II

106TH CONGRESS

1ST SESSION S. 240

To amend the Public Health Service Act and the Employee Retirement

Income Security Act of 1974 to protect consumers in managed care

plans and other health coverage.

IN THE SENATE OF THE UNITED STATES

JANUARY 19, 1999

Mr. DASCHLE (for himself and Mr. KENNEDY) introduced the following bill;

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To amend the Public Health Service Act and the Employee

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

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Patients’ Bill of Rights Act of 1999’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—HEALTH INSURANCE BILL OF RIGHTS
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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.

Subtitle G—Definitions

Sec. 191. Definitions.

Sec. 192. Preemption; State flexibility; construction.

Sec. 193. Regulations.

TITLE II—APPLICATION OF PATIENT PROTECTION STANDARDS

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

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

Sec. 202. Application to individual health insurance coverage.
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TITLE III—AMENDMENTS TO THE EMPLOYEE RETIREMENT

INCOME SECURITY ACT OF 1974

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

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

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

TITLE IV—EFFECTIVE DATES; COORDINATION IN

IMPLEMENTATION

Sec. 401. Effective dates and related rules.

Sec. 402. Coordination in implementation.

1 TITLE I—HEALTH INSURANCE

2 BILL OF RIGHTS

3 Subtitle A—Access to Care

4 SEC. 101. ACCESS TO EMERGENCY CARE.

5 (a) COVERAGE OF EMERGENCY SERVICES.—

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

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

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

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

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

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

16 provider with respect to such services;

17 (C) in a manner so that, if such services

18 are provided to a participant, beneficiary, or en19 rollee by a nonparticipating health care provider
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1 without prior authorization by the plan or

2 issuer, the participant, beneficiary, or enrollee

3 is not liable for amounts that exceed the

4 amounts of liability that would be incurred if

5 the services were provided by a participating

6 health care provider with prior authorization by

7 the plan or issuer; and

8 (D) without regard to any other term or

9 condition of such coverage (other than exclusion

10 or coordination of benefits, or an affiliation or

11 waiting period, permitted under section 2701 of

12 the Public Health Service Act or section 701 of

13 the Employee Retirement Income Security Act

14 of 1974, and other than applicable cost-shar15 ing).

16 (2) DEFINITIONS.—In this section:

17 (A) EMERGENCY MEDICAL CONDITION

18 BASED ON PRUDENT LAYPERSON STANDARD.—

19 The term ‘‘emergency medical condition’’ means

20 a medical condition manifesting itself by acute

21 symptoms of sufficient severity (including se22 vere pain) such that a prudent layperson, who

23 possesses an average knowledge of health and

24 medicine, could reasonably expect the absence

25 of immediate medical attention to result in a
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1 condition described in clause (i), (ii), or (iii) of

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

3 Act.

4 (B) EMERGENCY SERVICES.—The term

5 ‘‘emergency services’’ means—

6 (i) a medical screening examination

7 (as required under section 1867 of the So8 cial Security Act) that is within the capa9 bility of the emergency department of a

10 hospital, including ancillary services rou11 tinely available to the emergency depart12 ment to evaluate an emergency medical

13 condition (as defined in subparagraph

14 (A)), and

15 (ii) within the capabilities of the staff

16 and facilities available at the hospital, such

17 further medical examination and treatment

18 as are required under section 1867 of such

19 Act to stabilize the patient.

20 (b) REIMBURSEMENT FOR MAINTENANCE CARE AND

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

22 (other than emergency services) for which benefits are

23 available under a group health plan, or under health insur24 ance coverage offered by a health insurance issuer, the

25 plan or issuer shall provide for reimbursement with re-
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1 spect to such services provided to a participant, bene2 ficiary, or enrollee other than through a participating

3 health care provider in a manner consistent with sub4 section (a)(1)(C) (and shall otherwise comply with the

5 guidelines established under section 1852(d)(2) of the So6 cial Security Act (relating to promoting efficient and time7 ly coordination of appropriate maintenance and post-sta8 bilization care of an enrollee after an enrollee has been

9 determined to be stable), or, in the absence of guidelines

10 under such section, such guidelines as the Secretary shall

11 establish to carry out this subsection), if the services are

12 maintenance care or post-stabilization care covered under

13 such guidelines.

14 SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS

15 UNDER GROUP HEALTH PLANS.

16 (a) REQUIREMENT.—

17 (1) OFFERING OF POINT-OF-SERVICE COV18 ERAGE OPTION.—Except as provided in paragraph

19 (2), if a group health plan (or health insurance cov20 erage offered by a health insurance issuer in connec21 tion with a group health plan) provides benefits only

22 through participating health care providers, the plan

23 or issuer shall offer the participant the option to

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

25 subsection (b)) for all such benefits for which cov-
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1 erage is otherwise so limited. Such option shall be

2 made available to the participant at the time of en3 rollment under the plan or coverage and at such

4 other times as the plan or issuer offers the partici5 pant a choice of coverage options.

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

7 apply with respect to a participant in a group health

8 plan if the plan offers the participant a choice of

9 health insurance coverage.

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

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

12 with respect to benefits covered under a group health plan

13 or health insurance issuer, coverage of such benefits when

14 provided by a nonparticipating health care provider. Such

15 coverage need not include coverage of providers that the

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

17 reasons.

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

19 construed—

20 (1) as requiring coverage for benefits for a par21 ticular type of health care provider;

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

23 as a result of this section or to make equal contribu24 tions with respect to different health coverage op25 tions; or
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1 (3) as preventing a group health plan or health

2 insurance issuer from imposing higher premiums or

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

4 point-of-service coverage option.

5 (d) NO REQUIREMENT FOR GUARANTEED AVAIL6 ABILITY.—If a health insurance issuer offers health insur7 ance coverage that includes point-of-service coverage with

8 respect to an employer solely in order to meet the require9 ment of subsection (a), nothing in section 2711(a)(1)(A)

10 of the Public Health Service Act shall be construed as re11 quiring the offering of such coverage with respect to an12 other employer.

13 SEC. 103. CHOICE OF PROVIDERS.

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

15 health insurance issuer that offers health insurance cov16 erage, shall permit each participant, beneficiary, and en17 rollee to receive primary care from any participating pri18 mary care provider who is available to accept such individ19 ual.

20 (b) SPECIALISTS.—

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

22 group health plan and a health insurance issuer that

23 offers health insurance coverage shall permit each

24 participant, beneficiary, or enrollee to receive medi25 cally necessary or appropriate specialty care, pursu-
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1 ant to appropriate referral procedures, from any

2 qualified participating health care provider who is

3 available to accept such individual for such care.

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

5 apply to specialty care if the plan or issuer clearly

6 informs participants, beneficiaries, and enrollees of

7 the limitations on choice of participating providers

8 with respect to such care.

9 SEC. 104. ACCESS TO SPECIALTY CARE.

10 (a) OBSTETRICAL AND GYNECOLOGICAL CARE.—

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

12 health insurance issuer in connection with the provi13 sion of health insurance coverage, requires or pro14 vides for a participant, beneficiary, or enrollee to

15 designate a participating primary care provider—

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

17 individual who is a female to designate a par18 ticipating physician who specializes in obstetrics

19 and gynecology as the individual’s primary care

20 provider; and

21 (B) if such an individual has not des22 ignated such a provider as a primary care pro23 vider, the plan or issuer—

24 (i) may not require authorization or a

25 referral by the individual’s primary care
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1 provider or otherwise for coverage of rou2 tine gynecological care (such as preventive

3 women’s health examinations) and preg4 nancy-related services provided by a par5 ticipating health care professional who spe6 cializes in obstetrics and gynecology to the

7 extent such care is otherwise covered, and

8 (ii) may treat the ordering of other

9 gynecological care by such a participating

10 health professional as the authorization of

11 the primary care provider with respect to

12 such care under the plan or coverage.

13 (2) CONSTRUCTION.—Nothing in paragraph

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

15 relating to medical necessity or appropriateness with

16 respect to coverage of gynecological care so ordered.

17 (b) PEDIATRIC CARE.—If a group health plan, or a

18 health insurance issuer in connection with the provision

19 of health insurance coverage, requires or provides for a

20 participant, beneficiary, or enrollee to designate a partici21 pating primary care provider for a child of such partici22 pant, beneficiary, or enrollee, the plan or issuer shall per23 mit the participant, beneficiary, or enrollee to designate

24 a physician who specializes in pediatrics as the child’s pri25 mary care provider.
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1 (c) SPECIALTY CARE.—

2 (1) SPECIALTY CARE FOR COVERED SERV3 ICES.—

4 (A) IN GENERAL.—If—

5 (i) an individual is a participant or

6 beneficiary under a group health plan or

7 an enrollee who is covered under health in8 surance coverage offered by a health insur9 ance issuer,

10 (ii) the individual has a condition or

11 disease of sufficient seriousness and com12 plexity to require treatment by a specialist,

13 and

14 (iii) benefits for such treatment are

15 provided under the plan or coverage,

16 the plan or issuer shall make or provide for a

17 referral to a specialist who is available and ac18 cessible to provide the treatment for such condi19 tion or disease.

20 (B) SPECIALIST DEFINED.—For purposes

21 of this subsection, the term ‘‘specialist’’ means,

22 with respect to a condition, a health care practi23 tioner, facility, or center (such as a center of

24 excellence) that has adequate expertise through

25 appropriate training and experience (including,
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1 in the case of a child, appropriate pediatric ex2 pertise) to provide high quality care in treating

3 the condition.

4 (C) CARE UNDER REFERRAL.—A group

5 health plan or health insurance issuer may re6 quire that the care provided to an individual

7 pursuant to such referral under subparagraph

8 (A) be—

9 (i) pursuant to a treatment plan, only

10 if the treatment plan is developed by the

11 specialist and approved by the plan or

12 issuer, in consultation with the designated

13 primary care provider or specialist and the

14 individual (or the individual’s designee),

15 and

16 (ii) in accordance with applicable

17 quality assurance and utilization review

18 standards of the plan or issuer.

19 Nothing in this subsection shall be construed as

20 preventing such a treatment plan for an individ21 ual from requiring a specialist to provide the

22 primary care provider with regular updates on

23 the specialty care provided, as well as all nec24 essary medical information.
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1 (D) REFERRALS TO PARTICIPATING PRO2 VIDERS.—A group health plan or health insur3 ance issuer is not required under subparagraph

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

5 is not a participating provider, unless the plan

6 or issuer does not have an appropriate specialist

7 that is available and accessible to treat the indi8 vidual’s condition and that is a participating

9 provider with respect to such treatment.

10 (E) TREATMENT OF NONPARTICIPATING

11 PROVIDERS.—If a plan or issuer refers an indi12 vidual to a nonparticipating specialist pursuant

13 to subparagraph (A), services provided pursu14 ant to the approved treatment plan (if any)

15 shall be provided at no additional cost to the in16 dividual beyond what the individual would oth17 erwise pay for services received by such a spe18 cialist that is a participating provider.

19 (2) SPECIALISTS AS PRIMARY CARE PROVID20 ERS.—

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

22 a health insurance issuer, in connection with

23 the provision of health insurance coverage, shall

24 have a procedure by which an individual who is

25 a participant, beneficiary, or enrollee and who
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1 has an ongoing special condition (as defined in

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

3 specialist for such condition who shall be re4 sponsible for and capable of providing and co5 ordinating the individual’s primary and spe6 cialty care. If such an individual’s care would

7 most appropriately be coordinated by such a

8 specialist, such plan or issuer shall refer the in9 dividual to such specialist.

10 (B) TREATMENT AS PRIMARY CARE PRO11 VIDER.—Such specialist shall be permitted to

12 treat the individual without a referral from the

13 individual’s primary care provider and may au14 thorize such referrals, procedures, tests, and

15 other medical services as the individual’s pri16 mary care provider would otherwise be per17 mitted to provide or authorize, subject to the

18 terms of the treatment plan (referred to in

19 paragraph (1)(C)(i)).

20 (C) ONGOING SPECIAL CONDITION DE21 FINED.—In this paragraph, the term ‘‘special

22 condition’’ means a condition or disease that—

23 (i) is life-threatening, degenerative, or

24 disabling, and
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1 (ii) requires specialized medical care

2 over a prolonged period of time.

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

5 paragraph (1) apply with respect to referrals

6 under subparagraph (A) of this paragraph in

7 the same manner as they apply to referrals

8 under paragraph (1)(A).

9 (3) STANDING REFERRALS.—

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

11 and a health insurance issuer in connection

12 with the provision of health insurance coverage,

13 shall have a procedure by which an individual

14 who is a participant, beneficiary, or enrollee

15 and who has a condition that requires ongoing

16 care from a specialist may receive a standing

17 referral to such specialist for treatment of such

18 condition. If the plan or issuer, or if the pri19 mary care provider in consultation with the

20 medical director of the plan or issuer and the

21 specialist (if any), determines that such a

22 standing referral is appropriate, the plan or

23 issuer shall make such a referral to such a spe24 cialist.
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1 (B) TERMS OF REFERRAL.—The provi2 sions of subparagraphs (C) through (E) of

3 paragraph (1) apply with respect to referrals

4 under subparagraph (A) of this paragraph in

5 the same manner as they apply to referrals

6 under paragraph (1)(A).

7 SEC. 105. CONTINUITY OF CARE.

8 (a) IN GENERAL.—

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

10 between a group health plan, or a health insurance

11 issuer in connection with the provision of health in12 surance coverage, and a health care provider is ter13 minated (as defined in paragraph (3)), or benefits or

14 coverage provided by a health care provider are ter15 minated because of a change in the terms of pro16 vider participation in a group health plan, and an in17 dividual who is a participant, beneficiary, or enrollee

18 in the plan or coverage is undergoing a course of

19 treatment from the provider at the time of such ter20 mination, the plan or issuer shall—

21 (A) notify the individual on a timely basis

22 of such termination, and

23 (B) subject to subsection (c), permit the

24 individual to continue or be covered with re25 spect to the course of treatment with the pro-
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1 vider during a transitional period (provided

2 under subsection (b)).

3 (2) TREATMENT OF TERMINATION OF CON4 TRACT WITH HEALTH INSURANCE ISSUER.—If a

5 contract for the provision of health insurance cov6 erage between a group health plan and a health in7 surance issuer is terminated and, as a result of such

8 termination, coverage of services of a health care

9 provider is terminated with respect to an individual,

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

11 provisions of this section) shall apply under the plan

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

13 between the plan and the provider that had been ter14 minated, but only with respect to benefits that are

15 covered under the plan after the contract termi16 nation.

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

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

19 the expiration or nonrenewal of the contract, but

20 does not include a termination of the contract by the

21 plan or issuer for failure to meet applicable quality

22 standards or for fraud.

23 (b) TRANSITIONAL PERIOD.—

24 (1) IN GENERAL.—Except as provided in para25 graphs (2) through (4), the transitional period under
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1 this subsection shall extend for at least 90 days from

2 the date of the notice described in subsection

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

4 (2) INSTITUTIONAL CARE.—The transitional pe5 riod under this subsection for institutional or inpa6 tient care from a provider shall extend until the dis7 charge or termination of the period of institutional8 ization and also shall include institutional care pro9 vided within a reasonable time of the date of termi10 nation of the provider status if the care was sched11 uled before the date of the announcement of the ter12 mination of the provider status under subsection

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

14 an established waiting list or otherwise scheduled to

15 have such care.

16 (3) PREGNANCY.—If—

17 (A) a participant, beneficiary, or enrollee

18 has entered the second trimester of pregnancy

19 at the time of a provider’s termination of par20 ticipation, and

21 (B) the provider was treating the preg22 nancy before date of the termination,

23 the transitional period under this subsection with re24 spect to provider’s treatment of the pregnancy shall
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1 extend through the provision of post-partum care di2 rectly related to the delivery.

3 (4) TERMINAL ILLNESS.—If—

4 (A) a participant, beneficiary, or enrollee

5 was determined to be terminally ill (as deter6 mined under section 1861(dd)(3)(A) of the So7 cial Security Act) at the time of a provider’s

8 termination of participation, and

9 (B) the provider was treating the terminal

10 illness before the date of termination,

11 the transitional period under this subsection shall

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

13 care directly related to the treatment of the terminal

14 illness.

15 (c) PERMISSIBLE TERMS AND CONDITIONS.—A

16 group health plan or health insurance issuer may condi17 tion coverage of continued treatment by a provider under

18 subsection (a)(1)(B) upon the provider agreeing to the fol19 lowing terms and conditions:

20 (1) The provider agrees to accept reimburse21 ment from the plan or issuer and individual involved

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

23 prior to the start of the transitional period as pay24 ment in full (or, in the case described in subsection

25 (a)(2), at the rates applicable under the replacement
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1 plan or issuer after the date of the termination of

2 the contract with the health insurance issuer) and

3 not to impose cost-sharing with respect to the indi4 vidual in an amount that would exceed the cost-shar5 ing that could have been imposed if the contract re6 ferred to in subsection (a)(1) had not been termi7 nated.

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

9 assurance standards of the plan or issuer responsible

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

11 such plan or issuer necessary medical information

12 related to the care provided.

13 (3) The provider agrees otherwise to adhere to

14 such plan’s or issuer’s policies and procedures, in15 cluding procedures regarding referrals and obtaining

16 prior authorization and providing services pursuant

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

18 issuer.

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

20 construed to require the coverage of benefits which would

21 not have been covered if the provider involved remained

22 a participating provider.

23 SEC. 106. COVERAGE FOR INDIVIDUALS PARTICIPATING IN

24 APPROVED CLINICAL TRIALS.

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

2 health insurance issuer that is providing health in3 surance coverage, provides coverage to a qualified in4 dividual (as defined in subsection (b)), the plan or

5 issuer—

6 (A) may not deny the individual participa7 tion in the clinical trial referred to in subsection

8 (b)(2);

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

10 (or limit or impose additional conditions on) the

11 coverage of routine patient costs for items and

12 services furnished in connection with participa13 tion in the trial; and

14 (C) may not discriminate against the indi15 vidual on the basis of the enrollee’s participa16 tion in such trial.

17 (2) EXCLUSION OF CERTAIN COSTS.—For pur18 poses of paragraph (1)(B), routine patient costs do

19 not include the cost of the tests or measurements

20 conducted primarily for the purpose of the clinical

21 trial involved.

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

23 or more participating providers is participating in a

24 clinical trial, nothing in paragraph (1) shall be con25 strued as preventing a plan or issuer from requiring
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1 that a qualified individual participate in the trial

2 through such a participating provider if the provider

3 will accept the individual as a participant in the

4 trial.

5 (b) QUALIFIED INDIVIDUAL DEFINED.—For pur6 poses of subsection (a), the term ‘‘qualified individual’’

7 means an individual who is a participant or beneficiary

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

9 insurance coverage, and who meets the following condi10 tions:

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

12 serious illness for which no standard treatment is ef13 fective.

14 (B) The individual is eligible to participate in

15 an approved clinical trial according to the trial pro16 tocol with respect to treatment of such illness.

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

18 offers meaningful potential for significant clinical

19 benefit for the individual.

20 (2) Either—

21 (A) the referring physician is a participat22 ing health care professional and has concluded

23 that the individual’s participation in such trial

24 would be appropriate based upon the individual
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1 meeting the conditions described in paragraph

2 (1); or

3 (B) the participant, beneficiary, or enrollee

4 provides medical and scientific information es5 tablishing that the individual’s participation in

6 such trial would be appropriate based upon the

7 individual meeting the conditions described in

8 paragraph (1).

9 (c) PAYMENT.—

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

11 health plan or health insurance issuer shall provide

12 for payment for routine patient costs described in

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

14 of items and services that are reasonably expected

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

16 the sponsors of an approved clinical trial.

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

18 items and services provided by—

19 (A) a participating provider, the payment

20 rate shall be at the agreed upon rate, or

21 (B) a nonparticipating provider, the pay22 ment rate shall be at the rate the plan or issuer

23 would normally pay for comparable services

24 under subparagraph (A).

25 (d) APPROVED CLINICAL TRIAL DEFINED.—
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1 (1) IN GENERAL.—In this section, the term

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

3 study or clinical investigation approved and funded

4 (which may include funding through in-kind con5 tributions) by one or more of the following:

6 (A) The National Institutes of Health.

7 (B) A cooperative group or center of the

8 National Institutes of Health.

9 (C) Either of the following if the condi10 tions described in paragraph (2) are met:

11 (i) The Department of Veterans Af12 fairs.

13 (ii) The Department of Defense.

14 (2) CONDITIONS FOR DEPARTMENTS.—The

15 conditions described in this paragraph, for a study

16 or investigation conducted by a Department, are

17 that the study or investigation has been reviewed

18 and approved through a system of peer review that

19 the Secretary determines—

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

21 review of studies and investigations used by the

22 National Institutes of Health, and

23 (B) assures unbiased review of the highest

24 scientific standards by qualified individuals who

25 have no interest in the outcome of the review.
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1 (e) CONSTRUCTION.—Nothing in this section shall be

2 construed to limit a plan’s or issuer’s coverage with re3 spect to clinical trials.

4 SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.

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

6 insurance issuer that offers health insurance coverage,

7 provides benefits with respect to prescription drugs but

8 the coverage limits such benefits to drugs included in a

9 formulary, the plan or issuer shall—

10 (1) ensure participation of participating physi11 cians and pharmacists in the development of the for12 mulary;

13 (2) disclose to providers and, disclose upon re14 quest under section 121(c)(6) to participants, bene15 ficiaries, and enrollees, the nature of the formulary

16 restrictions; and

17 (3) consistent with the standards for a utiliza18 tion review program under section 115, provide for

19 exceptions from the formulary limitation when a

20 non-formulary alternative is medically indicated.

21 (b) COVERAGE OF APPROVED DRUGS AND MEDICAL

22 DEVICES.—

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

24 health insurance coverage offered in connection with

25 such a plan) that provides any coverage of prescrip-
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1 tion drugs or medical devices shall not deny coverage

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

3 is investigational, if the use—

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

5 (i) is included in the labeling author6 ized by the application in effect for the

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

8 section 505 of the Federal Food, Drug,

9 and Cosmetic Act, without regard to any

10 postmarketing requirements that may

11 apply under such Act; or

12 (ii) is included in the labeling author13 ized by the application in effect for the

14 drug under section 351 of the Public

15 Health Service Act, without regard to any

16 postmarketing requirements that may

17 apply pursuant to such section; or

18 (B) in the case of a medical device, is in19 cluded in the labeling authorized by a regula20 tion under subsection (d) or (3) of section 513

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

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

23 an application approved under section 515 of

24 such Act, without regard to any postmarketing

25 requirements that may apply under such Act.
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1 (2) CONSTRUCTION.—Nothing in this sub2 section shall be construed as requiring a group

3 health plan (or health insurance coverage offered in

4 connection with such a plan) to provide any coverage

5 of prescription drugs or medical devices.

6 SEC. 108. ADEQUACY OF PROVIDER NETWORK.

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

8 health insurance issuer offering health insurance coverage,

9 that provides benefits, in whole or in part, through partici10 pating health care providers shall have (in relation to the

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

12 qualified participating health care providers to ensure that

13 all covered health care services, including specialty serv14 ices, will be available and accessible in a timely manner

15 to all participants, beneficiaries, and enrollees under the

16 plan or coverage. This subsection shall only apply to a

17 plan’s or issuer’s application of restrictions on the partici18 pation of health care providers in a network and shall not

19 be construed as requiring a plan or issuer to create or

20 establish new health care providers in an area.

21 (b) TREATMENT OF CERTAIN PROVIDERS.—The

22 qualified health care providers under subsection (a) may

23 include Federally qualified health centers, rural health

24 clinics, migrant health centers, and other essential com25 munity providers located in the service area of the plan
28

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1 or issuer and shall include such providers if necessary to

2 meet the standards established to carry out such sub3 section.

4 SEC. 109. NONDISCRIMINATION IN DELIVERY OF SERVICES.

5 (a) APPLICATION TO DELIVERY OF SERVICES.—Sub6 ject to subsection (b), a group health plan, and health in7 surance issuer in relation to health insurance coverage,

8 may not discriminate against a participant, beneficiary, or

9 enrollee in the delivery of health care services consistent

10 with the benefits covered under the plan or coverage or

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

12 origin, religion, sex, age, mental or physical disability, sex13 ual orientation, genetic information, or source of payment.

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

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

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

17 under a plan or health insurance coverage, the application

18 of any pre-existing condition exclusion consistent with ap19 plicable law, or premiums charged under such plan or cov20 erage. Pursuant to section 192(b), except as provided in

21 section 152, nothing in this title shall be construed as re22 quiring a group health plan or health insurance issuer to

23 provide specific benefits under the terms of such plan or

24 coverage.
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1 Subtitle B—Quality Assurance

2 SEC. 111. INTERNAL QUALITY ASSURANCE PROGRAM.

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

4 health insurance issuer that offers health insurance cov5 erage, shall establish and maintain an ongoing, internal

6 quality assurance and continuous quality improvement

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

8 (b) PROGRAM REQUIREMENTS.—The requirements of

9 this subsection for a quality improvement program of a

10 plan or issuer are as follows:

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

12 a separate identifiable unit with responsibility for

13 administration of the program.

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

15 written plan for the program that is updated annu16 ally and that specifies at least the following:

17 (A) The activities to be conducted.

18 (B) The organizational structure.

19 (C) The duties of the medical director.

20 (D) Criteria and procedures for the assess21 ment of quality.

22 (3) SYSTEMATIC REVIEW.—The program pro23 vides for systematic review of the type of health

24 services provided, consistency of services provided

25 with good medical practice, and patient outcomes.
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1 (4) QUALITY CRITERIA.—The program—

2 (A) uses criteria that are based on per3 formance and patient outcomes where feasible

4 and appropriate;

5 (B) includes criteria that are directed spe6 cifically at meeting the needs of at-risk popu7 lations and covered individuals with chronic

8 conditions or severe illnesses, including gender9 specific criteria and pediatric-specific criteria

10 where available and appropriate;

11 (C) includes methods for informing covered

12 individuals of the benefit of preventive care and

13 what specific benefits with respect to preventive

14 care are covered under the plan or coverage;

15 and

16 (D) makes available to the public a de17 scription of the criteria used under subpara18 graph (A).

19 (5) SYSTEM FOR REPORTING.—The program

20 has procedures for reporting of possible quality con21 cerns by providers and enrollees and for remedial ac22 tions to correct quality problems, including written

23 procedures for responding to concerns and taking

24 appropriate corrective action.
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1 (6) DATA ANALYSIS.—The program provides,

2 using data that include the data collected under sec3 tion 112, for an analysis of the plan’s or issuer’s

4 performance on quality measures.

5 (7) DRUG UTILIZATION REVIEW.—The program

6 provides for a drug utilization review program in ac7 cordance with section 114.

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

9 requirements of—

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

11 are deemed to be met with respect to a health insur12 ance issuer that is a qualified health maintenance

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

14 Public Health Service Act); or

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

16 respect to a health insurance issuer that is accred17 ited by a national accreditation organization that the

18 Secretary certifies as applying, as a condition of cer19 tification, standards at least as stringent as those

20 required for a quality improvement program under

21 subsection (b).

22 (d) VARIATION PERMITTED.—The Secretary may

23 provide for variations in the application of the require24 ments of this section to group health plans and health in25 surance issuers based upon differences in the delivery sys-
32

•S 240 IS

1 tem among such plans and issuers as the Secretary deems

2 appropriate.

3 SEC. 112. COLLECTION OF STANDARDIZED DATA.

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

5 insurance issuer that offers health insurance coverage

6 shall collect uniform quality data that include a minimum

7 uniform data set described in subsection (b).

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

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

10 required to be included in the minimum uniform data set

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

12 data. Such data shall include at least—

13 (1) aggregate utilization data;

14 (2) data on the demographic characteristics of

15 participants, beneficiaries, and enrollees;

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

17 mortality rates and (to the extent feasible) morbidity

18 rates of such individuals;

19 (4) data on satisfaction (including satisfaction

20 with respect to services to children) of such individ21 uals, including data on voluntary disenrollment and

22 grievances; and

23 (5) data on quality indicators and health out24 comes, including, to the extent feasible and appro-
33

•S 240 IS

1 priate, data on pediatric cases and on a gender-spe2 cific basis.

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

4 under subsection (a) shall be disclosed under section

5 121(b)(9). The Secretary shall be provided access to all

6 the data so collected.

7 (d) VARIATION PERMITTED.—The Secretary may

8 provide for variations in the application of the require9 ments of this section to group health plans and health in10 surance issuers based upon differences in the delivery sys11 tem among such plans and issuers as the Secretary deems

12 appropriate.

13 (e) EXCEPTION FOR NON-MEDICAL, RELIGIOUS

14 CARE PROVIDERS.—The requirements of subsection (a),

15 insofar as they may apply to a provider of health care,

16 do not apply to a provider that provides no medical care

17 and that provides only a religious method of healing or

18 religious nonmedical nursing care.

19 SEC. 113. PROCESS FOR SELECTION OF PROVIDERS.

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

21 insurance issuer that offers health insurance coverage

22 shall, if it provides benefits through participating health

23 care professionals, have a written process for the selection

24 of participating health care professionals, including mini25 mum professional requirements.
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1 (b) VERIFICATION OF BACKGROUND.—Such process

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

3 and a history of suspension or revocation.

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

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

6 with residents with poorer health status as a basis for ex7 cluding providers from participation.

8 (d) NONDISCRIMINATION BASED ON LICENSURE.—

9 (1) IN GENERAL.—Such process shall not dis10 criminate with respect to participation or indem11 nification as to any provider who is acting within the

12 scope of the provider’s license or certification under

13 applicable State law, solely on the basis of such li14 cense or certification.

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

16 be construed—

17 (A) as requiring the coverage under a plan

18 or coverage of particular benefits or services or

19 to prohibit a plan or issuer from including pro20 viders only to the extent necessary to meet the

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

22 beneficiaries, or enrollees or from establishing

23 any measure designed to maintain quality and

24 control costs consistent with the responsibilities

25 of the plan or issuer; or
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•S 240 IS

1 (B) to override any State licensure or

2 scope-of-practice law.

3 (e) GENERAL NONDISCRIMINATION.—

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

5 such process shall not discriminate with respect to

6 selection of a health care professional to be a partici7 pating health care provider, or with respect to the

8 terms and conditions of such participation, based on

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

10 origin, age, sexual orientation, or disability (consist11 ent with the Americans with Disabilities Act of

12 1990).

13 (2) RULES.—The appropriate Secretary may

14 establish such definitions, rules, and exceptions as

15 may be appropriate to carry out paragraph (1), tak16 ing into account comparable definitions, rules, and

17 exceptions in effect under employment-based non18 discrimination laws and regulations that relate to

19 each of the particular bases for discrimination de20 scribed in such paragraph.

21 SEC. 114. DRUG UTILIZATION PROGRAM.

22 A group health plan, and a health insurance issuer

23 that provides health insurance coverage, that includes ben24 efits for prescription drugs shall establish and maintain,

25 as part of its internal quality assurance and continuous
36

•S 240 IS

1 quality improvement program under section 111, a drug

2 utilization program which—

3 (1) encourages appropriate use of prescription

4 drugs by participants, beneficiaries, and enrollees

5 and providers, and

6 (2) takes appropriate action to reduce the inci7 dence of improper drug use and adverse drug reac8 tions and interactions.

9 SEC. 115. STANDARDS FOR UTILIZATION REVIEW ACTIVI10 TIES.

11 (a) COMPLIANCE WITH REQUIREMENTS.—

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

13 health insurance issuer that provides health insur14 ance coverage, shall conduct utilization review activi15 ties in connection with the provision of benefits

16 under such plan or coverage only in accordance with

17 a utilization review program that meets the require18 ments of this section.

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

20 section shall be construed as preventing a group

21 health plan or health insurance issuer from arrang22 ing through a contract or otherwise for persons or

23 entities to conduct utilization review activities on be24 half of the plan or issuer, so long as such activities
37

•S 240 IS

1 are conducted in accordance with a utilization review

2 program that meets the requirements of this section.

3 (3) UTILIZATION REVIEW DEFINED.—For pur4 poses of this section, the terms ‘‘utilization review’’

5 and ‘‘utilization review activities’’ mean procedures

6 used to monitor or evaluate the clinical necessity,

7 appropriateness, efficacy, or efficiency of health care

8 services, procedures or settings, and includes pro9 spective review, concurrent review, second opinions,

10 case management, discharge planning, or retrospec11 tive review.

12 (b) WRITTEN POLICIES AND CRITERIA.—

13 (1) WRITTEN POLICIES.—A utilization review

14 program shall be conducted consistent with written

15 policies and procedures that govern all aspects of the

16 program.

17 (2) USE OF WRITTEN CRITERIA.—

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

19 utilize written clinical review criteria developed

20 pursuant to the program with the input of ap21 propriate physicians. Such criteria shall include

22 written clinical review criteria described in sec23 tion 111(b)(4)(B).

24 (B) CONTINUING USE OF STANDARDS IN

25 RETROSPECTIVE REVIEW.—If a health care
38

•S 240 IS

1 service has been specifically pre-authorized or

2 approved for an enrollee under such a program,

3 the program shall not, pursuant to retrospective

4 review, revise or modify the specific standards,

5 criteria, or procedures used for the utilization

6 review for procedures, treatment, and services

7 delivered to the enrollee during the same course

8 of treatment.

9 (c) CONDUCT OF PROGRAM ACTIVITIES.—

10 (1) ADMINISTRATION BY HEALTH CARE PRO11 FESSIONALS.—A utilization review program shall be

12 administered by qualified health care professionals

13 who shall oversee review decisions. In this sub14 section, the term ‘‘health care professional’’ means a

15 physician or other health care practitioner licensed,

16 accredited, or certified to perform specified health

17 services consistent with State law.

18 (2) USE OF QUALIFIED, INDEPENDENT PER19 SONNEL.—

20 (A) IN GENERAL.—A utilization review

21 program shall provide for the conduct of utiliza22 tion review activities only through personnel

23 who are qualified and, to the extent required,

24 who have received appropriate training in the

25 conduct of such activities under the program.
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1 (B) PEER REVIEW OF SAMPLE OF AD2 VERSE CLINICAL DETERMINATIONS.—Such a

3 program shall provide that clinical peers (as de4 fined in section 191(c)(2)) shall evaluate the

5 clinical appropriateness of at least a sample of

6 adverse clinical determinations.

7 (C) PROHIBITION OF CONTINGENT COM8 PENSATION ARRANGEMENTS.—Such a program

9 shall not, with respect to utilization review ac10 tivities, permit or provide compensation or any11 thing of value to its employees, agents, or con12 tractors in a manner that—

13 (i) provides incentives, direct or indi14 rect, for such persons to make inappropri15 ate review decisions, or

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

17 the quantity or type of adverse determina18 tions rendered.

19 (D) PROHIBITION OF CONFLICTS.—Such a

20 program shall not permit a health care profes21 sional who provides health care services to an

22 individual to perform utilization review activi23 ties in connection with the health care services

24 being provided to the individual.
40

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1 (3) ACCESSIBILITY OF REVIEW.—Such a pro2 gram shall provide that appropriate personnel per3 forming utilization review activities under the pro4 gram are reasonably accessible by toll-free telephone

5 during normal business hours to discuss patient care

6 and allow response to telephone requests, and that

7 appropriate provision is made to receive and respond

8 promptly to calls received during other hours.

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

10 shall not provide for the performance of utilization

11 review activities with respect to a class of services

12 furnished to an individual more frequently than is

13 reasonably required to assess whether the services

14 under review are medically necessary or appropriate.

15 (5) LIMITATION ON INFORMATION REQUESTS.—

16 Under such a program, information shall be required

17 to be provided by health care providers only to the

18 extent it is necessary to perform the utilization re19 view activity involved.

20 (d) DEADLINE FOR DETERMINATIONS.—

21 (1) PRIOR AUTHORIZATION SERVICES.—Except

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

•S 240 IS

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

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

4 care provider by telephone and in printed form, as

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

7 business days after the date of receipt of information

8 that is reasonably necessary to make such deter9 mination.

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

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

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

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

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

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

25 include, with respect to continued or extended health
42

•S 240 IS

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

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

4 (3) PREVIOUSLY PROVIDED SERVICES.—In the

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

9 services, and provide notice of the determination to

10 the individual or the individual’s designee and the

11 individual’s health care provider by telephone and in

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

13 of information that is reasonably necessary to make

14 such determination.

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

22 (e) NOTICE OF ADVERSE DETERMINATIONS.—

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

25 provided in printed form and shall include—
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•S 240 IS

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

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

5 (C) notice of the availability, upon request

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

7 of the clinical review criteria relied upon to

8 make such determination.

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

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

14 appeal.

15 SEC. 116. HEALTH CARE QUALITY ADVISORY BOARD.

16 (a) ESTABLISHMENT.—The President shall establish

17 an advisory board to provide information to Congress and

18 the administration on issues relating to quality monitoring

19 and improvement in the health care provided under group

20 health plans and health insurance coverage.

21 (b) NUMBER AND APPOINTMENT.—The advisory

22 board shall be composed of the Secretary of Health and

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

•S 240 IS

1 tion with the Majority and Minority Leaders of the Senate

2 and House of Representatives. The members so appointed

3 shall include individuals with expertise in—

4 (1) consumer needs;

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

7 (3) health care services;

8 (4) health plan management;

9 (5) health care accreditation, quality assurance,

10 improvement, measurement, and oversight;

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

13 (7) prevention and public health; and

14 (8) public and private group purchasing for

15 small and large employers or groups.

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

17 (1) identify, update, and disseminate measures

18 of health care quality for group health plans and

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

21 (2) advise the Secretary on the development

22 and maintenance of the minimum data set in section

23 112(b); and
45

•S 240 IS

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

3 health insurance coverage.

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

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

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

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

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

10 other public and private entities that have expertise in

11 health care quality.

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

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

15 and regional trends in health care quality. Such report

16 shall include a description of determinants of health care

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

19 (e) SECRETARIAL CONSULTATION.—In serving on

20 the advisory board, the Secretaries of Health and Human

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

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

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

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

•S 240 IS

1 bers of the board shall serve without compensation but

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

4 their duties. Administrative support, scientific support,

5 and technical assistance for the advisory board shall be

6 provided by the Secretary of Health and Human Services.

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

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

9 to the termination of advisory committees) shall not apply

10 to the advisory board.

11 Subtitle C—Patient Information

12 SEC. 121. PATIENT INFORMATION.

13 (a) DISCLOSURE REQUIREMENT.—

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

15 plan shall—

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

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

19 the case of individuals who are participants or

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

22 subsection (b) in printed form;

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

•S 240 IS

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

4 changes; and

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

10 (2) HEALTH INSURANCE ISSUERS.—A health

11 insurance issuer in connection with the provision of

12 health insurance coverage shall—

13 (A) provide to individuals enrolled under

14 such coverage at the time of enrollment, and at

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

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

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

22 significant changes; and

23 (C) upon request, make available to the

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

•S 240 IS

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

2 printed form.

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

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

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

8 plan or issuer.

9 (2) BENEFITS.—Benefits offered under the

10 plan or coverage, including—

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

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

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

18 provided by non participating providers or that

19 are furnished without meeting the applicable

20 utilization review requirements;

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

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

•S 240 IS

1 ticipating providers and the types of providers

2 participating in the plan or issuer network;

3 (E) process for determining experimental

4 coverage; and

5 (F) use of a prescription drug formulary.

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

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

8 providers under the plan or coverage.

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

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

12 any supplemental premium or cost-sharing for

13 such option).

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

16 change participating primary and specialty pro17 viders.

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

20 participating and nonparticipating providers.

21 (F) The name, address, and telephone

22 number of participating health care providers

23 and an indication of whether each such provider

24 is available to accept new patients.
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1 (G) Any limitations imposed on the selec2 tion of qualifying participating health care pro3 viders, including any limitations imposed under

4 section 103(b)(2).

5 (H) How the plan or issuer addresses the

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

8 who have other special communications needs in

9 accessing providers under the plan or coverage,

10 including the provision of information described

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

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

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

19 (5) EMERGENCY COVERAGE.—Coverage of

20 emergency services, including—

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

23 or its local equivalent in emergency situations

24 and an explanation of what constitutes an

25 emergency situation;
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•S 240 IS

1 (B) the process and procedures of the plan

2 or issuer for obtaining emergency services; and

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

5 physicians and hospitals provide emergency

6 services and post-stabilization care.

7 (6) PERCENTAGE OF PREMIUMS USED FOR

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

10 health plans that do not provide coverage through

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

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

19 (8) GRIEVANCE AND APPEALS PROCEDURES.—

20 All appeal or grievance rights and procedures under

21 the plan or coverage, including the method for filing

22 grievances and the time frames and circumstances

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

25 and the availability of assistance through an om-
52

•S 240 IS

1 budsman to individuals in relation to group health

2 plans and health insurance coverage.

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

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

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

8 disenrollment and grievances and appeals) described

9 in section 112(b)(4).

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

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

15 coverage.

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

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

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

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

3 the following:

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

7 rights) under any utilization review program under

8 section 115, including under any drug formulary

9 program under section 107.

10 (2) GRIEVANCE AND APPEALS INFORMATION.—

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

13 matters.

14 (3) METHOD OF PHYSICIAN COMPENSATION.—

15 An overall summary description as to the method of

16 compensation of participating physicians, including

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

19 Security Act) provided by the plan or issuer under

20 the coverage.

21 (4) SPECIFIC INFORMATION ON CREDENTIALS

22 OF PARTICIPATING PROVIDERS.—In the case of each

23 participating provider, a description of the creden24 tials of the provider.
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1 (5) CONFIDENTIALITY POLICIES AND PROCE2 DURES.—A description of the policies and proce3 dures established to carry out section 122.

4 (6) FORMULARY RESTRICTIONS.—A description

5 of the nature of any drug formula restrictions.

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

7 current participating health care providers.

8 (d) FORM OF DISCLOSURE.—

9 (1) UNIFORMITY.—Information required to be

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

12 specified by the Secretary, after consultation with

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

15 issuers and coverage offered within an area.

16 (2) INFORMATION INTO HANDBOOK.—Nothing

17 in this section shall be construed as preventing a

18 group health plan or health insurance issuer from

19 making the information under subsections (b) and

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

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

25 health care providers described in subsection
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1 (b)(3)(C) shall be updated within such reasonable

2 period as determined appropriate by the Secretary.

3 Nothing in this section shall prevent an issuer from

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

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

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

9 plan or health insurance issuer and any provider.

10 SEC. 122. PROTECTION OF PATIENT CONFIDENTIALITY.

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

12 issuer that offers health insurance coverage, maintains

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

15 shall establish procedures—

16 (1) to safeguard the privacy of any individually

17 identifiable enrollee information;

18 (2) to maintain such records and information in

19 a manner that is accurate and timely, and

20 (3) to assure timely access of such individuals

21 to such records and information.

22 SEC. 123. HEALTH INSURANCE OMBUDSMEN.

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

24 under subsection (c) shall provide for creation and oper25 ation of a Health Insurance Ombudsman through a con-
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1 tract with a not-for-profit organization that operates inde2 pendent of group health plans and health insurance

3 issuers. Such Ombudsman shall be responsible for at least

4 the following:

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

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

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

13 such coverage or plans.

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

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

17 and operation of a Health Insurance Ombudsman through

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

19 independent of group health plans and health insurance

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

22 subsection (a) by a Health Insurance Ombudsman.

23 (c) AUTHORIZATION OF APPROPRIATIONS.—There

24 are authorized to be appropriated to the Secretary of

25 Health and Human Services such amounts as may be nec-
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•S 240 IS

1 essary to provide for grants to States for contracts for

2 Health Insurance Ombudsmen under subsection (a) or

3 contracts for such Ombudsmen under subsection (b).

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

5 construed to prevent the use of other forms of enrollee

6 assistance.

7 Subtitle D—Grievance and Appeals

8 Procedures

9 SEC. 131. ESTABLISHMENT OF GRIEVANCE PROCESS.

10 (a) ESTABLISHMENT OF GRIEVANCE SYSTEM.—

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

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

14 maintain a system to provide for the presentation

15 and resolution of oral and written grievances

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

18 other individuals acting on behalf of an individual

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

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

23 quality of care, choice and accessibility of providers,

24 network adequacy, and compliance with the require25 ments of this title.
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1 (b) GRIEVANCE SYSTEM.—Such system shall include

2 the following components with respect to individuals who

3 are participants, beneficiaries, or enrollees:

4 (1) Written notification to all such individuals

5 and providers of the telephone numbers and business

6 addresses of the plan or issuer personnel responsible

7 for resolution of grievances and appeals.

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

9 period of at least 3 previous years, all grievances

10 and appeals made and their status.

11 (3) A process providing for timely processing

12 and resolution of grievances.

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

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

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

18 grievances and appeals relating to quality of care.

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

21 (a) RIGHT OF APPEAL.—

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

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

25 issuer, and any provider or other person acting on
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1 behalf of such an individual with the individual’s

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

5 section 133. Such individuals and providers shall be

6 provided with a written explanation of the appeal

7 process and the determination upon the conclusion

8 of the appeals process and as provided in section

9 121(b)(8).

10 (2) APPEALABLE DECISION DEFINED.—In this

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

12 the following:

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

14 failure to provide or make payment (in whole or

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

16 cover an item or service for which benefits are

17 otherwise provided because it is determined to

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

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

24 (C) Failure to provide a choice of provider

25 under section 103.
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1 (D) Failure to provide qualified health care

2 providers under section 103.

3 (E) Failure to provide access to specialty

4 and other care under section 104.

5 (F) Failure to provide continuation of care

6 under section 105.

7 (G) Failure to provide coverage of routine

8 patient costs in connection with an approval

9 clinical trial under section 106.

10 (H) Failure to provide access to needed

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

12 (I) Discrimination in delivery of services in

13 violation of section 109.

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

16 (K) The imposition of a limitation that is

17 prohibited under section 151.

18 (b) INTERNAL APPEAL PROCESS.—

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

20 health insurance issuer shall establish and maintain

21 an internal appeal process under which any partici22 pant, beneficiary, or enrollee, or any provider or

23 other person acting on behalf of such an individual

24 with the individual’s consent, who is dissatisfied with

25 any appealable decision has the opportunity to ap-
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1 peal the decision through an internal appeal process.

2 The appeal may be communicated orally.

3 (2) CONDUCT OF REVIEW.—

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

6 other health care professional (or professionals)

7 who has been selected by the plan or issuer and

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

10 (B) AVAILABILITY AND PARTICIPATION OF

11 CLINICAL PEERS.—The individuals conducting

12 such review shall include one or more clinical

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

14 not been involved in the appealable decision at

15 issue in the appeal.

16 (3) DEADLINE.—

17 (A) IN GENERAL.—Subject to subsection

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

21 exigencies of the case involved, but in no event

22 later than—

23 (i) 72 hours after the time of receipt

24 of an expedited appeal, and
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1 (ii) except as provided in subpara2 graph (B), 30 business days after such

3 time (or, if the participant, beneficiary, or

4 enrollee supplies additional information

5 that was not available to the plan or issuer

6 at the time of the receipt of the appeal,

7 after the date of supplying such additional

8 information) in the case of all other ap9 peals.

10 (B) EXTENSION.—In the case of an appeal

11 that does not relate to a decision regarding an

12 expedited appeal and that does not involve med13 ical exigencies, if a group health plan or health

14 insurance issuer is unable to conclude the ap15 peal within the time period provided under sub16 paragraph (A)(ii) due to circumstances beyond

17 the control of the plan or issuer, the deadline

18 shall be extended for up to an additional 10

19 business days if the plan or issuer provides, on

20 or before 10 days before the deadline otherwise

21 applicable, written notice to the participant,

22 beneficiary, or enrollee and the provider in23 volved of the extension and the reasons for the

24 extension.
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1 (4) NOTICE.—If a plan or issuer denies an ap2 peal, the plan or issuer shall provide the participant,

3 beneficiary, or enrollee and provider involved with

4 notice in printed form of the denial and the reasons

5 therefore, together with a notice in printed form of

6 rights to any further appeal.

7 (c) EXPEDITED REVIEW PROCESS.—

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

9 health insurance issuer, shall establish procedures in

10 writing for the expedited consideration of appeals

11 under subsection (b) in situations in which the appli12 cation of the normal timeframe for making a deter13 mination could seriously jeopardize the life or health

14 of the participant, beneficiary, or enrollee (including

15 in the case of a child, development) or such an indi16 vidual’s ability to regain maximum function.

17 (2) PROCESS.—Under such procedures—

18 (A) the request for expedited appeal may

19 be submitted orally or in writing by an individ20 ual or provider who is otherwise entitled to re21 quest the appeal;

22 (B) all necessary information, including

23 the plan’s or issuer’s decision, shall be trans24 mitted between the plan or issuer and the re-
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1 quester by telephone, facsimile, or other simi2 larly expeditious available method; and

3 (C) the plan or issuer shall expedite the

4 appeal if the request for an expedited appeal is

5 submitted under subparagraph (A) by a physi6 cian and the request indicates that the situation

7 described in paragraph (1) exists.

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

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

10 the deadlines for completion of appeals under this section

11 or in the event that the plan or issuer for any reason ex12 pressly waives its rights to an internal review of an appeal

13 under subsection (b), the participant, beneficiary, or en14 rollee involved and the provider involved shall be relieved

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

16 at such an individual’s or provider’s option, proceed di17 rectly to seek further appeal through any applicable exter18 nal appeals process.

19 SEC. 133. EXTERNAL APPEALS OF ADVERSE DETERMINA20 TIONS.

21 (a) RIGHT TO EXTERNAL APPEAL.—

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

23 health insurance issuer offering group health insur24 ance coverage, shall provide for an external appeals

25 process that meets the requirements of this section
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1 in the case of an externally appealable decision de2 scribed in paragraph (2). The appropriate Secretary

3 shall establish standards to carry out such require4 ments.

5 (2) EXTERNALLY APPEALABLE DECISION DE6 FINED.—For purposes of this section, the term ‘‘ex7 ternally appealable decision’’ means an appealable

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

9 (A) the amount involved exceeds a signifi10 cant threshold; or

11 (B) the patient’s life or health is jeopard12 ized (including, in the case of a child, develop13 ment) as a consequence of the decision.

14 Such term does not include a denial of coverage for

15 services that are specifically listed in plan or cov16 erage documents as excluded from coverage.

17 (3) EXHAUSTION OF INTERNAL APPEALS PROC18 ESS.—A plan or issuer may condition the use of an

19 external appeal process in the case of an externally

20 appealable decision upon completion of the internal

21 review process provided under section 132, but only

22 if the decision is made in a timely basis consistent

23 with the deadlines provided under this subtitle.

24 (b) GENERAL ELEMENTS OF EXTERNAL APPEALS

25 PROCESS.—
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1 (1) CONTRACT WITH QUALIFIED EXTERNAL AP2 PEAL ENTITY.—

3 (A) CONTRACT REQUIREMENT.—Subject to

4 subparagraph (B), the external appeal process

5 under this section of a plan or issuer shall be

6 conducted under a contract between the plan or

7 issuer and one or more qualified external appeal

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

9 (B) RESTRICTIONS ON QUALIFIED EXTER10 NAL APPEAL ENTITY.—

11 (i) BY STATE FOR HEALTH INSUR12 ANCE ISSUERS.—With respect to health in13 surance issuers in a State, the State may

14 provide for external review activities to be

15 conducted by a qualified external appeal

16 entity that is designated by the State or

17 that is selected by the State in such a

18 manner as to assure an unbiased deter19 mination.

20 (ii) BY FEDERAL GOVERNMENT FOR

21 GROUP HEALTH PLANS.—With respect to

22 group health plans, the appropriate Sec23 retary may exercise the same authority as

24 a State may exercise with respect to health

25 insurance issuers under clause (i). Such
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1 authority may include requiring the use of

2 the qualified external appeal entity des3 ignated or selected under such clause.

4 (iii) LIMITATION ON PLAN OR ISSUER

5 SELECTION.—If an applicable authority

6 permits more than one entity to qualify as

7 a qualified external appeal entity with re8 spect to a group health plan or health in9 surance issuer and the plan or issuer may

10 select among such qualified entities, the

11 applicable authority—

12 (I) shall assure that the selection

13 process will not create any incentives

14 for external appeal entities to make a

15 decision in a biased manner, and

16 (II) shall implement procedures

17 for auditing a sample of decisions by

18 such entities to assure that no such

19 decisions are made in a biased man20 ner.

21 (C) OTHER TERMS AND CONDITIONS.—

22 The terms and conditions of a contract under

23 this paragraph shall be consistent with the

24 standards the appropriate Secretary shall estab25 lish to assure there is no real or apparent con-
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1 flict of interest in the conduct of external ap2 peal activities. Such contract shall provide that

3 the direct costs of the process (not including

4 costs of representation of a participant, bene5 ficiary, or enrollee) shall be paid by the plan or

6 issuer, and not by the participant, beneficiary,

7 or enrollee.

8 (2) ELEMENTS OF PROCESS.—An external ap9 peal process shall be conducted consistent with

10 standards established by the appropriate Secretary

11 that include at least the following:

12 (A) FAIR PROCESS; DE NOVO DETERMINA13 TION.—The process shall provide for a fair, de

14 novo determination.

15 (B) DETERMINATION CONCERNING EXTER16 NALLY APPEALABLE DECISIONS.—A qualified

17 external appeal entity shall determine whether a

18 decision is an externally appealable decision and

19 related decisions, including—

20 (i) whether such a decision involves an

21 expedited appeal;

22 (ii) the appropriate deadlines for in23 ternal review process required due to medi24 cal exigencies in a case; and
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1 (iii) whether such a process has been

2 completed.

3 (C) OPPORTUNITY TO SUBMIT EVIDENCE,

4 HAVE REPRESENTATION, AND MAKE ORAL

5 PRESENTATION.—Each party to an externally

6 appealable decision—

7 (i) may submit and review evidence

8 related to the issues in dispute,

9 (ii) may use the assistance or rep10 resentation of one or more individuals (any

11 of whom may be an attorney), and

12 (iii) may make an oral presentation.

13 (D) PROVISION OF INFORMATION.—The

14 plan or issuer involved shall provide timely ac15 cess to all its records relating to the matter of

16 the externally appealable decision and to all

17 provisions of the plan or health insurance cov18 erage (including any coverage manual) relating

19 to the matter.

20 (E) TIMELY DECISIONS.—A determination

21 by the external appeal entity on the decision

22 shall—

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

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

25 parties in writing as soon as possible;
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1 (ii) be binding on the plan or issuer;

2 (iii) be made in accordance with the

3 medical exigencies of the case involved, but

4 in no event later than 60 days (or 72

5 hours in the case of an expedited appeal)

6 from the date of completion of the filing of

7 notice of external appeal of the decision;

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

9 basis for the determination, including, if

10 relevant, any basis in the terms or condi11 tions of the plan or coverage; and

12 (v) inform the participant, beneficiary,

13 or enrollee of the individual’s rights to seek

14 further review by the courts (or other proc15 ess) of the external appeal determination.

16 (c) QUALIFICATIONS OF EXTERNAL APPEAL ENTI17 TIES.—

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

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

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

21 be a governmental entity) that is certified under

22 paragraph (2) as meeting the following require23 ments:

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

25 interest that would impede the entity conduct-
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1 ing external appeal activities independent of the

2 plan or issuer.

3 (B) The entity conducts external appeal

4 activities through clinical peers.

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

6 and other expertise and sufficient staffing to

7 conduct external appeal activities for the plan

8 or issuer on a timely basis consistent with sub9 section (b)(3)(E).

10 (D) The entity meets such other require11 ments as the appropriate Secretary may im12 pose.

13 (2) CERTIFICATION OF EXTERNAL APPEAL EN14 TITIES.—

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

16 as a qualified external appeal entity with re17 spect to—

18 (i) a group health plan, the entity

19 must be certified (and, in accordance with

20 subparagraph (B), periodically recertified)

21 as meeting the requirements of paragraph

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

23 process recognized or approved by the Sec24 retary of Labor); or
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1 (ii) a health insurance issuer operat2 ing in a State, the entity must be certified

3 (and, in accordance with subparagraph

4 (B), periodically recertified) as meeting

5 such requirements by the applicable State

6 authority (or, if the State has not estab7 lished an adequate certification and recer8 tification process, by the Secretary of

9 Health and Human Services, or under a

10 process recognized or approved by such

11 Secretary).

12 (B) RECERTIFICATION PROCESS.—The ap13 propriate Secretary shall develop standards for

14 the recertification of external appeal entities.

15 Such standards shall include a specification

16 of—

17 (i) the information required to be sub18 mitted as a condition of recertification on

19 the entity’s performance of external appeal

20 activities, which information shall include

21 the number of cases reviewed, a summary

22 of the disposition of those cases, the length

23 of time in making determinations on those

24 cases, and such information as may be nec25 essary to assure the independence of the
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•S 240 IS

1 entity from the plans or issuers for which

2 external appeal activities are being con3 ducted; and

4 (ii) the periodicity which recertifi5 cation will be required.

6 (d) CONTINUING LEGAL RIGHTS OF ENROLLEES.—

7 Nothing in this title shall be construed as removing any

8 legal rights of participants, beneficiaries, enrollees, and

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

10 file judicial actions to enforce rights.

11 Subtitle E—Protecting the Doctor12 Patient Relationship

13 SEC. 141. PROHIBITION OF INTERFERENCE WITH CERTAIN

14 MEDICAL COMMUNICATIONS.

15 (a) PROHIBITION.—

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

17 contract or agreement, or the operation of any con18 tract or agreement, between a group health plan or

19 health insurance issuer in relation to health insur20 ance coverage (including any partnership, associa21 tion, or other organization that enters into or ad22 ministers such a contract or agreement) and a

23 health care provider (or group of health care provid24 ers) shall not prohibit or restrict the provider from
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1 engaging in medical communications with the pro2 vider’s patient.

3 (2) NULLIFICATION.—-- Any contract provision

4 or agreement that restricts or prohibits medical com5 munications in violation of paragraph (1) shall be

6 null and void.

7 (b) RULES OF CONSTRUCTION.—Nothing in this sec8 tion shall be construed—

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

10 contract or agreement to which a health care pro11 vider is a party, of any mutually agreed upon terms

12 and conditions, including terms and conditions re13 quiring a health care provider to participate in, and

14 cooperate with, all programs, policies, and proce15 dures developed or operated by a group health plan

16 or health insurance issuer to assure, review, or im17 prove the quality and effective utilization of health

18 care services (if such utilization is according to

19 guidelines or protocols that are based on clinical or

20 scientific evidence and the professional judgment of

21 the provider) but only if the guidelines or protocols

22 under such utilization do not prohibit or restrict

23 medical communications between providers and their

24 patients; or
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1 (2) to permit a health care provider to mis2 represent the scope of benefits covered under the

3 group health plan or health insurance coverage or to

4 otherwise require a group health plan health insur5 ance issuer to reimburse providers for benefits not

6 covered under the plan or coverage.

7 (c) MEDICAL COMMUNICATION DEFINED.—In this

8 section:

9 (1) IN GENERAL.—The term ‘‘medical commu10 nication’’ means any communication made by a

11 health care provider with a patient of the health care

12 provider (or the guardian or legal representative of

13 such patient) with respect to—

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

15 care, or treatment options;

16 (B) any utilization review requirements

17 that may affect treatment options for the pa18 tient; or

19 (C) any financial incentives that may af20 fect the treatment of the patient.

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

22 communication’’ does not include a communication

23 by a health care provider with a patient of the

24 health care provider (or the guardian or legal rep25 resentative of such patient) if the communication in-
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•S 240 IS

1 volves a knowing or willful misrepresentation by

2 such provider.

3 SEC. 142. PROHIBITION AGAINST TRANSFER OF INDEM4 NIFICATION OR IMPROPER INCENTIVE AR5 RANGEMENTS.

6 (a) PROHIBITION OF TRANSFER OF INDEMNIFICA7 TION.—

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

9 between a group health plan or health insurance

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

11 or issuer) and a health care provider shall contain

12 any provision purporting to transfer to the health

13 care provider by indemnification or otherwise any li14 ability relating to activities, actions, or omissions of

15 the plan, issuer, or agent (as opposed to the pro16 vider).

17 (2) NULLIFICATION.—Any contract or agree18 ment provision described in paragraph (1) shall be

19 null and void.

20 (b) PROHIBITION OF IMPROPER PHYSICIAN INCEN21 TIVE PLANS.—

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

23 health insurance issuer offering health insurance

24 coverage may not operate any physician incentive

25 plan (as defined in subparagraph (B) of section
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•S 240 IS

1 1876(i)(8) of the Social Security Act) unless the re2 quirements described in subparagraph (A) of such

3 section are met with respect to such a plan.

4 (2) APPLICATION.—For purposes of carrying

5 out paragraph (1), any reference in section

6 1876(i)(8) of the Social Security Act to the Sec7 retary, an eligible organization, or an individual en8 rolled with the organization shall be treated as a ref9 erence to the applicable authority, a group health

10 plan or health insurance issuer, respectively, and a

11 participant, beneficiary, or enrollee with the plan or

12 organization, respectively.

13 SEC. 143. ADDITIONAL RULES REGARDING PARTICIPATION

14 OF HEALTH CARE PROFESSIONALS.

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

16 or health insurance issuer that offers health insurance cov17 erage, provides benefits through participating health care

18 professionals, the plan or issuer shall establish reasonable

19 procedures relating to the participation (under an agree20 ment between a professional and the plan or issuer) of

21 such professionals under the plan or coverage. Such proce22 dures shall include—

23 (1) providing notice of the rules regarding par24 ticipation;
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1 (2) providing written notice of participation de2 cisions that are adverse to professionals; and

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

4 for appealing such adverse decisions, including the

5 presentation of information and views of the profes6 sional regarding such decision.

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

8 health plan, and health insurance issuer that offers health

9 insurance coverage, shall consult with participating physi10 cians (if any) regarding the plan’s or issuer’s medical pol11 icy, quality, and medical management procedures.

12 SEC. 144. PROTECTION FOR PATIENT ADVOCACY.

13 (a) PROTECTION FOR USE OF UTILIZATION REVIEW

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

15 health insurance issuer with respect to the provision of

16 health insurance coverage, may not retaliate against a par17 ticipant, beneficiary, enrollee, or health care provider

18 based on the participant’s, beneficiary’s, enrollee’s or pro19 vider’s use of, or participation in, a utilization review proc20 ess or a grievance process of the plan or issuer (including

21 an internal or external review or appeal process) under

22 this title.

23 (b) PROTECTION FOR QUALITY ADVOCACY BY

24 HEALTH CARE PROFESSIONALS.—
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1 (1) IN GENERAL.—A group health plan or

2 health insurance issuer may not retaliate or dis3 criminate against a protected health care profes4 sional because the professional in good faith—

5 (A) discloses information relating to the

6 care, services, or conditions affecting one or

7 more participants, beneficiaries, or enrollees of

8 the plan or issuer to an appropriate public reg9 ulatory agency, an appropriate private accredi10 tation body, or appropriate management per11 sonnel of the plan or issuer; or

12 (B) initiates, cooperates, or otherwise par13 ticipates in an investigation or proceeding by

14 such an agency with respect to such care, serv15 ices, or conditions.

16 If an institutional health care provider is a partici17 pating provider with such a plan or issuer or other18 wise receives payments for benefits provided by such

19 a plan or issuer, the provisions of the previous sen20 tence shall apply to the provider in relation to care,

21 services, or conditions affecting one or more patients

22 within an institutional health care provider in the

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

24 relation to care, services, or conditions provided to

25 one or more participants, beneficiaries, or enrollees;
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1 and for purposes of applying this sentence, any ref2 erence to a plan or issuer is deemed a reference to

3 the institutional health care provider.

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

5 paragraph (1), a protected health care professional

6 is considered to be acting in good faith with respect

7 to disclosure of information or participation if, with

8 respect to the information disclosed as part of the

9 action—

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

11 personal knowledge and is consistent with that

12 degree of learning and skill ordinarily possessed

13 by health care professionals with the same li14 censure or certification and the same experi15 ence;

16 (B) the professional reasonably believes the

17 information to be true;

18 (C) the information evidences either a vio19 lation of a law, rule, or regulation, of an appli20 cable accreditation standard, or of a generally

21 recognized professional or clinical standard or

22 that a patient is in imminent hazard of loss of

23 life or serious injury; and

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

25 of paragraph (3), the professional has followed
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1 reasonable internal procedures of the plan,

2 issuer, or institutional health care provider es3 tablished for the purpose of addressing quality

4 concerns before making the disclosure.

5 (3) EXCEPTION AND SPECIAL RULE.—

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

7 does not protect disclosures that would violate

8 Federal or State law or diminish or impair the

9 rights of any person to the continued protection

10 of confidentiality of communications provided

11 by such law.

12 (B) NOTICE OF INTERNAL PROCEDURES.—

13 Subparagraph (D) of paragraph (2) shall not

14 apply unless the internal procedures involved

15 are reasonably expected to be known to the

16 health care professional involved. For purposes

17 of this subparagraph, a health care professional

18 is reasonably expected to know of internal pro19 cedures if those procedures have been made

20 available to the professional through distribu21 tion or posting.

22 (C) INTERNAL PROCEDURE EXCEPTION.—

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

24 not apply if—
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1 (i) the disclosure relates to an immi2 nent hazard of loss of life or serious injury

3 to a patient;

4 (ii) the disclosure is made to an ap5 propriate private accreditation body pursu6 ant to disclosure procedures established by

7 the body; or

8 (iii) the disclosure is in response to an

9 inquiry made in an investigation or pro10 ceeding of an appropriate public regulatory

11 agency and the information disclosed is

12 limited to the scope of the investigation or

13 proceeding.

14 (4) ADDITIONAL CONSIDERATIONS.—It shall

15 not be a violation of paragraph (1) to take an ad16 verse action against a protected health care profes17 sional if the plan, issuer, or provider taking the ad18 verse action involved demonstrates that it would

19 have taken the same adverse action even in the ab20 sence of the activities protected under such para21 graph.

22 (5) NOTICE.—A group health plan, health in23 surance issuer, and institutional health care provider

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

25 the Secretary of Labor, setting forth excerpts from,
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1 or summaries of, the pertinent provisions of this

2 subsection and information pertaining to enforce3 ment of such provisions.

4 (6) CONSTRUCTIONS.—

5 (A) DETERMINATIONS OF COVERAGE.—

6 Nothing in this subsection shall be construed to

7 prohibit a plan or issuer from making a deter8 mination not to pay for a particular medical

9 treatment or service or the services of a type of

10 health care professional.

11 (B) ENFORCEMENT OF PEER REVIEW PRO12 TOCOLS AND INTERNAL PROCEDURES.—Noth13 ing in this subsection shall be construed to pro14 hibit a plan, issuer, or provider from establish15 ing and enforcing reasonable peer review or uti16 lization review protocols or determining whether

17 a protected health care professional has com18 plied with those protocols or from establishing

19 and enforcing internal procedures for the pur20 pose of addressing quality concerns.

21 (C) RELATION TO OTHER RIGHTS.—Noth22 ing in this subsection shall be construed to

23 abridge rights of participants, beneficiaries, en24 rollees, and protected health care professionals

25 under other applicable Federal or State laws.
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1 (7) PROTECTED HEALTH CARE PROFESSIONAL

2 DEFINED.—For purposes of this subsection, the

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

4 individual who is a licensed or certified health care

5 professional and who—

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

7 health insurance issuer, is an employee of the

8 plan or issuer or has a contract with the plan

9 or issuer for provision of services for which ben10 efits are available under the plan or issuer; or

11 (B) with respect to an institutional health

12 care provider, is an employee of the provider or

13 has a contract or other arrangement with the

14 provider respecting the provision of health care

15 services.

16 Subtitle F—Promoting Good

17 Medical Practice

18 SEC. 151. PROMOTING GOOD MEDICAL PRACTICE.

19 (a) PROHIBITING ARBITRARY LIMITATIONS OR CON20 DITIONS FOR THE PROVISION OF SERVICES.—

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

22 health insurance issuer in connection with the provi23 sion of health insurance coverage, may not arbitrar24 ily interfere with or alter the decision of the treating

25 physician regarding the manner or setting in which
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1 particular services are delivered if the services are

2 medically necessary or appropriate for treatment or

3 diagnosis to the extent that such treatment or diag4 nosis is otherwise a covered benefit.

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

6 be construed as prohibiting a plan or issuer from

7 limiting the delivery of services to one or more

8 health care providers within a network of such pro9 viders.

10 (3) MANNER OR SETTING DEFINED.—In para11 graph (1), the term ‘‘manner or setting’’ means the

12 location of treatment, such as whether treatment is

13 provided on an inpatient or outpatient basis, and the

14 duration of treatment, such as the number of days

15 in a hospital. Such term does not include the cov16 erage of a particular service or treatment.

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

18 not be construed as requiring coverage of particular serv19 ices the coverage of which is otherwise not covered under

20 the terms of the plan or coverage or from conducting utili21 zation review activities consistent with this subsection.

22 (c) MEDICAL NECESSITY OR APPROPRIATENESS DE23 FINED.—In subsection (a), the term ‘‘medically necessary

24 or appropriate’’ means, with respect to a service or benefit,
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1 a service or benefit which is consistent with generally ac2 cepted principles of professional medical practice.

3 SEC. 152. STANDARDS RELATING TO BENEFITS FOR CER4 TAIN BREAST CANCER TREATMENT.

5 (a) INPATIENT CARE.—

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

7 health insurance issuer offering group health insur8 ance coverage, that provides medical and surgical

9 benefits shall ensure that inpatient coverage with re10 spect to the treatment of breast cancer is provided

11 for a period of time as is determined by the attend12 ing physician, in his or her professional judgment

13 consistent with generally accepted medical stand14 ards, in consultation with the patient, to be medi15 cally appropriate following—

16 (A) a mastectomy;

17 (B) a lumpectomy; or

18 (C) a lymph node dissection for the treat19 ment of breast cancer.

20 (2) EXCEPTION.—Nothing in this section shall

21 be construed as requiring the provision of inpatient

22 coverage if the attending physician and patient de23 termine that a shorter period of hospital stay is

24 medically appropriate.
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1 (b) PROHIBITIONS.—A group health plan, and a

2 health insurance issuer offering group health insurance

3 coverage in connection with a group health plan, may

4 not—

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

6 eligibility, to enroll or to renew coverage under the

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

8 the requirements of this section;

9 (2) provide monetary payments or rebates to

10 women to encourage such women to accept less than

11 the minimum protections available under this sec12 tion;

13 (3) penalize or otherwise reduce or limit the re14 imbursement of an attending provider because such

15 provider provided care to an individual participant

16 or beneficiary in accordance with this section;

17 (4) provide incentives (monetary or otherwise)

18 to an attending provider to induce such provider to

19 provide care to an individual participant or bene20 ficiary in a manner inconsistent with this section; or

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

22 for any portion of a period within a hospital length

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

24 which is less favorable than the benefits provided for

25 any preceding portion of such stay.
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1 (c) RULES OF CONSTRUCTION.—

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

3 require a woman who is a participant or

4 beneficiary—

5 (A) to undergo a mastectomy or lymph

6 node dissection in a hospital; or

7 (B) to stay in the hospital for a fixed pe8 riod of time following a mastectomy or lymph

9 node dissection.

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

11 any group health plan, or any group health insur12 ance coverage offered by a health insurance issuer,

13 which does not provide benefits for hospital lengths

14 of stay in connection with a mastectomy or lymph

15 node dissection for the treatment of breast cancer.

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

17 preventing a group health plan or issuer from impos18 ing deductibles, coinsurance, or other cost-sharing in

19 relation to benefits for hospital lengths of stay in

20 connection with a mastectomy or lymph node dissec21 tion for the treatment of breast cancer under the

22 plan (or under health insurance coverage offered in

23 connection with a group health plan), except that

24 such coinsurance or other cost-sharing for any por25 tion of a period within a hospital length of stay re-
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1 quired under subsection (a) may not be greater than

2 such coinsurance or cost-sharing for any preceding

3 portion of such stay.

4 (d) LEVEL AND TYPE OF REIMBURSEMENTS.—Noth5 ing in this section shall be construed to prevent a group

6 health plan or a health insurance issuer offering group

7 health insurance coverage from negotiating the level and

8 type of reimbursement with a provider for care provided

9 in accordance with this section.

10 (e) EXCEPTION FOR HEALTH INSURANCE COVERAGE

11 IN CERTAIN STATES.—

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

13 section shall not apply with respect to health insur14 ance coverage if there is a State law (as defined in

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

16 for a State that regulates such coverage that is de17 scribed in any of the following subparagraphs:

18 (A) Such State law requires such coverage

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

20 of stay following a mastectomy performed for

21 treatment of breast cancer and at least a 24-

22 hour hospital length of stay following a lymph

23 node dissection for treatment of breast cancer.

24 (B) Such State law requires, in connection

25 with such coverage for surgical treatment of
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1 breast cancer, that the hospital length of stay

2 for such care is left to the decision of (or re3 quired to be made by) the attending provider in

4 consultation with the woman involved.

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

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

7 the Employee Retirement Income Security Act of

8 1974 shall not be construed as superseding a State

9 law described in paragraph (1).

10 Subtitle G—Definitions

11 SEC. 191. DEFINITIONS.

12 (a) INCORPORATION OF GENERAL DEFINITIONS.—

13 The provisions of section 2971 of the Public Health Serv14 ice Act shall apply for purposes of this title in the same

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

16 Act.

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

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

19 Human Services, in consultation with the Secretary of

20 Labor and the Secretary of the Treasury and the term

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

22 and Human Services in relation to carrying out this title

23 under sections 2707 and 2753 of the Public Health Serv24 ice Act and the Secretary of Labor in relation to carrying
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1 out this title under section 714 of the Employee Retire2 ment Income Security Act of 1974.

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

4 title:

5 (1) APPLICABLE AUTHORITY.—The term ‘‘ap6 plicable authority’’ means—

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

8 Secretary of Health and Human Services and

9 the Secretary of Labor; and

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

11 with respect to a specific provision of this title,

12 the applicable State authority (as defined in

13 section 2791(d) of the Public Health Service

14 Act), or the Secretary of Health and Human

15 Services, if such Secretary is enforcing such

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

17 2761(a)(2) of the Public Health Service Act.

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

19 means, with respect to a review or appeal, a physi20 cian (allopathic or osteopathic) or other health care

21 professional who holds a non-restricted license in a

22 State and who is appropriately credentialed in the

23 same or similar specialty as typically manages the

24 medical condition, procedure, or treatment under re25 view or appeal and includes a pediatric specialist
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1 where appropriate; except that only a physician may

2 be a clinical peer with respect to the review or ap3 peal of treatment rendered by a physician.

4 (3) HEALTH CARE PROVIDER.—The term

5 ‘‘health care provider’’ includes a physician or other

6 health care professional, as well as an institutional

7 provider of health care services.

8 (4) NONPARTICIPATING.—The term ‘‘non9 participating’’ means, with respect to a health care

10 provider that provides health care items and services

11 to a participant, beneficiary, or enrollee under group

12 health plan or health insurance coverage, a health

13 care provider that is not a participating health care

14 provider with respect to such items and services.

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

16 means, with respect to a health care provider that

17 provides health care items and services to a partici18 pant, beneficiary, or enrollee under group health

19 plan or health insurance coverage offered by a

20 health insurance issuer, a health care provider that

21 furnishes such items and services under a contract

22 or other arrangement with the plan or issuer.
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1 SEC. 192. PREEMPTION; STATE FLEXIBILITY; CONSTRUC2 TION.

3 (a) CONTINUED APPLICABILITY OF STATE LAW

4 WITH RESPECT TO HEALTH INSURANCE ISSUERS.—

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

6 this title shall not be construed to supersede any

7 provision of State law which establishes, implements,

8 or continues in effect any standard or requirement

9 solely relating to health insurance issuers in connec10 tion with group health insurance coverage except to

11 the extent that such standard or requirement pre12 vents the application of a requirement of this title.

13 (2) CONTINUED PREEMPTION WITH RESPECT

14 TO GROUP HEALTH PLANS.—Nothing in this title

15 shall be construed to affect or modify the provisions

16 of section 514 of the Employee Retirement Income

17 Security Act of 1974 with respect to group health

18 plans.

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

20 in section 152, nothing in this title shall be construed as

21 requiring a group health plan or health insurance coverage

22 to provide specific benefits under the terms of such plan

23 or coverage.

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

25 (1) STATE LAW.—The term ‘‘State law’’ in26 cludes all laws, decisions, rules, regulations, or other
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1 State action having the effect of law, of any State.

2 A law of the United States applicable only to the

3 District of Columbia shall be treated as a State law

4 rather than a law of the United States.

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

6 State, the Northern Mariana Islands, any political

7 subdivisions of a State or such Islands, or any agen8 cy or instrumentality of either.

9 SEC. 193. REGULATIONS.

10 The Secretaries of Health and Human Services,

11 Labor, and the Treasury shall issue such regulations as

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

13 Such regulations shall be issued consistent with section

14 104 of Health Insurance Portability and Accountability

15 Act of 1996. Such Secretaries may promulgate any in16 terim final rules as the Secretaries determine are appro17 priate to carry out this title.
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1 TITLE II—APPLICATION OF PA2 TIENT PROTECTION STAND3 ARDS TO GROUP HEALTH

4 PLANS AND HEALTH INSUR5 ANCE COVERAGE UNDER

6 PUBLIC HEALTH SERVICE

7 ACT

8 SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND

9 GROUP HEALTH INSURANCE COVERAGE.

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

11 XXVII of the Public Health Service Act, as amended by

12 the Omnibus Consolidated and Emergency Supplemental

13 Appropriations Act, 1999 (Public Law 105–277), is

14 amended by adding at the end the following new section:

15 ‘‘SEC. 2707. PATIENT PROTECTION STANDARDS.

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

17 comply with patient protection requirements under title I

18 of the Patients’ Bill of Rights Act of 1999, and each

19 health insurance issuer shall comply with patient protec20 tion requirements under such title with respect to group

21 health insurance coverage it offers, and such requirements

22 shall be deemed to be incorporated into this subsection.

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

24 the notice requirement under section 711(d) of the Em25 ployee Retirement Income Security Act of 1974 with re-
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1 spect to the requirements referred to in subsection (a) and

2 a health insurance issuer shall comply with such notice

3 requirement as if such section applied to such issuer and

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

5 (b) CONFORMING AMENDMENT.—Section

6 2721(b)(2)(A) of the Public Health Service Act (42

7 U.S.C. 300gg–21(b)(2)(A)) is amended by inserting

8 ‘‘(other than section 2707)’’ after ‘‘requirements of such

9 subparts’’.

10 SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR11 ANCE COVERAGE.

12 Subpart 3 of part B of title XXVII of the Public

13 Health Service Act, as amended by the Omnibus Consoli14 dated and Emergency Supplemental Appropriations Act,

15 1999 (Public Law 105-277), is amended by adding at the

16 end the following new section:

17 ‘‘SEC. 2753. PATIENT PROTECTION STANDARDS.

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

19 shall comply with patient protection requirements under

20 title I of the Patients’ Bill of Rights Act of 1999 with

21 respect to individual health insurance coverage it offers,

22 and such requirements shall be deemed to be incorporated

23 into this subsection.

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

25 part shall comply with the notice requirement under sec-
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1 tion 711(d) of the Employee Retirement Income Security

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

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

4 were a group health plan.’’.

5 TITLE III—AMENDMENTS TO

6 THE EMPLOYEE RETIREMENT

7 INCOME SECURITY ACT OF

8 1974

9 SEC. 301. APPLICATION OF PATIENT PROTECTION STAND10 ARDS TO GROUP HEALTH PLANS AND GROUP

11 HEALTH INSURANCE COVERAGE UNDER THE

12 EMPLOYEE RETIREMENT INCOME SECURITY

13 ACT OF 1974.

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

15 B of title I of the Employee Retirement Income Security

16 Act of 1974, as amended by the Omnibus Consolidated

17 and Emergency Supplemental Appropriations Act, 1999

18 (Public Law 105-277), is amended by adding at the end

19 the following:

20 ‘‘SEC. 714. PATIENT PROTECTION STANDARDS.

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

22 group health plan (and a health insurance issuer offering

23 group health insurance coverage in connection with such

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

25 the Patients’ Bill of Rights Act of 1999 (as in effect as
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1 of the date of the enactment of such Act), and such re2 quirements shall be deemed to be incorporated into this

3 subsection.

4 ‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE5 MENTS.—

6 ‘‘(1) SATISFACTION OF CERTAIN REQUIRE7 MENTS THROUGH INSURANCE.—For purposes of

8 subsection (a), insofar as a group health plan pro9 vides benefits in the form of health insurance cov10 erage through a health insurance issuer, the plan

11 shall be treated as meeting the following require12 ments of title I of the Patients’ Bill of Rights Act

13 of 1999 with respect to such benefits and not be

14 considered as failing to meet such requirements be15 cause of a failure of the issuer to meet such require16 ments so long as the plan sponsor or its representa17 tives did not cause such failure by the issuer:

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

19 emergency care).

20 ‘‘(B) Section 102(a)(1) (relating to offer21 ing option to purchase point-of-service cov22 erage), but only insofar as the plan is meeting

23 such requirement through an agreement with

24 the issuer to offer the option to purchase point25 of-service coverage under such section.
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1 ‘‘(C) Section 103 (relating to choice of pro2 viders).

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

4 specialty care).

5 ‘‘(E) Section 105(a)(1) (relating to con6 tinuity in case of termination of provider con7 tract) and section 105(a)(2) (relating to con8 tinuity in case of termination of issuer con9 tract), but only insofar as a replacement issuer

10 assumes the obligation for continuity of care.

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

12 individuals participating in approved clinical

13 trials.)

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

15 needed prescription drugs).

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

17 provider network).

18 ‘‘(I) Subtitle B (relating to quality assur19 ance).

20 ‘‘(J) Section 143 (relating to additional

21 rules regarding participation of health care pro22 fessionals).

23 ‘‘(K) Section 152 (relating to standards re24 lating to benefits for certain breast cancer

25 treatment).
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1 ‘‘(2) INFORMATION.—With respect to informa2 tion required to be provided or made available under

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

4 provides benefits in the form of health insurance

5 coverage through a health insurance issuer, the Sec6 retary shall determine the circumstances under

7 which the plan is not required to provide or make

8 available the information (and is not liable for the

9 issuer’s failure to provide or make available the in10 formation), if the issuer is obligated to provide and

11 make available (or provides and makes available)

12 such information.

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

14 With respect to the grievance system and internal

15 appeals process required to be established under sec16 tions 131 and 132, in the case of a group health

17 plan that provides benefits in the form of health in18 surance coverage through a health insurance issuer,

19 the Secretary shall determine the circumstances

20 under which the plan is not required to provide for

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

22 issuer’s failure to provide for such system and proc23 ess), if the issuer is obligated to provide for (and

24 provides for) such system and process.
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1 ‘‘(4) EXTERNAL APPEALS.—Pursuant to rules

2 of the Secretary, insofar as a group health plan en3 ters into a contract with a qualified external appeal

4 entity for the conduct of external appeal activities in

5 accordance with section 133, the plan shall be treat6 ed as meeting the requirement of such section and

7 is not liable for the entity’s failure to meet any re8 quirements under such section.

9 ‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu10 ant to rules of the Secretary, if a health insurance

11 issuer offers health insurance coverage in connection

12 with a group health plan and takes an action in vio13 lation of any of the following sections, the group

14 health plan shall not be liable for such violation un15 less the plan caused such violation:

16 ‘‘(A) Section 109 (relating to non17 discrimination in delivery of services).

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

19 of interference with certain medical communica20 tions).

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

22 against transfer of indemnification or improper

23 incentive arrangements).

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

25 on retaliation).
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1 ‘‘(E) Section 151 (relating to promoting

2 good medical practice).

3 ‘‘(6) CONSTRUCTION.—Nothing in this sub4 section shall be construed to affect or modify the re5 sponsibilities of the fiduciaries of a group health

6 plan under part 4 of subtitle B.

7 ‘‘(7) APPLICATION TO CERTAIN PROHIBITIONS

8 AGAINST RETALIATION.—With respect to compliance

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

10 Patients’ Bill of Rights Act of 1999, for purposes of

11 this subtitle the term ‘group health plan’ is deemed

12 to include a reference to an institutional health care

13 provider.

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

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

16 professional who believes that the professional has

17 been retaliated or discriminated against in violation

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

19 Act of 1999 may file with the Secretary a complaint

20 within 180 days of the date of the alleged retaliation

21 or discrimination.

22 ‘‘(2) INVESTIGATION.—The Secretary shall in23 vestigate such complaints and shall determine if a

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

25 shall issue an order to ensure that the protected
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1 health care professional does not suffer any loss of

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

3 issuer, or provider involved, as a result of the viola4 tion found by the Secretary.

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

6 may issue regulations to coordinate the requirements on

7 group health plans under this section with the require8 ments imposed under the other provisions of this title.’’.

9 (b) SATISFACTION OF ERISA CLAIMS PROCEDURE

10 REQUIREMENT.—Section 503 of the Employee Retirement

11 Income Security Act of 1974 (29 U.S.C. 1133) is amended

12 by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’ and by adding at

13 the end the following new subsection:

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

15 in section 733) compliance with the requirements of sub16 title D (and section 115) of title I of the Patients’ Bill

17 of Rights Act of 1999 in the case of a claims denial shall

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

19 such claims denial.’’.

20 (c) CONFORMING AMENDMENTS.—

21 (1) Section 732(a) of the Employee Retirement

22 Income Security Act of 1974 (29 U.S.C. 1185(a)) is

23 amended by striking ‘‘section 711’’ and inserting

24 ‘‘sections 711 and 714’’.
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1 (2) The table of contents in section 1 of the

2 Employee Retirement Income Security Act of 1974,

3 as amended by the Omnibus Consolidated and

4 Emergency Supplemental Appropriations Act, 1999

5 (Public Law 105–277), is amended by inserting

6 after the item relating to section 713 the following

7 new item:

‘‘Sec. 714. Patient protection standards.’’.

8 (3) Section 502(b)(3) of the Employee Retire9 ment Income Security Act of 1974 (29 U.S.C.

10 1132(b)(3)) is amended by inserting ‘‘(other than

11 section 144(b))’’ after ‘‘part 7’’.

12 SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN

13 ACTIONS INVOLVING HEALTH INSURANCE

14 POLICYHOLDERS.

15 (a) IN GENERAL.—Section 514 of the Employee Re16 tirement Income Security Act of 1974 (29 U.S.C. 1144)

17 is amended by adding at the end the following subsection:

18 ‘‘(e) PREEMPTION NOT TO APPLY TO CERTAIN AC19 TIONS ARISING OUT OF PROVISION OF HEALTH BENE20 FITS.—

21 ‘‘(1) IN GENERAL.—Except as provided in this

22 subsection, nothing in this title shall be construed to

23 invalidate, impair, or supersede any cause of action

24 brought by a plan participant or beneficiary (or the

25 estate of a plan participant or beneficiary) under
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1 State law to recover damages resulting from per2 sonal injury or for wrongful death against any

3 person—

4 ‘‘(A) in connection with the provision of in5 surance, administrative services, or medical

6 services by such person to or for a group health

7 plan (as defined in section 733), or

8 ‘‘(B) that arises out of the arrangement by

9 such person for the provision of such insurance,

10 administrative services, or medical services by

11 other persons.

12 ‘‘(2) EXCEPTION FOR EMPLOYERS AND OTHER

13 PLAN SPONSORS.—

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graph (B), paragraph (1) does not authorize—

16 ‘‘(i) any cause of action against an

17 employer or other plan sponsor maintain18 ing the group health plan or against an

19 employee of such an employer or sponsor

20 acting within the scope of employment, or

21 ‘‘(ii) a right of recovery or indemnity

22 by a person against an employer or other

23 plan sponsor (or such an employee) for

24 damages assessed against the person pur-
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1 suant to a cause of action under paragraph

2 (1).

3 ‘‘(B) SPECIAL RULE.—Subparagraph (A)

4 shall not preclude any cause of action described

5 in paragraph (1) against an employer or other

6 plan sponsor (or against an employee of such

7 an employer or sponsor acting within the scope

8 of employment) if—

9 ‘‘(i) such action is based on the em10 ployer’s or other plan sponsor’s (or em11 ployee’s) exercise of discretionary authority

12 to make a decision on a claim for benefits

13 covered under the plan or health insurance

14 coverage in the case at issue; and

15 ‘‘(ii) the exercise by such employer or

16 other plan sponsor (or employee of such

17 authority) resulted in personal injury or

18 wrongful death.

19 ‘‘(3) CONSTRUCTION.—Nothing in this sub20 section shall be construed as permitting a cause of

21 action under State law for the failure to provide an

22 item or service which is not covered under the group

23 health plan involved.

24 ‘‘(4) PERSONAL INJURY DEFINED.—For pur25 poses of this subsection, the term ‘personal injury’
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1 means a physical injury and includes an injury aris2 ing out of the treatment (or failure to treat) a men3 tal illness or disease.’’.

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

5 subsection (a) shall apply to acts and omissions occurring

6 on or after the date of the enactment of this Act from

7 which a cause of action arises.

8 TITLE IV—EFFECTIVE DATES;

9 COORDINATION IN IMPLE10 MENTATION

11 SEC. 401. EFFECTIVE DATES AND RELATED RULES.

12 (a) GROUP HEALTH COVERAGE.—

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

14 the amendments made by sections 201(a), 301, and

15 401 (and title I insofar as it relates to such sections)

16 shall apply with respect to group health plans, and

17 health insurance coverage offered in connection with

18 group health plans, for plan years beginning on or

19 after January 1, 2000 (in this section referred to as

20 the ‘‘general effective date’’).

21 (2) TREATMENT OF COLLECTIVE BARGAINING

22 AGREEMENTS.—In the case of a group health plan

23 maintained pursuant to 1 or more collective bargain24 ing agreements between employee representatives

25 and 1 or more employers ratified before the date of
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1 enactment of this Act, the amendments made by sec2 tions 201(a), 301, and 401 (and title I insofar as it

3 relates to such sections) shall not apply to plan

4 years beginning before the later of—

5 (A) the date on which the last collective

6 bargaining agreements relating to the plan ter7 minates (determined without regard to any ex8 tension thereof agreed to after the date of en9 actment of this Act), or

10 (B) the general effective date.

11 For purposes of subparagraph (A), any plan amend12 ment made pursuant to a collective bargaining

13 agreement relating to the plan which amends the

14 plan solely to conform to any requirement added by

15 this Act shall not be treated as a termination of

16 such collective bargaining agreement.

17 (b) INDIVIDUAL HEALTH INSURANCE COVERAGE.—

18 The amendments made by section 202 shall apply with

19 respect to individual health insurance coverage offered,

20 sold, issued, renewed, in effect, or operated in the individ21 ual market on or after the general effective date.

22 (c) TREATMENT OF RELIGIOUS NONMEDICAL PRO23 VIDERS.—

24 (1) IN GENERAL.—Nothing in this Act (or the

25 amendments made thereby) shall be construed to—
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1 (A) restrict or limit the right of group

2 health plans, and of health insurance issuers of3 fering health insurance coverage, to include as

4 providers religious nonmedical providers;

5 (B) require such plans or issuers to—

6 (i) utilize medically based eligibility

7 standards or criteria in deciding provider

8 status of religious nonmedical providers;

9 (ii) use medical professionals or cri10 teria to decide patient access to religious

11 nonmedical providers;

12 (iii) utilize medical professionals or

13 criteria in making decisions in internal or

14 external appeals regarding coverage for

15 care by religious nonmedical providers; or

16 (iv) compel a participant or bene17 ficiary to undergo a medical examination

18 or test as a condition of receiving health

19 insurance coverage for treatment by a reli20 gious nonmedical provider; or

21 (C) require such plans or issuers to ex22 clude religious nonmedical providers because

23 they do not provide medical or other required

24 data, if such data is inconsistent with the reli-
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1 gious nonmedical treatment or nursing care

2 provided by the provider.

3 (2) RELIGIOUS NONMEDICAL PROVIDER.—For

4 purposes of this subsection, the term ‘‘religious non5 medical provider’’ means a provider who provides no

6 medical care but who provides only religious non7 medical treatment or religious nonmedical nursing

8 care.

9 SEC. 402. COORDINATION IN IMPLEMENTATION.

10 Section 104(1) of Health Insurance Portability and

11 Accountability Act of 1996 is amended by striking ‘‘this

12 subtitle (and the amendments made by this subtitle and

13 section 401)’’ and inserting ‘‘the provisions of part 7 of

14 subtitle B of title I of the Employee Retirement Income

15 Security Act of 1974, the provisions of parts A and C of

16 title XXVII of the Public Health Service Act, and title

17 I of the Patients’ Bill of Rights Act of 1999’’.

Æ