‘sub24 section (b), nothing in this part’’ and inserting

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

2 subsection:

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

4 REQUIREMENTS.—Subject to subsection (b), the provi5 sions of section 2752 and part C, and part D insofar as

6 it applies to section 2752 or part C, shall not prevent a

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

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

11 (d) ADDITIONAL CONFORMING AMENDMENTS.—

12 (1) Section 2723(a)(1) of such Act (42 U.S.C.

13 300gg–23(a)(1)) is amended by striking ‘‘part C’’

14 and inserting ‘‘parts C and D’’.

15 (2) Section 2762(b)(1) of such Act (42 U.S.C.

16 300gg–62(b)(1)) is amended by striking ‘‘part C’’

17 and inserting ‘‘part D’’.

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

19 the Health Insurance Portability and Accountability Act

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

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

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

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

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

2 Code of 1986’’.

3 SEC. 202. MANAGED CARE REQUIREMENTS UNDER THE EM4 PLOYEE RETIREMENT INCOME SECURITY

5 ACT OF 1974.

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

7 B of title I of the Employee Retirement Income Security

8 Act of 1974 is amended by adding at the end the following

9 new section:

10 ‘‘SEC. 713. MANAGED CARE REQUIREMENTS.

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

12 group health plan (and a health insurance issuer offering

13 group health insurance coverage in connection with such

14 a plan) shall comply with the applicable requirements of

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

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

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

18 C—

19 ‘‘(1) to a health insurance issuer and health in20 surance coverage offered by such an issuer is

21 deemed to include a reference to a group health plan

22 and coverage under such plan, respectively;

23 ‘‘(2) to the Secretary is deemed a reference to

24 the Secretary of Labor;
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1 ‘‘(3) to an applicable State authority is deemed

2 a reference to the Secretary of Labor; and

3 ‘‘(4) to an enrollee with respect to health insur4 ance coverage is deemed to include a reference to a

5 participant or beneficiary with respect to a group

6 health plan.’’.

7 (b) MODIFICATION OF PREEMPTION STANDARDS.—

8 Section 731 of such Act (42 U.S.C. 1191) is amended—

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

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

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

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

13 (3) by inserting after subsection (b) the follow14 ing new subsection:

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

16 REQUIREMENTS.—Subject to subsection (a)(2), the provi17 sions of section 713 and part C of title XXVII of the Pub18 lic Health Service Act, and subpart C insofar as it applies

19 to section 713 or such part, shall not be construed to pre20 empt any State law, or the enactment or implementation

21 of such a State law, that provides protections for individ22 uals that are equivalent to or stricter than the protections

23 provided under such provisions.’’.
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1 (c) CONFORMING AMENDMENTS.—(1) Section 732(a)

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

3 ‘‘section 711’’ and inserting ‘‘sections 711 and 713’’.

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

5 is amended by inserting after the item relating to section

6 712 the following new item:

‘‘Sec. 713. Managed care requirements.’’.

7 SEC. 203. MANAGED CARE REQUIREMENTS UNDER THE IN8 TERNAL REVENUE CODE OF 1986.

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

10 7 of subtitle B of title I of the Employee Retirement In11 come Security Act of 1974 is amended by adding at the

12 end the following new section:

13 ‘‘SEC. 9813. MANAGED CARE REQUIREMENTS.

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

15 group health plan shall comply with the applicable require16 ments of part C of title XXVII of the Public Health Serv17 ice Act.

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

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

20 such part C—

21 ‘‘(1) to the Secretary is deemed a reference to

22 the Secretary of the Treasury; and

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

24 a reference to the Secretary.’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

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

3 by inserting after the item relating to section 9812 the

4 following new item:

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

5 SEC. 204. MANAGED CARE REQUIREMENTS UNDER MEDI6 CARE, MEDICAID, AND THE FEDERAL EM7 PLOYEES HEALTH BENEFITS PROGRAM

8 (FEHBP).

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

10 Act (42 U.S.C. 1395w–22), as inserted by section 4001

11 of the Balanced Budget Act of 1997 (Public Law 101–

12 33), is amended by adding at the end the following new

13 subsection:

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

15 Medicare+Choice organization that offers a

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

17 shall comply with the applicable requirements of part C

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

19 same manner as such requirements apply with respect to

20 health insurance coverage offered by a health insurance

21 issuer, except to the extent such requirements are less pro22 tective of enrollees than the requirements established

23 under this part.’’.
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1 (b) MEDICAID.—Section 1932(b)(8) of the Social Se2 curity Act, as added by section 4704(a) of the Balanced

3 Budget Act of 1997, is amended—

4 (1) by striking ‘‘AND MENTAL HEALTH’’ and in5 serting ‘‘, MENTAL HEALTH, AND MANAGED CARE’’,

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

7 A’’, and

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

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

10 are less protective of enrollees than the requirements

11 established under this title’’.

12 (c) FEDERAL EMPLOYEES’ HEALTH BENEFITS PRO13 GRAM (FEHBP).—Chapter 89 of title 5, United States

14 Code, is amended—

15 (1) by inserting after the item relating to sec16 tion 8905a the following new section:

17 ‘‘§ 8905b. Application of managed care requirements

18 ‘‘Each health benefit plan offered under this chapter

19 shall comply with the applicable requirements of part C

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

21 same manner as such requirements apply with respect to

22 health insurance coverage offered by a health insurance

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

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

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

3 SEC. 205. EFFECTIVE DATES.

4 (a) GENERAL EFFECTIVE DATE FOR GROUP

5 HEALTH PLANS.—

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

7 the amendments made by section 101, subsections

8 (a), (c)(1), and (d) of section 201, and sections 203

9 and 204 shall apply with respect to group health in10 surance coverage for group health plan years begin11 ning on or after July 1, 1998 (in this section re12 ferred to as the ‘‘general effective date’’) and also

13 shall apply to portions of plan years occurring on

14 and after January 1, 1999.

15 (2) TREATMENT OF GROUP HEALTH PLANS

16 MAINTAINED PURSUANT TO CERTAIN COLLECTIVE

17 BARGAINING AGREEMENTS.—In the case of a group

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

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

22 more employers ratified before the date of enactment

23 of this Act, the amendments described in paragraph

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

25 the later of—
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1 (A) the date on which the last collective

2 bargaining agreements relating to the plan ter3 minates (determined without regard to any ex4 tension thereof agreed to after the date of en5 actment of this Act), or

6 (B) the general effective date.

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

9 agreement relating to the plan which amends the

10 plan solely to conform to any requirement added by

11 such amendments shall not be treated as a termi12 nation of such collective bargaining agreement.

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

15 101 and subsections (b), (c)(2), and (d) of section 201

16 shall apply with respect to individual health insurance cov17 erage offered, sold, issued, renewed, in effect, or operated

18 in the individual market on or after the general effective

19 date.

20 (c) EFFECTIVE DATE FOR COORDINATION.—The

21 amendment made by section 201(e) shall take effect on

22 the date of the enactment of this Act.

23 (d) FEDERAL PROGRAMS.—The amendments made

24 by section 204 shall take effect on January 1, 1999.

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