I
105TH CONGRESS
1ST SESSION
H. R. 3009
To amend the Public Health Service Act and the Employee Retirement
Income Security Act of 1974 to establish standards for managed care plans.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 9, 1997
Mr. PALLONE (for himself, Mr. GILMAN, Mr. BROWN of Ohio, Mr. FOX of
Pennsylvania, Ms. SANCHEZ, Mr. HORN, Ms. ESHOO, Mr. GREEN, Mr.
FROST, Mr. ANDREWS, Mr. FILNER, Mr. ACKERMAN, Mr. WEXLER, Mr.
BROWN of California, Mrs. MALONEY of New York, Mr. HASTINGS of
Florida, Mr. PASCRELL, Mr. MASCARA, Mr. DAVIS of Illinois, Ms.
MILLENDER-MCDONALD, Ms. CARSON, Mrs. CLAYTON, Mr. LAMPSON,
Mr. NADLER, Ms. JACKSON-LEE of Texas, Mr. ROTHMAN, Mr. ENGEL,
Mr. PAYNE, Mr. MCCOLLUM, Mr. SHERMAN, Mr. CRAMER, and Mrs.
MORELLA) introduced the following bill; which was referred to the Com-
mittee on Commerce, and in addition to the Committees on Ways and
Means, and Education and the Workforce, for a period to be subsequently
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Public Health Service Act and the Employee
Retirement Income Security Act of 1974 to establish
standards for 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 Care Consumer Protection 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—PATIENT CHOICE; ACCESS; QUALITY OF CARE
Sec. 101. Patient choice.
Sec. 102. Access to care.
Sec. 103. Quality of care.
Sec. 104. Patient confidentiality.
Sec. 105. Coverage under approved clinical trials.
Sec. 106. Access to needed prescription drugs; drug utilization program.
TITLE II—CONTRACTING AND TERMINATION RIGHTS
Sec. 201. Nondiscrimination against providers.
Sec. 202. Development of plan policies.
Sec. 203. Due process.
Sec. 204. Non-preemption of State law respecting liability of group health
plans.
TITLE III—INFORMATION REPORTING
Sec. 301. Information reporting.
Sec. 302. Automatic exclusion from medicare and medicaid for health plans
that lie about quality data.
TITLE IV—PATIENT-PROVIDER COMMUNICATION
Sec. 401. Short title; findings.
Sec. 402. Prohibition of interference with certain medical communications.
Sec. 403. Definitions.
Sec. 404. Effective date.
TITLE V—UTILIZATION REVIEW AND MANAGEMENT
Sec. 501. Utilization review due process for enrollees.
TITLE VI—ADDITIONAL AMENDMENTS; EFFECTIVE DATES.
Sec. 601. Application to group and individual health insurance coverage.
Sec. 602. Consumer protection standards under the Employee Retirement In-
come Security Act of 1974.
TITLE I—PATIENT CHOICE;
ACCESS; QUALITY OF CARE
SEC. 101. PATIENT CHOICE.
(a) UNDER HEALTH INSURANCE COVERAGE.—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—CONSUMER PROTECTIONS UNDER MANAGED
CARE
‘‘SEC. 2770. PATIENT CHOICE OF HEALTH PROFESSIONALS
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)—
‘‘(A) the health insurance coverage shall
provide for reimbursement rates for covered
services offered by health professionals and pro-
viders who are not participating health profes-
sionals or providers that are not less than the
reimbursement rates for covered services offered
by participating health professionals and pro-
viders; and
‘‘(B) the issuer shall disclose to enrollees
their potential liability for cost-sharing and
other out-of-pocket expenses.
‘‘(c) CONTINUITY OF CARE.—A health insurance is-
suer offering network coverage shall—
‘‘(1) ensure that any process established by the
issuer to coordinate care and control costs does not
create an undue burden, as defined by the applicable
State authority, for enrollees with special health care
needs or chronic conditions;
‘‘(2) ensure direct access to relevant specialists
for the continued care of such enrollees when medi-
cally or clinically indicated in the judgment of the
treating health professional, in consultation with the
enrollee;
‘‘(3) in the case of an enrollee with special
health care needs or a chronic condition, determine
whether, based on the judgment of the treating
health professional, in consultation with the enrollee,
it is medically or clinically necessary to use a spe-
cialist or a care coordinator from an interdiscipli-
nary team to ensure continuity of care; and
‘‘(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.
‘‘(d) 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.
‘‘(e) 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.’’.
(b) REQUIRING MEDICARE+CHOICE ORGANIZATIONS
TO OFFER COVERAGE
FOR OUT-OF-NETWORK SERV-
ICES.—
(1) IN GENERAL.—Section 1852(a)(3) of the
Social Security Act (42 U.S.C. 1395w–22(a)(3)), as
added by section 4001 of the Balanced Budget Act
of 1997, is amended by redesignating subparagraph
(C) as subparagraph (D) and by inserting after sub-
paragraph (B) the following new subparagraph:
‘‘(C) REQUIRING OUT-OF-NETWORK SERV-
ICE OPTION.—If a Medicare+Choice organiza-
tion offers to members enrolled under this part
a plan which provides for coverage of services
covered under parts A and B of this title only
if such services are furnished through providers
and other persons who are members of a net-
work of providers and other persons who have
entered into a contract with the organization to
provide such services, the contract with the or-
ganization under section 1857 shall provide
that the organization shall also offer to mem-
bers enrolled under this part (at the time of en-
rollment) a plan which provides for coverage of
such services which are not furnished through
providers and other persons who are members
of such a network.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to contracts for years
beginning with 1999.
SEC. 102. ACCESS TO CARE.
(a) IN GENERAL.—Part C of title XVIII of the Public
Health Service Act, as inserted by section 101, is amended
by adding at the end the following:
‘‘SEC. 2771. 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.
(1) GENERAL
RULE.—The provisions of any
contract or agreement, or the operation of any con-
tract or agreement, between an entity operating a
health plan (including any partnership, association,
or other organization that enters into or administers
such a contract or agreement) and a health care
provider (or group of health care providers) shall not
prohibit or restrict the provider from engaging in
medical communications with his or her patient.
(2) NULLIFICATION.—Any contract provision or
agreement described in paragraph (1) shall be null
and void.
(3) PROHIBITION ON PROVISIONS.—Effective on
the date described in section 404, a contract or
agreement described in paragraph (1) shall not in-
clude a provision that violates paragraph (1).
(b) RULES OF CONSTRUCTION.—Nothing in this title
shall be construed—
(1) to prohibit the enforcement, as part of a
contract or agreement to which a health care pro-
vider is a party, of any mutually agreed upon terms
and conditions, including terms and conditions re-
quiring a health care provider to participate in, and
cooperate with, all programs, policies, and proce-
dures developed or operated by a health plan to as-