I

104TH CONGRESS

2D SESSION H. R. 4220

To amend the Internal Revenue Code of 1986 and titles XVIII and XIX

of the Social Security Act to ensure access to services and prevent

fraud and abuse for enrollees of managed care plans, to amend standards

for Medicare supplemental policies, to modify the Medicare select program, and to provide other protections for beneficiaries of health plans

generally, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 26, 1996

Mr. STARK introduced the following bill; which was referred to the Committee

on Ways and Means, and in addition to the Committee on Commerce,

for a period to be subsequently determined by the Speaker, in each case

for consideration of such provisions as fall within the jurisdiction of the

committee concerned

A BILL

To amend the Internal Revenue Code of 1986 and titles

XVIII and XIX of the Social Security Act to ensure

access to services and prevent fraud and abuse for enrollees of managed care plans, to amend standards for Medicare supplemental policies, to modify the Medicare select

program, and to provide other protections for beneficiaries of health plans generally, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•HR 4220 IH

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Managed Care Consumer Protection Act of 1996’’.

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

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—PROTECTIONS FOR BENEFICIARIES ENROLLED IN

MANAGED CARE PLANS

‘‘Subtitle L—Protections for Beneficiaries Under Managed Care Plans

‘‘CHAPTER 101—PROTECTIONS FOR BENEFICIARIES

UNDER MANAGED CARE PLANS

‘‘SUBCHAPTER A—IMPOSITION OF TAX

‘‘Sec. 9901. Excise tax on failure to meet requirement of beneficiary protection.

‘‘Sec. 9902. Definitions.

‘‘SUBCHAPTER B—REQUIREMENTS

‘‘Sec. 9911. Requirements relating to managed care organizations and providers of health services.

‘‘Sec. 9912. Grievance procedures and deadline for responding to requests

for coverage of services.

‘‘Sec. 9913. Requirements for organization service areas; nondiscrimination.

‘‘Sec. 9914. Providing information.

‘‘Sec. 9915. Restrictions on commissions for agents.

‘‘Sec. 9916. Protection of patient right to know.

‘‘Sec. 9917. Patient access to clinical studies.

‘‘Sec. 9918. Required minimum childbirth benefits.

‘‘Sec. 9919. Assuring equitable health plan coverage with respect to emergency services.

Subtitle C—Effective Date

Sec. 121. Effective date.

TITLE II—MEDICARE

Sec. 201. Prohibition on payments under Medicare until completion of orientation and medical profile.

Sec. 202. Changes in requirements for Medicare supplemental policies relating

to community rating and loss ratios.

Sec. 203. Other additional consumer protections for Medicare supplemental insurance.

Sec. 204. Application of standards to Medicare select policies.

Sec. 205. Arrangements for out-of-area dialysis services.

Sec. 206. Coordination of Medicare enrollment.
3

•HR 4220 IH

TITLE III—MEDICAID

Sec. 301. Prohibition on payments under Medicaid until completion of orientation, medical profile, and immunization.

Sec. 302. Requirement for Medicaid capitated plans to assure appropriate childhood immunizations.

1 TITLE I—PROTECTIONS FOR

2 BENEFICIARIES ENROLLED

3 IN MANAGED CARE PLANS

4 (a) IN GENERAL.—The Internal Revenue Code of

5 1986 (as amended by the Health Insurance Portability

6 and Accountability Act of 1996) is amended by adding at

7 the end the following:

8 ‘‘Subtitle L—Protections for Bene9 ficiaries Under Managed Care

10 Plans

11 ‘‘CHAPTER 101—PROTECTIONS FOR BENE12 FICIARIES UNDER MANAGED CARE

13 PLANS

‘‘Subchapter A. Imposition of tax.

‘‘Subchapter B. Requirements.

14 ‘‘Subchapter A—Imposition of Tax

‘‘Sec. 9901. Excise tax on failure to meet requirement of beneficiary protection.

‘‘Sec. 9902. Definitions.

15 ‘‘SEC. 9901. EXCISE TAX ON FAILURE TO MEET REQUIRE16 MENT OF BENEFICIARY PROTECTION.

17 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed

18 a tax on the failure of—
4

•HR 4220 IH

1 ‘‘(1) a managed care group health plan to meet

2 the requirements of subchapter B; and

3 ‘‘(2) an insurer that offers managed care health

4 insurance coverage (other than to a group health

5 plan subject to paragraph (1)) to meet the require6 ments of such subchapter.

7 ‘‘(b) AMOUNT OF TAX.—

8 ‘‘(1) GROUP HEALTH PLAN.—

9 ‘‘(A) IN GENERAL.—The amount of tax

10 imposed by subsection (a)(1) on any failure

11 with respect to a participant or beneficiary of a

12 group health plan shall be 25 percent of each

13 premium received by the group health plan for

14 the plan year in which such failure occurs.

15 ‘‘(B) SELF-INSURED PLANS.—In the case

16 that the group health plan is self-insured, the

17 cost to the plan of the coverage of participants

18 and beneficiaries shall be treated as the pre19 mium received for the purposes of subpara20 graph (A).

21 ‘‘(2) INSURER OFFERING INDIVIDUAL HEALTH

22 INSURANCE COVERAGE.—The amount of tax im23 posed by subsection (a)(2) on any failure of an in24 surer with respect to an individual described in para25 graph (1) or (2) of section 9902(b) shall be 25 per-
5

•HR 4220 IH

1 cent of the total amount of the premiums paid to the

2 insurer for such coverage for the plan year in which

3 such failure occurs.

4 ‘‘(c) LIMITATIONS ON AMOUNT OF TAX.—

5 ‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT

6 DISCOVERED EXERCISING REASONABLE DILI7 GENCE.—No tax shall be imposed by subsection (a)

8 on any failure during any period for which it is es9 tablished to the satisfaction of the Secretary that

10 none of the persons referred to in subsection (e)

11 knew, or exercising reasonable diligence would have

12 known, that such failure existed.

13 ‘‘(2) TAX NOT TO APPLY TO FAILURES COR14 RECTED WITHIN 30 DAYS.—No tax shall be imposed

15 by subsection (a) on any failure if—

16 ‘‘(A) such failure was due to reasonable

17 cause and not to willful neglect, and

18 ‘‘(B) such failure is corrected during the

19 30-day period beginning on the 1st date any of

20 the persons referred to in subsection (e) knew,

21 or exercising reasonable diligence would have

22 known, that such failure existed.

23 ‘‘(3) WAIVER.—In the case of a failure which is

24 due to reasonable cause and not to willful neglect,

25 the Secretary may waive part or all of the tax im-
6

•HR 4220 IH

1 posed by subsection (a) to the extent that the pay2 ment of such tax would be excessive relative to the

3 failure involved.

4 ‘‘(d) TAX NOT TO APPLY TO CERTAIN PLANS.—This

5 section shall not apply to—

6 ‘‘(1) any governmental plan (within the mean7 ing of section 414(d)), or

8 ‘‘(2) any church plan (within the meaning of

9 section 414(e)).

10 ‘‘(e) LIABILITY FOR TAX.—The following shall be re11 sponsible for the tax imposed by subsection (a):

12 ‘‘(1) In the case of the tax imposed by sub13 section (a)(1) on a group health plan, the plan.

14 ‘‘(2) In the case of the tax imposed by sub15 section (a)(2) on an insurer offering health insur16 ance coverage, the insurer.

17 ‘‘SEC. 9902. DEFINITIONS.

18 ‘‘(a) DEFINITIONS RELATING TO MANAGED CARE.—

19 For purposes of this chapter—

20 ‘‘(1) ENROLLEE.—The term ‘enrollee’ means,

21 with respect to a group health plan or health insur22 ance issuer offering health insurance coverage, an

23 individual enrolled with the plan or enrolled with the

24 issuer with respect to such coverage.
7

•HR 4220 IH

1 ‘‘(2) MANAGED CARE.—The term ‘managed

2 care’ means, with respect to a group health plan or

3 health insurance coverage offered by a health insur4 ance issuer, such a plan or coverage that—

5 ‘‘(A) provides or arranges for the provision

6 of health care items and services to enrollees

7 primarily through participating physicians and

8 providers, or

9 ‘‘(B) provides financial incentives (such as

10 variable copayments and deductibles) to induce

11 enrollees to obtain benefits primarily through

12 participating physicians and providers,

13 or both.

14 ‘‘(3) PARTICIPATING.—The term ‘participating’

15 means, with respect to a physician or provider in re16 lation to a group health plan or health insurance

17 coverage offered by a health insurance issuer, a phy18 sician or provider that furnishes health care items

19 and services to enrollees of the plan or issuer under

20 an agreement with the plan or issuer.

21 ‘‘(4) PROVIDER NETWORK.—The term ‘provider

22 network’ means, with respect to a plan or issuer,

23 providers of health care services provided by or

24 through the plan or issuer who have entered into an

25 agreement with the plan or issuer or an agreement
8

•HR 4220 IH

1 with a subcontracting organization under which the

2 providers are obligated to provide such services to

3 individuals enrolled with the plan or issuer.

4 ‘‘(b) ADDITIONAL DEFINITIONS.—The provisions of

5 section 9805 apply for purposes of this chapter in the

6 same manner as they apply for purposes of chapter 100.

7 ‘‘Subchapter B—Requirements

‘‘Sec. 9911. Requirements relating to managed care plans and

coverage and providers of health services.

‘‘Sec. 9912. Grievance procedures and deadline for responding to

requests for coverage of services.

‘‘Sec. 9913. Requirements for service areas; nondiscrimination.

‘‘Sec. 9914. Providing information.

‘‘Sec. 9915. Restrictions on commissions for agents.

‘‘Sec. 9916. Protection of patient right to know.

‘‘Sec. 9917. Patient access to clinical studies.

‘‘Sec. 9918. Required minimum childbirth benefits.

‘‘Sec. 9919. Assuring equitable health plan coverage with respect

to emergency services.

8 ‘‘SEC. 9911. REQUIREMENTS RELATING TO MANAGED CARE

9 PLANS AND COVERAGE AND PROVIDERS OF

10 HEALTH SERVICES.

11 ‘‘(a) UTILIZATION REVIEW.—

12 ‘‘(1) MEETING REQUIREMENTS.—

13 ‘‘(A) IN GENERAL.—A managed care

14 group health plan (or health insurance issuer

15 that offers managed care health insurance cov16 erage) may not deny coverage of or payment for

17 items and services on the basis of a utilization

18 review program unless the Secretary of Health

19 and Human Services certifies (and periodically
9

•HR 4220 IH

1 recertifies) that the program meets the stand2 ards established by such Secretary under this

3 subsection.

4 ‘‘(B) CERTIFICATION.—The Secretary of

5 Health and Human Services may certify a man6 aged care plan or coverage as meeting such

7 standards if the Secretary determines that the

8 plan or coverage has met the utilization stand9 ards required for accreditation as applied by a

10 nationally recognized, independent, nonprofit

11 accreditation entity. Such Secretary shall peri12 odically review the standards used by the pri13 vate accreditation entity to ensure that such

14 standards meet or exceed the standards estab15 lished by the Secretary under this subsection.

16 ‘‘(2) STANDARDS.—Such Secretary shall estab17 lish standards for utilization review programs of

18 managed care group health plans and managed care

19 health insurance coverage, consistent with paragraph

20 (3), and shall periodically review and update such

21 standards to reflect changes in the delivery of health

22 care services. Such Secretary shall establish such

23 standards in consultation with appropriate parties.

24 ‘‘(3) DESCRIPTION.—Under the standards es25 tablished under paragraph (2)—
10

•HR 4220 IH

1 ‘‘(A) the plan or issuer offering the cov2 erage shall have a written description of the uti3 lization review program of the plan or relating

4 to the coverage, including a description of—

5 ‘‘(i) the delegated and nondelegated

6 activities under the program;

7 ‘‘(ii) the policies and procedures used

8 under the program to evaluate medical ne9 cessity; and

10 ‘‘(iii) the clinical review criteria, infor11 mation sources, and the process used to re12 view and approve the provision of medical

13 services under the program;

14 ‘‘(B) with respect to the administration of

15 the utilization review program, the plan or is16 suer may not employ utilization reviewers or

17 contract with a utilization management organi18 zation if the conditions of employment or the

19 contract terms include financial incentives to

20 reduce or limit the medically necessary or ap21 propriate services provided to covered individ22 uals and individuals performing utilization re23 view may not receive financial compensation

24 based upon the number of denials of coverage;
11

•HR 4220 IH

1 ‘‘(C) the plan or issuer shall develop proce2 dures for periodically reviewing and modifying

3 the utilization review of the plan or relating to

4 the coverage under which providers may partici5 pate in the plan or coverage in the development

6 and review of utilization review policies and

7 procedures;

8 ‘‘(D) utilization review—

9 ‘‘(i) shall be conducted in accordance

10 with uniformly applied standards that are

11 based on the most currently available med12 ical evidence,

13 ‘‘(ii) shall develop and apply recorded

14 (written or otherwise) utilization review de15 cision protocols based on sound medical

16 evidence;

17 ‘‘(E) the clinical review criteria used under

18 the utilization review decision protocols to as19 sess the appropriateness of medical services

20 shall be clearly documented and available to

21 participating health professionals upon request

22 and shall include a mechanism for assessing the

23 consistency of the application of the criteria

24 used under the protocols across reviewers, and
12

•HR 4220 IH

1 a mechanism for periodically updating such cri2 teria;

3 ‘‘(F) the procedures applied under a utili4 zation review program with respect to the

5 preauthorization and concurrent review of the

6 necessity and appropriateness of medical items,

7 services or procedures, shall require that quali8 fied medical professionals supervise review deci9 sions and, with respect to a decision to deny the

10 provision of medical items, services or proce11 dures, a provider licensed in the same field shall

12 conduct a subsequent review to determine the

13 medical appropriateness of such a denial and

14 physicians from the same medical branch

15 (allopathic or osteopathic medicine) and spe16 cialty (recognized by the American Board of

17 Medical Specialties or the American Osteo18 pathic Association) shall be utilized in the re19 view process as needed;

20 ‘‘(G) negative determinations of the medi21 cal necessity or appropriateness of services or

22 the site at which services are furnished may be

23 made only by clinically qualified personnel;

24 ‘‘(H) the utilization review program shall

25 provide for a process under which an enrollee or
13

•HR 4220 IH

1 provider may obtain timely review of a denial of

2 coverage under section 9912; and

3 ‘‘(I) the plan or issuer shall provide each

4 covered individual, at the time of enrollment

5 and not less frequently than annually there6 after, an explanation of the utilization review

7 requirements of the plan or under the coverage

8 offered by the issuer.

9 ‘‘(b) ASSURANCE OF ACCESS.—

10 ‘‘(1) IN GENERAL.—Each managed care group

11 health plan, and each health insurance issuer offer12 ing managed care health insurance coverage, shall

13 demonstrate that the plan or issuer (in relation to

14 the coverage) has a sufficient number, distribution,

15 and variety of qualified health care providers to en16 sure that all covered health care services will be

17 available and accessible in a timely manner to all in18 dividuals enrolled under the plan or such coverage.

19 ‘‘(2) ACCESS TO SPECIALIZED TREATMENT EX20 PERTISE.—Such a plan or issuer shall demonstrate

21 that enrollees have access, when medically or clini22 cally indicated in the judgment of the treating health

23 professional, to specialized treatment expertise.

24 ‘‘(3) COORDINATION OF CARE.—
14

•HR 4220 IH

1 ‘‘(A) IN GENERAL.—Any process estab2 lished by such a plan or issuer to coordinate

3 care and control costs may not impose an

4 undue burden on enrollees with chronic health

5 conditions. Such a plan or issuer shall ensure a

6 continuity of care and shall, when medically or

7 clinically indicated in the judgment of the treat8 ing health professional, ensure direct access to

9 relevant specialists for continued care.

10 ‘‘(B) COMPLEX CONDITIONS.—In the case

11 of an enrollee who has a severe, complex, or

12 chronic condition, such a plan or issuer shall

13 determine, based on the judgment of the treat14 ing health professional, whether it is medically

15 or clinically necessary or appropriate to use a

16 care coordinator from an interdisciplinary team

17 or a specialist to ensure continuity of care.

18 ‘‘(4) NO WAIVER.—

19 ‘‘(A) IN GENERAL.—The requirements of

20 this subsection may not be waived and shall be

21 met in all areas where the plan or issuer (in re22 lation to managed care health insurance cov23 erage) has enrollees, including rural areas.

24 ‘‘(B) OUT-OF-PLAN COVERAGE.—If such a

25 plan or issuer fails to meet the requirements of
15

•HR 4220 IH

1 this subsection, the plan or issuer shall arrange

2 for the provision of out-of-plan or out-of-issuer

3 services to enrollees in a manner that provides

4 enrollees with access to services in accordance

5 with this subsection.

6 ‘‘(c) ACCESS TO CENTERS OF EXCELLENCE.—

7 ‘‘(1) IN GENERAL.—Each managed care group

8 health plan or health insurance issuer offering man9 aged care health insurance coverage shall dem10 onstrate that individuals enrolled with the plan or

11 under such coverage who have chronic diseases or

12 otherwise require specialized services have access

13 through the plan or issuer to specialized treatment

14 expertise of designated centers of excellence. Such a

15 plan or issuer shall demonstrate such access accord16 ing to standards developed by the Secretary of

17 Health and Human Services, including requirements

18 relating to arrangements with such centers and re19 ferral of enrollees to such centers.

20 ‘‘(2) DESIGNATION PROCESS.—Such Secretary

21 shall establish a process for the designation of facili22 ties as centers of excellence for purposes of this sub23 section. A facility may not be designated unless the

24 facility is determined—

25 ‘‘(A) to provide specialty care,
16

•HR 4220 IH

1 ‘‘(B) to deliver care for complex cases re2 quiring specialized treatment or for individuals

3 with chronic diseases, and

4 ‘‘(C) to meet other requirements that may

5 be established by such Secretary relating to spe6 cialized education and training of health profes7 sionals, participation in peer-reviewed research,

8 or treatment of patients from outside the geo9 graphic area of the facility.

10 ‘‘(d) RECOGNITION OF TRAUMA CENTERS.—

11 ‘‘(1) IN GENERAL.—A managed care group

12 health plan or health insurance issuer offering man13 aged care health insurance coverage shall provide for

14 health services contracted for and which are pro15 vided to such an individual other than through the

16 plan or coverage (including trauma services provided

17 by designated trauma centers), if (A) the services

18 were medically necessary and immediately required

19 because of an unforeseen illness, injury, or condition

20 and (B) it was not reasonable given the cir21 cumstances to obtain the services through the plan

22 or participating providers in relation to such cov23 erage.

24 ‘‘(2) DEFINITION.—In paragraph (1), the term

25 ‘designated trauma center’ has the meaning given
17

•HR 4220 IH

1 such term in section 1231 of the Public Health

2 Service Act, and includes a trauma center which the

3 Secretary finds meets the standards under section

4 1213 of such Act to be a designated trauma center

5 but is located in a State that has not designated

6 trauma centers under such section.

7 ‘‘(e) NO REFERRAL REQUIRED FOR OBSTETRICS

8 AND GYNECOLOGY.—A managed care group health plan

9 or health insurance issuer offering managed care health

10 insurance coverage may not require an individual to obtain

11 a referral from a physician in order to obtain covered

12 items and services from a physician who specializes in ob13 stetrics and gynecology.

14 ‘‘(f) COVERAGE OF SERVICES OF ESSENTIAL COM15 MUNITY PROVIDERS.—

16 ‘‘(1) IN GENERAL.—The Secretary of Health

17 and Human Services may require a managed care

18 group health plan or health insurance issuer that of19 fers managed health insurance coverage to enter into

20 agreements with essential community providers serv21 ing the plan’s or issuer’s service area (in relation to

22 the coverage) to join the plan’s or issuer’s provider

23 network if such Secretary finds that such agree24 ments are necessary for the plan or issuer to make

25 contracted for services (A) available and accessible
18

•HR 4220 IH

1 to each enrollee, within the area served by the plan

2 or issuer (in relation to such coverage), with reason3 able promptness and in a manner which assures con4 tinuity, and (B) when medically necessary, available

5 and accessible twenty-four hours a day and seven

6 days a week.

7 ‘‘(2) ESSENTIAL COMMUNITY PROVIDER DE8 FINED.—For purposes of paragraph (1), the term

9 ‘essential community provider’ means a rural health

10 clinic (described in section 1861(aa)(2) of the Social

11 Security Act), a Federally qualified health center

12 (described in section 1861(aa)(4) of such Act), and

13 any other provider meeting such standards as the

14 Secretary of Health and Human Services may re15 quire.

16 ‘‘(g) DUE PROCESS PROTECTIONS FOR PROVID17 ERS.—

18 (1) IN GENERAL.—In consultation with provid19 ers of health care services who are members of the

20 plan’s or issuer’s provider network, each managed

21 care group health plan and each health insurance is22 suer offering managed care health insurance cov23 erage shall establish standards to be used by the

24 plan or issuer (in relation to such coverage) for con25 tracting with providers, and shall make descriptive
19

•HR 4220 IH

1 information regarding these standards available to

2 enrollees, providers who are members of the net3 work, and prospective enrollees and prospective

4 members of the network.

5 ‘‘(2) LIMITATION ON TERMINATION.—

6 ‘‘(A) IN GENERAL.—Such a group health

7 plan or health insurance issuer may not termi8 nate or refuse to renew an agreement with a

9 provider of health care services to participate in

10 the plan’s or issuer’s provider network unless

11 the plan or issuer provides written notification

12 to the provider of the decision to terminate or

13 refuse to renew the agreement. The notification

14 shall include a statement of the reasons for the

15 plan’s or issuer’s decision, consistent with the

16 standards established under paragraph (1).

17 ‘‘(B) NOTICE.—Such a plan or issuer shall

18 provide the notification required under subpara19 graph (A) at least 45 days prior to the effective

20 date of the termination or expiration of the

21 agreement (whichever is applicable). The pre22 vious sentence shall not apply if failure to ter23 minate the agreement prior to the deadline

24 would adversely affect the health or safety of an

25 individual enrolled with the plan or issuer.
20

•HR 4220 IH

1 ‘‘(3) REVIEW PROCESS.—

2 ‘‘(A) IN GENERAL.—Each such plan or is3 suer shall provide a process under which a pro4 vider of health care services may request a re5 view of the plan’s or issuer’s decision to termi6 nate or refuse to renew the provider’s participa7 tion agreement. Such review shall be conducted

8 by a group of individuals the majority of whom

9 are providers of health care services who are

10 members of the plan’s or issuer’s provider net11 work or employees of the plan or issuer, and, to

12 the extent possible, who are members of the

13 same profession as the provider who requests

14 the review and, for physicians, the same medi15 cal branch (allopathic or osteopathic medicine).

16 ‘‘(B) REPRESENTATION.—If the provider

17 requests in advance, the plan or issuer shall

18 permit an attorney representing the provider to

19 be present at the provider’s review.

20 ‘‘(C) ADVISORY FINDINGS.—The findings

21 and conclusions of a review under this para22 graph shall be advisory and non-binding.

23 ‘‘(D) CONSTRUCTION.—Nothing in this

24 paragraph shall be construed to affect any

25 other provision of law that provides an appeals
21

•HR 4220 IH

1 process or other form of relief to a provider of

2 health care services.

3 ‘‘SEC. 9912. GRIEVANCE PROCEDURES AND DEADLINE FOR

4 RESPONDING TO REQUESTS FOR COVERAGE

5 OF SERVICES.

6 ‘‘(a) GRIEVANCE PROCEDURES.—A managed care

7 group health plan and a health insurance issuer offering

8 managed care health insurance coverage shall provide

9 meaningful procedures for hearing and resolving griev10 ances between the plan or issuer (any entity or individual

11 through which the plan or issuer provides health care serv12 ices) and members enrolled with the plan or issuer.

13 ‘‘(b) DETAILS.—The procedures provided under sub14 section (a) shall include—

15 ‘‘(1) recorded (written or otherwise) procedures

16 for registering and responding to complaints and

17 grievances in a timely manner;

18 ‘‘(2) documentation concerning the substance of

19 complaints, grievances, and actions taken concerning

20 such complaints and grievances, which shall be in

21 writing.

22 ‘‘(3) procedures to ensure a resolution of a

23 complaint or grievance;

24 ‘‘(4) the compilation and analysis of complaint

25 and grievance data;
22

•HR 4220 IH

1 ‘‘(5) procedures to expedite the complaint proc2 ess if the complaint involves a dispute about the cov3 erage of an immediately and urgently needed service;

4 and

5 ‘‘(6) procedures to ensure that if an enrollee

6 orally notifies the plan or issuer about a complaint,

7 the plan or issuer (if requested) must send the en8 rollee a complaint form that includes the telephone

9 numbers and addresses of member services, and a

10 description of the plan’s or issuer’s grievance proce11 dure.

12 The Secretary of Health and Human Services may estab13 lish deadlines for the complaint procedures under para14 graph (5) in order to ensure timely resolution of disputes

15 involving immediately and urgently needed services.

16 ‘‘(c) APPEALS PROCESS.—Such a plan or issuer shall

17 adopt an appeals process to enable covered individuals to

18 appeal decisions that are adverse to the individuals. Such

19 a process shall include—

20 ‘‘(1) the right to a review by a grievance panel;

21 ‘‘(2) the right to a second review with a dif22 ferent panel, independent of the plan or issuer, or to

23 a review through an impartial arbitration process

24 which shall be described in writing by the plan or is25 suer; and
23

•HR 4220 IH

1 ‘‘(3) an expedited process for review in emer2 gency cases.

3 The Secretary of Health and Human Services shall de4 velop guidelines for the structure and requirements appli5 cable to the independent review panel and impartial arbi6 tration process described in paragraph (2).

7 ‘‘(d) WRITTEN DECISION.—With respect to the com8 plaint, grievance, and appeals processes required under

9 this section, the plan or issuer shall, upon the request of

10 an enrollee, provide the enrollee a written decision con11 cerning a complaint, grievance, or appeal in a timely fash12 ion.

13 ‘‘(e) CONSTRUCTION.—The complaint, grievance, and

14 appeals processes established in accordance with this sec15 tion may not be used in any fashion to discourage or pre16 vent an enrollee from receiving medically necessary care

17 in a timely manner.

18 ‘‘(f) PROMPT RESPONSE TO REQUESTS FOR SERV19 ICES.—In addition to the procedures available pursuant

20 to the previous provisions of this section, in the case of

21 the request of an enrollee with such a plan or issuer—

22 ‘‘(i) the plan or issuer shall respond to the re23 quest not later than 24 hours after the request is

24 made; and
24

•HR 4220 IH

1 ‘‘(ii) the plan or issuer shall hear and resolve

2 the enrollee’s appeal of a denial of coverage of such

3 services in accordance with a process meeting stand4 ards established by the Secretary of Health and

5 Human Services.

6 ‘‘SEC. 9913. REQUIREMENTS FOR SERVICE AREAS; NON7 DISCRIMINATION.

8 ‘‘(a) SERVICE AREA REQUIREMENTS.—

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), if the service area of a group health plan

11 or health insurance issuer offering health insurance

12 coverage includes any part of a metropolitan statis13 tical area, the service area shall include the entire

14 metropolitan statistical area (including any area des15 ignated by the Secretary of Health and Human

16 Services as a health professional shortage area

17 under section 332(a)(1)(A) of the Public Health

18 Service Act within such metropolitan statistical

19 area).

20 ‘‘(2) EXCEPTION.—The Secretary of Health

21 and Human Services may permit a plan’s or issuer’s

22 service area to exclude any portion of a metropolitan

23 statistical area (other than the central county of

24 such metropolitan statistical area) if—
25

•HR 4220 IH

1 ‘‘(A) the plan or issuer demonstrates that

2 it lacks the financial or administrative capacity

3 to serve the entire metropolitan statistical area;

4 and

5 ‘‘(B) such Secretary finds that the com6 position of the plan’s or issuer’s service area

7 does not reduce the financial risk to the plan or

8 issuer of providing services to enrollees because

9 of the health status or other demographic char10 acteristics of individuals residing in the service

11 area (as compared to the health status or demo12 graphic characteristics of individuals residing in

13 the portion of the metropolitan statistical area

14 not included in the plan’s or issuer’s service

15 area).

16 ‘‘(b) NONDISCRIMINATION.—No group health plan

17 and no health insurance issuer offering health insurance

18 coverage may discriminate (directly or through contractual

19 arrangements) in any activity, including the selection of

20 a service area, that has the effect of discriminating against

21 an individual on the basis of race, national origin, gender,

22 language, socioeconomic status, age, disability, health sta23 tus, or anticipated need for health services.
26

•HR 4220 IH

1 ‘‘SEC. 9914. PROVIDING INFORMATION.

2 ‘‘(a) INFORMATION ON PHYSICIAN INCENTIVE

3 PLANS.—

4 ‘‘(1) IN GENERAL.—Upon the request of an en5 rollee of a managed care group health plan or under

6 managed care health insurance coverage offered by

7 a health insurance issuer or an individual consider8 ing enrollment with such a plan or for such cov9 erage, the plan or issuer shall provide the enrollee or

10 individual with descriptive information regarding any

11 physician incentive plan of the plan or issuer appli12 cable to such enrollment.

13 ‘‘(2) PHYSICIAN INCENTIVE PLAN DEFINED.—

14 In this subsection, the term ‘physician incentive

15 plan’ means any compensation arrangement between

16 a managed care group health plan or health insur17 ance issuer offering managed care health insurance

18 coverage and a physician or physician group that

19 may directly or indirectly have the effect of reducing

20 or limiting services provided with respect to individ21 uals enrolled with the plan or under such coverage.

22 ‘‘(b) INFORMATION ON PROVIDER CREDENTIALS.—

23 Each managed care group health plan and each health in24 surance issuer offering managed care health insurance

25 coverage shall provide each enrollee, at the time of enroll26 ment and not less frequently than annually thereafter, an
27

•HR 4220 IH

1 explanation of the credentials of the individuals and enti2 ties providing services to enrollees under the plan or cov3 erage.

4 ‘‘(c) OTHER INFORMATION.—Each such plan and is5 suer shall provide prospective enrollees with written infor6 mation concerning the following with respect to coverage

7 offered under the plan or coverage:

8 ‘‘(1) Coverage provisions, benefits, and any ex9 clusions by category of service or product, including

10 premiums, deductibles, and copayments associated

11 with any point-of-service benefits.

12 ‘‘(2) Loss ratios with an explanation that such

13 ratios reflect the percentage of the premiums ex14 pended for health services.

15 ‘‘(3) Prior authorization or other review re16 quirements including preauthorization review, con17 current review, post-service review, post-payment re18 view, and procedures that may lead the patient to be

19 denied coverage for, or not be provided, a particular

20 service or product.

21 ‘‘(4) Covered individual satisfaction statistics,

22 including disenrollment statistics.

23 ‘‘(5) Advance directives and organ donation.

24 ‘‘(6) The characteristics and availability of

25 health care professionals and institutions participat-
28

•HR 4220 IH

1 ing in the plan or coverage, including descriptions of

2 the financial arrangements or contractual provisions

3 with hospitals, utilization review organizations, phy4 sicians, or any other provider of health care services

5 that would affect the services offered, referral or

6 treatment options, or physician’s fiduciary respon7 sibility to patients, including financial incentives re8 garding the provision of medical or other services.

9 ‘‘(7) Quality indicators for the plan or issuer

10 and for participating health professionals and pro11 viders under the plan or coverage, including popu12 lation-based statistics such as immunization rates

13 and other preventive care and health outcomes

14 measures such as survival after surgery, adjusted for

15 case mix.

16 ‘‘(8) An explanation of the appeals process and

17 the grievance procedure.

18 ‘‘(9) Salaries and other compensation for key

19 executives of the plan or issuer.

20 ‘‘(10) Physician ownership and investment

21 structure of the plan or issuer.

22 ‘‘(11) Fiscal year reports of the plan or issuer.

23 ‘‘(12) A description of lawsuits that are filed

24 against the plan or issuer, insofar as they may have

25 a material bearing on the financial circumstances of
29

•HR 4220 IH

1 the plan or issuer or reveal quality and medical cov2 erage issues.

3 Information under this subsection shall be disclosed in a

4 standard format, specified by the Secretary of Health and

5 Human Services, so that prospective covered individuals

6 may compare the attributes of all such plans and coverage

7 offered within an area.

8 ‘‘SEC. 9915. RESTRICTIONS ON COMMISSIONS FOR AGENTS.

9 ‘‘In the case of a managed care group health plan

10 or health insurance issuer that offers managed care health

11 insurance coverage which employs or otherwise com12 pensates agents to enroll individuals under the plan or cov13 erage and which pays an agent a commission with respect

14 to the enrollment of an individual—

15 ‘‘(1) such commissions may not constitute the

16 predominant source of the agent’s total compensa17 tion from the plan or issuer (in accordance with

18 standards established by the Secretary of Health

19 and Human Services); and

20 ‘‘(2) if an agent receives a commission from the

21 plan or issuer with respect to an individual who en22 rolls with the plan or under such coverage and the

23 individual terminates enrollment with the plan or

24 such coverage during the 90-day period beginning on
30

•HR 4220 IH

1 the date of the individual’s enrollment, the plan or

2 issuer shall recoup the commission from the agent.

3 ‘‘SEC. 9916. PROTECTION OF PATIENT RIGHT TO KNOW.

4 ‘‘(a) IN GENERAL.—

5 ‘‘(1) PROHIBITION OF CERTAIN PROVISION.—A

6 managed care group health plan and health insur7 ance issuer offering managed care health insurance

8 coverage may not include as part of such plan or in

9 relation to such coverage any provision that pro10 hibits, restricts, or interferes with any medical com11 munication (as defined in subsection (b)) as part

12 of—

13 ‘‘(A) a written contract or agreement with

14 a health care provider,

15 ‘‘(B) a written statement to such a pro16 vider, or

17 ‘‘(C) an oral communication to such a pro18 vider.

19 ‘‘(2) PROHIBITION OF ADVERSE ACTION.—Such

20 a plan or issuer may not take any of the following

21 actions against a health care provider on the basis

22 of a medical communication:

23 ‘‘(A) Refusal to contract with the health

24 care provider.
31

•HR 4220 IH

1 ‘‘(B) Termination or refusal to renew a

2 contract with the health care provider.

3 ‘‘(C) Refusal to refer patients to or allow

4 others to refer patients to the health care pro5 vider.

6 ‘‘(D) Refusal to compensate the health

7 care provider for covered services.

8 ‘‘(E) Any other retaliatory action against

9 the health care provider.

10 ‘‘(3) NULLIFICATION.—Any provision that is

11 prohibited under paragraph (1) is null and void.

12 ‘‘(b) MEDICAL COMMUNICATION DEFINED.—For

13 purposes of this section, the term ‘medical communica14 tion’—

15 ‘‘(1) means any communication, other than a

16 knowing and willful misrepresentation, made by the

17 health care provider—

18 ‘‘(A) regarding the mental or physical

19 health care needs or treatment of a patient and

20 the provisions, terms, or requirements of the

21 managed care group health plan or managed

22 care health insurance coverage or another plan

23 or coverage relating to such needs or treatment,

24 and

25 ‘‘(B) between—
32

•HR 4220 IH

1 ‘‘(i) the provider and a current,

2 former, or prospective patient (or the

3 guardian or legal representative of a pa4 tient),

5 ‘‘(ii) the provider and any employee or

6 representative of the plan or issuer, or

7 ‘‘(iii) the provider and any employee

8 or representative of any State or Federal

9 authority with responsibility for the licens10 ing or oversight with respect to the plan or

11 issuer; and

12 ‘‘(2) includes communications concerning—

13 ‘‘(A) any tests, consultations, and treat14 ment options,

15 ‘‘(B) any risks or benefits associated with

16 such tests, consultations, and options,

17 ‘‘(C) variation among any health care pro18 viders and any institutions providing such serv19 ices in experience, quality, or outcomes,

20 ‘‘(D) the basis or standard for the decision

21 of a managed care group health plan or health

22 insurance issuer in relation to managed care

23 health insurance coverage to authorize or deny

24 health care services or benefits,
33

•HR 4220 IH

1 ‘‘(E) the process used by the plan or issuer

2 to determine whether to authorize or deny

3 health care services or benefits, and

4 ‘‘(F) any financial incentives or disincen5 tives provided by the plan or issuer to a health

6 care provider that are based on service utiliza7 tion.

8 ‘‘(c) NON-PREEMPTION OF STATE LAW.—A State

9 may establish or enforce requirements with respect to the

10 subject matter of this section, but only if such require11 ments are more protective of medical communications

12 than the requirements established under this section.

13 ‘‘(d) CONSTRUCTION.—Nothing in this section shall

14 be construed as—

15 ‘‘(1) requiring a managed care group health

16 plan or health insurance issuer in relation to man17 aged care health insurance coverage to enter into or

18 renew a contract or agreement with any willing

19 health care provider, or

20 ‘‘(2) preventing such a plan or issuer from act21 ing on information relating to treatment actually

22 provided to a patient or the failure of a health care

23 provider to comply with legal standards relating to

24 the provision of care.
34

•HR 4220 IH

1 ‘‘SEC. 9917. PATIENT ACCESS TO CLINICAL STUDIES.

2 ‘‘(a) PERMITTING PARTICIPATION IN APPROVED

3 CLINICAL STUDIES.—A managed care group health plan

4 and a health insurance issuer offering managed care

5 health insurance coverage health plan may not deny (or

6 limit or impose additional conditions on) coverage of items

7 and services furnished to an enrollee if—

8 ‘‘(1) the enrollee is participating in an approved

9 clinical study,

10 ‘‘(2) the items and services are furnished ac11 cording to the design of the study or to treat condi12 tions resulting from participation in the study, and

13 ‘‘(3) the items and services would otherwise be

14 covered under the plan or coverage except for the

15 fact that they are provided in connection with par16 ticipation in such a study.

17 Such a plan or issuer may not discriminate against an

18 enrollee on the basis of the enrollee’s participation in such

19 a study.

20 ‘‘(b) CONSTRUCTION.—Nothing in subsection (a)

21 shall be construed as requiring a plan or issuer to provide

22 for payment for items and services routinely paid for as

23 part of an approved clinical study.

24 ‘‘(c) APPROVED CLINICAL STUDY DEFINED.—For

25 purposes of this section, the term ‘approved clinical study’

26 means—
35

•HR 4220 IH

1 ‘‘(1) a research study approved by the Sec2 retary of Health and Human Services, the Director

3 of the National Institutes of Health, the Commis4 sioner of the Food and Drug Administration, the

5 Secretary of Veterans Affairs, the Secretary of De6 fense, or a qualified nongovernmental research entity

7 (as defined in guidelines of the National Institute of

8 Health), or

9 ‘‘(2) a peer-reviewed and approved research

10 program, as defined by the Secretary of Health and

11 Human Services, conducted for the primary purpose

12 of determining whether or not a treatment is safe,

13 efficacious, or having any other characteristic of a

14 treatment which must be demonstrated in order for

15 the treatment to be medically necessary or appro16 priate.

17 ‘‘SEC. 9918. REQUIRED MINIMUM CHILDBIRTH BENEFITS.

18 ‘‘(a) MINIMUM CHILDBIRTH BENEFITS.—If a man19 aged care group health plan or managed care health insur20 ance coverage offered by a health insurance issuer pro21 vides coverage that includes any benefits for inpatient care

22 for childbirth for a mother or newborn child, the plan or

23 issuer (in relation to such coverage) shall meet the follow24 ing requirements:
36

•HR 4220 IH

1 ‘‘(1) MINIMUM LENGTH OF STAY FOR INPA2 TIENT CARE BENEFITS.—The plan or coverage shall

3 provide benefits for inpatient care for childbirth for

4 a minimum length of stay of 48 hours following a

5 vaginal delivery and a minimum length of stay of 96

6 hours following a caesarean section.

7 ‘‘(2) COVERAGE OF POST-DELIVERY FOLLOW-UP

8 CARE.—If an attending provider, in consultation

9 with the mother, decides to discharge a covered

10 mother or newborn child from an inpatient setting

11 before the expiration of the minimum length of stay

12 period described in paragraph (1), the plan or cov13 erage shall include benefits for timely post-delivery

14 care by a registered nurse, physician, nurse practi15 tioner, nurse midwife or physician assistant experi16 enced in maternal and child health in the home, a

17 provider’s office, a hospital, a federally qualified

18 health center, a federally qualified rural health clin19 ic, a State health department maternity clinic, or an20 other setting (such as a birthing center or an inter21 mediate care facility) determined appropriate under

22 regulations promulgated by the Secretary of Health

23 and Human Services.

24 ‘‘(3) NOTICE.—The plan or issuer shall provide

25 notice to each enrollee eligible for childbirth benefits
37

•HR 4220 IH

1 under this subsection regarding the requirements of

2 this section.

3 (b) PROHIBITIONS.—In implementing the require4 ments of subsection (a), such a plan or issuer may not—

5 ‘‘(1) require or condition the provision of bene6 fits under subsection (a) on any authorization or ap7 proval of an attending or other provider;

8 ‘‘(2) deny enrollment, renewal, or continued

9 coverage to a mother and her newborn child who are

10 otherwise eligible to be so covered based on compli11 ance with this section;

12 ‘‘(3) provide monetary incentives to mothers to

13 encourage such mothers to request less than the

14 minimum coverage required under subsection (a);

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

16 to an attending provider to induce such provider to

17 provide treatment in a manner inconsistent with this

18 section; or

19 ‘‘(5) penalize or otherwise reduce or limit the

20 reimbursement of an attending provider because

21 such provider provided treatment in accordance with

22 this section.

23 ‘‘(c) ADDITIONAL TERMS AND CONDITIONS.—

24 ‘‘(1) ATTENDING PROVIDER.—As used in this

25 section, the term ‘attending provider’ means, with
38

•HR 4220 IH

1 respect to a mother and her newborn child, an obste2 trician-gynecologist, pediatrician, family physician,

3 or other physician, or any other health care provider

4 (such as a nurse midwife or nurse practitioner),

5 who, acting in accordance with applicable State law,

6 is primarily responsible for the care of the mother

7 and child.

8 (2) TIMELY CARE DEFINED.—As used in sub9 section (a)(2), the term ‘timely post-delivery care’

10 means health care that is provided—

11 ‘‘(A) following the discharge of a mother

12 and her newborn child from the inpatient set13 ting following childbirth; and

14 ‘‘(B) in a manner that meets the health

15 care needs of the mother and her newborn

16 child, that provides for the appropriate monitor17 ing of the conditions of the mother and child,

18 and that occurs within the 72-hour period im19 mediately following discharge.

20 ‘‘(3) REGULATIONS REGARDING APPROPRIATE

21 POST-CARE DELIVERY SETTINGS.—The Secretary of

22 Health and Human Services, with respect to regula23 tions promulgated under subsection (a)(2) concern24 ing appropriate post-delivery care settings—
39

•HR 4220 IH

1 ‘‘(A) shall ensure that, to the extent prac2 ticable, such regulations are consistent with

3 State licensing and practice laws,

4 ‘‘(B) shall consider telemedicine and other

5 innovative means to provide follow-up care, and

6 ‘‘(C) shall consider both urban and rural

7 settings.

8 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in

9 this section shall be construed to require that a

10 mother—

11 ‘‘(A) give birth in a hospital; or

12 ‘‘(B) stay in the hospital for a fixed period

13 of time following the birth of her child.

14 ‘‘(5) REQUIREMENTS.—The notice required

15 under subsection (a)(3) shall be in accordance with

16 regulations promulgated by the Secretary of Health

17 and Human Services. Such regulations shall provide

18 that the notice shall be in writing, shall be conspicu19 ous and prominently positioned, and shall be re20 quired to be provided as follows:

21 ‘‘(A) HEALTH INSURANCE COVERAGE.—By

22 a health insurance issuer in relation to man23 aged care health insurance coverage—

24 ‘‘(i) to enrollees described in sub25 section (a) who are enrolled on the effec-
40

•HR 4220 IH

1 tive date of this chapter within 120 days

2 after such effective date and annually

3 thereafter, and

4 ‘‘(ii) to other enrollees at the time of

5 enrollment and annually thereafter.

6 ‘‘(B) GROUP HEALTH PLANS.—By a man7 aged care group health plan—

8 ‘‘(i) to enrollees described in sub9 section (a) who are enrolled on the effec10 tive date of this chapter within 120 days

11 after such effective date, and

12 ‘‘(ii) for plan years beginning on or

13 after such effective date, as part of its

14 summary plan description.

15 ‘‘SEC. 9919. ASSURING EQUITABLE HEALTH PLAN COV16 ERAGE WITH RESPECT TO EMERGENCY SERV17 ICES.

18 ‘‘(a) PROHIBITION OF CONTRACTUAL LIMITATIONS

19 ON COVERAGE OF EMERGENCY SERVICES.—A managed

20 care group health plan or managed care health insurance

21 coverage offered by a health insurance issuer that provides

22 any coverage with respect to emergency services shall

23 cover emergency services furnished to an enrollee of the

24 plan or issuer (with respect to such managed care cov25 erage)—
41

•HR 4220 IH

1 ‘‘(1) without regard to whether or not the pro2 vider furnishing the emergency services has a con3 tractual or other arrangement with the plan or is4 suer for the provision of such services to such enroll5 ees, and

6 ‘‘(2) without regard to prior authorization.

7 ‘‘(b) PROHIBITION OF DISCRIMINATORY PAYMENT

8 OR COST-SHARING.—

9 ‘‘(1) IN GENERAL.—Such a plan or issuer that

10 provides any coverage with respect to emergency

11 services—

12 ‘‘(A) shall determine and make prompt

13 payment in a reasonable and appropriate

14 amount for such services, and

15 ‘‘(B) subject to paragraph (2), may not

16 impose cost-sharing for services furnished in a

17 hospital emergency department that is cal18 culated in a manner (such as the use of a dif19 ferent percentage) that imposes greater cost

20 sharing with respect to such services compared

21 to comparable services furnished in other set22 tings.

23 ‘‘(2) IMPOSITION OF REASONABLE COPAYMENT

24 PERMITTED.—Such a plan or issuer may impose a

25 reasonable copayment (as determined in accordance
42

•HR 4220 IH

1 with standards established by the Secretary of

2 Health and Human Services) in lieu of coinsurance

3 to deter inappropriate use of services of hospital

4 emergency departments.

5 ‘‘(c) ASSURING TIMELINESS OF PRIOR AUTHORIZA6 TION DETERMINATION FOR NEEDED CARE IDENTIFIED

7 IN INITIAL EVALUATION.—

8 ‘‘(1) IN GENERAL.—

9 ‘‘(A) ACCESS TO PROCESS.—If an enrollee

10 of a managed care group health plan or health

11 insurance issuer in relation to managed care

12 health insurance coverage receives emergency

13 services from an emergency department pursu14 ant to a screening evaluation conducted by a

15 treating physician or other emergency depart16 ment personnel and pursuant to the evaluation

17 such physician or personnel identifies items and

18 services (other than emergency services)

19 promptly needed by the enrollee, the plan or is20 suer shall provide access 24 hours a day, 7 days

21 a week, to such persons as may be authorized

22 to make any prior authorization determinations

23 respecting coverage of such promptly needed

24 items and services.
43

•HR 4220 IH

1 ‘‘(B) DEEMED APPROVAL.—Such a plan or

2 issuer is deemed to have approved a request for

3 a prior authorization for such promptly needed

4 items and services if such physician or other

5 personnel—

6 ‘‘(i) has attempted to contact such a

7 person for authorization—

8 ‘‘(I) to provide an appropriate re9 ferral for the items and services, or

10 ‘‘(II) to provide the items and

11 services to the enrollee,

12 and access to the person has not been pro13 vided (as required under subparagraph

14 (A)), or

15 ‘‘(ii) has requested such authorization

16 from such a person and the person has not

17 denied the authorization within 30 minutes

18 after the time the request is made.

19 ‘‘(2) REFERRAL BY PHYSICIAN TO HOSPITAL

20 EMERGENCY DEPARTMENT DEEMED PRIOR AUTHOR21 IZATION.—If a participating physician or other per22 son authorized to make prior authorization deter23 minations for such a plan or issuer refers an enrollee

24 to a hospital emergency department for evaluation

25 or treatment, a request for prior authorization of the
44

•HR 4220 IH

1 items and services reasonably furnished the enrollee

2 pursuant to such referral shall be deemed to have

3 been made and approved.

4 ‘‘(3) EFFECT OF APPROVAL.—

5 ‘‘(A) IN GENERAL.—Approval of a request

6 for a prior authorization determination (includ7 ing a deemed approval under paragraph (1) or

8 (2)) shall be treated as approval of any health

9 care items and services required to treat the

10 medical condition identified pursuant to a

11 screening evaluation referred to in paragraph

12 (1)(A).

13 ‘‘(B) PAYMENT.—Such a plan or issuer

14 may not subsequently deny or reduce payment

15 for an item or service furnished pursuant to

16 such an approval unless the approval was based

17 on information about the medical condition of

18 an enrollee that was fraudulent.

19 ‘‘(d) ENCOURAGING APPROPRIATE USE OF 911

20 EMERGENCY TELEPHONE NUMBER.—Such a plan or is21 suer—

22 ‘‘(1) shall include, in any educational materials

23 the plan makes available to its enrollees on the pro24 cedures for obtaining emergency services—
45

•HR 4220 IH

1 ‘‘(A) a statement that it is appropriate for

2 an enrollee to use the 911 emergency telephone

3 number for an emergency medical condition (as

4 defined in subsection (f)(3)), and

5 ‘‘(B) an explanation of what is an emer6 gency medical condition;

7 ‘‘(2) shall not discourage appropriate use of the

8 911 emergency telephone number by enrollees with

9 emergency medical conditions; and

10 ‘‘(3) shall not deny coverage or payment for an

11 item or service solely on the basis that an enrollee

12 uses the 911 emergency telephone number to sum13 mon treatment for an emergency medical condition.

14 ‘‘(e) EFFECT ON STATE LAW.—

15 ‘‘(1) PREEMPTION.—Nothing in this section

16 shall be construed as preempting or otherwise super17 seding any provision of State law unless such provi18 sion directly conflicts with this section.

19 ‘‘(2) CONSUMER PROTECTIONS.—A provision of

20 State law shall not be considered to conflict directly

21 with this section if the provision provides the enroll22 ees with protections that exceed the protections of

23 this section.

24 ‘‘(f) DEFINITIONS.—For purposes of this section:
46

•HR 4220 IH

1 ‘‘(1) COST-SHARING.—The term ‘cost-sharing’

2 means any deductible, coinsurance amount, copay3 ment, or other out-of-pocket payment that an en4 rollee is responsible for paying with respect to a

5 health care item or service covered under a managed

6 care group health plan or managed care health in7 surance coverage.

8 ‘‘(2) EMERGENCY DEPARTMENT.—The term

9 ‘emergency department’ includes, with respect to a

10 hospital, a trauma center in the hospital if the cen11 ter—

12 ‘‘(A) is designated under section 1213 of

13 the Public Health Service Act, or

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

15 designations and is determined by the Secretary

16 to meet the standards under such section for

17 such designation.

18 ‘‘(3) EMERGENCY MEDICAL CONDITION.—The

19 term ‘emergency medical condition’ means a medical

20 condition, the onset of which or change in which is

21 sudden, that manifests itself by symptoms of suffi22 cient severity, including severe pain, that a prudent

23 layperson, who possesses an average knowledge of

24 health and medicine, could reasonably expect the ab25 sence of immediate medical attention to result in—
47

•HR 4220 IH

1 ‘‘(A) placing the person’s health in serious

2 jeopardy,

3 ‘‘(B) serious impairment to bodily func4 tions, or

5 ‘‘(C) serious dysfunction of any bodily

6 organ or part.

7 ‘‘(4) EMERGENCY SERVICES.—The term ‘emer8 gency services’ means—

9 ‘‘(A) health care items and services fur10 nished in the emergency department of a hos11 pital, and

12 ‘‘(B) ancillary services routinely available

13 to such department,

14 to the extent they are required to evaluate and treat

15 an emergency medical condition (as defined in para16 graph (3)) until the condition is stabilized.

17 ‘‘(5) PRIOR AUTHORIZATION DETERMINA18 TION.—The term ‘prior authorization determination’

19 means, with respect to health care items and serv20 ices for which coverage may be provided under a

21 group health plan or health insurance coverage, a

22 determination, before the provision of the items and

23 services and as a condition of coverage of the items

24 and services under the plan or coverage, that cov-
48

•HR 4220 IH

1 erage will be provided for the items and services

2 under the plan or coverage.

3 ‘‘(6) STABILIZED.—The term ‘stabilized’

4 means, with respect to an emergency medical condi5 tion, that no material deterioration of the condition

6 is likely, within reasonable medical probability, to re7 sult or occur before an individual can be transferred

8 in compliance with the requirements of section 1867

9 of the Social Security Act.

10 ‘‘(7) 911 EMERGENCY TELEPHONE NUMBER.—

11 The term ‘911 emergency telephone number’ in12 cludes, in the case of a geographic area where 911

13 is not in use for emergencies, such other telephone

14 number as is in use for emergencies.’’

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

16 for the Internal Revenue Code of 1986 is amended by add17 ing after the item relating to subtitle K the following new

18 item:

‘‘Subtitle L. Protection for Beneficiaries Under Managed Care

Plans.’’

19 (c) EFFECTIVE DATE.—The requirement of section

20 9902 of the Internal Revenue Code of 1986 (as added by

21 subsection (a) of this section) shall take effect on January

22 1, 1998, and shall apply to coverage offered on or after

23 such date regardless of whether the plan year began before

24 such date.
49

•HR 4220 IH

1 Subtitle C—Effective Date

2 SEC. 121. EFFECTIVE DATE.

3 The amendments made by this title shall apply with

4 respect to contract years beginning on or after January

5 1, 1998.

6 TITLE II—MEDICARE

7 SEC. 201. PROHIBITION ON PAYMENTS UNDER MEDICARE

8 UNTIL COMPLETION OF ORIENTATION AND

9 MEDICAL PROFILE.

10 (a) IN GENERAL.—Section 1876(c)(3) of the Social

11 Security Act (42 U.S.C. 1395mm(c)(3)) is amended by

12 adding at the end the following:

13 ‘‘(G)(i) The Secretary may not make a payment to

14 an eligible organization under a risk-sharing contract

15 under this section with respect to an enrollee until the eli16 gible organization certifies to the Secretary that the orga17 nization—

18 ‘‘(I) has provided the enrollee an orientation as

19 described in clause (ii), and

20 ‘‘(II) has a medical profile described in clause

21 (iii) with respect to the enrollee.

22 ‘‘(ii) The orientation required under this subpara23 graph includes an explanation of the following features of

24 the health plan offered by such organization:
50

•HR 4220 IH

1 ‘‘(I) Access to care, including choice of physi2 cian, physician location, and hospital coverage.

3 ‘‘(II) The information required under section

4 9914 of the Internal Revenue Code of 1986.

5 ‘‘(iii) The medical profile described in this clause is

6 such profile of the medical condition of the enrollee as the

7 Secretary shall specify by regulation.’’.

8 (b) PROMULGATION OF REQUIREMENTS FOR ORI9 ENTATION AND MEDICAL PROFILE.—Not later that 180

10 days after the date of the enactment of this Act, the Sec11 retary of Health and Human Services shall, by rule, first

12 specify the elements of the orientation and of the medical

13 profile described in clauses (ii) and (iii) of section

14 1876(c)(3)(G) of the Social Security Act (as added by sub15 section (a)). Chapter 8 of title 5, United States Code, shall

16 not apply to such rule. Such rule shall apply on a final

17 basis, pending notice and opportunity for public comment.

18 (c) EFFECTIVE DATE.—The amendment made by

19 subsection (a) applies with respect to enrollees as of the

20 first day of the first month that begins more than 60 days

21 after the date on which the Secretary first publishes the

22 rule under subsection (b) in the Federal Register.
51

•HR 4220 IH

1 SEC. 202. CHANGES IN REQUIREMENTS FOR MEDICARE

2 SUPPLEMENTAL POLICIES RELATING TO

3 COMMUNITY RATING AND LOSS RATIOS.

4 (a) REQUIREMENT OF COMMUNITY RATING.—

5 (1) IN GENERAL.—Section 1882(s) of the So6 cial Security Act (42 U.S.C. 1395ss(s)) is amend7 ed—

8 (A) in paragraph (3), by striking ‘‘para9 graphs (1) and (2)’’ and inserting ‘‘this sub10 section’’, and by redesignating such paragraph

11 as paragraph (4), and

12 (B) by inserting after paragraph (2) the

13 following new paragraph:

14 ‘‘(3)(A) Except as provided in this paragraph, the is15 suer of a Medicare supplemental policy may not vary the

16 premium among individuals who reside in the same com17 munity rating area.

18 ‘‘(B)(i) In the first year for which this paragraph ap19 plies to such an issuer in a State, the premium rate

20 charged by the issuer for such a policy in a community

21 may vary so long as the premium range percentage (as

defined in clause (iii)) does not exceed 2 22 ⁄3 of the premium

23 range percentage of premium rates charged by the insurer

24 for such policies in the community rating area in the pre25 vious year.
52

•HR 4220 IH

1 ‘‘(ii) In the second year for which this paragraph ap2 plies to such an issuer in a State, the premium rate

3 charged by the issuer for such a policy in a community

4 may vary so long as the premium range percentage (as

defined in clause (iii)) does not exceed 1 5 ⁄2 of the maximum

6 premium range percentage permitted under clause (i) for

7 the previous year.

8 ‘‘(iii) In this paragraph, the term ‘premium range

9 percentage’ means—

10 ‘‘(I) the highest premium rate minus the lowest

11 premium rate, divided by

12 ‘‘(II) the lowest premium rate,

13 expressed as a percentage.

14 ‘‘(C) For purposes of this paragraph, each of the fol15 lowing is considered to be a separate ‘community rating

16 area’:

17 ‘‘(1) Each metropolitan statistical area.

18 ‘‘(2) The area of each State that is not within

19 a metropolitan statistical area.

20 (2) CONFORMING AMENDMENT.—Section

21 1882(s)(2)(A) of such Act (42 U.S.C.

22 1395ss(s)(2)(A)) is amended by striking ‘‘, or dis23 criminate in the pricing of the policy,’’.

24 (b) INCREASE IN LOSS RATIO.—Section

25 1882(r)(1)(A) of such Act (42 U.S.C. 1395ss(r)(1)(A)) is
53

•HR 4220 IH

1 amended by striking ‘‘75 percent’’ and all that follows

2 through the semicolon and inserting ‘‘85 percent;’’.

3 (c) EFFECTIVE DATE.—

4 (1) NAIC STANDARDS.—If, within 6 months

5 after the date of the enactment of this Act, the Na6 tional Association of Insurance Commissioners (in

7 this section referred to as the ‘‘NAIC’’) makes

8 changes in the 1991 NAIC Model Regulation (as de9 fined in section 1882(p)(1)(A) of the Social Security

10 Act) to incorporate the additional requirements im11 posed by the amendments made by this section, sec12 tion 1882(g)(2)(A) of such Act shall be applied in

13 each State, effective for policies issued to policy14 holders on and after the date specified in paragraph

15 (3), as if the reference to the Model Regulation

16 adopted on June 6, 1979, were a reference to the

17 1991 NAIC Model Regulation (as so defined) as

18 changed under this section (such changed Regula19 tion referred to in this section as the ‘‘1996 NAIC

20 Model Regulation’’).

21 (2) SECRETARY STANDARDS.—If the NAIC

22 does not make changes in the 1991 NAIC Model

23 Regulation (as so defined) within the 6-month period

24 specified in paragraph (1), the Secretary of Health

25 and Human Services (in this subsection as the ‘‘Sec-
54

•HR 4220 IH

1 retary’’) shall promulgate a regulation and section

2 1882(g)(2)(A) of the Social Security Act shall be ap3 plied in each State, effective for policies issued to

4 policyholders on and after the date specified in para5 graph (3), as if the reference to the Model Regula6 tion adopted in June 6, 1979, were a reference to

7 the 1991 NAIC Model Regulation (as so defined) as

8 changed by the Secretary under this subsection

9 (such changed Regulation referred to in this sub10 section as the ‘‘1996 Federal Regulation’’).

11 (3) DATE SPECIFIED.—

12 (A) IN GENERAL.—Subject to subpara13 graph (B), the date specified in this paragraph

14 for a State is the earlier of—

15 (i) the date the State adopts the 1996

16 NAIC Model Regulation or the 1996 Fed17 eral Regulation; or

18 (ii) 1 year after the date the NAIC or

19 the Secretary first adopts such regulations.

20 (B) ADDITIONAL LEGISLATIVE ACTION RE21 QUIRED.—In the case of a State which the Sec22 retary identifies, in consultation with the NAIC,

23 as—

24 (i) requiring State legislation (other

25 than legislation appropriating funds) in
55

•HR 4220 IH

1 order for medicare supplemental policies to

2 meet the 1996 NAIC Model Regulation or

3 the 1996 Federal Regulation, but

4 (ii) having a legislature which is not

5 scheduled to meet in 1997 in a legislative

6 session in which such legislation may be

7 considered,

8 the date specified in this paragraph is the first

9 day of the first calendar quarter beginning after

10 the close of the first legislative session of the

11 State legislature that begins on or after Janu12 ary 1, 1997. For purposes of the previous sen13 tence, in the case of a State that has a 2-year

14 legislative session, each year of such session

15 shall be deemed to be a separate regular session

16 of the State legislature.

17 SEC. 203. OTHER ADDITIONAL CONSUMER PROTECTIONS

18 FOR MEDICARE SUPPLEMENTAL INSURANCE.

19 (a) GUARANTEEING ISSUE WITHOUT PREEXISTING

20 CONDITIONS FOR CONTINUOUSLY COVERED INDIVID21 UALS.—Section 1882(s) of the Social Security Act (42

22 U.S.C. 1395ss(s)), as amended by section 202(a), is

23 amended—

24 (1) by redesignating paragraph (4) as para25 graph (5), and
56

•HR 4220 IH

1 (2) by inserting after paragraph (3) the follow2 ing new paragraph:

3 ‘‘(4)(A) The issuer of a Medicare supplemental pol4 icy—

5 ‘‘(i) may not deny or condition the issuance or

6 effectiveness of a Medicare supplemental policy de7 scribed in subparagraph (C);

8 ‘‘(ii) may not discriminate in the pricing of the

9 policy on the basis of the individual’s health status,

10 medical condition (including both physical and men11 tal illnesses), claims experience, receipt of health

12 care, medical history, genetic information, evidence

13 of insurability (including conditions arising out of

14 acts of domestic violence), or disability; and

15 ‘‘(iii) may not impose an exclusion of benefits

16 based on a pre-existing condition,

17 in the case of an individual described in subparagraph (B)

18 who seeks to enroll under the policy not later than 63 days

19 after the date of the termination of enrollment described

20 in such subparagraph.

21 ‘‘(B) An individual described in this subparagraph is

22 an individual described in any of the following clauses:

23 ‘‘(i) The individual is enrolled with an eligible

24 organization under a contract under section 1876 or

25 with an organization under an agreement under sec-
57

•HR 4220 IH

1 tion 1833(a)(1)(A) and such enrollment ceases ei2 ther because the individual moves outside the service

3 area of the organization under the contract or agree4 ment or because of the termination or nonrenewal of

5 the contract or agreement.

6 ‘‘(ii) The individual is enrolled with an organi7 zation under a policy described in subsection (t) and

8 such enrollment ceases either because the individual

9 moves outside the service area of the organization

10 under the policy, because of the bankruptcy or insol11 vency of the insurer, or because the insurer closes

12 the block of business to new enrollment.

13 ‘‘(iii) The individual is covered under a Medi14 care supplemental policy and such coverage is termi15 nated because of the bankruptcy or insolvency of the

16 insurer issuing the policy, because the insurer closes

17 the block of business to new enrollment, or because

18 the individual changes residence so that the individ19 ual no longer resides in a State in which the issuer

20 of the policy is licensed.

21 ‘‘(iv) The individual is enrolled under an em22 ployee welfare benefit plan that provides health ben23 efits that supplement the benefits under this title

24 and the plan terminates or ceases to provide (or sig-
58

•HR 4220 IH

1 nificantly reduces) such supplemental health benefits

2 to the individual.

3 ‘‘(v)(I) The individual is enrolled with an eligi4 ble organization under a contract under section

5 1876 or with an organization under an agreement

6 under section 1833(a)(1)(A) and such enrollment is

7 terminated by the enrollee during the first 12

8 months of such enrollment, but only if the individual

9 never was previously enrolled with an eligible organi10 zation under a contract under section 1876 or with

11 an organization under an agreement under section

12 1833(a)(1)(A).

13 ‘‘(II) The individual is enrolled under a policy

14 described in subsection (t) and such enrollment is

15 terminated during the first 12 months of such en16 rollment, but only if the individual never was pre17 viously enrolled under such a policy under such sub18 section.

19 ‘‘(C)(i) Subject to clause (ii), a Medicare supple20 mental policy described in this subparagraph, with respect

21 to an individual described in subparagraph (B), is a policy

22 the benefits under which are comparable or lesser in rela23 tion to the benefits under the enrollment described in sub24 paragraph (B) (or, in the case of an individual described
59

•HR 4220 IH

1 in clause (ii), under the most recent Medicare supple2 mental policy described in clause (ii)(II)).

3 ‘‘(ii) An individual described in this clause is an indi4 vidual who—

5 ‘‘(I) is described in subparagraph (B)(v), and

6 ‘‘(II) was enrolled in a Medicare supplemental

7 policy within the 63 day period before the enrollment

8 described in such subparagraph.

9 ‘‘(iii) As a condition for approval of a State regu10 latory program under subsection (b)(1) and for purposes

11 of applying clause (i) to policies to be issued in the State,

12 the regulatory program shall provide for the method of

13 determining whether policy benefits are comparable or

14 lesser in relation to other benefits. With respect to a State

15 without such an approved program, the Secretary shall es16 tablish such method.

17 ‘‘(D) At the time of an event described in subpara18 graph (B) because of which an individual ceases enroll19 ment or loses coverage or benefits under a contract or

20 agreement, policy, or plan, the organization that offers the

21 contract or agreement, the insurer offering the policy, or

22 the administrator of the plan, respectively, shall notify the

23 individual of the rights of the individual, and obligations

24 of issuers of Medicare supplemental policies, under sub25 paragraph (A).’’.
60

•HR 4220 IH

1 (b) LIMITATION ON IMPOSITION OF PREEXISTING

2 CONDITION EXCLUSION DURING INITIAL OPEN ENROLL3 MENT PERIOD.—Section 1882(s)(2)(B) of such Act (42

4 U.S.C. 1395ss(s)(2)(B)) is amended to read as follows:

5 ‘‘(B) In the case of a policy issued during the 6-

6 month period described in subparagraph (A), the policy

7 may not exclude benefits based on a pre-existing condi8 tion.’’.

9 (c) CLARIFYING THE NONDISCRIMINATION REQUIRE10 MENTS DURING THE 6-MONTH INITIAL ENROLLMENT

11 PERIOD.—Section 1882(s)(2)(A) of such Act (42 U.S.C.

12 1395ss(s)(2)(A)) is amended to read as follows:

13 ‘‘(2)(A)(i) In the case of an individual described in

14 clause (ii), the issuer of a Medicare supplemental policy—

15 ‘‘(I) may not deny or condition the issuance or

16 effectiveness of a Medicare supplemental policy, and

17 ‘‘(II) may not discriminate in the pricing of the

18 policy on the basis of the individual’s health status,

19 medical condition (including both physical and men20 tal illnesses), claims experience, receipt of health

21 care, medical history, genetic information, evidence

22 of insurability (including conditions arising out of

23 acts of domestic violence), or disability.

24 ‘‘(ii) An individual described in this clause is an indi25 vidual for whom an application is submitted before the end
61

•HR 4220 IH

1 of the 6-month period beginning with the first month as

2 of the first day on which the individual is 65 years of age

3 or older and is enrolled for benefits under part B.’’.

4 (d) EXTENDING 6-MONTH INITIAL ENROLLMENT

5 PERIOD TO NON-ELDERLY MEDICARE BENEFICIARIES.—

6 Section 1882(s)(2)(A)(ii) of such Act (42 U.S.C.

7 1395ss(s)(2)(A)), as amended by subsection (c), is amend8 ed by striking ‘‘is submitted’’ and all that follows and in9 serting the following: ‘‘is submitted—

10 ‘‘(I) before the end of the 6-month period be11 ginning with the first month as of the first day on

12 which the individual is 65 years of age or older and

13 is enrolled for benefits under part B; and

14 ‘‘(II) for each time the individual becomes eligi15 ble for benefits under part A pursuant to section

16 226(b) or 226A and is enrolled for benefits under

17 part B, before the end of the 6-month period begin18 ning with the first month as of the first day on

19 which the individual is so eligible and so enrolled.’’.

20 (e) EFFECTIVE DATES.—

21 (1) GUARANTEED ISSUE.—The amendment

22 made by subsection (a) shall take effect on July 1,

23 1997.

24 (2) LIMIT ON PREEXISTING CONDITION EXCLU25 SIONS.—The amendment made by subsection (b)
62

•HR 4220 IH

1 shall apply to policies issued on or after July 1,

2 1997.

3 (3) CLARIFICATION OF NONDISCRIMINATION

4 REQUIREMENTS.—The amendment made by sub5 section (c) shall apply to policies issued on or after

6 July 1, 1997.

7 (4) EXTENSION OF ENROLLMENT PERIOD TO

8 DISABLED INDIVIDUALS.—

9 (A) IN GENERAL.—The amendment made

10 by subsection (d) shall take effect on July 1,

11 1997.

12 (B) TRANSITION RULE.—In the case of an

13 individual who first became eligible for benefits

14 under part A of title XVIII of the Social Secu15 rity Act pursuant to section 226(b) or 226A of

16 such Act and enrolled for benefits under part B

17 of such title before July 1, 1997, the 6-month

18 period described in section 1882(s)(2)(A) of

19 such Act shall begin on July 1, 1997. Before

20 July 1, 1997, the Secretary of Health and

21 Human Services shall notify any individual de22 scribed in the previous sentence of their rights

23 in connection with Medicare supplemental poli24 cies under section 1882 of such Act, by reason

25 of the amendment made by subsection (d).
63

•HR 4220 IH

1 (f) TRANSITION PROVISIONS.—

2 (1) IN GENERAL.—If the Secretary of Health

3 and Human Services identifies a State as requiring

4 a change to its statutes or regulations to conform its

5 regulatory program to the changes made by this sec6 tion, the State regulatory program shall not be con7 sidered to be out of compliance with the require8 ments of section 1882 of the Social Security Act due

9 solely to failure to make such change until the date

10 specified in paragraph (4).

11 (2) NAIC STANDARDS.—If, within 9 months

12 after the date of the enactment of this Act, the Na13 tional Association of Insurance Commissioners (in

14 this subsection referred to as the ‘‘NAIC’’) modifies

15 its NAIC Model Regulation relating to section 1882

16 of the Social Security Act (referred to in such sec17 tion as the 1991 NAIC Model Regulation, as modi18 fied pursuant to section 171(m)(2) of the Social Se19 curity Act Amendments of 1994 (Public Law 103–

20 432) and as modified pursuant to section

21 1882(d)(3)(A)(vi)(IV) of the Social Security Act, as

22 added by section 271(a) of the Health Care Port23 ability and Accountability Act of 1996 (Public Law

24 104–191) to conform to the amendments made by

25 this section, such revised regulation incorporating
64

•HR 4220 IH

1 the modifications shall be considered to be the appli2 cable NAIC model regulation (including the revised

3 NAIC model regulation and the 1991 NAIC Model

4 Regulation) for the purposes of such section.

5 (3) SECRETARY STANDARDS.—If the NAIC

6 does not make the modifications described in para7 graph (2) within the period specified in such para8 graph, the Secretary of Health and Human Services

9 shall make the modifications described in such para10 graph and such revised regulation incorporating the

11 modifications shall be considered to be the appro12 priate Regulation for the purposes of such section.

13 (4) DATE SPECIFIED.—

14 (A) IN GENERAL.—Subject to subpara15 graph (B), the date specified in this paragraph

16 for a State is the earlier of—

17 (i) the date the State changes its stat18 utes or regulations to conform its regu19 latory program to the changes made by

20 this section, or

21 (ii) 1 year after the date the NAIC or

22 the Secretary first makes the modifications

23 under paragraph (2) or (3), respectively.
65

•HR 4220 IH

1 (B) ADDITIONAL LEGISLATIVE ACTION RE2 QUIRED.—In the case of a State which the Sec3 retary identifies as—

4 (i) requiring State legislation (other

5 than legislation appropriating funds) to

6 conform its regulatory program to the

7 changes made in this section, but

8 (ii) having a legislature which is not

9 scheduled to meet in 1998 in a legislative

10 session in which such legislation may be

11 considered,

12 the date specified in this paragraph is the first

13 day of the first calendar quarter beginning after

14 the close of the first legislative session of the

15 State legislature that begins on or after July 1,

16 1998. For purposes of the previous sentence, in

17 the case of a State that has a 2-year legislative

18 session, each year of such session shall be

19 deemed to be a separate regular session of the

20 State legislature.

21 SEC. 204. APPLICATION OF STANDARDS TO MEDICARE SE22 LECT POLICIES.

23 Section 1882(t) of the Social Security Act (42 U.S.C.

24 1395ss(t)) is amended—
66

•HR 4220 IH

1 (1) in the matter in paragraph (1) before sub2 paragraph (A), by inserting ‘‘, under the standards

3 established under paragraph (4)’’ after ‘‘if’’;

4 (2) by striking ‘‘and’’ at the end of paragraph

5 (1)(E);

6 (3) by striking the period at the end of para7 graph (1)(F) and inserting a semicolon;

8 (4) by adding at the end of paragraph (1) the

9 following new subparagraphs:

10 ‘‘(G) notwithstanding any other provision

11 of this section to the contrary, if the issuer of

12 the policy meet the requirements of paragraph

13 (5).’’;

14 (5) by adding at the end of paragraph (2) the

15 following: ‘‘The intermediate sanctions described in

16 clauses (ii) and (iii) of section 1876(i)(6)(B) shall

17 apply to actions described in the first sentence of

18 this paragraph in the same manner as they apply to

19 violations described in section 1876(i)(6)(A).’’; and

20 (6) by adding at the end the following new

21 paragraphs:

22 ‘‘(4)(A) The Secretary shall establish by regulation

23 standards for policies in order to be provided special treat24 ment under paragraph (1). To the extent practicable, such

25 standards shall be the same as the standards established
67

•HR 4220 IH

1 by the National Association of Insurance Commissioners

2 with respect to such policies. Any additional standards

3 shall be developed in consultation with such Association.

4 ‘‘(B) If the Secretary determines that a State has es5 tablished an effective program to enforce the standards

6 established under subparagraph (A), any policy that a

7 State determines under such program to meet such stand8 ards shall be deemed to meet such standards for purposes

9 of this section.

10 ‘‘(5) For purposes of paragraph (1), the requirements

11 of this paragraph, with respect to a policy are as follows:

12 ‘‘(A) If the issuer of the policy—

13 ‘‘(i) is an eligible organization (as defined

14 in section 1876(a)), the benefits under the pol15 icy (in coordination with benefits made available

16 under this title) are the same as the benefits re17 quired to be made available by such an organi18 zation with a risk-sharing contract under sec19 tion 1876, or

20 ‘‘(ii) is not such an organization, the bene21 fits under the policy shall be either—

22 ‘‘(I) the benefits required under the

23 Standardized Medicare supplement benefit

24 plan ‘E’ (as specified in section 9E(5) of

25 the 1991 NAIC Model Regulation), plus
68

•HR 4220 IH

1 One Hundred Percent (100%) of the Medi2 care Part B Excess Charges (as defined in

3 section 8C(5) of such Regulation); or

4 ‘‘(II) the benefits required under the

5 Standardized Medicare supplement benefit

6 plan ‘J’ (as specified in section 9E(10) of

7 such Regulation).

8 ‘‘(B) The issuer of the policy (in relation to the

9 policy) meets the same requirements under section

10 1876 that would apply to an eligible organization

11 with a risk-sharing contract under that section (in12 cluding community rating of premiums and prior ap13 proval of marketing materials, but not including pro14 vision of benefits).’’.

15 SEC. 205. ARRANGEMENTS FOR OUT-OF-AREA DIALYSIS

16 SERVICES.

17 Section 1876(c) of the Social Security Act (42 U.S.C.

18 1395mm(c)) is amended by adding at the end the follow19 ing new paragraph:

20 ‘‘(9) Each eligible organization shall assure that en21 rollees requiring renal dialysis services who are tempo22 rarily outside of the organization’s service area (within the

23 United States) have reasonable access to such services

24 by—
69

•HR 4220 IH

1 ‘‘(A) making such arrangements with providers

2 of services or renal dialysis facilities outside the

3 service area for the coverage of and payment for

4 such services furnished to enrollees as the Secretary

5 determines necessary to assure reasonable access; or

6 ‘‘(B) providing for the reimbursement of any

7 provider of services or renal dialysis facility outside

8 the service area for the furnishing of such services

9 to enrollees.’’.

10 SEC. 206. COORDINATION OF MEDICARE ENROLLMENT.

11 (a) UNIFORM OPEN ENROLLMENT PERIODS.—

12 (1) FOR MEDIGAP PLANS.—Section 1882(s) of

13 such Act (42 U.S.C. 1395ss(s)), as amended by sec14 tions 202(a) and 203(a), is amended—

15 (A) by redesignating paragraph (5) as

16 paragraph (6), and

17 (B) by inserting after paragraph (4) the

18 following new paragraph:

19 ‘‘(5) Each issuer of a Medicare supplemental policy

20 shall have an open enrollment period (which shall be the

21 period specified by the Secretary under section

22 1876(c)(3)(A)(i)), of at least 30 days duration every year,

23 during which the issuer may not deny or condition the is24 suance or effectiveness of a Medicare supplemental policy,

25 or discriminate in the pricing of the policy, because of age,
70

•HR 4220 IH

1 health status, claims experience, receipt of health care, or

2 medical condition. The policy may not provide any time

3 period applicable to pre-existing conditions, waiting peri4 ods, elimination periods, and probationary periods (except

5 as provided by paragraph (2)(B)). The Secretary may re6 quire enrollment through a third party designated under

7 section 1876(c)(3)(B).’’.

8 (2) FOR MEDICARE SELECT POLICIES.—Section

9 1882(t)(5) of such Act (42 U.S.C. 1395ss(t)(5)), as

10 added by section 204(6), is amended by adding at

11 the end the following new subparagraph:

12 ‘‘(C) The periods for enrollment applicable for

13 the policy are the same periods applicable to a Medi14 care supplemental policy under section 1882(s)(4).’’.

15 (b) ENROLLMENTS FOR NEW MEDICARE BENE16 FICIARIES AND THOSE WHO MOVE.—Section

17 1876(c)(3)(A) of such Act (42 U.S.C. 1395mm(c)(3)(A))

18 is amended—

19 (1) in clause (i), by striking ‘‘clause (ii)’’ and

20 inserting ‘‘clauses (ii) through (iv)’’, and

21 (2) by adding at the end the following:

22 ‘‘(iii) Each eligible organization shall have an open

23 enrollment period for each individual eligible to enroll

24 under subsection (d) during any enrollment period speci25 fied by section 1837 that applies to that individual. Enroll-
71

•HR 4220 IH

1 ment under this clause shall be effective as specified by

2 section 1838.

3 ‘‘(iv) Each eligible organization shall have an open

4 enrollment period for each individual eligible to enroll

5 under subsection (d) who has previously resided outside

6 the geographic area which the organization serves. The en7 rollment period shall begin with the beginning of the

8 month that precedes the month in which the individual

9 becomes a resident of that geographic area and shall end

10 at the end of the following month. Enrollment under this

11 clause shall be effective as of the first of the month follow12 ing the month in which the individual enrolls.’’.

13 (c) PROVISION BY SECRETARY OF ENROLLMENT IN14 FORMATION AND OTHER INFORMATION ON ELIGIBLE OR15 GANIZATIONS AND MEDICARE SUPPLEMENTAL POLI16 CIES.—

17 (1) IN GENERAL.—Section 1804(b) of such Act

18 (42 U.S.C. 1395b–2(b)) is amended to read as fol19 lows:

20 ‘‘(b) The Secretary shall provide information upon re21 quest (including through the mails and via a toll-free tele22 phone number) to any individual entitled to benefits under

23 this title on the programs under this title, including—

24 ‘‘(1) information to assist individuals in enroll25 ing with eligible organizations under section 1876
72

•HR 4220 IH

1 and in selecting among such organizations for enroll2 ment, including information on the premiums

3 charged by such organizations for enrollment; and

4 ‘‘(2) information on Medicare supplemental

5 policies under section 1882, including the relation6 ship of State programs under title XIX to such poli7 cies and the premiums charged by such policies for

8 enrollment (to the extent information on such pre9 miums is available to the Secretary).’’.

10 (2) CONFORMING AMENDMENT.—Section

11 1882(f) of such Act (42 U.S.C. 1395ss(f)) is re12 pealed.

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section apply to enrollments occurring after 1997 (but

15 only after the Secretary of Health and Human Services

16 has prescribed the relevant annual period), except that the

17 amendments made by subsection (b)(2) apply to enroll18 ments for a Medicare supplemental policy made after

19 1997.

20 TITLE III—MEDICAID

21 SEC. 301. PROHIBITION ON PAYMENTS UNDER MEDICAID

22 UNTIL COMPLETION OF ORIENTATION, MEDI23 CAL PROFILE, AND IMMUNIZATION.

24 (a) REQUIREMENT FOR ORIENTATION AND MEDICAL

25 PROFILE.—
73

•HR 4220 IH

1 (1) IN GENERAL.—Notwithstanding any other

2 provision of law, no payment shall be made to a

3 State under title XIX of the Social Security Act with

4 respect to expenditures incurred by it for payment

5 (determined under a prepaid capitation basis or

6 under any other risk basis) for services provided by

7 any entity (including a health insuring organization)

8 for an individual enrolled with the entity until the

9 entity certifies to the Secretary of Health and

10 Human Services that—

11 (A) the entity has provided the enrollee

12 with such orientation as the Secretary of

13 Health and Human Services specifies, which

14 orientation shall include the explanation of

15 rights described in paragraph (2) and the expla16 nation of access to care described in paragraph

17 (3);

18 (B) the entity has a medical profile de19 scribed in section 1876(c)(3)(G)(iii) of the So20 cial Security Act (as added by section 201(a))

21 with respect to the enrollee; and

22 (C) if the entity is responsible for the pro23 vision (directly or through arrangements with

24 providers of services) of immunizations for an

25 enrollee who is a child—
74

•HR 4220 IH

1 (i) the entity has obtained the immu2 nization status of such child, and

3 (ii) the entity has begun to provide

4 (or is providing) for immunizations of such

5 child in accordance with the standards es6 tablished for early and periodic screening,

7 diagnostic, and treatment services under

8 such title.

9 (2) EXPLANATION OF RIGHTS.—The expla10 nation of rights described in this paragraph shall in11 clude an explanation of an enrollee’s rights under

12 such title in relation to enrollment with the entity,

13 including an explanation of—

14 (A) the enrollee’s rights to benefits from the en15 tity,

16 (B) the restrictions on payments under such

17 title for services furnished other than by or through

18 the entity,

19 (C) out-of-area coverage provided by the entity,

20 (D) the entity’s coverage of emergency services

21 and urgently needed care, and

22 (E) appeal rights of enrollees.

23 (3) EXPLANATION OF ACCESS TO CARE.—The

24 explanation of access to care described in this para25 graph includes an explanation of the following fea-
75

•HR 4220 IH

1 tures of the benefits offered by the entity under such

2 title:

3 (A) Access to care, including choice of phy4 sician, physician location, and hospital coverage.

5 (B) The information required under sec6 tion 9914 of the Internal Revenue Code of

7 1986.

8 (b) PROMULGATION OF REQUIREMENTS FOR ORI9 ENTATION AND MEDICAL PROFILE.—Not later that 180

10 days after the date of the enactment of this Act, the Sec11 retary of Health and Human Services shall, by rule, first

12 specify the elements of the orientation and of the medical

13 profile described in section 1876(c)(3)(G) of the Social Se14 curity Act. Chapter 8 of title 5, United States Code, shall

15 not apply to such rule. Such rule shall apply on a final

16 basis, pending notice and opportunity for public comment.

17 (c) EFFECTIVE DATES.—

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

19 subsection (a) applies with respect to enrollees as of

20 the date that is 60 days after the date on which the

21 Secretary first publishes the rule under subsection

22 (b) in the Federal Register.

23 (2) IMMUNIZATION REQUIREMENTS.—Sub24 section (a)(1)(C) applies with respect to enrollees as

25 of the first day of the first month that begins more
76

•HR 4220 IH

1 than 60 days after the date on which the Secretary

2 first publishes the rule under subsection (b) in the

3 Federal Register.

4 SEC. 302. REQUIREMENT FOR MEDICAID CAPITATED PLANS

5 TO ASSURE APPROPRIATE CHILDHOOD IM6 MUNIZATIONS.

7 (a) IN GENERAL.—Notwithstanding any other provi8 sion of law, no payment shall be made to a State under

9 title XIX of the Social Security Act with respect to ex10 penditures incurred by it for payment (determined under

11 a prepaid capitation basis or under any other risk basis)

12 for services provided by any entity (including a health in13 suring organization) which is responsible for the provision

14 (directly or through arrangements with providers of serv15 ices) of immunizations for children unless (and until)—

16 (1) the entity has obtained the immunization

17 status of each child enrolled with the entity, and

18 (2) the entity has begun to provide (or is pro19 viding) for immunizations of each such child in ac20 cordance with the standards established for early

21 and periodic screening, diagnostic, and treatment

22 services under such title.
77

•HR 4220 IH

1 (b) EFFECTIVE DATE.—Subsection (a) shall apply to

2 expenditures by States for months beginning more than

3 180 days after the date of the enactment of this Act.

Æ