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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1499 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                S. 1499

  To amend the title XXVII of the Public Health Service Act and other 
    laws to assure the rights of enrollees under managed care plans.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            November 9, 1997

  Mrs. Boxer introduced the following bill; which was referred to the 
                 Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL

 
  To amend the title XXVII of the Public Health Service Act and other 
    laws to assure the rights of enrollees under managed care plans.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Insurance 
Consumer's Bill of Rights Act of 1997''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                TITLE I--HEALTH INSURANCE BILL OF RIGHTS

Sec. 101. Health insurance bill of rights.
               ``Part C--Health Insurance Bill of Rights

        ``Sec. 2770. Notice; additional definitions.
  ``Subpart 1--Access to Primary Care Physicians, Specialists, Out of 
     Network Providers, Emergency Room Services, Prescription Drugs

        ``Sec. 2771. Access to personnel and facilities; assuring 
                            adequate choice of health care 
                            professionals.
        ``Sec. 2772. Access to specialty care.
        ``Sec. 2773. Access to emergency care.
        ``Sec. 2774. Coverage for individuals participating in approved 
                            clinical trials.
        ``Sec. 2775. Continuity of care.
        ``Sec. 2776. Prohibition of interference with certain medical 
                            communications.
        ``Sec. 2777. Access to needed prescription drugs.
   ``Subpart 2--Utilization Review, Grievance, Appeals, and Quality 
                              Improvement

        ``Sec. 2779. Standards for utilization review activities, 
                            complaints, and appeals.
        ``Sec. 2780. Quality improvement program.
                     ``Subpart 3--Nondiscrimination

        ``Sec. 2784. Nondiscrimination.
                      ``Subpart 4--Confidentiality

        ``Sec. 2785. Medical records and confidentiality.
                        ``Subpart 5--Disclosures

        ``Sec. 2786. Health prospectus; disclosure of information.
``Subpart 6--Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

        ``Sec. 2787. Promoting good medical practice.
       TITLE II--APPLICATION OF BILL OF RIGHTS UNDER VARIOUS LAWS

        Sec. 201. Amendments to the Public Health Service Act.
        Sec. 202. Managed care requirements under the Employee 
                            Retirement Income Security Act of 1974.
        Sec. 203. Managed care requirements under the Internal Revenue 
                            Code of 1986.
        Sec. 204. Managed care requirements under medicare, medicaid, 
                            and the Federal employees health benefits 
                            program (FEHBP).
        Sec. 205. Effective dates.

                TITLE I--HEALTH INSURANCE BILL OF RIGHTS

SEC. 101. HEALTH INSURANCE BILL OF RIGHTS.

    Title XXVII of the Public Health Service Act is amended--
            (1) by redesignating part C as part D, and
            (2) by inserting after part B the following new part:

               ``Part C--Health Insurance Bill of Rights

``SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS.

    ``(a) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 711(d) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this part as if such section applied to such issuer and such issuer 
were a group health plan.
    ``(b) Additional Definitions.--For purposes of this part:
            ``(1) Enrollee.--The term `enrollee' means an individual 
        who is entitled to benefits under a group health plan or under 
        health insurance coverage.
            ``(2) Health care professional.--The term `health care 
        professional' means a physician or other health care 
        practitioner providing health care services.
            ``(3) Health care provider.--The term `health care 
        provider' means a clinic, hospital physician organization, 
        preferred provider organization, independent practice 
        association, community service provider, family planning 
        clinic, or other appropriately licensed provider of health care 
        services or supplies.
            ``(4) Managed care.--The term `managed care' means, with 
        respect to a group health plan or health insurance coverage, 
        such a plan or coverage that provides financial incentives for 
        enrollees to obtain benefits through participating health care 
        providers or professionals.
            ``(5) Nonparticipating.--The term `nonparticipating' means, 
        with respect to a health care provider or professional and a 
        group health plan or health insurance coverage, such a provider 
        or professional that is not a participating provider or 
        professional with respect to such services.
            ``(6) Participating.--The term `participating' means, with 
        respect to a health care provider or professional and a group 
        health plan or health insurance coverage offered by a health 
        insurance issuer, such a provider or professional that has 
entered into an agreement or arrangement with the plan or issuer with 
respect to the provision of health care services to enrollees under the 
plan or coverage.
            ``(7) Primary care practitioner.--The term `primary care 
        practitioner' means, with respect to a group health plan or 
        health insurance coverage offered by a health insurance issuer, 
        a health care professional (who may be trained in family 
        practice, general practice, internal medicine, obstetrics and 
        gynecology, or pediatrics and who is practicing within the 
        scope of practice authorized by State law) designated by the 
        plan or issuer to coordinate, supervise, or provide ongoing 
        care to enrollees.

  ``Subpart 1--Access to Primary Care Physicians, Specialists, Out of 
     Network Providers, Emergency Room Services, Prescription Drugs

``SEC. 2771. ACCESS TO PERSONNEL AND FACILITIES; ASSURING ADEQUATE 
              CHOICE OF HEALTH CARE PROFESSIONALS.

    ``A managed care group health plan (and a health insurance issuer 
offering managed care group health insurance coverage) shall comply 
with regulations promulgated by the Secretary that ensure that such 
plans and issuers--
            ``(1) have a sufficient number and type of primary care 
        practitioners and specialists, throughout the service area to 
        meet the needs of enrollees and to provide meaningful choice;
            ``(2) maintain a mix of primary care practitioners that is 
        adequate to meet the needs of the enrollees' varied 
        characteristics, including age, gender, race, and health 
        status; and
            ``(3) include, to the extent possible, a variety of primary 
        care providers (including community health centers, rural 
        health clinics, and family planning clinics).

``SEC. 2772. ACCESS TO SPECIALTY CARE.

    ``A managed care group health plan (and a health insurance issuer 
offering managed care group health insurance coverage) shall comply 
with regulations promulgated by the Secretary that ensure that such 
plans and issuers provide enrollees with--
            ``(1) access to specialty care;
            ``(2) standing referrals to specialists;
            ``(3) access to nonparticipating providers;
            ``(4) direct access (without the need for a referral) to 
        health care professionals trained in obstetrics and gynecology; 
        and
            ``(5) a process that permits a health care provider trained 
        in obstetrics and gynecology to be designated and treated as a 
        primary care practitioner.

``SEC. 2773. ACCESS TO EMERGENCY CARE.

    ``(a) In General.--If a group health plan or health insurance 
coverage provides any benefits with respect to emergency services (as 
defined in subsection (b)(1)), the plan or the health insurance issuer 
offering such coverage shall--
            ``(1) provide for emergency services without regard to 
        prior authorization or the emergency care provider's 
        contractual relationship with the organization; and
            ``(2) comply with such guidelines as the Secretary of 
        Health and Human Services may prescribe relating to promoting 
        efficient and timely coordination of appropriate maintenance 
        and post-stabilization care of an enrollee after the enrollee 
        has been determined to be stable under section 1867 of the 
        Social Security Act.
    ``(b) Definition of Emergency Services.--In this subsection--
            ``(1) In general.--The term `emergency services' means, 
        with respect to an enrollee under a plan or coverage, inpatient 
        and outpatient services covered under the plan or coverage 
        that--
                    ``(A) are furnished by a provider that is qualified 
                to furnish such services under the plan or coverage, 
                and
                    ``(B) are needed to evaluate or stabilize an 
                emergency medical condition (as defined in subparagraph 
                (B)).
            ``(2) Emergency medical condition based on prudent 
        layperson.--The term `emergency medical condition' means a 
        medical condition manifesting itself by acute symptoms of 
        sufficient severity (including severe pain) such that a prudent 
        layperson, who possesses an average knowledge of health and 
        medicine, could reasonably expect the absence of immediate 
        medical attention to result in--
                    ``(A) placing the health of the individual (or, 
                with respect to a pregnant woman, the health of the 
                woman or her unborn child) in serious jeopardy,
                    ``(B) serious impairment to bodily functions, or
                    ``(C) serious dysfunction of any bodily organ or 
                part.

``SEC. 2774. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED 
              CLINICAL TRIALS.

    ``(a) In General.--If a group health plan provides benefits, or a 
health insurance issuer offers health insurance coverage to, a 
qualified enrollee (as defined in subsection (b)), the plan or issuer--
            ``(1) may not deny the enrollee participation in the 
        clinical trial referred to in subsection (b)(2);
            ``(2) subject to subsection (c), may not deny (or limit or 
        impose additional conditions on) the coverage of routine 
        patient costs for items and services furnished in connection 
        with participation in the trial; and
            ``(3) may not discriminate against the enrollee on the 
        basis of the enrollee's participation in such trial.
    ``(b) Qualified Enrollee Defined.--For purposes of subsection (a), 
the term `qualified enrollee' means an enrollee who meets the following 
conditions:
            ``(1) The enrollee has a life-threatening or serious 
        illness for which no standard treatment is effective.
            ``(2) The enrollee is eligible to participate in an 
        approved clinical trial with respect to treatment of such 
        illness.
            ``(3) The enrollee and the referring physician conclude 
        that the enrollee's participation in such trial would be 
        appropriate.
            ``(4) The enrollee's participation in the trial offers 
        potential for significant clinical benefit for the enrollee.
    ``(c) Payment.--
            ``(1) In general.--Under this section a plan or issuer 
        shall provide for payment for routine patient costs described 
        in subsection (a)(2) but is not required to pay for costs of 
        items and services that are reasonably expected (as determined 
        by the Secretary) to be paid for by the sponsors of an approved 
        clinical trial.
            ``(2) Payment rate.--In the case of covered items and 
        services provided by--
                    ``(A) a participating provider, the payment rate 
                shall be at the agreed upon rate, or
                    ``(B) a nonparticipating provider, the payment rate 
                shall be at the rate the plan or issuer would normally 
                pay for comparable services under subparagraph (A).
    ``(d) Approved Clinical Trial Defined.--In this section, the term 
`approved clinical trial' means a clinical research study or clinical 
investigation approved by the Food and Drug Administration or approved 
and funded by one or more of the following:
            ``(1) The National Institutes of Health.
            ``(2) A cooperative group or center of the National 
        Institutes of Health.
            ``(3) The Department of Veterans Affairs.
            ``(4) The Department of Defense.

``SEC. 2775. CONTINUITY OF CARE.

    ``A managed care group health plan (and a health insurance issuer 
offering managed care group health insurance coverage) shall comply 
with regulations promulgated by the Secretary that ensure that such 
plans and issuers provide continuity of coverage in the case of the 
terminated coverage where an enrollee is undergoing a course of 
treatment with the provider at the time of such termination.

``SEC. 2776. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    ``(a) In General.--The provisions of any contract or agreement, or 
the operation of any contract or agreement, between a group health plan 
or health insurance issuer (offering health insurance coverage in 
connection with a group health plan) and a health professional shall 
not prohibit or restrict the health professional from engaging in 
medical communications with his or her patient.
    ``(b) Nullification.--Any contract provision or agreement described 
in subsection (a) shall be null and void.
    ``(c) Medical Communication Defined.--For purposes of this section, 
the term `medical communication' has the meaning given such term by the 
Secretary.

``SEC. 2777. ACCESS TO NEEDED PRESCRIPTION DRUGS.

    ``If a group health plan, or health insurance issuer offers health 
insurance coverage that, provides benefits with respect to prescription 
drugs but the coverage limits such benefits to drugs included in a 
formulary, the plan or issuer shall ensure in accordance with 
regulations of the Secretary that--
            ``(1) the nature of the formulary restrictions is fully 
        disclosed to enrollees; and
            ``(2) exceptions from the formulary restriction are 
        provided when medically necessary or appropriate.

   ``Subpart 2--Utilization Review, Grievance, Appeals, and Quality 
                              Improvement

``SEC. 2779. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES, COMPLAINTS, 
              AND APPEALS.

    ``A group health plan and a health insurance issuer offering health 
insurance coverage in connection with a group health plan shall comply 
with standards established by the Secretary relating to its conduct of 
utilization review activities. Such standards shall include the 
following:
            ``(1) A requirement that a plan or issuer develop written 
        policies and criteria concerning utilization review activities.
            ``(2) A requirement that a plan or issuer provide notice of 
        such policies and criteria and the written notice of adverse 
        determinations.
            ``(3) A restriction on the use of contingent compensation 
        arrangements with providers.
            ``(4) A requirement establishing deadlines to ensure timely 
        utilization review determinations.
            ``(5) The establishment of an adequate process for filing 
        complaints, and appealing decisions, concerning utilization 
        review determinations, including the mandatory use of an 
        outside review panel to make decisions on such appeals.
            ``(6) A requirement that a plan or issuer that utilizes 
        clinial practice guidelines uniformly apply review criteria 
        that are based on sound scientific principles and the most 
        recent medical evidence.

``SEC. 2780. QUALITY IMPROVEMENT PROGRAM.

    ``(a) In General.--A group health plan and health insurance issuer 
offering health insurance coverage shall make arrangements for an 
ongoing quality improvement program for health care services it 
provides to enrollees. Such a program shall meet standards established 
by the Secretary, including standards relating to--
            ``(1) the measurement of health outcomes relevant to all 
        populations, including women;
            ``(2) evaluation of high risk services;
            ``(3) monitoring utilization of services;
            ``(4) ensuring appropriate action to improve quality of 
        care; and
            ``(5) providing for an independent external review of the 
        program

                     ``Subpart 3--Nondiscrimination

``SEC. 2784. NONDISCRIMINATION.

    ``(a) Enrollees.--A group health plan or health insurance issuer 
offering health insurance coverage (whether or not a managed care plan 
or coverage) may not discriminate or engage (directly or through 
contractual arrangements) in any activity, including the selection of 
service area, that has the effect of discriminating against an 
individual on the basis of race, culture, national origin, gender, 
sexual orientation, language, socioeconomic status, age, disability, 
genetic makeup, health status, payer source, or anticipated need for 
healthcare services.
    ``(b) Providers.--Such a plan or issuer may not discriminate in the 
selection of members of the health provider or provider network (and in 
establishing the terms and conditions for membership in the network) of 
the plan or coverage based on any of the factors described in 
subsection (a).
    ``(c) Services.--Such a plan or issuer may not exclude coverage 
(including procedures and drugs) if the effect is to discriminate in 
violation of subsection (a) or (b).

                      ``Subpart 4--Confidentiality

``SEC. 2785. MEDICAL RECORDS AND CONFIDENTIALITY.

    ``A managed care group health plan (and a health insurance issuer 
offering managed care group health insurance) shall--
            ``(1) establish written policies and procedures for the 
        handling of medical records and enrollee communications to 
        ensure enrollee confidentiality;
            ``(2) ensure the confidentiality of specified enrollee 
        information, including, prior medical history, medical record 
        information and claims information, except where disclosure of 
        this information is required by law; and
            ``(3) not release any individual patient record 
        information, unless such a release is authorized in writing by 
        the enrollee or otherwise required by law.

                        ``Subpart 5--Disclosures

``SEC. 2786. HEALTH PROSPECTUS; DISCLOSURE OF INFORMATION.

    ``(a) Disclosure.--Each group health plan, and each health 
insurance issuer providing health insurance coverage, shall provide to 
each enrollee at the time of enrollment and on an annual basis, and 
shall make available to each prospective enrollee upon request--
            ``(1) a prospectus that relates to the plan or coverage 
        offered and that meets the requirements of subsection (b); and
            ``(2) additional information described in subsection (c).
    ``(b) Prospectus.--
            ``(1) In general.--Each prospectus under this subsection 
        for a plan or coverage--
                    ``(A) shall contain the information described in 
                paragraphs (2) through (4) concerning the plan or 
                coverage,
                    ``(B) shall contain such additional information as 
                the Secretary deems appropriate, and
                    ``(C) shall be no longer than 3 pages in length and 
                in a format specified by the Secretary, for purposes of 
                comparison by prospective enrollees.
            ``(2) Qualitative information.--The information described 
        in this paragraph is a summary of the quality assessment data 
        on the plan or coverage. The data shall--
                    ``(A) be the similar to the types of data as are 
                collected for managed care plans under title XVIII of 
                the Social Security Act, as determined by the Secretary 
                and taking into account differences between the 
                populations covered under such title and the 
populations covered under this title;
                    ``(B) be collected by independent, auditing 
                agencies;
                    ``(C) include--
                            ``(i) a description of the types of 
                        methodologies (including capitation, financial 
                        incentive or bonuses, fee-for-service, salary, 
                        and withholds) used by the plan or issuer to 
                        reimburse physicians, including the proportions 
                        of physicians who have each of these types of 
                        arrangements; and
                            ``(ii) cost-sharing requirements for 
                        enrollees.
        The information under subparagraph (C) shall include, upon 
        request, information on the reimbursement methodology used by 
        the plan or issuer or medical groups for individual physicians, 
        but do not require the disclosure of specific reimbursement 
        rates.
            ``(3) Quantitative information.--The information described 
        in this paragraph is measures of performance of the plan or 
        issuer (in relation to coverage offered) with respect to each 
        of the following and such other salient data as the Secretary 
        may specify:
                    ``(A) The ratio of physicians to enrollees, 
                including the ratio of physicians who are obstetrician/
                gynecologists to adult, female enrollees.
                    ``(B) The ratio of specialists to enrollees.
                    ``(C) The incentive structure used for payment of 
                primary care physicians and specialists.
                    ``(D) Patient outcomes for procedures, including 
                procedures specific to female enrollees.
                    ``(E) The number of grievances filed under the plan 
                or coverage.
                    ``(F) The number of requests for procedures for 
                which utilization review board review or approval is 
                required and the number (and percentage) of such 
                requests that are denied.
                    ``(G) The number of appeals filed from denial of 
                such requests and the number (and percentage) of such 
                appeals that are approved, such numbers and percentages 
                broken down by gender of the enrollee involved.
                    ``(H) Disenrollment data.
            ``(3) Description of benefits.--The information described 
        in this paragraph is a description of the benefits provided 
        under the plan or coverage, as well as explicit exclusions, 
        including a description of the following:
                    ``(A) Coverage policy with respect to coverage for 
                female-specific benefits, including screening 
                mammography, hormone replacement therapy, bone density 
                testing, osteoporosis screening, maternity care, and 
                reconstructive surgery following a mastectomy.
                    ``(B) The costs of copayments for treatments, 
                including any exceptions.
    ``(c) Additional Information.--The additional information described 
in this subsection is information about each of the following:
            ``(1) The plan's or issuer's structure and provider 
        network, including the names and credentials of physicians in 
        the network.
            ``(2) Coverage provided and excluded, including out-of-area 
        coverage.
            ``(3) Procedures for utilization management.
            ``(4) Procedures for determining coverage for 
        investigational or experimental treatments as well as 
        definitions for coverage terms.
            ``(5) Any restrictive formularies or prior approval 
        requirements for obtaining prescription drugs, including, upon 
        request, information on whether or not specific drugs are 
        covered.
            ``(6) Use of voluntary or mandatory arbitration.
            ``(7) Procedures for receiving emergency care and out-of-
        network services when those services are not available in the 
        network and information on the coverage of emergency services, 
        including--
                    ``(A) the appropriate use of emergency services, 
                including use of the 911 telephone system or its local 
                equivalent in emergency situations and an explanation 
                of what constitutes an emergency situation;
                    ``(B) the process and procedures for obtaining 
                emergency services; and
                    ``(C) the locations of (i) emergency departments, 
                and (ii) other settings, in which physicians and 
                hospitals provide emergency services and post-
                stabilization care.
            ``(8) How to contact agencies that regulate the plan or 
        issuer.
            ``(9) How to contact consumer assistance agencies, such as 
        ombudsmen programs.
            ``(10) How to obtain covered services.
            ``(11) How to receive preventive health services and health 
        education.
            ``(12) How to select providers and obtain referrals.
            ``(13) How to appeal health plan decisions and file 
        grievances.
    ``(d) State Authority To Require Additional Information.--
            ``(1) In general.--Subject to paragraph (2), this section 
        shall not be construed as preventing a State from requiring 
        health insurance issuers, in relation to their offering of 
        health insurance coverage, to disclose separately information 
        (including comparative ratings of health insurance coverage) in 
        addition to the information required to be disclosed under this 
        section.
            ``(2) Continued preemption with respect to group health 
        plans.--Nothing in this part shall be construed to affect or 
        modify the provisions of section 514 with respect to group 
        health plans.

``Subpart 6--Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

``SEC. 2787. PROMOTING GOOD MEDICAL PRACTICE.

    ``(a) Prohibiting Arbitrary Limitations or Conditions for the 
Provision of Services.--A group health plan and a health insurance 
issuer, in connection with the provision of health insurance coverage, 
may not impose limits on the manner in which particular services are 
delivered if the services are medically necessary or appropriate to the 
extent that such procedure or treatment is otherwise a covered benefit.
    ``(b) Construction.--Subsection (a) shall not be construed as 
requiring coverage of particular services the coverage of which is 
otherwise not covered under the terms of the coverage.''.

       TITLE II--APPLICATION OF BILL OF RIGHTS UNDER VARIOUS LAWS

SEC. 201. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Application to Group Health Insurance Coverage.--Subpart 2 of 
part A of title XXVII of the Public Health Service Act is amended by 
adding at the end the following new section:

``SEC. 2706. MANAGED CARE REQUIREMENTS.

    ``Each health insurance issuer shall comply with the applicable 
requirements under part C with respect to group health insurance 
coverage it offers.''.
    (b) Application to Individual Health Insurance Coverage.--Part B of 
title XXVII of the Public Health Service Act is amended by inserting 
after section 2751 the following new section:

``SEC. 2752. MANAGED CARE REQUIREMENTS.

    ``Each health insurance issuer shall comply with the applicable 
requirements under part C with respect to individual health insurance 
coverage it offers, in the same manner as such requirements apply to 
group health insurance coverage.''.
    (c) Modification of Preemption Standards.--
            (1) Group health insurance coverage.--Section 2723 of such 
        Act (42 U.S.C. 300gg-23) is amended--
                    (A) in subsection (a)(1), by striking ``subsection 
                (b)'' and inserting ``subsections (b) and (c)'';
                    (B) by redesignating subsections (c) and (d) as 
                subsections (d) and (e), respectively; and
                    (C) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Special Rules in Case of Managed Care Requirements.--Subject 
to subsection (a)(2), the provisions of section 2706 and part C, and 
part D insofar as it applies to section 2706 or part C, shall not 
prevent a State from establishing requirements relating to the subject 
matter of such provisions so long as such requirements are at least as 
stringent on health insurance issuers as the requirements imposed under 
such provisions.''.
            (2) Individual health insurance coverage.--Section 2762 of 
        such Act (42 U.S.C. 300gg-62), as added by section 605(b)(3)(B) 
        of Public Law 104-204, is amended--
                    (A) in subsection (a), by striking ``subsection 
                (b), nothing in this part'' and inserting ``subsections 
                (b) and (c)'', and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Special Rules in Case of Managed Care Requirements.--Subject 
to subsection (b), the provisions of section 2752 and part C, and part 
D insofar as it applies to section 2752 or part C, shall not prevent a 
State from establishing requirements relating to the subject matter of 
such provisions so long as such requirements are at least as stringent 
on health insurance issuers as the requirements imposed under such 
section.''.
    (d) Additional Conforming Amendments.--
            (1) Section 2723(a)(1) of such Act (42 U.S.C. 300gg-
        23(a)(1)) is amended by striking ``part C'' and inserting 
        ``parts C and D''.
            (2) Section 2762(b)(1) of such Act (42 U.S.C. 300gg-
        62(b)(1)) is amended by striking ``part C'' and inserting 
        ``part D''.
    (e) Assuring Coordination.--Section 104(1) of the Health Insurance 
Portability and Accountability Act of 1996 (Public Law 104-191) is 
amended by striking ``under this subtitle (and the amendments made by 
this subtitle and section 401)'' and inserting ``title XXVII of the 
Public Health Service Act, under part 7 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974, and chapter 100 of the 
Internal Revenue Code of 1986''.

SEC. 202. MANAGED CARE REQUIREMENTS UNDER THE EMPLOYEE RETIREMENT 
              INCOME SECURITY ACT OF 1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 is amended by 
adding at the end the following new section:

``SEC. 713. MANAGED CARE REQUIREMENTS.

    ``(a) In General.--Subject to subsection (b), a group health plan 
(and a health insurance issuer offering group health insurance coverage 
in connection with such a plan) shall comply with the applicable 
requirements of part C of title XXVII of the Public Health Service Act.
    ``(b) References in Application.--In applying subsection (a) under 
this part, any reference in such part C--
            ``(1) to a health insurance issuer and health insurance 
        coverage offered by such an issuer is deemed to include a 
        reference to a group health plan and coverage under such plan, 
        respectively;
            ``(2) to the Secretary is deemed a reference to the 
        Secretary of Labor;
            ``(3) to an applicable State authority is deemed a 
        reference to the Secretary of Labor; and
            ``(4) to an enrollee with respect to health insurance 
        coverage is deemed to include a reference to a participant or 
        beneficiary with respect to a group health plan.''.
    (b) Modification of Preemption Standards.--Section 731 of such Act 
(42 U.S.C. 1191) is amended--
            (1) in subsection (a)(1), by striking ``subsection (b)'' 
        and inserting ``subsections (b) and (c)'';
            (2) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Special Rules in Case of Managed Care Requirements.--Subject 
to subsection (a)(2), the provisions of section 713 and part C of title 
XXVII of the Public Health Service Act, and subpart C insofar as it 
applies to section 713 or such part, shall not be construed to preempt 
any State law, or the enactment or implementation of such a State law, 
that provides protections for individuals that are equivalent to or 
stricter than the protections provided under such provisions.''.
    (c) Conforming Amendments.--(1) Section 732(a) of such Act (29 
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting 
``sections 711 and 713''.
    (2) The table of contents in section 1 of such Act is amended by 
inserting after the item relating to section 712 the following new 
item:

``Sec. 713. Managed care requirements.''.

SEC. 203. MANAGED CARE REQUIREMENTS UNDER THE INTERNAL REVENUE CODE OF 
              1986.

    (a) In General.--Subchapter B of part B of part 7 of subtitle B of 
title I of the Employee Retirement Income Security Act of 1974 is 
amended by adding at the end the following new section:

``SEC. 9813. MANAGED CARE REQUIREMENTS.

    ``(a) In General.--Subject to subsection (b), a group health plan 
shall comply with the applicable requirements of part C of title XXVII 
of the Public Health Service Act.
    ``(b) References in Application.--In applying subsection (a) under 
this subchapter, any reference in such part C--
            ``(1) to the Secretary is deemed a reference to the 
        Secretary of the Treasury; and
            ``(2) to an applicable State authority is deemed a 
        reference to the Secretary.''.
    (b) Clerical Amendment.--The table of sections in subchapter B of 
chapter 100 of such Code is amended by inserting after the item 
relating to section 9812 the following new item:

                              ``Sec. 9813. Managed care 
                                        requirements.''.

SEC. 204. MANAGED CARE REQUIREMENTS UNDER MEDICARE, MEDICAID, AND THE 
              FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM (FEHBP).

    (a) Medicare.--Section 1852 of the Social Security Act (42 U.S.C. 
1395w-22), as inserted by section 4001 of the Balanced Budget Act of 
1997 (Public Law 101-33), is amended by adding at the end the following 
new subsection:
    ``(l) Managed Care Requirements.--Each Medicare+Choice organization 
that offers a Medicare+Choice plan described in section 1851(a)(1)(A) 
shall comply with the applicable requirements of part C of title XXVII 
of the Public Health Service Act in the same manner as such 
requirements apply with respect to health insurance coverage offered by 
a health insurance issuer, except to the extent such requirements are 
less protective of enrollees than the requirements established under 
this part.''.
    (b) Medicaid.--Section 1932(b)(8) of the Social Security Act, as 
added by section 4704(a) of the Balanced Budget Act of 1997, is 
amended--
            (1) by striking ``and mental health'' and inserting ``, 
        mental health, and managed care'',
            (2) by inserting ``and of part C'' after ``of part A'', and
            (3) by inserting before the period at the end the 
        following: ``, except to the extent such requirements are less 
        protective of enrollees than the requirements established under 
        this title''.
    (c) Federal Employees' Health Benefits Program (FEHBP).--Chapter 89 
of title 5, United States Code, is amended--
            (1) by inserting after the item relating to section 8905a 
        the following new section:
``Sec. 8905b. Application of managed care requirements
    ``Each health benefit plan offered under this chapter shall comply 
with the applicable requirements of part C of title XXVII of the Public 
Health Service Act in the same manner as such requirements apply with 
respect to health insurance coverage offered by a health insurance 
issuer, except to the extent such requirements are less protective of 
enrollees than the requirements established under this chapter.''; and
            (2) in the table of sections, by inserting the following 
        item after the item relating to section 8905a:

``8905b.   Application of managed care requirements.''.

SEC. 205. EFFECTIVE DATES.

    (a) General Effective Date for Group Health Plans.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by section 101, subsections (a), (c)(1), and (d) of 
        section 201, and sections 203 and 204 shall apply with respect 
        to group health insurance coverage for group health plan years 
        beginning on or after July 1, 1998 (in this section referred to 
        as the ``general effective date'') and also shall apply to 
        portions of plan years occurring on and after January 1, 1999.
            (2) Treatment of group health plans maintained pursuant to 
        certain collective bargaining agreements.--In the case of a 
        group health plan, or group health insurance coverage provided 
        pursuant to a group health plan, maintained pursuant to 1 or 
        more collective bargaining agreements between employee 
        representatives and 1 or more employers ratified before the 
        date of enactment of this Act, the amendments described in 
        paragraph (1) shall not apply to plan years beginning before 
        the later of--
                    (A) the date on which the last collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of enactment of this Act), or
                    (B) the general effective date.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by such amendments shall not be treated as a termination 
        of such collective bargaining agreement.
    (b) General Effective Date for Health Insurance Coverage.--The 
amendments made by section 101 and subsections (b), (c)(2), and (d) of 
section 201 shall apply with respect to individual health insurance 
coverage offered, sold, issued, renewed, in effect, or operated in the 
individual market on or after the general effective date.
    (c) Effective Date for Coordination.--The amendment made by section 
201(e) shall take effect on the date of the enactment of this Act.
    (d) Federal Programs.--The amendments made by section 204 shall 
take effect on January 1, 1999.
                                 <all>
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