I

105TH CONGRESS

1ST SESSION H. R. 66

To amend title XVIII of the Social Security Act to provide protections

for Medicare beneficiaries who enroll in Medicare managed care plans.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 7, 1997

Mr. COBURN (for himself and Mr. BROWN of Ohio) 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 title XVIII of the Social Security Act to provide

protections for Medicare beneficiaries who enroll in Medicare managed care plans.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Medicare Patient

5 Choice and Access Act of 1997’’.

6 SEC. 2. FINDINGS.

7 Congress finds the following:
2

•HR 66 IH

1 (1) There should be no unreasonable barriers or

2 impediments to the ability of individuals enrolled in

3 health care plans to obtain appropriate specialized

4 medical services.

5 (2) The patient’s first point of contact in a

6 health care plan must be encouraged to make all ap7 propriate medical referrals and should not be con8 strained financially from making such referrals.

9 (3) Some health care plans may impede timely

10 access to specialty care.

11 (4) Some contracts between health care plans

12 and providers may contain provisions which impede

13 the provider in informing the patient of the full

14 range of treatment options.

15 (5) Patients cannot make appropriate health

16 care decisions without access to all relevant informa17 tion relating to those decisions.

18 (6) Restrictions on the ability of health care

19 providers to provide full disclosure of all relevant in20 formation to patients making health care decisions

21 violate the principles of informed consent and the

22 ethical standards of the health care professions.

23 Contractual clauses and other policies that interfere

24 with communications between health care providers
3

•HR 66 IH

1 and patients can impact the quality of care received

2 by those patients.

3 (7) Patients should have the opportunity to ac4 cess out-of-network items, treatment, and services at

5 an additional cost to the patient which is not so pro6 hibitive that they are deterred from seeing the

7 health care provider of their own choice.

8 (8) Specialty care must be available for the full

9 duration of the patient’s medical needs and not lim10 ited by time or number of visits.

11 (9) Direct access to specialty care is essential

12 for patients in emergency and non-emergency situa13 tions and for patients with chronic and temporary

14 conditions.

15 SEC. 3. PROTECTION FOR MEDICARE HMO ENROLLEES.

16 (a) IN GENERAL.—Section 1876 of the Social Secu17 rity Act (42 U.S.C. 1395mm) is amended—

18 (1) in subsection (c)(1), by striking ‘‘subsection

19 (e)’’ and inserting ‘‘subsections (e) and (k)’’, and

20 (2) by adding at the end the following new sub21 section:

22 ‘‘(k) BENEFICIARY PROTECTION.—

23 ‘‘(1) ASSURING ADEQUATE IN-NETWORK AC24 CESS.—
4

•HR 66 IH

1 ‘‘(A) TIMELY ACCESS.—An eligible organi2 zation that restricts the providers from whom

3 benefits may be obtained must guarantee to en4 rollees under this section timely access to pri5 mary and specialty health care providers who

6 are appropriate to the enrollee’s condition.

7 ‘‘(B) ACCESS TO SPECIALIZED CARE.—En8 rollees must have access to specialized treat9 ment when necessary. This access may be satis10 fied through contractual arrangements with

11 specialized providers outside of the network.

12 ‘‘(C) CONTINUITY OF CARE.—An eligible

13 organization’s use of case management may not

14 create an undue burden for enrollees under this

15 section. An organization must ensure direct ac16 cess to specialists for ongoing care as so deter17 mined by the case manager in consultation with

18 the specialty care provider. This continuity of

19 care may be satisfied for enrollees with chronic

20 conditions through the use of a specialist serv21 ing as case manager.

22 ‘‘(2) OUT-OF-NETWORK ACCESS.—If an eligible

23 organization offers to members enrolled under this

24 section a plan which provides for coverage of services

25 covered under parts A and B only if such services
5

•HR 66 IH

1 are furnished through providers and other persons

2 who are members of a network of providers and

3 other persons who have entered into a contract with

4 the organization to provide such services, the con5 tract with the organization under this section shall

6 provide that the organization shall also offer to

7 members enrolled under this section (at the time of

8 enrollment) a plan which provides for coverage of

9 such items which are not furnished through provid10 ers and other persons who are members of such a

11 network.

12 ‘‘(3) GRIEVANCE PROCESS.—

13 ‘‘(A) IN GENERAL.—An eligible organiza14 tion must provide a meaningful and expedited

15 procedure, which includes notice and hearing

16 requirements, for resolving grievances between

17 the organization (including any entity or indi18 vidual through which the organization provides

19 health care services) and members enrolled with

20 the organization under this section. Under the

21 procedure any member enrolled with the organi22 zation may at any time file a complaint to re23 solve grievances between the member and the

24 organization before a board of appeals estab25 lished under subparagraph (C).
6

•HR 66 IH

1 ‘‘(B) NOTICE REQUIREMENTS.—

2 ‘‘(i) IN GENERAL.—The organization

3 must provide, in a timely manner, an en4 rollee a notice of any denial of services in5 network or denial of payment for out-of6 network care.

7 ‘‘(ii) INFORMATION REQUIRED.—Such

8 notice shall include the following:

9 ‘‘(I) A clear statement of the rea10 son for the denial.

11 ‘‘(II) An explanation of the com12 plaint process under subparagraph

13 (C) which is available to the enrollee

14 upon request.

15 ‘‘(III) An explanation of all other

16 appeal rights available to all enrollees.

17 ‘‘(IV) A description of how to ob18 tain supporting evidence for this hear19 ing, including the patient’s medical

20 records from the organization, as well

21 as supporting affidavits from the at22 tending health care providers.

23 ‘‘(C) HEARING BOARD.—
7

•HR 66 IH

1 ‘‘(i) IN GENERAL.—Each eligible or2 ganization shall establish a board of ap3 peals to hear and make determinations on

4 complaints by enrollees concerning denials

5 of coverage or payment for services

6 (whether in-network or out-of-network)

7 and the medical necessity and appropriate8 ness of covered items and services.

9 ‘‘(ii) COMPOSITION.—A board of ap10 peals of an eligible organization shall con11 sist of—

12 ‘‘(I) representatives of the orga13 nization, including physicians, non14 physicians, administrators, and enroll15 ees;

16 ‘‘(II) consumers who are not en17 rollees; and

18 ‘‘(III) providers with expertise in

19 the field of medicine which neces20 sitates treatment.

21 ‘‘(iii) DEADLINE FOR DECISION.—A

22 board of appeals shall hear and resolve

23 complaints within 30 days after the date

24 the complaint is filed with the board.
8

•HR 66 IH

1 ‘‘(D) APPEAL TO SECRETARY.—Nothing in

2 this paragraph may be construed to replace or

3 supersede any appeals mechanism otherwise

4 provided for an individual entitled to benefits

5 under this title.

6 ‘‘(4) NOTICE OF ENROLLEE RIGHTS AND EN7 ROLLEE INFORMATION CHECKLIST.—

8 ‘‘(A) IN GENERAL.—Each eligible organi9 zation shall provide each enrollee, at the time of

10 enrollment and not less frequently than annu11 ally thereafter, an explanation of the enrollee’s

12 rights under this section and a copy of the most

13 recent enrollee information checklist for the or14 ganization (as described in subparagraph (C)).

15 ‘‘(B) RIGHTS DESCRIBED.—The expla16 nation of rights under subparagraph (A) shall

17 include an explanation of—

18 ‘‘(i) the enrollee’s rights to benefits

19 from the organization;

20 ‘‘(ii) the restrictions on payments

21 under this title for services furnished other

22 than by or through the organization;

23 ‘‘(iii) out-of-area coverage provided by

24 the organization;
9

•HR 66 IH

1 ‘‘(iv) the organization’s coverage of

2 emergency services and urgently needed

3 care;

4 ‘‘(v) the organization’s coverage of

5 out-of-network services, including services

6 that are additional to the items and serv7 ices covered under parts A and B; and

8 ‘‘(vi) appeal rights of enrollees.

9 ‘‘(C) ENROLLEE INFORMATION CHECK10 LIST.—For purposes of subparagraph (A), the

11 term ‘enrollee information checklist’ means,

12 with respect to an eligible organization for a

13 year, a list containing the following information

14 (provided in a manner that permits consumers

15 to compare organizations with respect to the in16 formation):

17 ‘‘(i) For each plan, information on—

18 ‘‘(I) the premium for the plan,

19 ‘‘(II) identity, location, qualifica20 tions and availability of providers in

21 any provider networks of the plan,

22 ‘‘(III) the number of individuals

23 enrolling and disenrolling from the

24 plan,
10

•HR 66 IH

1 ‘‘(IV) procedures used by the

2 plan to control utilization of services

3 and expenditures,

4 ‘‘(V) procedures used by the plan

5 to assure quality of care, and

6 ‘‘(VI) rights and responsibilities

7 of enrollees.

8 ‘‘(ii) In addition, for each managed

9 care plan, information on—

10 ‘‘(I) restrictions on payment for

11 services provided outside the plan’s

12 provider network,

13 ‘‘(II) the process by which serv14 ices may be obtained through the

15 plan’s provider network,

16 ‘‘(III) coverage for out-of-area

17 services, and

18 ‘‘(IV) any exclusions in the types

19 of providers participating in the plan’s

20 provider network.

21 ‘‘(5) RESTRICTIONS ON PROVIDER INCENTIVE

22 PLANS.—

23 ‘‘(A) IN GENERAL.—Each contract with an

24 eligible organization under this section shall

25 provide that the organization may not operate
11

•HR 66 IH

1 any provider incentive plan (as defined in sub2 paragraph (B)) unless the following require3 ments are met:

4 ‘‘(i) No specific payment is made di5 rectly or indirectly under the plan to a pro6 vider or provider group as an inducement

7 to reduce or limit medically necessary serv8 ices.

9 ‘‘(ii) If the plan places a provider or

10 provider group at substantial financial risk

11 (as determined by the Secretary) for serv12 ices not provided by the provider or pro13 vider group, the organization—

14 ‘‘(I) provides stop-loss protection

15 for the provider or group that is ade16 quate and appropriate, based on

17 standards developed by the Secretary

18 that take into account the number

19 (and type) of providers placed at such

20 substantial financial risk in the group

21 or under the plan and the number of

22 individuals enrolled with the organiza23 tion who receive services from the pro24 vider or the group, and
12

•HR 66 IH

1 ‘‘(II) conducts periodic surveys of

2 both individuals enrolled and individ3 uals previously enrolled with the orga4 nization to determine the degree of

5 access of such individuals to services

6 provided by the organization and sat7 isfaction with the quality of such serv8 ices.

9 ‘‘(iii) The organization provides the

10 Secretary with descriptive information re11 garding the plan, sufficient to permit the

12 Secretary to determine whether the plan is

13 in compliance with the requirements of this

14 subparagraph.

15 ‘‘(B) PROVIDER INCENTIVE PLAN DE16 FINED.—In this paragraph, the term ‘provider

17 incentive plan’ means any compensation ar18 rangement between an eligible organization and

19 a provider or provider group that may directly

20 or indirectly have the effect of reducing or lim21 iting medically necessary services provided with

22 respect to individuals enrolled with the organi23 zation.

24 ‘‘(6) PROHIBITION OF INTERFERENCE WITH

25 CERTAIN MEDICAL COMMUNICATIONS.—
13

•HR 66 IH

1 ‘‘(A) IN GENERAL.—

2 ‘‘(i) PROHIBITION OF CERTAIN PROVI3 SIONS.—Subject to subparagraph (C), an

4 eligible organization may not include with

5 respect to its plan under this section any

6 provision that prohibits or restricts any

7 medical communication (as defined in sub8 paragraph (B)) as part of—

9 ‘‘(I) a written contract or agree10 ment with a health care provider,

11 ‘‘(II) a written statement to such

12 a provider, or

13 ‘‘(III) an oral communication to

14 such a provider.

15 ‘‘(ii) NULLIFICATION.—Any provision

16 described in clause (i) is null and void.

17 ‘‘(B) MEDICAL COMMUNICATION DE18 FINED.—In this paragraph, the term ‘medical

19 communication’ means a communication made

20 by a health care provider with a patient of the

21 provider (or the guardian or legal representative

22 of such patient) with respect to any of the fol23 lowing:

24 ‘‘(i) How participating physicians and

25 providers are paid.
14

•HR 66 IH

1 ‘‘(ii) Utilization review procedures.

2 ‘‘(iii) The basis for specific utilization

3 review decisions.

4 ‘‘(iv) Whether a specific prescription

5 drug or biological is included in the for6 mulary.

7 ‘‘(v) How the eligible organization de8 cides whether a treatment or procedure is

9 experimental.

10 ‘‘(vi) The patient’s physical or mental

11 condition or treatment options.

12 ‘‘(C) CONSTRUCTION.—Nothing in this

13 paragraph shall be construed as preventing an

14 entity from—

15 ‘‘(i) acting on information relating to

16 the provision of (or failure to provide)

17 treatment to a patient, or

18 ‘‘(ii) restricting a medical communica19 tion that recommends one health plan over

20 another if the sole purpose of the commu21 nication is to secure financial gain for the

22 health care provider.

23 ‘‘(7) ADDITIONAL DEFINITIONS.—For purposes

24 of this subsection:
15

•HR 66 IH

1 ‘‘(A) HEALTH CARE PROVIDER.—The term

2 ‘health care provider’ means anyone licensed

3 under State law to provide health care services

4 under part A or part B.

5 ‘‘(B) IN-NETWORK.—The term ‘in-network’

6 means services provided by health care provid7 ers who have entered into a contract or agree8 ment with the organization under which such

9 providers are obligated to provide items, treat10 ment, and services under this section to individ11 uals enrolled with the organization under this

12 section.

13 ‘‘(C) NETWORK.—The term ‘network’

14 means, with respect to an eligible organization,

15 the health care providers who have entered into

16 a contract or agreement with the organization

17 under which such providers are obligated to

18 provide items, treatment, and services under

19 this section to individuals enrolled with the or20 ganization under this section.

21 ‘‘(D) OUT-OF-NETWORK.—The term ‘out22 of-network’ means services provided by health

23 care providers who have not entered into a con24 tract agreement with the organization under

25 which such providers are obligated to provide
16

•HR 66 IH

1 items, treatment, and services under this sec2 tion to individuals enrolled with the organiza3 tion under this section.

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

5 State may establish or enforce requirements with re6 spect to the subject matter of this subsection, but

7 only if such requirements are more stringent than

8 the requirements established under this subsection.’’.

9 (b) CONFORMING AMENDMENTS.—Section 1876 of

10 such Act is further amended—

11 (1) by striking subparagraph (E) of subsection

12 (c)(3);

13 (2) by striking paragraphs (4) and (5) of sub14 section (c); and

15 (3) by striking paragraph (8) of subsection (i).

16 (c) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to contracts entered into or re18 newed under section 1876 of the Social Security Act after

19 the expiration of the 1-year period which begins on the

20 date of the enactment of this Act.

21 SEC. 4. APPLICATION OF PROTECTIONS TO MEDICARE SE22 LECT POLICIES.

23 (a) IN GENERAL.—Section 1882(t)(1) of the Social

24 Security Act (42 U.S.C. 1395ss(t)(1)) is amended—
17

•HR 66 IH

1 (1) by striking ‘‘and’’ at the end of subpara2 graph (E);

3 (2) by striking the period at the end of sub4 paragraph (F) and inserting a semicolon; and

5 (3) by adding at the end the following new sub6 paragraph:

7 ‘‘(G) notwithstanding any other provision

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

9 the policy meets the requirements of section

10 1876(k) with respect to individuals enrolled

11 under the policy in the same manner such re12 quirements apply with respect to an eligible or13 ganization under such section with respect to

14 individuals enrolled with the organization under

15 such section.’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 subsection (a) shall apply to policies issued or renewed on

18 or after the expiration of the 1-year period which begins

19 on the date of the enactment of this Act.

Æ