I
106TH CONGRESS
1ST SESSION
H. R. 2758
To amend title I of the Employee Retirement Income Security Act to establish
new procedures and access to courts for grievances arising under group
health plans.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 5, 1999
Mr. HILLEARY (for himself and Mrs. EMERSON) introduced the following bill;
which was referred to the Committee on Education and the Workforce
A BILL
To amend title I of the Employee Retirement Income Secu-
rity Act to establish new procedures and access to courts
for grievances arising under group health 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.
This Act may be cited as the ‘‘Common Ground
Healthcare Security Act of 1999’’.
SEC. 2. SPECIAL RULES FOR GROUP HEALTH PLANS.
(a) IN GENERAL.—Section 503 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1133)
is amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ after
‘‘SEC. 503.’’;
(2) by inserting ‘‘(other than a group health
plan)’’ after ‘‘employee benefit plan’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) SPECIAL RULES FOR GROUP HEALTH PLANS.—
‘‘(1) 
COVERAGE
DETERMINATIONS.—Every
group health plan shall—
‘‘(A) provide adequate notice in writing in
accordance with this subsection to any partici-
pant or beneficiary of any adverse coverage de-
cision with respect to benefits of such partici-
pant or beneficiary under the plan, setting forth
the specific reasons for such coverage decision
and any rights of review provided under the
plan, written in a manner calculated to be un-
derstood by the participant;
‘‘(B) provide such notice in writing also to
any treating medical care provider of such par-
ticipant or beneficiary, if such provider has
claimed reimbursement for any item or service
involved in such coverage decision, or if a claim
submitted by the provider initiated the pro-
ceedings leading to such decision;
‘‘(C) afford a reasonable opportunity to
any participant or beneficiary who is in receipt
of the notice of such adverse coverage decision,
and who files a written request for review of the
initial coverage decision within 180 days after
receipt of the notice of the initial decision, for
a full and fair de novo review of the decision by
an appropriate named fiduciary who did not
make the initial decision; and
‘‘(D) meet the additional requirements of
this subsection.
‘‘(2) TIME LIMITS FOR MAKING INITIAL COV-
ERAGE DECISIONS FOR BENEFITS AND COMPLETING
INTERNAL APPEALS.—
‘‘(A) TIME
LIMITS
FOR
DECIDING
RE-
QUESTS
FOR
BENEFIT
PAYMENTS, REQUESTS
FOR ADVANCE DETERMINATION OF COVERAGE,
AND
REQUESTS
FOR
REQUIRED
DETERMINA-
TION OF MEDICAL NECESSITY.—Except as pro-
vided in subparagraph (B)—
‘‘(i) INITIAL DECISIONS.—If a request
for benefit payments, a request for advance
determination of coverage, or a request for
required determination of medical necessity
is submitted to a group health plan in such
reasonable form as may be required under
the plan, the plan shall issue in writing an
initial coverage decision on the request be-
fore the end of the initial decision period
under paragraph (10)(I) following the fil-
ing completion date.
‘‘(ii) INTERNAL REVIEWS OF INITIAL
DENIALS.—Upon the written request of a
participant or beneficiary for review of an
initial adverse coverage decision under
clause (i), a review by an appropriate
named fiduciary (subject to paragraph (3))
of the initial coverage decision shall be
completed, including issuance by the plan
of a written decision affirming, reversing,
or modifying the initial coverage decision,
setting forth the grounds for such decision,
before the end of the internal review period
following the review filing date. Such deci-
sion shall be treated as the final decision
of the plan, subject to any applicable re-
consideration under paragraph (4).
‘‘(B) TIME LIMITS FOR MAKING COVERAGE
DECISIONS RELATING TO EMERGENCY MEDICAL
CARE
AND
FOR
COMPLETING
INTERNAL
AP-
PEALS.—
‘‘(i) INITIAL DECISIONS.—In cases in-
volving emergency medical care, a group
health plan shall issue in writing an initial
coverage decision on any request for expe-
dited advance determination of coverage or
for expedited required determination of
medical necessity submitted, in such rea-
sonable form as may be required under the
plan, before the end of the emergency deci-
sion period under paragraph (10)(K) fol-
lowing the filing completion date.
‘‘(ii) INTERNAL REVIEWS OF INITIAL
DENIALS.—In cases involving emergency
medical care, upon the written request of
a participant or beneficiary for review of
an initial adverse coverage decision under
clause (i), a review by an appropriate
named fiduciary (subject to paragraph (3))
of the initial coverage decision shall be
completed, including issuance by the plan
of a written decision affirming, reversing,
or modifying the initial coverage decision,
setting forth the grounds for the decision,
before the end of the emergency decision
period under paragraph (10)(K) following
the review filing date. Such decision shall
be treated as the final decision of the plan,
subject to any applicable reconsideration
under paragraph (4).
‘‘(C) 
CONTINUED
APPLICABILITY
OF
SHORTER TIME LIMITS UNDER PLAN.—Nothing
in this paragraph shall be construed to exempt
any group health plan from the terms of such
plan relating to timeliness of decisionmaking
thereunder to the extent that such terms re-
quire time limits of shorter duration that those
provided under this paragraph.
‘‘(3) PHYSICIANS MUST REVIEW INITIAL COV-
ERAGE
DECISIONS
INVOLVING
MEDICAL
APPRO-
PRIATENESS
OR
NECESSITY
OR
EXPERIMENTAL
TREATMENT.—
‘‘(A) IN GENERAL.—If an initial coverage
decision under paragraph (2)(A)(i) or (2)(B)(i)
is based on a determination that provision of a
particular item or service is excluded from cov-
erage under the terms of the plan because the
provision of such item or service does not meet
the plan’s requirements for medical appro-
priateness or necessity or would constitute ex-
perimental treatment or technology, the review
under paragraph (2)(A)(ii) or (2)(B)(ii), to the
extent that it relates to medical appropriateness
or necessity or to experimental treatment or
technology, shall be conducted by a qualified
physician who is selected to serve as an appro-
priate named fiduciary under the plan and who
did not make the initial denial.
‘‘(B) QUALIFIED
PHYSICIAN.—For pur-
poses of subparagraph (A), the term ‘qualified
physician’ means a physician who—
‘‘(i) is licensed, accredited, or cer-
tified, under the State law of the State in
which the review occurs, to provide the
particular item or service referred to in
subparagraph (A),
‘‘(ii) is professionally accountable for
the decision referred to in subparagraph
(A) to the applicable licensing authority of
such physician, and
‘‘(iii) is, in the course of making such
decision, operating within the scope of such
licensure, accreditation, or certification.
‘‘(4) ELECTIVE EXTERNAL REVIEW BY INDE-
PENDENT MEDICAL EXPERT AND RECONSIDERATION
OF INITIAL REVIEW DECISION.—
‘‘(A) IN GENERAL.—The requirements of
subparagraphs (B), (C) and (D) shall apply—
‘‘(i) in the case of any adverse cov-
erage decision which is not reversed upon
a review conducted pursuant to paragraph
(1)(C) (including any review pursuant to
paragraph (2)(A)(ii) or (2)(B)(ii)), and
‘‘(ii) in the case of any failure to time-
ly issue a coverage decision upon internal
review under paragraph (2)(A)(ii) or
(2)(B)(ii) which is deemed under para-
graph (8) to be a denial of the request for
such decision (thereby failing to constitute
a coverage decision for which specific rea-
sons have been set forth as required under
paragraph (1)(A)).
‘‘(B) LIMITS
ON
ALLOWABLE
ADVANCE
PAYMENTS BY PLAN ENROLLEE EXECUTING EX-
TERNAL APPEAL.—The review under this para-
graph in connection with an adverse coverage
decision shall be available subject to any re-
quirement of the plan (unless waived by the
plan for financial or other reasons) for payment
in advance to the plan by the participant or
beneficiary seeking review of an amount not to
exceed the greater of—
‘‘(i) the lesser of $100 or 10 percent
of the cost of the medical care involved in
the decision; or
‘‘(ii) $25,
with each such dollar amount subject to com-
pounded annual adjustments in the same man-
ner and to the same extent as apply under sec-
tion 215(i) of the Social Security Act, except
that, for any calendar year, such amount as so
adjusted shall be deemed, solely for such cal-
endar year, to be equal to such amount rounded
to the nearest $10. No such payment may be
required in the case of any participant or bene-
ficiary whose enrollment under the plan is paid
for, in whole or in part, under a State plan
under title XIX or XXI of the Social Security
Act. Any such advance payment shall be reim-
bursed to the participant or beneficiary if a rec-
ommendation is reported under subparagraph
(C)(iv) to reverse or modify the coverage deci-
sion.
‘‘(C) RECONSIDERATION
OF
INITIAL
RE-
VIEW DECISION.—In any case in which a partic-
ipant or beneficiary who has received an ad-
verse decision of the plan upon initial review of
the coverage decision and who has not com-
menced review of the initial coverage decision
under section 502 makes a request in writing,
within 30 days after the date of the receipt of
such review decision, for reconsideration of such
review decision, the terms of the plan shall pro-
vide for a procedure for such reconsideration
under which—
‘‘(i) one or more independent medical
experts will be selected in accordance with
subparagraph (F) to review the coverage
decision described in subparagraph (A) to
determine whether benefit determinations
in accordance with such decision would
meet the requirements for medical appro-
priateness or necessity or would constitute
experimental treatment or technology;
‘‘(ii) one or more independent experts
in contract interpretation will be selected
in accordance with subparagraph (G) to re-
view the coverage decision described in
subparagraph (A), with respect to matters
not described in clause (i), to determine
whether such decision was in accordance
with the terms of the plan and this title;
‘‘(iii) the record for review—
‘‘(I) will be presented to such ex-
perts and maintained in such a man-
ner which will ensure confidentiality
of such record,
‘‘(II) will include a specification
of the terms of the plan and other cri-
teria serving as the basis for the ini-
tial review decision,
‘‘(III) will include all relevant
medical records, and
‘‘(IV) will include such other doc-
umentary evidence as may be sub-
mitted by the participant or bene-
ficiary requesting review; and
‘‘(iv) each expert will report in writing
to the plan the expert’s decision, based on
the determination made under clause (i) or
(ii) as to whether such coverage decision
should be affirmed, modified, or reversed,
setting forth the grounds (including the
clinical basis) for the recommendation.
‘‘(D) TIME
LIMITS
FOR
RECONSIDER-
ATION.—Any review under this paragraph shall
be completed before the end of the reconsider-
ation period (as defined in paragraph (10)(M))
following the review filing date in connection
with such review.
‘‘(E) FINAL
DECISION.—The decision of
the experts reported pursuant to subparagraph
(C)(iv) in any case on a matter considered
under clause (i) or (ii) of subparagraph (C) af-
firming, reversing, or modifying the initial re-
view decision of the plan regarding such matter
shall be the final decision of the plan regarding
such matter in such case.
‘‘(F) INDEPENDENT MEDICAL EXPERTS.—
‘‘(i) IN
GENERAL.—For purposes of
this paragraph, the term ‘independent
medical expert’ means, in connection with
any coverage decision by a group health
plan, a professional—
‘‘(I) who is a physician or, if ap-
propriate, another medical profes-
sional;
‘‘(II) who has appropriate cre-
dentials and has attained recognized
expertise in the applicable medical
field;
‘‘(III) who was not involved in
the initial decision or any earlier re-
view thereof; and
‘‘(IV) who is selected in accord-
ance with clause (ii) and meets the re-
quirements of subparagraph (H).
‘‘(ii) SELECTION
OF
MEDICAL
EX-
PERTS.—An independent medical expert is
selected in accordance with this clause if—
‘‘(I) the expert is selected by an
intermediary which itself meets the re-
quirements of subparagraph (H), by
means of a method which ensures that
the identity of the expert is not dis-
closed to the plan, any health insur-
ance issuer offering health insurance
coverage to the aggrieved participant
or beneficiary in connection with the
plan, and the aggrieved participant or
beneficiary under the plan, and the
identities of the plan, the issuer, and
the aggrieved participant or bene-
ficiary are not disclosed to the expert;
‘‘(II) the expert is selected, by an
appropriately credentialed panel of
physicians meeting the requirements
of subparagraph (H) established by a
fully 
accredited 
teaching 
hospital
meeting such requirements;
‘‘(III) the expert is selected by an
organization 
described 
in 
section
1152(1)(A) of the Social Security Act
which meets the requirements of sub-
paragraph (H);
‘‘(IV) the expert is selected by an
external review organization which
meets the requirements of subpara-
graph (H) and is accredited by a pri-
vate 
standard-setting 
organization
meeting such requirements and recog-
nized as such by the Secretary; or
‘‘(V) the expert is selected, by an
intermediary or otherwise, in a man-
ner that is, under regulations issued
pursuant to negotiated rulemaking,
sufficient to ensure the expert’s inde-
pendence,
and the method of selection is devised to
reasonably ensure that the expert selected
meets the independence requirements of
subparagraph (H).
‘‘(G) INDEPENDENT
EXPERTS
ON
CON-
TRACT INTERPRETATION.—
‘‘(i) IN
GENERAL.—For purposes of
this paragraph, the term ‘independent ex-
pert on contract interpretation’ means, in
connection with any coverage decision by a
group health plan, a professional—
‘‘(I) who has demonstrated ex-
pertise in making contractual benefit
entitlement determinations;
‘‘(II) who is fully credentialed in
the relevant area of expertise regard-
ing the matter or matters at issue;
‘‘(III) who was not involved in
the initial decision or any earlier re-
view thereof; and
‘‘(IV) who is selected in accord-
ance with clause (ii) and meets the re-
quirements of subparagraph (H).
‘‘(ii) SELECTION
OF
EXPERTS.—An
independent expert on contract interpreta-
tion is selected in accordance with this
clause if—
‘‘(I) the expert is selected by an
intermediary which itself meets the re-
quirements of subparagraph (H), by
means of a method which ensures that
the identity of the expert is not dis-
closed to the plan, any health insur-
ance issuer offering health insurance
coverage to the aggrieved participant
or beneficiary in connection with the
plan, and the aggrieved participant or
beneficiary under the plan, and the
identities of the plan, the issuer, and
the aggrieved participant or bene-
ficiary are not disclosed to the expert;
‘‘(II) the expert is selected, by an
appropriately credentialed panel of ex-
perts in contract interpretation meet-
ing the requirements of subparagraph
(H);
‘‘(III) the expert is selected by an
organization 
described 
in 
section
1152(1)(A) of the Social Security Act
which meets the requirements of sub-
paragraph (H);
‘‘(IV) the expert is selected by an
external review organization which
meets the requirements of subpara-
graph (H) and is accredited by a pri-
vate 
standard-setting 
organization
meeting such requirements and recog-
nized as such by the Secretary; or
‘‘(V) the expert is selected, by an
intermediary or otherwise, in a man-
ner that is, under regulations issued
pursuant to negotiated rulemaking,
sufficient to ensure the expert’s inde-
pendence,
and the method of selection is devised to
reasonably ensure that the expert selected
meets the independence requirements of
subparagraph (H).
‘‘(H) INDEPENDENCE
REQUIREMENTS.—
Any independent expert in contract interpreta-
tion, any independent medical expert, or any
other entity described in subparagraph (F)(ii)
or (G)(ii) meets the independence requirements
of this subparagraph if—
‘‘(i) the expert or entity is not affili-
ated with any related party;
‘‘(ii) any compensation received by
such expert or entity in connection with
the external review is reasonable and not
contingent on any decision rendered by the
expert or entity;
‘‘(iii) under the terms of the plan and
any health insurance coverage offered in
connection with the plan, the plan and the
issuer (if any) have no recourse against the
expert or entity in connection with the ex-
ternal review; and
‘‘(iv) the expert or entity does not oth-
erwise have a conflict of interest with a re-
lated party as determined under any regu-
lations which the Secretary may prescribe.
For purposes of clause (i), the term ‘affiliated’
means, in connection with any entity, having a
familial, financial, or professional relationship
with, or interest in, such entity, disregarding
any compensation received in connection with
services performed as a reviewing entity under
this paragraph.
‘‘(I) RELATED
PARTY.—For purposes of
subparagraphs (F)(ii)(I) and (G)(ii)(I), the
term ‘related party’ means—
‘‘(i) the plan or any health insurance
issuer offering health insurance coverage in
connection with the plan (or any officer,
director, or management employee of such
plan or issuer);
‘‘(ii) the physician or other medical
care provider that provided the medical
care involved in the coverage decision;
‘‘(iii) the institution at which the med-
ical care involved in the coverage decision
is provided;
‘‘(iv) the manufacturer of any drug or
other item that was included in the med-
ical care involved in the coverage decision;
or
‘‘(v) any other party determined
under any regulations which the Secretary
may prescribe to have a substantial inter-
est in the coverage decision.
‘‘(5) PERMITTED ALTERNATIVES TO REQUIRED
INTERNAL REVIEW.—
‘‘(A) IN GENERAL.—A group health plan
shall not be treated as failing to meet the re-
quirements under paragraphs (2)(A)(ii) and
(2)(B)(ii) relating to review of initial coverage
decisions for benefits, if—
‘‘(i) in lieu of the procedures relating
to review under paragraphs (2)(A)(ii) and
(2)(B)(ii) and in accordance with such reg-
ulations (if any) as may be prescribed by
the Secretary—
‘‘(I) the aggrieved participant or
beneficiary elects in the request for
the review an alternative dispute reso-
lution procedure which is available
under the plan with respect to simi-
larly situated participants and bene-
ficiaries; or
‘‘(II) in the case of any such plan
or portion thereof which is established
and maintained pursuant to a bona
fide collective bargaining agreement,
the plan provides for a procedure by
which such disputes are resolved by
means of any alternative dispute reso-
lution procedure;
‘‘(ii) the time limits not exceeding the
time limits otherwise applicable under
paragraphs (2)(A)(ii) and (2)(B)(ii) are in-
corporated in such alternative dispute reso-
lution procedure;
‘‘(iii) any applicable requirement for
review by a physician under paragraph (3),
unless waived by the participant or bene-
ficiary (in a manner consistent with such
regulations as the Secretary may prescribe
to ensure equitable procedures), is incor-
porated in such alternative dispute resolu-
tion procedure; and
‘‘(iv) the plan meets the additional re-
quirements of subparagraph (B).
In any case in which a procedure described in
subclause (I) or (II) of clause (i) is utilized and
an alternative dispute resolution procedure is
voluntarily elected by the aggrieved participant
or beneficiary, the plan may require or allow (in
a manner consistent with such regulations as
the Secretary may prescribe to ensure equitable
procedures) the aggrieved participant or bene-
ficiary to waive review of the coverage decision
under paragraph (3), to waive further review of
the coverage decision under paragraph (4) or
section 502, and to elect an alternative means
of external review (other than review under
paragraph (4)).
‘‘(B) ADDITIONAL
REQUIREMENTS.—The
requirements of this subparagraph are met if
the means of resolution of dispute allow for
adequate presentation by the aggrieved partici-
pant or beneficiary of scientific and medical evi-
dence supporting the position of such partici-
pant or beneficiary.
‘‘(6) PERMITTED ALTERNATIVES TO REQUIRED
EXTERNAL REVIEW.—A group health plan shall not
be treated as failing to meet the requirements of this
subsection in connection with review of coverage de-
cisions under paragraph (4) if the aggrieved partici-
pant or beneficiary elects to utilize a procedure in
connection with such review which is made generally
available under the plan (in a manner consistent
with such regulations as the Secretary may prescribe
to ensure equitable procedures) under which—
‘‘(A) the plan agrees in advance of the rec-
ommendations of the experts under paragraph
(4)(C)(iii) to render a final decision in accord-
ance with such recommendations; and
‘‘(B) the participant or beneficiary waives
in advance any right to review of the final deci-
sion under section 502.
‘‘(7) SPECIAL RULE FOR ACCESS TO SPECIALTY
CARE.— In the case of a request for advance deter-
mination of coverage consisting of a request by a
physician for a determination of coverage of the
services of a specialist with respect to any condition,
if coverage of the services of such specialist for such
condition is otherwise provided under the plan, the
initial coverage decision referred to in subparagraph
(A)(i) or (B)(i) of paragraph (2) shall be issued
within the specialty decision period. For purposes of
this paragraph, the term ‘specialist’ means, with re-
spect to a condition, a physician who has a high level
of expertise through appropriate training and experi-
ence (including, in the case of a child, appropriate
pediatric expertise) to treat the condition.
‘‘(8) EFFECT ON PLAN OF FAILURE TO COMPLY
WITH TIME LIMITS FOR DECISIONMAKING.— In any
case in which a group health plan fails to take rea-
sonable care to ensure that the decision by the plan,
on a written request of a participant or beneficiary
made under paragraph (2) or (4), for a reversal or
modification of an earlier decision of the plan, is
issued to the participant or beneficiary as required
under such paragraph before the end of the applica-
ble period specified in such paragraph, for purposes
of further review under this subsection or section
502—
‘‘(A) the request shall be deemed to have
been denied by the plan, resulting in exhaustion
of any review required as a prerequisite for
such further review, and
‘‘(B) the position of the participant or ben-
eficiary serving as the basis for the request for
review shall be deemed consistent with the
terms of the plan, except to the extent that the
plan proves in the course of such further review
that such position is not consistent with the
terms of the plan or this title.
‘‘(9) GROUP
HEALTH
PLAN
DEFINED.—For
purposes of this section—
‘‘(A) IN
GENERAL.—The term ‘group
health plan’ shall have the meaning provided in
section 733(a).
‘‘(B) TREATMENT
OF
PARTNERSHIPS.—
The provisions of paragraphs (1), (2), and (3)
of section 732(d) shall apply.
‘‘(10) OTHER DEFINITIONS.—For purposes of
this subsection—
‘‘(A) 
REQUEST
FOR
BENEFIT
PAY-
MENTS.—The term ‘request for benefit pay-
ments’ means a request, for payment of benefits
by a group health plan for medical care, which
is made by or on behalf of a participant or ben-
eficiary after such medical care has been pro-
vided.
‘‘(B) REQUIRED DETERMINATION OF MED-
ICAL
APPROPRIATENESS
OR
NECESSITY.—The
term ‘required determination of medical appro-
priateness or necessity’ means a determination
required under a group health plan solely that
proposed medical care meets, under the facts
and circumstances at the time of the determina-
tion, the requirements for medical appropriate-
ness or necessity (which may be subject to ex-
ceptions under the plan for fraud or misrepre-
sentation) as determined, in the case of an ini-
tial coverage decision, by the qualified physician
(as defined in paragraph (3)(B)) or, in the case
of an elective external review, by the inde-
pendent medical expert (as defined in para-
graph (4)(F)), irrespective of whether the pro-
posed medical care otherwise meets other terms
and conditions of coverage, but only if such de-
termination does not constitute an advance de-
termination of coverage (as defined in subpara-
graph (C)).
‘‘(C) ADVANCE DETERMINATION OF COV-
ERAGE.—The term ‘advance determination of
coverage’ means a determination under a group
health plan that proposed medical care meets,
under the facts and circumstances at the time
of the determination, the plan’s terms and con-
ditions of coverage (which may be subject to ex-
ceptions under the plan for fraud or misrepre-
sentation).
‘‘(D) REQUEST FOR ADVANCE DETERMINA-
TION OF COVERAGE.—The term ‘request for ad-
vance determination of coverage’ means a re-
quest for an advance determination of coverage
of medical care which is made by or on behalf
of a participant or beneficiary before such med-
ical care is provided.
‘‘(E) REQUEST FOR EXPEDITED ADVANCE
DETERMINATION OF COVERAGE.—The term ‘re-
quest for expedited advance determination of
coverage’ means a request for advance deter-
mination of coverage, in any case in which the
proposed medical care constitutes emergency
medical care.
‘‘(F) REQUEST
FOR
REQUIRED
DETER-
MINATION OF MEDICAL APPROPRIATENESS OR
NECESSITY.—The term ‘request for required
determination of medical appropriateness or ne-
cessity’ means a request for a required deter-
mination of medical appropriateness or neces-
sity for medical care which is made by or on be-
half of a participant or beneficiary before the
medical care is provided.
‘‘(G) REQUEST FOR EXPEDITED REQUIRED
DETERMINATION
OF
MEDICAL
APPROPRIATE-
NESS OR NECESSITY.—The term ‘request for
expedited required determination of medical ap-
propriateness or necessity’ means a request for
required determination of medical appropriate-
ness or necessity in any case in which the pro-
posed medical care constitutes emergency med-
ical care.
‘‘(H) EMERGENCY
MEDICAL
CARE.—The
term ‘emergency medical care’ means medical
care in any case in which a certification has
been made in writing by an appropriate physi-
cian (as provided in regulations which shall be
prescribed by the Secretary)—
‘‘(i) that failure to immediately pro-
vide the care to the participant or bene-
ficiary could reasonably be expected to re-
sult in—
‘‘(I) placing the health of such
participant or beneficiary (or, with re-
spect to such a participant or bene-
ficiary who is a pregnant woman, the
health of the woman or her unborn
child) in serious jeopardy;
‘‘(II) serious impairment to bod-
ily functions; or
‘‘(III) serious dysfunction of any
bodily organ or part; or
‘‘(ii) that immediate provision of the
care is necessary because the participant
or beneficiary has made or is at serious
risk of making an attempt to harm himself
or herself or another individual.
‘‘(I) INITIAL DECISION PERIOD.—The term
‘initial decision period’ means a period of 14
days, or such longer period as may be pre-
scribed in regulations of the Secretary.
‘‘(J) INTERNAL
REVIEW
PERIOD.—The
term ‘internal review period’ means a period of
14 days, or such longer period as may be pre-
scribed in regulations of the Secretary.
‘‘(K) EMERGENCY
DECISION
PERIOD.—
The term ‘emergency decision period’ means a
period of 72 hours, or such longer period as
may be prescribed in regulations of the Sec-
retary.
‘‘(L) SPECIALTY DECISION PERIOD.—The
term ‘specialty decision period’ means a period
of 72 hours, or such longer period as may be
prescribed in regulations of the Secretary.
‘‘(M) RECONSIDERATION
PERIOD.—The
term ‘reconsideration period’ means a period of
14 days, or such longer period as may be pre-
scribed in regulations of the Secretary, except
that, in the case of a decision involving emer-
gency medical care, such term means the emer-
gency decision period.
‘‘(N) FILING
COMPLETION
DATE.—The
term ‘filing completion date’ means, in connec-
tion with a group health plan, the date as of
which the plan is in receipt of all information
reasonably required (in writing or in such other
reasonable form as may be specified by the
plan) to make an initial coverage decision.
‘‘(O) REVIEW
FILING
DATE.—The term
‘review filing date’ means, in connection with a
group health plan, the date as of which the ap-
propriate named fiduciary (or the expert or ex-
perts selected in the case of a review under
paragraph (4)) is in receipt of all information
reasonably required (in writing or in such other
reasonable form as may be specified by the
plan) to make a decision to affirm, modify, or
reverse a coverage decision.
‘‘(P) MEDICAL CARE.—The term ‘medical
care’ has the meaning provided such term by
section 733(a)(2).
‘‘(Q) HEALTH
INSURANCE
COVERAGE.—
The term ‘health insurance coverage’ has the
meaning 
provided 
such 
term 
by 
section
733(b)(1).
‘‘(R) HEALTH
INSURANCE
ISSUER.—The
term ‘health insurance issuer’ has the meaning
provided such term by section 733(b)(2).
‘‘(S) WRITTEN OR IN WRITING.—
‘‘(i) IN GENERAL.—A request or deci-
sion shall be deemed to be ‘written’ or ‘in
writing’ if such request or decision is pre-
sented in a generally recognized printable
or electronic format. The Secretary may by
regulation provide for presentation of in-
formation otherwise required to be in writ-
ten form in such other forms as may be
appropriate under the circumstances.
‘‘(ii) MEDICAL APPROPRIATENESS OR
EXPERIMENTAL
TREATMENT
DETERMINA-
TIONS.—For purposes of this subpara-
graph, in the case of a request for advance
determination of coverage, a request for
expedited advance determination of cov-
erage, a request for required determination
of medical appropriateness or necessity, or
a request for expedited required determina-
tion of medical appropriateness or neces-
sity, if the decision on such request is con-
veyed to the provider of medical care or to
the participant or beneficiary by means of
telephonic or other electronic communica-
tions, such decision shall be treated as a
written decision.
‘‘(11) DETERMINATIONS
CONSISTENT
WITH
THE TERMS OF THE PLAN.—Nothing in this sub-
section shall be construed as permitting, in the case
of any group health plan, a determination by any
independent expert in contract interpretation, any
independent medical expert, or any other person that
such plan is required to provide an item or service
which is not covered under the terms of such plan.
Determinations under this subsection of whether an
item or service is covered under the terms of a group
health plan shall be made solely by a professional
who has demonstrated expertise in making contrac-
tual benefit entitlement determinations and who is
fully credentialed in the relevant area of expertise
regarding the matter or matters at issue.’’.
(b) EXPEDITED FEDERAL COURT REVIEW.—
(1) IN GENERAL.—Section 502 of such Act (29
U.S.C. 1132) is amended—
(A) in subsection (a)(8), by striking ‘‘or’’
at the end;
(B) in subsection (a)(9), by striking the
period and inserting ‘‘; or’’;
(C) by adding at the end of subsection (a)
the following new paragraph:
‘‘(10) by a participant or beneficiary for appropriate
relief under subsection (b)(4).’’; and
(D) by adding at the end of subsection (b) the
following new paragraph:
‘‘(4) In any case in which exhaustion of administra-
tive remedies in accordance with paragraph (2)(A)(ii) or
(2)(B)(ii) of section 503(b) otherwise necessary for an ac-
tion for relief under paragraph (1)(B) or (3) of subsection
(a) has not been obtained and it is demonstrated to the
court by means of certification by an appropriate physi-
cian that such exhaustion is not reasonably attainable
under the facts and circumstances without undue risk of
irreparable harm to the health of the participant or bene-
ficiary, a civil action may be brought by a participant or
beneficiary to obtain appropriate equitable relief. Any de-
terminations 
made 
under 
paragraph 
(2)(A)(ii) 
or
(2)(B)(ii) of section 503(b) made while an action under
this paragraph is pending shall be given due consideration
by the court in any such action.’’.
(2) 
CONCURRENT
JURISDICTION.—Section
502(e)(1) of such Act (29 U.S.C. 1132(e)(1)) is
amended—
(A) in the first sentence, by striking
‘‘under subsection (a)(1)(B) of this section’’
and inserting ‘‘under subsection (a)(1)(B) or
(b)(4)’’; and
(B) in the last sentence, by striking ‘‘of ac-
tions under paragraphs (1)(B) and (7) of sub-
section (a) of this section’’ and inserting ‘‘of ac-
tions under paragraphs (1)(B) and (7) of sub-
section (a) and paragraph (4) of subsection
(b)’’.
(3) STANDARD OF REVIEW UNAFFECTED.—The
standard of review under section 502 of the Em-
ployee Retirement Income Security Act of 1974 (as
amended by this subsection) shall continue on and
after the date of the enactment of this Act to be the
standard of review which was applicable under such
section as of immediately before such date.
SEC. 3. AVAILABILITY OF COURT REMEDIES.
(a) IN GENERAL.—Section 502 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1132)
is amended by adding at the end the following new sub-
section:
‘‘(n) CAUSE OF ACTION RELATING TO PROVISION OF
HEALTH BENEFITS.—
‘‘(1) IN GENERAL.—Any fiduciary of a group
health plan (as defined in section 733(a)) who fails
to exercise ordinary care resulting in personal injury
to, or wrongful death of, a participant or beneficiary
shall be liable to the participant or beneficiary for
actual damages (including compensatory and con-
sequential damages, subject to paragraph (6)) proxi-
mately caused by such failure, if such failure con-
sists of—
‘‘(A) failing to exercise ordinary care in
making an incorrect determination that an item
or service is excluded from coverage under the
terms of the plan based on the fact that the
item or service—
‘‘(i) does not meet the plan’s require-
ments for medical appropriateness or ne-
cessity, or
‘‘(ii) would constitute experimental
treatment or technology (as defined under
the plan), or
‘‘(B) failing to exercise ordinary care to
ensure that—
‘‘(i) any initial coverage decision re-
ferred to in subparagraph (A)(i) or (B)(i)
of section 503(b)(2) on which the cause of
action is based, or
‘‘(ii) any decision by the plan on a re-
quest, made in writing by a participant or
beneficiary under subparagraph (A)(ii) or
(B)(ii) of section 503(b)(2) or under sec-
tion 503(b)(4), for a reversal or modifica-
tion of an earlier decision of the plan on
which the cause of action is based,
is issued to the participant or beneficiary (in
such form and manner as may be prescribed in
regulations of the Secretary) before the end of
the applicable period specified in the applicable
provision cited in clause (i) or (ii).
‘‘(2) ORDINARY CARE.—For purposes of this
subsection, the term ‘ordinary care’ means the care,
skill, prudence, and diligence under the cir-
cumstances then prevailing that a prudent individual
acting in a like capacity and familiar with such mat-
ters would use in the conduct of an enterprise of a
like character and with like aims.
‘‘(3) EXCEPTION FOR EMPLOYERS AND OTHER
PLAN SPONSORS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), paragraph (1) does not authorize—
‘‘(i) any cause of action against an
employer or other plan sponsor maintain-
ing the group health plan (or against an
employee of such an employer or sponsor
acting within the scope of employment), or
‘‘(ii) a right of recovery or indemnity
by a person against an employer or other
plan sponsor (or such an employee) for
damages assessed against the person pur-
suant to a cause of action under paragraph
(1).
‘‘(B) SPECIAL RULE.—Subparagraph (A)
shall not preclude any cause of action described
in paragraph (1) commenced during a plan year
against an employer or other plan sponsor (or
against an employee of such an employer or
sponsor acting within the scope of employment)
if—
‘‘(i) such action is based on the direct
participation of the employer or other plan
sponsor (or employee of the employer or
plan sponsor) in the final decision of the
plan under section 503(b)(2) on a claim
for benefits covered under the plan or
health insurance coverage in the case at
issue; and
‘‘(ii) the decision on the claim resulted
in personal injury or wrongful death.
‘‘(C) DIRECT
PARTICIPATION.—For pur-
poses of subparagraph (B)(ii), in determining
whether an employer or other plan sponsor (or
employee of an employer or other plan sponsor)
is engaged in direct participation in the final
decision of the plan under section 503(b)(2) on
a claim, the employer or plan sponsor (or em-
ployee) shall not be construed to be engaged in
such direct participation solely because of—
‘‘(i) any participation by the employer
or other plan sponsor (or employee) in the
selection of the group health plan or health
insurance coverage involved,
‘‘(ii) any engagement by the employer
or other plan sponsor (or employee) in any
cost-benefit analysis undertaken in connec-
tion with the selection of, or continued
maintenance of, the plan or coverage in-
volved, or
‘‘(iii) any other form of decision-
making or other conduct performed by the
employer or other plan sponsor (or em-
ployee) in connection with the plan or cov-
erage involved which constitutes neither
the making of a final decision of the plan
consisting of a failure described in para-
graph (1)(A) nor a failure described in
paragraph (1)(B).
‘‘(4) REQUIREMENT
OF
EXHAUSTION
OF
AD-
MINISTRATIVE REMEDIES.—
‘‘(A) IN GENERAL.—Paragraph (1) applies
in the case of any cause of action only if all
remedies under section 503 with respect to such
cause of action have been exhausted.
‘‘(B) EXTERNAL REVIEW REQUIRED.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), administrative remedies
under section 503 shall not be deemed ex-
hausted until available remedies under sec-
tion 503(b)(4) have been elected and are
exhausted.
‘‘(ii) EXCEPTION
FOR
NOT
REASON-
ABLY
ATTAINABLE
EXHAUSTION
OF
AD-
MINISTRATIVE REMEDIES.—Clause (i) shall
not apply in the case of any cause of action
if it is demonstrated to the court by means
of certification by an appropriate physician
that such exhaustion is not reasonably at-
tainable under the facts and circumstances
without undue risk of irreparable harm to
the health of the participant or beneficiary.
‘‘(C) CONSIDERATION OF ADMINISTRATIVE
DETERMINATIONS.—Any determinations made
under section 503(b) made while an action
under this paragraph is pending shall be given
due consideration by the court in such action.
‘‘(5) REBUTTABLE PRESUMPTION.—In the case
of any action commenced pursuant to paragraph (1),
there shall be a rebuttable presumption in favor of
the decision of the independent expert rendered upon
completion of any review elected under section
503(b)(4).
‘‘(6) STANDARDS
FOR
AWARD
OF
PUNITIVE
DAMAGES.—
‘‘(A) GENERAL
RULE.—Nothing in this
subsection shall be construed as authorizing a
cause of action for punitive damages, except
that punitive damages are authorized in any
case in which the plaintiff establishes by clear
and convincing evidence that conduct carried
out by the defendant with a conscious, flagrant
indifference to the rights or safety of others
was the proximate cause of the harm that is the
subject of the action.
‘‘(B) LIMITATION ON AMOUNT.—
‘‘(i) IN
GENERAL.—The amount of
punitive damages that may be awarded in
an action described in subparagraph (A)
may not exceed the greater of—
‘‘(I) 2 times the sum of the
amount awarded to the claimant for
economic loss; or
‘‘(II) $250,000.
‘‘(ii) 
SPECIAL
RULE.—Notwith-
standing clause (i), in any action described
in subparagraph (A) against an individual
whose net worth does not exceed $500,000
or against an owner of an unincorporated
business, or any partnership, corporation,
association, unit of local government, or
organization which has fewer that 25 em-
ployees, the punitive damages shall not ex-
ceed the lesser of—
‘‘(I) 2 times the sum of the
amount awarded to the claimant for
economic loss and noneconomic loss;
or
‘‘(II) $250,000.
‘‘(iii) CONTROLLED GROUPS.—
‘‘(I) IN GENERAL.—For the pur-
pose of determining the applicability
of clause (ii) to any employer, in de-
termining the number of employees of
an employer who is a member of a
controlled group, the employees of any
person in such group shall be deemed
to be employees of the employer.
‘‘(II) CONTROLLED GROUP.—For
purposes of subclause (I), the term
‘controlled group’ means any group
treated as a single employer under
subsection (b), (c), (m), or (o) of sec-
tion 414 of the Internal Revenue Code
of 1986.
‘‘(C) 
EXCEPTION
FOR
INSUFFICIENT
AWARD IN CASES OF EGREGIOUS CONDUCT.—
‘‘(i) DETERMINATION BY COURT.—If
the court makes a determination, after
considering each of the factors in subpara-
graph (D), that the application of subpara-
graph (A) would result in an award of pu-
nitive damages that is insufficient to pun-
ish the egregious conduct of the defendant
against whom the punitive damages are to
be awarded or to deter such conduct in the
future, the court shall determine the addi-
tional amount of punitive damages (re-
ferred to in this subparagraph as the ‘addi-
tional amount’) in excess of the amount
determined in accordance with subpara-
graph (A) to be awarded against the de-
fendant in a separate proceeding in accord-
ance with this subparagraph.
‘‘(ii) REQUIREMENTS FOR AWARDING
ADDITIONAL
AMOUNT.—If 
the 
court
awards an additional amount pursuant to
this subparagraph, the court shall state its
reasons for setting the amount of the addi-
tional amount in findings of fact and con-
clusions of law.
‘‘(D) FACTORS
FOR
CONSIDERATION
IN
CASES OF EGREGIOUS CONDUCT.—In any pro-
ceeding under subparagraph (C), the matters to
be considered by the court shall include (but
are not limited to)—
‘‘(i) the extent to which the defendant
acted with actual malice;
‘‘(ii) the likelihood that serious harm
would arise from the conduct of the de-
fendant;
‘‘(iii) the degree of the awareness of
the defendant of that likelihood;
‘‘(iv) the profitability of the mis-
conduct to the defendant;
‘‘(v) the duration of the misconduct
and any concurrent or subsequent conceal-
ment of the conduct by the defendant;
‘‘(vi) the attitude and conduct of the
defendant upon the discovery of the mis-
conduct and whether the misconduct has
terminated;
‘‘(vii) the financial condition of the
defendant; and
‘‘(viii) the cumulative deterrent effect
of other losses, damages, and punishment
suffered by the defendant as a result of the
misconduct, reducing the amount of puni-
tive damages on the basis of the economic
impact and severity of all measures to
which the defendant has been or may be
subjected, including—
‘‘(I) compensatory and punitive
damage awards to similarly situated
claimants;
‘‘(II) the adverse economic effect
of stigma or loss of reputation;
‘‘(III) civil fines and criminal and
administrative penalties; and
‘‘(IV) stop sale, cease and desist,
and other remedial or enforcement or-
ders.
‘‘(E) APPLICATION BY COURT.—This para-
graph shall be applied by the court and applica-
tion of this paragraph shall not be disclosed to
the jury. Nothing in this paragraph shall au-
thorize the court to enter an award of punitive
damages in excess of the jury’s initial award of
punitive damages.
‘‘(F) BIFURCATION AT REQUEST OF ANY
PARTY.—
‘‘(i) IN GENERAL.—At the request of
any party the trier of fact in any action
that is subject to this paragraph shall con-
sider in a separate proceeding, held subse-
quent to the determination of the amount
of compensatory damages, whether puni-
tive damages are to be awarded for the
harm that is the subject of the action and
the amount of the award.
‘‘(ii) INADMISSIBILITY
OF
EVIDENCE
RELATIVE ONLY TO A CLAIM OF PUNITIVE
DAMAGES IN A PROCEEDING CONCERNING
COMPENSATORY
DAMAGES.—If any party
requests a separate proceeding under
clause (i), in a proceeding to determine
whether the claimant may be awarded
compensatory damages, any evidence, ar-
gument, or contention that is relevant only
to the claim of punitive damages, as deter-
mined by applicable State law, shall be in-
admissible.
‘‘(7) SEVERAL LIABILITY.—
‘‘(A) GENERAL RULE.—In an action de-
scribed in paragraph (1), the liability of each
defendant shall be several only and shall not be
joint.
‘‘(B) AMOUNT OF LIABILITY.—