I
103D CONGRESS
1ST SESSION
H. R. 30
To provide for universal access to basic group health benefits coverage and
to remove barriers and provide incentives in order to make such coverage
more affordable, to improve and make more efficient the provision of
medical and health insurance information, and to improve enforcement
of requirements relating to multiple employer welfare arrangements.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. GRANDY
(for himself, Mr. GOODLING, Mr. HENRY, and Mr.
CUNNINGHAM) introduced the following bill; which was referred jointly to
the Committees on Education and Labor, Energy and Commerce, and
Ways and Means
A BILL
To provide for universal access to basic group health benefits
coverage and to remove barriers and provide incentives
in order to make such coverage more affordable, to im-
prove and make more efficient the provision of medical
and health insurance information, and to improve en-
forcement of requirements relating to multiple employer
welfare arrangements.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Universal Health Benefits Empowerment and Partner-
ship Act of 1993’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and declaration of policy.
TITLE I—UNIVERSAL ACCESS TO HEALTH COVERAGE
Sec. 101. Universal access to coverage under group health plans and accessible
health benefits systems.
‘‘PART 6—UNIVERSAL ACCESS TO COVERAGE UNDER GROUP HEALTH PLANS
AND ACCESSIBLE HEALTH BENEFITS SYSTEMS
‘‘Subpart A—General Provisions
‘‘Sec. 601. Definitions and special rules.
‘‘Subpart B—Required Coverage Options; Group Health Payroll Deduction
Plans
‘‘Sec. 611. Coverage for eligible individuals under basic group health plans
or group health payroll deduction plans.
‘‘Sec. 612. Group health payroll deduction plans.
‘‘Sec. 613. Availability of coverage under accessible health benefits sys-
tems.
‘‘Subpart C—Accessible Health Benefits Systems
‘‘Sec. 621. General requirements.
‘‘Sec. 622. Reporting requirements.
‘‘Sec. 623. Participation requirements.
‘‘Sec. 624. Benefits requirements.
‘‘Sec. 625. Contribution requirements.
‘‘Sec. 626. Reciprocity and reliance by accessible health benefits systems
on other such systems.
‘‘Sec. 627. Regulatory authority of Secretary of Health and Human
Services.
‘‘Subpart D—Coverage for Uninsurable Risks and Material Pre-Existing
Conditions
‘‘Sec. 631. Coverage for uninsurable risks and pre-existing conditions.
‘‘Sec. 632. Participation requirements for uninsurable risks and material
pre-existing conditions.
‘‘Sec. 633. Benefits requirements for uninsurable risks and material pre-
existing conditions.
‘‘Sec. 634. Regulatory authority of Secretary of Health and Human
Services.’’.
Sec. 102. Establishment of State-based system in absence of State-wide access
to coverage; substitute systems.
Sec. 103. Continuation coverage and accessible health benefits systems or sub-
stitute systems.
Sec. 104. Preemption of State law to provide for more affordable health care
coverage.
Sec. 105. Encouragement of multiple employer arrangements providing basic
health benefits.
Sec. 106. Treatment practice guidelines and outcomes research for all
Americans.
‘‘PART A—ESTABLISHMENT AND GENERAL DUTIES
‘‘Sec. 901. Establishment.
‘‘Sec. 902. General authorities and duties.
‘‘PART B—FORUM FOR QUALITY AND EFFECTIVENESS IN HEALTH CARE
‘‘Sec. 911. Establishment of office.
‘‘Sec. 912. Duties.
Sec. 107. Federal Advisory Council on Health Care Coverage and Costs.
Sec. 108. Increase in deduction for health insurance costs of self-employed indi-
viduals from 25 percent to 100 percent.
Sec. 109. Effective dates.
TITLE II—MEDICAL AND HEALTH INSURANCE INFORMATION
REFORM
Sec. 201. Short title.
Sec. 202. Medical and health insurance information reform.
‘‘TITLE XXII—MEDICAL AND HEALTH INSURANCE INFORMATION
REFORM
‘‘PART A—COMPARATIVE VALUE INFORMATION
‘‘Sec. 2200. Comparative value information programs for health care pur-
chasing.
‘‘Sec. 2201. Grants for the development of State programs.
‘‘PART B—STORAGE AND TRANSMISSION OF MEDICAL AND HEALTH
INSURANCE INFORMATION AND PRIORITY OF PAYMENT
‘‘Sec. 2210. Preemption of State quill pen laws.
‘‘Sec. 2211. Promulgation of requirements by Secretary.
‘‘Sec. 2212. State programs.
‘‘Sec. 2213. Application of Federal requirements.
‘‘Sec. 2214. Health insurance information privacy and confidentiality pro-
tection.
‘‘Sec. 2215. Identification numbers.
‘‘Sec. 2216. Standards and requirements for the receipt and transmission
of health insurance information.
‘‘Sec. 2217. Health insurance claim forms.
‘‘Sec. 2218. Priority among insurers.
‘‘Sec. 2219. Furnishing of information among insurers.
‘‘Sec. 2220. Noncompliance with Federal requirements.
‘‘Sec. 2221. No effect on scope of benefits covered.
‘‘PART C—MEDICAL DATA REQUIREMENTS
‘‘Sec. 2230. Promulgation of requirements by Secretary.
‘‘Sec. 2231. Medicare requirements for hospitals.
‘‘Sec. 2232. Electronic transmission to Federal agencies.
‘‘PART D—GENERAL PROVISIONS
‘‘Sec. 2240. Definitions.’’.
Sec. 203. Conforming amendment.
Sec. 204. Failure to satisfy certain health insurance requirements.
TITLE III—MEWA ENFORCEMENT IMPROVEMENTS
Sec. 301. Short title.
Sec. 302. Amendment to definition of employee welfare benefit plan.
Sec. 303. Amendment to definition of multiple employer welfare arrangement.
Sec. 304. Coverage.
Sec. 305. Registration requirement.
Sec. 306. Enforcement and civil penalties.
Sec. 307. Exemption procedure.
Sec. 308. Clarification of States’ ability to obtain information.
Sec. 309. Effective date.
SEC. 2. FINDINGS AND DECLARATION OF POLICY.
(a) FINDINGS.—The Congress finds that—
(1) the health care delivery system of the Unit-
ed States provides most Americans with a level of
access and quality of care that is unsurpassed;
(2) for a significant minority of Americans, the
system works less well because they cannot obtain or
otherwise do not have basic health care coverage
under either public or private programs;
(3) these individuals represent a diversity of sit-
uations for which there is no single solution;
(4) assuring access to basic health care cov-
erage and quality care for these individuals is a com-
pelling national priority that will require commit-
ments from both the private and public sectors;
(5) the most practical and effective solutions for
these access problems are ones that—
(A) preserve the pluralistic base of the
health care delivery system of the United
States;
(B) emphasize incentives, innovation, and
the removal of current barriers to access; and
(C) recognize that both the complexity of
the problem and the existence of fiscal con-
straints means that responsibility must be
shared among employers, employees, insurers,
providers, and patients, as well as Federal,
State, and local governments;
(6) Federal efforts need to be closely coordi-
nated with others who share in the responsibility for
improving access to basic health care services;
(7) Federal efforts need to reflect not only the
diversity of interested parties but also the diversity
of areas where action is appropriate, including public
health, basic group health coverage, State initiatives,
medical malpractice laws, Medicaid, and tax incen-
tives; and
(8) improving access requires dealing with
many of the most difficult problems in the health
system, including—
(A) the escalating costs, State mandated
health benefits, and other factors that have
made health care coverage less affordable for
many employers and individuals, especially the
near poor who need more creative workplace
and public options to be able to obtain basic
health care coverage; and
(B) the inability of many individuals to
protect themselves against catastrophic health
care expenses because preexisting conditions
make them ‘‘uninsurable’’.
(b) PURPOSES.—Therefore the Congress declares the
purposes of this Act to be to provide a sound, flexible,
and workable Federal framework to simultaneously ad-
dress the issues of access to basic health care coverage
and the affordability of such coverage, with an emphasis
on improving health care quality by—
(1) empowering employers, employees, and
other individuals to obtain more affordable basic
health care coverage, and
(2) providing incentives for private and public-
private partnership arrangements to be established
for such purposes.
(c) DECLARATION OF POLICY.—In carrying out such
purposes, it is the policy of this Act to—
(1) provide universal access to basic group
health coverage for all Americans under plans of-
fered by employers or, in the case in which such cov-
erage is unavailable to employees and other individ-
uals from private sources or existing public pro-
grams, under accessible health benefits systems;
(2) make such basic health coverage more af-
fordable—
(A) by removing barriers and encouraging
‘‘group’’ plans and arrangements to spread risk
and lower expenses;
(B) by preempting State health benefit
mandates, thereby encouraging group health
coverage providers to offer lower cost basic cov-
erage to the uninsured;
(C) by preempting State barriers to the
providing of managed care, thereby encouraging
competition, innovation of cost-control ap-
proaches, and quality review;
(D) by encouraging the development of
treatment practice guidelines and outcomes re-
search to aid in reducing unnecessary services,
increasing quality care, and reducing mal-
practice costs;
(E) by eliminating tax inequities and bar-
riers—
(i) to the full deductibility of contribu-
tions to health plans covering the self-em-
ployed, and
(ii) to the establishment of soundly fi-
nanced multiple employer basic group
health plans;
(3) improve and make more efficient the provi-
sion of medical and health insurance information;
and
(4) improve enforcement of requirements relat-
ing to multiple employer welfare arrangements.
TITLE I—UNIVERSAL ACCESS TO
HEALTH COVERAGE
SEC. 101. UNIVERSAL ACCESS TO COVERAGE UNDER
GROUP HEALTH PLANS AND ACCESSIBLE
HEALTH BENEFITS SYSTEMS.
(a) IN GENERAL.—Subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974 is amend-
ed—
(1) by striking the heading for part 6 and in-
serting the following:
‘‘Subpart E—Continuation Coverage Requirements’’;
(2) by redesignating sections 601 through 608
as sections 641 through 648, respectively; and
(3) by inserting after part 5 the following:
‘‘PART 6—UNIVERSAL ACCESS TO COVERAGE UNDER GROUP
HEALTH PLANS AND ACCESSIBLE HEALTH BENEFITS SYSTEMS
‘‘Subpart A—General Provisions
‘‘SEC. 601. DEFINITIONS AND SPECIAL RULES.
‘‘(a) IN GENERAL.—For purposes of this part—
‘‘(1) GROUP HEALTH PLAN.—The term ‘group
health plan’ means an employee welfare benefit plan
providing medical care (as defined in section 213(d)
of the Internal Revenue Code of 1986) to partici-
pants or beneficiaries directly or through insurance,
reimbursement, or otherwise.
‘‘(2) BASIC GROUP HEALTH PLAN.—
‘‘(A) IN GENERAL.—The term ‘basic group
health plan’ means a group health plan, or any
combination of two or more group health plans,
which includes at least a basic health benefits
provision.
‘‘(B) 
TREATMENT
OF
UNINSURABLE
RISKS.—A plan which excludes from coverage
under a basic health benefits provision any indi-
vidual (who would otherwise be eligible for cov-
erage) solely because the individual is an unin-
surable risk shall not be treated as a basic
group health plan, unless the requirements of
subparagraph (D) are met for purposes of this
subparagraph with respect to such individual.
‘‘(C) TREATMENT OF MATERIAL PRE-EX-
ISTING
CONDITIONS.—A plan which provides
coverage to any individual under a basic health
benefits provision subject to a substantial re-
striction based on a material pre-existing condi-
tion shall not be treated as a basic group health
plan, unless the requirements of subparagraph
(D) are met for purposes of this subparagraph
with respect to such individual.
‘‘(D) EXEMPTION WHERE ADEQUATE AC-
CESSIBLE HEALTH BENEFITS SYSTEM OR SUB-
STITUTE SYSTEM IS AVAILABLE.—The require-
ments of this subparagraph are met with re-
spect to any individual—
‘‘(i) for purposes of subparagraph
(B), if such individual is eligible for cov-
erage under an accessible health benefits
system established and maintained in ac-
cordance with subpart C (and subpart D
as applicable) (or under any substitute
basic health benefits system with respect to
which the Secretary of Health and Human
Services has made a determination pursu-
ant to section 102(b) of the Universal
Health Benefits Empowerment and Part-
nership Act of 1993 relating to the element
of 
coverage 
described 
in 
section
102(b)(2)(B)(i) of such Act (relating to
treatment of individuals as uninsurable
risks)), or
‘‘(ii) for purposes of subparagraph
(C), if such individual is eligible for cov-
erage for the material pre-existing condi-
tion referred to in subparagraph (C) under
an accessible health benefits system estab-
lished and maintained in accordance with
subpart C (and subpart D as applicable)
(or under any substitute basic health bene-
fits system with respect to which the Sec-
retary of Health and Human Services has
made a determination pursuant to section
102(b) of the Universal Health Benefits
Empowerment and Partnership Act of
1993 relating to the element of coverage
described in section 102(b)(2)(B)(ii) of
such Act (relating to treatment of material
preexisting conditions)).
‘‘(3) BASIC
HEALTH
BENEFITS
PROVISION.—
The term ‘basic health benefits provision’ means,
with respect to any plan, combination of plans, or
health benefit system, an arrangement which—
‘‘(A) provides to individuals provided cov-
erage under such plan, combination of plans, or
system, directly or through insurance, reim-
bursement, or otherwise, medical care (as de-
fined in section 213(d) of the Internal Revenue
Code of 1986)—
‘‘(i) which consists of services deter-
mined by the Secretary of Health and
Human Services, under regulations pre-
scribed by such Secretary, to consist of
basic health care services (including physi-
cian’s, inpatient hospital, and outpatient
hospital services which are prevalent under
group health plans and other services
which may be necessary for basic health
care), and
‘‘(ii) which consists of coverage at a
percentage of cost determined by such Sec-
retary under such regulations (by means of
deductibles, coinsurance, and other limits
on covered services) to be not less than a
percentage which is, taking into account
the population covered and the extent of
cost currently covered under group health
plans, adequate to meet basic health care
needs, and
‘‘(B) in the case of any individual de-
scribed in paragraph (2)(B) or (C) in relation
to a basic group health plan maintained by the
employer of such individual (or of the person of
whom such individual is a dependent), requires
contributions by the employer of not less than
the amount provided under the plan with re-
spect to individuals covered under such plan
who are similarly situated, disregarding any
condition under the plan relating to uninsurable
risks (in the case of an individual described in
paragraph (2)(B)) or to material pre-existing
conditions (in the case of an individual de-
scribed in paragraph (2)(C)).
In issuing regulations referred to in this paragraph
(including any revisions thereof), the Secretary of
Health and Human Services shall take into account
recommendations submitted to such Secretary by the
Federal Advisory Council on Health Care Coverage
and Costs pursuant to section 107(d)(2) of the Uni-
versal Health Benefits Empowerment and Partner-
ship Act of 1993.
‘‘(4) 
DEPENDENT.—The 
term 
‘dependent’
means, with respect to any individual, any person
who—
‘‘(A) is the spouse or surviving spouse of
the individual, or
‘‘(B) is, under regulations of the Secretary,
a child of such individual who—
‘‘(i) is under 18 years of age,
‘‘(ii) is under 23 years of age and a
full-time student, or
‘‘(iii) is otherwise dependent on such
individual.
‘‘(5) EMPLOYER.—The term ‘employer’ shall
have the meaning applicable under section 3(5), ex-
cept that such term shall include any State (or polit-
ical subdivision thereof), or any agency or instru-
mentality of one or more of the foregoing.
‘‘(6) ELIGIBLE INDIVIDUAL.—The term ‘eligible
individual’ means any employee or dependent there-
of, unless such employee or dependent—
‘‘(A) was eligible for coverage under a
basic group health plan which is maintained by
the employer and to which the employer makes
contributions but such coverage was declined
under such plan, or
‘‘(B) is excluded from coverage under such
a plan as an uninsurable risk but is eligible for
uninsurable risk coverage under an accessible
health benefits system in accordance with sub-
part C (and subpart D as applicable) (or any
substitute basic health benefits system with re-
spect to which the Secretary of Health and
Human Services has made a determination pur-
suant to section 102 of the Universal Health
Benefits Empowerment and Partnership Act of
1993 relating to the element of coverage de-
scribed in section 102(b)(2)(B)(i) of such Act
(relating to treatment of individuals as uninsur-
able risks)).
‘‘(7) UNINSURABLE RISK.—An individual shall
be deemed to have been excluded from coverage
under a basic health benefits provision as an ‘unin-
surable risk’ if such denial of coverage is provided—
‘‘(A) in such terms, or
‘‘(B) in such other terms or under such
circumstances as are, subject to such regula-
tions as the Secretary of Health and Human
Services may prescribe, reasonably equivalent to
such a denial.
‘‘(8) MATERIAL PRE-EXISTING CONDITION.—An
individual shall be deemed to have been provided
coverage by a basic health benefits provision subject
to a restriction based on a ‘material pre-existing
condition’ if, subject to such regulations as the Sec-
retary of Health and Human Services may prescribe,
under such provision—
‘‘(A) benefits (which would otherwise be
payable) are not paid solely on the basis of a
material pre-existing condition, or
‘‘(B) the costs for coverage of the individ-
ual with a material pre-existing condition, to ei-
ther an employer or to the individual, are at a
rate materially greater than costs for coverage
of similarly situated individuals without such a
material pre-existing condition, to the extent
such costs are payable to a third party.
‘‘(b) CROSS-REFERENCES.—
‘‘(1) GENERAL
RULE.—Except as otherwise
provided in this part, for definitions of terms used
in this part, see section 3.
‘‘(2) SECRETARY.—Except with respect to ref-
erences specifically to the Secretary of Health and
Human Services, for the definition of ‘Secretary’,
see section 3(13).
‘‘(3) REGULATIONS.—Except with respect to
provisions for which regulatory authority is specifi-
cally provided to the Secretary of Health and
Human Services, for provisions governing regulatory
authority under this part, see section 505.
‘‘Subpart B—Required Coverage Options; Group
Health Payroll Deduction Plans
‘‘SEC. 611. COVERAGE FOR ELIGIBLE INDIVIDUALS UNDER
BASIC GROUP HEALTH PLANS OR GROUP
HEALTH PAYROLL DEDUCTION PLANS.
‘‘(a) REQUIREMENT THAT EMPLOYERS OFFER COV-
ERAGE FOR ELIGIBLE INDIVIDUALS UNDER BASIC GROUP
HEALTH PLANS OR GROUP HEALTH PAYROLL DEDUC-
TION PLANS.—Each employer shall maintain with respect
to each eligible individual—
‘‘(1) a basic group health plan under which cov-
erage of such individual may be elected, or
‘‘(2) a group health payroll deduction plan (as
defined in section 612).
‘‘(b) SPECIAL RULES.—
‘‘(1) EXCLUSION OF CERTAIN EMPLOYERS.—
‘‘(A) IN GENERAL.—This section shall not
apply to any employer for any plan year if, as
of the beginning of such plan year—
‘‘(i) such employer (including any
predecessor thereof) has been an employer
for less than 2 years,
‘‘(ii) such employer has no more than
2 individuals in such employer’s employ, or
‘‘(iii) no more than 2 individuals in
such employer’s employ are not covered
under any basic group health plan.
‘‘(B) EXCLUSION OF FAMILY MEMBERS.—
Under such procedures as the Secretary may
prescribe, any relative of an employer may be,
at the election of the employer, excluded from
consideration as an employee for purposes of
this paragraph. In the case of an employer that
is not an individual, an employee who is a rel-
ative of a key employee (as defined in section
416(i)(1) of the Internal Revenue Code of
1986) of the employer may, at the election of
the key employee, be considered a relative ex-
cludible under this subparagraph.
‘‘(2) EXCLUSION OF CERTAIN TEMPORARY EM-
PLOYEES.—A plan shall not be treated as failing to
meet the requirements of this section solely because
a period of service by an employee of not more than
60 days is required under the plan for coverage of
such employee or any dependent thereof under the
plan.
‘‘SEC. 612. GROUP HEALTH PAYROLL DEDUCTION PLANS.
‘‘(a) GENERAL RULE.—For purposes of this subpart,
the term ‘group health payroll deduction plan’ means a
basic group health plan under which amounts are de-
ducted by the employer from the employee’s wages pursu-
ant to an election by the employee and paid as a contribu-
tion to such plan in accordance with such regulations as
the Secretary may prescribe relating to withholding proce-
dures and timely payment of premiums.
‘‘(b) ELECTIONS.—
‘‘(1) IN
GENERAL.—Any election by an em-
ployee under a group health payroll deduction plan
shall specify the amount which is to be deducted in
relation to the benefits provided under the plan. Any
such election may be revoked or changed by the em-
ployee under the terms of the plan.
‘‘(2) MANNER
FOR
MAKING
OR
REVOKING
ELECTIONS.—Any election under a group health
payroll deduction plan (and any revocation or
change of such an election) shall be made in such
form and in such manner as the Secretary may by
regulations prescribe.
‘‘SEC. 613. AVAILABILITY OF COVERAGE UNDER ACCES-
SIBLE HEALTH BENEFITS SYSTEMS.
‘‘In any case in which there is in effect, as of the
beginning of a plan year of any group health payroll de-
duction plan, an entity determined by the Secretary of
Health and Human Services to be an accessible health
benefits system established and maintained in accordance
with subpart C (and subpart D as applicable) with respect
to the employee, such plan shall not be treated as failing
to meet the requirements of section 612(a) for such plan
solely because the amounts deducted are, under such plan,
paid for such plan year or the succeeding plan year as
a contribution to such a system accepting coverage of such
employee rather than to such plan, if a provider of group
health plan coverage with respect to the plan rejects an
individual otherwise eligible for coverage under such plan
because of a requirement that a certain number or per-
centage of individuals otherwise eligible for coverage under
the plan are not covered.
‘‘Subpart C—Accessible Health Benefits Systems
‘‘SEC. 621. GENERAL REQUIREMENTS.
‘‘For purposes of this part, an accessible health bene-
fits system established and maintained in accordance with
this subpart is any system which, with respect to any
group of individuals residing in a defined geographic
area—
‘‘(1) meets the reporting requirements of sec-
tion 622,
‘‘(2) meets the participation requirements of
section 623 with respect to residents of the State,
‘‘(3) meets the benefit requirements of section
624,
‘‘(4) meets the contribution requirements of
section 625, and
‘‘(5) provides coverage in accordance with sub-
part D (relating to uninsurable risks and material
pre-existing conditions) as applicable.
‘‘SEC. 622. REPORTING REQUIREMENTS.
‘‘(a) IN GENERAL.—A health benefits system meets
the reporting requirements of this section if the system
maintains a program under which the system provides,
upon the request of group health payroll deduction plans
under which amounts are paid from such plans to the sys-
tem, such information held by the system as the plans re-
quire to meet the requirements of part 1 of subtitle B of
title I.
‘‘(b) FORM OF REQUESTS.—Each system shall be re-
quired to process requests made under this section only
if such requests are made in such form and manner as
may be prescribed in regulations of the Secretary.
‘‘SEC. 623. PARTICIPATION REQUIREMENTS.
‘‘A health benefits system meets the participation re-
quirements of this section if the system provides that an
individual within the group referred to in section 621 is
provided coverage under the system if such individual—
‘‘(1) BASIC AND CATASTROPHIC BENEFITS.—
Coverage under a basic health benefits provision.
‘‘(2) CATASTROPHIC
ONLY
COVERAGE.—Cata-
strophic coverage with respect to basic health care
services.
‘‘(3) 
SUPPLEMENTAL
BENEFITS.—Coverage
consisting of coverage described in paragraph (1)
and such supplemental coverage as the Secretary of
Health and Human Services may by regulation pre-
scribe.
‘‘(b) COST CONTAINMENT AND QUALITY OF CARE.—
A health benefits system does not meet the requirements
of this section unless such system, to the maximum extent
determined practicable under regulations of the Secretary
of Health and Human Services, taking into account qual-
ity of care, provides for a hospital precertification utiliza-
tion review program, constraint of costs to the extent prac-
ticable through the use of appropriately managed care,
and such other cost containment procedures as may from
time to time be proven effective.
‘‘(c) TREATMENT OF UNINSURABLE RISKS AND MA-
TERIAL PRE-EXISTING CONDITIONS.—In any case in
which the requirements of section 633 are met with re-
spect to any individual with respect to whom the system
meets the requirements of section 631, the requirements
of subsection (a) shall be treated as satisfied with respect
to such individual.
‘‘(d) DURATION OF COVERAGE.—A health benefits
system does not meet the requirements of this section if
coverage under such system terminates solely by reason
of the termination of a period of coverage required under
subpart E of this part or title XXII of the Public Health
Service Act.
‘‘(e) COVERAGE UNDER ACCESSIBLE HEALTH BENE-
FITS SYSTEM SECONDARY TO COVERAGE UNDER EM-
PLOYEE BENEFIT PLANS.—A health benefits system does
not meet the requirements of this section unless, under
the terms of such system, coverage under such system
with respect to any claim is secondary to coverage pro-
vided under any employee benefit plan with respect to such
claim.
‘‘SEC. 625. CONTRIBUTION REQUIREMENTS.
‘‘(a) IN GENERAL.—Except as otherwise provided in
this section, a health benefits system meets the contribu-
tion requirements of this section if the system does not
require, for coverage of individuals described in para-
graphs (1) and (2) of section 623(a), contributions in ex-
cess of levels determined—
‘‘(1) on the basis of its own experience with re-
spect to covered individuals described in such para-
graphs (1) and (2), and
‘‘(2) without regard to any coverage provided
under the system to individuals who are not de-
scribed in such paragraphs (1) and (2).
‘‘(b) VARIANCES IN RATE LEVEL.—
‘‘(1) SEPARATE
SCHEDULE
REQUIRED
FOR
CHILDREN-ONLY COVERAGE.—A health benefits sys-
tem does not meet the contribution requirements of
this section unless the system provides for a sepa-
rate schedule of contributions with respect to chil-
dren-only coverage.
‘‘(2) OTHER VARIANCES PERMITTED.—A health
benefits system shall not be treated as failing to
meet the requirements of this section solely because
the system otherwise provides for differing rates of
contributions to reflect the age, family composition,
or income of the covered individual and the location
at which the covered individual is expected to nor-
mally receive medical care.
‘‘(c) CERTAIN STATE AND OTHER CONTRIBUTIONS
PERMITTED.—A health benefits system shall not be treat-
ed as failing to meet the requirements of this section solely
because the system provides for—
‘‘(1) payment by any State or any other entity
of part or all of the contribution with respect to any
covered individual,
‘‘(2) varying the amount of such payment based
on the individual’s income or any other basis, or
‘‘(3) payment by any State or any other entity
of all or part of monthly premiums for purposes of
enrollment under section 1818 or 1818A of the So-
cial Security Act, or of premiums under section
1916(c) of such Act.
‘‘(d) MAXIMIZED PARTICIPATION.—A health benefits
system does not meet the requirements of this section if
the Secretary of Health and Human Services determines,
under regulations prescribed by such Secretary and on the
basis of past experience, that, under such system, con-
tributions are not established and maintained in such form
and manner as to be promotive of participation in the
system.
‘‘SEC. 626. RECIPROCITY AND RELIANCE BY ACCESSIBLE
HEALTH 
BENEFITS 
SYSTEMS 
ON 
OTHER
SUCH SYSTEMS.
‘‘The requirements of the preceding provisions of this
subpart may be met with respect to any health benefits
system by means of reciprocity agreements between such
system and any other such system with respect to which
such requirements are met.
‘‘SEC. 627. REGULATORY AUTHORITY OF SECRETARY OF
HEALTH AND HUMAN SERVICES.
‘‘The Secretary of Health and Human Services shall
prescribe such regulations as such Secretary considers
necessary to carry out the provisions of this subpart (other
than section 622).
‘‘Subpart D—Coverage for Uninsurable Risks and
Material Pre-Existing Conditions
‘‘SEC. 631. COVERAGE FOR UNINSURABLE RISKS AND PRE-
EXISTING CONDITIONS.
‘‘A health benefits system provides coverage in ac-
cordance with this subpart if such system, such system
in combination with one or more other health benefits sys-
tems, or such system under voluntary participation in a
program established by or under State law—
‘‘(1) meets the participation requirements of
section 632,
‘‘(2) meets the benefits requirements of section
633, and
‘‘(3) to the extent practicable and actuarially
sound, provides for separate accounting for such
coverage so as to separately account at least for in-
dividuals described in section 632(1)(A) and for in-
dividuals described in section 632(2)(A).
‘‘SEC. 632. PARTICIPATION REQUIREMENTS FOR UNINSUR-
ABLE RISKS AND MATERIAL PRE-EXISTING
CONDITIONS.
‘‘A health benefits system meets the participation re-
quirements of this section if the system meets the follow-
ing requirements:
‘‘(1) COVERAGE
FOR
UNINSURABLE
RISKS.—
The system provides that an individual is provided
coverage under the system if—
‘‘(A) such individual is an employee (or a
dependent thereof) who has been excluded as an
uninsurable risk from coverage under a basic
health benefits provision included in the system
or in a basic group health plan maintained by
the employer, or
‘‘(B) such individual is not an employee
(or dependent) described in subparagraph (A),
and—
‘‘(i) would, in accordance with section
623 (except section 623(a)(3)), be subject
to exclusion from coverage under a basic
health benefits provision included in the
system, or
‘‘(ii) in the case of an individual not
otherwise eligible for coverage under a
basic health benefits provision included in
the system or in a basic group health plan
or coverage under title XIX of the Social
Security Act, is rejected for coverage under
any policy of insurance which provides at
least basic health care services described in
section 601(a)(3)(A),
but would be eligible for such coverage but for
the exclusion of such individual from coverage
as an uninsurable risk.
‘‘(2) COVERAGE FOR MATERIAL PRE-EXISTING
CONDITIONS.—The system provides that an individ-
ual is provided coverage under the system for any
material pre-existing condition if—
‘‘(A) such individual is an employee (or a
dependent thereof) who is provided coverage
under a basic health benefits provision included
in the system or in a basic group health plan,
subject to a substantial restriction based on
such material pre-existing condition, or
‘‘(B) such individual is not an employee
(or dependent) described in subparagraph (A),
and—
‘‘(i) is provided coverage under a basic
health benefits provision included in the
system under subpart C, or
‘‘(ii) in the case of an individual not
otherwise eligible for coverage under a
basic health benefits provision included in
the system or in a basic group health plan
or coverage under title XIX of the Social
Security Act, is provided coverage under a
policy of insurance which provides at least
basic health care services,
but such coverage is provided subject to such a
substantial restriction.
‘‘SEC. 633. BENEFITS REQUIREMENTS FOR UNINSURABLE
RISKS AND MATERIAL PRE-EXISTING CONDI-
TIONS.
‘‘A health benefits system meets the benefits require-
ments of this section if the system provides, directly or
through insurance, reinsurance, or otherwise—
‘‘(1) in the case of individuals described in sec-
tion 632(1), benefits described in section 624(a),
and
‘‘(2) in the case of individuals described in sec-
tion 632(2), coverage of the material pre-existing
condition which is not otherwise covered to the ex-
tent necessary to constitute basic health care serv-
ices described in section 601(a)(3)(A) with respect
to such condition, in accordance with such regula-
tions as the Secretary of Health and Human Serv-
ices may prescribe.
‘‘SEC. 634. REGULATORY AUTHORITY OF SECRETARY OF
HEALTH AND HUMAN SERVICES.
‘‘The Secretary of Health and Human Services shall
prescribe such regulations as such Secretary considers
necessary to carry out the provisions of this subpart.’’.
(b) REGULATIONS FOR DEFINING BASIC HEALTH
CARE PROVISIONS.—
(1)
INITIAL
REGULATIONS.—Not
later
than July 1, 1994, the Secretary of Health and
Human Services shall publish in the Federal Reg-
ister proposed regulations referred to in section
601(a)(3) of the Employee Retirement Income Secu-
rity Act of 1974 (as amended by subsection (a)). In
prescribing such proposed regulations, the Secretary
shall take into account recommendations submitted
to the Secretary by the Federal Advisory Council on
Health Care Coverage and Costs pursuant to section
107(d)(1) of this Act.
(2) INTERIM
REVIEW
PERIOD
BEFORE
ISSU-
ANCE OF FINAL REGULATIONS.—The Secretary of
Health and Human Services shall not issue the reg-
ulations referred to in section 601(a)(3) of the Em-
ployee Retirement Income Security Act of 1974 in
final form before July 1, 1995.
(c) ENFORCEMENT OF CERTAIN PROVISIONS BY SEC-
RETARY OF HEALTH AND HUMAN SERVICES.—Section
502(a) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132(a)) is amended by adding at the
end, after and below paragraph (6), the following new
flush sentence:
‘‘With respect to provisions of subparts C and D of part
6 (other than section 622), the references to ‘Secretary’
in paragraph (5), and in other provisions of this part relat-
ing to actions brought under such paragraph, shall be
deemed a reference to the Secretary of Health and Human
Services.’’.
(d) CLERICAL AMENDMENT.—The table of contents
in section 1 of such Act is amended by striking the items
relating to part 6 of subtitle B of title I and inserting
the following new items:
‘‘PART 6—UNIVERSAL ACCESS TO COVERAGE UNDER GROUP HEALTH PLANS
AND STATE HEALTH BENEFITS SYSTEMS
‘‘Subpart A—General Provisions
‘‘Sec. 601. Definitions and special rules.
‘‘Subpart B—Required Coverage Options; Group Health Payroll Deduction
Plans
‘‘Sec. 611. Coverage for eligible individuals under basic group health plans or
group health payroll deduction plans.
‘‘Sec. 612. Group health payroll deduction plans.
‘‘Sec. 613. Availability of coverage under accessible health benefits systems.
‘‘Subpart C—Accessible Health Benefits Systems
‘‘Sec. 621. General requirements.
‘‘Sec. 622. Reporting requirements.
‘‘Sec. 623. Participation requirements.
‘‘Sec. 624. Benefits requirements.
‘‘Sec. 625. Contribution requirements.
‘‘Sec. 626. Reciprocity and reliance by accessible health benefits systems on
other such systems.
‘‘Sec. 627. Regulatory Authority of Secretary of Health and Human Services.
‘‘Subpart D—Coverage for Uninsurable Risks and Material Pre-Existing
Conditions
‘‘Sec. 631. Coverage for uninsurable risks and material pre-existing conditions.
‘‘Sec. 632. Participation requirements for uninsurable risks and material pre-
existing conditions.
‘‘Sec. 633. Benefit requirements for uninsurable risks and material pre-existing
conditions.
‘‘Sec. 634. Regulatory authority of Secretary of Health and Human Services.
‘‘Subpart E—Continuation Coverage Requirements
‘‘Sec. 641. Plans must provide continuation coverage to certain individuals.
‘‘Sec. 642. Continuation coverage.
‘‘Sec. 643. Qualifying event.
‘‘Sec. 644. Applicable premium.
‘‘Sec. 645. Election.
‘‘Sec. 646. Notice requirements.
‘‘Sec. 647. Definitions.
‘‘Sec. 648. Regulations.’’.
SEC. 102. ESTABLISHMENT OF STATE-BASED SYSTEM IN AB-
SENCE OF STATE-WIDE ACCESS TO COV-
ERAGE; SUBSTITUTE SYSTEMS.
(a) STATE-BASED SYSTEMS.—
(1) IN GENERAL.—If, as of January 1, 1996,
one or more residents of any State (as defined in
section 3(10) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(10))) are—
(A) individuals described in section 623(a)
of such Act (as amended by this Act), and
(B) are eligible for coverage under none of
the following:
(i) a basic group health plan (as de-
fined in section 601(a)(2) of such Act (as
amended by this Act)),
(ii) an accessible health benefits sys-
tem meeting the requirements of subpart C
(and subpart D as applicable) of part 6 of
subtitle B of title I of such Act, and
(iii) a substitute health benefits sys-
tem (as defined in subsection (b)(2)(A)),
then such State may establish and maintain a health
benefits system covering such residents to the extent
that such system is an accessible health benefits sys-
tem established and maintained in accordance with
this subsection and such subpart C (and such sub-
part D as applicable).
(2) GOVERNANCE
OF
SYSTEM.—The system
shall not be treated as meeting the requirements of
this subsection unless such system—
(A) is administered by a nonprofit corpora-
tion which is established by and regulated
under the laws of such State,
(B) such corporation is governed by a
Board of Directors whose membership includes
representatives of at least employers, employee
organizations, and providers of group health
plan coverage, and
(C) such corporation is subject under State
law to the supervision of an agency of the State
which is responsible for the regulation of pro-
viders of group health plan coverage.
(3) EXCLUSIONS.—The system shall not be
treated as meeting the requirements of this sub-
section unless the system excludes from coverage—
(A) except to the extent permitted under
section 625(c)(3) of the Employee Retirement
Income Security Act of 1974 (as amended by
this Act), individuals entitled to benefits under
title XVIII or XIX of the Social Security Act,
or
(B) inmates of public institutions.
(b) SUBSTITUTE BASIC HEALTH BENEFITS SYS-
TEMS.—
(1) IN GENERAL.—If, at any time before the ef-
fective date for the amendments made by section
101, the Secretary of Health and Human Services
determines, under regulations prescribed by the Sec-
retary—
(A) that there is in effect, with respect to
any group of individuals, an arrangement which
is a substitute basic health benefits system, and
(B) that, with respect to such group of in-
dividuals, such system meets requirements (pro-
vided in such regulations) for a specified ele-
ment of coverage which are substantially equiv-
alent to the requirements of the specified
ERISA provision which is applicable to such
specified element of coverage,
then the requirements of such specified ERISA pro-
vision shall be treated as met with respect to such
individuals until such Secretary nullifies such deter-
mination under such regulations.
(2) DEFINITIONS
AND
SPECIAL
RULES.—For
purposes of this subsection—
(A) SUBSTITUTE BASIC HEALTH BENEFITS
SYSTEM.—The term ‘‘substitute basic health
benefits system’’ means, with respect to any
group of individuals, any arrangement (other
than an accessible health benefits system estab-
lished and maintained in accordance with sub-
part C (and subpart D as applicable) of part 6
of subtitle B of title I of ERISA) which—
(i) includes at least a basic health
benefits provision (as defined in section
601(a)(3) of ERISA), and
(ii) meets, with respect to such indi-
viduals, the reporting requirements of sec-
tion 622 of ERISA, the participation re-
quirements of section 623 of ERISA, the
benefits requirements of section 624 of
ERISA, and the contribution requirements
of section 625 of ERISA.
(B) SPECIFIED ELEMENT OF COVERAGE.—
The term ‘‘specified element of coverage’’
means any of the following:
(i) TREATMENT
OF
UNINSURABLE
RISKS.—Exclusion from coverage of an in-
dividual as an uninsurable risk under a
basic health benefits provision included in
a plan, within the meaning of section
601(a)(7) of ERISA.
(ii) TREATMENT OF MATERIAL PRE-
EXISTING
CONDITIONS.—Coverage of an
individual under a basic health benefits
provision included in a plan subject to a
restriction based on a material pre-existing
condition, within the meaning of section
601(a)(8) of ERISA.
(iii) PROVISION
OF
CONTINUATION
COVERAGE.—Provision of coverage by a
plan to qualified beneficiaries required
under subpart E of part 6 of subtitle B of
title I of ERISA or under title XXII of the
Public Health Service Act.
(C) SPECIFIED ERISA PROVISIONS.—
(i) TREATMENT
OF
UNINSURABLE
RISKS.—The ‘‘specified ERISA provision’’
applicable to the specified element of cov-
erage described in subparagraph (B)(i) is
section 601(a)(2)(D)(i) of ERISA.
(ii) TREATMENT OF MATERIAL PRE-
EXISTING
CONDITIONS.—The 
‘‘specified
ERISA provision’’ applicable to the speci-
fied element of coverage described in sub-
paragraph 
(B)(ii) 
is 
section
601(a)(2)(D)(ii) of ERISA.
(iii) PROVISION
OF
CONTINUATION
COVERAGE.—The ‘‘specified ERISA provi-
sions’’ applicable to the specified element
of coverage described in subparagraph
(B)(iii) are section 641(b) of ERISA, sec-
tion 4980B(f)(8) of the Internal Revenue
Code of 1986, and section 2201(b) of the
Public Health Service Act.
(D) STATE.—The term ‘‘State’’ has the
meaning provided in section 3(10) of ERISA.
(E) ERISA.—The term ‘‘ERISA’’ means
the Employee Retirement Income Security Act
of 1974, as amended by this Act.
(c) FEDERAL ASSISTANCE IN ESTABLISHMENT OF
UNIVERSAL ACCESS TO COVERAGE.—
(1) 
GRANT
PROGRAM.—The 
Secretary 
of
Health and Human Services shall establish by regu-
lation a program of monetary assistance in the form
of grants to accessible health benefits systems estab-
lished and maintained in accordance with subpart C
(and subpart D as applicable) of part 6 of subtitle
B of title I of the Employee Retirement Income Se-
curity Act of 1974 pursuant to the amendments
made by this Act. Grants to any system shall be in
such amount as such Secretary considers appro-
priate to facilitate the effectuation of the policies of
this Act.
(2) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated for the De-
partment of Health and Human Services, for the
purpose of carrying out the provisions of paragraph
(1), $200,000,000 for each of the fiscal years 1994,
1995, and 1996.
SEC. 103. CONTINUATION COVERAGE AND ACCESSIBLE
HEALTH BENEFITS SYSTEMS OR SUBSTITUTE
SYSTEMS.
(a) AMENDMENT TO ERISA.—Section 641(b) of the
Employee Retirement Income Security Act of 1974 (as re-
designated by section 102) is amended to read as follows:
‘‘(b) SUBSTITUTION OF ACCESSIBLE HEALTH BENE-
FITS SYSTEM
OR SUBSTITUTE SYSTEM.—The require-
ments of this subpart may be met by providing, as an op-
tion to qualified beneficiaries or otherwise, for coverage
of them under an accessible health benefits system estab-
lished and maintained in accordance with subpart C (and
subpart D as applicable), or under a substitute health ben-
efits system providing continuation coverage in accordance
with section 102 of the Universal Health Benefits
Empowerment and Partnership Act of 1993, in lieu of cov-
erage as otherwise required under this subpart.’’.
(b) CONFORMING AMENDMENT TO INTERNAL REVE-
NUE CODE.—Section 4980B of the Internal Revenue Code
of 1986 (relating to excise tax for failure to satisfy con-
tinuation coverage requirements of group health plans) is
amended—
ments of this title may be met by providing, as an option
to qualified beneficiaries or otherwise, for coverage of
them under an accessible health benefits system estab-
lished and maintained in accordance with subpart C (and
subpart D as applicable) of part 6 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974, or under a substitute health benefits system provid-
ing continuation coverage in accordance with section 102
of the Universal Health Benefits Empowerment and Part-
nership Act of 1993, in lieu of coverage as otherwise re-
quired under this title.’’.
SEC. 104. PREEMPTION OF STATE LAW TO PROVIDE FOR
MORE 
AFFORDABLE 
HEALTH 
CARE 
COV-
ERAGE.
(a) IN GENERAL.—Section 514(b)(2)(B) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1144(b)(2)(B)) is amended—
(1) by inserting ‘‘(i)’’ after ‘‘(B)’’; and
(2) by adding at the end the following new
clause:
‘‘(ii) A provision of State law which provides that one
or more specific benefits must be provided or made avail-
able by a contract or policy of health insurance issued to
an employee benefit plan, or which provides that services
rendered by one or more particular classes of health care
providers must be covered under such a contract or policy,
is a law which relates to an employee benefit plan within
the meaning of subsection (a) and is not a law which regu-
lates insurance within the meaning of subparagraph (A).’’.
(b) PREEMPTION
OF CERTAIN STATE LAWS RE-
STRICTING MANAGED CARE UNDER EMPLOYEE WELFARE
BENEFIT PLANS.—Section 514(b) of such Act is amended
by adding at the end the following new paragraph:
‘‘(9) For purposes of this section, a provision of State
law which in any manner restricts managed care under
an employee welfare benefit plan providing medical care
(as defined in section 213(d) of the Internal Revenue Code
of 1986) to participants or beneficiaries directly or
through insurance, reimbursement, or otherwise, by re-
stricting the ability to negotiate provider reimbursement
rates or to set such rates for any provider, limiting the
number or type of providers, or restricting utilization or
quality review in connection with such plan shall be
deemed a law which relates to an employee benefit plan
within the meaning of subsection (a) and not a law which
regulates insurance within the meaning of paragraph
(2)(A).’’.
SEC. 105. ENCOURAGEMENT OF MULTIPLE EMPLOYER AR-
RANGEMENTS 
PROVIDING 
BASIC 
HEALTH
BENEFITS.
Paragraph (9) of section 501(c) of the Internal Reve-
nue Code of 1986 (relating to exempt organizations) is
amended—
(1) by inserting ‘‘(A)’’ after ‘‘(9)’’; and
(2) by adding at the end the following:
‘‘(B) Any determination of whether a multiple
employer welfare arrangement (as defined in section
3(25) of the Employee Retirement Income Security
Act of 1974) is a voluntary employees’ beneficiary
association meeting the requirements of this para-
graph shall be made without regard to any deter-
mination of commonality of interest or geographic
location if—
‘‘(i) such arrangement provides at least
basic health care services described in section
601(a)(3)(A) of the Employee Retirement In-
come Security Act of 1974, and
‘‘(I) such arrangement is fully in-
sured, or
‘‘(II) 
meets 
the 
requirements
enforcible under section 514(b)(6)(B)(i) of
such Act, and
‘‘(ii) meets reporting requirements which
shall be prescribed by the Secretary and are
similar to the requirements of section 622 of
such Act.’’.
SEC. 106. TREATMENT PRACTICE GUIDELINES AND OUT-
COMES RESEARCH FOR ALL AMERICANS.
(a) AGENCY FOR HEALTH CARE POLICY AND RE-
SEARCH.—So much of part A of title IX of the Public
Health Service Act as precedes section 902(c) is amended
to read as follows:
‘‘PART A—ESTABLISHMENT AND GENERAL DUTIES
‘‘SEC. 901. ESTABLISHMENT.
‘‘(a) IN GENERAL.—There is established within the
Service an agency to be known as the Agency for Health
Care Policy and Research.
‘‘(b) PURPOSE.—The purpose of the Agency is to en-
hance the quality, appropriateness, and effectiveness of
health care services for all Americans, and access to such
services, through the establishment of a broad base of sci-
entific research and through the promotion of improve-
ments in clinical practice and in the organization, financ-
ing, and delivery of health care services.
‘‘(c) APPOINTMENT
OF
ADMINISTRATOR.—There
shall be at the head of the Agency an official to be known
as the Administrator for Health Care Policy and Re-
search. The Administrator shall be appointed by the Sec-
retary. The Secretary, acting through the Administrator,
shall carry out the authorities and duties established in
this title.
‘‘SEC. 902. GENERAL AUTHORITIES AND DUTIES.
‘‘(a) IN GENERAL.—In carrying out section 901(b),
the Administrator shall conduct and support research,
demonstration projects, evaluations, training, guideline de-
velopment, and the dissemination of information, on
health care services and on systems for the delivery of
such services to all Americans, including activities with re-
spect to—
‘‘(1) the effectiveness, efficiency, and quality of
health care services;
‘‘(2) subject to subsection (d), the outcomes of
health care services and procedures;
‘‘(3) clinical practice, including primary care
and practice-oriented research;
‘‘(4) health care technologies, facilities, and
equipment;
‘‘(5) health care costs, productivity, and market
forces;
‘‘(6) health promotion and disease prevention;
‘‘(7) health statistics and epidemiology; and
‘‘(8) medical liability.
‘‘(b) REQUIREMENTS WITH RESPECT
TO RURAL
AREAS AND UNDERSERVED POPULATIONS.—In carrying
out subsection (a), the Administrator shall undertake and
support research, demonstration projects, and evaluations
with respect to—
‘‘(1) the delivery of health care services in rural
areas (including frontier areas) to Americans of all
ages; and
‘‘(2) the health of low-income groups, minority
groups, and the elderly.’’.
(b) FORUM FOR QUALITY AND EFFECTIVENESS IN
HEALTH CARE.—So much of part B of title IX of the
Public Health Service Act as precedes section 912(c) is
amended to read as follows:
‘‘PART B—FORUM FOR QUALITY AND EFFECTIVENESS
IN HEALTH CARE
‘‘SEC. 911. ESTABLISHMENT OF OFFICE.
‘‘There is established within the Agency an office to
be known as the Office of the Forum for Quality and Ef-
fectiveness in Health Care. The office shall be headed by
a director, who shall be appointed by the Administrator.
‘‘SEC. 912. DUTIES.
‘‘(a) ESTABLISHMENT OF FORUM PROGRAM.—The
Administrator, acting through the Director, shall establish
a program to be known as the Forum for Quality and Ef-
fectiveness in Health Care. For the purpose of promoting
the quality, appropriateness, and effectiveness of health
care, the Director, using the process set forth in section
913, shall arrange for the development and periodic review
and updating of—
‘‘(1) clinically relevant guidelines that may be
used by physicians, educators, and health care prac-
titioners to assist in determining how diseases, dis-
orders, and other health conditions can most effec-
tively and appropriately be prevented, diagnosed,
treated, and managed clinically; and
‘‘(2) standards of quality, performance meas-
ures, and medical review criteria through which
health care providers and other appropriate entities
may assess or review the provision of health care
and assure the quality of such care.
‘‘(b) CERTAIN REQUIREMENTS.—Guidelines, stand-
ards, performance measures, and review criteria under
subsection (a) shall—
‘‘(1) be based on the best available research and
professional judgment regarding the effectiveness
and appropriateness of health care services and pro-
cedures;
‘‘(2) be presented—
‘‘(A) in formats appropriate for use by
physicians, health care practitioners, providers,
medical educators, and medical review organiza-
tions,
‘‘(B) in formats appropriate for use by
group health plans (as defined in section
601(a)(1) of the Employee Retirement Income
Security Act of 1974), health benefits systems
established and maintained by States in accord-
ance with subpart C of part 6 of subtitle B of
title I of the Employee Retirement Income Se-
curity Act of 1974, and substitute basic health
benefits systems with respect to which the Sec-
retary has made a determination pursuant to
section 4 of the Universal Health Benefits
Empowerment and Partnership Act of 1990 re-
lating to an element of coverage described in
section 4(a)(2)(B) of such Act, and
‘‘(C) in formats appropriate for use by
consumers of health care; and
‘‘(3) include treatment-specific or condition-spe-
cific practice guidelines for clinical treatments and
conditions in forms appropriate for use in clinical
practice, for use in educational programs, and for
use in reviewing quality and appropriateness of med-
ical care.’’.
(c) DISSEMINATION
OF
STANDARDS, CRITERIA,
ETC.—Section 914(c) of the Public Health Service Act is
amended to read as follows:
‘‘(c) DISSEMINATION.—
‘‘(1) IN GENERAL.—The Director shall promote
and support the dissemination of the guidelines,
standards, performance measures, and review cri-
teria described in section 912(a).
‘‘(2) ORGANIZATIONS UTILIZED.—Such dissemi-
nation shall be carried out through—
‘‘(1) organizations representing health care
providers;
‘‘(2) group health plans (as defined in sec-
tion 601(a)(1) of the Employee Retirement In-
come Security Act of 1974);
‘‘(3) accessible health benefits systems es-
tablished and maintained in accordance with
subpart C (and subpart D as applicable) of part
6 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974;
‘‘(4) organizations representing health care
consumers;
‘‘(5) peer review organizations;
‘‘(6) accrediting bodies; and
‘‘(7) other appropriate entities.’’.
(d) STUDY OF ROLE OF PRACTICE GUIDELINES IN
REDUCING MALPRACTICE COSTS.—As soon as practicable
after the date of the enactment of this Act, the Federal
Advisory Council on Health Care Coverage and Costs shall
undertake a study of the manner in which practice guide-
lines may be used in reducing medical malpractice costs.
The Council shall submit the results of such study to-
gether with any recommendations to the Secretary of
Health and Human Services.
(e) AUTHORIZATION
OF ADDITIONAL APPROPRIA-
TIONS.—Section 926(a) of the Public Health Service Act
is amended by adding at the end the following: ‘‘In addi-
tion to amounts otherwise authorized by this subsection,
for the purpose of carrying out the amendments made by
section 8 of the Universal Health Benefits Empowerment
and Partnership Act of 1993, there are authorized to be
appropriated 
$10,000,000 
for 
fiscal 
year 
1994,
$15,000,000 for fiscal year 1995, and $20,000,000 for fis-
cal year 1996.’’.
SEC. 107. FEDERAL ADVISORY COUNCIL ON HEALTH CARE
COVERAGE AND COSTS.
(a) IN GENERAL.—There is hereby established a
Federal Advisory Council on Health Care Coverage and
Costs for the purpose of reviewing, overseeing, and making
recommendations relating to the implementation of the
provisions of this Act and studying the causes of changes
in the costs of health care coverage and delivery.
(b) MEMBERSHIP.—The Council shall consist of a
Chairman and 12 other persons, appointed by the Sec-
retary of Health and Human Services with the concur-
rence of the Secretary of Labor and without regard to the
provisions of title 5, United States Code, governing ap-
pointments in the competitive service. The appointed
members shall, to the extent possible, represent organiza-
tions of small and large employers, employee organiza-
tions, health care providers, providers of group health plan
coverage, State and local governments, the field of actuar-
ial counseling, and the general public.
(c) EXPENSES.—
(1) SERVICES AND ASSISTANCE.—The Council
is authorized to engage such technical assistance, in-
cluding actuarial services, as may be required to
carry out its functions, and the Secretary of Health
and Human Services and the Secretary of Labor
shall, in addition, make available to the Council such
secretarial, clerical, and other assistance as it may
require to carry out such functions. The Secretary of
Health and Human Services and the Secretary of
Labor shall, in addition, make available to the Coun-
cil such actuarial and other pertinent data prepared
by the Department of Health and Human Services,
the Department of Labor, or other agencies of the
Government as it may require to carry out such
functions.
(2) TRAVEL AND PER DIEM.—Appointed mem-
bers of the Council, while serving on the business of
the Council (inclusive of travel time), while so serv-
ing away from their homes or regular places of busi-
ness, may be allowed travel expenses, including per
diem in lieu of subsistence, as authorized by section
5703 of title 5, United States Code, for persons in
the Government employed intermittently.
(d) FUNCTIONS.—The Council shall—
(1) make timely recommendations to the Sec-
retary of Health and Human Services for purposes
of the issuance of initial regulations under section
101(b)(1),
(2) make recommendations to the Secretary of
Health and Human Services relating to appropriate
mechanisms for and the frequency of revisions of
regulations under section 601(a)(3) of the Employee
Retirement Income Security Act of 1974 (as amend-
ed by this Act),
(3) otherwise advise the Secretary of Health
and Human Services and the Secretary of Labor
with respect to the implementation of the amend-
ments made by this Act,
(4) offer States and other entities advice re-
garding health benefits systems and implementation
of the amendments made by this Act,
(5) serve as a forum for exchange of advice,
recommendations, and information regarding the
amendments made by this Act, their implementation,
and health benefits systems established and main-
tained by States, and otherwise foster cooperation
between States and other entities in implementing
such amendments,
(6) make from time to time such recommenda-
tions as it considers appropriate relating to possible
improvements relating to the financing and afford-
ability of health care coverage for individuals eligible
for coverage under health benefits systems estab-
lished and maintained by States and other entities,
and
(7) make from time to time such recommenda-
tions to the Secretary of Health and Human Serv-
ices and to the Congress as it considers appropriate
relating to changes in the costs of health care cov-
erage and delivery.
(e) REPORTS.—The Council shall, at least annually,
submit a report to the Secretary of Health and Human
Services and the Secretary of Labor of any findings or
recommendations relating to matters considered by the
Council, and such reports shall thereupon be transmitted
to the Congress.
(f) FINAL REPORT AND TERMINATION.—Upon the
request of the Secretary of Health and Human Services,
the Council shall submit a final report to such Secretary
and the Secretary of Labor. The Council shall terminate
upon the submission of such final report.
SEC. 108. INCREASE IN DEDUCTION FOR HEALTH INSUR-
ANCE COSTS OF SELF-EMPLOYED INDIVID-
UALS FROM 25 PERCENT TO 100 PERCENT.
(a) IN GENERAL.—Paragraph (1) of section 162(l)
of the Internal Revenue Code of 1986 (relating to special
rules for health insurance costs of self-employed individ-
uals) is amended by striking ‘‘25 percent’’ and inserting
‘‘the applicable percentage’’.
(b) APPLICABLE PERCENTAGE.—Paragraph (6) of
section 162(l) of such Code is amended to read as follows:
‘‘(6) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1)—
In the case of taxable
years beginning in
The applicable
calendar year:
percentage is:
1992, 1993, 1994, or 1995 .......................................
25 percent
1996 or 1997 .............................................................
50 percent
1998 or thereafter .....................................................
100 percent.’’
SEC. 109. EFFECTIVE DATES.
(a) SECTIONS 101 AND 103.—The amendments made
by section 101 shall take effect January 1, 1996, and the
amendments made by section 103 shall apply with respect
to plan years beginning on or after such date.
(b) SECTION 102.—The provisions of section 102
shall take effect on the date of the enactment of this Act.
(c) SECTION 104.—The amendments made by section
104(b) shall take effect January 1, 1994. The amend-
ments made by section 104(a) shall take effect January
1, 1994, except that with respect to plans in effect on the
date of the enactment of this Act, such amendments shall
take effect on the effective date of section 101.
(d) SECTION 105.—The amendments made by sec-
tion 105 shall apply with respect to determinations made
on or after January 1, 1994.
(e) SECTION 106.—The amendments made by section
106 shall take effect January 1, 1994.
(f) SECTION 107.—The provisions of section 107
shall take effect on the date of the enactment of this Act.
(g) SECTION 108.—The amendments made by sec-
tion 108 shall apply with respect to taxable years begin-
ning on or after January 1, 1992.
TITLE II—MEDICAL AND HEALTH
INSURANCE 
INFORMATION
REFORM
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘Medical and Health
Insurance Information Reform Act of 1993’’.
SEC. 202. MEDICAL AND HEALTH INSURANCE INFORMA-
TION REFORM.
The Social Security Act, as amended by section 202,
is further amended by adding at the end the following new
title:
‘‘TITLE XXII—MEDICAL AND HEALTH
INSURANCE INFORMATION REFORM
‘‘PART A—COMPARATIVE VALUE INFORMATION
‘‘COMPARATIVE VALUE INFORMATION PROGRAMS FOR
HEALTH CARE PURCHASING
‘‘SEC. 2200. (a) PURPOSE.—In order to assure the
availability of comparative value information to purchasers
of health care in each State, the Secretary shall determine
whether each State is developing and implementing a
health care value information program that meets the cri-
teria and the schedule see out in subsection (b).
‘‘(b) CRITERIA FOR STATE PROGRAMS.—A State’s
health care value information program shall be determined
by the Secretary to meet the criteria and the schedule of
this subsection if—
‘‘(1) the State begins promptly after enactment
of this section to develop (directly or through con-
tractual or other arrangements with coalitions of
health care purchasers, one or more States, other
entities, or any combination of such arrangements)
information systems regarding comparative health
care values;
‘‘(2) the information contained in such systems
covers at least the average prices of common health
care services (as defined in subsection (c)) and infor-
mation related to the value of each health insurance
plan available in the State, including premium costs
and the value of benefits, and, where available,
measures of the variability of those prices within the
State or other market areas;
‘‘(3) the information described in paragraph (2)
is made available within the State beginning not
later than one year after enactment of this section,
and is revised as frequently as reasonably necessary,
but at intervals of no greater than one year; and
‘‘(4) not later than four years following the en-
actment of this section, the State has developed in-
formation systems that provide comparative quality
and outcomes data with respect to health insurance
plans and hospitals and made the information broad-
ly available within the relevant market areas.
‘‘(c) DEFINITION.—For purposes of this section,
‘common health care services’ includes such procedures as
the Secretary may specify and any additional health care
services which a State may wish to include in its compara-
tive value information program.
‘‘(d) FEDERAL IMPLEMENTATION.—If the Secretary
finds, at any time, that a State has not developed a health
care value information program, or has failed to imple-
ment it (on a continuing basis) in accordance with the cri-
teria and schedule set out in subsection (b), he shall take
the actions necessary, directly or through grant or con-
tract, to implement a comparable program in such State.
Fees may be charged by the Secretary for the informa-
tional materials provided pursuant to such program. Any
amounts so collected shall be deposited in the appropria-
tion account from which the Secretary’s costs of develop-
ing and providing such materials were met, and shall re-
main available for such purposes until expended.
‘‘(e) COMPARATIVE VALUE INFORMATION CONCERN-
ING FEDERAL PROGRAMS.—The head of each Federal
agency with responsibility for the provision of health in-
surance, or of health care services, to individuals shall
promptly develop health care value information relating to
each program that he administers, and covering types of
data comparative to the types of data that a State pro-
gram meeting the criteria of this part would provide. Such
information shall be made generally available to States
and to providers and consumers of health care services.
‘‘(f) INFORMATION
FOR RESEARCH FROM INSUR-
ERS.—
‘‘(1) The Secretary, after consulting with insur-
ers, providers, and others, shall promulgate (and
may modify from time to time) requirements for the
periodic submission by insurers to the Secretary on
a sample basis of health care data relevant to re-
search concerning health care services, and shall
promulgate an effective date for those requirements,
to be at least one year after their promulgation.
‘‘(2) Each insurer shall comply with the re-
quirements specified by the Secretary under para-
graph (1) by the effective date specified by the Sec-
retary.
‘‘(3) For provisions imposing an excise tax with
respect to noncompliance with Federal requirements
under this subsection, see section 5000A of the In-
ternal Revenue Code of 1986.
‘‘(g) RELEASE OF MEDICARE INFORMATION.—
‘‘(1) The Department of Health and Human
Services shall make available, under section 552 of
title 5, United States Code, all records of claims
filed under the programs established by title XVIII
of the Social Security Act, without regard to the
consent of the physician or other individual who fur-
nished the item or service in question.
‘‘(2)(A) Paragraph (1) shall not affect any pro-
hibition against disclosure under section 552a of
title 5, United States Code, with respect to any indi-
vidual to whom an item or service was furnished.
‘‘(B) The requirement of paragraph (1) does
not apply to information received by the Department
of Health and Human Services, or by any of its con-
tractors, before the date of enactment of the Medical
and Health Insurance Information Reform Act of
1994.
‘‘(h) DEVELOPMENT OF MODEL SYSTEMS.—
‘‘(1) The Secretary shall, directly or through
grant or contract, develop model systems to facilitate
gathering of health care cost, quality, and outcomes
data and analyzing such data in a manner that will
permit the valid comparison of such data cost, qual-
ity, and outcomes among providers and among
health plans. The Secretary shall support experimen-
tation with different approaches to achieve the objec-
tives of the preceding sentence in the most cost ef-
fective manner (relative to the accuracy and timeli-
ness of the data secured) and shall evaluate the var-
ious methods to determine their relative success.
When he considers it appropriate, the Secretary may
establish standards for the collection and reporting
of health care cost, quality, and outcomes data in
order to facilitate analysis and comparisons among
States and nationally.
‘‘(2) There are authorized to be appropriated
such sums as are necessary for each fiscal year be-
ginning with fiscal year 1994, to enable the Sec-
retary to conduct the activities required by para-
graph (1), including evaluation of the different ap-
proaches tested under such paragraph and their rel-
ative cost effectiveness.
‘‘GRANTS FOR THE DEVELOPMENT OF STATE PROGRAMS
‘‘SEC. 2201. (a) GRANT AUTHORITY.—The Secretary
may make grants to each State to enable such State to
plan the development of its health care value information
program described in section 2200, and if necessary, to
initiate the implementation of such program. Each State
seeking such a grant shall submit an application therefor,
containing such information as the Secretary finds nec-
essary to assure that the State is likely to develop and
implement a program in accordance with the criteria and
schedule of section 2200(b).
‘‘(b) OFFSET AUTHORITY.—If, at any time within the
three year period following the receipt by a State of a
grant pursuant to subsection (a), the Secretary is required
by section 2200(d) to implement a health care information
program in such State, he may recover the amount of the
grant under subsection (a) by offset against any other
amount payable to such State under this Act. The amount
of the offset shall be made available (from the appropria-
tion account with respect to which the offset was taken)
to the Secretary to carry out section 2200(d) in such
State.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There
are authorized to be appropriated such sums as are nec-
essary to carry out this section, to remain available until
expended.
‘‘PART B—STORAGE AND TRANSMISSION OF MEDICAL
AND HEALTH INSURANCE INFORMATION AND PRI-
ORITY OF PAYMENT
‘‘PREEMPTION OF STATE QUILL PEN LAWS
‘‘SEC. 2210. After 1994, no effect shall be given to
any provision of State law that requires medical or health
insurance records (including billing information) to be
maintained in written, rather than electronic, form.
‘‘PROMULGATION OF REQUIREMENTS BY SECRETARY
‘‘SEC. 2211. (a) HEALTH INSURANCE INFORMATION
PRIVACY AND CONFIDENTIALITY PROTECTION.—
‘‘(1) The Secretary, after taking into consider-
ation the Insurance Information and Privacy Protec-
tion Model Act of the NAIC, shall promulgate by
January 1, 1994, (and may modify from time to
time) requirements concerning health insurance in-
formation privacy and confidentiality protection for
individuals. There shall be included a requirement
that information that identifies individuals shall not
be redisclosed (with such limited exceptions as the
Secretary may provide) except to the extent nec-
essary to carry out the purpose for which the infor-
mation was collected.
‘‘(2) The Secretary, in promulgating require-
ments under paragraph (1), shall take into consider-
ation the following principles concerning information
that identifies individuals:
‘‘(A) Such information should be collected
only to the extent necessary to carry out the
purpose for which the information is collected.
‘‘(B) Such information collected for one
purpose should not be used for another purpose
without the individual’s informed consent.
‘‘(C) Such information should be disposed
of when no longer necessary to carry out the
purpose for which it was collected.
‘‘(D) Methods to ensure the accuracy, reli-
ability, relevance, completeness, and timeliness
of such information should be instituted.
‘‘(E) Individuals should be notified (in ad-
vance of the collection of such information) as
to whether the furnishing of such information is
mandatory or voluntary, as to what the record
keeping practices are concerning such informa-
tion, and as to what uses will be made of such
information.
‘‘(F) Individuals should be permitted to in-
spect and correct such information concerning
themselves.
‘‘(b) STANDARDS
AND REQUIREMENTS
FOR
THE
ELECTRONIC RECEIPT AND TRANSMISSION OF HEALTH
INSURANCE INFORMATION.—
‘‘(1) By January 1, 1995, the Secretary shall
determine whether problems relating to standards
for the electronic receipt and transmission of health
insurance information cause significant administra-
tive costs. If the Secretary determines that such
problems do cause significant administrative costs,
the Secretary, after consulting with the Accredited
Standards Committee X–12 of the American Na-
tional Standards Institute, insurers, providers, and
others, shall promulgate (and may modify from time
to time) standards concerning the electronic receipt
and transmission of claims, payment, eligibility, and
enrollment information (including requirements, con-
sistent with those promulgated under subsection (a),
to protect privacy and confidentiality), and shall pro-
mulgate an effective date for those standards, to be
at least one year after the promulgation of the
standards.
‘‘(2) By January 1, 1995, the Secretary shall
determine whether problems relating to the receipt
and transmission of health insurance eligibility ver-
ification cause significant administrative costs. If the
Secretary determines that such problems do cause
significant administrative costs, the Secretary, after
consulting with the Accredited Standards Committee
X–12 of the American National Standards Institute,
insurers, providers, and others, shall promulgate
(and may modify from time to time) requirements
concerning the receipt and transmission of health in-
surance eligibility verification, and shall promulgate
an effective date for those requirements, to be at
least one year after the promulgation of the require-
ment.
‘‘(3) By January 1, 1995, the Secretary shall
determine whether the proportion of health insur-
ance claims and payment information received and
transmitted by paper will continue to cause signifi-
cant administrative costs. If the Secretary deter-
mines that the proportion will continue to cause sig-
nificant administrative costs, the Secretary, after
consulting with the Accredited Standards Committee
X–12 of the American National Standards Institute,
insurers, providers, and others, shall promulgate
(and may modify from time to time) a requirement
that insurers receive and transmit a specified pro-
portion of (or all) health insurance claims and pay-
ment information electronically (with such excep-
tions as the Secretary may specify from time to
time), and shall promulgate an effective date for
that requirement, to be at least one year after the
promulgation of the requirement.
‘‘(c) HEALTH INSURANCE CLAIM FORMS.—
‘‘(1) By January 1, 1995, the Secretary, after
consulting with insurers, providers, and others, shall
promulgate (and may modify from time to time) re-
quirements for the format and content of basic claim
forms under health insurance plans.
‘‘(2) The Secretary shall determine whether the
variety of information requested by insurers (in ad-
dition to the information requested in basic claim
forms) causes administrative costs that are dis-
proportionate to the benefits derived from that infor-
mation. If the Secretary determines that the variety
of information requested does cause such costs, the
Secretary, after consulting with insurers, providers,
and others, shall publish (and may modify from time
to time) recommendations concerning what addi-
tional information should be allowed to be requested
and in what format.
‘‘(d) PRIORITY AMONG INSURERS.—By January 1,
1995, but after June 30, 1994, the Secretary, after con-
sulting with the NAIC, shall promulgate (and may modify
from time to time) rules for determining the liability of
insurers when benefits are payable under two or more
health insurance plans.
‘‘(e) FURNISHING OF INFORMATION AMONG INSUR-
ERS.—By January 1, 1996, but after June 30, 1995, the
Secretary shall determine whether problems relating to the
availability of information among insurers when benefits
are payable under two or more health insurance plans
cause significant mistaken benefit payments or adminis-
trative costs. If the Secretary determines that such prob-
lems do cause significant mistaken benefit payments or
administrative costs, the Secretary shall promulgate (and
may modify from time to time) requirements concerning
the transfer among insurers (and annual updating) of ap-
propriate information (which may include requirements
for the use of unique identifiers, and for the listing of all
individuals covered under a health insurance plan), and
shall promulgate an effective date for those requirements
(to be not earlier than one year after the promulgation
of the requirements).
‘‘STATE PROGRAMS
‘‘SEC. 2212. The Secretary shall determine from time
to time, for each State, whether—
‘‘(1) the State has in effect standards, require-
ments, and rules (for insurers other than adminis-
trators of self-insured employee plans) substantially
the same (or, for section 2214, at least as protective
of privacy and confidentiality) as those described in
sections 2214 through 2219, and
‘‘(2) the State maintains an effective enforce-
ment mechanism for those State requirements.
‘‘APPLICATION OF FEDERAL REQUIREMENTS
‘‘SEC. 2213. (a) ADMINISTRATORS OF SELF-INSURED
EMPLOYEE PLANS.—The provisions in each of sections
2214 through 2219 apply to administrators of self-insured
employee plans.
(b) OTHER INSURERS.—The provisions in each of
sections 2214 through 2219 apply to activities (of insurers
other than administrators of self-insured employee plans)
in a State only if—
‘‘(1) with respect to a section, the Secretary de-
termines that the State does not meet the require-
ments of section 2212, or
‘‘(2) with respect to a section, the State fails to
provide such information from time to time as re-
quested by the Secretary to enable the Secretary to
make a determination under section 2212.
‘‘HEALTH INSURANCE INFORMATION PRIVACY AND
CONFIDENTIALITY PROTECTION
‘‘SEC. 2214. As of January 1, 1995, each insurer
shall comply with the requirements promulgated by the
Secretary under section 2211(a).
‘‘IDENTIFICATION NUMBERS
‘‘SEC. 2215. As of January 1, 1995, each insurer
shall—
‘‘(1) for each of its beneficiaries that has a so-
cial security number, use that number, and
‘‘(2) for each provider that has a unique identi-
fier for purposes of title XVIII and that furnishes
health care items or services to a beneficiary under
a health insurance plan of that insurer, use that
identifier.
‘‘STANDARDS
AND
REQUIREMENTS
FOR
THE
RECEIPT
AND TRANSMISSION OF HEALTH INSURANCE INFOR-
MATION
‘‘SEC. 2216. If the Secretary promulgates standards
or requirements under section 2211(b), each insurer, by
the effective date specified by the Secretary for those
standards or requirements, shall comply with them.
‘‘HEALTH INSURANCE CLAIM FORMS
‘‘SEC. 2217. As of January 1, 1996, each insurer
shall comply with the requirements promulgated by the
Secretary under section 2211(c)(1).
‘‘PRIORITY AMONG INSURERS
‘‘SEC. 2218. As of January 1, 1996, each insurer
shall comply with the rules promulgated by the Secretary
under section 2211(d).
‘‘FURNISHING OF INFORMATION AMONG INSURERS
‘‘SEC. 2219. If the Secretary promulgates require-
ments under section 2211(e), each insurer, by the effective
date specified by the Secretary for those requirements,
shall comply with them.
‘‘NONCOMPLIANCE WITH FEDERAL REQUIREMENTS
‘‘SEC. 2220. For provisions imposing an excise tax
with respect to noncompliance with Federal requirements
under this part, see section 5000A of the Internal Revenue
Code of 1986.
‘‘NO EFFECT ON SCOPE OF BENEFITS COVERED
‘‘SEC. 2221. Nothing in this part shall be construed
to specify what items and services are covered under a
health insurance plan.
‘‘PART C—MEDICAL DATA REQUIREMENTS
‘‘PROMULGATION OF REQUIREMENTS BY SECRETARY
‘‘SEC. 2230. (a) PROMULGATION OF REQUIREMENTS
FOR HOSPITALS.—
‘‘(1) By January 1, 1996, but after June 30,
1995, the Secretary shall promulgate requirements
for hospitals concerning electronic medical data. In
developing the requirements, the Secretary shall con-
sult with the American National Standards Insti-
tute, insurers, hospitals, and other interested parties
(and shall take into consideration, in developing re-
quirements under paragraph (2)(A), the data set
used by the utilization and quality control peer re-
view program under part B of title XI).
‘‘(2) The requirements promulgated under
paragraph (1) shall include—
‘‘(A) the definition of a standard set of
data elements for use by utilization and quality
control peer review organizations,
‘‘(B) the definition of a set of data ele-
ments for use by intermediaries and carriers
under the programs established by title XVIII
(that shall include the standard set of data ele-
ments defined under subparagraph (A)),
‘‘(C) standards for an electronic patient
care information system with data obtained at
the point of care (including requirements, con-
sistent with those promulgated under section
2211(a), to protect privacy and confidentiality),
‘‘(D) the specification of, and manner of
presentation of, the individual data elements of
the sets and system under the preceding sub-
paragraph, and
‘‘(E) standards concerning the trans-
mission of electronic medical data.
‘‘(3) The Secretary may from time to time
(after consulting with the American National Stand-
ards Institute, insurers, hospitals, and other inter-
ested parties) modify the requirements promulgated
under the preceding paragraphs.
‘‘(b) 
PROMULGATION
OF
REQUIREMENTS
FOR
OTHER HEALTH CARE PROVIDERS.—
‘‘(1) The Secretary may promulgate require-
ments concerning electronic medical data for provid-
ers that are not hospitals. In developing the require-
ments, the Secretary shall consult with the American
National Standards Institute, insurers, providers
other than hospitals, and other interested parties.
‘‘(2) The requirements promulgated under
paragraph (1) may include—
‘‘(A) the definition of a set of data ele-
ments for use by intermediaries and carriers
under the programs established by title XVIII,
‘‘(B) the specification of, and manner of
presentation of, the individual data elements of
the set under subparagraph (A), and
‘‘(C) standards concerning the trans-
mission of electronic medical data.
‘‘(3) The Secretary may from time to time
modify the requirements promulgated under para-
graph (1).
‘‘MEDICARE REQUIREMENTS FOR HOSPITALS
‘‘SEC. 2231. (a) GENERAL RULE.—As of January 1,
1997, each hospital that has entered into an agreement
under section 1866 shall (except as otherwise provided by
subsection (b))—
‘‘(1) maintain an electronic patient care infor-
mation system that meets the requirements of sub-
paragraphs (C) and (D) of section 2230(a)(2);
‘‘(2) upon request of the Secretary or of a utili-
zation and quality control peer review organization
(with which the Secretary has entered into a con-
tract under part B of title XI), transmit electroni-
cally the data set specified under subparagraphs (A)
and (D) of section 2230(a)(2) with respect to a
specified discharge;
‘‘(3) upon request of the Secretary, or of a fis-
cal intermediary or carrier (as defined in both cases
in title XVIII), transmit electronically any data
(with respect to a claim) from the data set specified
under subparagraphs (B) and (D) of section
2230(a)(2); and
‘‘(4) transmit the data specified under para-
graphs (2) and (3) in accordance with the require-
ments of section 2230(a)(2)(E).
‘‘(b) WAIVERS.—
‘‘(1) The Secretary may waive the requirements
of subsection (a) until January 1, 1999, for a hos-
pital that—
‘‘(A) is in the process of developing a sys-
tem specified under section 2230(a)(2)(C) and
that 
executes 
agreements 
with 
its 
fiscal
intermediary and its utilization and quality con-
trol peer review organization that the hospital
will meet the requirements of subsection (a) by
a specified date (not later than January 1,
1999), or
‘‘(B) is a small rural hospital (as defined
by the Secretary).
‘‘(2) The Secretary may waive the requirements
of subsection (a)(1) for a hospital that—
‘‘(A) agrees to obtain from its records the
data elements that are needed to meet the re-
quirements of paragraphs (2) and (3) of sub-
section (a), and
‘‘(B) agrees to subject its data transfer
process to a quality assurance program speci-
fied by the Secretary.
‘‘ELECTRONIC TRANSMISSION TO FEDERAL AGENCIES
‘‘SEC. 2232. As of January 1, 1999, the head of any
Federal agency may require any provider that is required
to transmit a data element (utilized by that agency in car-
rying out health care or research programs) specified
under section 2230(a)(2)(D) or 2230(b)(2)(B)—
‘‘(1) to transmit the data element electronically
in accordance with the requirements of section
2230(a)(2)(E) or 2230(b)(2)(C), as applicable, and
‘‘(2) to present the data element in the manner
prescribed 
under 
section 
2230(a)(2)(D) 
or
2230(b)(2)(B), as applicable.
‘‘PART D—GENERAL PROVISIONS
‘‘DEFINITIONS
‘‘SEC. 2240. For purposes of this title—
‘‘(1) The term ‘administrator’ has the meaning
given that term in section 3(16)(A) of the Employee
Retirement Income Security Act of 1974.
‘‘(2) The term ‘employee welfare benefit plan’
has the meaning given that term in section 3(1) of
the Employee Retirement Income Security Act of
1974.
‘‘(3) The term ‘health insurance plan’ means
any contract or arrangement under which an entity
bears all or part of the cost of providing health care
items and services, including a hospital or medical
expense incurred policy or certificate, hospital or
medical service plan contract, or health maintenance
subscriber contract (including any self-insured