II

105TH CONGRESS

2D SESSION S. 1997

To protect the right of a member of a health maintenance organization

to receive continuing care at a facility selected by that member.

IN THE SENATE OF THE UNITED STATES

APRIL 28, 1998

Ms. MIKULSKI (for herself and Mr. FAIRCLOTH) introduced the following bill;

which was read twice and referred to the Committee on Labor and

Human Resources

A BILL

To protect the right of a member of a health maintenance

organization to receive continuing care at a facility selected by that member.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Seniors’ Access to Con5 tinuing Care Act of 1998’’.

6 SEC. 2. AMENDMENTS TO THE EMPLOYEE RETIREMENT IN7 COME SECURITY ACT OF 1974.

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

9 B of title I of the Employee Retirement Income Security
2

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1 Act of 1974 (as added by section 603(a) of the Newborns’

2 and Mothers’ Health Protection Act of 1996 and amended

3 by section 702(a) of the Mental Health Parity Act of

4 1996) is amended by adding at the end the following new

5 section:

6 ‘‘SEC. 713. ENSURING CHOICE FOR CONTINUING CARE.

7 ‘‘(a) IN GENERAL.—With respect to health insurance

8 coverage provided to participants or beneficiaries through

9 a managed care organization under a group health plan,

10 or through a health insurance issuer providing health in11 surance coverage in connection with a group health plan,

12 such plan or issuer may not deny coverage for services

13 provided to such participant or beneficiary by a continuing

14 care retirement community, skilled nursing facility, or

15 other qualified facility in which the participant or bene16 ficiary resided prior to a hospitalization, regardless of

17 whether such organization is under contract with such

18 community or facility if the requirements described in sub19 section (b) are met.

20 ‘‘(b) REQUIREMENTS.—The requirements of this sub21 section are that—

22 ‘‘(1) the service involved is a service for which

23 the managed care organization involved would be re24 quired to provide or pay for under its contract with

25 the participant or beneficiary if the continuing care
3

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1 retirement community, skilled nursing facility, or

2 other qualified facility were under contract with the

3 organization;

4 ‘‘(2) the participant or beneficiary involved—

5 ‘‘(A) resided in the continuing care retire6 ment community, skilled nursing facility, or

7 other qualified facility prior to being hospital8 ized;

9 ‘‘(B) had a contractual or other right to

10 return to the facility after hospitalization; and

11 ‘‘(C) elects to return to the facility after

12 hospitalization, whether or not the residence of

13 the participant or beneficiary after returning

14 from the hospital is the same part of the facility

15 in which the beneficiary resided prior to hos16 pitalization;

17 ‘‘(3) the continuing care retirement community,

18 skilled nursing facility, or other qualified facility has

19 the capacity to provide the services the participant

20 or beneficiary needs;

21 ‘‘(4) the continuing care retirement community,

22 skilled nursing facility, or other qualified facility is

23 willing to accept substantially similar payment under

24 the same terms and conditions that apply to simi-
4

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1 larly situated health care facility providers under

2 contract with the organization involved.

3 ‘‘(c) SERVICES TO PREVENT HOSPITALIZATION.—A

4 group health plan or health insurance issuer to which this

5 section applies may not deny payment for a skilled nursing

6 service provided to a participant or beneficiary by a con7 tinuing care retirement community, skilled nursing facil8 ity, or other qualified facility in which the participant or

9 beneficiary resides, without a preceding hospital stay, re10 gardless of whether the organization is under contract

11 with such community or facility, if—

12 ‘‘(1) the plan or issuer has determined that the

13 service is necessary to prevent the hospitalization of

14 the participant or beneficiary; and

15 ‘‘(2) the service to prevent hospitalization is

16 provided as an additional benefit as described in sec17 tion 417.594 of title 42, Code of Federal Regula18 tions.

19 ‘‘(d) RIGHTS OF SPOUSES.—A group health plan or

20 health insurance issuer to which this section applies shall

21 not deny payment for services provided by a skilled nurs22 ing facility for the care of a participant or beneficiary, re23 gardless of whether the plan or issuer is under contract

24 with such facility, if the spouse of the participant or bene-
5

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1 ficiary is already a resident of such facility and the re2 quirements described in subsection (b) are met.

3 ‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply—

4 ‘‘(1) where the attending acute care physician

5 and the participant or beneficiary (or a designated

6 representative of the participant or beneficiary where

7 the participant or beneficiary is physically or men8 tally incapable of making an election under this

9 paragraph) do not elect to pursue a course of treat10 ment necessitating continuing care; or

11 ‘‘(2) unless the community or facility involved—

12 ‘‘(A) meets all applicable licensing and cer13 tification requirements of the State in which it

14 is located; and

15 ‘‘(B) agrees to reimbursement for the care

16 of the participant or beneficiary at a rate simi17 lar to the rate negotiated by the managed care

18 organization with similar providers of care for

19 similar services.

20 ‘‘(f) PROHIBITIONS.—A group health plan and a

21 health insurance issuer providing health insurance cov22 erage in connection with a group health plan may not—

23 ‘‘(1) deny to an individual eligibility, or contin24 ued eligibility, to enroll or to renew coverage with a

25 managed care organization under the plan, solely for
6

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1 the purpose of avoiding the requirements of this sec2 tion;

3 ‘‘(2) provide monetary payments or rebates to

4 enrollees to encourage such enrollees to accept less

5 than the minimum protections available under this

6 section;

7 ‘‘(3) penalize or otherwise reduce or limit the

8 reimbursement of an attending physician because

9 such physician provided care to a participant or ben10 eficiary in accordance with this section; or

11 ‘‘(4) provide incentives (monetary or otherwise)

12 to an attending physician to induce such physician

13 to provide care to a participant or beneficiary in a

14 manner inconsistent with this section.

15 ‘‘(g) RULES OF CONSTRUCTION.—

16 ‘‘(1) HMO NOT OFFERING BENEFITS.—This

17 section shall not apply with respect to any managed

18 care organization under a group health plan, or

19 through a health insurance issuer providing health

20 insurance coverage in connection with a group health

21 plan, that does not provide benefits for stays in a

22 continuing care retirement community, skilled nurs23 ing facility, or other qualified facility.

24 ‘‘(2) COST-SHARING.—Nothing in this section

25 shall be construed as preventing a managed care or-
7

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1 ganization under a group health plan, or through a

2 health insurance issuer providing health insurance

3 coverage in connection with a group health plan,

4 from imposing deductibles, coinsurance, or other

5 cost-sharing in relation to benefits for care in a con6 tinuing care facility.

7 ‘‘(h) PREEMPTION; EXCEPTION FOR HEALTH INSUR8 ANCE COVERAGE IN CERTAIN STATES.—

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

10 section shall not apply with respect to health insur11 ance coverage if there is a State law (as defined in

12 section 2723(d)(1)) for a State that regulates such

13 coverage that is described in any of the following

14 subparagraphs:

15 ‘‘(A) Such State law requires such cov16 erage to provide for referral to a continuing

17 care retirement community, skilled nursing fa18 cility, or other qualified facility consistent with

19 this section.

20 ‘‘(B) Such State law requires, in connec21 tion with such coverage for continuing care,

22 that the necessity for such care is left to the de23 cision of (or required to be made by) the at24 tending provider in consultation with the en25 rollee.
8

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1 ‘‘(C) Such State law expands the range of

2 services or facilities covered under this section.

3 ‘‘(2) CONSTRUCTION.—Section 731(a)(1) shall

4 not be construed as superseding a State law de5 scribed in paragraph (1).

6 ‘‘(i) PENALTIES.—A participant or beneficiary may

7 enforce the provisions of this section in an appropriate

8 Federal district court. An action for injunctive relief or

9 damages may be commenced on behalf of the participant

10 or beneficiary by the participant’s or beneficiary’s legal

11 representative. The court may award reasonable attorneys’

12 fees to the prevailing party. If a beneficiary dies before

13 conclusion of an action under this section, the action may

14 be maintained by a representative of the participant’s or

15 beneficiary’s estate.

16 ‘‘(j) DEFINITIONS.—In this section:

17 ‘‘(1) ATTENDING ACUTE CARE PROVIDER.—The

18 term ‘attending acute care provider’ means anyone

19 licensed or certified under State law to provide

20 health care services who is operating within the

21 scope of such license and who is primarily respon22 sible for the care of the enrollee.

23 ‘‘(2) CONTINUING CARE RETIREMENT COMMU24 NITY.—The term ‘continuing care retirement com25 munity’ means an organization that provides or ar-
9

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1 ranges for the provision of housing and health-relat2 ed services to an older person under an agreement

3 effective for the life of the person or for a specified

4 period greater than 1 year.

5 ‘‘(3) MANAGED CARE ORGANIZATION.—The

6 term ‘managed care organization’ means an organi7 zation that provides comprehensive health services to

8 participants or beneficiaries, directly or under con9 tract or other agreement, on a prepayment basis to

10 such individuals. For purposes of this section, the

11 following shall be considered as managed care orga12 nizations:

13 ‘‘(A) A Medicare+Choice plan authorized

14 under section 1851(a) of the Social Security

15 Act.

16 ‘‘(B) Any other entity that manages the

17 cost, utilization, and delivery of health care

18 through the use of predetermined periodic pay19 ments to health care providers employed by or

20 under contract or other agreement, directly or

21 indirectly, with the entity.

22 ‘‘(4) OTHER QUALIFIED FACILITY.—The term

23 ‘other qualified facility’ means any facility that can

24 provide the services required by the participant or

25 beneficiary consistent with State and Federal law.
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1 ‘‘(5) SKILLED NURSING FACILITY.—The term

2 ‘skilled nursing facility’ means a facility that meets

3 the requirements of section 1819 of the Social Secu4 rity Act (42 U.S.C. 1395i–3).’’.

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

6 in section 1 of such Act, as amended by section 603 of

7 the Newborns’ and Mothers’ Health Protection Act of

8 1996 and section 702 of the Mental Health Parity Act

9 of 1996, is amended by inserting after the item relating

10 to section 712 the following new item:

‘‘Sec. 713. Ensuring choice for continuing care.’’.

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

12 this section shall apply with respect to plan years begin13 ning on or after January 1, 1998.

14 SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE

15 ACT RELATING TO THE GROUP MARKET.

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

17 XXVII of the Public Health Service Act (as added by sec18 tion 604(a) of the Newborns’ and Mothers’ Health Protec19 tion Act of 1996 and amended by section 703(a) of the

20 Mental Health Parity Act of 1996) is amended by adding

21 at the end the following new section:

22 ‘‘SEC. 2706. ENSURING CHOICE FOR CONTINUING CARE.

23 ‘‘(a) IN GENERAL.—With respect to health insurance

24 coverage provided to enrollees through a managed care or25 ganization under a group health plan, or through a health
11

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1 insurance issuer providing health insurance coverage in

2 connection with a group health plan, such plan or issuer

3 may not deny coverage for services provided to such en4 rollee by a continuing care retirement community, skilled

5 nursing facility, or other qualified facility in which the en6 rollee resided prior to a hospitalization, regardless of

7 whether such organization is under contract with such

8 community or facility if the requirements described in sub9 section (b) are met.

10 ‘‘(b) REQUIREMENTS.—The requirements of this sub11 section are that—

12 ‘‘(1) the service involved is a service for which

13 the managed care organization involved would be re14 quired to provide or pay for under its contract with

15 the enrollee if the continuing care retirement com16 munity, skilled nursing facility, or other qualified fa17 cility were under contract with the organization;

18 ‘‘(2) the enrollee involved—

19 ‘‘(A) resided in the continuing care retire20 ment community, skilled nursing facility, or

21 other qualified facility prior to being hospital22 ized;

23 ‘‘(B) had a contractual or other right to

24 return to the facility after hospitalization; and
12

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1 ‘‘(C) elects to return to the facility after

2 hospitalization, whether or not the residence of

3 the enrollee after returning from the hospital is

4 the same part of the facility in which the bene5 ficiary resided prior to hospitalization;

6 ‘‘(3) the continuing care retirement community,

7 skilled nursing facility, or other qualified facility has

8 the capacity to provide the services the enrollee

9 needs;

10 ‘‘(4) the continuing care retirement community,

11 skilled nursing facility, or other qualified facility is

12 willing to accept substantially similar payment under

13 the same terms and conditions that apply to simi14 larly situated health care facility providers under

15 contract with the organization involved.

16 ‘‘(c) SERVICES TO PREVENT HOSPITALIZATION.—A

17 group health plan or health insurance issuer to which this

18 section applies may not deny payment for a skilled nursing

19 service provided to a enrollee by a continuing care retire20 ment community, skilled nursing facility, or other quali21 fied facility in which the enrollee resides, without a preced22 ing hospital stay, regardless of whether the plan or issuer

23 is under contract with such community or facility, if—
13

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1 ‘‘(1) the plan or issuer has determined that the

2 service is necessary to prevent the hospitalization of

3 the enrollee; and

4 ‘‘(2) the service to prevent hospitalization is

5 provided as an additional benefit as described in sec6 tion 417.594 of title 42, Code of Federal Regula7 tions.

8 ‘‘(d) RIGHTS OF SPOUSES.—A group health plan or

9 health insurance issuer to which this section applies shall

10 not deny payment for services provided by a skilled nurs11 ing facility for the care of an enrollee, regardless of wheth12 er the plan or issuer is under contract with such facility,

13 if the spouse of the enrollee is already a resident of such

14 facility and the requirements described in subsection (b)

15 are met.

16 ‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply—

17 ‘‘(1) where the attending acute care physician

18 and the enrollee (or a designated representative of

19 the enrollee where the enrollee is physically or men20 tally incapable of making an election under this

21 paragraph) do not elect to pursue a course of treat22 ment necessitating continuing care; or

23 ‘‘(2) unless the community or facility involved—
14

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1 ‘‘(A) meets all applicable licensing and cer2 tification requirements of the State in which it

3 is located; and

4 ‘‘(B) agrees to reimbursement for the care

5 of the enrollee at a rate similar to the rate ne6 gotiated by the managed care organization with

7 similar providers of care for similar services.

8 ‘‘(f) PROHIBITIONS.—A group health plan and a

9 health insurance issuer providing health insurance cov10 erage in connection with a group health plan may not—

11 ‘‘(1) deny to an individual eligibility, or contin12 ued eligibility, to enroll or to renew coverage with a

13 managed care organization under the plan, solely for

14 the purpose of avoiding the requirements of this sec15 tion;

16 ‘‘(2) provide monetary payments or rebates to

17 enrollees to encourage such enrollees to accept less

18 than the minimum protections available under this

19 section;

20 ‘‘(3) penalize or otherwise reduce or limit the

21 reimbursement of an attending physician because

22 such physician provided care to a enrollee in accord23 ance with this section; or

24 ‘‘(4) provide incentives (monetary or otherwise)

25 to an attending physician to induce such physician
15

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1 to provide care to an enrollee in a manner inconsist2 ent with this section.

3 ‘‘(g) RULES OF CONSTRUCTION.—

4 ‘‘(1) HMO NOT OFFERING BENEFITS.—This

5 section shall not apply with respect to any managed

6 care organization under a group health plan, or

7 through a health insurance issuer providing health

8 insurance coverage in connection with a group health

9 plan, that does not provide benefits for stays in a

10 continuing care retirement community, skilled nurs11 ing facility, or other qualified facility.

12 ‘‘(2) COST-SHARING.—Nothing in this section

13 shall be construed as preventing a managed care or14 ganization under a group health plan, or through a

15 health insurance issuer providing health insurance

16 coverage in connection with a group health plan,

17 from imposing deductibles, coinsurance, or other

18 cost-sharing in relation to benefits for care in a con19 tinuing care facility.

20 ‘‘(h) PREEMPTION; EXCEPTION FOR HEALTH INSUR21 ANCE COVERAGE IN CERTAIN STATES.—

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

23 section shall not apply with respect to health insur24 ance coverage if there is a State law (as defined in

25 section 2723(d)(1)) for a State that regulates such
16

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1 coverage that is described in any of the following

2 subparagraphs:

3 ‘‘(A) Such State law requires such cov4 erage to provide for referral to a continuing

5 care retirement community, skilled nursing fa6 cility, or other qualified facility consistent with

7 this section.

8 ‘‘(B) Such State law requires, in connec9 tion with such coverage for continuing care,

10 that the necessity for such care is left to the de11 cision of (or required to be made by) the at12 tending provider in consultation with the en13 rollee.

14 ‘‘(C) Such State law expands the range of

15 services or facilities covered under this section.

16 ‘‘(2) CONSTRUCTION.—Section 731(a)(1) shall

17 not be construed as superseding a State law de18 scribed in paragraph (1).

19 ‘‘(i) PENALTIES.—An enrollee may enforce the provi20 sions of this section in an appropriate Federal district

21 court. An action for injunctive relief or damages may be

22 commenced on behalf of the enrollee by the enrollee’s legal

23 representative. The court may award reasonable attorneys’

24 fees to the prevailing party. If a beneficiary dies before
17

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1 conclusion of an action under this section, the action may

2 be maintained by a representative of the enrollee’s estate.

3 ‘‘(j) DEFINITIONS.—In this section:

4 ‘‘(1) ATTENDING ACUTE CARE PROVIDER.—The

5 term ‘attending acute care provider’ means anyone

6 licensed or certified under State law to provide

7 health care services who is operating within the

8 scope of such license and who is primarily respon9 sible for the care of the enrollee.

10 ‘‘(2) CONTINUING CARE RETIREMENT COMMU11 NITY.—The term ‘continuing care retirement com12 munity’ means an organization that provides or ar13 ranges for the provision of housing and health-relat14 ed services to an older person under an agreement

15 effective for the life of the person or for a specified

16 period greater than 1 year.

17 ‘‘(3) MANAGED CARE ORGANIZATION.—The

18 term ‘managed care organization’ means an organi19 zation that provides comprehensive health services to

20 enrollees, directly or under contract or other agree21 ment, on a prepayment basis to such individuals.

22 For purposes of this section, the following shall be

23 considered as managed care organizations:
18

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1 ‘‘(A) A Medicare+Choice plan authorized

2 under section 1851(a) of the Social Security

3 Act.

4 ‘‘(B) Any other entity that manages the

5 cost, utilization, and delivery of health care

6 through the use of predetermined periodic pay7 ments to health care providers employed by or

8 under contract or other agreement, directly or

9 indirectly, with the entity.

10 ‘‘(4) OTHER QUALIFIED FACILITY.—The term

11 ‘other qualified facility’ means any facility that can

12 provide the services required by the enrollee consist13 ent with State and Federal law.

14 ‘‘(5) SKILLED NURSING FACILITY.—The term

15 ‘skilled nursing facility’ means a facility that meets

16 the requirements of section 1819 of the Social Secu17 rity Act (42 U.S.C. 1395i–3).’’.

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

19 this section shall apply with respect to group health plans

20 for plan years beginning on or after January 1, 1998.

21 SEC. 4. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT

22 RELATING TO THE INDIVIDUAL MARKET.

23 (a) IN GENERAL.—Subpart 3 of part B of title

24 XXVII of the Public Health Service Act (as added by sec25 tion 605(a) of the Newborn’s and Mother’s Health Protec-
19

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1 tion Act of 1996) is amended by adding at the end the

2 following new section:

3 ‘‘SEC. 2752. ENSURING CHOICE FOR CONTINUING CARE.

4 ‘‘The provisions of section 2706 shall apply to health

5 maintenance organization coverage offered by a health in6 surance issuer in the individual market in the same man7 ner as they apply to such coverage offered by a health

8 insurance issuer in connection with a group health plan

9 in the small or large group market.’’.

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

11 this section shall apply with respect to health insurance

12 coverage offered, sold, issued, renewed, in effect, or oper13 ated in the individual market on or after January 1, 1998.

Æ