I
105TH CONGRESS
2D SESSION
H. R. 4222
To amend the Public Health Service Act, Employee Retirement Income Secu-
rity Act of 1974, and titles XVIII and XIX of the Social Security
Act to require that group and individual health insurance coverage and
group health plans and managed care plans under the Medicare and
Medicaid Programs provide coverage for hospital lengths of stay as
determined by the attending health care provider in consultation with
the patient.
IN THE HOUSE OF REPRESENTATIVES
JULY 15, 1998
Mr. COBURN (for himself, Mr. STRICKLAND, Mr. NORWOOD, Mr. GANSKE, Mr.
BROWN of Ohio, and Mr. ACKERMAN) introduced the following bill; which
was referred to the Committee on Commerce, and in addition to the Com-
mittees on Education and the Workforce, and Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the commit-
tee concerned
A BILL
To amend the Public Health Service Act, Employee Retire-
ment Income Security Act of 1974, and titles XVIII
and XIX of the Social Security Act to require that
group and individual health insurance coverage and
group health plans and managed care plans under the
Medicare and Medicaid Programs provide coverage for
hospital lengths of stay as determined by the attending
health care provider in consultation with the patient.
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 ‘‘Hospital Length of
Stay Act of 1998’’.
SEC. 2. COVERAGE OF HOSPITAL LENGTH OF STAY.
(a) GROUP HEALTH PLANS.—
(1) PUBLIC
HEALTH
SERVICE
ACT
AMEND-
MENTS.—
(A) IN GENERAL.—Subpart 2 of part A of
title XXVII of the Public Health Service Act
(as added by section 604(a) of the Newborns’
and Mothers’ Health Protection Act of 1996
and amended by section 703(a) of the Mental
Health Parity Act of 1996) is amended by add-
ing at the end the following new section:
‘‘SEC. 2706. STANDARDS RELATING TO COVERAGE OF HOS-
PITAL LENGTHS OF STAY.
‘‘(a) REQUIREMENT.—A group health plan and a
health insurance issuer offering group health insurance
coverage in connection with a group health plan (including
a self-insured issuer) that provides coverage for inpatient
hospital services shall provide coverage for the length of
an inpatient hospital stay as determined by the attending
physician (or other attending health care provider to the
fered in connection with a group health plan, or the
supplemental policy, except that such coinsurance or
other cost-sharing for any portion of a period within
a hospital length of stay required under subsection
(a) may not be greater than such coinsurance or
cost-sharing for any preceding portion of such stay.
‘‘(d) NOTICE.—A group health plan under this part
shall comply with the notice requirement under section
713(d) of the Employee Retirement Income Security Act
of 1974 with respect to the requirements of this section
as if such section applied to such plan.
‘‘(e) LEVEL
AND TYPE
OF REIMBURSEMENTS.—
Nothing in this section shall be construed to prevent a
group health plan or a health insurance issuer offering
group health insurance coverage in connection with a
group health plan (including a self-insured issuer) from
negotiating the level and type of reimbursement with a
provider for care provided in accordance with this section.
‘‘(f) PREEMPTION; EXCEPTION FOR HEALTH INSUR-
ANCE COVERAGE IN CERTAIN STATES.—
‘‘(1) IN GENERAL.—The requirements of this
section shall not apply with respect to health insur-
ance coverage if there is a State law (as defined in
section 2723(d)(1)) for a State that regulates such
coverage and provides greater protections to patients
than those provided under this section.
‘‘(2) CONSTRUCTION.—Section 2723(a)(1) shall
not be construed as superseding a State law de-
scribed in paragraph (1).’’.
(B) CONFORMING
AMENDMENT.—Section
2723(c) of the Public Health Service Act (42
U.S.C. 300gg–23(c)), as amended by section
604(b)(2) of Public Law 104–204, is amended
by striking ‘‘section 2704’’ and inserting ‘‘sec-
tions 2704 and 2706’’.
(2) ERISA AMENDMENTS.—
(A) IN GENERAL.—Subpart B of part 7 of
subtitle B of title I of the Employee Retirement
Income Security Act of 1974 (as added by sec-
tion 603(a) of the Newborns’ and Mothers’
Health Protection Act of 1996 and amended by
section 702(a) of the Mental Health Parity Act
of 1996) is amended by adding at the end the
following new section:
‘‘SEC. 713. STANDARDS RELATING TO COVERAGE OF HOS-
PITAL LENGTHS OF STAY.
‘‘(a) REQUIREMENT.—A group health plan and a
health insurance issuer offering group health insurance
coverage in connection with a group health plan (including
a self-insured issuer), that provides coverage for inpatient
hospital services shall provide coverage for the length of
an inpatient hospital stay as determined by the attending
physician (or other attending health care provider to the
extent permitted under State law) in consultation with the
patient to be medically appropriate.
‘‘(b) PROHIBITIONS.—A group health plan and a
health insurance issuer offering group health insurance
coverage in connection with a group health plan (including
a self-insured issuer), may not—
‘‘(1) deny to an individual eligibility, or contin-
ued eligibility, to enroll or to renew coverage under
the terms of the plan, solely for the purpose of
avoiding the requirements of this section;
‘‘(2) provide monetary payments or rebates to
an individual to encourage the individual to accept
less than the minimum protections available under
this section;
‘‘(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because
such provider provided care to an individual partici-
pant or beneficiary in accordance with this section;
‘‘(4) provide incentives (monetary or otherwise)
to an attending provider to induce such provider to
provide care to an individual participant or bene-
ficiary in a manner inconsistent with this section; or
‘‘(5) subject to subsection (c)(4), restrict bene-
fits for any portion of a period within a hospital
length of stay required under subsection (a) in a
manner which is less favorable than the benefits pro-
vided for any preceding portion of such stay.
‘‘(c) RULES OF CONSTRUCTION.—
‘‘(1) NO REQUIREMENT TO STAY.—Nothing in
this section shall be construed to require an individ-
ual who is a participant or beneficiary to stay in the
hospital for a fixed period of time for any procedure.
‘‘(2) NO EFFECT ON REQUIREMENTS FOR MINI-
MUM HOSPITAL STAY FOLLOWING BIRTH.—Nothing
in this section shall be construed as modifying the
requirements of section 2704.
‘‘(3) NONAPPLICABILITY.—This section shall
not apply with respect to any group health plan or
any group health insurance coverage offered by a
health insurance issuer (including a self-insured
issuer), which does not provide benefits for hospital
lengths of stay.
‘‘(4) COST-SHARING.—Nothing in this section
shall be construed as preventing a group health plan
or a health insurance issuer offering group health
insurance coverage in connection with a group health
plan (including a self-insured issuer), from imposing
deductibles, coinsurance, or other cost-sharing in re-
lation to benefits for hospital lengths of stay under
the plan or health insurance coverage offered in con-
nection with a group health plan, except that such
coinsurance or other cost-sharing for any portion of
a period within a hospital length of stay required
under subsection (a) may not be greater than such
coinsurance or cost-sharing for any preceding por-
tion of such stay.
‘‘(d) NOTICE UNDER GROUP HEALTH PLAN.—The
imposition of the requirements of this section shall be
treated as a material modification in the terms of the plan
described in section 102(a)(1), for purposes of assuring
notice of such requirements under the plan; except that
the summary description required to be provided under the
last sentence of section 104(b)(1) with respect to such
modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirements apply.
‘‘(e) LEVEL
AND TYPE
OF REIMBURSEMENTS.—
Nothing in this section shall be construed to prevent a
group health plan or a health insurance issuer offering
group health insurance coverage in connection with a
group health plan (including a self-insured issuer), from
negotiating the level and type of reimbursement with a
provider for care provided in accordance with this section.
‘‘(f) PREEMPTION; EXCEPTION FOR HEALTH INSUR-
ANCE COVERAGE IN CERTAIN STATES.—
‘‘(1) IN GENERAL.—The requirements of this
section shall not apply with respect to health insur-
ance coverage if there is a State law (as defined in
section 731(d)(1)) for a State that regulates such
coverage and provides greater protections to patients
than those provided under this section.
‘‘(2) CONSTRUCTION.—Section 731(a)(1) shall
not be construed as superseding a State law de-
scribed in paragraph (1).’’.
(B) CONFORMING AMENDMENTS.—
(i) Section 731(c) of such Act (29
U.S.C. 1191(c)), as amended by section
603(b)(1) of Public Law 104–204, is
amended by striking ‘‘section 711’’ and in-
serting ‘‘sections 711 and 713’’.
(ii) Section 732(a) of such Act (29
U.S.C. 1191a(a)), as amended by section
603(b)(2) of Public Law 104–204, is
amended by striking ‘‘section 711’’ and in-
serting ‘‘sections 711 and 713’’.
(iii) The table of contents in section 1
of such Act is amended by inserting after
the item relating to section 712 the follow-
ing new item:
‘‘Sec. 713. Standards relating to coverage of hospital lengths of stay.’’.
(b) INDIVIDUAL MARKET.—Subpart 3 of part B of
title XXVII of the Public Health Service Act (as added
by section 605(a) of the Newborn’s and Mother’s Health
Protection Act of 1996) is amended by adding at the end
the following new section:
‘‘SEC. 2752. STANDARDS RELATING TO COVERAGE OF HOS-
PITAL LENGTHS OF STAY.
‘‘The provisions of section 2706 shall apply to health
insurance coverage offered by a health insurance issuer
in the individual market in the same manner as they apply
to health insurance coverage offered by a health insurance
issuer in connection with a group health plan in the small
or large group market.’’.
(c) EFFECTIVE DATES.—
(1) GROUP HEALTH PLANS.—Subject to para-
graph (3), the amendments made by subsection (a)
shall apply with respect to group health plans for
plan years beginning on or after January 1, 1999.
(2) 
HEALTH
INSURANCE
COVERAGE.—The
amendment made by subsection (b) shall apply with
respect to health insurance coverage offered, sold,
issued, renewed, in effect, or operated in the individ-
ual market on or after such date.
(3) COLLECTIVE BARGAINING AGREEMENTS.—
In the case of a group health plan maintained pur-
suant to 1 or more collective bargaining agreements
between employee representatives and 1 or more em-
ployers ratified before the date of enactment of this
Act, the amendments made under subsection (a)
shall not apply to plan years beginning before the
later of—
(A) the date on which the last collective
bargaining agreements relating to the plan ter-
minates (determined without regard to any ex-
tension thereof agreed to after the date of en-
actment of this Act), or
(B) January 1, 1999.
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining
agreement relating to the plan which amends the
plan solely to conform to any requirement added by
subsection (a) shall not be treated as a termination
of such collective bargaining agreement.
(d) COORDINATED REGULATIONS.—Section 104(1)
of Health Insurance Portability and Accountability Act of
1996 is amended by striking ‘‘this subtitle (and the
amendments made by this subtitle and section 401)’’ and
inserting ‘‘the provisions of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of
1974, and the provisions of parts A and C of title XXVII
of the Public Health Service Act’’.
SEC. 3. APPLICATION TO MEDICARE AND MEDICAID BENE-
FICIARIES.
(a) MEDICARE.—
(1) IN GENERAL.—Title XVIII of the Social Se-
curity Act (42 U.S.C. 1395 et seq.) is amended by
adding at the end the following:
‘‘HOSPITAL LENGTHS OF STAY FOR BENEFICIARIES
ENROLLED IN PRIVATE HEALTH PLANS
‘‘SEC. 1897. (a) APPLICATION TO MEDICARE.—Not-
withstanding the limitation on benefits described in sec-
tion 1812, or any other limitation on benefits imposed
under this title, the provisions of section 2706 of the Pub-
lic Health Service Act shall apply to the provision of items
and services under this title.
‘‘(b) MEDICARE+CHOICE AND ELIGIBLE ORGANIZA-
TIONS.—The Secretary may not enter into a contract with
a Medicare+Choice organization under part C, or with an
eligible organization with a risk-sharing contract under
section 1876, unless the organization meets the require-
ments of section 2706 of the Public Health Service Act
with respect to individuals enrolled with the organiza-
tion.’’.
(2) MEDICARE SUPPLEMENTAL POLICIES.—
(A) IN GENERAL.—Section 1882(c) of the
Social Security Act (42 U.S.C. 1395ss(c)) is
amended—
(i) in paragraph (4), by striking
‘‘and’’ at the end;
(ii) in paragraph (5), by striking the
period and inserting ‘‘, and’’; and
(iii) by adding at the end the follow-
ing:
‘‘(6) meets the requirements of section 2706 of
the Public Health Service Act with respect to indi-
viduals enrolled under the policy.’’.
(B) CONFORMING
AMENDMENT.—Section
1882(b)(1)(B) of the Social Security Act (42
U.S.C. 1395ss(b)(1)(B)) is amended by striking
‘‘(5)’’ and inserting ‘‘(6)’’.
(3) COST SHARING.—Nothing in this subsection
or section 2706(c) of the Public Health Service Act
shall be construed as authorizing the imposition of
cost sharing with respect to the coverage or benefits
required to be provided under the amendments to
the Social Security Act made by paragraphs (1) and
(2) that is inconsistent with the cost sharing that is
otherwise permitted under title XVIII of the Social
Security Act.
(b) MEDICAID.—Title XIX of the Social Security Act
(42 U.S.C. 1396 et seq.) is amended by redesignating sec-
tion 1935 as section 1936 and by inserting after section
1934 the following:
‘‘HOSPITAL LENGTHS OF STAY FOR BENEFICIARIES
ENROLLED IN PRIVATE HEALTH PLANS
‘‘SEC. 1935. (a) IN GENERAL.—A State plan may
not be approved under this title unless the plan requires
each health insurance issuer or other entity with a con-
tract with such plan to provide coverage or benefits to in-
dividuals eligible for medical assistance under the plan, in-
cluding a managed care entity, as defined in section
1932(a)(1)(B), to comply with the provisions of section
2706 of the Public Health Service Act with respect to such
coverage or benefits.
‘‘(b) COST SHARING.—Nothing in this section or sec-
tion 2706(c) of the Public Health Service Act shall be con-
strued as authorizing a health insurance issuer or entity
to impose cost sharing with respect to the coverage or ben-
efits required to be provided under section 2706 of the
Public Health Service Act that is inconsistent with the
cost sharing that is otherwise permitted under this title.
‘‘(c) WAIVERS PROHIBITED.—The requirement of
subsection (a) may not be waived under section 1115 or
section 1915(b) of the Social Security Act.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section apply to contract years under titles XVIII and
XIX of the Social Security Act beginning on or after Jan-
uary 1, 1999.
(d) MEDIGAP TRANSITION PROVISIONS.—
(1) IN GENERAL.—If the Secretary of Health
and Human Services identifies a State as requiring
a change to its statutes or regulations to conform its
regulatory program to the changes made by sub-
section (a)(2), the State regulatory program shall
not be considered to be out of compliance with the
requirements of section 1882 of the Social Security
Act due solely to failure to make such change until
the date specified in paragraph (4).
(2) NAIC STANDARDS.—If, within 9 months
after the date of the enactment of this Act, the Na-
tional Association of Insurance Commissioners (in
this subsection referred to as the ‘‘NAIC’’) modifies
its NAIC Model Regulation relating to section 1882
of the Social Security Act (referred to in such sec-
tion as the 1991 NAIC Model Regulation, as modi-
fied pursuant to section 171(m)(2) of the Social Se-
curity Act Amendments of 1994 (Public Law 103–
432) 
and 
as 
modified 
pursuant 
to 
section
1882(d)(3)(A)(vi)(IV) of the Social Security Act, as
added by section 271(a) of the Health Insurance
Portability and Accountability Act of 1996 (Public
Law 104–191) to conform to the amendments made
by this section, such revised regulation incorporating
the modifications shall be considered to be the appli-
cable NAIC model regulation (including the revised
NAIC model regulation and the 1991 NAIC Model
Regulation) for the purposes of such section.
(3) SECRETARY
STANDARDS.—If the NAIC
does not make the modifications described in para-
graph (2) within the period specified in such para-
graph, the Secretary of Health and Human Services
shall make the modifications described in such para-
graph and such revised regulation incorporating the
modifications shall be considered to be the appro-
priate Regulation for the purposes of such section.
(4) DATE SPECIFIED.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the date specified in this paragraph
for a State is the earlier of—
(i) the date the State changes its stat-
utes or regulations to conform its regu-
latory program to the changes made by
this section, or
(ii) 1 year after the date the NAIC or
the Secretary first makes the modifications
under paragraph (2) or (3), respectively.
(B) ADDITIONAL LEGISLATIVE ACTION RE-
QUIRED.—In the case of a State which the Sec-
retary identifies as—
(i) requiring State legislation (other
than legislation appropriating funds) to
conform its regulatory program to the
changes made in this section, but
(ii) having a legislature which is not
scheduled to meet in 1999 in a legislative
session in which such legislation may be
considered,
the date specified in this paragraph is the first
day of the first calendar quarter beginning after
the close of the first legislative session of the
State legislature that begins on or after July 1,
1999. For purposes of the previous sentence, in
the case of a State that has a 2-year legislative
session, each year of such session shall be
deemed to be a separate regular session of the
State legislature.
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