I
105TH CONGRESS
1ST SESSION
H. R. 2606
To amend the Public Health Service Act and the Employee Retirement
Income Security Act of 1974 to establish certain requirements for man-
aged care plans.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 2, 1997
Ms. VELA´ZQUEZ (for herself, Mr. DELLUMS, Mr. FROST, Mr. CONYERS, Mr.
NADLER, Mr. SERRANO, Mrs. MCCARTHY of New York, Mr. FILNER, Mr.
OWENS, Ms. SLAUGHTER, Mr. TOWNS, Mr. FLAKE, Mrs. MALONEY of
New York, Mr. SCHUMER, Mr. BONIOR, Mr. MILLER of California, Mrs.
LOWEY, Mr. HINCHEY, Mr. RANGEL, Mr. EVANS, and Mr. ACKERMAN)
introduced the following bill; which was referred to the Committee on
Commerce, and in addition to the Committee on Education and the
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend the Public Health Service Act and the Employee
Retirement Income Security Act of 1974 to establish
certain requirements 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
‘‘Managed Care Bill of Rights for Consumers Act of
1997’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Patient protection standards under the Public Health Service Act.
‘‘PART C—PATIENT PROTECTION STANDARDS
‘‘Sec. 2770. Notice; additional definitions.
‘‘Sec. 2771. Guarantee of medically necessary and appropriate treatment.
‘‘Sec. 2772. Guaranteed adequate access to health care.
‘‘Sec. 2773. Right to adequate physician network.
‘‘Sec. 2774. Meaningful choice of providers.
‘‘Sec. 2775. Guaranteed continuity of care.
‘‘Sec. 2776. Right to specialty care.
‘‘Sec. 2777. Required obstetric and gynecological care.
‘‘Sec. 2778. Assuring equitable coverage of emergency services.
‘‘Sec. 2779. Requirement for service to areas that include a medically un-
derserved population.
‘‘Sec. 2780. Right to language assistance.
‘‘Sec. 2781. Prohibition on financial incentives to limit care.
‘‘Sec. 2782. Prohibition on gag clauses.
‘‘Sec. 2783. Right to appeal denial of care.
‘‘Sec. 2784. External review.
‘‘Sec. 2785. Nondiscrimination right.
‘‘Sec. 2786. Protection of patient confidentiality.
‘‘Sec. 2787. Establishment of Managed Care Consumer Advisory Commis-
sion.
Sec. 3. Patient protection standards under the Employee Retirement Income
Security Act of 1974.
‘‘Sec. 713. Patient protection standards.
Sec. 4. Nonpreemption of State law respecting liability of group health plans.
Sec. 5. Effective date.
SEC. 2. PATIENT PROTECTION STANDARDS UNDER THE
PUBLIC HEALTH SERVICE ACT.
Title XXVII of the Public Health Service Act is
amended—
(1) by redesignating part C as part D; and
(2) by inserting after part B the following new
part:
‘‘PART C—PATIENT PROTECTION STANDARDS
‘‘SEC. 2770. NOTICE; DEFINITIONS.
‘‘(a) NOTICE.—A managed care plan under this part
shall comply with the notice requirement under section
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 plan and such plan were
a group health plan.
‘‘(b) DEFINITIONS.—For purposes of this part:
‘‘(1) ENROLLEE.—The term ‘enrollee’ means,
with respect to health insurance coverage offered by
a managed care plan, an individual enrolled with the
plan 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 law.
‘‘(3) MANAGED CARE PLAN.—The term ‘man-
aged care plan’ means a health plan that provides or
arranges for the provision of health care items and
services to enrollees primarily through participating
physicians and providers.
‘‘(4) NETWORK.—The term ‘network’ means,
with respect to a managed care plan, the participat-
ing health professionals and providers through which
the plan provides health care items and services to
enrollees.
‘‘(5) NETWORK COVERAGE.—The term ‘network
coverage’ means health insurance coverage offered
by a managed care plan that provides or arranges
for the provision of health care items and services to
enrollees through participating health professionals
and providers.
‘‘(6) 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 man-
aged care plan offering the coverage.
‘‘(7) PRIOR AUTHORIZATION.—The term ‘prior
authorization’ means the process of obtaining prior
approval from a managed care plan as to the neces-
sity or appropriateness of receiving medical or clini-
cal services for treatment of a medical or clinical
condition.
‘‘(8) 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.
‘‘(9) SERVICE AREA.—The term ‘service area’
means, with respect to a managed care plan, the ge-
ographic area served by the plan with respect to the
coverage.
‘‘SEC. 2771. GUARANTEE OF MEDICALLY NECESSARY AND
APPROPRIATE TREATMENT.
‘‘(a) IN GENERAL.—A managed care plan may not
impose limits on the delivery of services if the services
are—
‘‘(1) medically necessary and appropriate as de-
termined by the treating health professional, in con-
sultation with the enrollee; and
‘‘(2) otherwise a covered benefit.
‘‘(b) SECOND OPINION.—A managed care plan shall
provide to enrollees, upon request, a referral to a health
care practitioner for a second opinion as to what con-
stitutes medically necessary and appropriate treatment,
and provide coverage for such opinion without regard to
whether such health care practitioner has a contractual
or other arrangement with the plan for the provision of
such services to such enrollees.
‘‘SEC. 2772. GUARANTEED ADEQUATE ACCESS TO HEALTH
CARE.
‘‘(a) ADEQUATE ACCESS.—A managed care plan
shall provide adequate access to health care services.
‘‘(b) AVAILABLE ITEMS AND SERVICES.—The Sec-
retary shall ensure that items and services, including lab-
oratory and specialist services, covered under the plan
shall be available through providers that are reasonably
geographically accessible to all enrollees of such plan.
‘‘SEC. 2773. RIGHT TO ADEQUATE PHYSICIAN NETWORK.
‘‘(a) IN GENERAL.—A managed care plan shall main-
tain an adequate number, mix, and distribution of health
professionals and providers to ensure that covered items
and services are available and accessible to each enrollee.
‘‘(b) ADEQUATE
DISTRIBUTION.—The Secretary
shall determine the adequate number, mix, and distribu-
tion of health professionals and providers within the serv-
ice area of the managed care plan, including, but not lim-
ited to—
‘‘(1) the existence of a primary care provider
network that is sufficient to meet adult, pediatric,
and primary obstetrician gynecological needs of all
enrollees, including the average number and length
of visits per year per enrollee;
‘‘(2) the existence of a network of specialist of
sufficient number and diversity to meet the specialty
needs of all enrollees;
‘‘(3) the access to quality health services from
institutional providers for all enrollees; and
‘‘(4) the existence of at least one primary care
physician for every 1,500 enrollees.
‘‘SEC. 2774. MEANINGFUL CHOICE OF PROVIDERS.
‘‘(a) MINIMUM NUMBER OF CHOICES.—A managed
care plan shall provide to enrollees a choice of at least
3 providers within each category of providers based on the
health care needs of such enrollees, taking into account
the age, gender, health, native language, acute or chronic
diseases, and special needs of the enrollee. The enrollee
may change the selection of provider at any time.
‘‘(b) ACCESS TO OUT-OF-NETWORK PROVIDER.—A
managed care plan shall cover services that are furnished
by a physician or provider obtained by the enrollee without
regard to whether such physician or provider has a con-
tractual or other arrangement with the plan for the provi-
sion of such services to such enrollees. The plan may im-
pose a reasonable deductible and reasonable copayment
subject to a reasonable annual limit on total annual out-
of-pocket expenses.
‘‘SEC. 2775. GUARANTEED CONTINUITY OF CARE.
‘‘If a contract between a managed care plan and a
health care provider is terminated (other than by the plan
for failure to meet applicable quality standards or for
fraud) and an enrollee is undergoing a course of treatment
from the provider at the time of such termination, the plan
shall—
‘‘(1) notify the enrollee of such termination;
and
‘‘(2) permit the enrollee to continue the course
of treatment with the provider during a transitional
period as determined by the Secretary.
‘‘SEC. 2776. RIGHT TO SPECIALTY CARE.
‘‘(a) REFERRAL TO SPECIALISTS.—
‘‘(1) CHOICE OF SPECIALIST.—A managed care
plan shall permit each enrollee to receive specialty
care from any qualified participating health care
provider when such treatment is medically or clini-
cally necessary. The plan shall make or provide for
a referral to at least 3 specialists who are available
and accessible to provide treatment for such condi-
tion or disease.
‘‘(2) COST OF TREATMENT BY NONPARTICIPAT-
ING PROVIDERS.—In a case in which a plan refers
an enrollee to a nonparticipating specialist, the plan
shall cover any services provided by such specialist
at the rate it covers comparable services provided by
participating providers.
‘‘(b) CONTINUOUS REFERRALS.—A managed care
plan shall have a procedure by which an enrollee who has
a condition that requires ongoing care from a specialist
may receive a continuous referral to such specialist for
treatment of such condition, without additional authoriza-
tion from the primary care physician.
‘‘SEC. 2777. REQUIRED OBSTETRIC AND GYNECOLOGICAL
CARE.
‘‘(a) OBSTETRICIAN-GYNECOLOGIST
AS
PRIMARY
CARE PROVIDER.—In a case in which a managed care
plan requires or provides for an enrollee to designate a
participating primary care provider, a female enrollee may
designate a physician who specializes in obstetrics and
gynecology as primary care provider.
‘‘(b) NO
DESIGNATION
OF OBSTETRICIAN-GYNE-
COLOGIST.—In a case in which an enrollee does not des-
ignated an obstetrician-gynecologist under subsection (a)
as a primary care provider, the plan shall not require prior
authorization by the enrollee’s primary care provider for
coverage of routine gynecological care and pregnancy-re-
lated services provided by a participating physician who
specializes in obstetrics and gynecology.
‘‘(3) serious dysfunction of any bodily organ or
part.
‘‘SEC. 2779. REQUIREMENT FOR SERVICE TO AREAS THAT
INCLUDE A MEDICALLY UNDERSERVED POP-
ULATION.
‘‘A managed care plan seeking to provide services in
an area that includes a medically underserved population
must submit a plan to the Secretary outlining a proposal
for service that ensures access to quality care that is ap-
propriate to the medically underserved population. The
plan shall include the health needs of the medically under-
served population with special consideration given to fac-
tors including age, gender, race, and potential chronic con-
ditions.
‘‘SEC. 2780. RIGHT TO LANGUAGE ASSISTANCE.
‘‘In a case in which 2 percent of the enrollees of a
managed care plan in a service area (as defined in section
2770(b)(9)) are members of a group that speaks English
as a second language or requires special communication
needs, the Secretary shall ensure that the managed care
plan provide communication assistance and bilingual in-
formation, on a continuous basis, to such enrollees. The
plan shall ensure that—