I

104TH CONGRESS

2D SESSION H. R. 4315

To provide patients with information and rights to promote better health

care.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 28, 1996

Mr. OWENS (for himself, Ms. NORTON, Ms. MCKINNEY, Mr. FRAZER, Mr.

YATES, Mr. DELLUMS, Mr. PAYNE of New Jersey, Mr. HILLIARD, Mr.

KILDEE, and Mrs. MINK of Hawaii) introduced the following bill; which

was referred to the Committee on Commerce, and in addition to the Committee on Ways and Means, 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 provide patients with information and rights to promote

better health care.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Patient and Health Care Provider Protection Act of

6 1996’’.

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

8 this Act is as follows:
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Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Definitions.

TITLE I—HEALTH PLAN REQUIREMENTS

Sec. 101. Interference with medical communication prohibited.

Sec. 102. Improper incentive plan prohibited.

Sec. 103. Provisions regarding denial of care.

Sec. 104. Quality of care.

Sec. 105. Privacy.

Sec. 106. Fee.

Sec. 107. Enforcement through civil penalties.

Sec. 108. Prohibition on adverse action.

TITLE II—OFFICE OF CONSUMER ADVOCACY FOR HEALTH

Sec. 201. Establishment of office.

Sec. 202. Assistance to individuals with grievances against a health plan.

Sec. 203. Assurance of access by all individuals to quality health care.

Sec. 204. Federal investigation and emergency intervention.

Sec. 205. Annual report to the secretary.

Sec. 206. Office administration.

Sec. 207. Oversight.

Sec. 208. Funding of office.

TITLE III—INDEPENDENT CONSUMER ADVISORY COMMITTEES

Sec. 301. Establishment of committees.

Sec. 302. Membership and chair.

Sec. 303. Functions of committee.

Sec. 304. Liability of members of committee.

Sec. 305. Annual report to office.

Sec. 306. Funding for committees.

TITLE IV—COORDINATION AMONG OFFICE, COMMITTEES, AND

SECRETARY

Sec. 401. Interaction among office and other organizations.

Sec. 402. Assistance to committees.

Sec. 403. Coordinated data analysis and dissemination procedure.

1 SEC. 2. FINDINGS.

2 The Congress finds the following:

3 (1) The largest category of health spending is

4 hospital services; in 1994, 35 percent of national

5 health spending was for hospital services worth

6 $338,500,000,000.
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1 (2) The hospital industry exhibits the fastest

2 rising costs in the health care sector.

3 (3) The largest expenditures for the hospital in4 dustry are payroll (wages and salaries) and employee

5 benefits; in 1992, payroll and employee benefits ac6 counted for almost 55 percent of total hospital ex7 penses.

8 (4) Because registered nurses comprise the ma9 jority of a hospital’s expenses, in an effort to remain

10 competitive, hospitals are restructuring their oper11 ations by decreasing payroll and benefit outlays for

12 registered nurses and either decreasing their number

13 or replacing them with unlicensed aides to care di14 rectly for patients.

15 (5) While this reorganization is taking place, no

16 mandatory, national, and systematic compilation of

17 data is being undertaken to determine the correla18 tion between skilled nursing care and patient safety.

19 (6) Several studies, however, have noted a basic

20 relationship between skilled nursing care and patient

21 safety: increased deaths result when inadequate

22 nursing and lower levels of registered nurses in com23 bination with higher levels of unlicensed aides are

24 utilized by health care facilities.
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1 (7) A comprehensive effort is needed at the na2 tional level to collect data and develop a research

3 and evaluation agenda so that informed policy devel4 opment, implementation and evaluation are under5 taken in a timely manner to protect the safety of pa6 tients, the well being of health care workers, and the

7 integrity of the United States medical system.

8 (8) The quality of available health care will suf9 fer in the United States if health care delivery is al10 lowed to set priorities in which profit is made at the

11 expense of patient care quality and safety.

12 (9) Core clinical staff, such as registered

13 nurses, are a key component in increasing quality,

14 understanding patient care needs, and balancing

15 costs in any reformed health care system.

16 (10) Health care is a basic and universal need;

17 therefore, the right of any consumer to have access

18 to one’s own confidential medical records and perti19 nent information on the health care facility that is

20 delivering health care and to participate effectively

21 in the process of improving the delivery and quality

22 of such care should not be impaired.

23 SEC. 3. DEFINITIONS.

24 In this Act:
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1 (1) HEALTH CARE PROVIDER.—The term

2 ‘‘health care provider’’ means an individual or entity

3 licensed or certified under State law to provide

4 health care services.

5 (2) HEALTH PLAN.—The term ‘‘health plan’’

6 means any private health plan or arrangement (in7 cluding an employee welfare benefit plan) which pro8 vides, or pays the cost of, health care services.

9 (3) SECRETARY.—Except as otherwise expressly

10 provided, the term ‘‘Secretary’’ means Secretary of

11 Health and Human Services.

12 (4) COVERAGE OF THIRD PARTY ADMINISTRA13 TORS.—In the case of a health plan that is an em14 ployee welfare benefit plan (as defined in section

15 3(1) of the Employee Retirement Income Security

16 Act of 1974), any third party administrator or other

17 person with responsibility for contracts with health

18 care providers under the plan shall be considered,

19 for purposes of this Act, to be an entity offering

20 such health plan.

21 (5) ENROLLEE.—The term ‘‘enrollee’’ means a

22 person enrolled under a health plan.

23 (6) OFFICE.—The term ‘‘Office’’ means the Of24 fice of Consumer Advocacy for Health as described

25 in title II of this Act.
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1 (7) COMMITTEE.—The term ‘‘Committee’’

2 means an Independent Consumer Advisory Commit3 tee as described in title III of this Act.

4 TITLE I—HEALTH PLAN

5 REQUIREMENTS

6 SEC. 101. INTERFERENCE WITH MEDICAL COMMUNICATION

7 PROHIBITED.

8 (a) IN GENERAL.—A health plan may not as part of

9 any contract or agreement with a health care provider pro10 vide any restriction on or interference with any medical

11 communication, as defined in subsection (b).

12 (b) MEDICAL COMMUNICATION DEFINED.—For pur13 poses of subsection (a), the term ‘‘medical communica14 tion’’—

15 (1) means any communication, other than a

16 knowing misrepresentation, made by the health care

17 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 health plan or another health plan relating to

22 such needs or treatment; and

23 (B) between—
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1 (i) the provider and a current, former,

2 or prospective patient (or the guardian or

3 legal representative of a patient);

4 (ii) the provider and any employee or

5 representative of the such plan; or

6 (iii) the provider and any employee or

7 representative of any State or Federal au8 thority with responsibility for the licensing

9 or oversight with respect to such plan; and

10 (2) includes communications concerning—

11 (A) any tests, consultations, and treatment

12 options;

13 (B) any risks or benefits associated with

14 such test, consultations, and options;

15 (C) variation among any health care pro16 viders and any institutions providing such serv17 ices in experience, quality, or outcomes;

18 (D) the basis or standard for the decision

19 of a health plan to authorize or deny health

20 care services or benefits;

21 (E) the process used by such a plan to de22 termine whether to authorize or deny health

23 care services or benefits; and
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1 (F) any financial incentives or disincen2 tives provided by such a plan to a health care

3 provider that are based on service utilization.

4 (c) NON-PREEMPTION OF STATE LAW.—A State may

5 establish or enforce requirements with respect to the sub6 ject matter of this section, but only if such requirements

7 are more protective of a medical communication than the

8 requirements established under this section.

9 (d) EFFECTIVE DATE.—Subsection (a) shall apply to

10 contracts or agreements entered into or renewed on or

11 after the date of the enactment of this Act, and to con12 tracts and agreements entered into before such date as

13 of 30 days after the date of the enactment of this Act.

14 SEC. 102. IMPROPER INCENTIVE PLAN PROHIBITED.

15 (a) IN GENERAL.—A health plan may not as part of

16 any contract or agreement with a health care provider op17 erate an improper health care provider incentive plan as

18 described in subsection (b).

19 (b) IMPROPER INCENTIVE PLAN.—For purposes of

20 subsection (a), a health care provider incentive plan is im21 proper, unless such plan meets the requirements of section

22 1876(i)(8)(A) of the Social Security Act (42 U.S.C.

23 1395mm(i)(8)(A)) for physician incentive plans in con24 tracts with eligible organizations under section 1876 of

25 such Act.
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1 (c) INCENTIVE PLAN DEFINED.—In this section, the

2 term ‘‘health care provider incentive plan’’ means any

3 compensation or other financial arrangement between a

4 health plan and a health care provider that may directly

5 or indirectly have the effect of limiting services provided

6 with respect to an enrollee.

7 (d) EFFECTIVE DATE.—Subsection (a) shall apply to

8 contracts or agreements entered into or renewed on or

9 after the date of the enactment of this Act, and to con10 tracts and agreements entered into before such date as

11 of 30 days after the date of the enactment of this Act.

12 SEC. 103. PROVISIONS REGARDING DENIAL OF CARE.

13 (a) CRITERIA FOR DENIAL OF CARE.—A health plan

14 shall establish criteria, in consultation with the health care

15 providers who provide services under the plan, for the de16 nial of services under the plan.

17 (b) PRELIMINARY PHYSICAL EXAMINATION.—A

18 health plan shall provide for an initial physical examina19 tion of an enrollee in a timely manner before denying serv20 ices under the plan to the enrollee. Such examination shall

21 not constitute services under the health plan.

22 (c) REASON FOR DENIAL OF CARE PROVIDED TO

23 ENROLLEE.—A health plan shall provide in writing to an

24 enrollee, and to the health care provider recommending
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1 care for the enrollee, the reason for the denial of services

2 under the plan to the enrollee.

3 (d) PUBLICATION OF CRITERIA FOR DENIAL OF

4 CARE.—A health plan shall put in writing, annually up5 date, and make available to its enrollees through the Of6 fice and its Committee the written criteria established

7 under subsection (a).

8 (e) EFFECTIVE DATE.—The criteria under this sec9 tion shall apply to plan years beginning on or after 180

10 days after the date of the enactment of this Act.

11 SEC. 104. QUALITY OF CARE.

12 (a) CRITERIA FOR QUALITY OF CARE.—

13 (1) IN GENERAL.—A health plan, in consulta14 tion with the health care providers who provide

15 health services under the plan, shall establish cri16 teria to assure the quality of care provided under the

17 plan. Such plan shall establish such criteria utilizing

18 the data collected and analyzed under subsection (c)

19 and (d), and under section 403.

20 (2) DEADLINE.—The criteria under paragraph

21 (1) shall apply to plan years beginning on or after

22 2 years after the date of the enactment of this Act.

23 (b) PUBLIC ACCESS TO INFORMATION.—

24 (1) PUBLICATION OF CRITERIA TO ASSURE

25 QUALITY OF CARE.—A health plan shall put in writ-
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1 ing, annually update, and make available the written

2 criteria established under subsection (a) to its enroll3 ees through the plan’s Committee.

4 (2) SAFE STAFFING LEVELS.—

5 (A) IN GENERAL.—Not later than 1 year

6 after the date of the enactment of this Act, the

7 Secretary shall, by rule, establish guidelines

8 that determine the number and classifications

9 of health care providers necessary to ensure

10 safe and adequate staffing in relation to enroll11 ees under a health plan.

12 (B) FACTORS.—Such guidelines shall be

13 based on—

14 (i) the severity of illness of each en15 rollee;

16 (ii) factors affecting the period and

17 quality of recovery of each enrollee; and

18 (iii) any other factor substantially re19 lated to the condition and health care

20 needs of each enrollee.

21 (3) SAFE AND ADEQUATE STAFFING LEVELS.—

22 (A) IN GENERAL.—Not later than 180

23 days after the date the Secretary establishes the

24 guidelines under paragraph (2), a health plan

25 may not provide or pay for health care services
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1 provided to an enrollee at an institution unless

2 such institution complies with such guidelines.

3 (B) SUBMISSION OF PROPOSED STAND4 ARDS TO COMMITTEE.—In the case of an insti5 tution that elects not to adopt the guidelines es6 tablished under paragraph (2), such institution

7 shall submit proposed staffing levels to the

8 health plan and its Committee for review. Such

9 institution shall include with its submission an

10 explanation of the method and criteria used in

11 developing the proposed staffing levels.

12 (C) DEFAULT FEDERAL GUIDELINES.—If

13 the health plan’s Committee determines that

14 the staffing levels proposed by such institution

15 fail to meet the guidelines established under

16 paragraph (2), then the health plan may not

17 provide or pay for health care services provided

18 to an enrollee at such institution unless such in19 stitution adopts such guidelines as its staffing

20 levels.

21 (D) CRITERIA AND CERTIFICATE OF COM22 PLIANCE.—Such plan shall file with the Sec23 retary and the Office of the State in which the

24 plan offers health care services a certificate of

25 compliance with the staffing levels adopted by
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1 the institutions where the plan provides or pays

2 for health care services for its enrollees.

3 (E) PUBLIC INSPECTION.—Such institu4 tions shall keep on file, available for public in5 spection during regular business hours, daily re6 ports of staffing levels by department and of

7 patient census.

8 (4) IDENTIFICATION TAG.—

9 (A) IN GENERAL.—A health plan may not

10 provide or pay for health care services provided

11 to an enrollee at an institution unless such in12 stitution prohibits a health care provider who is

13 not wearing an identification tag from providing

14 care to an enrollee.

15 (B) LICENSURE STATUS.—An identifica16 tion tag under subparagraph (A) shall state the

17 health care provider’s name and the health care

18 position for which such provider has been li19 censed or certified by the State.

20 (C) VISIBILITY.—Such tag shall be visible

21 to the enrollee.

22 (D) EXCEPTION.—The requirement under

23 subparagraph (A) shall not apply where wear24 ing such tag poses a threat to the health of a

25 patient (such as in an operating room).
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1 (c) DATA COLLECTION.—

2 (1) MEDICAL DATA.—Except as provided in

3 section 105(a), a health plan, in conjunction with its

4 Committee, shall compile data on health care serv5 ices provided to enrollees under the health plan in6 cluding—

7 (A) enrollee outcome information, includ8 ing nosocomial infections, medication errors, en9 rollee injury, enrollee mortality, and rate of en10 rollee readmission;

11 (B) structure of care provided, including

12 nurse to enrollee ratios, general staffing ratios,

13 injuries to nurses and other staff, and quality

14 of staff; and

15 (C) process of care, including the planning

16 and delivery of care, an assessment of the deliv17 ery mechanisms, and safety measures.

18 (2) FINANCIAL DATA.—

19 (A) FINANCIAL REPORT.—Not later than

20 December 31st of each year, a health plan that

21 employs more than 150 individuals shall file,

22 with the Office of the State in which such plan

23 offers health care services, a copy of—
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1 (i) any financial report or return filed

2 under Federal or State tax or securities

3 laws;

4 (ii) a statement of any financial inter5 est greater than 5% or $5,000, whichever

6 is less, in any other health plan; and

7 (iii) a statement of the nature and

8 outcome of any complaint, lawsuit, arbitra9 tion, or other legal proceeding brought

10 against the plan, unless such disclosure is

11 prohibited by court order or law.

12 (B) QUALITY REPORT.—Not later than

13 December 31st of each year, a health plan shall

14 file, with the Office of the State in which that

15 plan offers health care services, a report of all

16 health care quality indicators, criteria, data, or

17 studies used to evaluate, assess, or determine

18 the nature, scope, quality, or staffing of health

19 care services, and for reductions in or modifica20 tions of the provision of health care services.

21 (C) FIRST REPORT.— Such plan shall file

22 its first report not later than December 31st of

23 its first plan year beginning on or after the

24 date of the enactment of this Act.

25 (d) DATA ANALYSIS AND DISSEMINATION.—
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1 (1) INFORMATION SUBMITTED TO COMMIT2 TEE.—For purposes of section 403, a health plan

3 shall provide the data collected under subsection

4 (c)(1) to its Committee.

5 (2) DISCLOSURE OF NURSING CARE DATA TO

6 ENROLLEES.—Such plan shall provide information

7 to an enrollee about the ratio of nurses to enrollees

8 provided under the plan.

9 SEC. 105. PRIVACY.

10 (a) ENROLLEE’S PRIVACY RIGHTS.—Prior to the col11 lection of data under section 104(c), a health plan shall

12 establish standards and procedures to protect from public

13 disclosure information that identifies an individual and re14 lates to such individual’s physical or mental health. Such

15 standards and procedures may not adversely affect the in16 tegrity of the data.

17 (b) ENROLLEE’S MEDICAL RECORDS.—A health plan

18 shall protect the privacy of a enrollee’s medical records,

19 and may only release such records—

20 (1) to a third party with the informed written

21 consent of the enrollee given at the time the release

22 is sought;

23 (2) to a law enforcement agency pursuant to a

24 warrant issued under the Federal Rules of Criminal
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1 Procedure, an equivalent State warrant, a grand

2 jury subpoena, or a court order; or

3 (3) pursuant to a court order, in a civil pro4 ceeding upon a showing of compelling need for the

5 information that cannot be accommodated by any

6 other means, if—

7 (A) the enrollee is given reasonable notice,

8 by the person seeking the release, of the court

9 proceeding relevant to the issuance of the court

10 order; and

11 (B) the enrollee is afforded the opportunity

12 to appear and contest the claim of the person

13 seeking the release.

14 (c) EFFECTIVE DATE.—Subsection (b) takes effect

15 30 days after the date of the enactment of this Act.

16 SEC. 106. FEE.

17 (a) IN GENERAL.—A health plan, in each State

18 where the plan offers health care services, shall pay to the

19 State 1 percent of the total amount of the annual pre20 miums for each year with respect to enrollment in the

21 health plan for such year of individuals residing in the

22 State, as described in section 208.

23 (b) FIRST PAYMENT.—

24 (1) IN GENERAL.—A health plan shall make the

25 first payment under subsection (a) not later than 6
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1 months after the first day of the first full month

2 after the date of the enactment of this Act.

3 (2) PAYMENTS PRORATED FROM DATE OF EN4 ACTMENT.—Payments due under subsection (a) for

5 the year in which this Act is enacted shall be pro6 rated to apply only with respect to months beginning

7 on or after the date of the enactment of this Act.

8 (c) STATE DEFINED.—As used in subsection (a), the

9 term ‘‘State’’ includes the District of Columbia, Puerto

10 Rico, the Virgin Islands, Guam, American Samoa, and the

11 Northern Mariana Islands.

12 SEC. 107. ENFORCEMENT THROUGH CIVIL PENALTIES.

13 (a) ENFORCEMENT THROUGH IMPOSITION OF CIVIL

14 MONEY PENALTY.—A health plan that violates any provi15 sion of sections 101 through 106 shall be subject to a civil

16 money penalty of—

17 (1) up to $25,000 for each violation; or

18 (2) up to $100,000 for each violation if the Sec19 retary determines that the plan has engaged, within

20 the 5 years immediately preceding such violation, in

21 a pattern of such violations.

22 (b) PROCEDURES.—The provisions of subsections (c)

23 through (l) of section 1128A of the Social Security Act

24 (42 U.S.C. 1320a–7a) shall apply to civil money penalties

25 under this section in the same manner as they apply to
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1 a penalty or proceeding under section 1128A(a) of such

2 Act.

3 SEC. 108. PROHIBITION ON ADVERSE ACTION.

4 (a) IN GENERAL.—No health plan may terminate or

5 take other adverse action against any health care provider

6 for actions taken for the purpose of—

7 (1) notifying such plan of conditions which the

8 identifies, in communications with the plan, as dan9 gerous or potentially dangerous or injurious to—

10 (A) enrollees who currently receive health

11 care services under the plan;

12 (B) individuals who are likely to receive

13 such services; or

14 (C) health care providers who provide such

15 services;

16 (2) notifying a Federal or State agency or an

17 accreditation agency, compliance with the standards

18 of which have been deemed to demonstrate compli19 ance with conditions of participation under the Med20 icare program, of such conditions as are identified in

21 paragraph (1);

22 (3) notifying other individuals of conditions

23 which the provider or group of providers reasonably

24 believe to be such as are described in paragraph (1);
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1 (4) discussing such conditions as are identified

2 in paragraph (1) with other providers for the pur3 poses of initiating action described in paragraph (1),

4 (2), or (3);

5 (5) a medical communication, as defined in sec6 tion 101(b); or

7 (6) other related activities as specified in rules

8 made by the Secretary.

9 (b) EXCEPTION.—The protections of this section

10 shall not apply to any health care provider who knowingly

11 or recklessly provides substantially false information to

12 the Secretary.

13 (c) SANCTION.—A determination by the Secretary

14 that a health plan has taken such action as described in

15 subsection (a) shall result in termination from participa16 tion in the Medicare program for a period of time to be

17 specified by the Secretary, such period to be not less than

18 1 month.

19 (d) CIVIL ACTION.—A health care provider aggrieved

20 by a violation of subsection (a) may in a civil action obtain

21 appropriate relief. Such relief may include, with respect

22 to a provider, the reinstatement of the provider to his or

23 her former position under the health plan together with

24 the compensation (including back pay), terms, conditions,

25 and privileges associated with such position.
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1 (e) EFFECTIVE DATE.—Subsection (a) shall apply to

2 actions taken on or after the date of the enactment of this

3 Act, regardless of when the communication on which the

4 action is based occurred.

5 TITLE II—OFFICE OF CONSUMER

6 ADVOCACY FOR HEALTH

7 SEC. 201. ESTABLISHMENT OF OFFICE.

8 (a) IN GENERAL.—The Secretary, in consultation

9 with the Secretary of Labor, shall establish for each State

10 an independent Office for such State to assist consumers

11 in dealing with problems that arise with respect to health

12 plans and health care providers operating in such State.

13 (b) ESTABLISHMENT THROUGH GRANT PROCESS.—

14 (1) IN GENERAL.—The Secretary shall carry

15 out the requirements of subsection (a) with respect

16 to each State by designating a non-profit organiza17 tion located in the State to serve as the Office for

18 the State, under a grant awarded, in consultation

19 with the Secretary of Labor, under a competitive se20 lection process. The grant may be awarded only to

21 organizations headed by an individual with expertise

22 and experience in the fields of health care and

23 consumer advocacy, who shall be designated the

24 Consumer Advocate for Health for the State. In
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1 awarding such grant, the Secretary, in consultation

2 with the Secretary of Labor, shall—

3 (A) consider any nominations submitted by

4 consumer advocacy organizations in the State;

5 and

6 (B) give preference to organizations that

7 represent a broad spectrum of the diverse

8 consumer interests in the State and that have

9 demonstrated a capability of representing, and

10 working with, a broad diversity of consumers,

11 including members of medically underserved

12 communities.

13 (2) REQUIREMENTS.—Each grant awarded

14 under this subsection shall provide as follows:

15 (A) CENTRAL OFFICE.—A central office of

16 the organization awarded the grant which is lo17 cated in the State shall be designated as the

18 Office.

19 (B) LOCAL OFFICES.—The organization

20 awarded the grant shall establish and maintain

21 local offices of the Office in accordance with

22 subsection (c).

23 (C) PERFORMANCE OF SPECIFIED FUNC24 TIONS.—The organization shall perform the

25 functions of the Office specified in this title and
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1 otherwise ensure that the requirements of this

2 section applicable to the Office are met.

3 (D) EVALUATION OF QUALITY AND EFFEC4 TIVENESS OF GRANTEE.—The Secretary, in

5 consultation with the Secretary of Labor, shall

6 evaluate the quality and effectiveness of the or7 ganization in carrying out the functions of the

8 Office.

9 (E) TERM OF GRANT AND RENEWABIL10 ITY.—Each grant shall be awarded for a term

11 of 4 years and shall be renewable for succeeding

12 4-year terms without reopening the competitive

13 selection process if the grantee has performed

14 properly pursuant to this section and the terms

15 of the grant.

16 (F) NOTICE OF INTENT NOT TO RENEW;

17 RECONSIDERATION.—Not later than 180 days

18 before the expiration of any term under a grant

19 awarded to an organization, if the Secretary at

20 such time intends not to renew the grant with

21 such organization, the Secretary shall notify

22 such organization of such intent, and shall pro23 vide such organization an opportunity for recon24 sideration by the Secretary, in consultation with

25 the Secretary of Labor, of the Secretary’s in-
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1 tent not to renew and to present information in

2 support of renewal.

3 (G) TERMINATION BY GRANTEE.—The or4 ganization may terminate the grant prior to its

5 expiration upon 180 days notice to the Sec6 retary.

7 (H) TERMINATION BY THE SECRETARY.—

8 The Secretary, in consultation with the Sec9 retary of Labor, may terminate the grant prior

10 to its expiration upon 180 days notice to the or11 ganization if the Secretary, in consultation with

12 the Secretary of Labor, determines that the or13 ganization is not meeting the requirements of

14 this section or that the organization is failing

15 substantially to carry out the grant. The Sec16 retary, in consultation with the Secretary of

17 Labor, shall provide for an appropriate appeals

18 mechanism, including establishment of a panel

19 of peers, to implement this subparagraph.

20 (c) DELEGATIONS TO LOCAL OFFICES.—

21 (1) IN GENERAL.—The Secretary, in consulta22 tion with the Secretary of Labor, shall provide for

23 appropriate delegation by the Consumer Advocate

24 for Health of the authority and responsibilities of

25 the Office to local offices to the extent necessary to
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1 effectively carry out the duties and responsibilities of

2 the Consumer Advocate for Health throughout the

3 State.

4 (2) MONITORING.—The Secretary, in consulta5 tion with the Secretary of Labor, shall develop and

6 maintain policies and procedures for monitoring

7 such local offices and ensuring compliance by such

8 local offices with the terms of such delegation.

9 (3) PLACEMENT OF LOCAL OFFICE IN EACH

10 COMMUNITY RATING AREA.—

11 (A) IN GENERAL.—Pursuant to such dele12 gation, the Consumer Advocate for Health shall

13 ensure that there is located in each community

14 rating area in the State an officer or employee

15 of the Office who is designated to assist individ16 uals residing in the area with respect to matters

17 relating to health plans and health care provid18 ers operating in the area.

19 (B) ASSIGNMENT OF STAFF FOR EACH

20 PLAN.—Each such office for such area shall

21 have an individual who is assigned with respect

22 to each health plan that enrolls individuals re23 siding in the area. Such an individual may be

24 assigned to more than one plan.
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1 (C) APPROPRIATE STAFFING.—The Office

2 shall ensure that sufficient staff in each local

3 office is assigned to work with respect to mat4 ters relating to each health plan whose enrollees

5 are served by the local office so as to ensure ef6 fective and efficient service in such local office

7 with respect to matters relating to such plan.

8 (d) ESTABLISHMENT OF COMMUNITY RATING

9 AREAS.—

10 (1) IN GENERAL.—The Secretary shall provide

11 for the division of each State into 1 or more commu12 nity rating areas. Each portion of the State shall be

13 within 1, and only 1, community rating area. The

14 Secretary may revise the boundaries of such areas

15 from time to time consistent with this subsection.

16 (2) MULTIPLE AREAS.—With respect to a com17 munity rating area—

18 (A) no metropolitan statistical area in a

19 State may be incorporated into more than 1

20 such area in the State;

21 (B) the number of individuals residing

22 within such an area may not be less than

23 250,000; and
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1 (C) no area incorporated in a community

2 rating area may be incorporated into another

3 such area.

4 (3) BOUNDARIES.—

5 (A) IN GENERAL.—In establishing bound6 aries for community rating areas, the Secretary

7 may not discriminate on the basis of or other8 wise take into account race, age, language, reli9 gion, national origin, socio-economic status, sex10 ual orientation, disability, or perceived health

11 status.

12 (B) TREATMENT OF CONSOLIDATED MET13 ROPOLITAN STATISTICAL AREAS.—A community

14 rating area that includes all of a Consolidated

15 Metropolitan Statistical Area that is within a

16 State is presumed to meet the requirement of

17 subparagraph (A).

18 SEC. 202. ASSISTANCE TO INDIVIDUALS WITH GRIEVANCES

19 AGAINST A HEALTH PLAN.

20 (a) IN GENERAL.—An Office shall provide an individ21 ual assistance with determining, in connection with any

22 stated grievance against a health plan, the manner and

23 extent to which such grievance may be presented as—

24 (1) an issue of denial of items or services, or re25 imbursement therefor;
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1 (2) an issue of denial of medical records;

2 (3) an issue of malpractice;

3 (4) an issue of discrimination;

4 (5) an issue of eligibility and payment of sub5 sidies for premium payments and cost sharing;

6 (6) an issue of enrollment; or

7 (7) any other violation actionable under this

8 Act.

9 (b) GRIEVANCE ASSISTANCE.—Such Office shall pro10 vide, in person and by toll–free telephone access, assist11 ance to an individual with a grievance under subsection

12 (a).

13 (c) COMPLAINT FORMS.—Such Office shall create an

14 instruction sheet that explains how to file, maintain, and

15 resolve a complaint against a health plan, and provide

16 such sheet to an individual seeking to file a complaint

17 against a health plan. Such instruction sheet shall be writ18 ten in plain language understandable by a layperson, and

19 it shall use a step-by-step format to guide the layperson

20 through each stage of the complaint process.

21 SEC. 203. ASSURANCE OF ACCESS BY ALL INDIVIDUALS TO

22 QUALITY HEALTH CARE.

23 (a) IN GENERAL.—An Office shall identify, inves24 tigate, publicize, promote solutions to, and resolve griev25 ances stemming from, any practice, policy, law, or regula-
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1 tion of a health plan that may adversely affect access by

2 an individual to quality health care, including a practice,

3 policy, law, or regulation relating to—

4 (1) marketing of the plan;

5 (2) availability of premium and cost sharing

6 subsidies;

7 (3) accessibility of services and resources in tra8 ditionally underserved areas;

9 (4) targeting of resources to traditionally un10 derserved areas; and

11 (5) elimination of practices that impede access

12 to available choices for individuals at health risk, in13 cluding the proper implementation of community

14 rating and risk adjustments.

15 (b) MONITORING OF HEALTH PLAN DENIAL PROCE16 DURES.—Such Office shall monitor procedures used by

17 health plans for denial of services and for reconsideration

18 of such denials.

19 SEC. 204. FEDERAL INVESTIGATION AND EMERGENCY

20 INTERVENTION.

21 (a) IN GENERAL.—An Office shall provide, in person

22 and by toll–free telephone access, assistance to an individ23 ual who seeks to report dangerous conditions in health

24 care services offered under a health plan.
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1 (b) FEDERAL INTERVENTION.—The Secretary may,

2 in cases of compromised safety that are life threatening,

3 initiate emergency investigation of or remedial interven4 tion in services provided or practices undertaken by a

5 health plan.

6 (c) RULES.—

7 (1) IN GENERAL.—For purposes of subsection

8 (b), the Secretary shall, by rule, establish guidelines

9 for safety.

10 (2) CONSIDERATION OF DATA.—In establishing

11 and reviewing the guidelines under paragraph (1),

12 the Secretary shall base the guidelines to the maxi13 mum extent practicable on the data collected and the

14 analysis performed under this Act.

15 SEC. 205. ANNUAL REPORT TO THE SECRETARY.

16 (a) IN GENERAL.—Not later than December 31st of

17 each year, an Office shall submit a report to the Secretary.

18 (b) CONTENT OF REPORT.—The report required by

19 subsection (a) shall include—

20 (1) the nature of consumer complaints against

21 health plans;

22 (2) the percentage of unresolved or outstanding

23 complaints against health plans;

24 (3) discernible patterns from the data collected;
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1 (4) recommendations for resolution of unre2 solved or outstanding complaints;

3 (5) recommendations to sanction a certain

4 health plan;

5 (6) a copy of any report received from a health

6 plan; and

7 (7) a copy of any report received from the Com8 mittee which reports to such Office.

9 (c) DATE OF FIRST REPORT.—An Office shall file its

10 first report not later than December 31st of the first full

11 calendar year after such Office is established.

12 SEC. 206. OFFICE ADMINISTRATION.

13 (a) IN GENERAL.—An Office shall ensure that indi14 viduals in each community rating area, as defined in sec15 tion 201(d), have regular and timely access to the services

16 provided through the Office and that the individual re17 ceives timely responses from a representative of the Office

18 to a request for assistance with a complaint against a

19 health plan.

20 (b) CONFIDENTIALITY OF COMPLAINANTS.—An Of21 fice shall provide for a system in the Office to treat as

22 confidential any identifying information regarding com23 plainants and other individuals with respect to whom the

24 Office maintain files or records.
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1 (c) PERSONNEL QUALIFICATIONS.—An Office shall

2 establish and implement minimum qualification and train3 ing requirements for personnel, including volunteers.

4 SEC. 207. OVERSIGHT.

5 The Secretary shall ensure that an Office carries out

6 the functions under this title, and such other activities as

7 the Office and the Secretary determine to be appropriate.

8 SEC. 208. FUNDING OF OFFICE.

9 (a) FUNDS HELD IN ESCROW.—In accordance with

10 procedures which shall be made by rule under subsection

11 (d), each State shall provide for a mechanism under which

12 the State shall hold in an escrow account 1 percent of the

13 total amount of the annual premiums for each year with

14 respect to enrollment in a health plan for such year of

15 individuals residing in the State. Any funds held in such

16 escrow account shall be available solely for remittance to

17 the Secretary under subsection (b).

18 (b) REMITTANCE TO SECRETARY.—Not later than

19 December 31 of each calendar year, each State shall remit

20 to the Secretary, in such form and manner as shall be

21 prescribed in regulations, the amounts held in escrow pur22 suant to subsection (a) for the applicable fiscal year end23 ing with or during such calendar year.

24 (c) ALLOCATIONS.—The amounts remitted by each

25 State to the Secretary for each year under subsection (b)
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1 shall be applied towards the establishment and operation

2 of the Office for such State under section 201 (including

3 amounts to be distributed to escrow accounts for Commit4 tees pursuant to section 306).

5 (d) RULES.—Not later than 180 days after the date

6 of the enactment of this Act, the Secretary shall make

7 rules to carry out this section.

8 TITLE III—INDEPENDENT

9 CONSUMER ADVISORY COM10 MITTEES

11 SEC. 301. ESTABLISHMENT OF COMMITTEES.

12 Each health plan shall establish and maintain an

13 Committee.

14 SEC. 302. MEMBERSHIP AND CHAIR.

15 (a) MEMBERSHIP.—

16 (1) IN GENERAL.—A Committee shall consist of

17 not fewer than 25 and not more than 50 members.

18 (2) QUALIFICATIONS.—Except as provided in

19 paragraph (3)(B), members of a Committee shall be

20 selected from enrollees who indicate interest in such

21 positions and who are not health care providers, offi22 cers or employees of any health plan, or employees

23 of a health care provider.

24 (3) METHOD OF SELECTION.—
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1 (A) ENROLLEES.—Except as provided in

2 subparagraph (B), members of a Committee

3 shall be selected biennially at random from each

4 of 4 categories of enrollees, in proportion to

5 their numbers among enrollees represented by

6 the Committee, as follows: senior citizens; par7 ents of children under 18 years of age; individ8 uals with disabilities; and all other enrollees.

9 (B) EMPLOYEES OF HEALTH PLAN.—Each

10 committee shall have as members at least 3, but

11 in no case more than 5, employees of the health

12 plan selected biennially at random from each of

13 3 categories as follows: staff nurses; physicians;

14 and administrators of the health plan.

15 (b) CHAIR.—Each Committee shall be headed by a

16 chair who shall be—

17 (1) a member of the Committee other than a

18 member who is an employee of a health plan; and

19 (2) elected by the Committee at its first meet20 ing.

21 (c) COMPENSATION AND EXPENDITURES FOR SERV22 ICES.—

23 (1) COMPENSATION OF MEMBERS.—Members of

24 each Committee shall serve without compensation,

25 except that the members shall be reimbursed by the
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1 Committee for the reasonable expenses incurred in

2 carrying out their duties as members.

3 (2) EXPENDITURES FOR SERVICES.—The Com4 mittee may provide for acquiring the services of such

5 staff and temporary consultants as may be necessary

6 from time to time to carry out the requirements of

7 this title.

8 SEC. 303. FUNCTIONS OF COMMITTEE.

9 (a) OUTREACH PROGRAMS.—Each Committee shall

10 develop and coordinate programs for outreach to the com11 munity.

12 (b) FORUM TO FACILITATE COMMUNICATION.—Each

13 Committee shall conduct regular meetings of enrollees and

14 representatives of the health plan under such procedural

15 rules as the Committee considers appropriate, so that such

16 meetings will serve as effective forums for facilitating com17 munication between such plan and enrollees.

18 (c) ENSURE ENROLLEE GRIEVANCES ARE AD19 DRESSED.—Each Committee shall conduct such ad hoc

20 meetings and other activities as may enable the Committee

21 to ensure that the grievances of enrollees in the area are

22 generally heard and addressed by the health plan.

23 (d) DISSEMINATION OF CRITERIA FOR ENROLLEE

24 CARE QUALITY.—Each Committee shall provide to the
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1 community the enrollee care quality criteria established by

2 the health plan under section 104(c).

3 (e) EVALUATION OF PERFORMANCE OF OFFICE OF

4 CONSUMER ADVOCACY.—Each Committee shall evaluate

5 annually the performance of the Office for the State in

6 which the health plan is located and make recommenda7 tions to the Secretary regarding the appropriateness for

8 continued service of the Office.

9 SEC. 304. LIABILITY OF MEMBERS OF COMMITTEE.

10 No member of a Committee established under this

11 section shall be liable under any law for the good faith

12 performance of the functions specified in this title.

13 SEC. 305. ANNUAL REPORT TO OFFICE.

14 (a) IN GENERAL.—Not later than December 31st of

15 each year, each Committee shall submit to the Office for

16 the State in which the health plan offers health care serv17 ices a report providing recommendations for improvements

18 in health care delivery under the plan, and including as19 sessments of—

20 (1) the accessibility (by location) of offices and

21 clinics providing items and services under the plan;

22 (2) the condition of health care facilities em23 ployed under the plan;

24 (3) the ease with which prescriptions are filled

25 under the plan;
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1 (4) delays occurring under the plan in receiving

2 requested medical attention;

3 (5) the time spent by enrollees in waiting rooms

4 under the plan;

5 (6) the complexity of paperwork required under

6 the plan;

7 (7) the courtesy of plan personnel; and

8 (8) such other concerns regarding the plan’s

9 system of delivering health care services that the

10 Committee may choose to assess.

11 (b) DATE OF FIRST REPORT.—Each committee shall

12 file its first report not later than December 31st of the

13 first full calendar year after such Committee is estab14 lished.

15 SEC. 306. FUNDING FOR COMMITTEES.

16 (a) ESCROW ACCOUNT FOR COMMITTEES.—In ac17 cordance with procedures which shall be made by rule

18 under subsection (e), an Office shall establish and main19 tain an escrow account for each Committee established in

20 the State served by the Office.

21 (b) DISTRIBUTION OF FUNDS TO ESCROW ACCOUNT

22 FOR COMMITTEES.—The Office shall annually distribute

23 an amount equal to 25 percent of the total amount remit24 ted for the year to the Secretary by the State under sec25 tion 208, on the basis of which funds are made available
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1 to the Office for the year under title II, in the form of

2 deposits to the escrow accounts maintained by the Office

3 for Committees pursuant to subsection (a). The amounts

4 deposited to such escrow accounts shall be in proportion

5 to the numbers of enrollees represented by the Committees

6 for which such escrow accounts are maintained.

7 (c) WITHDRAWAL OF FUNDS FOR COMMITTEE AT

8 THE REQUEST OF THE CHAIR.—The funds maintained in

9 each such escrow account for a Committee shall be made

10 available for withdrawal by the chair of the Committee

11 upon request of the chair, specifying in writing the pur12 pose for the withdrawal.

13 (d) ANNUAL ACCOUNTING.—The Office shall provide

14 the Secretary an annual accounting of the receipts and

15 disbursements made with respect to each such escrow ac16 count.

17 (e) RULES.—Not later than 180 days after the date

18 of the enactment of this Act, the Secretary shall make

19 rules to carry out this section.

20 (f) RESTRICTION ON USE OF FUNDS.—Funds with21 drawn from an escrow account maintained pursuant to

22 this section for a Committee established pursuant to this

23 title shall be used by the Committee solely for purposes

24 of carrying out its duties under this title.
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1 TITLE IV—COORDINATION

2 AMONG OFFICE, COMMIT3 TEES, AND SECRETARY

4 SEC. 401. INTERACTION AMONG OFFICE AND OTHER ORGA5 NIZATIONS.

6 An Office shall establish and maintain a system of

7 referrals among the Office, other consumer advocacy orga8 nizations, legal assistance providers serving low-income

9 persons, and protection and advocacy systems for individ10 uals with disabilities.

11 SEC. 402. ASSISTANCE TO COMMITTEES.

12 An Office shall provide technical assistance to the

13 Committees maintained by health plans pursuant to sec14 tion 301, and distribute and account for funding for such

15 Committees in accordance with section 306.

16 SEC. 403. COORDINATED DATA ANALYSIS AND DISSEMINA17 TION PROCEDURE.

18 (a) DATA COMPILATION AND SUBMISSION.—

19 (1) IN GENERAL.—Not later than December

20 31st of each year, each Committee shall compile the

21 enrollee quality care data collected under section

22 104(c) and shall submit such data to the Office from

23 which such Committee received its funds under sec24 tion 306.
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1 (2) TRANSMISSION FROM OFFICE TO SEC2 RETARY.—Not later than 30 days after the receipt

3 of the data submitted by the Committees under

4 paragraph (1), the Office shall compile all data re5 ceived from the Committees to which it transmits

6 funds under section 306 and shall submit such data

7 to the Secretary.

8 (b) DATA ANALYSIS AND PUBLICATION.—The Sec9 retary shall analyze the data received under subsection

10 (a)(2) with the purpose of using such data to develop Fed11 eral guidelines for patient care quality and shall publish

12 its findings.

13 (c) USE OF GUIDELINES FOR EVALUATION OF

14 HEALTH PLAN.—An Office and the Committees shall use

15 such findings and guidelines to evaluate the performance

16 of health plans operating in their community rating areas.

17 If an order is granted pursuant to subparagraph (C) or

18 (F), the court shall impose appropriate safeguards against

19 unauthorized disclosure. Court orders authorizing disclo20 sure under subparagraph (C) shall issue only with prior

21 notice to the consumer and only if the law enforcement

22 agency shows that there is probable cause to believe that

23 the records or other information sought are relevant to

24 a legitimate law enforcement inquiry. In the case of a

25 State government authority, such a court order shall not
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1 issue if prohibited by the law of such State. A court issu2 ing an order pursuant to this section, on a motion made

3 promptly by the video tape service provider, may quash

4 or modify such order if the information or records re5 quested are unreasonably voluminous in nature or if com6 pliance with such order otherwise would cause an unrea7 sonable burden on such provider.

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