‘‘(1) CONTRACT
WITH
QUALIFIED
EXTERNAL
APPEAL ENTITY.—
‘‘(A) CONTRACT
REQUIREMENT.—Subject
to subparagraph (B), the external appeal proc-
ess under this section of a plan or issuer shall
be conducted under a contract between the plan
or issuer and one or more qualified external ap-
peal entities (as defined in subsection (c)).
‘‘(B) RESTRICTIONS
ON
QUALIFIED
EX-
TERNAL APPEAL ENTITY.—
‘‘(i) BY STATE FOR HEALTH INSUR-
ANCE ISSUERS.—With respect to health in-
surance issuers in a State, the State may
provide for external review activities to be
conducted by a qualified external appeal
entity that is designated by the State or
that is selected by the State in such a
manner as to assure an unbiased deter-
mination.
‘‘(ii) BY FEDERAL GOVERNMENT FOR
GROUP HEALTH PLANS.—With respect to
group health plans, the Secretary may ex-
ercise the same authority as a State may
exercise with respect to health insurance
issuers under clause (i). Such authority
may include requiring the use of the quali-
fied external appeal entity designated or
selected under such clause.
‘‘(iii) 
LIMITATION
ON
PLAN
OR
ISSUER SELECTION.—If a State or the Sec-
retary under this subparagraph permits
more than one entity to qualify as a quali-
fied external appeal entity with respect to
a group health plan or health insurance
issuer and the plan or issuer may select
among such qualified entities, the State or
Secretary shall assure that the selection
process will not create any incentives for
external appeal entities to make a decision
in a biased manner.
‘‘(C) OTHER TERMS AND CONDITIONS.—
The terms and conditions of a contract under
this paragraph shall be consistent with the
standards the Secretary shall establish to as-
sure there is no real or apparent conflict of in-
terest in the conduct of external appeal activi-
ties. Such contract shall provide that the direct
costs of the process (not including costs of rep-
resentation of a participant, beneficiary, or en-
rollee) shall be paid by the plan or issuer, and
not by the participant, beneficiary, or enrollee.
‘‘(2) ELEMENTS OF PROCESS.—An external ap-
peal process shall be conducted consistent with
standards established by the Secretary that include
at least the following:
‘‘(A) FAIR
PROCESS; DE
NOVO
DETER-
MINATION.—The process shall provide for a
fair, de novo determination.
‘‘(B) DETERMINATION
CONCERNING
EX-
TERNALLY APPEALABLE DECISIONS.—A quali-
fied external appeal entity shall determine
whether a decision is an externally appealable
decision and related decisions, including—
‘‘(i) whether such a decision involves
emergency or urgent care,
‘‘(ii) the appropriate deadlines for in-
ternal review process required due to medi-
cal exigencies in a case, and
‘‘(iii) whether such a process has been
completed.
‘‘(C) OPPORTUNITY TO SUBMIT EVIDENCE,
HAVE
REPRESENTATION, 
AND
MAKE
ORAL
PRESENTATION.—Each party to an externally
appealable decision—
‘‘(i) may submit and review evidence
related to the issues in dispute,
‘‘(ii) may use the assistance or rep-
resentation of one or more individuals (any
of whom may be an attorney), and
‘‘(iii) may make an oral presentation.
‘‘(D) PROVISION OF INFORMATION.—The
plan or issuer involved shall provide timely ac-
cess to all its records relating to the matter of
the externally appealable decision and to all
provisions of the plan or health insurance cov-
erage (including any coverage manual) relating
to the matter.
‘‘(E) TIMELY
DECISIONS.—A determina-
tion by the external appeal entity on the deci-
sion shall—
‘‘(i) be made orally or in writing and,
if it is made orally, shall be supplied to the
parties in writing as soon as possible;
‘‘(ii) be binding on the plan or issuer;
‘‘(iii) be made in accordance with the
medical exigencies of the case involved, but
in no event later than 60 days (or 72
hours in the case of an externally appeal-
able decision involving emergency or ur-
gent care) from the date of completion of
the filing of notice of external appeal of
the decision;
‘‘(iv) state, in layperson’s language,
the basis for the determination, including,
if relevant, any basis in the terms or condi-
tions of the plan or coverage; and
‘‘(v) inform the enrollee of the enroll-
ee’s rights to seek further review by the
courts (or other process) of the external
appeal determination.
‘‘(c) QUALIFICATIONS OF EXTERNAL APPEAL ENTI-
TIES.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified external appeal entity’
means, in relation to a plan or issuer, an entity
(which may be a governmental entity) that is cer-
tified under paragraph (2) as meeting the following
requirements:
‘‘(A) There is no real or apparent conflict
of interest that would impede the entity con-
ducting external appeal activities independent
of the plan or issuer.
‘‘(B) The entity conducts external appeal
activities through clinical peers.
‘‘(C) The entity has sufficient medical,
legal, and other expertise and sufficient staffing
to conduct external appeal activities for the
plan or issuer on a timely basis consistent with
subsection (b)(3)(E)(ii).
‘‘(D) The entity meets such other require-
ments as the Secretary may impose.
‘‘(2) CERTIFICATION
OF
EXTERNAL
APPEAL
ENTITIES.—
‘‘(A) IN GENERAL.—In order to be treated
as a qualified external appeal entity with re-
spect to—
‘‘(i) a group health plan, the entity
must be certified (and, in accordance with
subparagraph (B), periodically recertified)
as meeting the requirements of paragraph
(1) by the Secretary of Labor (or under a
process recognized or approved by the Sec-
retary of Labor); or
‘‘(ii) a health insurance issuer operat-
ing in a State, the entity must be certified
(and, in accordance with subparagraph
(B), periodically recertified) as meeting
such requirements by the applicable State
authority (or, if the States has not estab-