I

104TH CONGRESS

2D SESSION H. R. 3751

To establish certain requirements for managed care plans.

IN THE HOUSE OF REPRESENTATIVES

JUNE 27, 1996

Ms. VELA ́ZQUEZ (for herself, Mr. OWENS, Mr. NADLER, Mr. CONYERS, Mr.

HILLIARD, Mr. THOMPSON, Mr. EVANS, and Mr. JOHNSTON of Florida)

introduced the following bill; which was referred to the Committee on

Commerce

A BILL

To establish certain requirements for managed care plans.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Managed Care Bill

5 of Rights for Consumers Act of 1996’’.

6 SEC. 2. REQUIREMENTS FOR MANAGED CARE PLANS.

7 (a) REQUIRED COVERAGE FOR SERVICES FUR8 NISHED BY SPECIALIST NOT CONTRACTED WITH MAN9 AGED CARE PLAN.—In a case in which an enrollee of a

10 managed care plan demonstrates to the plan that the plan

11 does not provide a specialist with knowledge of a specific
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1 condition for which the enrollee requires treatment, the

2 plan shall cover such services covered by the plan, under

3 comparable terms and conditions, furnished by a specialist

4 obtained by the enrollee without regard to whether or not

5 the specialist has a contractual or other arrangement with

6 the plan for the provision of such services to such enroll7 ees.

8 (b) REQUIREMENT FOR CONTINUED SERVICES OF A

9 SPECIALIST WITHOUT PRE-AUTHORIZATION.—In a case

10 in which an enrollee of a managed care plan requires con11 tinued treatment of a specific condition from a specialist

12 with knowledge of the specific condition, and such enrollee

13 has been referred by a primary care physician to a special14 ist, the enrollee may continue to obtain services from the

15 specialist without additional authorization from the pri16 mary care physician.

17 (c) ASSURING EQUITABLE COVERAGE WITH RE18 SPECT TO EMERGENCY SERVICES.—A managed care plan

19 that provides any coverage with respect to emergency serv20 ices (as defined in section 5(4)) shall cover emergency

21 services furnished to an enrollee of the plan—

22 (1) without regard to whether or not the pro23 vider furnishing the emergency services has a con24 tractual or other arrangement with the plan for the

25 provision of such services to such enrollees, and
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1 (2) without regard to prior authorization.

2 (d) REQUIREMENT FOR TRANSLATION BILINGUAL

3 RESOURCES.—In a case in which 5 percent of the enroll4 ees of a managed care plan in an area (as defined in sec5 tion 5(1)) are members of a single ethnic-minority group

6 that speaks English as a second language, the managed

7 care plan shall have available, on a continuous basis, a

8 person in the area to provide translation to such enrollees

9 in obtaining information and services under the plan. Such

10 person may be a doctor, nurse, or counselor who is em11 ployed by the managed care plan.

12 (e) PROHIBITION OF FINANCIAL BONUSES TO PHYSI13 CIANS WHO LIMIT SERVICES.—A managed care plan shall

14 ensure that no specific payment is made directly or indi15 rectly under the plan to a physician or physician group

16 as an inducement to reduce or limit medically necessary

17 services provided with respect to an enrollee.

18 (f) DETERMINATION OF MEDICALLY NECESSARY

19 AND APPROPRIATE TREATMENT.—

20 (1) IN GENERAL.—Under a managed care plan,

21 the determination of what is medically necessary and

22 appropriate for the health of an enrollee may be

23 made only by a licensed health care practitioner.

24 (2) SECOND OPINION AS TO MEDICALLY NEC25 ESSARY.—Any licensed health care practitioner who
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1 has a contractual or other arrangement with a man2 aged care plan may, upon request, provide an en3 rollee of the plan with a second opinion as to what

4 constitutes medically necessary and appropriate

5 treatment for the health of such enrollee.

6 (3) INSURANCE COVERAGE.—A managed care

7 plan must determine and pay a reasonable and ap8 propriate amount for a service determined, as de9 scribed in paragraphs (1) and (2), to be medically

10 necessary and appropriate if the service is covered

11 by the plan.

12 (g) REQUIREMENT FOR SERVICE TO AREAS THAT IN13 CLUDE A MEDICALLY UNDERSERVED POPULATION.—A

14 managed care plan seeking to provide services in an area

15 that includes a medically underserved population must

16 submit a plan to the Secretary outlining a proposal for

17 service to the medically underserved population.

18 (h) REQUIREMENT FOR MINIMUM NUMBER OF DOC19 TORS.—A managed care plan seeking to provide services

20 in an area must certify to the Secretary that the plan pro21 vides at least one physician for every 2,000 enrollees.

22 (i) DISCLOSURE OF FINANCIAL ARRANGEMENTS.—A

23 managed care plan shall disclose information to enrollees

24 on any financial arrangements which may restrict referral
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1 or treatment options or limit the services offered by the

2 plan to such enrollees.

3 (j) REQUIREMENT FOR GEOGRAPHICAL ACCESSIBIL4 ITY.—A managed care plan shall ensure that items and

5 services (including laboratory and specialist services) cov6 ered under the plan shall be available through providers

7 that are geographically accessible to enrollees of such plan.

8 (k) MEANINGFUL CHOICE OF PROVIDERS.—A man9 aged care plan shall provide to enrollees a choice of at

10 least three providers within each category of providers

11 based on the health care needs of such enrollees, taking

12 into account the age, gender, health, native language,

13 acute or chronic diseases, and special needs.

14 (l) RIGHT TO SEEK CARE FROM OUT OF NETWORK

15 PROVIDER.—A managed care plan shall cover services cov16 ered by the plan that are furnished by a physician or pro17 vider obtained by the enrollee without regard to whether

18 such physician or provider has a contractual or other ar19 rangement with the plan for the provision of such services

20 to such enrollees. The plan may impose a reasonable de21 ductible and reasonable co-payment subject to a reason22 able annual limit on total annual out of pocket expenses.

23 (m) CONFIDENTIALITY OF INFORMATION.—A man24 aged care plan shall provide that information collected by
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1 the plan on items and services used by the enrollees be

2 protected as confidential information.

3 (n) REQUIREMENT FOR GRIEVANCE PROCEDURES.—

4 Not later than 90 days after the date of the enactment

5 of this Act, the Health Care Financing Administration

6 shall establish complaint and grievance procedures for en7 rollees of managed care plans.

8 SEC. 3. ENFORCEMENT.

9 (a) IN GENERAL.—Any entity that offers a managed

10 care plan that violates a requirement of section 2 shall

11 be subject to a civil money penalty in an amount deter12 mined by the Secretary.

13 (b) PROCESS.—The provisions of section 1128A of

14 the Social Security Act (42 U.S.C. 1320a–7a) (other than

15 subsections (a) and (b)) shall apply to civil money pen16 alties under this section in the same manner as they apply

17 to a penalty or proceeding under section 1128A(a) of such

18 Act.

19 SEC. 4. REGULATIONS.

20 The Secretary shall promulgate such regulations as

21 may be necessary or appropriate to carry out this Act.

22 SEC. 5. DEFINITIONS.

23 For purposes of this Act:
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1 (1) AREA.—The term ‘‘area’’ means the local

2 health–service area as designated in the managed

3 care plan of operations.

4 (2) EMERGENCY DEPARTMENT.—The term

5 ‘‘emergency department’’ includes, with respect to a

6 hospital, a trauma center in the hospital if the cen7 ter—

8 (A) is designated under section 1213 of

9 the Public Health Service Act, or

10 (B) is in a State that has not made such

11 designations and is determined by the Secretary

12 to meet the standards under such section for

13 such designation.

14 (3) EMERGENCY MEDICAL CONDITION.—The

15 term ‘‘emergency medical condition’’ means a medi16 cal condition, the onset of which is sudden, that

17 manifests itself by symptoms of sufficient severity,

18 including severe pain, that a prudent layperson, who

19 possesses an average knowledge of health and medi20 cine, could reasonably expect the absence of imme21 diate medical attention to result in—

22 (A) placing the person’s health in serious

23 jeopardy,

24 (B) serious impairment to bodily functions,

25 or
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1 (C) serious dysfunction of any bodily organ

2 or part.

3 (4) EMERGENCY SERVICES.—The term ‘‘emer4 gency services’’ means—

5 (A) health care items and services fur6 nished in the emergency department of a hos7 pital, and

8 (B) ancillary services routinely available to

9 such department,

10 to the extent they are required to evaluate and treat

11 an emergency medical condition until the condition

12 is stabilized.

13 (5) LICENSED HEALTH CARE PRACTITIONER.—

14 The term ‘‘licensed health care practitioner’’ has the

15 meaning given such term in section 431(6) of the

16 Health Care Quality Improvement Act of 1986

17 (Public Law 99–660; 42 U.S.C. 11151(6)).

18 (6) MANAGED CARE PLAN.—The term ‘‘man19 aged care plan’’ means a health plan that provides

20 or arranges for the provision of health care items

21 and services to enrollees primarily through partici22 pating physicians and providers.

23 (7) MEDICALLY UNDERSERVED POPULATION.—

24 The term ‘‘medically underserved population’’ means

25 the population of an urban or rural area designated
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1 by the Secretary as an area with a shortage of per2 sonal health services or a population group des3 ignated by the Secretary as having a shortage of

4 such services.

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

6 means, with respect to a physician or provider in re7 lation to managed care, a physician or provider that

8 furnishes health care items and services to enrollees

9 of the plan under an agreement with the plan.

10 (9) SECRETARY.—The term ‘‘Secretary’’ means

11 of the Secretary of Health and Human Services.

12 (10) STABILIZED.—The term ‘‘stabilized’’

13 means, with respect to an emergency medical condi14 tion, that no material deterioration of the condition

15 is likely, within reasonable medical probability, to re16 sult or occur before an individual can be transferred

17 in compliance with the requirements of section 1867

18 of the Social Security Act.

19 SEC. 6. EFFECTIVE DATE.

20 The provisions of this Act shall apply to managed

21 care plans offered or renewed 90-days after the date of

22 the enactment of this Act.

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