I
105TH CONGRESS
1ST SESSION
H. R. 2967
To amend the title XXVII of the Public Health Service Act and other
laws to assure the rights of enrollees under managed care plans.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 8, 1997
Mr. SCHUMER introduced the following bill; which was referred to the Com-
mittee on Commerce, and in addition to the Committees on Education
and the Workforce, Ways and Means, and Government Reform and Over-
sight, 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 committee concerned
A BILL
To amend the title XXVII of the Public Health Service
Act and other laws to assure the rights of enrollees
under managed care plans.
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
‘‘Health Insurance Consumer’s Bill of Rights Act of
1997’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—HEALTH INSURANCE BILL OF RIGHTS
Sec. 101. Health insurance bill of rights.
‘‘PART C—HEALTH INSURANCE BILL OF RIGHTS
‘‘Sec. 2770. Notice; additional definitions.
‘‘SUBPART 1—ACCESS TO PRIMARY CARE PHYSICIANS, SPECIALISTS, OUT OF
NETWORK PROVIDERS, EMERGENCY ROOM SERVICES, PRESCRIPTION DRUGS
‘‘Sec. 2771. Access to personnel and facilities; assuring adequate choice of
health care professionals.
‘‘Sec. 2772. Access to specialty care.
‘‘Sec. 2773. Access to emergency care.
‘‘Sec. 2774. Coverage for individuals participating in approved clinical
trials.
‘‘Sec. 2775. Continuity of care.
‘‘Sec. 2776. Prohibition of interference with certain medical communica-
tions.
‘‘Sec. 2777. Access to needed prescription drugs.
‘‘SUBPART 2—UTILIZATION REVIEW, GRIEVANCE, APPEALS, AND QUALITY
IMPROVEMENT
‘‘Sec. 2779. Standards for utilization review activities, complaints, and ap-
peals.
‘‘Sec. 2780. Quality improvement program.
‘‘SUBPART 3—NONDISCRIMINATION
‘‘Sec. 2784. Nondiscrimination.
‘‘SUBPART 4—CONFIDENTIALITY
‘‘Sec. 2785. Medical records and confidentiality.
‘‘SUBPART 5—DISCLOSURES
‘‘Sec. 2786. Health prospectus; disclosure of information.
‘‘SUBPART 6—PROMOTING GOOD MEDICAL PRACTICE AND PROTECTING THE
DOCTOR-PATIENT RELATIONSHIP
‘‘Sec. 2787. Promoting good medical practice.
TITLE II—APPLICATION OF BILL OF RIGHTS UNDER VARIOUS
LAWS
Sec. 201. Amendments to the Public Health Service Act.
Sec. 202. Managed care requirements under the Employee Retirement In-
come Security Act of 1974.
Sec. 203. Managed care requirements under the Internal Revenue Code of
1986.
Sec. 204. Managed care requirements under medicare, medicaid, and the
Federal employees health benefits program (FEHBP).
Sec. 205. Effective dates.
TITLE I—HEALTH INSURANCE
BILL OF RIGHTS
SEC. 101. HEALTH INSURANCE BILL OF RIGHTS.
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—HEALTH INSURANCE BILL OF RIGHTS
‘‘SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS.
‘‘(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
an individual who is entitled to benefits under a
group health plan or under health insurance cov-
erage.
‘‘(2) HEALTH CARE PROFESSIONAL.—The term
‘health care professional’ means a physician or other
health care practitioner providing health care serv-
ices.
‘‘(3) HEALTH
CARE
PROVIDER.—The term
‘health care provider’ means a clinic, hospital physi-
cian organization, preferred provider organization,
independent practice association, community service
provider, family planning clinic, or other appro-
priately licensed provider of health care services or
supplies.
‘‘(4) MANAGED
CARE.—The term ‘managed
care’ means, with respect to a group health plan or
health insurance coverage, such a plan or coverage
that provides financial incentives for enrollees to ob-
tain benefits through participating health care pro-
viders or professionals.
‘‘(5) 
NONPARTICIPATING.—The 
term 
‘non-
participating’ means, with respect to a health care
provider or professional and a group health plan or
health insurance coverage, such a provider or profes-
sional that is not a participating provider or profes-
sional with respect to such services.
‘‘(6) PARTICIPATING.—The term ‘participating’
means, with respect to a health care provider or pro-
fessional and a group health plan or health insur-
ance coverage offered by a health insurance issuer,
such a provider or professional that has entered into
an agreement or arrangement with the plan or is-
suer with respect to the provision of health care
services to enrollees under the plan or coverage.
‘‘(7) PRIMARY CARE PRACTITIONER.—The term
‘primary care practitioner’ means, with respect to a
group health plan or health insurance coverage of-
fered by a health insurance issuer, a health care pro-
fessional (who may be trained in family practice,
general practice, internal medicine, obstetrics and
gynecology, or pediatrics and who is practicing with-
in the scope of practice authorized by State law)
designated by the plan or issuer to coordinate, su-
pervise, or provide ongoing care to enrollees.
‘‘SUBPART 1—ACCESS TO PRIMARY CARE PHYSICIANS,
SPECIALISTS, 
OUT
OF
NETWORK
PROVIDERS,
EMERGENCY
ROOM
SERVICES, 
PRESCRIPTION
DRUGS
‘‘SEC. 2771. ACCESS TO PERSONNEL AND FACILITIES; AS-
SURING 
ADEQUATE 
CHOICE 
OF 
HEALTH
CARE PROFESSIONALS.
‘‘A managed care group health plan (and a health
insurance issuer offering managed care group health in-
surance coverage) shall comply with regulations promul-
gated by the Secretary that ensure that such plans and
issuers—
‘‘(1) have a sufficient number and type of pri-
mary care practitioners and specialists, throughout
the service area to meet the needs of enrollees and
to provide meaningful choice;
‘‘(2) maintain a mix of primary care practition-
ers that is adequate to meet the needs of the enroll-
ees’ varied characteristics, including age, gender,
race, and health status; and
‘‘(3) include, to the extent possible, a variety of
primary care providers (including community health
centers, rural health clinics, and family planning
clinics).
‘‘SEC. 2772. ACCESS TO SPECIALTY CARE.
‘‘A managed care group health plan (and a health
insurance issuer offering managed care group health in-
surance coverage) shall comply with regulations promul-
gated by the Secretary that ensure that such plans and
issuers provide enrollees with—
‘‘(1) access to specialty care;
‘‘(2) standing referrals to specialists;
‘‘(3) access to nonparticipating providers;
‘‘(4) direct access (without the need for a refer-
ral) to health care professionals trained in obstetrics
and gynecology; and
‘‘(5) a process that permits a health care pro-
fessional trained in obstetrics and gynecology or
other field appropriate to women’s health to be des-
ignated and treated as a primary care practitioner.
‘‘SEC. 2773. ACCESS TO EMERGENCY CARE.
‘‘(a) IN GENERAL.—If a group health plan or health
insurance coverage provides any benefits with respect to
emergency services (as defined in subsection (b)(1)), the
plan or the health insurance issuer offering such coverage
shall—
‘‘(1) provide for emergency services without re-
gard to prior authorization or the emergency care
provider’s contractual relationship with the organiza-
tion; and
‘‘(2) comply with such guidelines as the Sec-
retary of Health and Human Services may prescribe
relating to promoting efficient and timely coordina-
tion of appropriate maintenance and post-stabiliza-
tion care of an enrollee after the enrollee has been
determined to be stable under section 1867 of the
Social Security Act.
‘‘(b) DEFINITION
OF EMERGENCY SERVICES.—In
this subsection—
‘‘(1) IN GENERAL.—The term ‘emergency serv-
ices’ means, with respect to an enrollee under a plan
or coverage, inpatient and outpatient services cov-
ered under the plan or coverage that—
‘‘(A) are furnished by a provider that is
qualified to furnish such services under the plan
or coverage, and
‘‘(B) are needed to evaluate or stabilize an
emergency medical condition (as defined in sub-
paragraph (B)).
‘‘(2) EMERGENCY MEDICAL CONDITION BASED
ON
PRUDENT
LAYPERSON.—The term ‘emergency
medical condition’ means a medical condition mani-
festing itself by acute symptoms of sufficient sever-
ity (including severe pain) such that a prudent
layperson, who possesses an average knowledge of
health and medicine, could reasonably expect the ab-
sence of immediate medical attention to result in—
‘‘(A) placing the health of the individual
(or, with respect to a pregnant woman, the
health of the woman or her unborn child) in se-
rious jeopardy,
‘‘(B) serious impairment to bodily func-
tions, or
‘‘(C) serious dysfunction of any bodily
organ or part.
‘‘SEC. 2774. COVERAGE FOR INDIVIDUALS PARTICIPATING
IN APPROVED CLINICAL TRIALS.
‘‘(a) IN GENERAL.—If a group health plan provides
benefits, or a health insurance issuer offers health insur-
ance coverage to, a qualified enrollee (as defined in sub-
section (b)), the plan or issuer—
‘‘(1) may not deny the enrollee participation in
the clinical trial referred to in subsection (b)(2);
‘‘(2) subject to subsection (c), may not deny (or
limit or impose additional conditions on) the cov-
erage of routine patient costs for items and services
furnished in connection with participation in the
trial; and
‘‘(3) may not discriminate against the enrollee
on the basis of the enrollee’s participation in such
trial.
‘‘(b) QUALIFIED ENROLLEE DEFINED.—For pur-
poses of subsection (a), the term ‘qualified enrollee’ means
an enrollee who meets the following conditions:
‘‘(1) The enrollee has a life-threatening or seri-
ous illness for which no standard treatment is effec-
tive.
‘‘(2) The enrollee is eligible to participate in an
approved clinical trial with respect to treatment of
such illness.
‘‘(3) The enrollee and the referring physician
conclude that the enrollee’s participation in such
trial would be appropriate.
‘‘(4) The enrollee’s participation in the trial of-
fers potential for significant clinical benefit for the
enrollee.
‘‘(c) PAYMENT.—
‘‘(1) IN GENERAL.—Under this section a plan
or issuer shall provide for payment for routine pa-
tient costs described in subsection (a)(2) but is not
required to pay for costs of items and services that
are reasonably expected (as determined by the Sec-
retary) to be paid for by the sponsors of an ap-
proved clinical trial.
‘‘(2) PAYMENT RATE.—In the case of covered
items and services provided by—
‘‘(A) a participating provider, the payment
rate shall be at the agreed upon rate, or
‘‘(B) a nonparticipating provider, the pay-
ment rate shall be at the rate the plan or issuer
would normally pay for comparable services
under subparagraph (A).
‘‘(d) APPROVED CLINICAL TRIAL DEFINED.—In this
section, the term ‘approved clinical trial’ means a clinical
research study or clinical investigation approved by the
Food and Drug Administration or approved and funded
by one or more of the following:
‘‘(1) The National Institutes of Health.
‘‘(2) A cooperative group or center of the Na-
tional Institutes of Health.
‘‘(3) The Department of Veterans Affairs.
‘‘(4) The Department of Defense.
‘‘SEC. 2775. CONTINUITY OF CARE.
‘‘A managed care group health plan (and a health
insurance issuer offering managed care group health in-
surance coverage) shall comply with regulations promul-
gated by the Secretary that ensure that such plans and
issuers provide continuity of coverage in the case of termi-
nated coverage where an enrollee is undergoing a course
of treatment with the provider at the time of such termi-
nation.
‘‘SEC. 2776. 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 group health plan or health insurance is-
suer (offering health insurance coverage in connection
with a group health plan) and a health professional shall
not prohibit or restrict the health professional from engag-
ing 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’
has the meaning given such term by the Secretary.
‘‘SEC. 2777. ACCESS TO NEEDED PRESCRIPTION DRUGS.
‘‘If a group health plan, or health insurance issuer
offers health insurance coverage that, provides benefits
with respect to prescription drugs but the coverage limits
such benefits to drugs included in a formulary, the plan
or issuer shall ensure in accordance with regulations of
the Secretary that—
‘‘(1) the nature of the formulary restrictions is
fully disclosed to enrollees; and
‘‘(2) exceptions from the formulary restriction
are provided when medically necessary or appro-
priate.
‘‘SUBPART 2—UTILIZATION REVIEW, GRIEVANCE,
APPEALS, AND QUALITY IMPROVEMENT
‘‘SEC. 2779. STANDARDS FOR UTILIZATION REVIEW ACTIVI-
TIES, COMPLAINTS, AND APPEALS.
‘‘A group health plan and a health insurance issuer
offering health insurance coverage in connection with a
group health plan shall comply with standards established
by the Secretary relating to its conduct of utilization re-
view activities. Such standards shall include the following:
‘‘(1) A requirement that a plan or issuer de-
velop written policies and criteria concerning utiliza-
tion review activities.
‘‘(2) A requirement that a plan or issuer pro-
vide notice of such policies and criteria and the writ-
ten notice of adverse determinations.
‘‘(3) A restriction on the use of contingent com-
pensation arrangements with providers.
‘‘(4) A requirement establishing deadlines to
ensure timely utilization review determinations.
‘‘(5) The establishment of an adequate process
for filing complaints, and appealing decisions, con-
cerning utilization review determinations, including
the mandatory use of an outside review panel to
make decisions on such appeals.
‘‘(6) A requirement that a plan or issuer that
utilizes clinical practice guidelines uniform apply re-
view criteria that are based on sound scientific prin-
ciples and the most recent medical evidence.
‘‘SEC. 2780. QUALITY IMPROVEMENT PROGRAM.
‘‘(a) IN GENERAL.—A group health plan and health
insurance issuer offering health insurance coverage shall
make arrangements for an ongoing quality improvement
program for health care services it provides to enrollees.
Such a program shall meet standards established by the
Secretary, including standards relating to—
‘‘(1) the measurement of health outcomes rel-
evant to all populations, including women;
‘‘(2) evaluation of high risk services;
‘‘(3) monitoring utilization, underutilization,
and overutilization of services;
‘‘(4) ensuring appropriate action to improve
quality of care; and
‘‘(5) providing for an independent external re-
view of the program.
‘‘SUBPART 3—NONDISCRIMINATION
‘‘SEC. 2784. NONDISCRIMINATION.
‘‘(a) ENROLLEES.—A group health plan or health in-
surance issuer offering health insurance coverage (whether
or not a managed care plan or coverage) may not discrimi-
nate or engage (directly or through contractual arrange-
ments) in any activity, including the selection of service
area, that has the effect of discriminating against an indi-
vidual on the basis of race, culture, national origin, gen-
der, sexual orientation, language, socio-economic status,
age, disability, genetic makeup, health status, anticipated
need for health care services, or payer source.
‘‘(b) PROVIDERS.—Such a plan or issuer may not dis-
criminate in the selection of members of the health pro-
vider or provider network (and in establishing the terms
and conditions for membership in the network) of the plan
or coverage based on any of the factors described in sub-
section (a).
‘‘(c) SERVICES.—Such a plan or issuer may not ex-
clude coverage (including procedures and drugs) if the ef-
fect is to discriminate in violation of subsection (a) or (b).
‘‘SUBPART 4—CONFIDENTIALITY
‘‘SEC. 2785. MEDICAL RECORDS AND CONFIDENTIALITY.
‘‘A managed care group health plan (and a health
insurance issuer offering managed care group health in-
surance) shall—
‘‘(1) establish written policies and procedures
for the handling of medical records and enrollee
communications to ensure enrollee confidentiality;
‘‘(2) ensure the confidentiality of specified en-
rollee information, including, prior medical history,
medical record information and claims information,
except where disclosure of this information is re-
quired by law; and
‘‘(3) not release any individual patient record
information, unless such a release is authorized in
writing by the enrollee or otherwise required by law.
‘‘SUBPART 5—DISCLOSURES
‘‘SEC. 2786. HEALTH PROSPECTUS; DISCLOSURE OF INFOR-
MATION.
‘‘(a) DISCLOSURE.—Each group health plan, and
each health insurance issuer providing health insurance
coverage, shall provide to each enrollee at the time of en-
rollment and on an annual basis, and shall make available
to each prospective enrollee upon request—
‘‘(1) a prospectus that relates to the plan or
coverage offered and that meets the requirements of
subsection (b); and
‘‘(2) additional information described in sub-
section (c).
‘‘(b) PROSPECTUS.—
‘‘(1) IN GENERAL.—Each prospectus under this
subsection for a plan or coverage—
‘‘(A) shall contain the information de-
scribed in paragraphs (2) through (4) concern-
ing the plan or coverage,
‘‘(B) shall contain such additional informa-
tion as the Secretary deems appropriate, and
‘‘(C) shall be no longer than 3 pages in
length and in a format specified by the Sec-
retary for purposes of comparison by prospec-
tive enrollees.
‘‘(2) QUALITATIVE INFORMATION.—The infor-
mation described in this paragraph is a summary of
the quality assessment data on the plan or coverage.
The data shall—
‘‘(A) be the similar to the types of data as
are collected for managed care plans under title
XVIII of the Social Security Act, as determined
by the Secretary and taking into account dif-
ferences between the populations covered under
such title and the populations covered under
this title;
‘‘(B) be collected by independent, auditing
agencies;
‘‘(C) include—
‘‘(i) a description of the types of
methodologies (including capitation, finan-
cial incentive or bonuses, fee-for-service,
salary, and withholds) used by the plan or
issuer to reimburse physicians, including
the proportions of physicians who have
each of these types of arrangements; and
‘‘(ii) cost-sharing requirements for en-
rollees.
The information under subparagraph (C) shall in-
clude, upon request, information on the reimburse-
ment methodology used by the plan or issuer or
medical groups for individual physicians, but do not
require the disclosure of specific reimbursement
rates.
‘‘(3) QUANTITATIVE INFORMATION.—The infor-
mation described in this paragraph is measures of
performance of the plan or issuer (in relation to cov-
erage offered) with respect to each of the following
and such other salient data as the Secretary may
specify:
‘‘(A) The ratio of physicians to enrollees,
including the ratio of physicians who are obste-
trician/gynecologists to adult, female enrollees.
‘‘(B) The ratio of specialists to enrollees.
‘‘(C) The incentive structure used for pay-
ment of primary care physicians and specialists.
‘‘(D) Patient outcomes for procedures, in-
cluding procedures specific to female enrollees.
‘‘(E) The number of grievances filed under
the plan or coverage.
‘‘(F) The number of requests for proce-
dures for which utilization review board review
or approval is required and the number (and
percentage) of such requests that are denied.
‘‘(G) The number of appeals filed from de-
nial of such requests and the number (and per-
centage) of such appeals that are approved,
such numbers and percentages broken down by
gender of the enrollee involved.
‘‘(H) Disenrollment data.
‘‘(4) DESCRIPTION OF BENEFITS.—The infor-
mation described in this paragraph is a description
of the benefits provided under the plan or coverage,
as well as explicit exclusions, including a description
of the following:
‘‘(A) Coverage policy with respect to cov-
erage for female-specific benefits, including
screening mammography, hormone replacement
therapy, bone density testing, osteoporosis
screening, maternity care, and reconstructive
surgery following a mastectomy.
‘‘(B) The costs of copayments for treat-
ments, including any exceptions.
‘‘(c) ADDITIONAL INFORMATION.—The additional in-
formation described in this subsection is information
about each of the following:
‘‘(1) The plan’s or issuer’s structure and pro-
vider network, including the names and credentials
of physicians in the network.
‘‘(2) Coverage provided and excluded, including
out-of-area coverage.
‘‘(3) Procedures for utilization management.
‘‘(4) Procedures for determining coverage for
investigational or experimental treatments, as well
as definitions for coverage terms.
‘‘(5) Any restrictive formularies or prior ap-
proval requirements for obtaining prescription drugs,
‘‘(12) How to select providers and obtain refer-
rals.
‘‘(13) How to appeal health plan decisions and
file grievances.
‘‘(d) STATE AUTHORITY TO REQUIRE ADDITIONAL
INFORMATION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
this section shall not be construed as preventing a
State from requiring health insurance issuers, in re-
lation to their offering of health insurance coverage,
to disclose separately information (including com-
parative ratings of health insurance coverage) in ad-
dition to the information required to be disclosed
under this section.
‘‘(2) CONTINUED PREEMPTION WITH RESPECT
TO GROUP HEALTH PLANS.—Nothing in this part
shall be construed to affect or modify the provisions
of section 514 with respect to group health plans.
‘‘SUBPART 6—PROMOTING GOOD MEDICAL PRACTICE
AND PROTECTING THE DOCTOR-PATIENT RELATIONSHIP
‘‘SEC. 2787. PROMOTING GOOD MEDICAL PRACTICE.
‘‘(a) PROHIBITING
ARBITRARY
LIMITATIONS
OR
CONDITIONS
FOR
THE PROVISION
OF SERVICES.—A
group health plan and a health insurance issuer, in con-
nection with the provision of health insurance coverage,
may not impose limits on the manner in which particular
services are delivered if the services are medically nec-
essary or appropriate to the extent that such procedure
or treatment is otherwise a covered benefit.
‘‘(b) CONSTRUCTION.—Subsection (a) shall not be
construed as requiring coverage of particular services the
coverage of which is otherwise not covered under the terms
of the coverage.’’.
TITLE II—APPLICATION OF BILL
OF RIGHTS UNDER VARIOUS
LAWS
SEC. 201. AMENDMENTS TO THE PUBLIC HEALTH SERVICE
ACT.
(a) APPLICATION TO GROUP HEALTH INSURANCE
COVERAGE.—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. MANAGED CARE REQUIREMENTS.
‘‘Each health insurance issuer shall comply with the
applicable requirements under part C with respect to
group health insurance coverage it offers.’’.
(b) 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. MANAGED CARE REQUIREMENTS.
‘‘Each health insurance issuer shall comply with the
applicable requirements under part C with respect to indi-
vidual health insurance coverage it offers, in the same
manner as such requirements apply to group health insur-
ance coverage.’’.
(c) 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 MANAGED CARE
REQUIREMENTS.—Subject to subsection (a)(2), the provi-
sions of section 2706 and part C, and part D insofar as
it applies to section 2706 or part C, shall not prevent a
State from establishing requirements relating to the sub-
ject matter of such provisions so long as such require-
ments are at least as stringent on health insurance issuers
as the requirements imposed 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 MANAGED CARE
REQUIREMENTS.—Subject to subsection (b), the provi-
sions of section 2752 and part C, and part D insofar as
it applies to section 2752 or part C, shall not prevent a
State from establishing requirements relating to the sub-
ject matter of such provisions so long as such require-
ments are at least as stringent on health insurance issuers
as the requirements imposed under such section.’’.
(d) 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’’.
(e) ASSURING COORDINATION.—Section 104(1) of
the Health Insurance Portability and Accountability Act
of 1996 (Public Law 104–191) is amended by striking
‘‘under this subtitle (and the amendments made by this
subtitle and section 401)’’ and inserting ‘‘title XXVII of
the Public Health Service Act, under part 7 of subtitle
B of title I of the Employee Retirement Income Security
Act of 1974, and chapter 100 of the Internal Revenue
Code of 1986’’.
SEC. 202. MANAGED CARE REQUIREMENTS UNDER THE EM-
PLOYEE 
RETIREMENT 
INCOME 
SECURITY
ACT OF 1974.
(a) IN GENERAL.—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. 713. MANAGED CARE REQUIREMENTS.
‘‘(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 applicable requirements of
part C of title XXVII of the Public Health Service Act.
‘‘(b) REFERENCES
IN APPLICATION.—In applying
subsection (a) under this part, any reference in such part
C—
‘‘(1) to a health insurance issuer and health in-
surance coverage offered by such an issuer is
deemed to include a reference to a group health plan
and coverage under such plan, respectively;
‘‘(2) to the Secretary is deemed a reference to
the Secretary of Labor;
‘‘(3) to an applicable State authority is deemed
a reference to the Secretary of Labor; and
‘‘(4) to an enrollee with respect to health insur-
ance coverage is deemed to include a reference to a
participant or beneficiary with respect to a group
health plan.’’.
(b) MODIFICATION OF PREEMPTION STANDARDS.—
Section 731 of such Act (42 U.S.C. 1191) is amended—
(1) in subsection (a)(1), by striking ‘‘subsection
(b)’’ and inserting ‘‘subsections (b) and (c)’’;
(2) by redesignating subsections (c) and (d) as
subsections (d) and (e), respectively; and
(3) by inserting after subsection (b) the follow-
ing new subsection:
‘‘(c) SPECIAL RULES IN CASE OF MANAGED CARE
REQUIREMENTS.—Subject to subsection (a)(2), the provi-
sions of section 713 and part C of title XXVII of the Pub-
lic Health Service Act, and subpart C insofar as it applies
to section 713 or such part, shall not be construed to pre-
empt any State law, or the enactment or implementation
of such a State law, that provides protections for individ-
uals that are equivalent to or stricter than the protections
provided under such provisions.’’.
(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 713’’.
(2) The table of contents in section 1 of such Act
is amended by inserting after the item relating to section
712 the following new item:
‘‘Sec. 713. Managed care requirements.’’.
SEC. 203. MANAGED CARE REQUIREMENTS UNDER THE IN-
TERNAL REVENUE CODE OF 1986.
(a) IN GENERAL.—Subchapter B of part B of part
7 of subtitle B of title I of the Employee Retirement In-
come Security Act of 1974 is amended by adding at the
end the following new section:
‘‘SEC. 9813. MANAGED CARE REQUIREMENTS.
‘‘(a) IN GENERAL.—Subject to subsection (b), a
group health plan shall comply with the applicable require-
ments of part C of title XXVII of the Public Health Serv-
ice Act.
‘‘(b) REFERENCES
IN APPLICATION.—In applying
subsection (a) under this subchapter, any reference in
such part C—
‘‘(1) to the Secretary is deemed a reference to
the Secretary of the Treasury; and
‘‘(2) to an applicable State authority is deemed
a reference to the Secretary.’’.
(b) CLERICAL AMENDMENT.—The table of sections
in subchapter B of chapter 100 of such Code is amended
by inserting after the item relating to section 9812 the
following new item:
‘‘Sec. 9813. Managed care requirements.’’.
SEC. 204. MANAGED CARE REQUIREMENTS UNDER MEDI-
CARE, MEDICAID, AND THE FEDERAL EM-
PLOYEES 
HEALTH 
BENEFITS 
PROGRAM
(FEHBP).
(a) MEDICARE.—Section 1852 of the Social Security
Act (42 U.S.C. 1395w–22), as inserted by section 4001
of the Balanced Budget Act of 1997 (Public Law 101–
33), is amended by adding at the end the following new
subsection:
‘‘(l) 
MANAGED
CARE
REQUIREMENTS.—Each
Medicare+Choice 
organization 
that 
offers 
a
Medicare+Choice plan described in section 1851(a)(1)(A)
shall comply with the applicable requirements of part C
of title XXVII of the Public Health Service Act in the
same manner as such requirements apply with respect to
health insurance coverage offered by a health insurance
issuer, except to the extent such requirements are less pro-
tective of enrollees than the requirements established
under this part.’’.
(b) MEDICAID.—Section 1932(b)(8) of the Social Se-
curity Act, as added by section 4704(a) of the Balanced
Budget Act of 1997, is amended—
(1) by striking ‘‘AND MENTAL HEALTH’’ and in-
serting ‘‘, MENTAL HEALTH, AND MANAGED CARE’’,
(2) by inserting ‘‘and of part C’’ after ‘‘of part
A’’, and
(3) by inserting before the period at the end the
following: ‘‘, except to the extent such requirements
are less protective of enrollees than the requirements
established under this title’’.
(c) FEDERAL EMPLOYEES’ HEALTH BENEFITS PRO-
GRAM (FEHBP).—Chapter 89 of title 5, United States
Code, is amended—
(1) by inserting after the item relating to sec-
tion 8905a the following new section:
‘‘§ 8905b. Application of managed care requirements
‘‘Each health benefit plan offered under this chapter
shall comply with the applicable requirements of part C
of title XXVII of the Public Health Service Act in the
same manner as such requirements apply with respect to
health insurance coverage offered by a health insurance
issuer, except to the extent such requirements are less pro-
tective of enrollees than the requirements established
under this chapter.’’; and
(2) in the table of sections, by inserting the fol-
lowing item after the item relating to section 8905a:
‘‘8905b.
Application of managed care requirements.’’.
SEC. 205. EFFECTIVE DATES.
(a) GENERAL
EFFECTIVE
DATE
FOR
GROUP
HEALTH PLANS.—
(1) IN GENERAL.—Subject to paragraph (2),
the amendments made by section 101, subsections
(a), (c)(1), and (d) of section 201, and sections 203
and 204 shall apply with respect to group health in-
surance coverage for group health plan years begin-
ning on or after July 1, 1998 (in this section re-
ferred to as the ‘‘general effective date’’) and also
shall apply to portions of plan years occurring on
and after January 1, 1999.
(2) TREATMENT
OF
GROUP
HEALTH
PLANS
MAINTAINED
PURSUANT
TO
CERTAIN
COLLECTIVE
BARGAINING AGREEMENTS.—In the case of a group
health plan, or group health insurance coverage pro-
vided pursuant to a group health plan, maintained
pursuant to 1 or more collective bargaining agree-
ments between employee representatives and 1 or
more employers ratified before the date of enactment
of this Act, the amendments described in paragraph
(1) shall not apply to plan years beginning before
the later of—
(A) the date on which the last collective
bargaining agreements relating to the plan ter-
minates (determined without regard to any ex-
tension thereof agreed to after the date of en-
actment of this Act), or
(B) the general effective date.
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining
agreement relating to the plan which amends the
plan solely to conform to any requirement added by
such amendments shall not be treated as a termi-
nation of such collective bargaining agreement.
(b) GENERAL EFFECTIVE DATE FOR HEALTH IN-
SURANCE COVERAGE.—The amendments made by section
101 and subsections (b), (c)(2), and (d) of section 201
shall apply with respect to individual health insurance cov-
erage offered, sold, issued, renewed, in effect, or operated
in the individual market on or after the general effective
date.
(c) EFFECTIVE DATE
FOR COORDINATION.—The
amendment made by section 201(e) shall take effect on
the date of the enactment of this Act.
(d) FEDERAL PROGRAMS.—The amendments made
by section 204 shall take effect on January 1, 1999.
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