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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1891 Introduced in Senate (IS)]

105th CONGRESS
  2d Session
                                S. 1891

  To amend the Internal Revenue Code of 1986 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 Finance

_______________________________________________________________________

                                 A BILL

 
  To amend the Internal Revenue Code of 1986 to protect consumers in 
             managed care plans and other health coverage.

    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 ``Patients' Bill of 
Rights Act of 1998''.
    (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

                       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.
TITLE II--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

Sec. 201. Amendments to the Internal Revenue Code of 1986.
                       TITLE III--EFFECTIVE DATES

Sec. 301. Effective dates.

                TITLE I--HEALTH INSURANCE BILL OF RIGHTS

                       Subtitle A--Access to Care

SEC. 101. ACCESS TO EMERGENCY CARE.

    (a) Coverage of Emergency Services.--
            (1) In general.--If a group health plan, or health 
        insurance coverage offered by a health insurance issuer, 
        provides any benefits with respect to emergency services (as 
        defined in paragraph (2)(B)), the plan or issuer shall cover 
        emergency services furnished under the plan or coverage--
                    (A) without the need for any prior authorization 
                determination;
                    (B) whether or not the health care provider 
                furnishing such services is a participating provider 
                with respect to such services;
                    (C) in a manner so that, if such services are 
                provided to a participant, beneficiary, or enrollee by 
                a nonparticipating health care provider--
                            (i) the participant, beneficiary, or 
                        enrollee is not liable for amounts that exceed 
                        the amounts of liability that would be incurred 
                        if the services were provided by a 
                        participating health care provider, and
                            (ii) the plan or issuer pays an amount that 
                        is not less than the amount paid to a 
                        participating health care provider for the same 
                        services; and
                    (D) without regard to any other term or condition 
                of such coverage (other than exclusion or coordination 
                of benefits, or an affiliation or waiting period, 
                permitted under section 2701 of the Public Health 
                Service Act, section 701 of the Employee Retirement 
                Income Security Act of 1974, or section 9801 of the 
                Internal Revenue Code of 1986, and other than 
                applicable cost-sharing).
            (2) Definitions.--In this section:
                    (A) Emergency medical condition based on prudent 
                layperson standard.--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 condition 
described in clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the 
Social Security Act.
                    (B) Emergency services.--The term ``emergency 
                services'' means--
                            (i) a medical screening examination (as 
                        required under section 1867 of the Social 
                        Security Act) that is within the capability of 
                        the emergency department of a hospital, 
                        including ancillary services routinely 
                        available to the emergency department to 
                        evaluate an emergency medical condition (as 
                        defined in subparagraph (A)), and
                            (ii) within the capabilities of the staff 
                        and facilities available at the hospital, such 
                        further medical examination and treatment as 
                        are required under section 1867 of such Act to 
                        stabilize the patient.
    (b) Reimbursement for Maintenance Care and Post-Stabilization 
Care.--In the case of services (other than emergency services) for 
which benefits are available under a group health plan, or under health 
insurance coverage offered by a health insurance issuer, the plan or 
issuer shall provide for reimbursement with respect to such services 
provided to a participant, beneficiary, or enrollee other than through 
a participating health care provider in a manner consistent with 
subsection (a)(1)(C) if the services are maintenance care or post-
stabilization care covered under the guidelines established under 
section 1852(d)(2) of the Social Security Act (relating to promoting 
efficient and timely coordination of appropriate maintenance and post-
stabilization care of an enrollee after an enrollee has been determined 
to be stable), or, in the absence of guidelines under such section, 
such guidelines as the Secretary shall establish to carry out this 
subsection.

SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS UNDER GROUP HEALTH 
              PLANS.

    (a) Requirement.--
            (1) Offering of point-of-service coverage option.--Except 
        as provided in paragraph (2), if a group health plan (or health 
        insurance coverage offered by a health insurance issuer in 
        connection with a group health plan) provides benefits only 
        through participating health care providers, the plan or issuer 
        shall offer the participant the option to purchase point-of-
        service coverage (as defined in subsection (b)) for all such 
        benefits for which coverage is otherwise so limited. Such 
        option shall be made available to the participant at the time 
        of enrollment under the plan or coverage and at such other 
        times as the plan or issuer offers the participant a choice of 
        coverage options.
            (2) Exception.--Paragraph (1) shall not apply with respect 
        to a participant in a group health plan if the plan offers the 
        participant--
                    (A) a choice of health insurance coverage through 
                more than one health insurance issuer; or
                    (B) two or more coverage options that differ 
                significantly with respect to the use of participating 
                health care providers or the networks of such providers 
                that are used.
    (b) Point-of-Service Coverage Defined.--In this section, the term 
``point-of-service coverage'' means, with respect to benefits covered 
under a group health plan or health insurance issuer, coverage of such 
benefits when provided by a nonparticipating health care provider. Such 
coverage need not include coverage of providers that the plan or issuer 
excludes because of fraud, quality, or similar reasons.
    (c) Construction.--Nothing in this section shall be construed--
            (1) as requiring coverage for benefits for a particular 
        type of health care provider;
            (2) as requiring an employer to pay any costs as a result 
        of this section or to make equal contributions with respect to 
        different health coverage options; or
            (3) as preventing a group health plan or health insurance 
        issuer from imposing higher premiums or cost-sharing on a 
        participant for the exercise of a point-of-service coverage 
        option.
    (d) No Requirement for Guaranteed Availability.--If a health 
insurance issuer offers health insurance coverage that includes point-
of-service coverage with respect to an employer solely in order to meet 
the requirement of subsection (a), nothing in section 2711(a)(1)(A) of 
the Public Health Service Act shall be construed as requiring the 
offering of such coverage with respect to another employer.

SEC. 103. CHOICE OF PROVIDERS.

    (a) Primary Care.--A group health plan, and a health insurance 
issuer that offers health insurance coverage, shall permit each 
participant, beneficiary, and enrollee to receive primary care from any 
participating primary care provider who is available to accept such 
individual.
    (b) Specialists.--
            (1) In general.--Subject to paragraph (2), a group health 
        plan and a health insurance issuer that offers health insurance 
        coverage shall permit each participant, beneficiary, or 
        enrollee to receive medically necessary or appropriate 
        specialty care, pursuant to appropriate referral procedures, 
        from any qualified participating health care provider who is 
        available to accept such individual for such care.
            (2) Limitation.--Paragraph (1) shall not apply to specialty 
        care if the plan or issuer clearly informs participants, 
        beneficiaries, and enrollees of the limitations on choice of 
        participating providers with respect to such care.

SEC. 104. ACCESS TO SPECIALTY CARE.

    (a) Obstetrical and Gynecological Care.--
            (1) In general.--If a group health plan, or a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, requires or provides for a participant, 
        beneficiary, or enrollee to designate a participating primary 
        care provider--
                    (A) the plan or issuer shall permit such an 
                individual who is a female to designate a participating 
                physician who specializes in obstetrics and gynecology 
                as the individual's primary care provider; and
                    (B) if such an individual has not designated such a 
                provider as a primary care provider, the plan or 
                issuer--
                            (i) may not require authorization or a 
                        referral by the individual's primary care 
                        provider or otherwise for coverage of routine 
                        gynecological care (such as preventive women's 
                        health examinations) and pregnancy-related 
                        services provided by a participating health 
                        care professional who specializes in obstetrics 
                        and gynecology to the extent such care is 
                        otherwise covered, and
                            (ii) may treat the ordering of other 
                        gynecological care by such a participating 
                        physician as the authorization of the primary 
                        care provider with respect to such care under 
                        the plan or coverage.
            (2) Construction.--Nothing in paragraph (1)(B)(ii) shall 
        waive any requirements of coverage relating to medical 
        necessity or appropriateness with respect to coverage of 
        gynecological care so ordered.
    (b) Specialty Care.--
            (1) Specialty care for covered services.--
                    (A) In general.--If--
                            (i) an individual is a participant or 
                        beneficiary under a group health plan or an 
                        enrollee who is covered under health insurance 
                        coverage offered by a health insurance issuer,
                            (ii) the individual has a condition or 
                        disease of sufficient seriousness and 
                        complexity to require treatment by a 
                        specialist, and
                            (iii) benefits for such treatment are 
                        provided under the plan or coverage,
                the plan or issuer shall make or provide for a referral 
                to a specialist who is available and accessible to 
                provide the treatment for such condition or disease.
                    (B) Specialist defined.--For purposes of this 
                subsection, the term ``specialist'' means, with respect 
                to a condition, a health care practitioner, facility, 
                or center (such as a center of excellence) that has 
                adequate expertise through appropriate training and 
                experience (including, in the case of a child, 
                appropriate pediatric expertise) to provide high 
                quality care in treating the condition.
                    (C) Care under referral.--A group health plan or 
                health insurance issuer may require that the care 
                provided to an individual pursuant to such referral 
                under subparagraph (A) be--
                            (i) pursuant to a treatment plan, only if 
                        the treatment plan is developed by the 
                        specialist and approved by the plan or issuer, 
                        in consultation with the designated primary 
                        care provider or specialist and the individual 
                        (or the individual's designee), and
                            (ii) in accordance with applicable quality 
                        assurance and utilization review standards of 
                        the plan or issuer.
                Nothing in this subsection shall be construed as 
                preventing such a treatment plan for an individual from 
                requiring a specialist to provide the primary care 
                provider with regular updates on the specialty care 
                provided, as well as all necessary medical information.
                    (D) Referrals to participating providers.--A group 
                health plan or health insurance issuer is not required 
                under subparagraph (A) to provide for a referral to a 
                specialist that is not a participating provider, unless 
                the plan or issuer does not have an appropriate 
                specialist that is available and accessible to treat 
                the individual's condition and that is a participating 
                provider with respect to such treatment.
                    (E) Treatment of nonparticipating providers.--If a 
                plan or issuer refers an individual to a 
                nonparticipating specialist pursuant to subparagraph 
                (A), services provided pursuant to the approved 
                treatment plan (if any) shall be provided at no 
                additional cost to the individual beyond what the 
                individual would otherwise pay for services received by 
                such a specialist that is a participating provider.
            (2) Specialists as primary care providers.--
                    (A) In general.--A group health plan, or a health 
                insurance issuer, in connection with the provision of 
                health insurance coverage, shall have a procedure by 
                which an individual who is a participant, beneficiary, 
                or enrollee and who has an ongoing special condition 
                (as defined in subparagraph (C)) may receive a referral 
                to a specialist for such condition who shall be 
responsible for and capable of providing and coordinating the 
individual's primary and specialty care. If such an individual's care 
would most appropriately be coordinated by such a specialist, such plan 
or issuer shall refer the individual to such specialist.
                    (B) Treatment as primary care provider.--Such 
                specialist shall be permitted to treat the individual 
                without a referral from the individual's primary care 
                provider and may authorize such referrals, procedures, 
                tests, and other medical services as the individual's 
                primary care provider would otherwise be permitted to 
                provide or authorize, subject to the terms of the 
                treatment plan (referred to in paragraph (1)(C)(i)).
                    (C) Ongoing special condition defined.--In this 
                paragraph, the term ``special condition'' means a 
                condition or disease that--
                            (i) is life-threatening, degenerative, or 
                        disabling, and
                            (ii) requires specialized medical care over 
                        a prolonged period of time.
                    (D) Terms of referral.--The provisions of 
                subparagraphs (C) through (E) of paragraph (1) apply 
                with respect to referrals under subparagraph (A) of 
                this paragraph in the same manner as they apply to 
                referrals under paragraph (1)(A).
            (3) Standing referrals.--
                    (A) In general.--A group health plan, and a health 
                insurance issuer in connection with the provision of 
                health insurance coverage, shall have a procedure by 
                which an individual who is a participant, beneficiary, 
                or enrollee and who has a condition that requires 
                ongoing care from a specialist may receive a standing 
                referral to such specialist for treatment of such 
                condition. If the plan or issuer, or if the primary 
                care provider in consultation with the medical director 
                of the plan or issuer and the specialist (if any), 
                determines that such a standing referral is 
                appropriate, the plan or issuer shall make such a 
                referral to such a specialist.
                    (B) Terms of referral.--The provisions of 
                subparagraphs (C) through (E) of paragraph (1) apply 
                with respect to referrals under subparagraph (A) of 
                this paragraph in the same manner as they apply to 
                referrals under paragraph (1)(A).

SEC. 105. CONTINUITY OF CARE.

    (a) In General.--
            (1) Termination of provider.--If a contract between a group 
        health plan, or a health insurance issuer in connection with 
        the provision of health insurance coverage, and a health care 
        provider is terminated (as defined in paragraph (3)), or 
        benefits or coverage provided by a health care provider are 
        terminated because of a change in the terms of provider 
        participation in a group health plan, and an individual who is 
        a participant, beneficiary, or enrollee in the plan or coverage 
        is undergoing a course of treatment from the provider at the 
        time of such termination, the plan or issuer shall--
                    (A) notify the individual on a timely basis of such 
                termination, and
                    (B) subject to subsection (c), permit the 
                individual to continue or be covered with respect to 
                the course of treatment with the provider during a 
                transitional period (provided under subsection (b)).
            (2) Treatment of termination of contract with health 
        insurance issuer.--If a contract for the provision of health 
        insurance coverage between a group health plan and a health 
        insurance issuer is terminated and, as a result of such 
        termination, coverage of services of a health care provider is 
        terminated with respect to an individual, the provisions of 
        paragraph (1) (and the succeeding provisions of this section) 
        shall apply under the plan in the same manner as if there had 
        been a contract between the plan and the provider that had been 
        terminated, but only with respect to benefits that are covered 
        under the plan after the contract termination.
            (3) Termination.--In this section, the term ``terminated'' 
        includes, with respect to a contract, the expiration or 
        nonrenewal of the contract, but does not include a termination 
        of the contract by the plan or issuer for failure to meet 
        applicable quality standards or for fraud.
    (b) Transitional Period.--
            (1) In general.--Except as provided in paragraphs (2) 
        through (4), the transitional period under this subsection 
        shall extend for at least 90 days from the date of the notice 
        described in subsection (a)(1)(A) of the provider's 
        termination.
            (2) Institutional care.--The transitional period under this 
        subsection for institutional or inpatient care from a provider 
        shall extend until the discharge or termination of the period 
        of institutionalization and also shall include institutional 
        care provided within a reasonable time of the date of 
        termination of the provider status if the care was scheduled 
        before the date of the announcement of the termination of the 
        provider status under subsection (a)(1)(A) or if the individual 
        on such date was on an established waiting list or otherwise 
        scheduled to have such care.
            (3) Pregnancy.--If--
                    (A) a participant, beneficiary, or enrollee has 
                entered the second trimester of pregnancy at the time 
                of a provider's termination of participation, and
                    (B) the provider was treating the pregnancy before 
                date of the termination,
        the transitional period under this subsection with respect to 
        provider's treatment of the pregnancy shall extend through the 
        provision of post-partum care directly related to the delivery.
            (4) Terminal illness.--If--
                    (A) a participant, beneficiary, or enrollee was 
                determined to be terminally ill (as determined under 
                section 1861(dd)(3)(A) of the Social Security Act) at 
                the time of a provider's termination of participation, 
                and
                    (B) the provider was treating the terminal illness 
                before the date of termination,
        the transitional period under this subsection shall extend for 
        the remainder of the individual's life for care directly 
        related to the treatment of the terminal illness.
    (c) Permissible Terms and Conditions.--A group health plan or 
health insurance issuer may condition coverage of continued treatment 
by a provider under subsection (a)(1)(B) upon the provider agreeing to 
the following terms and conditions:
            (1) The provider agrees to accept reimbursement from the 
        plan or issuer and individual involved (with respect to cost-
        sharing) at the rates applicable prior to the start of the 
        transitional period as payment in full (or, in the case 
        described in subsection (a)(2), at the rates applicable under 
        the replacement plan or issuer after the date of the 
        termination of the contract with the health insurance issuer) 
        and not to impose cost-sharing with respect to the individual 
        in an amount that would exceed the cost-sharing that could have 
        been imposed if the contract referred to in subsection (a)(1) 
        had not been terminated.
            (2) The provider agrees to adhere to the quality assurance 
        standards of the plan or issuer responsible for payment under 
        paragraph (1) and to provide to such plan or issuer necessary 
        medical information related to the care provided.
            (3) The provider agrees otherwise to adhere to such plan's 
        or issuer's policies and procedures, including procedures 
        regarding referrals and obtaining prior authorization and 
        providing services pursuant to a treatment plan (if any) 
        approved by the plan or issuer.
    (d) Construction.--Nothing in this section shall be construed to 
require the coverage of benefits which would not have been covered if 
the provider involved remained a participating provider.

SEC. 106. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL 
              TRIALS.

    (a) Coverage.--
            (1) In general.--If a group health plan, or health 
        insurance issuer that is providing health insurance coverage, 
        provides coverage to a qualified individual (as defined in 
        subsection (b)), the plan or issuer--
                    (A) may not deny the individual participation in 
                the clinical trial referred to in subsection (b)(2);
                    (B) 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
                    (C) may not discriminate against the individual on 
                the basis of the enrollee's participation in such 
                trial.
            (2) Exclusion of certain costs.--For purposes of paragraph 
        (1)(B), routine patient costs do not include the cost of the 
        tests or measurements conducted primarily for the purpose of 
        the clinical trial involved.
            (3) Use of in-network providers.--If one or more 
        participating providers is participating in a clinical trial, 
        nothing in paragraph (1) shall be construed as preventing a 
        plan or issuer from requiring that a qualified individual 
        participate in the trial through such a participating provider 
        if the provider will accept the individual as a participant in 
        the trial.
    (b) Qualified Individual Defined.--For purposes of subsection (a), 
the term ``qualified individual'' means an individual who is a 
participant or beneficiary in a group health plan, or who is an 
enrollee under health insurance coverage, and who meets the following 
conditions:
            (1)(A) The individual has a life-threatening or serious 
        illness for which no standard treatment is effective.
            (B) The individual is eligible to participate in an 
        approved clinical trial according to the trial protocol with 
        respect to treatment of such illness.
            (C) The individual's participation in the trial offers 
        meaningful potential for significant clinical benefit for the 
        individual.
            (2) Either--
                    (A) the referring physician is a participating 
                health care professional and has concluded that the 
                individual's participation in such trial would be 
                appropriate based upon the individual meeting the 
                conditions described in paragraph (1); or
                    (B) the participant, beneficiary, or enrollee 
                provides medical and scientific information 
                establishing that the individual's participation in 
                such trial would be appropriate based upon the 
                individual meeting the conditions described in 
                paragraph (1).
    (c) Payment.--
            (1) In general.--Under this section a group health plan or 
        health insurance 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.--
            (1) In general.--In this section, the term ``approved 
        clinical trial'' means a clinical research study or clinical 
        investigation approved and funded (which may include funding 
        through in-kind contributions) by one or more of the following:
                    (A) The National Institutes of Health.
                    (B) A cooperative group or center of the National 
                Institutes of Health.
                    (C) Either of the following if the conditions 
                described in paragraph (2) are met:
                            (i) The Department of Veterans Affairs.
                            (ii) The Department of Defense.
            (2) Conditions for departments.--The conditions described 
        in this paragraph, for a study or investigation conducted by a 
        Department, are that the study or investigation has been 
        reviewed and approved through a system of peer review that the 
        Secretary determines--
                    (A) to be comparable to the system of peer review 
                of studies and investigations used by the National 
                Institutes of Health, and
                    (B) assures unbiased review of the highest 
                scientific standards by qualified individuals who have 
                no interest in the outcome of the review.
    (e) Construction.--Nothing in this section shall be construed to 
limit a plan's or issuer's coverage with respect to clinical trials.

SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.

    (a) In General.--If a group health plan, or health insurance issuer 
that offers health insurance coverage, provides benefits with respect 
to prescription drugs but the coverage limits such benefits to drugs 
included in a formulary, the plan or issuer shall--
            (1) ensure participation of participating physicians and 
        pharmacists in the development of the formulary;
            (2) disclose to providers and, disclose upon request under 
        section 121(c)(6) to participants, beneficiaries, and 
        enrollees, the nature of the formulary restrictions; and
            (3) consistent with the standards for a utilization review 
        program under section 115, provide for exceptions from the 
        formulary limitation when a non-formulary alternative is 
        medically indicated.
    (b) Coverage of Approved Drugs and Medical Devices.--
            (1) In general.--A group health plan (or health insurance 
        coverage offered in connection with such a plan) that provides 
        any coverage of prescription drugs or medical devices shall not 
        deny coverage of such a drug or device on the basis that the 
        use is investigational, if the use--
                    (A) in the case of a prescription drug--
                            (i) is included in the labeling authorized 
                        by the application in effect for the drug 
                        pursuant to subsection (b) or (j) of section 
                        505 of the Federal Food, Drug, and Cosmetic 
                        Act, without regard to any postmarketing 
                        requirements that may apply under such Act; or
                            (ii) is included in the labeling authorized 
                        by the application in effect for the drug under 
                        section 351 of the Public Health Service Act, 
                        without regard to any postmarketing 
                        requirements that may apply pursuant to such 
                        section; or
                    (B) in the case of a medical device, is included in 
                the labeling authorized by a regulation under 
                subsection (d) or (3) of section 513 of the Federal 
                Food, Drug, and Cosmetic Act, an order under subsection 
                (f) of such section, or an application approved under 
                section 515 of such Act, without regard to any 
                postmarketing requirements that may apply under such 
                Act.
            (2) Construction.--Nothing in this subsection shall be 
        construed as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        coverage of prescription drugs or medical devices.

SEC. 108. ADEQUACY OF PROVIDER NETWORK.

    (a) In General.--Each group health plan, and each health insurance 
issuer offering health insurance coverage, that provides benefits, in 
whole or in part, through participating health care providers shall 
have (in relation to the coverage) a sufficient number, distribution, 
and variety of qualified participating health care providers to ensure 
that all covered health care services, including specialty services, 
will be available and accessible in a timely manner to all 
participants, beneficiaries, and enrollees under the plan or coverage.
    (b) Treatment of Certain Providers.--The qualified health care 
providers under subsection (a) may include Federally qualified health 
centers, rural health clinics, migrant health centers, and other 
essential community providers located in the service area of the plan 
or issuer and shall include such providers if necessary to meet the 
standards established to carry out such subsection.

SEC. 109. NONDISCRIMINATION IN DELIVERY OF SERVICES.

    (a) Application to Delivery of Services.--Subject to subsection 
(b), a group health plan, and health insurance issuer in relation to 
health insurance coverage, may not discriminate against a participant, 
beneficiary, or enrollee in the delivery of health care services 
consistent with the benefits covered under the plan or coverage or as 
required by law based on race, color, ethnicity, national origin, 
religion, sex, age, mental or physical disability, sexual orientation, 
genetic information, or source of payment.
    (b) Construction.--Nothing in subsection (a) shall be construed as 
relating to the eligibility to be covered, or the offering (or 
guaranteeing the offer) of coverage, under a plan or health insurance 
coverage, the application of any pre-existing condition exclusion 
consistent with applicable law, or premiums charged under such plan or 
coverage.

                     Subtitle B--Quality Assurance

SEC. 111. INTERNAL QUALITY ASSURANCE PROGRAM.

    (a) Requirement.--A group health plan, and a health insurance 
issuer that offers health insurance coverage, shall establish and 
maintain an ongoing, internal quality assurance and continuous quality 
improvement program that meets the requirements of subsection (b).
    (b) Program Requirements.--The requirements of this subsection for 
a quality improvement program of a plan or issuer are as follows:
            (1) Administration.--The plan or issuer has a separate 
        identifiable unit with responsibility for administration of the 
        program.
            (2) Written plan.--The plan or issuer has a written plan 
        for the program that is updated annually and that specifies at 
        least the following:
                    (A) The activities to be conducted.
                    (B) The organizational structure.
                    (C) The duties of the medical director.
                    (D) Criteria and procedures for the assessment of 
                quality.
            (3) Systematic review.--The program provides for systematic 
        review of the type of health services provided, consistency of 
        services provided with good medical practice, and patient 
        outcomes.
            (4) Quality criteria.--The program--
                    (A) uses criteria that are based on performance and 
                patient outcomes where feasible and appropriate;
                    (B) includes criteria that are directed 
                specifically at meeting the needs of at-risk 
                populations and covered individuals with chronic 
                conditions or severe illnesses, including gender-
                specific criteria and pediatric-specific criteria where 
                available and appropriate;
                    (C) includes methods for informing covered 
                individuals of the benefit of preventive care and what 
                specific benefits with respect to preventive care are 
                covered under the plan or coverage; and
                    (D) makes available to the public a description of 
                the criteria used under subparagraph (A).
            (5) System for reporting.--The program has procedures for 
        reporting of possible quality concerns by providers and 
        enrollees and for remedial actions to correct quality problems, 
        including written procedures for responding to concerns and 
        taking appropriate corrective action.
            (6) Data analysis.--The program provides, using data that 
        include the data collected under section 112, for an analysis 
        of the plan's or issuer's performance on quality measures.
            (7) Drug utilization review.--The program provides for a 
        drug utilization review program in accordance with section 114.
    (c) Deeming.--For purposes of subsection (a), the requirements of--
            (1) subsection (b) (other than paragraph (5)) are deemed to 
        be met with respect to a health insurance issuer that is a 
        qualified health maintenance organization (as defined in 
        section 1310(c) of the Public Health Service Act); or
            (2) subsection (b) are deemed to be met with respect to a 
        health insurance issuer that is accredited by a national 
        accreditation organization that the Secretary certifies as 
        applying, as a condition of certification, standards at least a 
        stringent as those required for a quality improvement program 
        under subsection (b).
    (d) Variation Permitted.--The Secretary may provide for variations 
in the application of the requirements of this section to group health 
plans and health insurance issuers based upon differences in the 
delivery system among such plans and issuers as the Secretary deems 
appropriate.

SEC. 112. COLLECTION OF STANDARDIZED DATA.

    (a) In General.--A group health plan and a health insurance issuer 
that offers health insurance coverage shall collect uniform quality 
data that include a minimum uniform data set described in subsection 
(b).
    (b) Minimum Uniform Data Set.--The Secretary shall specify (and may 
from time to time update) the data required to be included in the 
minimum uniform data set under subsection (a) and the standard format 
for such data. Such data shall include at least--
            (1) aggregate utilization data;
            (2) data on the demographic characteristics of 
        participants, beneficiaries, and enrollees;
            (3) data on disease-specific and age-specific mortality 
        rates and (to the extent feasible) morbidity rates of such 
        individuals;
            (4) data on satisfaction of such individuals, including 
        data on voluntary disenrollment and grievances; and
            (5) data on quality indicators and health outcomes, 
        including, to the extent feasible and appropriate, data on 
        pediatric cases and on a gender-specific basis.
    (c) Availability.--A summary of the data collected under subsection 
(a) shall be disclosed under section 121(b)(9). The Secretary shall be 
provided access to all the data so collected.
    (d) Variation Permitted.--The Secretary may provide for variations 
in the application of the requirements of this section to group health 
plans and health insurance issuers based upon differences in the 
delivery system among such plans and issuers as the Secretary deems 
appropriate.

SEC. 113. PROCESS FOR SELECTION OF PROVIDERS.

    (a) In General.--A group health plan and a health insurance issuer 
that offers health insurance coverage shall, if it provides benefits 
through participating health care professionals, have a written process 
for the selection of participating health care professionals, including 
minimum professional requirements.
    (b) Verification of Background.--Such process shall include 
verification of a health care provider's license and a history of 
suspension or revocation.
    (c) Restriction.--Such process shall not use a high-risk patient 
base or location of a provider in an area with residents with poorer 
health status as a basis for excluding providers from participation.
    (d) Nondiscrimination Based on Licensure.--
            (1) In general.--Such process shall not discriminate with 
        respect to participation or indemnification as to any provider 
        who is acting within the scope of the provider's license or 
        certification under applicable State law, solely on the basis 
        of such license or certification.
            (2) Construction.--Paragraph (1) shall not be construed--
                    (A) as requiring the coverage under a plan or 
                coverage of particular benefits or services or to 
                prohibit a plan or issuer from including providers only 
                to the extent necessary to meet the needs of the plan's 
                or issuer's participants, beneficiaries, or enrollees 
                or from establishing any measure designed to maintain 
                quality and control costs consistent with the 
                responsibilities of the plan or issuer; or
                    (B) to override any State licensure or scope-of-
                practice law.
    (e) General Nondiscrimination.--
            (1) In general.--Subject to paragraph (2), such process 
        shall not discriminate with respect to selection of a health 
        care professional to be a participating health care provider, 
        or with respect to the terms and conditions of such 
        participation, based on the professional's race, color, 
        religion, sex, national origin, age, sexual orientation, or 
        disability (consistent with the Americans with Disabilities Act 
        of 1990).
            (2) Rules.--The appropriate Secretary may establish such 
        definitions, rules, and exceptions as may be appropriate to 
carry out paragraph (1), taking into account comparable definitions, 
rules, and exceptions in effect under employment-based 
nondiscrimination laws and regulations that relate to each of the 
particular bases for discrimination described in such paragraph.

SEC. 114. DRUG UTILIZATION PROGRAM.

    A group health plan, and a health insurance issuer that provides 
health insurance coverage, that includes benefits for prescription 
drugs shall establish and maintain, as part of its internal quality 
assurance and continuous quality improvement program under section 111, 
a drug utilization program which--
            (1) encourages appropriate use of prescription drugs by 
        participants, beneficiaries, and enrollees and providers, and
            (2) takes appropriate action to reduce the incidence of 
        improper drug use and adverse drug reactions and interactions.

SEC. 115. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES.

    (a) Compliance With Requirements.--
            (1) In general.--A group health plan, and a health 
        insurance issuer that provides health insurance coverage, shall 
        conduct utilization review activities in connection with the 
        provision of benefits under such plan or coverage only in 
        accordance with a utilization review program that meets the 
        requirements of this section.
            (2) Use of outside agents.--Nothing in this section shall 
        be construed as preventing a group health plan or health 
        insurance issuer from arranging through a contract or otherwise 
        for persons or entities to conduct utilization review 
        activities on behalf of the plan or issuer, so long as such 
        activities are conducted in accordance with a utilization 
        review program that meets the requirements of this section.
            (3) Utilization review defined.--For purposes of this 
        section, the terms ``utilization review'' and ``utilization 
        review activities'' mean procedures used to monitor or evaluate 
        the clinical necessity, appropriateness, efficacy, or 
        efficiency of health care services, procedures or settings, and 
        includes prospective review, concurrent review, second 
        opinions, case management, discharge planning, or retrospective 
        review.
    (b) Written Policies and Criteria.--
            (1) Written policies.--A utilization review program shall 
        be conducted consistent with written policies and procedures 
        that govern all aspects of the program.
            (2) Use of written criteria.--
                    (A) In general.--Such a program shall utilize 
                written clinical review criteria developed pursuant to 
                the program with the input of appropriate physicians. 
                Such criteria shall include written clinical review 
                criteria described in section 111(b)(4)(B).
                    (B) Continuing use of standards in retrospective 
                review.--If a health care service has been specifically 
                pre-authorized or approved for an enrollee under such a 
                program, the program shall not, pursuant to 
                retrospective review, revise or modify the specific 
                standards, criteria, or procedures used for the 
                utilization review for procedures, treatment, and 
                services delivered to the enrollee during the same 
                course of treatment.
    (c) Conduct of Program Activities.--
            (1) Administration by health care professionals.--A 
        utilization review program shall be administered by qualified 
        health care professionals who shall oversee review decisions. 
        In this subsection, the term ``health care professional'' means 
        a physician or other health care practitioner licensed, 
        accredited, or certified to perform specified health services 
        consistent with State law.
            (2) Use of qualified, independent personnel.--
                    (A) In general.--A utilization review program shall 
                provide for the conduct of utilization review 
                activities only through personnel who are qualified 
                and, to the extent required, who have received 
                appropriate training in the conduct of such activities 
                under the program.
                    (B) Peer review of sample of adverse clinical 
                determinations.--Such a program shall provide that 
                clinical peers (as defined in section 191(c)(2)) shall 
                evaluate the clinical appropriateness of at least a 
                sample of adverse clinical determinations.
                    (C) Prohibition of contingent compensation 
                arrangements.--Such a program shall not, with respect 
                to utilization review activities, permit or provide 
                compensation or anything of value to its employees, 
                agents, or contractors in a manner that--
                            (i) provides incentives, direct or 
                        indirect, for such persons to make 
                        inappropriate review decisions, or
                            (ii) is based, directly or indirectly, on 
                        the quantity or type of adverse determinations 
                        rendered.
                    (D) Prohibition of conflicts.--Such a program shall 
                not permit a health care professional who provides 
                health care services to an individual to perform 
                utilization review activities in connection with the 
                health care services being provided to the individual.
            (3) Accessibility of review.--Such a program shall provide 
        that appropriate personnel performing utilization review 
        activities under the program are reasonably accessible by toll-
        free telephone during normal business hours to discuss patient 
        care and allow response to telephone requests, and that 
        appropriate provision is made to receive and respond promptly 
        to calls received during other hours.
            (4) Limits on frequency.--Such a program shall not provide 
        for the performance of utilization review activities with 
        respect to a class of services furnished to an individual more 
        frequently than is reasonably required to assess whether the 
        services under review are medically necessary or appropriate.
            (5) Limitation on information requests.--Under such a 
        program, information shall be required to be provided by health 
        care providers only to the extent it is necessary to perform 
        the utilization review activity involved.
            (6) Review of preliminary utilization review decision.--
        Under such program a participant, beneficiary, or enrollee or 
        any provider acting on behalf of such an individual with the 
        individual's consent, who is dissatisfied with a preliminary 
        utilization review decision has the opportunity to discuss the 
        decision with, and have such decision reviewed by, the medical 
        director of the plan or issuer involved (or the director's 
        designee) who has the authority to reverse the decision.
    (d) Deadline for Determinations.--
            (1) Prior authorization services.--Except as provided in 
        paragraph (2), in the case of a utilization review activity 
        involving the prior authorization of health care items and 
        services for an individual, the utilization review program 
        shall make a determination concerning such authorization, and 
        provide notice of the determination to the individual or the 
        individual's designee and the individual's health care provider 
        by telephone and in printed form, as soon as possible in 
        accordance with the medical exigencies of the cases, and in no 
        event later than 3 business days after the date of receipt of 
        information that is reasonably necessary to make such 
        determination.
            (2) Continued care.--In the case of a utilization review 
        activity involving authorization for continued or extended 
        health care services for an individual, or additional services 
        for an individual undergoing a course of continued treatment 
        prescribed by a health care provider, the utilization review 
        program shall make a determination concerning such 
        authorization, and provide notice of the determination to the 
        individual or the individual's designee and the individual's 
        health care provider by telephone and in printed form, as soon 
        as possible in accordance with the medical exigencies of the 
        cases, and in no event later than 1 business day after the date 
        of receipt of information that is reasonably necessary to make 
        such determination. Such notice shall include, with respect to 
        continued or extended health care services, the number of 
        extended services approved, the new total of approved services, 
        the date of onset of services, and the next review date, if 
        any.
            (3) Previously provided services.--In the case of a 
        utilization review activity involving retrospective review of 
        health care services previously provided for an individual, the 
        utilization review program shall make a determination 
        concerning such services, and provide notice of the 
        determination to the individual or the individual's designee 
        and the individual's health care provider by telephone and in 
        printed form, within 30 days of the date of receipt of 
        information that is reasonably necessary to make such 
        determination.
            (4) Reference to special rules for emergency services, 
        maintenance care, and post-stabilization care.--For waiver of 
        prior authorization requirements in certain cases involving 
        emergency services and maintenance care and post-stabilization 
        care, see subsections (a)(1) and (b) of section 101, 
        respectively.
    (e) Notice of Adverse Determinations.--
            (1) In general.--Notice of an adverse determination under a 
        utilization review program shall be provided in printed form 
        and shall include--
                    (A) the reasons for the determination (including 
                the clinical rationale);
                    (B) instructions on how to initiate an appeal under 
                section 132; and
                    (C) notice of the availability, upon request of the 
                individual (or the individual's designee) of the 
                clinical review criteria relied upon to make such 
                determination.
            (2) Specification of any additional information.--Such a 
        notice shall also specify what (if any) additional necessary 
        information must be provided to, or obtained by, the person 
        making the determination in order to make a decision on such an 
        appeal.

SEC. 116. HEALTH CARE QUALITY ADVISORY BOARD.

    (a) Establishment.--The President shall establish an advisory board 
to provide information to Congress and the administration on issues 
relating to quality monitoring and improvement in the health care 
provided under group health plans and health insurance coverage.
    (b) Number and Appointment.--The advisory board shall be composed 
of the Secretary of Health and Human Services (or the Secretary's 
designee), the Secretary of Labor (or the Secretary's designee), and 20 
additional members appointed by the President, in consultation with the 
Majority and Minority Leaders of the Senate and House of 
Representatives. The members so appointed shall include individuals 
with expertise in--
            (1) consumer needs;
            (2) education and training of health professionals;
            (3) health care services;
            (4) health plan management;
            (5) health care accreditation, quality assurance, 
        improvement, measurement, and oversight;
            (6) medical practice, including practicing physicians;
            (7) prevention and public health; and
            (8) public and private group purchasing for small and large 
        employers or groups.
    (c) Duties.--The advisory board shall--
            (1) identify, update, and disseminate measures of health 
        care quality for group health plans and health insurance 
        issuers, including network and non-network plans;
            (2) advise the Secretary on the development and maintenance 
        of the minimum data set in section 112(b); and
            (3) advise the Secretary on standardized formats for 
        information on group health plans and health insurance 
        coverage.
The measures identified under paragraph (1) may be used on a voluntary 
basis by such plans and issuers. In carrying out paragraph (1), the 
advisory board shall consult and cooperate with national health care 
standard setting bodies which define quality indicators, the Agency for 
Health Care Policy and Research, the Institute of Medicine, and other 
public and private entities that have expertise in health care quality.
    (d) Report.--The advisory board shall provide an annual report to 
Congress and the President on the quality of the health care in the 
United States and national and regional trends in health care quality. 
Such report shall include a description of determinants of health care 
quality and measurements of practice and quality variability within the 
United States.
    (e) Secretarial Consultation.--In serving on the advisory board, 
the Secretaries of Health and Human Services and Labor (or their 
designees) shall consult with the Secretaries responsible for other 
Federal health insurance and health care programs.
    (f) Vacancies.--Any vacancy on the board shall be filled in such 
manner as the original appointment. Members of the board shall serve 
without compensation but shall be reimbursed for travel, subsistence, 
and other necessary expenses incurred by them in the performance of 
their duties. Administrative support, scientific support, and technical 
assistance for the advisory board shall be provided by the Secretary of 
Health and Human Services.
    (g) Continuation.--Section 14(a)(2)(B) of the Federal Advisory 
Committee Act (5 U.S.C. App.; relating to the termination of advisory 
committees) shall not apply to the advisory board.

                    Subtitle C--Patient Information

SEC. 121. PATIENT INFORMATION.

    (a) Disclosure Requirement.--
            (1) Group health plans.--A group health plan shall--
                    (A) provide to participants and beneficiaries at 
                the time of initial coverage under the plan (or the 
                effective date of this section, in the case of 
                individuals who are participants or beneficiaries as of 
                such date), and at least annually thereafter, the 
                information described in subsection (b) in printed 
                form;
                    (B) provide to participants and beneficiaries, 
                within a reasonable period (as specified by the 
                appropriate Secretary) before or after the date of 
significant changes in the information described in subsection (b), 
information in printed form on such significant changes; and
                    (C) upon request, make available to participants 
                and beneficiaries, the applicable authority, and 
                prospective participants and beneficiaries, the 
                information described in subsection (b) or (c) in 
                printed form.
            (2) Health insurance issuers.--A health insurance issuer in 
        connection with the provision of health insurance coverage 
        shall--
                    (A) provide to individuals enrolled under such 
                coverage at the time of enrollment, and at least 
                annually thereafter, the information described in 
                subsection (b) in printed form;
                    (B) provide to enrollees, within a reasonable 
                period (as specified by the appropriate Secretary) 
                before or after the date of significant changes in the 
                information described in subsection (b), information in 
                printed form on such significant changes; and
                    (C) upon request, make available to the applicable 
                authority, to individuals who are prospective 
                enrollees, and to the public the information described 
                in subsection (b) or (c) in printed form.
    (b) Information Provided.--The information described in this 
subsection with respect to a group health plan or health insurance 
coverage offered by a health insurance issuer includes the following:
            (1) Service area.--The service area of the plan or issuer.
            (2) Benefits.--Benefits offered under the plan or coverage, 
        including--
                    (A) covered benefits, including benefit limits and 
                coverage exclusions;
                    (B) cost sharing, such as deductibles, coinsurance, 
                and copayment amounts, including any liability for 
                balance billing, any maximum limitations on out of 
                pocket expenses, and the maximum out of pocket costs 
                for services that are provided by non participating 
                providers or that are furnished without meeting the 
                applicable utilization review requirements;
                    (C) the extent to which benefits may be obtained 
                from nonparticipating providers;
                    (D) the extent to which a participant, beneficiary, 
                or enrollee may select from among participating 
                providers and the types of providers participating in 
                the plan or issuer network;
                    (E) process for determining experimental coverage; 
                and
                    (F) use of a prescription drug formulary.
            (3) Access.--A description of the following:
                    (A) The number, mix, and distribution of providers 
                under the plan or coverage.
                    (B) Out-of-network coverage (if any) provided by 
                the plan or coverage.
                    (C) Any point-of-service option (including any 
                supplemental premium or cost-sharing for such option).
                    (D) The procedures for participants, beneficiaries, 
                and enrollees to select, access, and change 
                participating primary and specialty providers.
                    (E) The rights and procedures for obtaining 
                referrals (including standing referrals) to 
                participating and nonparticipating providers.
                    (F) The name, address, and telephone number of 
                participating health care providers and an indication 
                of whether each such provider is available to accept 
                new patients.
                    (G) Any limitations imposed on the selection of 
                qualifying participating health care providers, 
                including any limitations imposed under section 
                103(b)(2).
                    (H) How the plan or issuer addresses the needs of 
                participants, beneficiaries, and enrollees and others 
                who do not speak English or who have other special 
                communications needs in accessing providers under the 
                plan or coverage, including the provision of 
                information described in this subsection and subsection 
                (c) to such individuals and including the provision of 
                information in a language other than English if 5 
                percent of the number of participants, beneficiaries, 
                and enrollees communicate in that language instead of 
                English.
            (4) Out-of-area coverage.--Out-of-area coverage provided by 
        the plan or issuer.
            (5) Emergency coverage.--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 of the plan or 
                issuer for obtaining emergency services; and
                    (C) the locations of (i) emergency departments, and 
                (ii) other settings, in which plan physicians and 
                hospitals provide emergency services and post-
                stabilization care.
            (6) Percentage of premiums used for benefits (loss-
        ratios).--In the case of health insurance coverage only (and 
        not with respect to group health plans that do not provide 
        coverage through health insurance coverage), a description of 
        the overall loss-ratio for the coverage (as defined in 
        accordance with rules established or recognized by the 
        Secretary of Health and Human Services).
            (7) Prior authorization rules.--Rules regarding prior 
        authorization or other review requirements that could result in 
        noncoverage or nonpayment.
            (8) Grievance and appeals procedures.--All appeal or 
        grievance rights and procedures under the plan or coverage, 
        including the method for filing grievances and the time frames 
        and circumstances for acting on grievances and appeals, who is 
        the applicable authority with respect to the plan or issuer, 
        and the availability of assistance through an ombudsman to 
        individuals in relation to group health plans and health 
        insurance coverage.
            (9) Quality assurance.--A summary description of the data 
        on quality collected under section 112(a), including a summary 
        description of the data on satisfaction of participants, 
        beneficiaries, and enrollees (including data on individual 
        voluntary disenrollment and grievances and appeals) described 
        in section 112(b)(4).
            (10) Summary of provider financial incentives.--A summary 
        description of the information on the types of financial 
        payment incentives (described in section 1852(j)(4) of the 
        Social Security Act) provided by the plan or issuer under the 
        coverage.
            (11) Information on issuer.--Notice of appropriate mailing 
        addresses and telephone numbers to be used by participants, 
        beneficiaries, and enrollees in seeking information or 
        authorization for treatment.
            (12) Availability of information on request.--Notice that 
        the information described in subsection (c) is available upon 
        request.
    (c) Information Made Available Upon Request.--The information 
described in this subsection is the following:
            (1) Utilization review activities.--A description of 
        procedures used and requirements (including circumstances, time 
        frames, and appeal rights) under any utilization review program 
        under section 115, including under any drug formulary program 
        under section 107.
            (2) Grievance and appeals information.--Information on the 
        number of grievances and appeals and on the disposition in the 
        aggregate of such matters.
            (3) Method of physician compensation.--An overall summary 
        description as to the method of compensation of participating 
        physicians, including information on the types of financial 
        payment incentives (described in section 1852(j)(4) of the 
        Social Security Act) provided by the plan or issuer under the 
        coverage.
            (4) Specific information on credentials of participating 
        providers.--In the case of each participating provider, a 
        description of the credentials of the provider.
            (5) Confidentiality policies and procedures.--A description 
        of the policies and procedures established to carry out section 
        122.
            (6) Formulary restrictions.--A description of the nature of 
        any drug formula restrictions.
            (7) Participating provider list.--A list of current 
        participating health care providers.
    (d) Form of Disclosure.--
            (1) Uniformity.--Information required to be disclosed under 
        this section shall be provided in accordance with uniform, 
        national reporting standards specified by the Secretary, after 
        consultation with applicable State authorities, so that 
        prospective enrollees may compare the attributes of different 
        issuers and coverage offered within an area.
            (2) Information into handbook.--Nothing in this section 
        shall be construed as preventing a group health plan or health 
        insurance issuer from making the information under subsections 
        (b) and (c) available to participants, beneficiaries, and 
        enrollees through an enrollee handbook or similar publication.
            (3) Updating participating provider information.--The 
        information on participating health care providers described in 
        subsection (b)(3)(C) shall be updated within such reasonable 
period as determined appropriate by the Secretary. Nothing in this 
section shall prevent an issuer from changing or updating other 
information made available under this section.
    (e) Construction.--Nothing in this section shall be construed as 
requiring public disclosure of individual contracts or financial 
arrangements between a group health plan or health insurance issuer and 
any provider.

SEC. 122. PROTECTION OF PATIENT CONFIDENTIALITY.

    Insofar as a group health plan, or a health insurance issuer that 
offers health insurance coverage, maintains medical records or other 
health information regarding participants, beneficiaries, and 
enrollees, the plan or issuer shall establish procedures--
            (1) to safeguard the privacy of any individually 
        identifiable enrollee information;
            (2) to maintain such records and information in a manner 
        that is accurate and timely, and
            (3) to assure timely access of such individuals to such 
        records and information.

SEC. 123. HEALTH INSURANCE OMBUDSMEN.

    (a) In General.--Each State that obtains a grant under subsection 
(c) shall provide for creation and operation of a Health Insurance 
Ombudsman through a contract with a not-for-profit organization that 
operates independent of group health plans and health insurance 
issuers. Such Ombudsman shall be responsible for at least the 
following:
            (1) To assist consumers in the State in choosing among 
        health insurance coverage or among coverage options offered 
        within group health plans.
            (2) To provide counseling and assistance to enrollees 
        dissatisfied with their treatment by health insurance issuers 
        and group health plans in regard to such coverage or plans and 
        with respect to grievances and appeals regarding determinations 
        under such coverage or plans.
    (b) Federal Role.--In the case of any State that does not provide 
for such an Ombudsman under subsection (a), the Secretary shall provide 
for the creation and operation of a Health Insurance Ombudsman through 
a contract with a not-for-profit organization that operates independent 
of group health plans and health insurance issuers and that is 
responsible for carrying out with respect to that State the functions 
otherwise provided under subsection (a) by a Health Insurance 
Ombudsman.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Health and Human Services such amounts 
as may be necessary to provide for grants to States for contracts for 
Health Insurance Ombudsmen under subsection (a) or contracts for such 
Ombudsmen under subsection (b).
    (d) Construction.--Nothing in this section shall be construed to 
prevent the use of other forms of enrollee assistance.

              Subtitle D--Grievance and Appeals Procedures

SEC. 131. ESTABLISHMENT OF GRIEVANCE PROCESS.

    (a) Establishment of Grievance System.--
            (1) In general.--A group health plan, and a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, shall establish and maintain a system to 
        provide for the presentation and resolution of oral and written 
        grievances brought by individuals who are participants, 
        beneficiaries, or enrollees, or health care providers or other 
        individuals acting on behalf of an individual and with the 
        individual's consent, regarding any aspect of the plan's or 
        issuer's services.
            (2) Scope.--The system shall include grievances regarding 
        access to and availability of services, quality of care, choice 
        and accessibility of providers, network adequacy, and 
        compliance with the requirements of this title.
    (b) Grievance System.--Such system shall include the following 
components with respect to individuals who are participants, 
beneficiaries, or enrollees:
            (1) Written notification to all such individuals and 
        providers of the telephone numbers and business addresses of 
        the plan or issuer personnel responsible for resolution of 
        grievances and appeals.
            (2) A system to record and document, over a period of at 
        least 3 previous years, all grievances and appeals made and 
        their status.
            (3) A process providing for timely processing and 
        resolution of grievances.
            (4) Procedures for follow-up action, including the methods 
        to inform the person making the grievance of the resolution of 
        the grievance.
            (5) Notification to the continuous quality improvement 
        program under section 111(a) of all grievances and appeals 
        relating to quality of care.

SEC. 132. INTERNAL APPEALS OF ADVERSE DETERMINATIONS.

    (a) Right of Appeal.--
            (1) In general.--A participant or beneficiary in a group 
        health plan, and an enrollee in health insurance coverage 
        offered by a health insurance issuer, and any provider or other 
        person acting on behalf of such an individual with the 
        individual's consent, may appeal any appealable decision (as 
        defined in paragraph (2)) under the procedures described in 
        this section and (to the extent applicable) section 133. Such 
        individuals and providers shall be provided with a written 
        explanation of the appeal process and the determination upon 
        the conclusion of the appeals process and as provided in 
        section 121(b)(8).
            (2) Appealable decision defined.--In this section, the term 
        ``appealable decision'' means any of the following:
                    (A) Denial, reduction, or termination of, or 
                failure to provide or make payment (in whole or in 
                part) for, a benefit, including a failure to cover an 
                item or service for which benefits are otherwise 
                provided because it is determined to be experimental or 
                investigational or not medically necessary or 
                appropriate.
                    (B) Failure to provide coverage of emergency 
                services or reimbursement of maintenance care or post-
                stabilization care under section 101.
                    (C) Failure to provide a choice of provider under 
                section 103.
                    (D) Failure to provide qualified health care 
                providers under section 103.
                    (E) Failure to provide access to specialty and 
                other care under section 104.
                    (F) Failure to provide continuation of care under 
                section 105.
                    (G) Failure to provide coverage of routine patient 
                costs in connection with an approval clinical trial 
                under section 106.
                    (H) Failure to provide access to needed drugs under 
                section 107(a)(3) or 107(b).
                    (I) Discrimination in delivery of services in 
                violation of section 109.
                    (J) An adverse determination under a utilization 
                review program under section 115.
                    (K) The imposition of a limitation that is 
                prohibited under section 151.
    (b) Internal Appeal Process.--
            (1) In general.--Each group health plan and health 
        insurance issuer shall establish and maintain an internal 
        appeal process under which any participant, beneficiary, 
        enrollee, or provider acting on behalf of such an individual 
        with the individual's consent, who is dissatisfied with any 
        appealable decision has the opportunity to appeal the decision 
        through an internal appeal process. The appeal may be 
        communicated orally.
            (2) Conduct of review.--
                    (A) In general.--The process shall include a review 
                of the decision by a physician or other health care 
                professional (or professionals) who has been selected 
                by the plan or issuer and who has not been involved in 
                the appealable decision at issue in the appeal.
                    (B) Availability and participation of clinical 
                peers.--The individuals conducting such review shall 
                include one or more clinical peers (as defined in 
                section 191(c)(2)) who have not been involved in the 
                appealable decision at issue in the appeal.
            (3) Deadline.--
                    (A) In general.--Subject to subsection (c), the 
                plan or issuer shall conclude each appeal as soon as 
                possible after the time of the receipt of the appeal in 
                accordance with medical exigencies of the case 
                involved, but in no event later than--
                            (i) 72 hours after the time of receipt of 
                        an expedited appeal, and
                            (ii) except as provided in subparagraph 
                        (B), 15 business days after such time in the 
                        case of all other appeals.
                    (B) Extension.--A group health plan or health 
                insurance issuer may extend the deadline for an appeal 
                that does not relate to a decision regarding an 
                expedited appeal and that does not involve medical 
                exigencies up to an additional 10 business days where 
                it can demonstrate to the applicable authority 
                reasonable cause for the delay beyond its control and 
                where it provides, within the original deadline under 
                subparagraph (A), a written progress report and 
                explanation for the delay to such authority and to the 
                participant, beneficiary, or enrollee and provider 
                involved.
            (4) Notice.--If a plan or issuer denies an appeal, the plan 
        or issuer shall provide the participant, beneficiary, or 
        enrollee and provider involved with notice in printed form of 
        the denial and the reasons therefore, together with a notice in 
        printed form of rights to any further appeal.
    (c) Expedited Review Process.--
            (1) In general.--A group health plan, and a health 
        insurance issuer, shall establish procedures in writing for the 
        expedited consideration of appeals under subsection (b) in 
        situations in which the application of the normal timeframe for 
        making a determination could seriously jeopardize the life or 
        health of the participant, beneficiary, or enrollee or such an 
        individual's ability to regain maximum function.
            (2) Process.--Under such procedures--
                    (A) the request for expedited appeal may be 
                submitted orally or in writing by an individual or 
                provider who is otherwise entitled to request the 
                appeal;
                    (B) all necessary information, including the plan's 
                or issuer's decision, shall be transmitted between the 
                plan or issuer and the requester by telephone, 
                facsimile, or other similarly expeditious available 
                method; and
                    (C) the plan or issuer shall expedite the appeal if 
                the request for an expedited appeal is submitted under 
                subparagraph (A) by a physician and the request 
                indicates that the situation described in paragraph (1) 
                exists.
    (d) Direct Use of Further Appeals.--In the event that the plan or 
issuer fails to comply with any of the deadlines for completion of 
appeals under this section or in the event that the plan or issuer for 
any reason expressly waives its rights to an internal review of an 
appeal under subsection (b), the participant, beneficiary, or enrollee 
involved and the provider involved shall be relieved of any obligation 
to complete the appeal involved and may, at such an individual's or 
provider's option, proceed directly to seek further appeal through any 
applicable external appeals process.

SEC. 133. EXTERNAL APPEALS OF ADVERSE DETERMINATIONS.

    (a) Right to External Appeal.--
            (1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, 
        shall provide for an external appeals process that meets the 
        requirements of this section in the case of an externally 
        appealable decision described in paragraph (2). The appropriate 
        Secretary shall establish standards to carry out such 
        requirements.
            (2) Externally appealable decision defined.--For purposes 
        of this section, the term ``externally appealable decision'' 
        means an appealable decision (as defined in section 132(a)(2)) 
        if--
                    (A) the amount involved exceeds a significant 
                threshold; or
                    (B) the patient's life or health is jeopardized as 
                a consequence of the decision.
        Such term does not include a denial of coverage for services 
        that are specifically listed in plan or coverage documents as 
        excluded from coverage.
            (3) Exhaustion of internal appeals process.--A plan or 
        issuer may condition the use of an external appeal process in 
        the case of an externally appealable decision upon completion 
        of the internal review process provided under section 132, but 
        only if the decision is made in a timely basis consistent with 
        the deadlines provided under this subtitle.
    (b) General Elements of External Appeals Process.--
            (1) Contract with qualified external appeal entity.--
                    (A) Contract requirement.--Subject to subparagraph 
                (B), the external appeal process under this section of 
                a plan or issuer shall be conducted under a contract 
                between the plan or issuer and one or more qualified 
                external appeal entities (as defined in subsection 
                (c)).
                    (B) Restrictions on qualified external appeal 
                entity.--
                            (i) By state for health insurance 
                        issuers.--With respect to health insurance 
                        issuers in a State, the State may provide for 
                        external review activities to be conducted by a 
                        qualified external appeal entity that is 
                        designated by the State or that is selected by 
                        the State in such a manner as to assure an 
                        unbiased determination.
                            (ii) By federal government for group health 
                        plans.--With respect to group health plans, the 
                        appropriate Secretary may exercise the same 
                        authority as a State may exercise with respect 
                        to health insurance issuers under clause (i). 
                        Such authority may include requiring the use of 
                        the qualified external appeal entity designated 
                        or selected under such clause.
                            (iii) Limitation on plan or issuer 
                        selection.--If an applicable authority permits 
                        more than one entity to qualify as a qualified 
                        external appeal entity with respect to a group 
                        health plan or health insurance issuer and the 
                        plan or issuer may select among such qualified 
                        entities, the applicable authority--
                                    (I) shall assure that the selection 
                                process will not create any incentives 
                                for external appeal entities to make a 
                                decision in a biased manner, and
                                    (II) shall implement a procedures 
                                for auditing a sample of decisions by 
                                such entities to assure that no such 
                                decisions are made in a biased manner.
                    (C) Other terms and conditions.--The terms and 
                conditions of a contract under this paragraph shall be 
                consistent with the standards the appropriate Secretary 
                shall establish to assure there is no real or apparent 
                conflict of interest in the conduct of external appeal 
                activities. Such contract shall provide that the direct 
                costs of the process (not including costs of 
                representation of a participant, beneficiary, or 
                enrollee) shall be paid by the plan or issuer, and not 
                by the participant, beneficiary, or enrollee.
            (2) Elements of process.--An external appeal process shall 
        be conducted consistent with standards established by the 
        appropriate Secretary that include at least the following:
                    (A) Fair process; de novo determination.--The 
                process shall provide for a fair, de novo 
                determination.
                    (B) Determination concerning externally appealable 
                decisions.--A qualified external appeal entity shall 
                determine whether a decision is an externally 
                appealable decision and related decisions, including--
                            (i) whether such a decision involves an 
                        expedited appeal;
                            (ii) the appropriate deadlines for internal 
                        review process required due to medical 
                        exigencies in a case; and
                            (iii) whether such a process has been 
                        completed.
                    (C) Opportunity to submit evidence, have 
                representation, and make oral presentation.--Each party 
                to an externally appealable decision--
                            (i) may submit and review evidence related 
                        to the issues in dispute,
                            (ii) may use the assistance or 
                        representation of one or more individuals (any 
                        of whom may be an attorney), and
                            (iii) may make an oral presentation.
                    (D) Provision of information.--The plan or issuer 
                involved shall provide timely access to all its records 
                relating to the matter of the externally appealable 
                decision and to all provisions of the plan or health 
                insurance coverage (including any coverage manual) 
                relating to the matter.
                    (E) Timely decisions.--A determination by the 
                external appeal entity on the decision shall--
                            (i) be made orally or in writing and, if it 
                        is made orally, shall be supplied to the 
                        parties in writing as soon as possible;
                            (ii) be binding on the plan or issuer;
                            (iii) be made in accordance with the 
                        medical exigencies of the case involved, but in 
                        no event later than 60 days (or 72 hours in the 
                        case of an expedited appeal) from the date of 
                        completion of the filing of notice of external 
                        appeal of the decision;
                            (iv) state, in layperson's language, the 
                        basis for the determination, including, if 
                        relevant, any basis in the terms or conditions 
                        of the plan or coverage; and
                            (v) inform the participant, beneficiary, or 
                        enrollee of the individual's rights to seek 
                        further review by the courts (or other process) 
                        of the external appeal determination.
    (c) Qualifications of External Appeal Entities.--
            (1) In general.--For purposes of this section, the term 
        ``qualified external appeal entity'' means, in relation to a 
        plan or issuer, an entity (which may be a governmental entity) 
        that is certified under paragraph (2) as meeting the following 
        requirements:
                    (A) There is no real or apparent conflict of 
                interest that would impede the entity conducting 
                external appeal activities independent of the plan or 
                issuer.
                    (B) The entity conducts external appeal activities 
                through clinical peers.
                    (C) The entity has sufficient medical, legal, and 
                other expertise and sufficient staffing to conduct 
                external appeal activities for the plan or issuer on a 
                timely basis consistent with subsection (b)(3)(E).
                    (D) The entity meets such other requirements as the 
                appropriate Secretary may impose.
            (2) Certification of external appeal entities.--
                    (A) In general.--In order to be treated as a 
                qualified external appeal entity with respect to--
                            (i) a group health plan, the entity must be 
                        certified (and, in accordance with subparagraph 
                        (B), periodically recertified) as meeting the 
                        requirements of paragraph (1) by the Secretary 
                        of Labor (or under a process recognized or 
                        approved by the Secretary of Labor); or
                            (ii) a health insurance issuer operating in 
                        a State, the entity must be certified (and, in 
                        accordance with subparagraph (B), periodically 
                        recertified) as meeting such requirements by 
                        the applicable State authority (or, if the 
                        States has not established an adequate 
                        certification and recertification process, by 
                        the Secretary of Health and Human Services, or 
                        under a process recognized or approved by such 
                        Secretary).
                    (B) Recertification process.--The appropriate 
                Secretary shall develop standards for the 
                recertification of external appeal entities. Such 
                standards shall include a specification of--
                            (i) the information required to be 
                        submitted as a condition of recertification on 
                        the entity's performance of external appeal 
                        activities, which information shall include the 
                        number of cases reviewed, a summary of the 
                        disposition of those cases, the length of time 
                        in making determinations on those cases, and 
                        such information as may be necessary to assure 
                        the independence of the entity from the plans 
                        or issuers for which external appeal activities 
                        are being conducted; and
                            (ii) the periodicity which recertification 
                        will be required.
    (d) Continuing Legal Rights of Enrollees.--Nothing in this title 
shall be construed as removing any legal rights of participants, 
beneficiaries, enrollees, and others under State or Federal law, 
including the right to file judicial actions to enforce rights.

         Subtitle E--Protecting the Doctor-Patient Relationship

SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    (a) Prohibition.--
            (1) General rule.--The provisions of any contract or 
        agreement, or the operation of any contract or agreement, 
        between a group health plan or health insurance issuer in 
        relation to health insurance coverage (including any 
        partnership, association, or other organization that enters 
        into or administers such a contract or agreement) and a health 
        care provider (or group of health care providers) shall not 
        prohibit or restrict the provider from engaging in medical 
        communications with the provider's patient.
            (2) Nullification.--Any contract provision or agreement 
        described in paragraph (1) shall be null and void.
    (b) Rules of Construction.--Nothing in this section shall be 
construed--
            (1) to prohibit the enforcement, as part of a contract or 
        agreement to which a health care provider is a party, of any 
        mutually agreed upon terms and conditions, including terms and 
        conditions requiring a health care provider to participate in, 
        and cooperate with, all programs, policies, and procedures 
        developed or operated by a group health plan or health 
        insurance issuer to assure, review, or improve the quality and 
        effective utilization of health care services (if such 
        utilization is according to guidelines or protocols that are 
        based on clinical or scientific evidence and the professional 
        judgment of the provider) but only if the guidelines or 
        protocols under such utilization do not prohibit or restrict 
        medical communications between providers and their patients; or
            (2) to permit a health care provider to misrepresent the 
        scope of benefits covered under the group health plan or health 
        insurance coverage or to otherwise require a group health plan 
        health insurance issuer to reimburse providers for benefits not 
        covered under the plan or coverage.
    (c) Medical Communication Defined.--In this section:
            (1) In general.--The term ``medical communication'' means 
        any communication made by a health care provider with a patient 
        of the health care provider (or the guardian or legal 
        representative of such patient) with respect to--
                    (A) the patient's health status, medical care, or 
                treatment options;
                    (B) any utilization review requirements that may 
                affect treatment options for the patient; or
                    (C) any financial incentives that may affect the 
                treatment of the patient.
            (2) Misrepresentation.--The term ``medical communication'' 
        does not include a communication by a health care provider with 
        a patient of the health care provider (or the guardian or legal 
        representative of such patient) if the communication involves a 
        knowing or willful misrepresentation by such provider.

SEC. 142. PROHIBITION AGAINST TRANSFER OF INDEMNIFICATION OR IMPROPER 
              INCENTIVE ARRANGEMENTS.

    (a) Prohibition of Transfer of Indemnification.--
            (1) In general.--No contract or agreement between a group 
        health plan or health insurance issuer (or any agent acting on 
        behalf of such a plan or issuer) and a health care provider 
        shall contain any provision purporting to transfer to the 
        health care provider by indemnification or otherwise any 
        liability relating to activities, actions, or omissions of the 
        plan, issuer, or agent (as opposed to the provider).
            (2) Nullification.--Any contract or agreement provision 
        described in paragraph (1) shall be null and void.
    (b) Prohibition of Improper Physician Incentive Plans.--
            (1) In general.--A group health plan and a health insurance 
        issuer offering health insurance coverage may not operate any 
        physician incentive plan (as defined in subparagraph (B) of 
        section 1876(i)(8) of the Social Security Act) unless the 
        requirements described in subparagraph (A) of such section are 
        met with respect to such a plan.
            (2) Application.--For purposes of carrying out paragraph 
        (1), any reference in section 1876(i)(8) of the Social Security 
        Act to the Secretary, an eligible organization, or an 
        individual enrolled with the organization shall be treated as a 
        reference to the applicable authority, a group health plan or 
        health insurance issuer, respectively, and a participant, 
        beneficiary, or enrollee with the plan or organization, 
        respectively.

SEC. 143. ADDITIONAL RULES REGARDING PARTICIPATION OF HEALTH CARE 
              PROFESSIONALS.

    (a) Procedures.--Insofar as a group health plan, or health 
insurance issuer that offers health insurance coverage, provides 
benefits through participating health care professionals, the plan or 
issuer shall establish reasonable procedures relating to the 
participation (under an agreement between a professional and the plan 
or issuer) of such professionals under the plan or coverage. Such 
procedures shall include--
            (1) providing notice of the rules regarding participation;
            (2) providing written notice of participation decisions 
        that are adverse to professionals; and
            (3) providing a process within the plan or issuer for 
        appealing such adverse decisions, including the presentation of 
        information and views of the professional regarding such 
        decision.
    (b) Consultation in Medical Policies.--A group health plan, and 
health insurance issuer that offers health insurance coverage, shall 
consult with participating physicians (if any) regarding the plan's or 
issuer's medical policy, quality, and medical management procedures.

SEC. 144. PROTECTION FOR PATIENT ADVOCACY.

    (a) Protection for Use of Utilization Review and Grievance 
Process.--A group health plan, and a health insurance issuer with 
respect to the provision of health insurance coverage, may not 
retaliate against a participant, beneficiary, enrollee, or health care 
provider based on the participant's, beneficiary's, enrollee's or 
provider's use of, or participation in, a utilization review process or 
a grievance process of the plan or issuer (including an internal or 
external review or appeal process) under this title.
    (b) Protection for Quality Advocacy by Health Care Professionals.--
            (1) In general.--A group health plan or health insurance 
        issuer may not retaliate or discriminate against a protected 
        health care professional because the professional in good 
        faith--
                    (A) discloses information relating to the care, 
                services, or conditions affecting one or more 
                participants, beneficiaries, or enrollees of the plan 
                or issuer to an appropriate public regulatory agency, 
                an appropriate private accreditation body, or 
                appropriate management personnel of the plan or issuer; 
                or
                    (B) initiates, cooperates, or otherwise 
                participates in an investigation or proceeding by such 
                an agency with respect to such care, services, or 
                conditions.
        If an institutional health care provider is a participating 
        provider with such a plan or issuer or otherwise receives 
        payments for benefits provided by such a plan or issuer, the 
        provisions of the previous sentence shall apply to the provider 
        in relation to care, services, or conditions affecting one or 
        more patients within an institutional health care provider in 
        the same manner as they apply to the plan or issuer in relation 
        to care, services, or conditions provided to one or more 
        participants, beneficiaries, or enrollees; and for purposes of 
        applying this sentence, any reference to a plan or issuer is 
        deemed a reference to the institutional health care provider.
            (2) Good faith action.--For purposes of paragraph (1), a 
        protected health care professional is considered to be acting 
        in good faith with respect to disclosure of information or 
        participation if, with respect to the information disclosed as 
        part of the action--
                    (A) the disclosure is made on the basis of personal 
                knowledge and is consistent with that degree of 
                learning and skill ordinarily possessed by health care 
                professionals with the same licensure or certification 
                and the same experience;
                    (B) the professional reasonably believes the 
                information to be true;
                    (C) the information evidences either a violation of 
                a law, rule, or regulation, of an applicable 
                accreditation standard, or of a generally recognized 
                professional or clinical standard or that a patient is 
                in imminent hazard of loss of life or serious injury; 
                and
                    (D) subject to subparagraphs (B) and (C) of 
                paragraph (3), the professional has followed reasonable 
                internal procedures of the plan, issuer, or 
                institutional health care provider established or the 
                purpose of addressing quality concerns before making 
                the disclosure.
            (3) Exception and special rule.--
                    (A) General exception.--Paragraph (1) does not 
                protect disclosures that would violate Federal or State 
                law or diminish or impair the rights of any person to 
                the continued protection of confidentiality of 
                communications provided by such law.
                    (B) Notice of internal procedures.--Subparagraph 
                (D) of paragraph (2) shall not apply unless the 
                internal procedures involved are reasonably expected to 
                be known to the health care professional involved. For 
                purposes of this subparagraph, a health care 
                professional is reasonably expected to know of internal 
                procedures if those procedures have been made available 
                to the professional through distribution or posting.
                    (C) Internal procedure exception.--Subparagraph (D) 
                of paragraph (2) also shall not apply if--
                            (i) the disclosure relates to an imminent 
                        hazard of loss of life or serious injury to a 
                        patient;
                            (ii) the disclosure is made to an 
                        appropriate private accreditation body pursuant 
                        to disclosure procedures established by the 
                        body; or
                            (iii) the disclosure is in response to an 
                        inquiry made in an investigation or proceeding 
                        of an appropriate public regulatory agency and 
                        the information disclosed is limited to the 
                        scope of the investigation or proceeding.
            (4) Additional considerations.--It shall not be a violation 
        of paragraph (1) to take an adverse action against a protected 
        health care professional if the plan, issuer, or provider 
        taking the adverse action involved demonstrates that it would 
        have taken the same adverse action even in the absence of the 
        activities protected under such paragraph.
            (5) Notice.--A group health plan, health insurance issuer, 
        and institutional health care provider shall post a notice, to 
        be provided or approved by the Secretary of Labor, setting 
        forth excerpts from, or summaries of, the pertinent provisions 
        of this subsection and information pertaining to enforcement of 
        such provisions.
            (6) Constructions.--
                    (A) Determinations of coverage.--Nothing in this 
                subsection shall be construed to prohibit a plan or 
                issuer from making a determination not to pay for a 
                particular medical treatment or service or the services 
                of a type of health care professional.
                    (B) Enforcement of peer review protocols and 
                internal procedures.--Nothing in this subsection shall 
                be construed to prohibit a plan, issuer, or provider 
                from establishing and enforcing reasonable peer review 
                or utilization review protocols or determining whether 
                a protected health care professional has complied with 
                those protocols or from establishing and enforcing 
                internal procedures for the purpose of addressing 
                quality concerns.
                    (C) Relation to other rights.--Nothing in this 
                subsection shall be construed to abridge rights of 
                participants, beneficiaries, enrollees, and protected 
                health care professionals under other applicable 
                Federal or State laws.
            (7) Protected health care professional defined.--For 
        purposes of this subsection, the term ``protected health care 
        professional'' means an individual who is a licensed or 
        certified health care professional and who--
                    (A) with respect to a group health plan or health 
                insurance issuer, is an employee of the plan or issuer 
                or has a contract with the plan or issuer for provision 
                of services for which benefits are available under the 
                plan or issuer; or
                    (B) with respect to an institutional health care 
                provider, is an employee of the provider or has a 
                contract or other arrangement with the provider 
                respecting the provision of health care services.

              Subtitle F--Promoting Good Medical Practice

SEC. 151. PROMOTING GOOD MEDICAL PRACTICE.

    (a) Prohibiting Arbitrary Limitations or Conditions for the 
Provision of Services.--
            (1) In general.--A group health plan, and a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, may not arbitrarily interfere with or alter 
        the decision of the treating physician regarding the manner or 
        setting in which particular services are delivered if the 
        services are medically necessary or appropriate for treatment 
        or diagnosis to the extent that such treatment or diagnosis is 
        otherwise a covered benefit.
            (2) Construction.--Paragraph (1) shall not be construed as 
        prohibiting a plan or issuer from limiting the delivery of 
        services to one or more health care providers within a network 
        of such providers.
    (b) No Change in Coverage.--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 plan or coverage or from 
conducting utilization review activities consistent with this 
subsection.
    (c) Medical Necessity or Appropriateness Defined.--In subsection 
(a), the term ``medically necessary or appropriate'' means, with 
respect to a service or benefit, a service or benefit which is 
consistent with generally accepted principles of professional medical 
practice.

SEC. 152. STANDARDS RELATING TO BENEFITS FOR CERTAIN BREAST CANCER 
              TREATMENT.

    (a) Requirements for Minimum Hospital Stay Following Mastectomy or 
Lymph Node Dissection.--
            (1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, may 
        not--
                    (A) except as provided in paragraph (2)--
                            (i) restrict benefits for any hospital 
                        length of stay in connection with a mastectomy 
                        for the treatment of breast cancer to less than 
                        48 hours, or
                            (ii) restrict benefits for any hospital 
                        length of stay in connection with a lymph node 
                        dissection for the treatment of breast cancer 
                        to less than 24 hours, or
                    (B) require that a provider obtain authorization 
                from the plan or the issuer for prescribing any length 
                of stay required under subparagraph (A) (without regard 
                to paragraph (2)).
            (2) Exception.--Paragraph (1)(A) shall not apply in 
        connection with any group health plan or health insurance 
        issuer in any case in which the decision to discharge the woman 
        involved prior to the expiration of the minimum length of stay 
        otherwise required under paragraph (1)(A) is made by the 
        attending provider in consultation with the woman or in a case 
        involving a partial mastectomy without lymph node dissection.
    (b) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            (1) deny to a woman eligibility, or continued eligibility, 
        to enroll or to renew coverage under the terms of the plan, 
        solely for the purpose of avoiding the requirements of this 
        section;
            (2) provide monetary payments or rebates to women to 
        encourage such women to accept less than the minimum 
        protections available under this section;
            (3) penalize or otherwise reduce or limit the reimbursement 
        of an attending provider because such provider provided care to 
        an individual participant or beneficiary in accordance with 
        this section;
            (4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to 
        an individual participant or beneficiary in a manner 
        inconsistent with this section; or
            (5) subject to subsection (c)(3), restrict benefits for any 
        portion of a period within a hospital length of stay required 
        under subsection (a) in a manner which is less favorable than 
        the benefits provided for any preceding portion of such stay.
    (c) Rules of Construction.--
            (1) Nothing in this section shall be construed to require a 
        woman who is a participant or beneficiary--
                    (A) to undergo a mastectomy or lymph node 
                dissection in a hospital; or
                    (B) to stay in the hospital for a fixed period of 
                time following a mastectomy or lymph node dissection.
            (2) This section shall not apply with respect to any group 
        health plan, or any group health insurance coverage offered by 
        a health insurance issuer, which does not provide benefits for 
        hospital lengths of stay in connection with a mastectomy or 
        lymph node dissection for the treatment of breast cancer.
            (3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in relation to 
        benefits for hospital lengths of stay in connection with a 
        mastectomy or lymph node dissection for the treatment of breast 
        cancer under the plan (or under health insurance coverage 
        offered in connection with a group health plan), except that 
        such coinsurance or other cost-sharing for any portion of a 
        period within a hospital length of stay required under 
        subsection (a) may not be greater than such coinsurance or 
        cost-sharing for any preceding portion of such stay.
    (d) Level and Type of Reimbursements.--Nothing in this section 
shall be construed to prevent a group health plan or a health insurance 
issuer offering group health insurance coverage from negotiating the 
level and type of reimbursement with a provider for care provided in 
accordance with this section.
    (e) Exception for Health Insurance Coverage in Certain States.--
            (1) In general.--The requirements of this section shall not 
        apply with respect to health insurance coverage if there is a 
        State law (as defined in section 2723(d)(1) of the Public 
        Health Service Act) for a State that regulates such coverage 
        that is described in any of the following subparagraphs:
                    (A) Such State law requires such coverage to 
                provide for at least a 48-hour hospital length of stay 
                following a mastectomy performed for treatment of 
                breast cancer and at least a 24-hour hospital length of 
                stay following a lymph node dissection for treatment of 
                breast cancer.
                    (B) Such State law requires, in connection with 
                such coverage for surgical treatment of breast cancer, 
                that the hospital length of stay for such care is left 
                to the decision of (or required to be made by) the 
                attending provider in consultation with the woman 
                involved.
            (2) Construction.--Section 2723(a)(1) of the Public Health 
        Service Act and section 731(a)(1) of the Employee Retirement 
        Income Security Act of 1974 shall not be construed as 
        superseding a State law described in paragraph (1).

SEC. 153. STANDARDS RELATING TO BENEFITS FOR RECONSTRUCTIVE BREAST 
              SURGERY.

    (a) Requirements for Reconstructive Breast Surgery.--
            (1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, that 
        provides coverage for breast surgery in connection with a 
        mastectomy shall provide coverage for reconstructive breast 
        surgery resulting from the mastectomy. Such coverage shall 
        include coverage for all stages of reconstructive breast 
        surgery performed on a nondiseased breast to establish symmetry 
        with the diseased when reconstruction on the diseased breast is 
        performed and coverage of prostheses and complications of 
        mastectomy including lymphedema.
            (2) Reconstructive breast surgery defined.--In this 
        section, the term ``reconstructive breast surgery'' means 
        surgery performed as a result of a mastectomy to reestablish 
        symmetry between two breasts, and includes augmentation 
        mammoplasty, reduction mammoplasty, and mastopexy.
            (3) Mastectomy defined.--In this section, the term 
        ``mastectomy'' means the surgical removal of all or part of a 
        breast.
    (b) Prohibitions.--
            (1) Denial of coverage based on cosmetic surgery.--A group 
        health plan, and a health insurance issuer offering group 
        health insurance coverage in connection with a group health 
        plan, may not deny coverage described in subsection (a)(1) on 
        the basis that the coverage is for cosmetic surgery.
            (2) Application of similar prohibitions.--Paragraphs (2) 
        through (5) of section 152 shall apply under this section in 
        the same manner as they apply with respect to section 152.
    (c) Rules of Construction.--
            (1) Nothing in this section shall be construed to require a 
        woman who is a participant or beneficiary to undergo 
        reconstructive breast surgery.
            (2) This section shall not apply with respect to any group 
        health plan, or any group health insurance coverage offered by 
        a health insurance issuer, which does not provide benefits for 
        mastectomies.
            (3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in relation to 
        benefits for reconstructive breast surgery under the plan (or 
        under health insurance coverage offered in connection with a 
        group health plan), except that such coinsurance or other cost-
        sharing for any portion may not be greater than such 
        coinsurance or cost-sharing that is otherwise applicable with 
        respect to benefits for mastectomies.
    (e) Level and Type of Reimbursements.--Nothing in this section 
shall be construed to prevent a group health plan or a health insurance 
issuer offering group health insurance coverage from negotiating the 
level and type of reimbursement with a provider for care provided in 
accordance with this section.
    (f) Exception for Health Insurance Coverage in Certain States.--
            (1) In general.--The requirements of this section shall not 
        apply with respect to health insurance coverage if there is a 
        State law (as defined in section 2723(d)(1) of the Public 
        Health Service Act) for a State that regulates such coverage 
        and that requires coverage of at least the coverage of 
        reconstructive breast surgery otherwise required under this 
        section.
            (2) Construction.--Section 2723(a)(1) of the Public Health 
        Service Act and section 731(a)(1) of the Employee Retirement 
        Income Security Act of 1974 shall not be construed as 
        superseding a State law described in paragraph (1).

                        Subtitle G--Definitions

SEC. 191. DEFINITIONS.

    (a) Incorporation of General Definitions.--The provisions of 
section 2971 of the Public Health Service Act shall apply for purposes 
of this title in the same manner as they apply for purposes of title 
XXVII of such Act.
    (b) Secretary.--Except as otherwise provided, the term 
``Secretary'' means the Secretary of Health and Human Services, in 
consultation with the Secretary of Labor and the Secretary of the 
Treasury and the term ``appropriate Secretary'' means the Secretary of 
Health and Human Services in relation to carrying out this title under 
sections 2706 and 2751 of the Public Health Service Act, the Secretary 
of Labor in relation to carrying out this title under section 713 of 
the Employee Retirement Income Security Act of 1974, and the Secretary 
of the Treasury in relation to carrying out this title under chapter 
100 and section 4980D of the Internal Revenue Code of 1986.
    (c) Additional Definitions.--For purposes of this title:
            (1) Applicable authority.--The term ``applicable 
        authority'' means--
                    (A) in the case of a group health plan, the 
                Secretary of Health and Human Services and the 
                Secretary of Labor; and
                    (B) in the case of a health insurance issuer with 
                respect to a specific provision of this title, the 
                applicable State authority (as defined in section 
                2791(d) of the Public Health Service Act), or the 
                Secretary of Health and Human Services, if such 
                Secretary is enforcing such provision under section 
                2722(a)(2) or 2761(a)(2) of the Public Health Service 
                Act.
            (2) Clinical peer.--The term ``clinical peer'' means, with 
        respect to a review or appeal, a physician (allopathic or 
        osteopathic) or other health care professional who holds a non-
        restricted license in a State and who is appropriately 
        credentialed in the same or similar specialty as typically 
        manages the medical condition, procedure, or treatment under 
        review or appeal and includes a pediatric specialist where 
        appropriate; except that only a physician may be a clinical 
        peer with respect to the review or appeal of treatment rendered 
        by a physician.
            (3) Health care provider.--The term ``health care 
        provider'' includes a physician or other health care 
        professional, as well as an institutional provider of health 
        care services.
            (4) Nonparticipating.--The term ``nonparticipating'' means, 
        with respect to a health care provider that provides health 
        care items and services to a participant, beneficiary, or 
        enrollee under group health plan or health insurance coverage, 
        a health care provider that is not a participating health care 
        provider with respect to such items and services.
            (5) Participating.--The term ``participating'' mean, with 
        respect to a health care provider that provides health care 
        items and services to a participant, beneficiary, or enrollee 
        under group health plan or health insurance coverage offered by 
        a health insurance issuer, a health care provider that 
        furnishes such items and services under a contract or other 
        arrangement with the plan or issuer.

SEC. 192. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

    (a) Continued Applicability of State Law With Respect to Health 
Insurance Issuers.--
            (1) In general.--Subject to paragraph (2), this title shall 
        not be construed to supersede any provision of State law which 
        establishes, implements, or continues in effect any standard or 
        requirement solely relating to health insurance issuers in 
        connection with group health insurance coverage except to the 
        extent that such standard or requirement prevents the 
        application of a requirement of this title.
            (2) Continued preemption with respect to group health 
        plans.--Nothing in this title shall be construed to affect or 
        modify the provisions of section 514 of the Employee Retirement 
        Income Security Act of 1974 with respect to group health plans.
    (b) Rules of Construction.--Except as provided in sections 152 and 
153, nothing in this title shall be construed as requiring a group 
health plan or health insurance coverage to provide specific benefits 
under the terms of such plan or coverage.
    (c) Definitions.--For purposes of this section--
            (1) State law.--The term ``State law'' includes all laws, 
        decisions, rules, regulations, or other State action having the 
        effect of law, of any State. A law of the United States 
        applicable only to the District of Columbia shall be treated as 
        a State law rather than a law of the United States.
            (2) State.--The term ``State'' includes a State, the 
        Northern Mariana Islands, any political subdivisions of a State 
        or such Islands, or any agency or instrumentality of either.

SEC. 193. REGULATIONS.

    The Secretaries of Health and Human Services, Labor, and the 
Treasury shall issue such regulations as may be necessary or 
appropriate to carry out this title. Such regulations shall be issued 
consistent with section 104 of Health Insurance Portability and 
Accountability Act of 1996. Such Secretaries may promulgate any interim 
final rules as the Secretaries determine are appropriate to carry out 
this title.

TITLE II--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

SEC. 201. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986 
(as amended by section 1531(a) of the Taxpayer Relief Act of 1997) is 
amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9812 the following new item:

                              ``Sec. 9813. Standard relating to patient 
                                        freedom of choice.''; and
            (2) by inserting after section 9812 the following:

``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

    ``A group health plan shall comply with the requirements of title I 
of the Patients' Bill of Rights Act of 1998 (as in effect as of the 
date of the enactment of such Act), and such requirements shall be 
deemed to be incorporated into this section.''.

       TITLE III--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 301. EFFECTIVE DATES.

    (a) In General.--Subject to subsection (b), the amendments made by 
section 201 (and title I insofar as it relates to such section) shall 
apply with respect to group health plans for plan years beginning on or 
after January 1, 1999 (in this section referred to as the ``general 
effective date'') and also shall apply to portions of plan years 
occurring on and after such date.
    (b) Treatment of Collective Bargaining Agreements.--In the case of 
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 made by section 201 (and title I insofar as it relates to 
such section) shall not apply to plan years beginning before the later 
of--
            (1) 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
            (2) the general effective date.
For purposes of paragraph (1), 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 this Act shall not 
be treated as a termination of such collective bargaining agreement.
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