(C) PROHIBITION OF CONFLICTS.—Such a
program shall not permit a health care profes-
sional who is providing health care services to
an individual to perform utilization review ac-
tivities in connection with the health care serv-
ices being provided to the individual.
(3) ACCESSIBILITY OF REVIEW.—Such a pro-
gram shall provide that appropriate personnel per-
forming utilization review activities under the pro-
gram, including the utilization review administrator,
are reasonably accessible by toll-free telephone dur-
ing normal business hours to discuss patient care
and allow response to telephone requests, and that
appropriate provision is made to receive and respond
promptly to calls received during other hours.
(4) LIMITS ON FREQUENCY.—Such a program
shall not provide for the performance of utilization
review activities with respect to a class of services
furnished to an individual more frequently than is
reasonably required to assess whether the services
under review are medically necessary or appropriate.
(d) DEADLINE FOR DETERMINATIONS.—
(1) PRIOR AUTHORIZATION SERVICES.—
(A) IN GENERAL.—Except as provided in
paragraph (2), in the case of a utilization re-
view activity involving the prior authorization of
health care items and services for an individual,
the utilization review program shall make a de-
termination concerning such authorization, and
provide notice of the determination to the indi-
vidual or the individual’s designee and the indi-
vidual’s health care provider by telephone and
in printed form, as soon as possible in accord-
ance with the medical exigencies of the case,
and in no event later than the deadline specified
in subparagraph (B).
(B) DEADLINE.—
(i) IN GENERAL.—Subject to clauses
(ii) and (iii), the deadline specified in this
subparagraph is 14 days after the date of
receipt of the request for prior authoriza-
tion.
(ii) EXTENSION
PERMITTED
WHERE
NOTICE OF ADDITIONAL INFORMATION RE-
QUIRED.—If 
a 
utilization 
review
program—
(I) receives a request for a prior
authorization,
(II) determines that additional
information is necessary to complete
the review and make the determina-
tion on the request, and
(III) notifies the requester, not
later than 5 business days after the
date of receiving the request, of the
need for such specified additional in-
formation,
the deadline specified in this subparagraph
is 14 days after the date the program re-
ceives the specified additional information,
but in no case later than 28 days after the
date of receipt of the request for the prior
authorization. This clause shall not apply
if the deadline is specified in clause (iii).
(iii) EXPEDITED CASES.—In the case
of 
a 
situation 
described 
in 
section
102(c)(1)(A), the deadline specified in this
subparagraph is 72 hours after the time of
the request for prior authorization.
(2) ONGOING CARE.—
(A) CONCURRENT REVIEW.—
(i) IN GENERAL.—Subject to subpara-
graph (B), in the case of a concurrent re-
view of ongoing care (including hospitaliza-
tion), which results in a termination or re-
duction of such care, the plan must provide
by telephone and in printed form notice of
the concurrent review determination to the
individual or the individual’s designee and
the individual’s health care provider as
soon as possible in accordance with the
medical exigencies of the case, with suffi-
cient time prior to the termination or re-
duction to allow for an appeal under sec-
tion 102(c)(1)(A) to be completed before
the termination or reduction takes effect.
(ii) CONTENTS OF NOTICE.—Such no-
tice shall include, with respect to ongoing
health care items and services, the number
of ongoing services approved, the new total
of approved services, the date of onset of
services, and the next review date, if any,
as well as a statement of the individual’s
rights to further appeal.
(B) EXCEPTION.—Subparagraph (A) shall
not be interpreted as requiring plans or issuers
to provide coverage of care that would exceed
the coverage limitations for such care.
(3) PREVIOUSLY PROVIDED SERVICES.—In the
case of a utilization review activity involving retro-
spective review of health care services previously pro-
vided for an individual, the utilization review pro-
gram shall make a determination concerning such
services, and provide notice of the determination to
the individual or the individual’s designee and the
individual’s health care provider by telephone and in
printed form, within 30 days of the date of receipt
of information that is reasonably necessary to make
such determination, but in no case later than 60
days after the date of receipt of the claim for bene-
fits.
(4) FAILURE TO MEET DEADLINE.—In a case
in which a group health plan or health insurance
issuer fails to make a determination on a claim for
benefit under paragraph (1), (2)(A), or (3) by the
applicable deadline established under the respective
paragraph, the failure shall be treated under this
subtitle as a denial of the claim as of the date of the
deadline.
(5) REFERENCE TO SPECIAL RULES FOR EMER-
GENCY SERVICES, MAINTENANCE CARE, AND POST-
STABILIZATION CARE.—For waiver of prior author-
ization requirements in certain cases involving emer-
gency services and maintenance care and post-sta-
bilization care, see subsections (a)(1) and (b) of sec-
tion 113, respectively.
(e) NOTICE OF DENIALS OF CLAIMS FOR BENE-
FITS.—
(1) IN GENERAL.—Notice of a denial of claims
for benefits under a utilization review program shall
be provided in printed form and written in a manner
calculated to be understood by the participant, bene-
ficiary, or enrollee and shall include—
(A) the reasons for the denial (including
the clinical rationale);
(B) instructions on how to initiate an ap-
peal under section 102; and
(C) notice of the availability, upon request
of the individual (or the individual’s designee)
of the clinical review criteria relied upon to
make such denial.
(2) SPECIFICATION OF ANY ADDITIONAL INFOR-
MATION.—Such a notice shall also specify what (if
any) additional necessary information must be pro-
vided to, or obtained by, the person making the de-
nial in order to make a decision on such an appeal.
(f) CLAIM FOR BENEFITS AND DENIAL OF CLAIM
FOR BENEFITS DEFINED.—For purposes of this subtitle:
(1) CLAIM FOR BENEFITS.—The term ‘‘claim
for benefits’’ means any request for coverage (in-
cluding authorization of coverage), for eligibility, or
for payment in whole or in part, for an item or serv-
ice under a group health plan or health insurance
coverage.
(2) DENIAL
OF
CLAIM
FOR
BENEFITS.—The
term ‘‘denial’’ means, with respect to a claim for
benefits, means a denial, or a failure to act on a
timely basis upon, in whole or in part, the claim for
benefits and includes a failure to provide benefits
(including items and services) required to be pro-
vided under this title.
SEC. 102. INTERNAL APPEALS PROCEDURES.
(a) RIGHT OF REVIEW.—
(1) IN GENERAL.—Each group health plan, and
each health insurance issuer offering health insur-
ance coverage—
(A) shall provide adequate notice in writ-
ing to any participant or beneficiary under such
plan, or enrollee under such coverage, whose
claim for benefits under the plan or coverage
has been denied (within the meaning of section
101(f)(2)), setting forth the specific reasons for
such denial of claim for benefits and rights to
any further review or appeal, written in a man-
ner calculated to be understood by the partici-
pant, beneficiary, or enrollee; and
(B) shall afford such a participant, bene-
ficiary, or enrollee (and any provider or other
person acting on behalf of such an individual
with the individual’s consent or without such
consent if the individual is medically unable to
provide such consent) who is dissatisfied with
such a denial of claim for benefits a reasonable
opportunity (of not less than 180 days) to re-
quest and obtain a full and fair review by a
named fiduciary (with respect to such plan) or
named appropriate individual (with respect to
such coverage) of the decision denying the
claim.
(2) TREATMENT OF ORAL REQUESTS.—The re-
quest for review under paragraph (1)(B) may be
made orally, but, in the case of an oral request, shall
be followed by a request in writing.
(b) INTERNAL REVIEW PROCESS.—
(1) CONDUCT OF REVIEW.—
(A) IN GENERAL.—A review of a denial of
claim under this section shall be made by an in-
dividual who—
(i) in a case involving medical judg-
ment, shall be a physician or, in the case
of limited scope coverage (as defined in
subparagraph (B), shall be an appropriate
specialist;
(ii) has been selected by the plan or
issuer; and
(iii) did not make the initial denial in
the internally appealable decision.
(B) 
LIMITED
SCOPE
COVERAGE
DE-
FINED.—For purposes of subparagraph (A), the
term ‘‘limited scope coverage’’ means a group
health plan or health insurance coverage the
only benefits under which are for benefits de-
scribed in section 2791(c)(2)(A) of the Public
Health Service Act (42 U.S.C. 300gg–91(c)(2)).
(2) TIME LIMITS FOR INTERNAL REVIEWS.—
(A) IN GENERAL.—Having received such a
request for review of a denial of claim, the plan
or issuer shall, in accordance with the medical
exigencies of the case but not later than the
deadline specified in subparagraph (B), com-
plete the review on the denial and transmit to
the participant, beneficiary, enrollee, or other
person involved a decision that affirms, re-
verses, or modifies the denial. If the decision
does not reverse the denial, the plan or issuer
shall transmit, in printed form, a notice that
sets forth the grounds for such decision and
that includes a description of rights to any fur-
ther appeal. Such decision shall be treated as
the final decision of the plan. Failure to issue
such a decision by such deadline shall be treat-
ed as a final decision affirming the denial of
claim.
(B) DEADLINE.—
(i) IN GENERAL.—Subject to clauses
(ii) and (iii), the deadline specified in this
subparagraph is 14 days after the date of
receipt of the request for internal review.
(ii) EXTENSION
PERMITTED
WHERE
NOTICE OF ADDITIONAL INFORMATION RE-
QUIRED.—If a group health plan or health
insurance issuer—
(I) receives a request for internal
review,
(II) determines that additional
information is necessary to complete
the review and make the determina-
tion on the request, and
(III) notifies the requester, not
later than 5 business days after the
date of receiving the request, of the
need for such specified additional in-
formation,
the deadline specified in this subparagraph
is 14 days after the date the plan or issuer
receives the specified additional informa-
tion, but in no case later than 28 days
after the date of receipt of the request for
the internal review. This clause shall not
apply if the deadline is specified in clause
(iii).
(iii) EXPEDITED CASES.—In the case
of a situation described in subsection
(c)(1)(A), the deadline specified in this
subparagraph is 72 hours after the time of
the request for review.
(c) EXPEDITED REVIEW PROCESS.—
(1) IN GENERAL.—A group health plan, and a
health insurance issuer, shall establish procedures in
writing for the expedited consideration of requests
for review under subsection (b) in situations—
(A) in which, as determined by the plan or
issuer or as certified in writing by a treating
health care professional, the application of the
normal timeframe for making a determination
could seriously jeopardize the life or health of
the participant, beneficiary, or enrollee or such
an individual’s ability to regain maximum func-
tion; or
(B) described in section 101(d)(2) (relat-
ing to requests for continuation of ongoing care
which would otherwise be reduced or termi-
nated).
(2) PROCESS.—Under such procedures—
(A) the request for expedited review may
be submitted orally or in writing by an indi-
vidual or provider who is otherwise entitled to
request the review;
(B) all necessary information, including
the plan’s or issuer’s decision, shall be trans-
mitted between the plan or issuer and the re-
quester by telephone, facsimile, or other simi-
larly expeditious available method; and
(C) the plan or issuer shall expedite the re-
view in the case of any of the situations de-
scribed in subparagraph (A) or (B) of para-
graph (1).
(3) DEADLINE FOR DECISION.—The decision on
the expedited review must be made and commu-
nicated to the parties as soon as possible in accord-
ance with the medical exigencies of the case, and in
no event later than 72 hours after the time of re-
ceipt of the request for expedited review, except that
in a case described in paragraph (1)(B), the decision
must be made before the end of the approved period
of care.
(d) WAIVER OF PROCESS.—A plan or issuer may
waive its rights for an internal review under subsection
(b). In such case the participant, beneficiary, or enrollee
involved (and any designee or provider involved) shall be
relieved of any obligation to complete the review involved
and may, at the option of such participant, beneficiary,
enrollee, designee, or provider, proceed directly to seek
further appeal through any applicable external appeals
process.
SEC. 103. EXTERNAL APPEALS PROCEDURES.
(a) RIGHT TO EXTERNAL APPEAL.—
(1) IN GENERAL.—A group health plan, and a
health insurance issuer offering health insurance
coverage, shall provide for an external appeals proc-
ess that meets the requirements of this section in
the case of an externally appealable decision de-
scribed in paragraph (2), for which a timely appeal
is made either by the plan or issuer or by the partic-
ipant, beneficiary, or enrollee (and any provider or
other person acting on behalf of such an individual
with the individual’s consent or without such consent
if such an individual is medically unable to provide
such consent). The appropriate Secretary shall es-
tablish standards to carry out such requirements.
(2) EXTERNALLY APPEALABLE DECISION DE-
FINED.—
(A) IN GENERAL.—For purposes of this
section, the term ‘‘externally appealable deci-
sion’’ means a denial of claim for benefits (as
defined in section 101(f)(2))—
(i) that is based in whole or in part on
a decision that the item or service is not
medically necessary or appropriate or is in-
vestigational or experimental; or
(ii) in which the decision as to wheth-
er a benefit is covered involves a medical
judgment.
(B) INCLUSION.—Such term also includes
a failure to meet an applicable deadline for in-
ternal review under section 102.
(C) EXCLUSIONS.—Such term does not
include—
(i) specific exclusions or express limi-
tations on the amount, duration, or scope
of coverage that do not involve medical
judgment; or
(ii) a decision regarding whether an
individual is a participant, beneficiary, or
enrollee under the plan or coverage.
(3) EXHAUSTION OF INTERNAL REVIEW PROC-
ESS.—Except as provided under section 102(d), a
plan or issuer may condition the use of an external
appeal process in the case of an externally appeal-
able decision upon a final decision in an internal re-
view under section 102, but only if the decision is
made in a timely basis consistent with the deadlines
provided under this subtitle.
(4) FILING FEE REQUIREMENT.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), a plan or issuer may condition the
use of an external appeal process upon payment
to the plan or issuer of a filing fee that does
not exceed $25.
(B) EXCEPTION
FOR
INDIGENCY.—The
plan or issuer may not require payment of the
filing fee in the case of an individual partici-
pant, beneficiary, or enrollee who certifies (in a
form and manner specified in guidelines estab-
lished by the Secretary of Health and Human
Services) that the individual is indigent (as de-
fined in such guidelines).
(C) REFUNDING FEE IN CASE OF SUCCESS-
FUL APPEALS.—The plan or issuer shall refund
payment of the filing fee under this paragraph
if the recommendation of the external appeal
entity is to reverse or modify the denial of a
claim for benefits which is the subject of the
appeal.
(b) GENERAL ELEMENTS OF EXTERNAL APPEALS
PROCESS.—
(1) CONTRACT WITH QUALIFIED EXTERNAL AP-
PEAL ENTITY.—
(A) CONTRACT REQUIREMENT.—Except as
provided in subparagraph (D), the external ap-
peal process under this section of a plan or
issuer shall be conducted under a contract be-
tween the plan or issuer and one or more quali-
fied external appeal entities (as defined in sub-
section (c)).
(B) LIMITATION ON PLAN OR ISSUER SE-
LECTION.—The applicable authority shall im-
plement procedures—
(i) to assure that the selection process
among qualified external appeal entities
will not create any incentives for external
appeal entities to make a decision in a bi-
ased manner, and
(ii) for auditing a sample of decisions
by such entities to assure that no such de-
cisions are made in a biased manner.
(C) OTHER
TERMS
AND
CONDITIONS.—
The terms and conditions of a contract under
this paragraph shall be consistent with the
standards the appropriate Secretary shall estab-
lish to assure there is no real or apparent con-
flict of interest in the conduct of external ap-
peal activities. Such contract shall provide that
all costs of the process (except those incurred
by the participant, beneficiary, enrollee, or
treating professional in support of the appeal)
shall be paid by the plan or issuer, and not by
the participant, beneficiary, or enrollee. The
previous sentence shall not be construed as ap-
plying to the imposition of a filing fee under
subsection (a)(4).
(D) STATE
AUTHORITY
WITH
RESPECT
QUALIFIED
EXTERNAL
APPEAL
ENTITY
FOR
HEALTH INSURANCE ISSUERS.—With respect to
health insurance issuers offering health insur-
ance coverage in a State, the State may provide
for external review activities to be conducted by
a qualified external appeal entity that is des-
ignated by the State or that is selected by the
State in a manner determined by the State to
assure an unbiased determination.
(2) ELEMENTS OF PROCESS.—An external ap-
peal process shall be conducted consistent with
standards established by the appropriate Secretary
that include at least the following:
(A) FAIR
AND
DE
NOVO
DETERMINA-
TION.—The process shall provide for a fair, de
novo determination. However, nothing in this
paragraph shall be construed as providing for
coverage of items and services for which bene-
fits are specifically excluded under the plan or
coverage.
(B) STANDARD OF REVIEW.—An external
appeal entity shall determine whether the plan’s
or issuer’s decision is in accordance with the
medical needs of the patient involved (as deter-
mined by the entity) taking into account, as of
the time of the entity’s determination, the pa-
tient’s medical condition and any relevant and
reliable evidence the entity obtains under sub-
paragraph (D). If the entity determines the de-
cision is in accordance with such needs, the en-
tity shall affirm the decision and to the extent
that the entity determines the decision is not in
accordance with such needs, the entity shall re-
verse or modify the decision.
(C) CONSIDERATION
OF
PLAN
OR
COV-
ERAGE DEFINITIONS.—In making such deter-
mination, the external appeal entity shall con-
sider (but not be bound by) any language in the
plan or coverage document relating to the defi-
nitions of the terms medical necessity, medically
necessary or appropriate, or experimental, in-
vestigational, or related terms.
(D) EVIDENCE.—
(i) IN GENERAL.—An external appeal
entity shall include, among the evidence
taken into consideration—
nanced in whole or in part by one or
more government agencies.
(III) 
Practice 
and 
treatment
guidelines prepared or financed in
whole or in part by government agen-
cies.
(IV) Government-issued coverage
and treatment policies.
(V) Community standard of care
and generally accepted principles of
professional medical practice.
(VI) To the extent that the entity
determines it to be free of any conflict
of interest, the opinions of individuals
who are qualified as experts in one or
more fields of health care which are
directly related to the matters under
appeal.
(VII) To the extent that the enti-
ty determines it to be free of any con-
flict of interest, the results of peer re-
views conducted by the plan or issuer
involved.
(E) DETERMINATION CONCERNING EXTER-
NALLY
APPEALABLE
DECISIONS.—A qualified
external appeal entity shall determine—
(i) whether a denial of claim for bene-
fits is an externally appealable decision
(within the meaning of subsection (a)(2));
(ii) whether an externally appealable
decision involves an expedited appeal; and
(iii) for purposes of initiating an ex-
ternal review, whether the internal review
process has been completed.
(F) 
OPPORTUNITY
TO
SUBMIT
EVI-
DENCE.—Each party to an externally appeal-
able decision may submit evidence related to the
issues in dispute.
(G) PROVISION
OF
INFORMATION.—The
plan or issuer involved shall provide timely ac-
cess to the external appeal entity to information
and to provisions of the plan or health insur-
ance coverage relating to the matter of the ex-
ternally appealable decision, as determined by
the entity.
(H) TIMELY DECISIONS.—A determination
by the external appeal entity on the decision
shall—
(i) be made orally or in writing and,
if it is made orally, shall be supplied to the
parties in writing as soon as possible;
(ii) be made in accordance with the
medical exigencies of the case involved, but
in no event later than 21 days after the
date (or, in the case of an expedited ap-
peal, 72 hours after the time) of requesting
an external appeal of the decision;
(iii) state, in layperson’s language, the
basis for the determination, including, if
relevant, any basis in the terms or condi-
tions of the plan or coverage; and
(iv) inform the participant, bene-
ficiary, or enrollee of the individual’s rights
(including any limitation on such rights) to
seek further review by the courts (or other
process) of the external appeal determina-
tion.
(I) COMPLIANCE WITH DETERMINATION.—
If the external appeal entity reverses or modi-
fies the denial of a claim for benefits, the plan
or issuer shall—
(i) upon the receipt of the determina-
tion, authorize benefits in accordance with
such determination;
(ii) take such actions as may be nec-
essary to provide benefits (including items
or services) in a timely manner consistent
with such determination; and
(iii) submit information to the entity
documenting compliance with the entity’s
determination and this subparagraph.
(c) QUALIFICATIONS OF EXTERNAL APPEAL ENTI-
TIES.—
(1) IN GENERAL.—For purposes of this section,
the term ‘‘qualified external appeal entity’’ means,
in relation to a plan or issuer, an entity that is cer-
tified under paragraph (2) as meeting the following
requirements:
(A) The entity meets the independence re-
quirements of paragraph (3).
(B) The entity conducts external appeal
activities through a panel of not fewer than 3
clinical peers.
(C) The entity has sufficient medical, legal,
and other expertise and sufficient staffing to
conduct external appeal activities for the plan
or issuer on a timely basis consistent with sub-
section (b)(2)(G).
(D) The entity meets such other require-
ments as the appropriate Secretary may im-
pose.
(2) INITIAL CERTIFICATION OF EXTERNAL AP-
PEAL ENTITIES.—
(A) IN GENERAL.—In order to be treated
as a qualified external appeal entity with re-
spect to—
(i) a group health plan, the entity
must be certified (and, in accordance with
subparagraph (B), periodically recertified)
as meeting the requirements of paragraph
(1)—
(I) by the Secretary of Labor;
(II) under a process recognized
or approved by the Secretary of
Labor; or
(III) to the extent provided in
subparagraph (C)(i), by a qualified
private standard-setting organization
(certified under such subparagraph);
or