105
‘‘(12) LIMITATION OF ACTION.—Paragraph (1)
shall not apply in connection with any action com-
menced after the later of—
‘‘(A) 1 year after (i) the date of the last
action which constituted a part of the failure,
or (ii) in the case of an omission, the latest
date on which the fiduciary could have cured
the failure, or
‘‘(B) 1 year after the earliest date on
which the plaintiff first knew, or reasonably
should have known, of the bodily injury result-
ing from the failure.
‘‘(13) COORDINATION
WITH
FIDUCIARY
RE-
QUIREMENTS.—A fiduciary shall not be treated as
failing to meet any requirement of part 4 solely by
reason of any action taken by a fiduciary which con-
sists of full compliance with the reversal under sec-
tion 103 of the Health Care Quality and Choice Act
of 1999 of a denial of claim for benefits (within the
meaning of section 101(f) of such Act).
‘‘(14) CONSTRUCTION.—Nothing in this sub-
section shall be construed as authorizing a cause of
action for the failure to provide an item or service
which is not covered under the group health plan in-
volved.
106
‘‘(15) PROTECTION OF MEDICAL MALPRACTICE
AND SIMILAR ACTIONS UNDER STATE LAW.—This
subsection shall not be construed to preclude any ac-
tion under State law (as defined in section
514(c)(1)) with respect to the duty (if any) under
such State law imposed on any person to exercise a
specified standard of care when making a health
care treatment decision where medical services are
provided by such person and the decision affects the
quality of care or treatment provided or received.
‘‘(16) REFERENCES
TO
THE
HEALTH
CARE
QUALITY AND CHOICE ACT OF 1999.—Any reference
in this subsection to any provision of the Health
Care Quality and Choice Act of 1999 shall be
deemed a reference to such provision as in effect on
the date of the enactment of such Act.’’.
(b) 
CONFORMING
AMENDMENT.—Section
502(a)(1)(A) of such Act (29 U.S.C. 1132(a)(1)(A)) is
amended by inserting ‘‘or (n)’’ after ‘‘subsection (c)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to acts and omissions (from which
a cause of action arises) occurring on or after the date
of the enactment of this Act.
107
SEC. 303. AVAILABILITY OF BINDING ARBITRATION.
(a) IN GENERAL.—Section 503 of the Employee Re-
tirement Income Security Act of 1974 (as amended by the
preceding provisions of this Act) is amended further—
(1) in subsection (a), by inserting ‘‘IN GEN-
ERAL.—’’ after ‘‘(a)’’;
(2) in subsection (b), by striking ‘‘(b) In the
case’’ and inserting the following:
‘‘(b) GROUP HEALTH PLANS.—
‘‘(1) IN GENERAL.—In the case’’; and
(3) by adding at the end of subsection (b) the
following:
‘‘(2) BINDING ARBITRATION PERMITTED AS AL-
TERNATIVE MEANS OF DISPUTE RESOLUTION.—
‘‘(A) IN GENERAL.—A group health plan
shall not be treated as failing to meet the re-
quirements of the preceding provisions of this
section relating to review of any adverse cov-
erage decision rendered by or under the plan,
if—
‘‘(i) in lieu of the procedures other-
wise provided under the plan in accordance
with such provisions and in lieu of any
subsequent review of the matter by a court
under section 502—
108
‘‘(I) the aggrieved participant or
beneficiary elects in the request for
the review a procedure by which the
dispute is resolved by binding arbitra-
tion which is available under the plan
with respect to similarly situated par-
ticipants and beneficiaries and which
meets the requirements of subpara-
graph (B); or
‘‘(II) in the case of any such plan
or portion thereof which is established
and maintained pursuant to a bona
fide collective bargaining agreement,
the plan provides for a procedure by
which such disputes are resolved by
means of binding arbitration which
meets the requirements of subpara-
graph (B); and
‘‘(ii) the additional requirements of
subparagraph (B) are met.
‘‘(B) ADDITIONAL
REQUIREMENTS.—The
Secretary shall prescribe by regulation require-
ments for arbitration procedures under this
paragraph, including at least the following re-
quirements:
109
‘‘(i) ARBITRATION PANEL.—The arbi-
tration shall be conducted by an arbitra-
tion panel meeting the requirements of
subparagraph (C).
‘‘(ii) FAIR PROCESS; DE NOVO DETER-
MINATION.—The procedure shall provide
for a fair, de novo determination.
‘‘(iii) OPPORTUNITY TO SUBMIT EVI-
DENCE, 
HAVE
REPRESENTATION, 
AND
MAKE ORAL PRESENTATION.—Each party
to the arbitration procedure—
‘‘(I) may submit and review evi-
dence related to the issues in dispute;
‘‘(II) may use the assistance or
representation of one or more individ-
uals (any of whom may be an attor-
ney); and
‘‘(III) may make an oral presen-
tation.
‘‘(iv) PROVISION OF INFORMATION.—
The plan shall provide timely access to all
its records relating to the matters under
arbitration and to all provisions of the plan
relating to such matters.
110
‘‘(v) TIMELY
DECISIONS.—A deter-
mination by the arbitration panel on the
decision shall—
‘‘(I) be made in writing;
‘‘(II) be binding on the parties;
and
‘‘(III) be made in accordance
with the medical exigencies of the case
involved.
‘‘(C) ARBITRATION PANEL.—
‘‘(i) IN GENERAL.—Arbitrations com-
menced pursuant to this paragraph shall
be conducted by a panel of arbitrators se-
lected by the parties made up of 3 individ-
uals, including at least one practicing phy-
sician and one practicing attorney.
‘‘(ii) 
QUALIFICATIONS.—Any 
indi-
vidual who is a member of an arbitration
panel shall meet the following require-
ments:
‘‘(I) There is no real or apparent
conflict of interest that would impede
the individual conducting arbitration
independent of the plan and meets the
111
independence requirements of clause
(iii).
‘‘(II) The individual has suffi-
cient medical or legal expertise to con-
duct the arbitration for the plan on a
timely basis.
‘‘(III) The individual has appro-
priate credentials and has attained
recognized expertise in the applicable
medical or legal field.
‘‘(IV) The individual was not in-
volved in the initial adverse coverage
decision or any other review thereof.
‘‘(iii) 
INDEPENDENCE
REQUIRE-
MENTS.—An individual described in clause
(ii) meets the independence requirements
of this clause if—
‘‘(I) the individual is not affili-
ated with any related party,
‘‘(II) any compensation received
by such individual in connection with
the binding arbitration procedure is
reasonable and not contingent on any
decision rendered by the individual,
112
‘‘(III) under the terms of the
plan, the plan has no recourse against
the individual or entity in connection
with the binding arbitration proce-
dure, and
‘‘(IV) the individual does not oth-
erwise have a conflict of interest with
a related party as determined under
such regulations as the Secretary may
prescribe.
‘‘(iv) RELATED PARTY.—For purposes
of clause (iii), the term ‘related party’
means—
‘‘(I) the plan or any health insur-
ance issuer offering health insurance
coverage in connection with the plan
(or any officer, director, or manage-
ment employee of such plan or issuer),
‘‘(II) the physician or other med-
ical care provider that provided the
medical care involved in the coverage
decision,
‘‘(III) the institution at which
the medical care involved in the cov-
erage decision is provided,
113
‘‘(IV) the manufacturer of any
drug or other item that was included
in the medical care involved in the
coverage decision, or
‘‘(V) any other party determined
under such regulations as the Sec-
retary may prescribe to have a sub-
stantial interest in the coverage deci-
sion .
‘‘(iv) AFFILIATED.—For purposes of
clause (iii), the term ‘affiliated’ means, in
connection with any entity, having a famil-
ial, financial, or professional relationship
with, or interest in, such entity.
‘‘(D) DECISIONS.—
‘‘(i) IN
GENERAL.—Decisions ren-
dered by the arbitration panel shall be
binding on all parties to the arbitration
and shall be enforcible under section 502
as if the terms of the decision were the
terms of the plan, except that the court
may vacate any award made pursuant to
the arbitration for any cause described in
paragraph (1), (2), (3), (4), or (5) of sec-
tion 10(a) of title 9, United States Code.
114
‘‘(ii) ALLOWABLE
REMEDIES.—The
remedies which may be implemented by the
arbitration panel shall consist of those
remedies which would be available in an
action timely commenced by a participant
or beneficiary under section 502 after ex-
haustion of administrative remedies.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to adverse coverage decisions ini-
tially rendered by group health plans on or after the date
of the enactment of this Act.
TITLE 
IV—APPLICATION 
TO
GROUP 
HEALTH 
PLANS
UNDER THE INTERNAL REV-
ENUE CODE OF 1986.
SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE
OF 1986.
Subchapter B of chapter 100 of the Internal Revenue
Code of 1986 is amended—
(1) in the table of sections, by inserting after
the item relating to section 9812 the following new
item:
‘‘Sec. 9813. Standard relating to Health Care Quality and
Choice Act.’’; and
(2) by inserting after section 9812 the fol-
lowing: