I
105TH CONGRESS
1ST SESSION
H. R. 1415
To amend the Public Health Service Act and the Employee Retirement
Income Security Act of 1974 to establish standards for relationships
between group health plans and health insurance issuers with enrollees,
health professionals, and providers.
IN THE HOUSE OF REPRESENTATIVES
APRIL 23, 1997
Mr. NORWOOD (for himself, Mr. BACHUS, Mr. BAKER, Mr. BARCIA, Mr. BARR
of Georgia, Mr. BARRETT of Wisconsin, Mr. BISHOP, Mr. BROWN of
Ohio, Mr. CANADY of Florida, Mr. CHAMBLISS, Mr. COBLE, Mr.
COBURN, Mr. COMBEST, Mr. COOKSEY, Mr. CRAMER, Mr. DAVIS of Illi-
nois, Mr. DAVIS of Virginia, Mr. DEAL of Georgia, Mr. DEFAZIO, Mr.
DICKEY, Mr. DUNCAN, Mr. FILNER, Mr. FOLEY, Mr. FOX of Pennsylva-
nia, Mr. FROST, Mr. GILMAN, Mr. GRAHAM, Mr. HALL of Ohio, Mr.
HILLEARY, Mr. HILLIARD, Mr. HINCHEY, Mr. JENKINS, Mrs. KELLY,
Mr. KENNEDY of Rhode Island, Mr. KIND, Mr. LAHOOD, Mr. LEWIS of
Kentucky, Mr. LINDER, Mr. LIVINGSTON, Mrs. MALONEY of New York,
Mr. MCHALE, Mr. MCHUGH, Mrs. MORELLA, Mrs. MYRICK, Mr.
NETHERCUTT, Mr. PALLONE, Mr. PICKERING, Mr. RANGEL, Mr. RIGGS,
Mrs. ROUKEMA, Mr. SANDERS, Mr. SCARBOROUGH, Mr. SENSEN-
BRENNER, Mr. SHADEGG, Mr. SOLOMON, Mr. SPENCE, Mr. STRICKLAND,
Mr. TOWNS, Mr. WALSH, Mr. WICKER, Mr. WISE, Ms. WOOLSEY, Mr.
WEYGAND, Mr. CHRISTENSEN, Mr. COLLINS, and Mr. WAMP) introduced
the following bill; which was referred to the Committee on Commerce,
and in addition to the Committee on Education and the Workforce, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To amend the Public Health Service Act and the Employee
Retirement Income Security Act of 1974 to establish
standards for relationships between group health plans
and health insurance issuers with enrollees, health pro-
fessionals, and providers.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Patient Access to Responsible Care Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Patient protection standards under the Public Health Service Act.
‘‘PART C—PATIENT PROTECTION STANDARDS
‘‘Sec. 2770. Notice; additional definitions; construction.
‘‘Sec. 2771. Enrollee access to care.
‘‘Sec. 2772. Enrollee choice of health professionals and providers.
‘‘Sec. 2773. Nondiscrimination against enrollees and in the selection of
health professionals; equitable access to networks.
‘‘Sec. 2774. Prohibition of interference with certain medical communica-
tions.
‘‘Sec. 2775. Development of plan policies.
‘‘Sec. 2776. Due process for enrollees.
‘‘Sec. 2777. Due process for health professionals and providers.
‘‘Sec. 2778. Information reporting and disclosure.
‘‘Sec. 2779. Confidentiality; adequate reserves.
‘‘Sec. 2780. Quality improvement program.
Sec. 3. Patient protection standards under the Employee Retirement Income
Security Act of 1974.
Sec. 4. Non-preemption of State law respecting liability of group health plans.
SEC. 2. PATIENT PROTECTION STANDARDS UNDER THE
PUBLIC HEALTH SERVICE ACT.
(a) 
PATIENT
PROTECTION
STANDARDS.—Title
XXVII of the Public Health Service Act is amended—
(1) by redesignating part C as part D, and
(2) by inserting after part B the following new
part:
‘‘PART C—PATIENT PROTECTION STANDARDS
‘‘SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS; CONSTRUC-
TION.
‘‘(a) NOTICE.—A health insurance issuer under this
part shall comply with the notice requirement under sec-
tion 711(d) of the Employee Retirement Income Security
Act of 1974 with respect to the requirements of this part
as if such section applied to such issuer and such issuer
were a group health plan.
‘‘(b) ADDITIONAL DEFINITIONS.—For purposes of
this part:
‘‘(1) ENROLLEE.—The term ‘enrollee’ means,
with respect to health insurance coverage offered by
a health insurance issuer, an individual enrolled with
the issuer to receive such coverage.
‘‘(2) 
HEALTH
PROFESSIONAL.—The 
term
‘health professional’ means a physician or other
health care practitioner licensed, accredited, or cer-
tified to perform specified health services consistent
with State law.
‘‘(3) NETWORK.—The term ‘network’ means,
with respect to a health insurance issuer offering
health insurance coverage, the participating health
professionals and providers through whom the plan
or issuer provides health care items and services to
enrollees.
‘‘(4) NETWORK COVERAGE.—The term ‘network
coverage’ means health insurance coverage offered
by a health insurance issuer that provides or ar-
ranges for the provision of health care items and
services to enrollees through participating health
professionals and providers.
‘‘(5) PARTICIPATING.—The term ‘participating’
means, with respect to a health professional or pro-
vider, a health professional or provider that provides
health care items and services to enrollees under
network coverage under an agreement with the
health insurance issuer offering the coverage.
‘‘(6) PRIOR AUTHORIZATION.—The term ‘prior
authorization’ means the process of obtaining prior
approval from a health insurance issuer as to the ne-
cessity or appropriateness of receiving medical or
clinical services for treatment of a medical or clinical
condition.
‘‘(7) PROVIDER.—The term ‘provider’ means a
health organization, health facility, or health agency
that is licensed, accredited, or certified to provide
health care items and services under applicable State
law.
‘‘(8) SERVICE AREA.—The term ‘service area’
means, with respect to a health insurance issuer
with respect to health insurance coverage, the geo-
graphic area served by the issuer with respect to the
coverage.
‘‘(9) UTILIZATION REVIEW.—The term ‘utiliza-
tion review’ means prospective, concurrent, or retro-
spective review of health care items and services for
medical necessity, appropriateness, or quality of care
that includes prior authorization requirements for
coverage of such items and services.
‘‘(c) NO REQUIREMENT FOR ANY WILLING PRO-
VIDER.—Nothing in this part shall be construed as requir-
ing a health insurance issuer that offers network coverage
to include for participation every willing provider or health
professional who meets the terms and conditions of the
plan or issuer.
‘‘SEC. 2771. ENROLLEE ACCESS TO CARE.
‘‘(a) GENERAL ACCESS.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2),
and (3), a health insurance issuer shall establish and
maintain adequate arrangements, as defined by the
applicable State authority, with a sufficient number,
mix, and distribution of health professionals and
providers to assure that covered items and services
are available and accessible to each enrollee under
health insurance coverage—
‘‘(A) in the service area of the issuer;
‘‘(B) in a variety of sites of service;
‘‘(C) with reasonable promptness (includ-
ing reasonable hours of operation and after-
hours services);
‘‘(D) with reasonable proximity to the resi-
dences and workplaces of enrollees; and
‘‘(E) in a manner that—
‘‘(i) takes into account the diverse
needs of enrollees, and
‘‘(ii) reasonably assures continuity of
care.
For a health insurance issuer that serves a rural or
medically underserved area, the issuer shall be treat-
ed as meeting the requirement of this subsection if
the issuer has arrangements with a sufficient num-
ber, mix, and distribution of health professionals and
providers having a history of serving such areas. The
use of telemedicine and other innovative means to
provide covered items and services by a health insur-
ance issuer that serves a rural or medically under-
served area shall also be considered in determining
whether the requirement of this subsection is met.
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed as requiring a
health insurance issuer to have arrangements that
conflict with its responsibilities to establish measures
designed to maintain quality and control costs.
‘‘(3) DEFINITIONS.—For purposes of paragraph
(1):
‘‘(A) MEDICALLY UNDERSERVED AREA.—
The term ‘medically underserved area’ means
an area that is designated as a health profes-
sional shortage area under section 332 of the
Public Health Service Act or as a medically un-
derserved area for purposes of section 330 or
1302(7) of such Act.
‘‘(B) RURAL AREA.—The term ‘rural area’
means an area that is not within a Standard
Metropolitan Statistical Area or a New England
County Metropolitan Area (as defined by the
Office of Management and Budget).
‘‘(b) EMERGENCY AND URGENT CARE.—
‘‘(1) IN GENERAL.—A health insurance issuer
shall—
‘‘(A) assure the availability and accessibil-
ity of medically or clinically necessary emer-
gency services and urgent care services within
the service area of the issuer 24 hours a day,
7 days a week;
‘‘(B) require no prior authorization for
items and services furnished in a hospital emer-
gency department to an enrollee (without re-
gard to whether the health professional or hos-
pital has a contractual or other arrangement
with the issuer) with symptoms that would rea-
sonably suggest to a prudent layperson an
emergency medical condition (including items
and 
services 
described 
in 
subparagraph
(C)(iii));
‘‘(C) cover (and make reasonable payments
for)—
‘‘(i) emergency services,
‘‘(ii) services that are not emergency
services but are described in subparagraph
(B),
‘‘(iii) medical screening examinations
and other ancillary services necessary to
diagnose, treat, and stabilize an emergency
medical condition, and
‘‘(iv) urgent care services, without re-
gard to whether the health professional or
provider furnishing such services has a
contractual (or other) arrangement with
the issuer; and
‘‘(D) make prior authorization determina-
tions for—
‘‘(i) services that are furnished in a
hospital emergency department (other than
services described in clauses (i) and (iii) of
subparagraph (C)), and
‘‘(ii) urgent care services, within the
time periods specified in (or pursuant to)
section 2776(a)(8).
‘‘(2) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) EMERGENCY MEDICAL CONDITION.—
The term ‘emergency medical condition’ means
a medical condition (including emergency labor
and delivery) manifesting itself by acute symp-
toms of sufficient severity (including severe
pain) such that a prudent layperson, who pos-
sesses an average knowledge of health and med-
icine, could reasonably expect the absence of
immediate medical attention could reasonably
be expected to result in—
‘‘(i) placing the patient’s health in se-
rious jeopardy,
‘‘(ii) serious impairment to bodily
functions, or
‘‘(iii) serious dysfunction of any bodily
organ or part.
‘‘(B) EMERGENCY
SERVICES.—The term
‘emergency services’ means health care items
and services that are necessary for the diag-
nosis, treatment, and stabilization of an emer-
gency medical condition.
‘‘(C) URGENT CARE SERVICES.—The term
‘urgent care services’ means health care items
and services that are necessary for the treat-
ment of a condition that—
‘‘(i) is not an emergency medical con-
dition,
‘‘(ii) requires prompt medical or clini-
cal treatment, and
‘‘(iii) poses a danger to the patient if
not treated in a timely manner, as defined
by the applicable State authority in con-
sultation with relevant treating health pro-
fessionals or providers.
‘‘(c) SPECIALIZED SERVICES.—
‘‘(1) IN GENERAL.—A health insurance issuer
offering network coverage shall demonstrate that en-
rollees have access to specialized treatment expertise
when such treatment is medically or clinically indi-
cated in the professional judgment of the treating
health professional, in consultation with the enrollee.
‘‘(2) DEFINITION.—For purposes of paragraph
(1), the term ‘specialized treatment expertise’ means
expertise in diagnosing or treating—
‘‘(A) unusual diseases or conditions, or
‘‘(B) diseases and conditions that are unusually
difficult to diagnose or treat.
‘‘(d) INCENTIVE PLANS.—
‘‘(1) IN GENERAL.—In the case of a health in-
surance issuer that offers network coverage, any
health professional or provider incentive plan oper-
ated by the issuer with respect to such coverage
shall meet the following requirements:
‘‘(A) No specific payment is made directly
or indirectly under the plan to a professional or
provider or group of professionals or providers
as an inducement to reduce or limit medically
necessary services provided with respect to a
specific enrollee.
‘‘(B) If the plan places such a professional,
provider, or group at substantial financial risk
(as determined by the Secretary) for services
not provided by the professional, provider, or
group, the issuer—
‘‘(i) provides stop-loss protection for
the professional, provider, or group that is
adequate and appropriate, based on stand-
ards developed by the Secretary that take
into account the number of professionals
or providers placed at such substantial fi-
nancial risk in the group or under the cov-
erage and the number of individuals en-
rolled with the issuer who receive services
from the professional, provider, or group,
and
‘‘(ii) conducts periodic surveys of both
individuals enrolled and individuals pre-
viously enrolled with the issuer to deter-
mine the degree of access of such individ-
uals to services provided by the issuer and
satisfaction with the quality of such serv-
ices.
‘‘(C) The issuer provides the Secretary
with descriptive information regarding the plan,
sufficient to permit the Secretary to determine
whether the plan is in compliance with the re-
quirements of this paragraph.
‘‘(2) In this subsection, the term ‘health profes-
sional or provider incentive plan’ means any com-
pensation arrangement between a health insurance
issuer and a health professional or provider or pro-
fessional or provide group that may directly or indi-
rectly have the effect of reducing or limiting services
provided with respect to individuals enrolled with the
issuer.
‘‘SEC. 2772. ENROLLEE CHOICE OF HEALTH PROFES-
SIONALS AND PROVIDERS.
‘‘(a) CHOICE
OF
PERSONAL
HEALTH
PROFES-
SIONAL.—A health insurance issuer shall permit each en-
rollee under network coverage to—
‘‘(1) select a personal health professional from
among the participating health professionals of the
issuer, and
‘‘(2) change that selection as appropriate.
‘‘(b) POINT-OF-SERVICE OPTION.—
‘‘(1) IN GENERAL.—If a health insurance issuer
offers to enrollees health insurance coverage which
provides for coverage of services only if such services
are furnished through health professionals and pro-
viders who are members of a network of health pro-
fessionals and providers who have entered into a
contract with the issuer to provide such services, the
issuer shall also offer to such enrollees (at the time
of enrollment) the option of health insurance cov-
erage which provides for coverage of such services
which are not furnished through health professionals
and providers who are members of such a network.
‘‘(2) FAIR PREMIUMS.—The amount of any ad-
ditional premium required for the option described
in paragraph (1) may not exceed an amount that is
fair and reasonable, as established by the applicable
State authority, in consultation with the National
Association of Insurance Commissioners, based on
the nature of the additional coverage provided.
‘‘(3) COST-SHARING.—Under the option de-
scribed in paragraph (1), the health insurance cov-
erage shall provide for reimbursement rates for cov-
ered services offered by health professionals and pro-
viders who are not participating health professionals
or providers that are not less than the reimburse-
ment rates for covered services offered by participat-
ing health professionals and providers. Nothing in
‘‘(4) in circumstances under which a change of
health professional or provider might disrupt the
continuity of care for an enrollee, such as—
‘‘(A) hospitalization, or
‘‘(B) dependency on high-technology home
medical equipment,
provide for continued coverage of items and services
furnished by the health professional or provider that
was treating the enrollee before such change for a
reasonable period of time.
For purposes of paragraph (4), a change of health profes-
sional or provider may be due to changes in the member-
ship of an issuer’s health professional and provider net-
work, changes in the health coverage made available by
an employer, or other similar circumstances.
‘‘SEC. 2773. NONDISCRIMINATION AGAINST ENROLLEES
AND IN THE SELECTION OF HEALTH PROFES-
SIONALS; EQUITABLE ACCESS TO NETWORKS.
‘‘(a) NONDISCRIMINATION AGAINST ENROLLEES.—
No health insurance issuer may discriminate (directly or
through contractual arrangements) in any activity that
has the effect of discriminating against an individual on
the basis of race, national origin, gender, language, socio-
economic status, age, disability, health status, or antici-
pated need for health services.
‘‘(b) NONDISCRIMINATION IN SELECTION OF NET-
WORK HEALTH PROFESSIONALS.—A health insurance is-
suer offering network coverage shall not discriminate in
selecting the members of its health professional network
(or in establishing the terms and conditions for member-
ship in such network) on the basis of—
‘‘(1) the race, national origin, gender, age, or
disability (other than a disability that impairs the
ability of an individual to provide health care serv-
ices or that may threaten the health of enrollees) of
the health professional; or
‘‘(2) the health professional’s lack of affiliation
with, or admitting privileges at, a hospital (unless
such lack of affiliation is a result of infractions of
quality standards and is not due to a health profes-
sional’s type of license).
‘‘(c) NONDISCRIMINATION IN ACCESS TO HEALTH
PLANS.—While nothing in this section shall be construed
as an ‘any willing provider’ requirement (as referred to
in section 2770(c)), a health insurance issuer shall not dis-
criminate in participation, reimbursement, or indemnifica-
tion against a health professional, who is acting within the
scope of the health professional’s license or certification
under applicable State law, solely on the basis of such li-
cense or certification.
‘‘SEC. 2774. PROHIBITION OF INTERFERENCE WITH CER-
TAIN MEDICAL COMMUNICATIONS.
‘‘(a) IN GENERAL.—The provisions of any contract
or agreement, or the operation of any contract or agree-
ment, between a health insurance issuer and a health pro-
fessional shall not prohibit or restrict the health profes-
sional from engaging in medical communications with his
or her patient.
‘‘(b) NULLIFICATION.—Any contract provision or
agreement described in subsection (a) shall be null and
void.
‘‘(c) MEDICAL
COMMUNICATION
DEFINED.—For
purposes of this section, the term ‘medical communication’
means a communication made by a health professional
with a patient of the health professional (or the guardian
or legal representative of the patient) with respect to—
‘‘(1) the patient’s health status, medical care,
or legal treatment options;
‘‘(2) any utilization review requirements that
may affect treatment options for the patient; or
‘‘(3) any financial incentives that may affect
the treatment of the patient.
‘‘SEC. 2775. DEVELOPMENT OF PLAN POLICIES.
‘‘A health insurance issuer that offers network cov-
erage shall establish mechanisms to consider the rec-
ommendations, suggestions, and views of enrollees and
participating health professionals and providers regard-
ing—
‘‘(1) the medical policies of the issuer (including
policies relating to coverage of new technologies,
treatments, and procedures);
‘‘(2) the utilization review criteria and proce-
dures of the issuer;
‘‘(3) the quality and credentialing criteria of the
issuer; and
‘‘(4) the medical management procedures of the
issuer.
‘‘SEC. 2776. DUE PROCESS FOR ENROLLEES.
‘‘(a) UTILIZATION REVIEW.—The utilization review
program of a health insurance issuer shall—
‘‘(1) be developed (including any screening cri-
teria used by such program) with the involvement of
participating health professionals and providers;
‘‘(2) to the extent consistent with the protection
of proprietary business information (as defined for
purposes of section 552 of title 5, United States
Code) release, upon request, to affected health pro-
fessionals, providers, and enrollees the screening cri-
teria, weighting elements, and computer algorithms
used in reviews and a description of the method by
which they were developed;
‘‘(3) uniformly apply review criteria that are
based on sound scientific principles and the most re-
cent medical evidence;
‘‘(4) use licensed, accredited, or certified health
professionals to make review determinations (and for
services requiring specialized training for their deliv-
ery, use a health professional who is qualified
through equivalent specialized training and experi-
ence);
‘‘(5) subject to reasonable safeguards, disclose
to health professionals and providers, upon request,
the names and credentials of individuals conducting
utilization review;
‘‘(6) not compensate individuals conducting uti-
lization review for denials of payment or coverage of
benefits;
‘‘(7) comply with the requirement of section
2771 that prior authorization not be required for
emergency and related services furnished in a hos-
pital emergency department;
‘‘(8) make prior authorization determinations—
‘‘(A) in the case of services that are urgent
care 
services 
described 
in 
section
2771(b)(2)(C), within 30 minutes of a request
for such determination, and
‘‘(B) in the case of other services, within
24 hours after the time of a request for deter-
mination;
‘‘(9) include in any notice of such determination
an explanation of the basis of the determination and
the right to an immediate appeal;
‘‘(10) treat a favorable prior authorization re-
view determination as a final determination for pur-
poses of making payment for a claim submitted for
the item or service involved unless such determina-
tion was based on false information knowingly sup-
plied by the person requesting the determination;
‘‘(11) provide timely access, as defined by the
applicable State authority, to utilization review per-
sonnel and, if such personnel are not available,
waives any prior authorization that would otherwise
be required; and
‘‘(12) provide notice of an initial determination
on payment of a claim within 30 days after the date
the claim is submitted for such item or service, and
include in such notice an explanation of the reasons
for such determination and of the right to an imme-
diate appeal.
‘‘(b) APPEALS PROCESS.—A health insurance issuer
shall establish and maintain an accessible appeals process
that—
‘‘(1) reviews an adverse prior authorization de-
termination—
‘‘(A) for urgent care services, described in
subsection (a)(8)(A), within 1 hour after the
time of a request for such review, and
‘‘(B) for other services, within 24 hours
after the time of a request for such review;
‘‘(2) reviews an initial determination on pay-
ment of claims described in subsection (a)(12) with-
in 30 days after the date of a request for such re-
view;
‘‘(3) provides for review of determinations de-
scribed in paragraphs (1) and (2) by an appropriate
clinical peer professional who is in the same or simi-
lar specialty as would typically provide the item or
service involved (or another licensed, accredited, or
certified health professional acceptable to the plan
and the person requesting such review); and
‘‘(4) provides for review of—
‘‘(A) the determinations described in para-
graphs (1), (2), and (3), and
‘‘(B) enrollee complaints about inadequate
access to any category or type of health profes-
sional or provider in the network of the issuer
or other matters specified by this part,
by an appropriate clinical peer professional who is in
the same or similar specialty as would typically pro-
vide the item or service involved (or another li-
censed, accredited, or certified health professional
acceptable to the issuer and the person requesting
such review) that is not involved in the operation of
the plan or in making the determination or policy
being appealed.
The procedures specified in this subsection shall not be
construed as preempting or superseding any other reviews
or appeals an issuer is required by law to make available.
‘‘SEC. 2777. DUE PROCESS FOR HEALTH PROFESSIONALS
AND PROVIDERS.
‘‘(a) IN GENERAL.—A health insurance issuer with
respect to its offering of network coverage shall—
‘‘(1) allow all health professionals and providers
in its service area to apply to become a participating
health professional or provider during at least one
period in each calendar year;
‘‘(2) provide reasonable notice to such health
professionals and providers of the opportunity to
apply and of the period during which applications
are accepted;
‘‘(3) provide for review of each application by a
credentialing committee with appropriate representa-
tion of the category or type of health professional or
provider;
‘‘(4) select participating health professionals
and providers based on objective standards of qual-
ity developed with the suggestions and advice of pro-
fessional associations, health professionals, and pro-
viders;
‘‘(5) make such selection standards available
to—
‘‘(A) those applying to become a partici-
pating provider or health professional;
‘‘(B) health plan purchasers, and
‘‘(C) enrollees;
‘‘(6) when economic considerations are taken
into account in selecting participating health profes-
sionals and providers, use objective criteria that are
available to those applying to become a participating
provider or health professional and enrollees;
‘‘(7) adjust any economic profiling to take into
account patient characteristics (such as severity of
illness) that may result in atypical utilization of
services;
‘‘(8) make the results of such profiling available
to insurance purchasers, enrollees, and the health
professional or provider involved;
‘‘(9) notify any health professional or provider
being reviewed under the process referred to in para-
graph (3) of any information indicating that the
health professional or provider fails to meet the
standards of the issuer;
‘‘(10) offer a health professional or provider re-
ceiving notice pursuant to the requirement of para-
graph (9) with an opportunity to—
‘‘(A) review the information referred to in
such paragraph, and
‘‘(B) submit supplemental or corrected in-
formation;
‘‘(11) not include in its contracts with partici-
pating health professionals and providers a provision
permitting the issuer to terminate the contract
‘without cause’;
‘‘(12) provide a due process appeal that con-
forms to the process specified in section 412 of the
Health Care Quality Improvement Act of 1986 (42
U.S.C. 11112) for all determinations that are ad-
verse to a health professional or provider; and
‘‘(13) unless a health professional or provider
poses an imminent harm to enrollees or an adverse
action by a governmental agency effectively impairs
the ability to provide health care items and services,
provide—
‘‘(A) reasonable notice of any decision to
terminate a health professional or provider ‘for
cause’ (including an explanation of the reasons
for the determination),
‘‘(B) an opportunity to review and discuss
all of the information on which the determina-
tion is based, and
‘‘(C) an opportunity to enter into a correc-
tive action plan, before the determination be-
comes subject to appeal under the process re-
ferred to in paragraph (12).
‘‘(b) RULE OF CONSTRUCTION.—The requirements of
subsection (a) shall not be construed as preempting or su-
perseding any other reviews and appeals a health insur-
ance issuer is required by law to make available.
‘‘SEC. 2778. INFORMATION REPORTING AND DISCLOSURE.
‘‘(a) IN GENERAL.—A health insurance issuer offer-
ing health insurance coverage shall provide enrollees and
prospective enrollees with information about—
‘‘(1) coverage provisions, benefits, and any ex-
clusions—
‘‘(A) by category of service,
‘‘(B) by category or type of health profes-
sional or provider, and
‘‘(C) if applicable, by specific service, in-
cluding experimental treatments;
‘‘(2) the percentage of the premium charged by
the issuer that is set aside for administration and
marketing of the issuer;
‘‘(3) the percentage of the premium charged by
the issuer that is expended directly for patient care;
‘‘(4) the number, mix, and distribution of par-
ticipating health professionals and providers;
‘‘(5) the ratio of enrollees to participating
health professionals and providers by category and
type of health professional and provider;
‘‘(6) the expenditures and utilization per en-
rollee by category and type of health professional
and provider;
‘‘(7) the financial obligations of the enrollee and
the 
issuer, 
including 
premiums, 
copayments,
‘‘(b) FINANCIAL RESERVES; SOLVENCY.—A health
insurance issuer shall—
‘‘(1) meet such financial reserve or other sol-
vency-related requirements as the applicable State
authority may establish to assure the continued
availability of (and appropriate payment for) covered
items and services for enrollees; and
‘‘(2) establish mechanisms specified by the ap-
plicable State authority to protect enrollees, health
professionals, and providers in the event of failure of
the issuer.
Such requirements shall not unduly impede the establish-
ment of health insurance issuers owned and operated by
health care professionals or providers or by non-profit
community-based organizations.
‘‘SEC. 2780. QUALITY IMPROVEMENT PROGRAM.
‘‘(a) IN GENERAL.—A health insurance issuer shall
establish a quality improvement program (consistent with
subsection (b)) that systematically and continuously as-
sesses and improves—
‘‘(1) enrollee health status, patient outcomes,
processes of care, and enrollee satisfaction associ-
ated with health care provided by the issuer; and
‘‘(2) the administrative and funding capacity of
the issuer to support and emphasize preventive care,
utilization, access and availability, cost effectiveness,
acceptable treatment modalities, specialists referrals,
the peer review process, and the efficiency of the ad-
ministrative process.
‘‘(b) FUNCTIONS.—A quality improvement program
established pursuant to subsection (a) shall—
‘‘(1) assess the performance of the issuer and
its participating health professionals and providers
and report the results of such assessment to pur-
chasers, participating health professionals and pro-
viders, and administrative personnel;
‘‘(2) demonstrate measurable improvements in
clinical outcomes and plan performance measured by
identified criteria, including those specified in sub-
section (a)(1); and
‘‘(3) analyze quality assessment data to deter-
mine specific interactions in the delivery system
(both the design and funding of the health insurance
coverage and the clinical provision of care) that have
an adverse impact on the quality of care.’’.
(b) APPLICATION TO GROUP HEALTH INSURANCE
COVERAGE.—
(1) Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at
the end the following new section:
‘‘SEC. 2706. PATIENT PROTECTION STANDARDS.
‘‘(a) IN GENERAL.—Each health insurance issuer
shall comply with patient protection requirements under
part C with respect to group health insurance coverage
it offers.
‘‘(b) ASSURING COORDINATION.—The Secretary of
Health and Human Services and the Secretary of Labor
shall ensure, through the execution of an interagency
memorandum of understanding between such Secretaries,
that—
‘‘(1) regulations, rulings, and interpretations is-
sued by such Secretaries relating to the same matter
over which such Secretaries have responsibility
under part C (and this section) and section 713 of
the Employee Retirement Income Security Act of
1974 are administered so as to have the same effect
at all times; and
‘‘(2) coordination of policies relating to enforc-
ing the same requirements through such Secretaries
in order to have a coordinated enforcement strategy
that avoids duplication of enforcement efforts and
assigns priorities in enforcement.’’.
(2) Section 2792 of such Act (42 U.S.C.
300gg–92) is amended by inserting ‘‘and section
2706(b)’’ after ‘‘of 1996’’.
(c) APPLICATION TO INDIVIDUAL HEALTH INSUR-
ANCE COVERAGE.—Part B of title XXVII of the Public
Health Service Act is amended by inserting after section
2751 the following new section:
‘‘SEC. 2752. PATIENT PROTECTION STANDARDS.
‘‘Each health insurance issuer shall comply with pa-
tient protection requirements under part C with respect
to individual health insurance coverage it offers.’’.
(d) MODIFICATION OF PREEMPTION STANDARDS.—
(1) GROUP HEALTH INSURANCE COVERAGE.—
Section 2723 of such Act (42 U.S.C. 300gg–23) is
amended—
(A) in subsection (a)(1), by striking ‘‘sub-
section (b)’’ and inserting ‘‘subsections (b) and
(c)’’;
(B) by redesignating subsections (c) and
(d) as subsections (d) and (e), respectively; and
(C) by inserting after subsection (b) the
following new subsection:
‘‘(c) SPECIAL RULES IN CASE OF PATIENT PROTEC-
TION REQUIREMENTS.—Subject to subsection (a)(2), the
provisions of section 2706 and part C, and part D insofar
as it applies to section 2706 or part C, shall not be con-
strued to preempt any State law, or the enactment or im-
plementation of such a State law, that provides protections
for individuals that are equivalent to or stricter than the
protections provided under such provisions.’’.
(2) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—Section 2762 of such Act (42 U.S.C.
300gg–62), as added by section 605(b)(3)(B) of
Public Law 104–204, is amended—
(A) in subsection (a), by striking ‘‘sub-
section (b), nothing in this part’’ and inserting
‘‘subsections (b) and (c)’’, and
(B) by adding at the end the following new
subsection:
‘‘(c) SPECIAL RULES IN CASE OF PATIENT PROTEC-
TION REQUIREMENTS.—Subject to subsection (b), the
provisions of section 2752 and part C, and part D insofar
as it applies to section 2752 or part C, shall not be con-
strued to preempt any State law, or the enactment or im-
plementation of such a State law, that provides protections
for individuals that are equivalent to or stricter than the
protections provided under such provisions.’’.
(e) ADDITIONAL CONFORMING AMENDMENTS.—
(1) Section 2723(a)(1) of such Act (42 U.S.C.
300gg–23(a)(1)) is amended by striking ‘‘part C’’
and inserting ‘‘parts C and D’’.
(2) Section 2762(b)(1) of such Act (42 U.S.C.
300gg–62(b)(1)) is amended by striking ‘‘part C’’
and inserting ‘‘part D’’.
(f) EFFECTIVE DATES.—(1)(A) Subject to subpara-
graph (B), the amendments made by subsections (a), (b),
(d)(1), and (e) shall apply with respect to group health
insurance coverage for group health plan years beginning
on or after July 1, 1998 (in this subsection referred to
as the ‘‘general effective date’’) and also shall apply to
portions of plan years occurring on and after January 1,
1999.
(B) In the case of group health insurance coverage
provided pursuant to a group health plan maintained pur-
suant to 1 or more collective bargaining agreements be-
tween employee representatives and 1 or more employers
ratified before the date of enactment of this Act, the
amendments made by subsections (a), (b), (d)(1), and (e)
shall not apply to plan years beginning before the later
of—
(i) the date on which the last collective bargain-
ing agreements relating to the plan terminates (de-
termined without regard to any extension thereof
agreed to after the date of enactment of this Act),
or
(ii) the general effective date.