II

105TH CONGRESS

2D SESSION S. 1890

To amend the Public Health Service Act and the Employee Retirement

Income Security Act of 1974 to protect consumers in managed care

plans and other health coverage.

IN THE SENATE OF THE UNITED STATES

MARCH 31, 1998

Mr. DASCHLE (for himself, Mr. KENNEDY, Mrs. BOXER, Mr. DODD, Ms. MIKULSKI, Mrs. FEINSTEIN, Mr. DURBIN, Mr. REED, Mr. INOUYE, Mr.

TORRICELLI, Mr. KERRY, Ms. MOSELEY-BRAUN, Mr. WYDEN, Mr. LAUTENBERG, Mr. ROCKEFELLER, Mr. CLELAND, Mr. LEAHY, Mrs. MURRAY, Mr. WELLSTONE, Mr. SARBANES, Mr. AKAKA, and Mr. BINGAMAN)

introduced the following bill; which was read twice and referred to the

Committee on Labor and Human Resources

A BILL

To amend the Public Health Service Act and the Employee

Retirement Income Security Act of 1974 to protect consumers in managed care plans and other health coverage.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Patients’ Bill of Rights Act of 1998’’.

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

7 this Act is as follows:
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Sec. 1. Short title; table of contents.

TITLE I—HEALTH INSURANCE BILL OF RIGHTS

Subtitle A—Access to Care

Sec. 101. Access to emergency care.

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

Sec. 103. Choice of providers.

Sec. 104. Access to specialty care.

Sec. 105. Continuity of care.

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

Sec. 107. Access to needed prescription drugs.

Sec. 108. Adequacy of provider network.

Sec. 109. Nondiscrimination in delivery of services.

Subtitle B—Quality Assurance

Sec. 111. Internal quality assurance program.

Sec. 112. Collection of standardized data.

Sec. 113. Process for selection of providers.

Sec. 114. Drug utilization program.

Sec. 115. Standards for utilization review activities.

Sec. 116. Health Care Quality Advisory Board.

Subtitle C—Patient Information

Sec. 121. Patient information.

Sec. 122. Protection of patient confidentiality.

Sec. 123. Health insurance ombudsmen.

Subtitle D—Grievance and Appeals Procedures

Sec. 131. Establishment of grievance process.

Sec. 132. Internal appeals of adverse determinations.

Sec. 133. External appeals of adverse determinations.

Subtitle E—Protecting the Doctor-Patient Relationship

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

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

arrangements.

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

Sec. 144. Protection for patient advocacy.

Subtitle F—Promoting Good Medical Practice

Sec. 151. Promoting good medical practice.

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

Sec. 153. Standards relating to benefits for reconstructive breast surgery.

Subtitle G—Definitions

Sec. 191. Definitions.

Sec. 192. Preemption; State flexibility; construction.

Sec. 193. Regulations.
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TITLE II—APPLICATION OF PATIENT PROTECTION STANDARDS

TO GROUP HEALTH PLANS AND HEALTH INSURANCE COVERAGE UNDER PUBLIC HEALTH SERVICE ACT

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

Sec. 202. Application to individual health insurance coverage.

TITLE III—AMENDMENTS TO THE EMPLOYEE RETIREMENT

INCOME SECURITY ACT OF 1974

Sec. 301. Application of patient protection standards to group health plans and

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

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

TITLE IV—EFFECTIVE DATES; COORDINATION IN

IMPLEMENTATION.

Sec. 401. Effective dates.

Sec. 402. Coordination in implementation.

1 TITLE I—HEALTH INSURANCE

2 BILL OF RIGHTS

3 Subtitle A—Access to Care

4 SEC. 101. ACCESS TO EMERGENCY CARE.

5 (a) COVERAGE OF EMERGENCY SERVICES.—

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

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

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

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

12 (A) without the need for any prior author13 ization determination;

14 (B) whether or not the health care pro15 vider furnishing such services is a participating

16 provider with respect to such services;
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1 (C) in a manner so that, if such services

2 are provided to a participant, beneficiary, or en3 rollee by a nonparticipating health care pro4 vider—

5 (i) the participant, beneficiary, or en6 rollee is not liable for amounts that exceed

7 the amounts of liability that would be in8 curred if the services were provided by a

9 participating health care provider, and

10 (ii) the plan or issuer pays an amount

11 that is not less than the amount paid to a

12 participating health care provider for the

13 same services; and

14 (D) without regard to any other term or

15 condition of such coverage (other than exclusion

16 or coordination of benefits, or an affiliation or

17 waiting period, permitted under section 2701 of

18 the Public Health Service Act, section 701 of

19 the Employee Retirement Income Security Act

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

22 cost-sharing).

23 (2) DEFINITIONS.—In this section:

24 (A) EMERGENCY MEDICAL CONDITION

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

2 a medical condition manifesting itself by acute

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

5 possesses an average knowledge of health and

6 medicine, could reasonably expect the absence

7 of immediate medical attention to result in a

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

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

10 Act.

11 (B) EMERGENCY SERVICES.—The term

12 ‘‘emergency services’’ means—

13 (i) a medical screening examination

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

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

20 condition (as defined in subparagraph

21 (A)), and

22 (ii) within the capabilities of the staff

23 and facilities available at the hospital, such

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

2 Act to stabilize the patient.

3 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

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

5 (other than emergency services) for which benefits are

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

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

11 health care provider in a manner consistent with sub12 section (a)(1)(C) if the services are maintenance care or

13 post-stabilization care covered under the guidelines estab14 lished under section 1852(d)(2) of the Social Security Act

15 (relating to promoting efficient and timely coordination of

16 appropriate maintenance and post-stabilization care of an

17 enrollee after an enrollee has been determined to be sta18 ble), or, in the absence of guidelines under such section,

19 such guidelines as the Secretary shall establish to carry

20 out this subsection.

21 SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS

22 UNDER GROUP HEALTH PLANS.

23 (a) REQUIREMENT.—

24 (1) OFFERING OF POINT-OF-SERVICE COV25 ERAGE OPTION.—Except as provided in paragraph
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1 (2), if a group health plan (or health insurance cov2 erage offered by a health insurance issuer in connec3 tion with a group health plan) provides benefits only

4 through participating health care providers, the plan

5 or issuer shall offer the participant the option to

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

7 subsection (b)) for all such benefits for which cov8 erage is otherwise so limited. Such option shall be

9 made available to the participant at the time of en10 rollment under the plan or coverage and at such

11 other times as the plan or issuer offers the partici12 pant a choice of coverage options.

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

14 apply with respect to a participant in a group health

15 plan if the plan offers the participant—

16 (A) a choice of health insurance coverage

17 through more than one health insurance issuer;

18 or

19 (B) two or more coverage options that dif20 fer significantly with respect to the use of par21 ticipating health care providers or the networks

22 of such providers that are used.

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

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

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

2 provided by a nonparticipating health care provider. Such

3 coverage need not include coverage of providers that the

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

5 reasons.

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

7 construed—

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

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

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

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

15 insurance issuer from imposing higher premiums or

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

17 point-of-service coverage option.

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

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

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

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

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

8 (b) SPECIALISTS.—

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

10 group health plan and a health insurance issuer that

11 offers health insurance coverage shall permit each

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

15 qualified participating health care provider who is

16 available to accept such individual for such care.

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

18 apply to specialty care if the plan or issuer clearly

19 informs participants, beneficiaries, and enrollees of

20 the limitations on choice of participating providers

21 with respect to such care.

22 SEC. 104. ACCESS TO SPECIALTY CARE.

23 (a) OBSTETRICAL AND GYNECOLOGICAL CARE.—

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

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

2 designate a participating primary care provider—

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

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

6 and gynecology as the individual’s primary care

7 provider; and

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

11 (i) may not require authorization or a

12 referral by the individual’s primary care

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

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

19 extent such care is otherwise covered, and

20 (ii) may treat the ordering of other

21 gynecological care by such a participating

22 physician as the authorization of the pri23 mary care provider with respect to such

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

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

3 relating to medical necessity or appropriateness with

4 respect to coverage of gynecological care so ordered.

5 (b) SPECIALTY CARE.—

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

8 (A) IN GENERAL.—If—

9 (i) an individual is a participant or

10 beneficiary under a group health plan or

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

14 (ii) the individual has a condition or

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

17 and

18 (iii) benefits for such treatment are

19 provided under the plan or coverage,

20 the plan or issuer shall make or provide for a

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

24 (B) SPECIALIST DEFINED.—For purposes

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

3 excellence) that has adequate expertise through

4 appropriate training and experience (including,

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

7 the condition.

8 (C) CARE UNDER REFERRAL.—A group

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

11 pursuant to such referral under subparagraph

12 (A) be—

13 (i) pursuant to a treatment plan, only

14 if the treatment plan is developed by the

15 specialist and approved by the plan or

16 issuer, in consultation with the designated

17 primary care provider or specialist and the

18 individual (or the individual’s designee),

19 and

20 (ii) in accordance with applicable

21 quality assurance and utilization review

22 standards of the plan or issuer.

23 Nothing in this subsection shall be construed as

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

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

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

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

8 is not a participating provider, unless the plan

9 or issuer does not have an appropriate specialist

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

12 provider with respect to such treatment.

13 (E) TREATMENT OF NONPARTICIPATING

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

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

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

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

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

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

2 have a procedure by which an individual who is

3 a participant, beneficiary, or enrollee and who

4 has an ongoing special condition (as defined in

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

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

10 most appropriately be coordinated by such a

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

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

15 treat the individual without a referral from the

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

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

21 terms of the treatment plan (referred to in

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

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

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

2 disabling, and

3 (ii) requires specialized medical care

4 over a prolonged period of time.

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

7 paragraph (1) apply with respect to referrals

8 under subparagraph (A) of this paragraph in

9 the same manner as they apply to referrals

10 under paragraph (1)(A).

11 (3) STANDING REFERRALS.—

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

13 and a health insurance issuer in connection

14 with the provision of health insurance coverage,

15 shall have a procedure by which an individual

16 who is a participant, beneficiary, or enrollee

17 and who has a condition that requires ongoing

18 care from a specialist may receive a standing

19 referral to such specialist for treatment of such

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

22 medical director of the plan or issuer and the

23 specialist (if any), determines that such a

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

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

5 paragraph (1) apply with respect to referrals

6 under subparagraph (A) of this paragraph in

7 the same manner as they apply to referrals

8 under paragraph (1)(A).

9 SEC. 105. CONTINUITY OF CARE.

10 (a) IN GENERAL.—

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

12 between a group health plan, or a health insurance

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

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

20 in the plan or coverage is undergoing a course of

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

23 (A) notify the individual on a timely basis

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

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

5 under subsection (b)).

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

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

11 termination, coverage of services of a health care

12 provider is terminated with respect to an individual,

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

14 provisions of this section) shall apply under the plan

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

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

18 covered under the plan after the contract termi19 nation.

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

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

22 the expiration or nonrenewal of the contract, but

23 does not include a termination of the contract by the

24 plan or issuer for failure to meet applicable quality

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

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

4 this subsection shall extend for at least 90 days from

5 the date of the notice described in subsection

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

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

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

17 an established waiting list or otherwise scheduled to

18 have such care.

19 (3) PREGNANCY.—If—

20 (A) a participant, beneficiary, or enrollee

21 has entered the second trimester of pregnancy

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

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

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

5 (4) TERMINAL ILLNESS.—If—

6 (A) a participant, beneficiary, or enrollee

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

10 termination of participation, and

11 (B) the provider was treating the terminal

12 illness before the date of termination,

13 the transitional period under this subsection shall

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

15 care directly related to the treatment of the terminal

16 illness.

17 (c) PERMISSIBLE TERMS AND CONDITIONS.—A

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

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

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

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

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

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

3 plan or issuer after the date of the termination of

4 the contract with the health insurance issuer) and

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

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

11 assurance standards of the plan or issuer responsible

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

13 such plan or issuer necessary medical information

14 related to the care provided.

15 (3) The provider agrees otherwise to adhere to

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

18 prior authorization and providing services pursuant

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

20 issuer.

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

22 construed to require the coverage of benefits which would

23 not have been covered if the provider involved remained

24 a participating provider.
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1 SEC. 106. COVERAGE FOR INDIVIDUALS PARTICIPATING IN

2 APPROVED CLINICAL TRIALS.

3 (a) COVERAGE.—

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

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

8 issuer—

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

11 (b)(2);

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

13 (or limit or impose additional conditions on) the

14 coverage of routine patient costs for items and

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

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

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

22 not include the cost of the tests or measurements

23 conducted primarily for the purpose of the clinical

24 trial involved.

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

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

3 that a qualified individual participate in the trial

4 through such a participating provider if the provider

5 will accept the individual as a participant in the

6 trial.

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

9 means an individual who is a participant or beneficiary

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

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

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

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

16 (B) The individual is eligible to participate in

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

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

20 offers meaningful potential for significant clinical

21 benefit for the individual.

22 (2) Either—

23 (A) the referring physician is a participat24 ing health care professional and has concluded

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

2 meeting the conditions described in paragraph

3 (1); or

4 (B) the participant, beneficiary, or enrollee

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

7 such trial would be appropriate based upon the

8 individual meeting the conditions described in

9 paragraph (1).

10 (c) PAYMENT.—

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

12 health plan or health insurance issuer shall provide

13 for payment for routine patient costs described in

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

15 of items and services that are reasonably expected

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

17 the sponsors of an approved clinical trial.

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

19 items and services provided by—

20 (A) a participating provider, the payment

21 rate shall be at the agreed upon rate, or

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

24 would normally pay for comparable services

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

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

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

4 study or clinical investigation approved and funded

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

7 (A) The National Institutes of Health.

8 (B) A cooperative group or center of the

9 National Institutes of Health.

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

12 (i) The Department of Veterans Af13 fairs.

14 (ii) The Department of Defense.

15 (2) CONDITIONS FOR DEPARTMENTS.—The

16 conditions described in this paragraph, for a study

17 or investigation conducted by a Department, are

18 that the study or investigation has been reviewed

19 and approved through a system of peer review that

20 the Secretary determines—

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

22 review of studies and investigations used by the

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

2 scientific standards by qualified individuals who

3 have no interest in the outcome of the review.

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

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

7 SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.

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

9 insurance issuer that offers health insurance coverage,

10 provides benefits with respect to prescription drugs but

11 the coverage limits such benefits to drugs included in a

12 formulary, the plan or issuer shall—

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

16 (2) disclose to providers and, disclose upon re17 quest under section 121(c)(6) to participants, bene18 ficiaries, and enrollees, the nature of the formulary

19 restrictions; and

20 (3) consistent with the standards for a utiliza21 tion review program under section 115, provide for

22 exceptions from the formulary limitation when a

23 non-formulary alternative is medically indicated.

24 (b) COVERAGE OF APPROVED DRUGS AND MEDICAL

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

2 health insurance coverage offered in connection with

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

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

6 is investigational, if the use—

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

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

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

11 section 505 of the Federal Food, Drug,

12 and Cosmetic Act, without regard to any

13 postmarketing requirements that may

14 apply under such Act; or

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

17 drug under section 351 of the Public

18 Health Service Act, without regard to any

19 postmarketing requirements that may

20 apply pursuant to such section; or

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

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

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

•S 1890 IS

1 an application approved under section 515 of

2 such Act, without regard to any postmarketing

3 requirements that may apply under such Act.

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

6 health plan (or health insurance coverage offered in

7 connection with such a plan) to provide any coverage

8 of prescription drugs or medical devices.

9 SEC. 108. ADEQUACY OF PROVIDER NETWORK.

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

11 health insurance issuer offering health insurance coverage,

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

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

15 qualified participating health care providers to ensure that

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

18 to all participants, beneficiaries, and enrollees under the

19 plan or coverage.

20 (b) TREATMENT OF CERTAIN PROVIDERS.—The

21 qualified health care providers under subsection (a) may

22 include Federally qualified health centers, rural health

23 clinics, migrant health centers, and other essential com24 munity providers located in the service area of the plan

25 or issuer and shall include such providers if necessary to
28

•S 1890 IS

1 meet the standards established to carry out such sub2 section.

3 SEC. 109. NONDISCRIMINATION IN DELIVERY OF SERVICES.

4 (a) APPLICATION TO DELIVERY OF SERVICES.—Sub5 ject to subsection (b), a group health plan, and health in6 surance issuer in relation to health insurance coverage,

7 may not discriminate against a participant, beneficiary, or

8 enrollee in the delivery of health care services consistent

9 with the benefits covered under the plan or coverage or

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

11 origin, religion, sex, age, mental or physical disability, sex12 ual orientation, genetic information, or source of payment.

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

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

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

16 under a plan or health insurance coverage, the application

17 of any pre-existing condition exclusion consistent with ap18 plicable law, or premiums charged under such plan or cov19 erage.

20 Subtitle B—Quality Assurance

21 SEC. 111. INTERNAL QUALITY ASSURANCE PROGRAM.

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

23 health insurance issuer that offers health insurance cov24 erage, shall establish and maintain an ongoing, internal
29

•S 1890 IS

1 quality assurance and continuous quality improvement

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

3 (b) PROGRAM REQUIREMENTS.—The requirements of

4 this subsection for a quality improvement program of a

5 plan or issuer are as follows:

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

7 a separate identifiable unit with responsibility for

8 administration of the program.

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

10 written plan for the program that is updated annu11 ally and that specifies at least the following:

12 (A) The activities to be conducted.

13 (B) The organizational structure.

14 (C) The duties of the medical director.

15 (D) Criteria and procedures for the assess16 ment of quality.

17 (3) SYSTEMATIC REVIEW.—The program pro18 vides for systematic review of the type of health

19 services provided, consistency of services provided

20 with good medical practice, and patient outcomes.

21 (4) QUALITY CRITERIA.—The program—

22 (A) uses criteria that are based on per23 formance and patient outcomes where feasible

24 and appropriate;
30

•S 1890 IS

1 (B) includes criteria that are directed spe2 cifically at meeting the needs of at-risk popu3 lations and covered individuals with chronic

4 conditions or severe illnesses, including gender5 specific criteria and pediatric-specific criteria

6 where available and appropriate;

7 (C) includes methods for informing covered

8 individuals of the benefit of preventive care and

9 what specific benefits with respect to preventive

10 care are covered under the plan or coverage;

11 and

12 (D) makes available to the public a de13 scription of the criteria used under subpara14 graph (A).

15 (5) SYSTEM FOR REPORTING.—The program

16 has procedures for reporting of possible quality con17 cerns by providers and enrollees and for remedial ac18 tions to correct quality problems, including written

19 procedures for responding to concerns and taking

20 appropriate corrective action.

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

22 using data that include the data collected under sec23 tion 112, for an analysis of the plan’s or issuer’s

24 performance on quality measures.
31

•S 1890 IS

1 (7) DRUG UTILIZATION REVIEW.—The program

2 provides for a drug utilization review program in ac3 cordance with section 114.

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

5 requirements of—

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

7 are deemed to be met with respect to a health insur8 ance issuer that is a qualified health maintenance

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

10 Public Health Service Act); or

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

12 respect to a health insurance issuer that is accred13 ited by a national accreditation organization that the

14 Secretary certifies as applying, as a condition of cer15 tification, standards at least as stringent as those

16 required for a quality improvement program under

17 subsection (b).

18 (d) VARIATION PERMITTED.—The Secretary may

19 provide for variations in the application of the require20 ments of this section to group health plans and health in21 surance issuers based upon differences in the delivery sys22 tem among such plans and issuers as the Secretary deems

23 appropriate.
32

•S 1890 IS

1 SEC. 112. COLLECTION OF STANDARDIZED DATA.

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

3 insurance issuer that offers health insurance coverage

4 shall collect uniform quality data that include a minimum

5 uniform data set described in subsection (b).

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

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

8 required to be included in the minimum uniform data set

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

10 data. Such data shall include at least—

11 (1) aggregate utilization data;

12 (2) data on the demographic characteristics of

13 participants, beneficiaries, and enrollees;

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

15 mortality rates and (to the extent feasible) morbidity

16 rates of such individuals;

17 (4) data on satisfaction of such individuals, in18 cluding data on voluntary disenrollment and griev19 ances; and

20 (5) data on quality indicators and health out21 comes, including, to the extent feasible and appro22 priate, data on pediatric cases and on a gender-spe23 cific basis.

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

25 under subsection (a) shall be disclosed under section
33

•S 1890 IS

1 121(b)(9). The Secretary shall be provided access to all

2 the data so collected.

3 (d) VARIATION PERMITTED.—The Secretary may

4 provide for variations in the application of the require5 ments of this section to group health plans and health in6 surance issuers based upon differences in the delivery sys7 tem among such plans and issuers as the Secretary deems

8 appropriate.

9 SEC. 113. PROCESS FOR SELECTION OF PROVIDERS.

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

11 insurance issuer that offers health insurance coverage

12 shall, if it provides benefits through participating health

13 care professionals, have a written process for the selection

14 of participating health care professionals, including mini15 mum professional requirements.

16 (b) VERIFICATION OF BACKGROUND.—Such process

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

18 and a history of suspension or revocation.

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

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

21 with residents with poorer health status as a basis for ex22 cluding providers from participation.

23 (d) NONDISCRIMINATION BASED ON LICENSURE.—

24 (1) IN GENERAL.—Such process shall not dis25 criminate with respect to participation or indem-
34

•S 1890 IS

1 nification as to any provider who is acting within the

2 scope of the provider’s license or certification under

3 applicable State law, solely on the basis of such li4 cense or certification.

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

6 be construed—

7 (A) as requiring the coverage under a plan

8 or coverage of particular benefits or services or

9 to prohibit a plan or issuer from including pro10 viders only to the extent necessary to meet the

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

12 beneficiaries, or enrollees or from establishing

13 any measure designed to maintain quality and

14 control costs consistent with the responsibilities

15 of the plan or issuer; or

16 (B) to override any State licensure or

17 scope-of-practice law.

18 (e) GENERAL NONDISCRIMINATION.—

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

20 such process shall not discriminate with respect to

21 selection of a health care professional to be a partici22 pating health care provider, or with respect to the

23 terms and conditions of such participation, based on

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

25 origin, age, sexual orientation, or disability (consist-
35

•S 1890 IS

1 ent with the Americans with Disabilities Act of

2 1990).

3 (2) RULES.—The appropriate Secretary may

4 establish such definitions, rules, and exceptions as

5 may be appropriate to carry out paragraph (1), tak6 ing into account comparable definitions, rules, and

7 exceptions in effect under employment-based non8 discrimination laws and regulations that relate to

9 each of the particular bases for discrimination de10 scribed in such paragraph.

11 SEC. 114. DRUG UTILIZATION PROGRAM.

12 A group health plan, and a health insurance issuer

13 that provides health insurance coverage, that includes ben14 efits for prescription drugs shall establish and maintain,

15 as part of its internal quality assurance and continuous

16 quality improvement program under section 111, a drug

17 utilization program which—

18 (1) encourages appropriate use of prescription

19 drugs by participants, beneficiaries, and enrollees

20 and providers, and

21 (2) takes appropriate action to reduce the inci22 dence of improper drug use and adverse drug reac23 tions and interactions.
36

•S 1890 IS

1 SEC. 115. STANDARDS FOR UTILIZATION REVIEW ACTIVI2 TIES.

3 (a) COMPLIANCE WITH REQUIREMENTS.—

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

5 health insurance issuer that provides health insur6 ance coverage, shall conduct utilization review activi7 ties in connection with the provision of benefits

8 under such plan or coverage only in accordance with

9 a utilization review program that meets the require10 ments of this section.

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

12 section shall be construed as preventing a group

13 health plan or health insurance issuer from arrang14 ing through a contract or otherwise for persons or

15 entities to conduct utilization review activities on be16 half of the plan or issuer, so long as such activities

17 are conducted in accordance with a utilization review

18 program that meets the requirements of this section.

19 (3) UTILIZATION REVIEW DEFINED.—For pur20 poses of this section, the terms ‘‘utilization review’’

21 and ‘‘utilization review activities’’ mean procedures

22 used to monitor or evaluate the clinical necessity,

23 appropriateness, efficacy, or efficiency of health care

24 services, procedures or settings, and includes pro25 spective review, concurrent review, second opinions,
37

•S 1890 IS

1 case management, discharge planning, or retrospec2 tive review.

3 (b) WRITTEN POLICIES AND CRITERIA.—

4 (1) WRITTEN POLICIES.—A utilization review

5 program shall be conducted consistent with written

6 policies and procedures that govern all aspects of the

7 program.

8 (2) USE OF WRITTEN CRITERIA.—

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

10 utilize written clinical review criteria developed

11 pursuant to the program with the input of ap12 propriate physicians. Such criteria shall include

13 written clinical review criteria described in sec14 tion 111(b)(4)(B).

15 (B) CONTINUING USE OF STANDARDS IN

16 RETROSPECTIVE REVIEW.—If a health care

17 service has been specifically pre-authorized or

18 approved for an enrollee under such a program,

19 the program shall not, pursuant to retrospective

20 review, revise or modify the specific standards,

21 criteria, or procedures used for the utilization

22 review for procedures, treatment, and services

23 delivered to the enrollee during the same course

24 of treatment.

25 (c) CONDUCT OF PROGRAM ACTIVITIES.—
38

•S 1890 IS

1 (1) ADMINISTRATION BY HEALTH CARE PRO2 FESSIONALS.—A utilization review program shall be

3 administered by qualified health care professionals

4 who shall oversee review decisions. In this sub5 section, the term ‘‘health care professional’’ means a

6 physician or other health care practitioner licensed,

7 accredited, or certified to perform specified health

8 services consistent with State law.

9 (2) USE OF QUALIFIED, INDEPENDENT PER10 SONNEL.—

11 (A) IN GENERAL.—A utilization review

12 program shall provide for the conduct of utiliza13 tion review activities only through personnel

14 who are qualified and, to the extent required,

15 who have received appropriate training in the

16 conduct of such activities under the program.

17 (B) PEER REVIEW OF SAMPLE OF AD18 VERSE CLINICAL DETERMINATIONS.—Such a

19 program shall provide that clinical peers (as de20 fined in section 191(c)(2)) shall evaluate the

21 clinical appropriateness of at least a sample of

22 adverse clinical determinations.

23 (C) PROHIBITION OF CONTINGENT COM24 PENSATION ARRANGEMENTS.—Such a program

25 shall not, with respect to utilization review ac-
39

•S 1890 IS

1 tivities, permit or provide compensation or any2 thing of value to its employees, agents, or con3 tractors in a manner that—

4 (i) provides incentives, direct or indi5 rect, for such persons to make inappropri6 ate review decisions, or

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

8 the quantity or type of adverse determina9 tions rendered.

10 (D) PROHIBITION OF CONFLICTS.—Such a

11 program shall not permit a health care profes12 sional who provides health care services to an

13 individual to perform utilization review activi14 ties in connection with the health care services

15 being provided to the individual.

16 (3) ACCESSIBILITY OF REVIEW.—Such a pro17 gram shall provide that appropriate personnel per18 forming utilization review activities under the pro19 gram are reasonably accessible by toll-free telephone

20 during normal business hours to discuss patient care

21 and allow response to telephone requests, and that

22 appropriate provision is made to receive and respond

23 promptly to calls received during other hours.

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

25 shall not provide for the performance of utilization
40

•S 1890 IS

1 review activities with respect to a class of services

2 furnished to an individual more frequently than is

3 reasonably required to assess whether the services

4 under review are medically necessary or appropriate.

5 (5) LIMITATION ON INFORMATION REQUESTS.—

6 Under such a program, information shall be required

7 to be provided by health care providers only to the

8 extent it is necessary to perform the utilization re9 view activity involved.

10 (6) REVIEW OF PRELIMINARY UTILIZATION RE11 VIEW DECISION.—Under such program a partici12 pant, beneficiary, or enrollee or any provider acting

13 on behalf of such an individual with the individual’s

14 consent, who is dissatisfied with a preliminary utili15 zation review decision has the opportunity to discuss

16 the decision with, and have such decision reviewed

17 by, the medical director of the plan or issuer in18 volved (or the director’s designee) who has the au19 thority to reverse the decision.

20 (d) DEADLINE FOR DETERMINATIONS.—

21 (1) PRIOR AUTHORIZATION SERVICES.—Except

22 as provided in paragraph (2), in the case of a utili23 zation review activity involving the prior authoriza24 tion of health care items and services for an individ25 ual, the utilization review program shall make a de-
41

•S 1890 IS

1 termination concerning such authorization, and pro2 vide notice of the determination to the individual or

3 the individual’s designee and the individual’s health

4 care provider by telephone and in printed form, as

5 soon as possible in accordance with the medical ex6 igencies of the cases, and in no event later than 3

7 business days after the date of receipt of information

8 that is reasonably necessary to make such deter9 mination.

10 (2) CONTINUED CARE.—In the case of a utiliza11 tion review activity involving authorization for con12 tinued or extended health care services for an indi13 vidual, or additional services for an individual under14 going a course of continued treatment prescribed by

15 a health care provider, the utilization review pro16 gram shall make a determination concerning such

17 authorization, and provide notice of the determina18 tion to the individual or the individual’s designee

19 and the individual’s health care provider by tele20 phone and in printed form, as soon as possible in ac21 cordance with the medical exigencies of the cases,

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

23 date of receipt of information that is reasonably nec24 essary to make such determination. Such notice shall

25 include, with respect to continued or extended health
42

•S 1890 IS

1 care services, the number of extended services ap2 proved, the new total of approved services, the date

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

4 (3) PREVIOUSLY PROVIDED SERVICES.—In the

5 case of a utilization review activity involving retro6 spective review of health care services previously pro7 vided for an individual, the utilization review pro8 gram shall make a determination concerning such

9 services, and provide notice of the determination to

10 the individual or the individual’s designee and the

11 individual’s health care provider by telephone and in

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

13 of information that is reasonably necessary to make

14 such determination.

15 (4) REFERENCE TO SPECIAL RULES FOR EMER16 GENCY SERVICES, MAINTENANCE CARE, AND POST17 STABILIZATION CARE.—For waiver of prior author18 ization requirements in certain cases involving emer19 gency services and maintenance care and post-sta20 bilization care, see subsections (a)(1) and (b) of sec21 tion 101, respectively.

22 (e) NOTICE OF ADVERSE DETERMINATIONS.—

23 (1) IN GENERAL.—Notice of an adverse deter24 mination under a utilization review program shall be

25 provided in printed form and shall include—
43

•S 1890 IS

1 (A) the reasons for the determination (in2 cluding the clinical rationale);

3 (B) instructions on how to initiate an ap4 peal under section 132; and

5 (C) notice of the availability, upon request

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

7 of the clinical review criteria relied upon to

8 make such determination.

9 (2) SPECIFICATION OF ANY ADDITIONAL INFOR10 MATION.—Such a notice shall also specify what (if

11 any) additional necessary information must be pro12 vided to, or obtained by, the person making the de13 termination in order to make a decision on such an

14 appeal.

15 SEC. 116. HEALTH CARE QUALITY ADVISORY BOARD.

16 (a) ESTABLISHMENT.—The President shall establish

17 an advisory board to provide information to Congress and

18 the administration on issues relating to quality monitoring

19 and improvement in the health care provided under group

20 health plans and health insurance coverage.

21 (b) NUMBER AND APPOINTMENT.—The advisory

22 board shall be composed of the Secretary of Health and

23 Human Services (or the Secretary’s designee), the Sec24 retary of Labor (or the Secretary’s designee), and 20 addi25 tional members appointed by the President, in consulta-
44

•S 1890 IS

1 tion with the Majority and Minority Leaders of the Senate

2 and House of Representatives. The members so appointed

3 shall include individuals with expertise in—

4 (1) consumer needs;

5 (2) education and training of health profes6 sionals;

7 (3) health care services;

8 (4) health plan management;

9 (5) health care accreditation, quality assurance,

10 improvement, measurement, and oversight;

11 (6) medical practice, including practicing physi12 cians;

13 (7) prevention and public health; and

14 (8) public and private group purchasing for

15 small and large employers or groups.

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

17 (1) identify, update, and disseminate measures

18 of health care quality for group health plans and

19 health insurance issuers, including network and non20 network plans;

21 (2) advise the Secretary on the development

22 and maintenance of the minimum data set in section

23 112(b); and
45

•S 1890 IS

1 (3) advise the Secretary on standardized for2 mats for information on group health plans and

3 health insurance coverage.

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

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

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

7 cooperate with national health care standard setting bod8 ies which define quality indicators, the Agency for Health

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

10 other public and private entities that have expertise in

11 health care quality.

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

13 annual report to Congress and the President on the qual14 ity of the health care in the United States and national

15 and regional trends in health care quality. Such report

16 shall include a description of determinants of health care

17 quality and measurements of practice and quality varia18 bility within the United States.

19 (e) SECRETARIAL CONSULTATION.—In serving on

20 the advisory board, the Secretaries of Health and Human

21 Services and Labor (or their designees) shall consult with

22 the Secretaries responsible for other Federal health insur23 ance and health care programs.

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

25 filled in such manner as the original appointment. Mem-
46

•S 1890 IS

1 bers of the board shall serve without compensation but

2 shall be reimbursed for travel, subsistence, and other nec3 essary expenses incurred by them in the performance of

4 their duties. Administrative support, scientific support,

5 and technical assistance for the advisory board shall be

6 provided by the Secretary of Health and Human Services.

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

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

9 to the termination of advisory committees) shall not apply

10 to the advisory board.

11 Subtitle C—Patient Information

12 SEC. 121. PATIENT INFORMATION.

13 (a) DISCLOSURE REQUIREMENT.—

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

15 plan shall—

16 (A) provide to participants and bene17 ficiaries at the time of initial coverage under

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

19 the case of individuals who are participants or

20 beneficiaries as of such date), and at least an21 nually thereafter, the information described in

22 subsection (b) in printed form;

23 (B) provide to participants and bene24 ficiaries, within a reasonable period (as speci25 fied by the appropriate Secretary) before or
47

•S 1890 IS

1 after the date of significant changes in the in2 formation described in subsection (b), informa3 tion in printed form on such significant

4 changes; and

5 (C) upon request, make available to par6 ticipants and beneficiaries, the applicable au7 thority, and prospective participants and bene8 ficiaries, the information described in sub9 section (b) or (c) in printed form.

10 (2) HEALTH INSURANCE ISSUERS.—A health

11 insurance issuer in connection with the provision of

12 health insurance coverage shall—

13 (A) provide to individuals enrolled under

14 such coverage at the time of enrollment, and at

15 least annually thereafter, the information de16 scribed in subsection (b) in printed form;

17 (B) provide to enrollees, within a reason18 able period (as specified by the appropriate Sec19 retary) before or after the date of significant

20 changes in the information described in sub21 section (b), information in printed form on such

22 significant changes; and

23 (C) upon request, make available to the

24 applicable authority, to individuals who are pro25 spective enrollees, and to the public the infor-
48

•S 1890 IS

1 mation described in subsection (b) or (c) in

2 printed form.

3 (b) INFORMATION PROVIDED.—The information de4 scribed in this subsection with respect to a group health

5 plan or health insurance coverage offered by a health in6 surance issuer includes the following:

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

8 plan or issuer.

9 (2) BENEFITS.—Benefits offered under the

10 plan or coverage, including—

11 (A) covered benefits, including benefit lim12 its and coverage exclusions;

13 (B) cost sharing, such as deductibles, coin14 surance, and copayment amounts, including any

15 liability for balance billing, any maximum limi16 tations on out of pocket expenses, and the max17 imum out of pocket costs for services that are

18 provided by non participating providers or that

19 are furnished without meeting the applicable

20 utilization review requirements;

21 (C) the extent to which benefits may be ob22 tained from nonparticipating providers;

23 (D) the extent to which a participant, ben24 eficiary, or enrollee may select from among par-
49

•S 1890 IS

1 ticipating providers and the types of providers

2 participating in the plan or issuer network;

3 (E) process for determining experimental

4 coverage; and

5 (F) use of a prescription drug formulary.

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

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

8 providers under the plan or coverage.

9 (B) Out-of-network coverage (if any) pro10 vided by the plan or coverage.

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

12 any supplemental premium or cost-sharing for

13 such option).

14 (D) The procedures for participants, bene15 ficiaries, and enrollees to select, access, and

16 change participating primary and specialty pro17 viders.

18 (E) The rights and procedures for obtain19 ing referrals (including standing referrals) to

20 participating and nonparticipating providers.

21 (F) The name, address, and telephone

22 number of participating health care providers

23 and an indication of whether each such provider

24 is available to accept new patients.
50

•S 1890 IS

1 (G) Any limitations imposed on the selec2 tion of qualifying participating health care pro3 viders, including any limitations imposed under

4 section 103(b)(2).

5 (H) How the plan or issuer addresses the

6 needs of participants, beneficiaries, and enroll7 ees and others who do not speak English or

8 who have other special communications needs in

9 accessing providers under the plan or coverage,

10 including the provision of information described

11 in this subsection and subsection (c) to such in12 dividuals and including the provision of infor13 mation in a language other than English if 5

14 percent of the number of participants, bene15 ficiaries, and enrollees communicate in that lan16 guage instead of English.

17 (4) OUT-OF-AREA COVERAGE.—Out-of-area cov18 erage provided by the plan or issuer.

19 (5) EMERGENCY COVERAGE.—Coverage of

20 emergency services, including—

21 (A) the appropriate use of emergency serv22 ices, including use of the 911 telephone system

23 or its local equivalent in emergency situations

24 and an explanation of what constitutes an

25 emergency situation;
51

•S 1890 IS

1 (B) the process and procedures of the plan

2 or issuer for obtaining emergency services; and

3 (C) the locations of (i) emergency depart4 ments, and (ii) other settings, in which plan

5 physicians and hospitals provide emergency

6 services and post-stabilization care.

7 (6) PERCENTAGE OF PREMIUMS USED FOR

8 BENEFITS (LOSS-RATIOS).—In the case of health in9 surance coverage only (and not with respect to group

10 health plans that do not provide coverage through

11 health insurance coverage), a description of the over12 all loss-ratio for the coverage (as defined in accord13 ance with rules established or recognized by the Sec14 retary of Health and Human Services).

15 (7) PRIOR AUTHORIZATION RULES.—Rules re16 garding prior authorization or other review require17 ments that could result in noncoverage or non18 payment.

19 (8) GRIEVANCE AND APPEALS PROCEDURES.—

20 All appeal or grievance rights and procedures under

21 the plan or coverage, including the method for filing

22 grievances and the time frames and circumstances

23 for acting on grievances and appeals, who is the ap24 plicable authority with respect to the plan or issuer,

25 and the availability of assistance through an om-
52

•S 1890 IS

1 budsman to individuals in relation to group health

2 plans and health insurance coverage.

3 (9) QUALITY ASSURANCE.—A summary descrip4 tion of the data on quality collected under section

5 112(a), including a summary description of the data

6 on satisfaction of participants, beneficiaries, and en7 rollees (including data on individual voluntary

8 disenrollment and grievances and appeals) described

9 in section 112(b)(4).

10 (10) SUMMARY OF PROVIDER FINANCIAL IN11 CENTIVES.—A summary description of the informa12 tion on the types of financial payment incentives

13 (described in section 1852(j)(4) of the Social Secu14 rity Act) provided by the plan or issuer under the

15 coverage.

16 (11) INFORMATION ON ISSUER.—Notice of ap17 propriate mailing addresses and telephone numbers

18 to be used by participants, beneficiaries, and enroll19 ees in seeking information or authorization for treat20 ment.

21 (12) AVAILABILITY OF INFORMATION ON RE22 QUEST.—Notice that the information described in

23 subsection (c) is available upon request.
53

•S 1890 IS

1 (c) INFORMATION MADE AVAILABLE UPON RE2 QUEST.—The information described in this subsection is

3 the following:

4 (1) UTILIZATION REVIEW ACTIVITIES.—A de5 scription of procedures used and requirements (in6 cluding circumstances, time frames, and appeal

7 rights) under any utilization review program under

8 section 115, including under any drug formulary

9 program under section 107.

10 (2) GRIEVANCE AND APPEALS INFORMATION.—

11 Information on the number of grievances and ap12 peals and on the disposition in the aggregate of such

13 matters.

14 (3) METHOD OF PHYSICIAN COMPENSATION.—

15 An overall summary description as to the method of

16 compensation of participating physicians, including

17 information on the types of financial payment incen18 tives (described in section 1852(j)(4) of the Social

19 Security Act) provided by the plan or issuer under

20 the coverage.

21 (4) SPECIFIC INFORMATION ON CREDENTIALS

22 OF PARTICIPATING PROVIDERS.—In the case of each

23 participating provider, a description of the creden24 tials of the provider.
54

•S 1890 IS

1 (5) CONFIDENTIALITY POLICIES AND PROCE2 DURES.—A description of the policies and proce3 dures established to carry out section 122.

4 (6) FORMULARY RESTRICTIONS.—A description

5 of the nature of any drug formula restrictions.

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

7 current participating health care providers.

8 (d) FORM OF DISCLOSURE.—

9 (1) UNIFORMITY.—Information required to be

10 disclosed under this section shall be provided in ac11 cordance with uniform, national reporting standards

12 specified by the Secretary, after consultation with

13 applicable State authorities, so that prospective en14 rollees may compare the attributes of different

15 issuers and coverage offered within an area.

16 (2) INFORMATION INTO HANDBOOK.—Nothing

17 in this section shall be construed as preventing a

18 group health plan or health insurance issuer from

19 making the information under subsections (b) and

20 (c) available to participants, beneficiaries, and en21 rollees through an enrollee handbook or similar pub22 lication.

23 (3) UPDATING PARTICIPATING PROVIDER IN24 FORMATION.—The information on participating

25 health care providers described in subsection
55

•S 1890 IS

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

2 period as determined appropriate by the Secretary.

3 Nothing in this section shall prevent an issuer from

4 changing or updating other information made avail5 able under this section.

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

7 construed as requiring public disclosure of individual con8 tracts or financial arrangements between a group health

9 plan or health insurance issuer and any provider.

10 SEC. 122. PROTECTION OF PATIENT CONFIDENTIALITY.

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

12 issuer that offers health insurance coverage, maintains

13 medical records or other health information regarding par14 ticipants, beneficiaries, and enrollees, the plan or issuer

15 shall establish procedures—

16 (1) to safeguard the privacy of any individually

17 identifiable enrollee information;

18 (2) to maintain such records and information in

19 a manner that is accurate and timely, and

20 (3) to assure timely access of such individuals

21 to such records and information.

22 SEC. 123. HEALTH INSURANCE OMBUDSMEN.

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

24 under subsection (c) shall provide for creation and oper25 ation of a Health Insurance Ombudsman through a con-
56

•S 1890 IS

1 tract with a not-for-profit organization that operates inde2 pendent of group health plans and health insurance

3 issuers. Such Ombudsman shall be responsible for at least

4 the following:

5 (1) To assist consumers in the State in choos6 ing among health insurance coverage or among cov7 erage options offered within group health plans.

8 (2) To provide counseling and assistance to en9 rollees dissatisfied with their treatment by health in10 surance issuers and group health plans in regard to

11 such coverage or plans and with respect to griev12 ances and appeals regarding determinations under

13 such coverage or plans.

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

15 does not provide for such an Ombudsman under sub16 section (a), the Secretary shall provide for the creation

17 and operation of a Health Insurance Ombudsman through

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

19 independent of group health plans and health insurance

20 issuers and that is responsible for carrying out with re21 spect to that State the functions otherwise provided under

22 subsection (a) by a Health Insurance Ombudsman.

23 (c) AUTHORIZATION OF APPROPRIATIONS.—There

24 are authorized to be appropriated to the Secretary of

25 Health and Human Services such amounts as may be nec-
57

•S 1890 IS

1 essary to provide for grants to States for contracts for

2 Health Insurance Ombudsmen under subsection (a) or

3 contracts for such Ombudsmen under subsection (b).

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

5 construed to prevent the use of other forms of enrollee

6 assistance.

7 Subtitle D—Grievance and Appeals

8 Procedures

9 SEC. 131. ESTABLISHMENT OF GRIEVANCE PROCESS.

10 (a) ESTABLISHMENT OF GRIEVANCE SYSTEM.—

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

12 health insurance issuer in connection with the provi13 sion of health insurance coverage, shall establish and

14 maintain a system to provide for the presentation

15 and resolution of oral and written grievances

16 brought by individuals who are participants, bene17 ficiaries, or enrollees, or health care providers or

18 other individuals acting on behalf of an individual

19 and with the individual’s consent, regarding any as20 pect of the plan’s or issuer’s services.

21 (2) SCOPE.—The system shall include griev22 ances regarding access to and availability of services,

23 quality of care, choice and accessibility of providers,

24 network adequacy, and compliance with the require25 ments of this title.
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•S 1890 IS

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

2 the following components with respect to individuals who

3 are participants, beneficiaries, or enrollees:

4 (1) Written notification to all such individuals

5 and providers of the telephone numbers and business

6 addresses of the plan or issuer personnel responsible

7 for resolution of grievances and appeals.

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

9 period of at least 3 previous years, all grievances

10 and appeals made and their status.

11 (3) A process providing for timely processing

12 and resolution of grievances.

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

14 the methods to inform the person making the griev15 ance of the resolution of the grievance.

16 (5) Notification to the continuous quality im17 provement program under section 111(a) of all

18 grievances and appeals relating to quality of care.

19 SEC. 132. INTERNAL APPEALS OF ADVERSE DETERMINA20 TIONS.

21 (a) RIGHT OF APPEAL.—

22 (1) IN GENERAL.—A participant or beneficiary

23 in a group health plan, and an enrollee in health in24 surance coverage offered by a health insurance

25 issuer, and any provider or other person acting on
59

•S 1890 IS

1 behalf of such an individual with the individual’s

2 consent, may appeal any appealable decision (as de3 fined in paragraph (2)) under the procedures de4 scribed in this section and (to the extent applicable)

5 section 133. Such individuals and providers shall be

6 provided with a written explanation of the appeal

7 process and the determination upon the conclusion

8 of the appeals process and as provided in section

9 121(b)(8).

10 (2) APPEALABLE DECISION DEFINED.—In this

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

12 the following:

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

14 failure to provide or make payment (in whole or

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

16 cover an item or service for which benefits are

17 otherwise provided because it is determined to

18 be experimental or investigational or not medi19 cally necessary or appropriate.

20 (B) Failure to provide coverage of emer21 gency services or reimbursement of mainte22 nance care or post-stabilization care under sec23 tion 101.

24 (C) Failure to provide a choice of provider

25 under section 103.
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•S 1890 IS

1 (D) Failure to provide qualified health care

2 providers under section 103.

3 (E) Failure to provide access to specialty

4 and other care under section 104.

5 (F) Failure to provide continuation of care

6 under section 105.

7 (G) Failure to provide coverage of routine

8 patient costs in connection with an approval

9 clinical trial under section 106.

10 (H) Failure to provide access to needed

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

12 (I) Discrimination in delivery of services in

13 violation of section 109.

14 (J) An adverse determination under a utili15 zation review program under section 115.

16 (K) The imposition of a limitation that is

17 prohibited under section 151.

18 (b) INTERNAL APPEAL PROCESS.—

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

20 health insurance issuer shall establish and maintain

21 an internal appeal process under which any partici22 pant, beneficiary, enrollee, or provider acting on be23 half of such an individual with the individual’s con24 sent, who is dissatisfied with any appealable decision

25 has the opportunity to appeal the decision through
61

•S 1890 IS

1 an internal appeal process. The appeal may be com2 municated orally.

3 (2) CONDUCT OF REVIEW.—

4 (A) IN GENERAL.—The process shall in5 clude a review of the decision by a physician or

6 other health care professional (or professionals)

7 who has been selected by the plan or issuer and

8 who has not been involved in the appealable de9 cision at issue in the appeal.

10 (B) AVAILABILITY AND PARTICIPATION OF

11 CLINICAL PEERS.—The individuals conducting

12 such review shall include one or more clinical

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

14 not been involved in the appealable decision at

15 issue in the appeal.

16 (3) DEADLINE.—

17 (A) IN GENERAL.—Subject to subsection

18 (c), the plan or issuer shall conclude each ap19 peal as soon as possible after the time of the re20 ceipt of the appeal in accordance with medical

21 exigencies of the case involved, but in no event

22 later than—

23 (i) 72 hours after the time of receipt

24 of an expedited appeal, and
62

•S 1890 IS

1 (ii) except as provided in subpara2 graph (B), 15 business days after such

3 time in the case of all other appeals.

4 (B) EXTENSION.—A group health plan or

5 health insurance issuer may extend the deadline

6 for an appeal that does not relate to a decision

7 regarding an expedited appeal and that does

8 not involve medical exigencies up to an addi9 tional 10 business days where it can dem10 onstrate to the applicable authority reasonable

11 cause for the delay beyond its control and

12 where it provides, within the original deadline

13 under subparagraph (A), a written progress re14 port and explanation for the delay to such au15 thority and to the participant, beneficiary, or

16 enrollee and provider involved.

17 (4) NOTICE.—If a plan or issuer denies an ap18 peal, the plan or issuer shall provide the participant,

19 beneficiary, or enrollee and provider involved with

20 notice in printed form of the denial and the reasons

21 therefore, together with a notice in printed form of

22 rights to any further appeal.

23 (c) EXPEDITED REVIEW PROCESS.—

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

25 health insurance issuer, shall establish procedures in
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•S 1890 IS

1 writing for the expedited consideration of appeals

2 under subsection (b) in situations in which the appli3 cation of the normal timeframe for making a deter4 mination could seriously jeopardize the life or health

5 of the participant, beneficiary, or enrollee or such an

6 individual’s ability to regain maximum function.

7 (2) PROCESS.—Under such procedures—

8 (A) the request for expedited appeal may

9 be submitted orally or in writing by an individ10 ual or provider who is otherwise entitled to re11 quest the appeal;

12 (B) all necessary information, including

13 the plan’s or issuer’s decision, shall be trans14 mitted between the plan or issuer and the re15 quester by telephone, facsimile, or other simi16 larly expeditious available method; and

17 (C) the plan or issuer shall expedite the

18 appeal if the request for an expedited appeal is

19 submitted under subparagraph (A) by a physi20 cian and the request indicates that the situation

21 described in paragraph (1) exists.

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

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

24 the deadlines for completion of appeals under this section

25 or in the event that the plan or issuer for any reason ex-
64

•S 1890 IS

1 pressly waives its rights to an internal review of an appeal

2 under subsection (b), the participant, beneficiary, or en3 rollee involved and the provider involved shall be relieved

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

5 at such an individual’s or provider’s option, proceed di6 rectly to seek further appeal through any applicable exter7 nal appeals process.

8 SEC. 133. EXTERNAL APPEALS OF ADVERSE DETERMINA9 TIONS.

10 (a) RIGHT TO EXTERNAL APPEAL.—

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

12 health insurance issuer offering group health insur13 ance coverage, shall provide for an external appeals

14 process that meets the requirements of this section

15 in the case of an externally appealable decision de16 scribed in paragraph (2). The appropriate Secretary

17 shall establish standards to carry out such require18 ments.

19 (2) EXTERNALLY APPEALABLE DECISION DE20 FINED.—For purposes of this section, the term ‘‘ex21 ternally appealable decision’’ means an appealable

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

23 (A) the amount involved exceeds a signifi24 cant threshold; or
65

•S 1890 IS

1 (B) the patient’s life or health is jeopard2 ized as a consequence of the decision.

3 Such term does not include a denial of coverage for

4 services that are specifically listed in plan or cov5 erage documents as excluded from coverage.

6 (3) EXHAUSTION OF INTERNAL APPEALS PROC7 ESS.—A plan or issuer may condition the use of an

8 external appeal process in the case of an externally

9 appealable decision upon completion of the internal

10 review process provided under section 132, but only

11 if the decision is made in a timely basis consistent

12 with the deadlines provided under this subtitle.

13 (b) GENERAL ELEMENTS OF EXTERNAL APPEALS

14 PROCESS.—

15 (1) CONTRACT WITH QUALIFIED EXTERNAL AP16 PEAL ENTITY.—

17 (A) CONTRACT REQUIREMENT.—Subject to

18 subparagraph (B), the external appeal process

19 under this section of a plan or issuer shall be

20 conducted under a contract between the plan or

21 issuer and one or more qualified external appeal

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

23 (B) RESTRICTIONS ON QUALIFIED EXTER24 NAL APPEAL ENTITY.—
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•S 1890 IS

1 (i) BY STATE FOR HEALTH INSUR2 ANCE ISSUERS.—With respect to health in3 surance issuers in a State, the State may

4 provide for external review activities to be

5 conducted by a qualified external appeal

6 entity that is designated by the State or

7 that is selected by the State in such a

8 manner as to assure an unbiased deter9 mination.

10 (ii) BY FEDERAL GOVERNMENT FOR

11 GROUP HEALTH PLANS.—With respect to

12 group health plans, the appropriate Sec13 retary may exercise the same authority as

14 a State may exercise with respect to health

15 insurance issuers under clause (i). Such

16 authority may include requiring the use of

17 the qualified external appeal entity des18 ignated or selected under such clause.

19 (iii) LIMITATION ON PLAN OR ISSUER

20 SELECTION.—If an applicable authority

21 permits more than one entity to qualify as

22 a qualified external appeal entity with re23 spect to a group health plan or health in24 surance issuer and the plan or issuer may
67

•S 1890 IS

1 select among such qualified entities, the

2 applicable authority—

3 (I) shall assure that the selection

4 process will not create any incentives

5 for external appeal entities to make a

6 decision in a biased manner, and

7 (II) shall implement a procedures

8 for auditing a sample of decisions by

9 such entities to assure that no such

10 decisions are made in a biased man11 ner.

12 (C) OTHER TERMS AND CONDITIONS.—

13 The terms and conditions of a contract under

14 this paragraph shall be consistent with the

15 standards the appropriate Secretary shall estab16 lish to assure there is no real or apparent con17 flict of interest in the conduct of external ap18 peal activities. Such contract shall provide that

19 the direct costs of the process (not including

20 costs of representation of a participant, bene21 ficiary, or enrollee) shall be paid by the plan or

22 issuer, and not by the participant, beneficiary,

23 or enrollee.

24 (2) ELEMENTS OF PROCESS.—An external ap25 peal process shall be conducted consistent with
68

•S 1890 IS

1 standards established by the appropriate Secretary

2 that include at least the following:

3 (A) FAIR PROCESS; DE NOVO DETERMINA4 TION.—The process shall provide for a fair, de

5 novo determination.

6 (B) DETERMINATION CONCERNING EXTER7 NALLY APPEALABLE DECISIONS.—A qualified

8 external appeal entity shall determine whether a

9 decision is an externally appealable decision and

10 related decisions, including—

11 (i) whether such a decision involves an

12 expedited appeal;

13 (ii) the appropriate deadlines for in14 ternal review process required due to medi15 cal exigencies in a case; and

16 (iii) whether such a process has been

17 completed.

18 (C) OPPORTUNITY TO SUBMIT EVIDENCE,

19 HAVE REPRESENTATION, AND MAKE ORAL

20 PRESENTATION.—Each party to an externally

21 appealable decision—

22 (i) may submit and review evidence

23 related to the issues in dispute,
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•S 1890 IS

1 (ii) may use the assistance or rep2 resentation of one or more individuals (any

3 of whom may be an attorney), and

4 (iii) may make an oral presentation.

5 (D) PROVISION OF INFORMATION.—The

6 plan or issuer involved shall provide timely ac7 cess to all its records relating to the matter of

8 the externally appealable decision and to all

9 provisions of the plan or health insurance cov10 erage (including any coverage manual) relating

11 to the matter.

12 (E) TIMELY DECISIONS.—A determination

13 by the external appeal entity on the decision

14 shall—

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

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

17 parties in writing as soon as possible;

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

19 (iii) be made in accordance with the

20 medical exigencies of the case involved, but

21 in no event later than 60 days (or 72

22 hours in the case of an expedited appeal)

23 from the date of completion of the filing of

24 notice of external appeal of the decision;
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•S 1890 IS

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

2 basis for the determination, including, if

3 relevant, any basis in the terms or condi4 tions of the plan or coverage; and

5 (v) inform the participant, beneficiary,

6 or enrollee of the individual’s rights to seek

7 further review by the courts (or other proc8 ess) of the external appeal determination.

9 (c) QUALIFICATIONS OF EXTERNAL APPEAL ENTI10 TIES.—

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

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

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

14 be a governmental entity) that is certified under

15 paragraph (2) as meeting the following require16 ments:

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

18 interest that would impede the entity conduct19 ing external appeal activities independent of the

20 plan or issuer.

21 (B) The entity conducts external appeal

22 activities through clinical peers.

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

24 and other expertise and sufficient staffing to

25 conduct external appeal activities for the plan
71

•S 1890 IS

1 or issuer on a timely basis consistent with sub2 section (b)(3)(E).

3 (D) The entity meets such other require4 ments as the appropriate Secretary may im5 pose.

6 (2) CERTIFICATION OF EXTERNAL APPEAL EN7 TITIES.—

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

9 as a qualified external appeal entity with re10 spect to—

11 (i) a group health plan, the entity

12 must be certified (and, in accordance with

13 subparagraph (B), periodically recertified)

14 as meeting the requirements of paragraph

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

16 process recognized or approved by the Sec17 retary of Labor); or

18 (ii) a health insurance issuer operat19 ing in a State, the entity must be certified

20 (and, in accordance with subparagraph

21 (B), periodically recertified) as meeting

22 such requirements by the applicable State

23 authority (or, if the States has not estab24 lished an adequate certification and recer25 tification process, by the Secretary of
72

•S 1890 IS

1 Health and Human Services, or under a

2 process recognized or approved by such

3 Secretary).

4 (B) RECERTIFICATION PROCESS.—The ap5 propriate Secretary shall develop standards for

6 the recertification of external appeal entities.

7 Such standards shall include a specification

8 of—

9 (i) the information required to be sub10 mitted as a condition of recertification on

11 the entity’s performance of external appeal

12 activities, which information shall include

13 the number of cases reviewed, a summary

14 of the disposition of those cases, the length

15 of time in making determinations on those

16 cases, and such information as may be nec17 essary to assure the independence of the

18 entity from the plans or issuers for which

19 external appeal activities are being con20 ducted; and

21 (ii) the periodicity which recertifi22 cation will be required.

23 (d) CONTINUING LEGAL RIGHTS OF ENROLLEES.—

24 Nothing in this title shall be construed as removing any

25 legal rights of participants, beneficiaries, enrollees, and
73

•S 1890 IS

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

2 file judicial actions to enforce rights.

3 Subtitle E—Protecting the Doctor4 Patient Relationship

5 SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN

6 MEDICAL COMMUNICATIONS.

7 (a) PROHIBITION.—

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

9 contract or agreement, or the operation of any con10 tract or agreement, between a group health plan or

11 health insurance issuer in relation to health insur12 ance coverage (including any partnership, associa13 tion, or other organization that enters into or ad14 ministers such a contract or agreement) and a

15 health care provider (or group of health care provid16 ers) shall not prohibit or restrict the provider from

17 engaging in medical communications with the pro18 vider’s patient.

19 (2) NULLIFICATION.—Any contract provision or

20 agreement described in paragraph (1) shall be null

21 and void.

22 (b) RULES OF CONSTRUCTION.—Nothing in this sec23 tion shall be construed—

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

25 contract or agreement to which a health care pro-
74

•S 1890 IS

1 vider is a party, of any mutually agreed upon terms

2 and conditions, including terms and conditions re3 quiring a health care provider to participate in, and

4 cooperate with, all programs, policies, and proce5 dures developed or operated by a group health plan

6 or health insurance issuer to assure, review, or im7 prove the quality and effective utilization of health

8 care services (if such utilization is according to

9 guidelines or protocols that are based on clinical or

10 scientific evidence and the professional judgment of

11 the provider) but only if the guidelines or protocols

12 under such utilization do not prohibit or restrict

13 medical communications between providers and their

14 patients; or

15 (2) to permit a health care provider to mis16 represent the scope of benefits covered under the

17 group health plan or health insurance coverage or to

18 otherwise require a group health plan health insur19 ance issuer to reimburse providers for benefits not

20 covered under the plan or coverage.

21 (c) MEDICAL COMMUNICATION DEFINED.—In this

22 section:

23 (1) IN GENERAL.—The term ‘‘medical commu24 nication’’ means any communication made by a

25 health care provider with a patient of the health care
75

•S 1890 IS

1 provider (or the guardian or legal representative of

2 such patient) with respect to—

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

4 care, or treatment options;

5 (B) any utilization review requirements

6 that may affect treatment options for the pa7 tient; or

8 (C) any financial incentives that may af9 fect the treatment of the patient.

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

11 communication’’ does not include a communication

12 by a health care provider with a patient of the

13 health care provider (or the guardian or legal rep14 resentative of such patient) if the communication in15 volves a knowing or willful misrepresentation by

16 such provider.

17 SEC. 142. PROHIBITION AGAINST TRANSFER OF INDEM18 NIFICATION OR IMPROPER INCENTIVE AR19 RANGEMENTS.

20 (a) PROHIBITION OF TRANSFER OF INDEMNIFICA21 TION.—

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

23 between a group health plan or health insurance

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

25 or issuer) and a health care provider shall contain
76

•S 1890 IS

1 any provision purporting to transfer to the health

2 care provider by indemnification or otherwise any li3 ability relating to activities, actions, or omissions of

4 the plan, issuer, or agent (as opposed to the pro5 vider).

6 (2) NULLIFICATION.—Any contract or agree7 ment provision described in paragraph (1) shall be

8 null and void.

9 (b) PROHIBITION OF IMPROPER PHYSICIAN INCEN10 TIVE PLANS.—

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

12 health insurance issuer offering health insurance

13 coverage may not operate any physician incentive

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

15 1876(i)(8) of the Social Security Act) unless the re16 quirements described in subparagraph (A) of such

17 section are met with respect to such a plan.

18 (2) APPLICATION.—For purposes of carrying

19 out paragraph (1), any reference in section

20 1876(i)(8) of the Social Security Act to the Sec21 retary, an eligible organization, or an individual en22 rolled with the organization shall be treated as a ref23 erence to the applicable authority, a group health

24 plan or health insurance issuer, respectively, and a
77

•S 1890 IS

1 participant, beneficiary, or enrollee with the plan or

2 organization, respectively.

3 SEC. 143. ADDITIONAL RULES REGARDING PARTICIPATION

4 OF HEALTH CARE PROFESSIONALS.

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

6 or health insurance issuer that offers health insurance cov7 erage, provides benefits through participating health care

8 professionals, the plan or issuer shall establish reasonable

9 procedures relating to the participation (under an agree10 ment between a professional and the plan or issuer) of

11 such professionals under the plan or coverage. Such proce12 dures shall include—

13 (1) providing notice of the rules regarding par14 ticipation;

15 (2) providing written notice of participation de16 cisions that are adverse to professionals; and

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

18 for appealing such adverse decisions, including the

19 presentation of information and views of the profes20 sional regarding such decision.

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

22 health plan, and health insurance issuer that offers health

23 insurance coverage, shall consult with participating physi24 cians (if any) regarding the plan’s or issuer’s medical pol25 icy, quality, and medical management procedures.
78

•S 1890 IS

1 SEC. 144. PROTECTION FOR PATIENT ADVOCACY.

2 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

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

4 health insurance issuer with respect to the provision of

5 health insurance coverage, may not retaliate against a par6 ticipant, beneficiary, enrollee, or health care provider

7 based on the participant’s, beneficiary’s, enrollee’s or pro8 vider’s use of, or participation in, a utilization review proc9 ess or a grievance process of the plan or issuer (including

10 an internal or external review or appeal process) under

11 this title.

12 (b) PROTECTION FOR QUALITY ADVOCACY BY

13 HEALTH CARE PROFESSIONALS.—

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

15 health insurance issuer may not retaliate or dis16 criminate against a protected health care profes17 sional because the professional in good faith—

18 (A) discloses information relating to the

19 care, services, or conditions affecting one or

20 more participants, beneficiaries, or enrollees of

21 the plan or issuer to an appropriate public reg22 ulatory agency, an appropriate private accredi23 tation body, or appropriate management per24 sonnel of the plan or issuer; or

25 (B) initiates, cooperates, or otherwise par26 ticipates in an investigation or proceeding by
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•S 1890 IS

1 such an agency with respect to such care, serv2 ices, or conditions.

3 If an institutional health care provider is a partici4 pating provider with such a plan or issuer or other5 wise receives payments for benefits provided by such

6 a plan or issuer, the provisions of the previous sen7 tence shall apply to the provider in relation to care,

8 services, or conditions affecting one or more patients

9 within an institutional health care provider in the

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

11 relation to care, services, or conditions provided to

12 one or more participants, beneficiaries, or enrollees;

13 and for purposes of applying this sentence, any ref14 erence to a plan or issuer is deemed a reference to

15 the institutional health care provider.

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

17 paragraph (1), a protected health care professional

18 is considered to be acting in good faith with respect

19 to disclosure of information or participation if, with

20 respect to the information disclosed as part of the

21 action—

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

23 personal knowledge and is consistent with that

24 degree of learning and skill ordinarily possessed

25 by health care professionals with the same li-
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•S 1890 IS

1 censure or certification and the same experi2 ence;

3 (B) the professional reasonably believes the

4 information to be true;

5 (C) the information evidences either a vio6 lation of a law, rule, or regulation, of an appli7 cable accreditation standard, or of a generally

8 recognized professional or clinical standard or

9 that a patient is in imminent hazard of loss of

10 life or serious injury; and

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

12 of paragraph (3), the professional has followed

13 reasonable internal procedures of the plan,

14 issuer, or institutional health care provider es15 tablished or the purpose of addressing quality

16 concerns before making the disclosure.

17 (3) EXCEPTION AND SPECIAL RULE.—

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

19 does not protect disclosures that would violate

20 Federal or State law or diminish or impair the

21 rights of any person to the continued protection

22 of confidentiality of communications provided

23 by such law.

24 (B) NOTICE OF INTERNAL PROCEDURES.—

25 Subparagraph (D) of paragraph (2) shall not
81

•S 1890 IS

1 apply unless the internal procedures involved

2 are reasonably expected to be known to the

3 health care professional involved. For purposes

4 of this subparagraph, a health care professional

5 is reasonably expected to know of internal pro6 cedures if those procedures have been made

7 available to the professional through distribu8 tion or posting.

9 (C) INTERNAL PROCEDURE EXCEPTION.—

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

11 not apply if—

12 (i) the disclosure relates to an immi13 nent hazard of loss of life or serious injury

14 to a patient;

15 (ii) the disclosure is made to an ap16 propriate private accreditation body pursu17 ant to disclosure procedures established by

18 the body; or

19 (iii) the disclosure is in response to an

20 inquiry made in an investigation or pro21 ceeding of an appropriate public regulatory

22 agency and the information disclosed is

23 limited to the scope of the investigation or

24 proceeding.
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1 (4) ADDITIONAL CONSIDERATIONS.—It shall

2 not be a violation of paragraph (1) to take an ad3 verse action against a protected health care profes4 sional if the plan, issuer, or provider taking the ad5 verse action involved demonstrates that it would

6 have taken the same adverse action even in the ab7 sence of the activities protected under such para8 graph.

9 (5) NOTICE.—A group health plan, health in10 surance issuer, and institutional health care provider

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

12 the Secretary of Labor, setting forth excerpts from,

13 or summaries of, the pertinent provisions of this

14 subsection and information pertaining to enforce15 ment of such provisions.

16 (6) CONSTRUCTIONS.—

17 (A) DETERMINATIONS OF COVERAGE.—

18 Nothing in this subsection shall be construed to

19 prohibit a plan or issuer from making a deter20 mination not to pay for a particular medical

21 treatment or service or the services of a type of

22 health care professional.

23 (B) ENFORCEMENT OF PEER REVIEW PRO24 TOCOLS AND INTERNAL PROCEDURES.—Noth25 ing in this subsection shall be construed to pro-
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•S 1890 IS

1 hibit a plan, issuer, or provider from establish2 ing and enforcing reasonable peer review or uti3 lization review protocols or determining whether

4 a protected health care professional has com5 plied with those protocols or from establishing

6 and enforcing internal procedures for the pur7 pose of addressing quality concerns.

8 (C) RELATION TO OTHER RIGHTS.—Noth9 ing in this subsection shall be construed to

10 abridge rights of participants, beneficiaries, en11 rollees, and protected health care professionals

12 under other applicable Federal or State laws.

13 (7) PROTECTED HEALTH CARE PROFESSIONAL

14 DEFINED.—For purposes of this subsection, the

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

16 individual who is a licensed or certified health care

17 professional and who—

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

19 health insurance issuer, is an employee of the

20 plan or issuer or has a contract with the plan

21 or issuer for provision of services for which ben22 efits are available under the plan or issuer; or

23 (B) with respect to an institutional health

24 care provider, is an employee of the provider or

25 has a contract or other arrangement with the
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•S 1890 IS

1 provider respecting the provision of health care

2 services.

3 Subtitle F—Promoting Good

4 Medical Practice

5 SEC. 151. PROMOTING GOOD MEDICAL PRACTICE.

6 (a) PROHIBITING ARBITRARY LIMITATIONS OR CON7 DITIONS FOR THE PROVISION OF SERVICES.—

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

9 health insurance issuer in connection with the provi10 sion of health insurance coverage, may not arbitrar11 ily interfere with or alter the decision of the treating

12 physician regarding the manner or setting in which

13 particular services are delivered if the services are

14 medically necessary or appropriate for treatment or

15 diagnosis to the extent that such treatment or diag16 nosis is otherwise a covered benefit.

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

18 be construed as prohibiting a plan or issuer from

19 limiting the delivery of services to one or more

20 health care providers within a network of such pro21 viders.

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

23 not be construed as requiring coverage of particular serv24 ices the coverage of which is otherwise not covered under
85

•S 1890 IS

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

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

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

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

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

10 (a) REQUIREMENTS FOR MINIMUM HOSPITAL STAY

11 FOLLOWING MASTECTOMY OR LYMPH NODE DISSEC12 TION.—

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

14 health insurance issuer offering group health insur15 ance coverage, may not—

16 (A) except as provided in paragraph (2)—

17 (i) restrict benefits for any hospital

18 length of stay in connection with a mastec19 tomy for the treatment of breast cancer to

20 less than 48 hours, or

21 (ii) restrict benefits for any hospital

22 length of stay in connection with a lymph

23 node dissection for the treatment of breast

24 cancer to less than 24 hours, or
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•S 1890 IS

1 (B) require that a provider obtain author2 ization from the plan or the issuer for prescrib3 ing any length of stay required under subpara4 graph (A) (without regard to paragraph (2)).

5 (2) EXCEPTION.—Paragraph (1)(A) shall not

6 apply in connection with any group health plan or

7 health insurance issuer in any case in which the de8 cision to discharge the woman involved prior to the

9 expiration of the minimum length of stay otherwise

10 required under paragraph (1)(A) is made by the at11 tending provider in consultation with the woman or

12 in a case involving a partial mastectomy without

13 lymph node dissection.

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

15 health insurance issuer offering group health insurance

16 coverage in connection with a group health plan, may

17 not—

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

19 eligibility, to enroll or to renew coverage under the

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

21 the requirements of this section;

22 (2) provide monetary payments or rebates to

23 women to encourage such women to accept less than

24 the minimum protections available under this sec25 tion;
87

•S 1890 IS

1 (3) penalize or otherwise reduce or limit the re2 imbursement of an attending provider because such

3 provider provided care to an individual participant

4 or beneficiary in accordance with this section;

5 (4) provide incentives (monetary or otherwise)

6 to an attending provider to induce such provider to

7 provide care to an individual participant or bene8 ficiary in a manner inconsistent with this section; or

9 (5) subject to subsection (c)(3), restrict benefits

10 for any portion of a period within a hospital length

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

12 which is less favorable than the benefits provided for

13 any preceding portion of such stay.

14 (c) RULES OF CONSTRUCTION.—

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

16 require a woman who is a participant or bene17 ficiary—

18 (A) to undergo a mastectomy or lymph

19 node dissection in a hospital; or

20 (B) to stay in the hospital for a fixed pe21 riod of time following a mastectomy or lymph

22 node dissection.

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

24 any group health plan, or any group health insur25 ance coverage offered by a health insurance issuer,
88

•S 1890 IS

1 which does not provide benefits for hospital lengths

2 of stay in connection with a mastectomy or lymph

3 node dissection for the treatment of breast cancer.

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

5 preventing a group health plan or issuer from impos6 ing deductibles, coinsurance, or other cost-sharing in

7 relation to benefits for hospital lengths of stay in

8 connection with a mastectomy or lymph node dissec9 tion for the treatment of breast cancer under the

10 plan (or under health insurance coverage offered in

11 connection with a group health plan), except that

12 such coinsurance or other cost-sharing for any por13 tion of a period within a hospital length of stay re14 quired under subsection (a) may not be greater than

15 such coinsurance or cost-sharing for any preceding

16 portion of such stay.

17 (d) LEVEL AND TYPE OF REIMBURSEMENTS.—Noth18 ing in this section shall be construed to prevent a group

19 health plan or a health insurance issuer offering group

20 health insurance coverage from negotiating the level and

21 type of reimbursement with a provider for care provided

22 in accordance with this section.

23 (e) EXCEPTION FOR HEALTH INSURANCE COVERAGE

24 IN CERTAIN STATES.—
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•S 1890 IS

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

2 section shall not apply with respect to health insur3 ance coverage if there is a State law (as defined in

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

5 for a State that regulates such coverage that is de6 scribed in any of the following subparagraphs:

7 (A) Such State law requires such coverage

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

9 of stay following a mastectomy performed for

10 treatment of breast cancer and at least a 24-

11 hour hospital length of stay following a lymph

12 node dissection for treatment of breast cancer.

13 (B) Such State law requires, in connection

14 with such coverage for surgical treatment of

15 breast cancer, that the hospital length of stay

16 for such care is left to the decision of (or re17 quired to be made by) the attending provider in

18 consultation with the woman involved.

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

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

21 the Employee Retirement Income Security Act of

22 1974 shall not be construed as superseding a State

23 law described in paragraph (1).
90

•S 1890 IS

1 SEC. 153. STANDARDS RELATING TO BENEFITS FOR RECON2 STRUCTIVE BREAST SURGERY.

3 (a) REQUIREMENTS FOR RECONSTRUCTIVE BREAST

4 SURGERY.—

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

6 health insurance issuer offering group health insur7 ance coverage, that provides coverage for breast sur8 gery in connection with a mastectomy shall provide

9 coverage for reconstructive breast surgery resulting

10 from the mastectomy. Such coverage shall include

11 coverage for all stages of reconstructive breast sur12 gery performed on a nondiseased breast to establish

13 symmetry with the diseased when reconstruction on

14 the diseased breast is performed and coverage of

15 prostheses and complications of mastectomy includ16 ing lymphedema.

17 (2) RECONSTRUCTIVE BREAST SURGERY DE18 FINED.—In this section, the term ‘‘reconstructive

19 breast surgery’’ means surgery performed as a result

20 of a mastectomy to reestablish symmetry between

21 two breasts, and includes augmentation

22 mammoplasty, reduction mammoplasty, and

23 mastopexy.

24 (3) MASTECTOMY DEFINED.—In this section,

25 the term ‘‘mastectomy’’ means the surgical removal

26 of all or part of a breast.
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•S 1890 IS

1 (b) PROHIBITIONS.—

2 (1) DENIAL OF COVERAGE BASED ON COSMETIC

3 SURGERY.—A group health plan, and a health insur4 ance issuer offering group health insurance coverage

5 in connection with a group health plan, may not

6 deny coverage described in subsection (a)(1) on the

7 basis that the coverage is for cosmetic surgery.

8 (2) APPLICATION OF SIMILAR PROHIBITIONS.—

9 Paragraphs (2) through (5) of section 152 shall

10 apply under this section in the same manner as they

11 apply with respect to section 152.

12 (c) RULES OF CONSTRUCTION.—

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

14 require a woman who is a participant or beneficiary

15 to undergo reconstructive breast surgery.

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

17 any group health plan, or any group health insur18 ance coverage offered by a health insurance issuer,

19 which does not provide benefits for mastectomies.

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

21 preventing a group health plan or issuer from impos22 ing deductibles, coinsurance, or other cost-sharing in

23 relation to benefits for reconstructive breast surgery

24 under the plan (or under health insurance coverage

25 offered in connection with a group health plan), ex-
92

•S 1890 IS

1 cept that such coinsurance or other cost-sharing for

2 any portion may not be greater than such coinsur3 ance or cost-sharing that is otherwise applicable with

4 respect to benefits for mastectomies.

5 (e) LEVEL AND TYPE OF REIMBURSEMENTS.—Noth6 ing in this section shall be construed to prevent a group

7 health plan or a health insurance issuer offering group

8 health insurance coverage from negotiating the level and

9 type of reimbursement with a provider for care provided

10 in accordance with this section.

11 (f) EXCEPTION FOR HEALTH INSURANCE COVERAGE

12 IN CERTAIN STATES.—

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

14 section shall not apply with respect to health insur15 ance coverage if there is a State law (as defined in

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

17 for a State that regulates such coverage and that re18 quires coverage of at least the coverage of recon19 structive breast surgery otherwise required under

20 this section.

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

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

23 the Employee Retirement Income Security Act of

24 1974 shall not be construed as superseding a State

25 law described in paragraph (1).
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•S 1890 IS

1 Subtitle G—Definitions

2 SEC. 191. DEFINITIONS.

3 (a) INCORPORATION OF GENERAL DEFINITIONS.—

4 The provisions of section 2971 of the Public Health Serv5 ice Act shall apply for purposes of this title in the same

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

7 Act.

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

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

10 Human Services, in consultation with the Secretary of

11 Labor and the Secretary of the Treasury and the term

12 ‘‘appropriate Secretary’’ means the Secretary of Health

13 and Human Services in relation to carrying out this title

14 under sections 2706 and 2751 of the Public Health Serv15 ice Act, the Secretary of Labor in relation to carrying out

16 this title under section 713 of the Employee Retirement

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

18 Treasury in relation to carrying out this title under chap19 ter 100 and section 4980D of the Internal Revenue Code

20 of 1986.

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

22 title:

23 (1) APPLICABLE AUTHORITY.—The term ‘‘ap24 plicable authority’’ means—
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•S 1890 IS

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

2 Secretary of Health and Human Services and

3 the Secretary of Labor; and

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

5 with respect to a specific provision of this title,

6 the applicable State authority (as defined in

7 section 2791(d) of the Public Health Service

8 Act), or the Secretary of Health and Human

9 Services, if such Secretary is enforcing such

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

11 2761(a)(2) of the Public Health Service Act.

12 (2) CLINICAL PEER.—The term ‘‘clinical peer’’

13 means, with respect to a review or appeal, a physi14 cian (allopathic or osteopathic) or other health care

15 professional who holds a non-restricted license in a

16 State and who is appropriately credentialed in the

17 same or similar specialty as typically manages the

18 medical condition, procedure, or treatment under re19 view or appeal and includes a pediatric specialist

20 where appropriate; except that only a physician may

21 be a clinical peer with respect to the review or ap22 peal of treatment rendered by a physician.

23 (3) HEALTH CARE PROVIDER.—The term

24 ‘‘health care provider’’ includes a physician or other
95

•S 1890 IS

1 health care professional, as well as an institutional

2 provider of health care services.

3 (4) NONPARTICIPATING.—The term ‘‘non4 participating’’ means, with respect to a health care

5 provider that provides health care items and services

6 to a participant, beneficiary, or enrollee under group

7 health plan or health insurance coverage, a health

8 care provider that is not a participating health care

9 provider with respect to such items and services.

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

11 mean, with respect to a health care provider that

12 provides health care items and services to a partici13 pant, beneficiary, or enrollee under group health

14 plan or health insurance coverage offered by a

15 health insurance issuer, a health care provider that

16 furnishes such items and services under a contract

17 or other arrangement with the plan or issuer.

18 SEC. 192. PREEMPTION; STATE FLEXIBILITY; CONSTRUC19 TION.

20 (a) CONTINUED APPLICABILITY OF STATE LAW

21 WITH RESPECT TO HEALTH INSURANCE ISSUERS.—

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

23 this title shall not be construed to supersede any

24 provision of State law which establishes, implements,

25 or continues in effect any standard or requirement
96

•S 1890 IS

1 solely relating to health insurance issuers in connec2 tion with group health insurance coverage except to

3 the extent that such standard or requirement pre4 vents the application of a requirement of this title.

5 (2) CONTINUED PREEMPTION WITH RESPECT

6 TO GROUP HEALTH PLANS.—Nothing in this title

7 shall be construed to affect or modify the provisions

8 of section 514 of the Employee Retirement Income

9 Security Act of 1974 with respect to group health

10 plans.

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

12 in sections 152 and 153, nothing in this title shall be con13 strued as requiring a group health plan or health insur14 ance coverage to provide specific benefits under the terms

15 of such plan or coverage.

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

17 (1) STATE LAW.—The term ‘‘State law’’ in18 cludes all laws, decisions, rules, regulations, or other

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

20 A law of the United States applicable only to the

21 District of Columbia shall be treated as a State law

22 rather than a law of the United States.

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

24 State, the Northern Mariana Islands, any political
97

•S 1890 IS

1 subdivisions of a State or such Islands, or any agen2 cy or instrumentality of either.

3 SEC. 193. REGULATIONS.

4 The Secretaries of Health and Human Services,

5 Labor, and the Treasury shall issue such regulations as

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

7 Such regulations shall be issued consistent with section

8 104 of Health Insurance Portability and Accountability

9 Act of 1996. Such Secretaries may promulgate any in10 terim final rules as the Secretaries determine are appro11 priate to carry out this title.

12 TITLE II—APPLICATION OF PA13 TIENT PROTECTION STAND14 ARDS TO GROUP HEALTH

15 PLANS AND HEALTH INSUR16 ANCE COVERAGE UNDER

17 PUBLIC HEALTH SERVICE

18 ACT

19 SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND

20 GROUP HEALTH INSURANCE COVERAGE.

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

22 XXVII of the Public Health Service Act is amended by

23 adding at the end the following new section:
98

•S 1890 IS

1 ‘‘SEC. 2706. PATIENT PROTECTION STANDARDS.

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

3 comply with patient protection requirements under title I

4 of the Patients’ Bill of Rights Act of 1998, and each

5 health insurance issuer shall comply with patient protec6 tion requirements under such title with respect to group

7 health insurance coverage it offers, and such requirements

8 shall be deemed to be incorporated into this subsection.

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

10 the notice requirement under section 711(d) of the Em11 ployee Retirement Income Security Act of 1974 with re12 spect to the requirements referred to in subsection (a) and

13 a health insurance issuer shall comply with such notice

14 requirement as if such section applied to such issuer and

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

16 (b) CONFORMING AMENDMENT.—Section

17 2721(b)(1)(A) of such Act (42 U.S.C. 300gg–21(b)(1)(A))

18 is amended by inserting ‘‘(other than section 2706)’’ after

19 ‘‘requirements of such subparts’’.

20 SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR21 ANCE COVERAGE.

22 Part B of title XXVII of the Public Health Service

23 Act is amended by inserting after section 2751 the follow24 ing new section:
99

•S 1890 IS

1 ‘‘SEC. 2752. PATIENT PROTECTION STANDARDS.

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

3 shall comply with patient protection requirements under

4 title I of the Patients’ Bill of Rights Act of 1998 with

5 respect to individual health insurance coverage it offers,

6 and such requirements shall be deemed to be incorporated

7 into this subsection.

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

9 part shall comply with the notice requirement under sec10 tion 711(d) of the Employee Retirement Income Security

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

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

13 were a group health plan.’’.

14 TITLE III—AMENDMENTS TO

15 THE EMPLOYEE RETIREMENT

16 INCOME SECURITY ACT OF

17 1974

18 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND19 ARDS TO GROUP HEALTH PLANS AND GROUP

20 HEALTH INSURANCE COVERAGE UNDER THE

21 EMPLOYEE RETIREMENT INCOME SECURITY

22 ACT OF 1974.

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

24 B of title I of the Employee Retirement Income Security

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

26 new section:
100

•S 1890 IS

1 ‘‘SEC. 713. PATIENT PROTECTION STANDARDS.

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

3 group health plan (and a health insurance issuer offering

4 group health insurance coverage in connection with such

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

6 the Patients’ Bill of Rights Act of 1998 (as in effect as

7 of the date of the enactment of such Act), and such re8 quirements shall be deemed to be incorporated into this

9 subsection.

10 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE11 MENTS.—

12 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE13 MENTS THROUGH INSURANCE.—For purposes of

14 subsection (a), insofar as a group health plan pro15 vides benefits in the form of health insurance cov16 erage through a health insurance issuer, the plan

17 shall be treated as meeting the following require18 ments of title I of the Patients’ Bill of Rights Act

19 of 1998 with respect to such benefits and not be

20 considered as failing to meet such requirements be21 cause of a failure of the issuer to meet such require22 ments so long as the plan sponsor or its representa23 tives did not cause such failure by the issuer:

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

25 emergency care).
101

•S 1890 IS

1 ‘‘(B) Section 102(a)(1) (relating to offer2 ing option to purchase point-of-service cov3 erage), but only insofar as the plan is meeting

4 such requirement through an agreement with

5 the issuer to offer the option to purchase point6 of-service coverage under such section.

7 ‘‘(C) Section 103 (relating to choice of pro8 viders).

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

10 specialty care).

11 ‘‘(E) Section 105(a)(1) (relating to con12 tinuity in case of termination of provider con13 tract) and section 105(a)(2) (relating to con14 tinuity in case of termination of issuer con15 tract), but only insofar as a replacement issuer

16 assumes the obligation for continuity of care.

17 ‘‘(F) Section 106 (relating to coverage for

18 individuals participating in approved clinical

19 trials.)

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

21 needed prescription drugs).

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

23 provider network).

24 ‘‘(I) Subtitle B (relating to quality assur25 ance).
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1 ‘‘(J) Section 143 (relating to additional

2 rules regarding participation of health care pro3 fessionals).

4 ‘‘(K) Section 152 (relating to standards re5 lating to benefits for certain breast cancer

6 treatment).

7 ‘‘(L) Section 153 (relating to standards re8 lating to benefits for reconstructive breast sur9 gery).

10 ‘‘(2) INFORMATION.—With respect to informa11 tion required to be provided or made available under

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

13 provides benefits in the form of health insurance

14 coverage through a health insurance issuer, the Sec15 retary shall determine the circumstances under

16 which the plan is not required to provide or make

17 available the information (and is not liable for the

18 issuer’s failure to provide or make available the in19 formation), if the issuer is obligated to provide and

20 make available (or provides and makes available)

21 such information.

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

23 With respect to the grievance system and internal

24 appeals process required to be established under sec25 tions 131 and 132, in the case of a group health
103

•S 1890 IS

1 plan that provides benefits in the form of health in2 surance coverage through a health insurance issuer,

3 the Secretary shall determine the circumstances

4 under which the plan is not required to provide for

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

6 issuer’s failure to provide for such system and proc7 ess), if the issuer is obligated to provide for (and

8 provides for) such system and process.

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

10 of the Secretary, insofar as a group health plan en11 ters into a contract with a qualified external appeal

12 entity for the conduct of external appeal activities in

13 accordance with section 133, the plan shall be treat14 ed as meeting the requirement of such section and

15 is not liable for the entity’s failure to meet any re16 quirements under such section.

17 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu18 ant to rules of the Secretary, if a health insurance

19 issuer offers health insurance coverage in connection

20 with a group health plan and takes an action in vio21 lation of any of the following sections, the group

22 health plan shall not be liable for such violation un23 less the plan caused such violation:

24 ‘‘(A) Section 109 (relating to non25 discrimination in delivery of services).
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•S 1890 IS

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

2 of interference with certain medical communica3 tions).

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

5 against transfer of indemnification or improper

6 incentive arrangements).

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

8 on retaliation).

9 ‘‘(E) Section 151 (relating to promoting

10 good medical practice).

11 ‘‘(6) CONSTRUCTION.—Nothing in this sub12 section shall be construed to affect or modify the re13 sponsibilities of the fiduciaries of a group health

14 plan under part 4 of subtitle B.

15 ‘‘(7) APPLICATION TO CERTAIN PROHIBITIONS

16 AGAINST RETALIATION.—With respect to compliance

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

18 Patients’ Bill of Rights Act of 1998, for purposes

19 of this subtitle the term ‘group health plan’ is

20 deemed to include a reference to an institutional

21 health care provider.

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

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

24 professional who believes that the professional has

25 been retaliated or discriminated against in violation
105

•S 1890 IS

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

2 Act of 1998 may file with the Secretary a complaint

3 within 180 days of the date of the alleged retaliation

4 or discrimination.

5 ‘‘(2) INVESTIGATION.—The Secretary shall in6 vestigate such complaints and shall determine if a

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

8 shall issue an order to ensure that the protected

9 health care professional does not suffer any loss of

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

11 issuer, or provider involved, as a result of the viola12 tion found by the Secretary.

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

14 may issue regulations to coordinate the requirements on

15 group health plans under this section with the require16 ments imposed under the other provisions of this title.’’.

17 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

18 REQUIREMENT.—Section 503 of such Act (29 U.S.C.

19 1133) is amended by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’

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

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

22 in section 733) compliance with the requirements of sub23 title D (and section 115) of title I of the Patients’ Bill

24 of Rights Act of 1998 in the case of a claims denial shall
106

•S 1890 IS

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

2 such claims denial.’’.

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

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

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

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

7 is amended by inserting after the item relating to section

8 712 the following new item:

‘‘Sec. 713. Patient protection standards.’’.

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

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

11 144(b))’’ after ‘‘part 7’’.

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

13 ACTIONS INVOLVING HEALTH INSURANCE

14 POLICYHOLDERS.

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

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

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

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

22 subsection, nothing in this title shall be construed to

23 invalidate, impair, or supersede any cause of action

24 under State law to recover damages resulting from
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1 personal injury or for wrongful death against any

2 person—

3 ‘‘(A) in connection with the provision of in4 surance, administrative services, or medical

5 services by such person to or for a group health

6 plan (as defined in section 733), or

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

8 such person for the provision of such insurance,

9 administrative services, or medical services by

10 other persons.

11 ‘‘(2) EXCEPTION FOR EMPLOYERS AND OTHER

12 PLAN SPONSORS.—

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (B), paragraph (1) does not authorize—

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

16 employer or other plan sponsor maintain17 ing the group health plan, or

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

19 by a person against an employer or other

20 plan sponsor for damages assessed against

21 the person pursuant to a cause of action

22 under paragraph (1).

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

24 shall not preclude any cause of action described
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1 in paragraph (1) against an employer or other

2 plan sponsor if—

3 ‘‘(i) such action is based on the em4 ployer’s or other plan sponsor’s exercise of

5 discretionary authority to make a decision

6 on a claim for benefits covered under the

7 plan or health insurance coverage in the

8 case at issue; and

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

10 other plan sponsor of such authority re11 sulted in personal injury or wrongful

12 death.’’.

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

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

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

16 which a cause of action arises.

17 TITLE IV—EFFECTIVE DATES;

18 COORDINATION IN IMPLE19 MENTATION.

20 SEC. 401. EFFECTIVE DATES.

21 (a) GROUP HEALTH COVERAGE.—

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

23 the amendments made by sections 201(a) and 301

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

25 shall apply with respect to group health plans, and
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1 health insurance coverage offered in connection with

2 group health plans, for plan years beginning on or

3 after January 1, 1999 (in this section referred to as

4 the ‘‘general effective date’’) and also shall apply to

5 portions of plan years occurring on and after such

6 date.

7 (2) TREATMENT OF COLLECTIVE BARGAINING

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

9 maintained pursuant to 1 or more collective bargain10 ing agreements between employee representatives

11 and 1 or more employers ratified before the date of

12 enactment of this Act, the amendments made by sec13 tions 201(a) and 301 (and title I insofar as it re14 lates to such sections) shall not apply to plan years

15 beginning before the later of—

16 (A) the date on which the last collective

17 bargaining agreements relating to the plan ter18 minates (determined without regard to any ex19 tension thereof agreed to after the date of en20 actment of this Act), or

21 (B) the general effective date.

22 For purposes of subparagraph (A), any plan amend23 ment made pursuant to a collective bargaining

24 agreement relating to the plan which amends the

25 plan solely to conform to any requirement added by
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1 this Act shall not be treated as a termination of

2 such collective bargaining agreement.

3 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—

4 The amendments made by section 202 shall apply with

5 respect to individual health insurance coverage offered,

6 sold, issued, renewed, in effect, or operated in the individ7 ual market on or after the general effective date.

8 SEC. 402. COORDINATION IN IMPLEMENTATION.

9 Section 104(1) of Health Insurance Portability and

10 Accountability Act of 1996 is amended by inserting ‘‘or

11 under title I of the Patients’ Bill of Rights Act of 1998

12 (and the amendments made by such Act)’’ after ‘‘section

13 401)’’.

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