issuer from including providers only to the extent
necessary to meet the needs of the plan’s or issuer’s
participants, beneficiaries, or enrollees or from es-
tablishing any measure designed to maintain quality
and control costs consistent with the responsibilities
of the plan or issuer;
(2) to override any State licensure or scope-of-
practice law; or
(3) as requiring a plan or issuer that offers net-
work coverage to include for participation every will-
ing provider who meets the terms and conditions of
the plan or issuer.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.
(a) IN GENERAL.—A group health plan and a health
insurance issuer offering health insurance coverage may
not operate any physician incentive plan (as defined in
subparagraph (B) of section 1876(i)(8) of the Social Secu-
rity Act) unless the requirements described in clauses (i),
(ii)(I), and (iii) of subparagraph (A) of such section are
met with respect to such a plan.
(b) APPLICATION.—For purposes of carrying out
paragraph (1), any reference in section 1876(i)(8) of the
Social Security Act to the Secretary, an eligible organiza-
tion, or an individual enrolled with the organization shall
be treated as a reference to the applicable authority, a
group health plan or health insurance issuer, respectively,
and a participant, beneficiary, or enrollee with the plan
or organization, respectively.
(c) CONSTRUCTION.—Nothing in this section shall be
construed as prohibiting all capitation and similar ar-
rangements or all provider discount arrangements.
SEC. 134. PAYMENT OF CLAIMS.
A group health plan, and a health insurance issuer
offering group health insurance coverage, shall provide for
prompt payment of claims submitted for health care serv-
ices or supplies furnished to a participant, beneficiary, or
enrollee with respect to benefits covered by the plan or
issuer, in a manner consistent with the provisions of sec-
tions 1816(c)(2) and 1842(c)(2) of the Social Security Act
(42 U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), ex-
cept that for purposes of this section, subparagraph (C)
of section 1816(c)(2) of the Social Security Act shall be
treated as applying to claims received from a participant,
beneficiary, or enrollee as well as claims referred to in
such subparagraph.
SEC. 135. PROTECTION FOR PATIENT ADVOCACY.
(a) PROTECTION FOR USE OF UTILIZATION REVIEW
AND GRIEVANCE PROCESS.—A group health plan, and a
health insurance issuer with respect to the provision of
health insurance coverage, may not retaliate against a par-
ticipant, beneficiary, enrollee, or health care provider
based on the participant’s, beneficiary’s, enrollee’s or pro-
vider’s use of, or participation in, a utilization review proc-
ess or a grievance process of the plan or issuer (including
an internal or external review or appeal process) under
this title.
(b) PROTECTION
FOR
QUALITY
ADVOCACY
BY
HEALTH CARE PROFESSIONALS.—
(1) IN
GENERAL.—A group health plan or
health insurance issuer may not retaliate or dis-
criminate against a protected health care profes-
sional because the professional in good faith—
(A) discloses information relating to the
care, services, or conditions affecting one or
more participants, beneficiaries, or enrollees of
the plan or issuer to an appropriate public reg-
ulatory agency, an appropriate private accredi-
tation body, or appropriate management per-
sonnel of the plan or issuer; or
(B) initiates, cooperates, or otherwise par-
ticipates in an investigation or proceeding by
such an agency with respect to such care, serv-
ices, or conditions.
If an institutional health care provider is a partici-
pating provider with such a plan or issuer or other-
wise receives payments for benefits provided by such
a plan or issuer, the provisions of the previous sen-
tence shall apply to the provider in relation to care,
services, or conditions affecting one or more patients
within an institutional health care provider in the
same manner as they apply to the plan or issuer in
relation to care, services, or conditions provided to
one or more participants, beneficiaries, or enrollees;
and for purposes of applying this sentence, any ref-
erence to a plan or issuer is deemed a reference to
the institutional health care provider.
(2) GOOD
FAITH
ACTION.—For purposes of
paragraph (1), a protected health care professional
is considered to be acting in good faith with respect
to disclosure of information or participation if, with
respect to the information disclosed as part of the
action—
(A) the disclosure is made on the basis of
personal knowledge and is consistent with that
degree of learning and skill ordinarily possessed
by health care professionals with the same li-
censure or certification and the same experi-
ence;
(B) the professional reasonably believes the
information to be true;
(C) the information evidences either a vio-
lation of a law, rule, or regulation, of an appli-
cable accreditation standard, or of a generally
recognized professional or clinical standard or
that a patient is in imminent hazard of loss of
life or serious injury; and
(D) subject to subparagraphs (B) and (C)
of paragraph (3), the professional has followed
reasonable internal procedures of the plan,
issuer, or institutional health care provider es-
tablished for the purpose of addressing quality
concerns before making the disclosure.
(3) EXCEPTION AND SPECIAL RULE.—
(A) GENERAL EXCEPTION.—Paragraph (1)
does not protect disclosures that would violate
Federal or State law or diminish or impair the
rights of any person to the continued protection
of confidentiality of communications provided
by such law.
(B) NOTICE OF INTERNAL PROCEDURES.—
Subparagraph (D) of paragraph (2) shall not
apply unless the internal procedures involved
are reasonably expected to be known to the
health care professional involved. For purposes
of this subparagraph, a health care professional
is reasonably expected to know of internal pro-
cedures if those procedures have been made
available to the professional through distribu-
tion or posting.
(C) INTERNAL PROCEDURE EXCEPTION.—
Subparagraph (D) of paragraph (2) also shall
not apply if—
(i) the disclosure relates to an immi-
nent hazard of loss of life or serious injury
to a patient;
(ii) the disclosure is made to an ap-
propriate private accreditation body pursu-
ant to disclosure procedures established by
the body; or
(iii) the disclosure is in response to an
inquiry made in an investigation or pro-
ceeding of an appropriate public regulatory
agency and the information disclosed is
limited to the scope of the investigation or
proceeding.
(4) ADDITIONAL
CONSIDERATIONS.—It shall
not be a violation of paragraph (1) to take an ad-
verse action against a protected health care profes-
sional if the plan, issuer, or provider taking the ad-
verse action involved demonstrates that it would
have taken the same adverse action even in the ab-
sence of the activities protected under such para-
graph.
(5) NOTICE.—A group health plan, health in-
surance issuer, and institutional health care provider
shall post a notice, to be provided or approved by
the Secretary of Labor, setting forth excerpts from,
or summaries of, the pertinent provisions of this
subsection and information pertaining to enforce-
ment of such provisions.
(6) CONSTRUCTIONS.—
(A) DETERMINATIONS
OF
COVERAGE.—
Nothing in this subsection shall be construed to
prohibit a plan or issuer from making a deter-
mination not to pay for a particular medical
treatment or service or the services of a type of
health care professional.
(B) ENFORCEMENT OF PEER REVIEW PRO-
TOCOLS AND INTERNAL PROCEDURES.—Noth-
ing in this subsection shall be construed to pro-
hibit a plan, issuer, or provider from estab-
lishing and enforcing reasonable peer review or
utilization review protocols or determining
whether a protected health care professional has
complied with those protocols or from estab-
lishing and enforcing internal procedures for
the purpose of addressing quality concerns.
(C) RELATION TO OTHER RIGHTS.—Noth-
ing in this subsection shall be construed to
abridge rights of participants, beneficiaries, en-
rollees, and protected health care professionals
under other applicable Federal or State laws.
(7) PROTECTED HEALTH CARE PROFESSIONAL
DEFINED.—For purposes of this subsection, the
term ‘‘protected health care professional’’ means an
individual who is a licensed or certified health care
professional and who—
(A) with respect to a group health plan or
health insurance issuer, is an employee of the
plan or issuer or has a contract with the plan
or issuer for provision of services for which ben-
efits are available under the plan or issuer; or
(B) with respect to an institutional health
care provider, is an employee of the provider or
has a contract or other arrangement with the
provider respecting the provision of health care
services.
Subtitle E—Definitions
SEC. 151. DEFINITIONS.
(a) INCORPORATION OF GENERAL DEFINITIONS.—
Except as otherwise provided, the provisions of section
2791 of the Public Health Service Act shall apply for pur-
poses of this title in the same manner as they apply for
purposes of title XXVII of such Act.
(b) SECRETARY.—Except as otherwise provided, the
term ‘‘Secretary’’ means the Secretary of Health and
Human Services, in consultation with the Secretary of
Labor and the term ‘‘appropriate Secretary’’ means the
Secretary of Health and Human Services in relation to
carrying out this title under sections 2706 and 2751 of
the Public Health Service Act and the Secretary of Labor
in relation to carrying out this title under section 713 of
the Employee Retirement Income Security Act of 1974.
(c) ADDITIONAL DEFINITIONS.—For purposes of this
title:
(1) ACTIVELY PRACTICING.—The term ‘‘actively
practicing’’ means, with respect to a physician or
other health care professional, such a physician or
professional who provides professional services to in-
dividual patients on average at least two full days
per week.
(2) APPLICABLE AUTHORITY.—The term ‘‘ap-
plicable authority’’ means—
(A) in the case of a group health plan, the
Secretary of Health and Human Services and
the Secretary of Labor; and
(B) in the case of a health insurance issuer
with respect to a specific provision of this title,
the applicable State authority (as defined in
section 2791(d) of the Public Health Service
Act), or the Secretary of Health and Human
Services, if such Secretary is enforcing such
provision 
under 
section 
2722(a)(2) 
or
2761(a)(2) of the Public Health Service Act.
(3) CLINICAL PEER.—The term ‘‘clinical peer’’
means, with respect to a review or appeal, an ac-
tively practicing physician (allopathic or osteopathic)
or other actively practicing health care professional
who holds a nonrestricted license, and who is appro-
priately credentialed in the same or similar specialty
or subspecialty (as appropriate) as typically handles
the medical condition, procedure, or treatment under
review or appeal and includes a pediatric specialist
where appropriate; except that only a physician
(allopathic or osteopathic) may be a clinical peer
with respect to the review or appeal of treatment
recommended or rendered by a physician.
(4) 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.
(5) GROUP HEALTH PLAN.—The term ‘‘group
health plan’’ has the meaning given such term in
section 733(a) of the Employee Retirement Income
Security Act of 1974 and in section 2791(a)(1) of
the Public Health Service Act.
(6) HEALTH CARE PROFESSIONAL.—The term
‘‘health care professional’’ means an individual who
is licensed, accredited, or certified under State law
to provide specified health care services and who is
operating within the scope of such licensure, accredi-
tation, or certification.
(7) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ includes a physician or other
health care professional, as well as an institutional
or other facility or agency that provides health care
services and that is licensed, accredited, or certified
to provide health care items and services under ap-
plicable State law.
(8) NETWORK.—The term ‘‘network’’ means,
with respect to a group health plan or health insur-
ance issuer offering health insurance coverage, the
participating health care professionals and providers
through whom the plan or issuer provides health
care items and services to participants, beneficiaries,
or enrollees.
(9) 
NONPARTICIPATING.—The 
term 
‘‘non-
participating’’ means, with respect to a health care
provider that provides health care items and services
to a participant, beneficiary, or enrollee under group
health plan or health insurance coverage, a health
care provider that is not a participating health care
provider with respect to such items and services.
(10) 
PARTICIPATING.—The 
term 
‘‘partici-
pating’’ means, with respect to a health care pro-
vider that provides health care items and services to
a participant, beneficiary, or enrollee under group
health plan or health insurance coverage offered by
a health insurance issuer, a health care provider that
furnishes such items and services under a contract
or other arrangement with the plan or issuer.
(11) PRIOR AUTHORIZATION.—The term ‘‘prior
authorization’’ means the process of obtaining prior
approval from a health insurance issuer or group
health plan for the provision or coverage of medical
services.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUC-
TION.
(a) CONTINUED APPLICABILITY
OF STATE LAW
WITH RESPECT TO HEALTH INSURANCE ISSUERS.—
(1) IN GENERAL.—Subject to paragraph (2),
this title shall not be construed to supersede any
provision of State law which establishes, implements,
or continues in effect any standard or requirement
solely relating to health insurance issuers (in connec-
tion with group health insurance coverage or other-
wise) except to the extent that such standard or re-
quirement prevents the application of a requirement
of this title.
(2) CONTINUED
PREEMPTION
WITH
RESPECT
TO GROUP HEALTH PLANS.—Nothing in this title
shall be construed to affect or modify the provisions
of section 514 of the Employee Retirement Income
Security Act of 1974 with respect to group health
plans.
(b) DEFINITIONS.—For purposes of this section:
(1) STATE
LAW.—The term ‘‘State law’’ in-
cludes all laws, decisions, rules, regulations, or other
State action having the effect of law, of any State.
A law of the United States applicable only to the
District of Columbia shall be treated as a State law
rather than a law of the United States.
(2) STATE.—The term ‘‘State’’ includes a
State, the District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa, the North-
ern Mariana Islands, any political subdivisions of
such, or any agency or instrumentality of such.
SEC. 153. EXCLUSIONS.
(a) NO BENEFIT REQUIREMENTS.—Nothing in this
title shall be construed to require a group health plan or
a health insurance issuer offering health insurance cov-
erage to include specific items and services (including
abortions) under the terms of such plan or coverage, other
than those provided under the terms of such plan or cov-
erage.
(b) EXCLUSION FROM ACCESS TO CARE MANAGED
CARE PROVISIONS FOR FEE-FOR-SERVICE COVERAGE.—
(1) IN GENERAL.—The provisions of sections
111 through 117 shall not apply to a group health
plan or health insurance coverage if the only cov-
erage offered under the plan or coverage is fee-for-
service coverage (as defined in paragraph (2)).
(2) FEE-FOR-SERVICE
COVERAGE
DEFINED.—
For purposes of this subsection, the term ‘‘fee-for-
service coverage’’ means coverage under a group
health plan or health insurance coverage that—
(A) reimburses hospitals, health profes-
sionals, and other providers on the basis of a
rate determined by the plan or issuer on a fee-
for-service basis without placing the provider at
financial risk;
(B) does not vary reimbursement for such
a provider based on an agreement to contract
terms and conditions or the utilization of health
care items or services relating to such provider;
(C) does not restrict the selection of pro-
viders among those who are lawfully authorized
to provide the covered services and agree to ac-
cept the terms and conditions of payment estab-
lished under the plan or by the issuer; and
(D) for which the plan or issuer does not
require prior authorization before providing cov-
erage for any services.
SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.
Only for purposes of applying the requirements of
this title under sections 2707 and 2753 of the Public
Health Service Act and section 714 of the Employee Re-
tirement 
Income 
Security 
Act 
of 
1974, 
section
2791(c)(2)(A), and section 733(c)(2)(A) of the Employee
Retirement Income Security Act of 1974 shall be deemed
not to apply.
SEC. 155. REGULATIONS.
The Secretaries of Health and Human Services and
Labor shall issue such regulations as may be necessary
or appropriate to carry out this title. Such regulations
shall be issued consistent with section 104 of Health In-
surance Portability and Accountability Act of 1996. Such
Secretaries may promulgate any interim final rules as the
Secretaries determine are appropriate to carry out this
title.
TITLE 
II—APPLICATION 
OF
QUALITY CARE STANDARDS
TO GROUP HEALTH PLANS
AND 
HEALTH 
INSURANCE
COVERAGE UNDER THE PUB-
LIC HEALTH SERVICE ACT
SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND
GROUP HEALTH INSURANCE COVERAGE.
(a) IN GENERAL.—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. 2707. PATIENT PROTECTION STANDARDS.
‘‘(a) IN GENERAL.—Each group health plan shall
comply with patient protection requirements under title I
of the Bipartisan Consensus Managed Care Improvement
Act of 1999, and each health insurance issuer shall comply
with patient protection requirements under such title with
respect to group health insurance coverage it offers, and
such requirements shall be deemed to be incorporated into
this subsection.
‘‘(b) NOTICE.—A group health plan shall comply with
the notice requirement under section 711(d) of the Em-
ployee Retirement Income Security Act of 1974 with re-
spect to the requirements referred to in subsection (a) and
a health insurance issuer shall comply with such notice
requirement as if such section applied to such issuer and
such issuer were a group health plan.’’.
(b) 
CONFORMING
AMENDMENT.—Section
2721(b)(2)(A) of such Act (42 U.S.C. 300gg–21(b)(2)(A))
is amended by inserting ‘‘(other than section 2707)’’ after
‘‘requirements of such subparts’’.
SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR-
ANCE COVERAGE.
Part B of title XXVII of the Public Health Service
Act is amended by inserting after section 2752 the fol-
lowing new section:
‘‘SEC. 2753. PATIENT PROTECTION STANDARDS.
‘‘(a) IN GENERAL.—Each health insurance issuer
shall comply with patient protection requirements under
title I of the Bipartisan Consensus Managed Care Im-
provement Act of 1999 with respect to individual health
insurance coverage it offers, and such requirements shall
be deemed to be incorporated into this subsection.
‘‘(b) 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 such title
as if such section applied to such issuer and such issuer
were a group health plan.’’.
TITLE 
III—AMENDMENTS 
TO
THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF
1974
SEC. 301. APPLICATION OF PATIENT PROTECTION STAND-
ARDS TO GROUP HEALTH PLANS AND GROUP
HEALTH INSURANCE COVERAGE UNDER THE
EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
Subpart B of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following new section:
‘‘SEC. 714. PATIENT PROTECTION STANDARDS.
‘‘(a) IN GENERAL.—Subject to subsection (b), a
group health plan (and a health insurance issuer offering
group health insurance coverage in connection with such
a plan) shall comply with the requirements of title I of
the Bipartisan Consensus Managed Care Improvement
Act of 1999 (as in effect as of the date of the enactment
of such Act), and such requirements shall be deemed to
be incorporated into this subsection.
‘‘(b) PLAN SATISFACTION OF CERTAIN REQUIRE-
MENTS.—
‘‘(1) SATISFACTION
OF
CERTAIN
REQUIRE-
MENTS
THROUGH
INSURANCE.—For purposes of
subsection (a), insofar as a group health plan pro-
vides benefits in the form of health insurance cov-
erage through a health insurance issuer, the plan
shall be treated as meeting the following require-
ments of title I of the Bipartisan Consensus Man-
aged Care Improvement Act of 1999 with respect to
such benefits and not be considered as failing to
meet such requirements because of a failure of the
issuer to meet such requirements so long as the plan
sponsor or its representatives did not cause such
failure by the issuer:
‘‘(A) Section 112 (relating to choice of pro-
viders).
‘‘(B) Section 113 (relating to access to
emergency care).
‘‘(C) Section 114 (relating to access to
specialty care).
‘‘(D) Section 115 (relating to access to ob-
stetrical and gynecological care).
‘‘(E) Section 116 (relating to access to pe-
diatric care).
‘‘(F) Section 117(a)(1) (relating to con-
tinuity in case of termination of provider con-
tract) and section 117(a)(2) (relating to con-
tinuity in case of termination of issuer con-
tract), but only insofar as a replacement issuer
assumes the obligation for continuity of care.
‘‘(G) Section 118 (relating to access to
needed prescription drugs).
‘‘(H) Section 119 (relating to coverage for
individuals participating in approved clinical
trials.)
‘‘(I) Section 134 (relating to payment of
claims).
‘‘(2) INFORMATION.—With respect to informa-
tion required to be provided or made available under
section 121, in the case of a group health plan that
provides benefits in the form of health insurance
coverage through a health insurance issuer, the Sec-
retary shall determine the circumstances under
which the plan is not required to provide or make
available the information (and is not liable for the
issuer’s failure to provide or make available the in-
formation), if the issuer is obligated to provide and
make available (or provides and makes available)
such information.
‘‘(3) GRIEVANCE
AND
INTERNAL
APPEALS.—
With respect to the internal appeals process and the
grievance system required to be established under
sections 102 and 104, in the case of a group health
plan that provides benefits in the form of health in-
surance coverage through a health insurance issuer,
the Secretary shall determine the circumstances
under which the plan is not required to provide for
such process and system (and is not liable for the
issuer’s failure to provide for such process and sys-
tem), if the issuer is obligated to provide for (and
provides for) such process and system.
‘‘(4) EXTERNAL APPEALS.—Pursuant to rules
of the Secretary, insofar as a group health plan en-
ters into a contract with a qualified external appeal
entity for the conduct of external appeal activities in
accordance with section 103, the plan shall be treat-
ed as meeting the requirement of such section and
is not liable for the entity’s failure to meet any re-
quirements under such section.
‘‘(5) APPLICATION TO PROHIBITIONS.—Pursu-
ant to rules of the Secretary, if a health insurance
issuer offers health insurance coverage in connection
with a group health plan and takes an action in vio-
lation of any of the following sections, the group
health plan shall not be liable for such violation un-
less the plan caused such violation:
‘‘(A) Section 131 (relating to prohibition of
interference with certain medical communica-
tions).
‘‘(B) Section 132 (relating to prohibition
of discrimination against providers based on li-
censure).
‘‘(C) Section 133 (relating to prohibition
against improper incentive arrangements).
‘‘(D) Section 135 (relating to protection
for patient advocacy).
‘‘(6) CONSTRUCTION.—Nothing in this sub-
section shall be construed to affect or modify the re-
sponsibilities of the fiduciaries of a group health
plan under part 4 of subtitle B.
‘‘(7) APPLICATION TO CERTAIN PROHIBITIONS
AGAINST RETALIATION.—With respect to compliance
with the requirements of section 135(b)(1) of the Bi-
partisan Consensus Managed Care Improvement Act
of 1999, for purposes of this subtitle the term
‘group health plan’ is deemed to include a reference
to an institutional health care provider.
‘‘(c) ENFORCEMENT OF CERTAIN REQUIREMENTS.—
‘‘(1) COMPLAINTS.—Any protected health care
professional who believes that the professional has
been retaliated or discriminated against in violation
of section 135(b)(1) of the Bipartisan Consensus
Managed Care Improvement Act of 1999 may file
with the Secretary a complaint within 180 days of
the date of the alleged retaliation or discrimination.
‘‘(2) INVESTIGATION.—The Secretary shall in-
vestigate such complaints and shall determine if a
violation of such section has occurred and, if so,
shall issue an order to ensure that the protected
health care professional does not suffer any loss of
position, pay, or benefits in relation to the plan,
issuer, or provider involved, as a result of the viola-
tion found by the Secretary.
‘‘(d) CONFORMING REGULATIONS.—The Secretary
may issue regulations to coordinate the requirements on
group health plans under this section with the require-
ments imposed under the other provisions of this title.’’.
(b) SATISFACTION OF ERISA CLAIMS PROCEDURE
REQUIREMENT.—Section 503 of such Act (29 U.S.C.
1133) is amended by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’
and by adding at the end the following new subsection:
‘‘(b) In the case of a group health plan (as defined
in section 733) compliance with the requirements of sub-
title A of title I of the Bipartisan Consensus Managed
Care Improvement Act of 1999 in the case of a claims
denial shall be deemed compliance with subsection (a) with
respect to such claims denial.’’.
(c) CONFORMING AMENDMENTS.—(1) Section 732(a)
of such Act (29 U.S.C. 1185(a)) is amended by striking
‘‘section 711’’ and inserting ‘‘sections 711 and 714’’.
(2) The table of contents in section 1 of such Act
is amended by inserting after the item relating to section
713 the following new item:
‘‘Sec. 714. Patient protection standards.’’.
(3) Section 502(b)(3) of such Act (29 U.S.C.
1132(b)(3)) is amended by inserting ‘‘(other than section
135(b))’’ after ‘‘part 7’’.
SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN
ACTIONS INVOLVING HEALTH INSURANCE
POLICYHOLDERS.
(a) IN GENERAL.—Section 514 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1144)
is amended by adding at the end the following subsection:
‘‘(e) PREEMPTION NOT TO APPLY TO CERTAIN AC-
TIONS ARISING OUT OF PROVISION OF HEALTH BENE-
FITS.—
‘‘(1) NON-PREEMPTION OF CERTAIN CAUSES OF
ACTION.—
‘‘(A) IN GENERAL.—Except as provided in
this subsection, nothing in this title shall be
construed to invalidate, impair, or supersede
any cause of action by a participant or bene-
ficiary (or the estate of a participant or bene-
ficiary) under State law to recover damages re-
sulting from personal injury or for wrongful
death against any person—
‘‘(i) in connection with the provision
of insurance, administrative services, or
medical services by such person to or for
a group health plan as defined in section
733), or
‘‘(ii) that arises out of the arrange-
ment by such person for the provision of
such insurance, administrative services, or
medical services by other persons.
‘‘(B) LIMITATION
ON
PUNITIVE
DAM-
AGES.—The plan or issuer is not liable for any
punitive, exemplary, or similar damages in the
case of a cause of action brought under sub-
paragraph (A) if—
‘‘(i) it relates to an externally appeal-
able decision (as defined in subsection
(a)(2) of section 103 of the Bipartisan
Consensus Managed Care Improvement
Act of 1999);
‘‘(ii) an external appeal with respect
to such decision was completed under such
section 103;
‘‘(iii) in the case such external appeal
was initiated by the plan or issuer filing
the request for the external appeal, the re-
quest was filed on a timely basis before the
date the action was brought or, if later,
within 30 days after the date the exter-
nally appealable decision was made; and
‘‘(iv) the plan or issuer complied with
the determination of the external appeal
entity upon receipt of the determination of
the external appeal entity.
The provisions of this subparagraph supersede
any State law or common law to the contrary.
‘‘(C) PERSONAL
INJURY
DEFINED.—For
purposes of this subsection, the term ‘personal