I
104TH CONGRESS
1ST SESSION
H. R. 2329
To amend title XVIII of the Social Security Act to provide protections
for medicare beneficiaries who enroll in medicare managed care plans.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 14, 1995
Mr. BROWN of Ohio introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Commerce, 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 title XVIII of the Social Security Act to provide
protections for medicare beneficiaries who enroll in medi-
care 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.
This Act may be cited as the ‘‘Medicare Patient
Choice Act of 1995’’.
SEC. 2. FINDINGS.
Congress finds the following:
(1) There should be no unreasonable barriers or
impediments to the ability of individuals enrolled in
health care plans to obtain appropriate specialized
medical services.
(2) The patient’s first point of contact in a
health care plan must be encouraged to make all ap-
propriate medical referrals and should not be con-
strained financially from making such referrals.
(3) Some health care plans may impede timely
access to specialty care.
(4) At any time, patients must be able to access
out-of-network items, treatment, and services at an
additional cost to the patient which is not so prohibi-
tive that they are deterred from seeing the health
care provider of their own choice.
(5) Specialty care must be available for the full
duration of the patient’s medical needs and not lim-
ited by time or number of visits.
(6) Direct access to specialty care is essential
for patients in emergency and nonemergency situa-
tions and for patients with chronic and temporary
conditions.
SEC. 3. PROTECTION FOR MEDICARE HMO ENROLLEES.
(a) IN GENERAL.—Section 1876 of the Social Secu-
rity Act (42 U.S.C. 1395mm) is amended—
(1) in subsection (c)(1), by striking ‘‘subsection
(e)’’ and inserting ‘‘subsections (e) and (k)’’, and
(2) by adding at the end the following new sub-
section:
‘‘(k) BENEFICIARY PROTECTION.—
‘‘(1) MINIMUM LOSS RATIO.—
‘‘(A) IN GENERAL.—Each eligible organi-
zation shall have a loss-ratio that is not less
than 85 percent for each contract year.
‘‘(B) LOSS RATIO DEFINED.—In subpara-
graph (A), the term ‘loss-ratio’ means, with re-
spect to an organization for a contract year, the
ratio of (i) the anticipated aggregate benefits
provided under this section to enrollees for the
year, to (ii) the aggregate amount of the pre-
miums collected (including payments to the or-
ganization under subsection (a) for the year, as
estimated on the basis of incurred claims expe-
rience and earned premium for the year.
‘‘(2) ASSURING
ADEQUATE
IN-NETWORK
AC-
CESS.—
‘‘(A) TIMELY ACCESS.—An eligible organi-
zation that restricts the providers from whom
benefits may be obtained must guarantee to en-
rollees under this section timely access to pri-
mary and specialty health care providers who
are appropriate to the enrollee’s condition.
‘‘(B) ACCESS TO SPECIALIZED CARE.—En-
rollees must have access to specialized treat-
ment when the treating provider deems nec-
essary. This access may be satisfied through
contractual arrangements with specialized pro-
viders outside of the network.
‘‘(C) CONTINUITY OF CARE.—An eligible
organization’s use of case management may not
create an undue burden for enrollees under this
section. An organization must ensure direct ac-
cess to specialists for ongoing care as so deter-
mined by the case manager in consultation with
the specialty care provider. This continuity of
care may be satisfied for enrollees with chronic
conditions through the use of a specialist serv-
ing as case manager.
‘‘(3) ASSURING OUT-OF-NETWORK ACCESS.—
‘‘(A) IN GENERAL.—An eligible organiza-
tion that contracts with a specific network of
providers must offer its enrollees or their treat-
ing provider with the patient’s authorization
under this section, the ability at any time, to
seek items, services, and treatment from out-of-
network providers for all covered benefits.
‘‘(B) REIMBURSEMENT FOR OUT-OF-NET-
WORK
SERVICES.—An 
eligible 
organization
under this section shall provide for reimburse-
ment for the enrollee, consistent with the cost-
sharing schedule established under subpara-
graph (C), with respect to out-of-network serv-
ices which are described in subparagraph (A),
so long as the services were medically appro-
priate, and were covered benefits in-network.
‘‘(C) ESTABLISHMENT
OF
COST-SHARING
SCHEDULE.—In consultation with the National
Association of Insurance Commissioners, the
Secretary shall establish (by not later than one
year after enactment of this Act) a cost-sharing
schedule which applies to payment required
under subparagraph (B) for out-of-network
services.
‘‘(4) APPROPRIATE
RANGE
OF
SERVICES.—A
health plan shall not deny any health care profes-
sionals, based solely on the license or certification as
applicable under State law, the ability to participate
in providing covered health care services, or be reim-
bursed or indemnified or by a network plan for pro-
viding such services. Organizations must ensure a
sufficient number, mix, and distribution of health
care professionals within a network plan to ensure
enrollees access to appropriate medical services.
‘‘(5) GRIEVANCE AND APPEALS PROCESSES.—
‘‘(A) GRIEVANCE PROCESS.—The organiza-
tion must provide meaningful procedures for
hearing and resolving grievances between the
organization (including any entity or individual
through which the organization provides health
care services) and members enrolled with the
organization under this section.
‘‘(B) BOARD OF APPEALS.—
‘‘(i) IN GENERAL.—Each eligible or-
ganization shall establish a board of ap-
peals to hear and make determinations on
complaints by enrollees concerning denials
of coverage or payment for services
(whether in-network or out-of-network)
and the medical necessity and appropriate-
ness of covered items and services.
‘‘(ii) COMPOSITION.—A board of ap-
peals of an eligible organization shall con-
sist of—