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graph (A) and a plan described by paragraph
(1) or (2); or
‘‘(ii) to require that a high deductible health
plan offer two levels of benefits.’’.
(2) TYPES
OF
BENEFITS.—Section 8904(a) of
title 5, United States Code, is amended by inserting
after paragraph (4) the following:
‘‘(5) HIGH DEDUCTIBLE HEALTH PLANS.—Ben-
efits of the types named under paragraph (1) or (2)
of this subsection or both.’’.
(3) CONFORMING AMENDMENTS.—
(A) Section 8903a of title 5, United States
Code, is amended by redesignating subsection (d)
as subsection (e) and by inserting after sub-
section (c) the following:
‘‘(d) The plans under this section may include one or
more plans, otherwise allowable under this section, that sat-
isfy the requirements of clauses (i) and (ii) of section
8903(5)(A).’’.
(B) Section 8909(d) of title 5, United States
Code, is amended by striking ‘‘8903a(d)’’ and in-
serting ‘‘8903a(e)’’.
(4) REFERENCES.—Section 8903 of title 5,
United States Code, is amended by adding after para-
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graph (5) (as added by paragraph (1) of this sub-
section) as a flush left sentence, the following:
‘‘The Office shall prescribe regulations in accordance with
which the requirements of section 8902(c), 8902(n), 8909(e),
and any other provision of this chapter that applies with
respect to a plan described by paragraph (1), (2), (3), or
(4) of this section shall apply with respect to the cor-
responding plan under paragraph (5) of this section. Simi-
lar regulations shall be prescribed with respect to any plan
under section 8903a(d).’’.
(f) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to contract years beginning
on or after October 1, 2001. The Office of Personnel Man-
agement shall take appropriate measures to ensure that cov-
erage under a high deductible health plan under chapter
89 of title 5, United States Code (as amended by this sec-
tion) shall be available as of the beginning of the first con-
tract year described in the preceding sentence.
SEC. 2113. RULE WITH RESPECT TO CERTAIN PLANS.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, health insurance issuers may offer, and eligible
individuals may purchase, high deductible health plans de-
scribed in section 220(c)(2)(A) of the Internal Revenue Code
of 1986. Effective for the 5-year period beginning on Octo-
ber 1, 2001, such health plans shall not be required to pro-
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vide payment for any health care items or services that are
exempt from the plan’s deductible.
(b) EXISTING STATE LAWS.—A State law relating to
payment for health care items and services in effect on the
date of enactment of this Act that is preempted under para-
graph (1), shall not apply to high deductible health plans
after the expiration of the 5-year period described in such
paragraph unless the State reenacts such law after such pe-
riod.
Subtitle C—Other Health-Related
Provisions
SEC. 2121. EXPANDED HUMAN CLINICAL TRIALS QUALI-
FYING FOR ORPHAN DRUG CREDIT.
(a) 
IN
GENERAL.—Subclause 
(I) 
of 
section
45C(b)(2)(A)(ii) of the Internal Revenue Code of 1986 is
amended to read as follows:
‘‘(I) after the date that the appli-
cation is filed for designation under
such section 526, and’’.
(b) CONFORMING AMENDMENT.—Clause (i) of section
45C(b)(2)(A) of such Code is amended by inserting ‘‘which
is’’ before ‘‘being’’ and by inserting before the comma at
the end ‘‘and which is designated under section 526 of such
Act’’.
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(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to amounts paid or incurred after De-
cember 31, 2001.
SEC. 2122. CARRYOVER OF UNUSED BENEFITS FROM CAFE-
TERIA 
PLANS, 
FLEXIBLE 
SPENDING 
AR-
RANGEMENTS, 
AND 
HEALTH 
FLEXIBLE
SPENDING ACCOUNTS.
(a) IN GENERAL.—Section 125 of the Internal Revenue
Code of 1986 (relating to cafeteria plans) is amended by
redesignating subsections (h) and (i) as subsections (i) and
(j) and by inserting after subsection (g) the following new
subsection:
‘‘(h) ALLOWANCE OF CARRYOVERS OF UNUSED BENE-
FITS TO LATER TAXABLE YEARS.—
‘‘(1) IN GENERAL.—For purposes of this title—
‘‘(A) notwithstanding subsection (d)(2), a
plan or other arrangement shall not fail to be
treated as a cafeteria plan or flexible spending or
similar arrangement, and
‘‘(B) no amount shall be required to be in-
cluded in gross income by reason of this section
or any other provision of this chapter,
solely because under such plan or other arrangement
any nontaxable benefit which is unused as of the close
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of a taxable year may be carried forward to 1 or more
succeeding taxable years.
‘‘(2) LIMITATION.—Paragraph (1) shall not
apply to amounts carried from a plan to the extent
such amounts exceed $500 (applied on an annual
basis). For purposes of this paragraph, all plans and
arrangements maintained by an employer or any re-
lated person shall be treated as 1 plan.
‘‘(3) ALLOWANCE OF ROLLOVER.—
‘‘(A) IN GENERAL.—In the case of any un-
used benefit described in paragraph (1) which
consists of amounts in a health flexible spending
account or dependent care flexible spending ac-
count, the plan or arrangement shall provide
that a participant may elect, in lieu of such car-
ryover, to have such amounts distributed to the
participant.
‘‘(B) AMOUNTS
NOT
INCLUDED
IN
IN-
COME.—Any distribution under subparagraph
(A) shall not be included in gross income to the
extent that such amount is transferred in a
trustee-to-trustee transfer, or is contributed with-
in 60 days of the date of the distribution, to—
‘‘(i) a qualified cash or deferred ar-
rangement described in section 401(k),
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‘‘(ii) a plan under which amounts are
contributed by an individual’s employer for
an annuity contract described in section
403(b),
‘‘(iii) an eligible deferred compensation
plan described in section 457, or
‘‘(iv) a medical savings account (with-
in the meaning of section 220).
Any amount rolled over under this subparagraph
shall be treated as a rollover contribution for the
taxable year from which the unused amount
would otherwise be carried.
‘‘(C) 
TREATMENT
OF
ROLLOVER.—Any
amount rolled over under subparagraph (B)
shall be treated as an eligible rollover under sec-
tion 220, 401(k), 403(b), or 457, whichever is ap-
plicable, and shall be taken into account in ap-
plying any limitation (or participation require-
ment) on employer or employee contributions
under such section or any other provision of this
chapter for the taxable year of the rollover.
‘‘(4) COST-OF-LIVING ADJUSTMENT.—In the case
of any taxable year beginning in a calendar year
after 2002, the $500 amount under paragraph (2)
shall be adjusted at the same time and in the same
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manner as under section 415(d)(2), except that the
base period taken into account shall be the calendar
quarter beginning October 1, 2001, and any increase
which is not a multiple of $50 shall be rounded to the
next lowest multiple of $50.
‘‘(5) 
APPLICABILITY.—This 
subsection 
shall
apply to taxable years beginning after December 31,
2001.’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 2001.
SEC. 2123. REDUCTION IN TAX ON VACCINES.
(a) IN GENERAL.—Paragraph (1) of section 4131(b)
of the Internal Revenue Code of 1986 (relating to amount
of tax) is amended by striking ‘‘75 cents’’ and inserting
‘‘50 cents’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on January 1, 2002.
Subtitle D—Miscellaneous
Provisions
SEC. 2131. NO IMPACT ON SOCIAL SECURITY TRUST FUND.
(a) IN GENERAL.—Nothing in this division (or an
amendment made by this division) shall be construed to
alter or amend the Social Security Act (or any regulation
promulgated under that Act).
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(b) TRANSFERS.—
(1) ESTIMATE OF SECRETARY.—The Secretary of
the Treasury shall annually estimate the impact that
the enactment of this division has on the income and
balances of the trust funds established under section
201 of the Social Security Act (42 U.S.C. 401).
(2) TRANSFER OF FUNDS.—If, under paragraph
(1), the Secretary of the Treasury estimates that the
enactment of this division has a negative impact on
the income and balances of the trust funds established
under section 201 of the Social Security Act (42
U.S.C. 401), the Secretary shall transfer, not less fre-
quently than quarterly, from the general revenues of
the Federal Government an amount sufficient so as to
ensure that the income and balances of such trust
funds are not reduced as a result of the enactment of
such division.
SEC. 2132. CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is
amended by striking ‘‘2003’’ and inserting ‘‘2010’’.
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SEC. 2133. ESTABLISHMENT OF MEDICARE ADMINISTRA-
TIVE 
FEE 
FOR 
SUBMISSION 
OF 
PAPER
CLAIMS.
(a) IMPOSITION OF FEE.—Notwithstanding any other
provision of law and subject to subsection (b), the Secretary
of Health and Human Services shall establish (in the form
of a separate fee or reduction of payment otherwise made
under the medicare program under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.)) an administrative
fee of $1 for the submission of a claim in a paper or non-
electronic form for items or services for which payment is
sought under such title.
(b) EXCEPTION AUTHORITY.—The Secretary of Health
and Human Services shall waive the imposition of the fee
under subsection (a)—
(1) in cases in which there is no method avail-
able for the submission of claims other than in a
paper or non-electronic form; and
(2) for rural providers and small providers that
the Secretary determines, under procedures established
by the Secretary, are unable to purchase the necessary
hardware in order to submit claims electronically.
(c) TREATMENT OF FEES FOR PURPOSES OF COST RE-
PORTS.—An entity may not include a fee assessed pursuant
to this section as an allowable item on a cost report under
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title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.) or title XIX of such Act (42 U.S.C. 1396 et seq.).
(d) EFFECTIVE DATE.—The provisions of this section
apply to claims submitted on or after January 1, 2002.
SEC. 2134. ESTABLISHMENT OF MEDICARE ADMINISTRA-
TIVE FEE FOR SUBMISSION OF DUPLICATE
AND UNPROCESSABLE CLAIMS.
(a) IMPOSITION OF FEE.—Notwithstanding any other
provision of law, the Secretary of Health and Human Serv-
ices shall establish (in the form of a separate fee or reduc-
tion of payment otherwise made under the medicare pro-
gram under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.)) an administrative fee of $2 for the
submission of a claim described in subsection (b).
(b) CLAIMS SUBJECT TO FEE.—A claim described in
this subsection is a claim that—
(1) is submitted by an individual or entity for
items or services for which payment is sought under
title XVIII of the Social Security Act; and
(2) either—
(A) duplicates, in whole or in part, another
claim submitted by the same individual or enti-
ty; or
(B) is a claim that cannot be processed and
must, in accordance with the Secretary of Health
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and Human Service’s instructions, be returned
by the fiscal intermediary or carrier to the indi-
vidual or entity for completion.
(c) TREATMENT OF FEES FOR PURPOSES OF COST RE-
PORTS.—An entity may not include a fee assessed pursuant
to this section as an allowable item on a cost report under
title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.) or title XIX of such Act (42 U.S.C. 1396 et seq.).
(d) EFFECTIVE DATE.—The provisions of this section
apply to claims submitted on or after January 1, 2002.
TITLE XXII—PATIENTS’ BILL OF
RIGHTS
Subtitle A—Right to Advice and
Care
SEC. 2201. PATIENT RIGHT TO MEDICAL ADVICE AND CARE.
(a) IN GENERAL.—Part 7 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1181 et seq.) is amended—
(1) by redesignating subpart C as subpart D;
and
(2) by inserting after subpart B the following:
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‘‘Subpart C—Patient Right to Medical Advice and
Care
‘‘SEC. 721. ACCESS TO EMERGENCY MEDICAL CARE.
‘‘(a) COVERAGE
OF EMERGENCY SERVICES.—If a
group health plan (other than a fully insured group health
plan) provides coverage for any benefits consisting of emer-
gency medical care, except for items or services specifically
excluded from coverage, the plan shall, without regard to
prior authorization or provider participation—
‘‘(1) provide coverage for emergency medical
screening examinations to the extent that a prudent
layperson, who possesses an average knowledge of
health and medicine, would determine such examina-
tions to be necessary; and
‘‘(2) provide coverage for additional emergency
medical care to stabilize an emergency medical condi-
tion following an emergency medical screening exam-
ination (if determined necessary), pursuant to the
definition of stabilize under section 1867(e)(3) of the
Social Security Act (42 U.S.C. 1395dd(e)(3)).
‘‘(b) COVERAGE OF EMERGENCY AMBULANCE SERV-
ICES.—If a group health plan (other than a fully insured
group health plan) provides coverage for any benefits con-
sisting of emergency ambulance services, except for items
or services specifically excluded from coverage, the plan
shall, without regard to prior authorization or provider
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participation, provide coverage for emergency ambulance
services to the extent that a prudent layperson, who pos-
sesses an average knowledge of health and medicine, would
determine such emergency ambulance services to be nec-
essary.
‘‘(c) CARE AFTER STABILIZATION.—
‘‘(1) IN GENERAL.—In the case of medically nec-
essary and appropriate items or services related to the
emergency medical condition that may be provided to
a participant or beneficiary by a nonparticipating
provider after the participant or beneficiary is sta-
bilized, the nonparticipating provider shall contact
the plan as soon as practicable, but not later than 2
hours after stabilization occurs, with respect to
whether—
‘‘(A) the provision of items or services is ap-
proved;
‘‘(B) the participant or beneficiary will be
transferred; or
‘‘(C) other arrangements will be made con-
cerning the care and treatment of the partici-
pant or beneficiary.
‘‘(2) FAILURE TO RESPOND AND MAKE ARRANGE-
MENTS.—If a group health plan fails to respond and
make arrangements within 2 hours of being contacted
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in accordance with paragraph (1), then the plan shall
be responsible for the cost of any additional items or
services provided by the nonparticipating provider
if—
‘‘(A) coverage for items or services of the
type furnished by the nonparticipating provider
is available under the plan;
‘‘(B) the items or services are medically nec-
essary and appropriate and related to the emer-
gency medical condition involved; and
‘‘(C) the timely provision of the items or
services is medically necessary and appropriate.
‘‘(3) RULE OF CONSTRUCTION.—Nothing in this
subsection shall be construed to apply to a group
health plan that does not require prior authorization
for items or services provided to a participant or ben-
eficiary after the participant or beneficiary is sta-
bilized.
‘‘(d) REIMBURSEMENT TO A NON-PARTICIPATING PRO-
VIDER.—The responsibility of a group health plan to pro-
vide reimbursement to a nonparticipating provider under
this section shall cease accruing upon the earlier of—
‘‘(1) the transfer or discharge of the participant
or beneficiary; or
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‘‘(2) the completion of other arrangements made
by the plan and the nonparticipating provider.
‘‘(e) RESPONSIBILITY OF PARTICIPANT.—With respect
to items or services provided by a nonparticipating pro-
vider under this section, the participant or beneficiary shall
not be responsible for amounts that exceed the amounts (in-
cluding co-insurance, co-payments, deductibles or any other
form of cost-sharing) that would be incurred if the care was
provided by a participating health care provider with prior
authorization.
‘‘(f) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit a group health plan from
negotiating reimbursement rates with a nonparticipating
provider for items or services provided under this section.
‘‘(g) DEFINITIONS.—In this section:
‘‘(1) EMERGENCY
AMBULANCE
SERVICES.—The
term ‘emergency ambulance services’ means, with re-
spect to a participant or beneficiary under a group
health plan (other than a fully insured group health
plan), ambulance services furnished to transport an
individual who has an emergency medical condition
to a treating facility for receipt of emergency medical
care if—
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‘‘(A) the emergency services are covered
under the group health plan (other than a fully
insured group health plan) involved; and
‘‘(B) a prudent layperson who possesses an
average knowledge of health and medicine could
reasonably expect the absence of such transport
to result in placing the health of the participant
or beneficiary (or, with respect to a pregnant
woman, the health of the woman or her unborn
child) in serious jeopardy, serious impairment to
bodily functions, or serious dysfunction of any
bodily organ or part.
‘‘(2) EMERGENCY
MEDICAL
CARE.—The term
‘emergency medical care’ means, with respect to a
participant or beneficiary under a group health plan
(other than a fully insured group health plan), cov-
ered inpatient and outpatient items or services that—
‘‘(A) are furnished by any provider, includ-
ing a nonparticipating provider, that is quali-
fied to furnish such items or services; and
‘‘(B) are needed to evaluate or stabilize (as
such term is defined in section 1867(e)(3) of the
Social Security Act (42 U.S.C. 1395dd(e)(3)) an
emergency medical condition.
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‘‘(3) EMERGENCY
MEDICAL
CONDITION.—The
term ‘emergency medical condition’ means a medical
condition manifesting itself by acute symptoms of suf-
ficient severity (including severe pain) such that a
prudent layperson, who possesses an average knowl-
edge of health and medicine, could reasonably expect
the absence of immediate medical attention to result
in placing the health of the participant or beneficiary
(or, with respect to a pregnant woman, the health of
the woman or her unborn child) in serious jeopardy,
serious impairment to bodily functions, or serious
dysfunction of any bodily organ or part.
‘‘SEC. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.
‘‘(a) REQUIREMENT.—If a group health plan (other
than a fully insured group health plan) provides coverage
for benefits only through a defined set of participating
health care professionals, the plan shall offer the participant
the option to purchase point-of-service coverage (as defined
in subsection (b)) for all such benefits for which coverage
is otherwise so limited. Such option shall be made available
to the participant at the time of enrollment under the plan
and at such other times as the plan offers the participant
a choice of coverage options.
‘‘(b) POINT-OF-SERVICE
COVERAGE
DEFINED.—In
this section, the term ‘point-of-service coverage’ means, with
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respect to benefits covered under a group health plan (other
than a fully insured group health plan), coverage of such
benefits when provided by a nonparticipating health care
professional.
‘‘(c) SMALL EMPLOYER EXEMPTION.—
‘‘(1) IN GENERAL.—This section shall not apply
to any group health plan (other than a fully insured
group health plan) of a small employer.
‘‘(2) SMALL EMPLOYER.—For purposes of para-
graph (1), the term ‘small employer’ means, in con-
nection with a group health plan (other than a fully
insured group health plan) with respect to a calendar
year and a plan year, an employer who employed an
average of at least 2 but not more than 50 employees
on business days during the preceding calendar year
and who employs at least 2 employees on the first day
of the plan year. For purposes of this paragraph, the
provisions of subparagraph (C) of section 712(c)(1)
shall apply in determining employer size.
‘‘(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed—
‘‘(1) as requiring coverage for benefits for a par-
ticular type of health care professional;
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‘‘(2) as requiring an employer to pay any costs
as a result of this section or to make equal contribu-
tions with respect to different health coverage options;
‘‘(3) as preventing a group health plan (other
than a fully insured group health plan) from impos-
ing higher premiums or cost-sharing on a participant
for the exercise of a point-of-service coverage option;
or
‘‘(4) to require that a group health plan (other
than a fully insured group health plan) include cov-
erage of health care professionals that the plan ex-
cludes because of fraud, quality of care, or other simi-
lar reasons with respect to such professionals.
‘‘SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECO-
LOGICAL CARE.
‘‘(a) GENERAL RIGHTS.—
‘‘(1) DIRECT ACCESS.—A group health plan de-
scribed in subsection (b) may not require authoriza-
tion or referral by the primary care provider de-
scribed in subsection (b)(2) in the case of a female
participant or beneficiary who seeks coverage for ob-
stetrical or gynecological care provided by a partici-
pating physician who specializes in obstetrics or gyn-
ecology.
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ization or a referral from a primary care provider in
order to obtain obstetrical or gynecological care from
a health care professional other than a physician if
the provision of obstetrical or gynecological care by
such professional is permitted by the group health
plan 
and 
consistent 
with 
State 
licensure,
credentialing, and scope of practice laws and regula-
tions; or
‘‘(5) to preclude the participant or beneficiary
described in subsection (a)(1) from designating a
health care professional other than a physician as a
primary care provider if such designation is per-
mitted by the group health plan and the treatment by
such professional is consistent with State licensure,
credentialing, and scope of practice laws and regula-
tions.
‘‘SEC. 724. ACCESS TO PEDIATRIC CARE.
‘‘(a) PEDIATRIC CARE.—If a group health plan (other
than a fully insured group health plan) requires or provides
for a participant or beneficiary to designate a participating
primary care provider for a child of such participant or
beneficiary, the plan shall permit the participant or bene-
ficiary to designate a physician who specializes in pediat-
rics as the child’s primary care provider if such provider
participates in the network of the plan.
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‘‘(b) RULES OF CONSTRUCTION.—With respect to the
child of a participant or beneficiary, nothing in subsection
(a) shall be construed to—
‘‘(1) require that the participant or beneficiary
obtain prior authorization or a referral from a pri-
mary care provider in order to obtain pediatric care
from a health care professional other than a physi-
cian if the provision of pediatric care by such profes-
sional is permitted by the plan and consistent with
State licensure, credentialing, and scope of practice
laws and regulations; or
‘‘(2) preclude the participant or beneficiary from
designating a health care professional other than a
physician as a primary care provider for the child if
such designation is permitted by the plan and the
treatment by such professional is consistent with
State licensure, credentialing, and scope of practice
laws.
‘‘SEC. 725. TIMELY ACCESS TO SPECIALISTS.
‘‘(a) TIMELY ACCESS.—
‘‘(1) IN GENERAL.—A group health plan (other
than a fully insured group health plan) shall ensure
that participants and beneficiaries receive timely cov-
erage for access to specialists who are appropriate to
the medical condition of the participant or bene-
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ficiary, when such specialty care is a covered benefit
under the plan.
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in
paragraph (1) shall be construed—
‘‘(A) to require the coverage under a group
health plan (other than a fully insured group
health plan) of benefits or services;
‘‘(B) to prohibit a plan from including pro-
viders in the network only to the extent necessary
to meet the needs of the plan’s participants and
beneficiaries;
‘‘(C) to prohibit a plan from establishing
measures designed to maintain quality and con-
trol costs consistent with the responsibilities of
the plan; or
‘‘(D) to override any State licensure or
scope-of-practice law.
‘‘(3) ACCESS TO CERTAIN PROVIDERS.—
‘‘(A) PARTICIPATING PROVIDERS.—Nothing
in this section shall be construed to prohibit a
group health plan (other than a fully insured
group health plan) from requiring that a partic-
ipant or beneficiary obtain specialty care from a
participating specialist.
‘‘(B) NONPARTICIPATING PROVIDERS.—
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‘‘(i) IN GENERAL.—With respect to spe-
cialty care under this section, if a group
health plan (other than a fully insured
group health plan) determines that a par-
ticipating specialist is not available to pro-
vide such care to the participant or bene-
ficiary, the plan shall provide for coverage
of such care by a nonparticipating spe-
cialist.
‘‘(ii) 
TREATMENT
OF
NONPARTICI-
PATING PROVIDERS.—If a group health plan
(other than a fully insured group health
plan) refers a participant or beneficiary to
a nonparticipating specialist pursuant to
clause (i), such specialty care shall be pro-
vided at no additional cost to the partici-
pant or beneficiary beyond what the partic-
ipant or beneficiary would otherwise pay
for such specialty care if provided by a par-
ticipating specialist.
‘‘(b) REFERRALS.—
‘‘(1) AUTHORIZATION.—Nothing in this section
shall be construed to prohibit a group health plan
(other than a fully insured group health plan) from
requiring an authorization in order to obtain cov-
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erage for specialty services so long as such authoriza-
tion is for an appropriate duration or number of re-
ferrals.
‘‘(2) REFERRALS FOR ONGOING SPECIAL CONDI-
TIONS.—
‘‘(A) IN GENERAL.—A group health plan
(other than a fully insured group health plan)
shall permit a participant or beneficiary who
has an ongoing special condition (as defined in
subparagraph (B)) to receive a referral to a spe-
cialist for the treatment of such condition and
such specialist may authorize such referrals, pro-
cedures, tests, and other medical services with re-
spect to such condition, or coordinate the care for
such condition, subject to the terms of a treat-
ment plan referred to in subsection (c) with re-
spect to the condition.
‘‘(B) ONGOING
SPECIAL
CONDITION
DE-
FINED.—In this subsection, the term ‘ongoing
special condition’ means a condition or disease
that—
‘‘(i) is life-threatening, degenerative, or
disabling; and
‘‘(ii) requires specialized medical care
over a prolonged period of time.
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‘‘(c) TREATMENT PLANS.—
‘‘(1) IN GENERAL.—Nothing in this section shall
be construed to prohibit a group health plan (other
than a fully insured group health plan) from requir-
ing that specialty care be provided pursuant to a
treatment plan so long as the treatment plan is—
‘‘(A) developed by the specialist, in con-
sultation with the case manager or primary care
provider, and the participant or beneficiary;
‘‘(B) approved by the plan in a timely
manner if the plan requires such approval; and
‘‘(C) in accordance with the applicable
quality assurance and utilization review stand-
ards of the plan.
‘‘(2) NOTIFICATION.—Nothing in paragraph (1)
shall be construed as prohibiting a plan from requir-
ing the specialist to provide the plan with regular up-
dates on the specialty care provided, as well as all
other necessary medical information.
‘‘(d) SPECIALIST DEFINED.—For purposes of this sec-
tion, the term ‘specialist’ means, with respect to the medical
condition of the participant or beneficiary, a health care
professional, facility, or center (such as a center of excel-
lence) that has adequate expertise (including age-appro-
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priate expertise) through appropriate training and experi-
ence.
‘‘(e) RIGHT TO EXTERNAL REVIEW.—Pursuant to the
requirements of section 503B, a participant or beneficiary
shall have the right to an independent external review if
the denial of an item or service or condition that is required
to be covered under this section is eligible for such review.
‘‘SEC. 726. CONTINUITY OF CARE.
‘‘(a) TERMINATION OF PROVIDER.—If a contract be-
tween a group health plan (other than a fully insured group
health plan) and a treating health care provider is termi-
nated (as defined in paragraph (e)(4)), or benefits or cov-
erage provided by a health care provider are terminated
because of a change in the terms of provider participation
in such plan, and an individual who is a participant or
beneficiary in the plan is undergoing an active course of
treatment for a serious and complex condition, institutional
care, pregnancy, or terminal illness from the provider at
the time the plan receives or provides notice of such termi-
nation, the plan shall—
‘‘(1) notify the individual, or arrange to have the
individual notified pursuant to subsection (d)(2), on
a timely basis of such termination;
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‘‘(2) provide the individual with an opportunity
to notify the plan of the individual’s need for transi-
tional care; and
‘‘(3) subject to subsection (c), permit the indi-
vidual to elect to continue to be covered with respect
to the active course of treatment with the provider’s
consent during a transitional period (as provided for
under subsection (b)).
‘‘(b) TRANSITIONAL PERIOD.—
‘‘(1) SERIOUS AND COMPLEX CONDITIONS.—The
transitional period under this section with respect to
a serious and complex condition shall extend for up
to 90 days from the date of the notice described in
subsection (a)(1) of the provider’s termination.
‘‘(2) INSTITUTIONAL OR INPATIENT CARE.—
‘‘(A) IN GENERAL.—The transitional period
under this section for institutional or non-elec-
tive inpatient care from a provider shall extend
until the earlier of—
‘‘(i) the expiration of the 90-day period
beginning on the date on which the notice
described in subsection (a)(1) of the pro-
vider’s termination is provided; or
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‘‘(ii) the date of discharge of the indi-
vidual from such care or the termination of
the period of institutionalization.
‘‘(B) SCHEDULED CARE.—The 90 day limi-
tation described in subparagraph (A)(i) shall in-
clude post-surgical follow-up care relating to
non-elective surgery that has been scheduled be-
fore the date of the notice of the termination of
the provider under subsection (a)(1).
‘‘(3) PREGNANCY.—If—
‘‘(A) a participant or beneficiary has en-
tered the second trimester of pregnancy at the
time of a provider’s termination of participa-
tion; and
‘‘(B) the provider was treating the preg-
nancy before the date of the termination;
the transitional period under this subsection with re-
spect to provider’s treatment of the pregnancy shall
extend through the provision of post-partum care di-
rectly related to the delivery.
‘‘(4) TERMINAL ILLNESS.—If—
‘‘(A) a participant or beneficiary was deter-
mined to be terminally ill (as determined under
section 1861(dd)(3)(A) of the Social Security
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Act) at the time of a provider’s termination of
participation; and
‘‘(B) the provider was treating the terminal
illness before the date of termination;
the transitional period under this subsection shall ex-
tend for the remainder of the individual’s life for care
that is directly related to the treatment of the ter-
minal illness.
‘‘(c) PERMISSIBLE TERMS AND CONDITIONS.—A group
health plan (other than a fully insured group health plan)
may condition coverage of continued treatment by a pro-
vider under this section upon the provider agreeing to the
following terms and conditions:
‘‘(1) The treating health care provider agrees to
accept reimbursement from the plan and individual
involved (with respect to cost-sharing) at the rates ap-
plicable prior to the start of the transitional period
as payment in full (or at the rates applicable under
the replacement plan after the date of the termination
of the contract with the group health plan) and not
to impose cost-sharing with respect to the individual
in an amount that would exceed the cost-sharing that
could have been imposed if the contract referred to in
this section had not been terminated.
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‘‘(2) The treating health care provider agrees to
adhere to the quality assurance standards of the plan
responsible for payment under paragraph (1) and to
provide to such plan necessary medical information
related to the care provided.
‘‘(3) The treating health care provider agrees
otherwise to adhere to such plan’s policies and proce-
dures, including procedures regarding referrals and
obtaining prior authorization and providing services
pursuant to a treatment plan (if any) approved by
the plan.
‘‘(d) RULES OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed—
‘‘(1) to require the coverage of benefits which
would not have been covered if the provider involved
remained a participating provider; or
‘‘(2) with respect to the termination of a contract
under subsection (a) to prevent a group health plan
from requiring that the health care provider—
‘‘(A) notify participants or beneficiaries of
their rights under this section; or
‘‘(B) provide the plan with the name of
each participant or beneficiary who the provider
believes is eligible for transitional care under
this section.
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‘‘(e) DEFINITIONS.—In this section:
‘‘(1) CONTRACT.—The term ‘contract between a
plan and a treating health care provider’ shall in-
clude a contract between such a plan and an orga-
nized network of providers.
‘‘(2) 
HEALTH
CARE
PROVIDER.—The 
term
‘health care provider’ or ‘provider’ means—
‘‘(A) any individual who is engaged in the
delivery of health care services in a State and
who is required by State law or regulation to be
licensed or certified by the State to engage in the
delivery of such services in the State; and
‘‘(B) any entity that is engaged in the de-
livery of health care services in a State and that,
if it is required by State law or regulation to be
licensed or certified by the State to engage in the
delivery of such services in the State, is so li-
censed.
‘‘(3) SERIOUS AND COMPLEX CONDITION.—The
term ‘serious and complex condition’ means, with re-
spect to a participant or beneficiary under the plan,
a condition that is medically determinable and—
‘‘(A) in the case of an acute illness, is a
condition serious enough to require specialized
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medical treatment to avoid the reasonable possi-
bility of death or permanent harm; or
‘‘(B) in the case of a chronic illness or con-
dition, is an illness or condition that—
‘‘(i) is complex and difficult to man-
age;
‘‘(ii) is disabling or life-threatening;
and
‘‘(iii) requires—
‘‘(I) frequent monitoring over a
prolonged period of time and requires
substantial on-going specialized med-
ical care; or
‘‘(II) frequent ongoing specialized
medical care across a variety of do-
mains of care.
‘‘(4) TERMINATED.—The term ‘terminated’ in-
cludes, with respect to a contract (as defined in para-
graph (1)), the expiration or nonrenewal of the con-
tract by the group health plan, but does not include
a termination of the contract by the plan for failure
to meet applicable quality standards or for fraud.
‘‘(f) RIGHT TO EXTERNAL REVIEW.—Pursuant to the
requirements of section 503B, a participant or beneficiary
shall have the right to an independent external review if
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the denial of an item or service or condition that is required
to be covered under this section is eligible for such review.
‘‘SEC. 727. PROTECTION OF PATIENT-PROVIDER COMMU-
NICATIONS.
‘‘(a) IN GENERAL.—Subject to subsection (b), a group
health plan (other than a fully insured group health plan
and in relation to a participant or beneficiary) shall not
prohibit or otherwise restrict a health care professional from
advising such a participant or beneficiary who is a patient
of the professional about the health status of the participant
or beneficiary or medical care or treatment for the condition
or disease of the participant or beneficiary, regardless of
whether coverage for such care or treatment are provided
under the contract, if the professional is acting within the
lawful scope of practice.
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed as requiring a group health plan
(other than a fully insured group health plan) to provide
specific benefits under the terms of such plan.
‘‘SEC. 728. PATIENT’S RIGHT TO PRESCRIPTION DRUGS.
‘‘(a) IN GENERAL.—To the extent that a group health
plan (other than a fully insured group health plan) pro-
vides coverage for benefits with respect to prescription
drugs, and limits such coverage to drugs included in a for-
mulary, the plan shall—
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‘‘(1) ensure the participation of physicians and
pharmacists in developing and reviewing such for-
mulary; and
‘‘(2) in accordance with the applicable quality
assurance and utilization review standards of the
plan, provide for exceptions from the formulary limi-
tation when a non-formulary alternative is medically
necessary and appropriate.
‘‘(b) RIGHT TO EXTERNAL REVIEW.—Pursuant to the
requirements of section 503B, a participant or beneficiary
shall have the right to an independent external review if
the denial of an item or service or condition that is required
to be covered under this section is eligible for such review.
‘‘SEC. 729. SELF-PAYMENT FOR BEHAVIORAL HEALTH CARE
SERVICES.
‘‘(a) IN GENERAL.—A group health plan (other than
a fully insured group health plan) may not—
‘‘(1) prohibit or otherwise discourage a partici-
pant or beneficiary from self-paying for behavioral
health care services once the plan has denied coverage
for such services; or
‘‘(2) terminate a health care provider because
such provider permits participants or beneficiaries to
self-pay for behavioral health care services—
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‘‘(A) that are not otherwise covered under
the plan; or
‘‘(B) for which the group health plan pro-
vides limited coverage, to the extent that the
group health plan denies coverage of the services.
‘‘(b) RULE OF CONSTRUCTION.—Nothing in subsection
(a)(2)(B) shall be construed as prohibiting a group health
plan from terminating a contract with a health care pro-
vider for failure to meet applicable quality standards or
for fraud.
‘‘SEC. 730. COVERAGE FOR INDIVIDUALS PARTICIPATING IN
APPROVED CANCER CLINICAL TRIALS.
‘‘(a) COVERAGE.—
‘‘(1) IN GENERAL.—If a group health plan (other
than a fully insured group health plan) provides cov-
erage to a qualified individual (as defined in sub-
section (b)), the plan—
‘‘(A) may not deny the individual partici-
pation in the clinical trial referred to in sub-
section (b)(2);
‘‘(B) subject to subsections (b), (c), and (d)
may not deny (or limit or impose additional
conditions on) the coverage of routine patient
costs for items and services furnished in connec-
tion with participation in the trial; and
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‘‘(C) may not discriminate against the in-
dividual on the basis of the participant’s or
beneficiaries participation in such trial.
‘‘(2) EXCLUSION OF CERTAIN COSTS.—For pur-
poses of paragraph (1)(B), routine patient costs do
not include the cost of the tests or measurements con-
ducted primarily for the purpose of the clinical trial
involved.
‘‘(3) USE OF IN-NETWORK PROVIDERS.—If one or
more participating providers is participating in a
clinical trial, nothing in paragraph (1) shall be con-
strued as preventing a plan from requiring that a
qualified individual participate in the trial through
such a participating provider if the provider will ac-
cept the individual as a participant in the trial.
‘‘(b) QUALIFIED INDIVIDUAL DEFINED.—For purposes
of subsection (a), the term ‘qualified individual’ means an
individual who is a participant or beneficiary in a group
health plan and who meets the following conditions:
‘‘(1)(A) The individual has been diagnosed with
cancer for which no standard treatment is effective.
‘‘(B) The individual is eligible to participate in
an approved clinical trial according to the trial pro-
tocol with respect to treatment of such illness.
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‘‘(2) STANDARDS
FOR
DETERMINING
ROUTINE
PATIENT
COSTS
ASSOCIATED
WITH
CLINICAL
TRIAL
PARTICIPATION.—
‘‘(A) IN GENERAL.—The Secretary shall, in
accordance with this paragraph, establish stand-
ards relating to the coverage of routine patient
costs for individuals participating in clinical
trials that group health plans must meet under
this section.
‘‘(B) FACTORS.—In establishing routine pa-
tient cost standards under subparagraph (A), the
Secretary shall consult with interested parties
and take into account —
‘‘(i) quality of patient care;
‘‘(ii) routine patient care costs versus
costs associated with the conduct of clinical
trials, including unanticipated patient care
costs as a result of participation in clinical
trials; and
‘‘(iii) previous and on-going studies re-
lating to patient care costs associated with
participation in clinical trials.
‘‘(C) APPOINTMENT AND MEETINGS OF NE-
GOTIATED RULEMAKING COMMITTEE.—
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‘‘(i) PUBLICATION
OF
NOTICE.—Not
later than November 15, 2000, the Secretary
shall publish notice of the establishment of
a negotiated rulemaking committee, as pro-
vided for under section 564(a) of title 5,
United States Code, to develop the stand-
ards described in subparagraph (A), which
shall include—
‘‘(I) the proposed scope of the
committee;
‘‘(II) the interests that may be
impacted by the standards;
‘‘(iii) a list of the proposed mem-
bership of the committee;
‘‘(iv) the proposed meeting sched-
ule of the committee;
‘‘(v) a solicitation for public com-
ment on the committee; and
‘‘(vi) the procedures under which
an individual may apply for member-
ship on the committee.
‘‘(ii) 
COMMENT
PERIOD.—Notwith-
standing section 564(c) of title 5, United
States Code, the Secretary shall provide for
a period, beginning on the date on which
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the notice is published under clause (i) and
ending on November 30, 2000, for the sub-
mission of public comments on the com-
mittee under this subparagraph.
‘‘(iii) APPOINTMENT OF COMMITTEE.—
Not later than December 30, 2000, the Sec-
retary shall appoint the members of the ne-
gotiated rulemaking committee under this
subparagraph.
‘‘(iv) FACILITATOR.—Not later than
January 10, 2001, the negotiated rule-
making 
committee 
shall 
nominate 
a
facilitator under section 566(c) of title 5,
United States Code, to carry out the activi-
ties described in subsection (d) of such sec-
tion.
‘‘(v) MEETINGS.—During the period
beginning on the date on which the
facilitator is nominated under clause (iv)
and ending on March 30, 2001, the nego-
tiated rulemaking committee shall meet to
develop the standards described in subpara-
graph (A).
‘‘(D) PRELIMINARY COMMITTEE REPORT.—
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‘‘(i) IN
GENERAL.—The negotiated
rulemaking committee appointed under sub-
paragraph (C) shall report to the Secretary,
by not later than March 30, 2001, regard-
ing the committee’s progress on achieving a
consensus with regard to the rulemaking
proceedings and whether such consensus is
likely to occur before the target date de-
scribed in subsection (F).
‘‘(ii) TERMINATION OF PROCESS AND
PUBLICATION OF RULE BY SECRETARY.—If
the committee reports under clause (i) that
the committee has failed to make significant
progress towards such consensus or is un-
likely to reach such consensus by the target
date described in subsection (F), the Sec-
retary shall terminate such process and pro-
vide for the publication in the Federal Reg-
ister, by not later than June 30, 2001, of a
rule under this paragraph through such
other methods as the Secretary may provide.
‘‘(E) FINAL COMMITTEE REPORT AND PUB-
LICATION OR RULE BY SECRETARY.—
‘‘(i) IN GENERAL.—If the rulemaking
committee is not terminated under subpara-
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graph (D)(ii), the committee shall submit to
the Secretary, by not later than May 30,
2001, a report containing a proposed rule.
‘‘(ii) PUBLICATION OF RULE.—If the
Secretary receives a report under clause (i),
the Secretary shall provide for the publica-
tion in the Federal Register, by not later
than June 30, 2001, of the proposed rule.
‘‘(F) TARGET DATE FOR PUBLICATION OF
RULE.—As part of the notice under subpara-
graph (C)(i), and for purposes of this paragraph,
the ‘target date for publication’ (referred to in
section 564(a)(5) of title 5, United States Code)
shall be June 30, 2001.
‘‘(G) EFFECTIVE DATE.—The provisions of
this paragraph shall apply to group health plans
(other than a fully insured group health plan)
for plan years beginning on or after January 1,
2002.
‘‘(3) PAYMENT
RATE.—In the case of covered
items and services provided by—
‘‘(A) a participating provider, the payment
rate shall be at the agreed upon rate, or
‘‘(B) a nonparticipating provider, the pay-
ment rate shall be at the rate the plan would
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normally pay for comparable services under sub-
paragraph (A).
‘‘(d) APPROVED CLINICAL TRIAL DEFINED.—
‘‘(1) IN GENERAL.—In this section, the term ‘ap-
proved clinical trial’ means a cancer clinical research
study or cancer clinical investigation approved or
funded (which may include funding through in-kind
contributions) by one or more of the following:
‘‘(A) The National Institutes of Health.
‘‘(B) A cooperative group or center of the
National Institutes of Health.
‘‘(C) The Food and Drug Administration.
‘‘(D) Either of the following if the condi-
tions described in paragraph (2) are met:
‘‘(i) The Department of Veterans Af-
fairs.
‘‘(ii) The Department of Defense.
‘‘(2) CONDITIONS FOR DEPARTMENTS.—The con-
ditions described in this paragraph, for a study or in-
vestigation conducted by a Department, are that the
study or investigation has been reviewed and ap-
proved through a system of peer review that the Sec-
retary determines—
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‘‘(A) to be comparable to the system of peer
review of studies and investigations used by the
National Institutes of Health, and
‘‘(B) assures unbiased review of the highest
scientific standards by qualified individuals who
have no interest in the outcome of the review.
‘‘(e) CONSTRUCTION.—Nothing in this section shall be
construed to limit a plan’s coverage with respect to clinical
trials.
‘‘(f) PLAN SATISFACTION OF CERTAIN REQUIREMENTS;
RESPONSIBILITIES OF FIDUCIARIES.—
‘‘(1) IN GENERAL.—For purposes of this section,
insofar as a group health plan provides benefits in the
form of health insurance coverage through a health in-
surance issuer, the plan shall be treated as meeting
the requirements of this section with respect to such
benefits and not be considered as failing to meet such
requirements because of a failure of the issuer to meet
such requirements so long as the plan sponsor or its
representatives did not cause such failure by the
issuer.
‘‘(2) CONSTRUCTION.—Nothing in this section
shall be construed to affect or modify the responsibil-
ities of the fiduciaries of a group health plan under
part 4 of subtitle B.
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‘‘(g) STUDY AND REPORT.—
‘‘(1) STUDY.—The Secretary shall study the im-
pact on group health plans for covering routine pa-
tient care costs for individuals who are entitled to
benefits under this section and who are enrolled in an
approved cancer clinical trial program.
‘‘(2) REPORT
TO
CONGRESS.—Not later than
January 1, 2005, the Secretary shall submit a report
to Congress that contains an assessment of—
‘‘(A) any incremental cost to group health
plans resulting from the provisions of this sec-
tion;
‘‘(B) a projection of expenditures to such
plans resulting from this section; and
‘‘(C) any impact on premiums resulting
from this section.
‘‘(h) RIGHT TO EXTERNAL REVIEW.—Pursuant to the
requirements of section 503B, a participant or beneficiary
shall have the right to an independent external review if
the denial of an item or service or condition that is required
to be covered under this section is eligible for such review.
‘‘SEC. 730A. PROHIBITION OF DISCRIMINATION AGAINST
PROVIDERS BASED ON LICENSURE.
‘‘(a) IN GENERAL.—A group health plan (other than
a fully insured group health plan) shall not discriminate
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with respect to participation or indemnification as to any
provider who is acting within the scope of the provider’s
license or certification under applicable State law, solely
on the basis of such license or certification.
‘‘(b) CONSTRUCTION.—Subsection (a) shall not be
construed—
‘‘(1) as requiring the coverage under a group
health plan of a particular benefit or service or to
prohibit a plan from including providers only to the
extent necessary to meet the needs of the plan’s par-
ticipants or beneficiaries or from establishing any
measure designed to maintain quality and control
costs consistent with the responsibilities of the plan;
‘‘(2) to override any State licensure or scope-of-
practice law; or
‘‘(3) as requiring a plan that offers network cov-
erage to include for participation every willing pro-
vider who meets the terms and conditions of the plan.
‘‘SEC. 730B. GENERALLY APPLICABLE PROVISION.
‘‘In the case of a group health plan that provides bene-
fits under 2 or more coverage options, the requirements of
this subpart shall apply separately with respect to each cov-
erage option.’’.
(b) RULE WITH RESPECT TO CERTAIN PLANS.—
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(1) IN
GENERAL.—Notwithstanding any other
provision of law, health insurance issuers may offer,
and eligible individuals may purchase, high deduct-
ible health plans described in section 220(c)(2)(A) of
the Internal Revenue Code of 1986. Effective for the
5-year period beginning on the date of the enactment
of this Act, such health plans shall not be required to
provide payment for any health care items or services
that are exempt from the plan’s deductible.
(2) EXISTING STATE LAWS.—A State law relat-
ing to payment for health care items and services in
effect on the date of enactment of this Act that is pre-
empted under paragraph (1), shall not apply to high
deductible health plans after the expiration of the 5-
year period described in such paragraph unless the
State reenacts such law after such period.
(c) DEFINITION.—Section 733(a) of the Employee Re-
tirement Income Security Act of 1974 (42 U.S.C. 1191(a))
is amended by adding at the end the following:
‘‘(3) FULLY INSURED GROUP HEALTH PLAN.—
The term ‘fully insured group health plan’ means a
group health plan where benefits under the plan are
provided pursuant to the terms of an arrangement be-
tween a group health plan and a health insurance
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issuer and are guaranteed by the health insurance
issuer under a contract or policy of insurance.’’.
(d) CONFORMING AMENDMENT.—The table of contents
in section 1 of the Employee Retirement Income Security
Act of 1974 is amended—
(1) in the item relating to subpart C of part 7
of subtitle B of title I, by striking ‘‘Subpart C’’ and
inserting ‘‘Subpart D’’; and
(2) by adding at the end of the items relating to
subpart B of part 7 of subtitle B of title I, the fol-
lowing:
‘‘SUBPART C—PATIENT RIGHT TO MEDICAL ADVICE AND CARE
‘‘Sec. 721. Access to emergency medical care.
‘‘Sec. 722. Offering of choice of coverage options.
‘‘Sec. 723. Patient access to obstetric and gynecological care.
‘‘Sec. 724. Access to pediatric care.
‘‘Sec. 725. Timely access to specialists.
‘‘Sec. 726. Continuity of care.
‘‘Sec. 727. Protection of patient-provider communications.
‘‘Sec. 728. Patient’s right to prescription drugs.
‘‘Sec. 729. Self-payment for behavioral health care services.
‘‘Sec. 730. Coverage for individuals participating in approved cancer clinical
trials.
‘‘Sec. 730A. Prohibition of discrimination against providers based on licensure.
‘‘Sec. 730B. Generally applicable provision.’’.
SEC. 2202. CONFORMING AMENDMENT TO THE INTERNAL
REVENUE CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue
Code of 1986 is amended—
(1) in the table of sections, by inserting after the
item relating to section 9812 the following new item:
‘‘Sec. 9813. Standard relating to patient’s bill of rights.’’;
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and
(2) by inserting after section 9812 the following:
‘‘SEC. 9813. STANDARD RELATING TO PATIENTS’ BILL OF
RIGHTS.
‘‘A group health plan (other than a fully insured group
health plan) shall comply with the requirements of subpart
C of part 7 of subtitle B of title I of the Employee Retire-
ment Income Security Act of 1974, as added by section 2201
of the Patients’ Bill of Rights Plus Act, and such require-
ments shall be deemed to be incorporated into this section.’’.
SEC. 2203. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL.—The amendments made by this sub-
title shall apply with respect to plan years beginning on
or after January 1 of the second calendar year following
the date of the enactment of this Act. The Secretary shall
issue all regulations necessary to carry out the amendments
made by this section before the effective date thereof.
(b) LIMITATION ON ENFORCEMENT ACTIONS.—No en-
forcement action shall be taken, pursuant to the amend-
ments made by this subtitle, against a group health plan
with respect to a violation of a requirement imposed by such
amendments before the date of issuance of regulations issued
in connection with such requirement, if the plan has sought
to comply in good faith with such requirement.
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Subtitle B—Right to Information
About Plans and Providers
SEC. 2211. INFORMATION ABOUT PLANS.
(a) EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974.—Subpart B of part 7 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by adding at the end the
following:
‘‘SEC. 714. HEALTH PLAN INFORMATION.
‘‘(a) REQUIREMENT—
‘‘(1) DISCLOSURE.—
‘‘(A) IN GENERAL.—A group health plan,
and a health insurance issuer that provides cov-
erage in connection with group health insurance
coverage, shall provide for the disclosure of the
information described in subsection (b) to par-
ticipants and beneficiaries—
‘‘(i) at the time of the initial enroll-
ment of the participant or beneficiary
under the plan or coverage;
‘‘(ii) 
on 
an 
annual 
basis 
after
enrollment—
‘‘(I) in conjunction with the elec-
tion period of the plan or coverage if
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the plan or coverage has such an elec-
tion period; or
‘‘(II) in the case of a plan or cov-
erage that does not have an election pe-
riod, in conjunction with the beginning
of the plan or coverage year; and
‘‘(iii) in the case of any material re-
duction to the benefits or information de-
scribed in paragraphs (1), (2) and (3) of
subsection (b), in the form of a summary
notice provided not later than the date on
which the reduction takes effect.
‘‘(B) PARTICIPANTS AND BENEFICIARIES.—
The disclosure required under subparagraph (A)
shall be provided—
‘‘(i) jointly to each participant and
beneficiary who reside at the same address;
or
‘‘(ii) in the case of a beneficiary who
does not reside at the same address as the
participant, separately to the participant
and such beneficiary.
‘‘(2) RULE OF CONSTRUCTION.—Nothing in this
section shall be construed to prevent a group health
plan sponsor and health insurance issuer from enter-
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ing into an agreement under which either the plan
sponsor or the issuer agrees to assume responsibility
for compliance with the requirements of this section,
in whole or in part, and the party delegating such re-
sponsibility is released from liability for compliance
with the requirements that are assumed by the other
party, to the extent the party delegating such respon-
sibility did not cause such noncompliance.
‘‘(3) PROVISION OF INFORMATION.—Information
shall be provided to participants and beneficiaries
under this section at the last known address main-
tained by the plan or issuer with respect to such par-
ticipants or beneficiaries, to the extent that such in-
formation is provided to participants or beneficiaries
via the United States Postal Service or other private
delivery service.
‘‘(b) REQUIRED INFORMATION.—The informational
materials to be distributed under this section shall include
for each option available under the group health plan or
health insurance coverage the following:
‘‘(1) BENEFITS.—A description of the covered
benefits, including—
‘‘(A) any in- and out-of-network benefits;
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‘‘(B) specific preventative services covered
under the plan or coverage if such services are
covered;
‘‘(C) any benefit limitations, including any
annual or lifetime benefit limits and any mone-
tary limits or limits on the number of visits,
days, or services, and any specific coverage ex-
clusions; and
‘‘(D) any definition of medical necessity
used in making coverage determinations by the
plan, issuer, or claims administrator.
‘‘(2) COST SHARING.—A description of any cost-
sharing requirements, including—
‘‘(A) any premiums, deductibles, coinsur-
ance, copayment amounts, and liability for bal-
ance billing above any reasonable and customary
charges, for which the participant or beneficiary
will be responsible under each option available
under the plan;
‘‘(B) any maximum out-of-pocket expense
for which the participant or beneficiary may be
liable;
‘‘(C) any cost-sharing requirements for out-
of-network benefits or services received from non-
participating providers; and
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‘‘(D) any additional cost-sharing or charges
for benefits and services that are furnished with-
out meeting applicable plan or coverage require-
ments, 
such 
as 
prior 
authorization 
or
precertification.
‘‘(3) SERVICE AREA.—A description of the plan
or issuer’s service area, including the provision of any
out-of-area coverage.
‘‘(4) PARTICIPATING PROVIDERS.—A directory of
participating providers (to the extent a plan or issuer
provides coverage through a network of providers)
that includes, at a minimum, the name, address, and
telephone number of each participating provider, and
information about how to inquire whether a partici-
pating provider is currently accepting new patients.
‘‘(5) CHOICE OF PRIMARY CARE PROVIDER.—A
description of any requirements and procedures to be
used by participants and beneficiaries in selecting,
accessing, or changing their primary care provider,
including providers both within and outside of the
network (if the plan or issuer permits out-of-network
services), and the right to select a pediatrician as a
primary care provider under section 724 for a partic-
ipant or beneficiary who is a child if such section ap-
plies.
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‘‘(6) PREAUTHORIZATION
REQUIREMENTS.—A
description of the requirements and procedures to be
used to obtain preauthorization for health services, if
such preauthorization is required.
‘‘(7) 
EXPERIMENTAL
AND
INVESTIGATIONAL
TREATMENTS.—A description of the process for deter-
mining whether a particular item, service, or treat-
ment is considered experimental or investigational,
and the circumstances under which such treatments
are covered by the plan or issuer.
‘‘(8) SPECIALTY CARE.—A description of the re-
quirements and procedures to be used by participants
and beneficiaries in accessing specialty care and ob-
taining referrals to participating and nonpartici-
pating specialists, including the right to timely cov-
erage for access to specialists care under section 725
if such section applies.
‘‘(9) CLINICAL TRIALS.—A description the cir-
cumstances and conditions under which participation
in clinical trials is covered under the terms and con-
ditions of the plan or coverage, and the right to ob-
tain coverage for approved cancer clinical trials
under section 729 if such section applies.
‘‘(10) PRESCRIPTION DRUGS.—To the extent the
plan or issuer provides coverage for prescription
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drugs, a statement of whether such coverage is limited
to drugs included in a formulary, a description of
any provisions and cost-sharing required for obtain-
ing on- and off-formulary medications, and a descrip-
tion of the rights of participants and beneficiaries in
obtaining access to access to prescription drugs under
section 727 if such section applies.
‘‘(11) EMERGENCY
SERVICES.—A summary of
the rules and procedures for accessing emergency serv-
ices, including the right of a participant or bene-
ficiary to obtain emergency services under the pru-
dent layperson standard under section 721, if such
section applies, and any educational information that
the plan or issuer may provide regarding the appro-
priate use of emergency services.
‘‘(12) CLAIMS AND APPEALS.—A description of
the plan or issuer’s rules and procedures pertaining
to claims and appeals, a description of the rights of
participants and beneficiaries under sections 503,
503A and 503B in obtaining covered benefits, filing
a claim for benefits, and appealing coverage decisions
internally and externally (including telephone num-
bers and mailing addresses of the appropriate author-
ity), and a description of any additional legal rights
and remedies available under section 502.
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‘‘(13) ADVANCE DIRECTIVES AND ORGAN DONA-
TION.—A description of procedures for advance direc-
tives and organ donation decisions if the plan or
issuer maintains such procedures.
‘‘(14) INFORMATION ON PLANS AND ISSUERS.—
The name, mailing address, and telephone number or
numbers of the plan administrator and the issuer to
be used by participants and beneficiaries seeking in-
formation about plan or coverage benefits and serv-
ices, payment of a claim, or authorization for services
and treatment. The name of the designated decision-
maker (or decision-makers) appointed under section
502(n)(2) for purposes of making final determina-
tions under section 503A and approving coverage
pursuant to the written determination of an inde-
pendent medical reviewer under section 503B. Notice
of whether the benefits under the plan are provided
under a contract or policy of insurance issued by an
issuer, or whether benefits are provided directly by the
plan sponsor who bears the insurance risk.
‘‘(15) TRANSLATION SERVICES.—A summary de-
scription of any translation or interpretation services
(including the availability of printed information in
languages other than English, audio tapes, or infor-
mation in Braille) that are available for non-English
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speakers and participants and beneficiaries with com-
munication disabilities and a description of how to
access these items or services.
‘‘(16) ACCREDITATION INFORMATION.—Any in-
formation that is made public by accrediting organi-
zations in the process of accreditation if the plan or
issuer is accredited, or any additional quality indica-
tors (such as the results of enrollee satisfaction sur-
veys) that the plan or issuer makes public or makes
available to participants and beneficiaries.
‘‘(17) NOTICE OF REQUIREMENTS.—A descrip-
tion of any rights of participants and beneficiaries
that are established by the Patients’ Bill of Rights
Plus Act (excluding those described in paragraphs (1)
through (16)) if such sections apply. The description
required under this paragraph may be combined with
the notices required under sections 711(d), 713(b), or
606(a)(1), and with any other notice provision that
the Secretary determines may be combined.
‘‘(18) AVAILABILITY
OF
ADDITIONAL
INFORMA-
TION.—A statement that the information described in
subsection (c), and instructions on obtaining such in-
formation (including telephone numbers and, if avail-
able, Internet websites), shall be made available upon
request.
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‘‘(c) ADDITIONAL INFORMATION.—The informational
materials to be provided upon the request of a participant
or beneficiary shall include for each option available under
a group health plan or health insurance coverage the fol-
lowing:
‘‘(1) STATUS OF PROVIDERS.—The State licen-
sure status of the plan or issuer’s participating health
care professionals and participating health care fa-
cilities, and, if available, the education, training, spe-
cialty qualifications or certifications of such profes-
sionals.
‘‘(2) COMPENSATION METHODS.—A summary de-
scription of the methods (such as capitation, fee-for-
service, salary, bundled payments, per diem, or a
combination thereof) used for compensating partici-
pating health care professionals (including primary
care providers and specialists) and facilities in con-
nection with the provision of health care under the
plan or coverage. The requirement of this paragraph
shall not be construed as requiring plans or issuers to
provide information concerning proprietary payment
methodology.
‘‘(3) PRESCRIPTION DRUGS.—Information about
whether a specific prescription medication is included
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in the formulary of the plan or issuer, if the plan or
issuer uses a defined formulary.
‘‘(4) EXTERNAL APPEALS INFORMATION.—Aggre-
gate information on the number and outcomes of ex-
ternal medical reviews, relative to the sample size
(such as the number of covered lives) determined for
the plan or issuer’s book of business.
‘‘(d) MANNER OF DISCLOSURE.—The information de-
scribed in this section shall be disclosed in an accessible me-
dium and format that is calculated to be understood by the
average participant.
‘‘(e) RULES OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit a group health plan, or
a health insurance issuer in connection with group health
insurance coverage, from—
‘‘(1) distributing any other additional informa-
tion determined by the plan or issuer to be important
or necessary in assisting participants and bene-
ficiaries in the selection of a health plan; and
‘‘(2) complying with the provisions of this sec-
tion by providing information in brochures, through
the Internet or other electronic media, or through
other similar means, so long as participants and
beneficiaries are provided with an opportunity to re-
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quest that informational materials be provided in
printed form.
‘‘(f) CONFORMING REGULATIONS.—The Secretary shall
issue regulations to coordinate the requirements on group
health plans and health insurance issuers under this section
with the requirements imposed under part 1, to reduce du-
plication with respect to any information that is required
to be provided under any such requirements.
‘‘(g) SECRETARIAL ENFORCEMENT AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary may assess a
civil monetary penalty against the administrator of
a plan or issuer in connection with the failure of the
plan or issuer to comply with the requirements of this
section.
‘‘(2) AMOUNT OF PENALTY.—
‘‘(A) IN GENERAL.—The amount of the pen-
alty to be imposed under paragraph (1) shall not
exceed $100 for each day for each participant
and beneficiary with respect to which the failure
to comply with the requirements of this section
occurs.
‘‘(B) INCREASE IN AMOUNT.—The amount
referred to in subparagraph (A) shall be in-
creased or decreased, for each calendar year that
ends after December 31, 2000, by the same per-
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centage as the percentage by which the medical
care expenditure category of the Consumer Price
Index for All Urban Consumers (United States
city average), published by the Bureau of Labor
Statistics, for September of the preceding cal-
endar year has increased or decreased from the
such Index for September of 2000.
‘‘(3) FAILURE DEFINED.—For purposes of this
subsection, a plan or issuer shall have failed to com-
ply with the requirements of this section with respect
to a participant or beneficiary if the plan or issuer
failed or refused to comply with the requirements of
this section within 30 days—
‘‘(A) of the date described in subsection
(a)(1)(A)(i);
‘‘(B) of the date described in subsection
(a)(1)(A)(ii); or
‘‘(C) of the date on which additional infor-
mation was requested under subsection (c).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 732(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1191a(a)) is
amended by striking ‘‘section 711’’ and inserting
‘‘sections 711 and 714’’.
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(2) The table of contents in section 1 of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1001) is amended by inserting after the item
relating to section 713, the following:
‘‘Sec 714. Health plan comparative information.’’.
(3) Section 502(b)(3) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1132(b)(3)) is amended by striking ‘‘733(a)(1))’’ and
inserting ‘‘733(a)(1)), except with respect to the re-
quirements of section 714’’.
SEC. 2212. INFORMATION ABOUT PROVIDERS.
(a) STUDY.—The Secretary of Health and Human
Services shall enter into a contract with the Institute of
Medicine for the conduct of a study, and the submission
to the Secretary of a report, that includes—
(1) an analysis of information concerning health
care professionals that is currently available to pa-
tients, consumers, States, and professional societies,
nationally and on a State-by-State basis, including
patient preferences with respect to information about
such professionals and their competencies;
(2) an evaluation of the legal and other barriers
to the sharing of information concerning health care
professionals; and
(3) recommendations for the disclosure of infor-
mation on health care professionals, including the
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competencies and professional qualifications of such
practitioners, to better facilitate patient choice, qual-
ity improvement, and market competition.
(b) REPORT.—Not later than 18 months after the date
of enactment of this Act, the Secretary of Health and
Human Services shall forward to the appropriate commit-
tees of Congress a copy of the report and study conducted
under subsection (a).
Subtitle C—Right to Hold Health
Plans Accountable
SEC. 2221. AMENDMENTS TO EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.
(a) IN GENERAL.—Part 5 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 is
amended by inserting after section 503 (29 U.S.C. 1133)
the following:
‘‘SEC. 503A. CLAIMS AND INTERNAL APPEALS PROCEDURES
FOR GROUP HEALTH PLANS.
‘‘(a) INITIAL CLAIM FOR BENEFITS UNDER GROUP
HEALTH PLANS.—
‘‘(1) PROCEDURES.—
‘‘(A) IN GENERAL.—A group health plan, or
health insurance issuer offering health insurance
coverage in connection with a group health plan,
shall ensure that procedures are in place for—
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‘‘(i) making a determination on an
initial claim for benefits by a participant
or beneficiary (or authorized representative)
regarding payment or coverage for items or
services under the terms and conditions of
the plan or coverage involved, including
any cost-sharing amount that the partici-
pant or beneficiary is required to pay with
respect to such claim for benefits; and
‘‘(ii) notifying a participant or bene-
ficiary (or authorized representative) and
the treating health care professional in-
volved regarding a determination on an ini-
tial claim for benefits made under the terms
and conditions of the plan or coverage, in-
cluding any cost-sharing amounts that the
participant or beneficiary may be required
to make with respect to such claim for bene-
fits, and of the right of the participant or
beneficiary to an internal appeal under
subsection (b).
‘‘(B) ACCESS TO INFORMATION.—With re-
spect to an initial claim for benefits, the partici-
pant or beneficiary (or authorized representa-
tive) and the treating health care professional (if
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any) shall provide the plan or issuer with access
to information necessary to make a determina-
tion relating to the claim, not later than 5 busi-
ness days after the date on which the claim is
filed or to meet the applicable timelines under
clauses (ii) and (iii) of paragraph (2)(A).
‘‘(C) ORAL REQUESTS.—In the case of a
claim for benefits involving an expedited or con-
current determination, a participant or bene-
ficiary (or authorized representative) may make
an initial claim for benefits orally, but a group
health plan, or health insurance issuer offering
health insurance coverage in connection with a
group health plan, may require that the partici-
pant or beneficiary (or authorized representa-
tive) provide written confirmation of such re-
quest in a timely manner.
‘‘(2) TIMELINE FOR MAKING DETERMINATIONS.—
‘‘(A) PRIOR
AUTHORIZATION
DETERMINA-
TION.—
‘‘(i) IN
GENERAL.—A group health
plan, or health insurance issuer offering
health insurance coverage in connection
with a group health plan, shall maintain
procedures to ensure that a prior authoriza-
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tion determination on a claim for benefits
is made within 14 business days from the
date on which the plan or issuer receives in-
formation that is reasonably necessary to
enable the plan or issuer to make a deter-
mination on the request for prior authoriza-
tion, but in no case shall such determina-
tion be made later than 28 business days
after the receipt of the claim for benefits.
‘‘(ii) EXPEDITED
DETERMINATION.—
Notwithstanding clause (i), a group health
plan, or health insurance issuer offering
health insurance coverage in connection
with a group health plan, shall maintain
procedures for expediting a prior authoriza-
tion determination on a claim for benefits
described in such clause when a request for
such an expedited determination is made by
a participant or beneficiary (or authorized
representative) at any time during the proc-
ess for making a determination and the
treating health care professional substan-
tiates, with the request, that a determina-
tion under the procedures described in
clause (i) would seriously jeopardize the life
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or health of the participant or beneficiary.
Such determination shall be made within
72 hours after a request is received by the
plan or issuer under this clause.
‘‘(iii) 
CONCURRENT
DETERMINA-
TIONS.—A group health plan, or health in-
surance issuer offering health insurance cov-
erage in connection with a group health
plan, shall maintain procedures to ensure
that a concurrent determination on a claim
for benefits that results in a discontinuation
of inpatient care is made within 24 hours
after the receipt of the claim for benefits.
‘‘(B) RETROSPECTIVE DETERMINATION.—A
group health plan, or health insurance issuer of-
fering health insurance coverage in connection
with a group health plan, shall maintain proce-
dures to ensure that a retrospective determina-
tion on a claim for benefits is made within 30
business days of the date on which the plan or
issuer receives information that is reasonably
necessary to enable the plan or issuer to make a
determination on the claim, but in no case shall
such determination be made later than 60 busi-
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ness days after the receipt of the claim for bene-
fits.
‘‘(3) NOTICE OF A DENIAL OF A CLAIM FOR BEN-
EFITS.—Written notice of a denial made under an
initial claim for benefits shall be issued to the partici-
pant or beneficiary (or authorized representative) and
the treating health care professional not later than 2
business days after the determination (or within the
72-hour or 24-hour period referred to in clauses (ii)
and (iii) of paragraph (2)(A) if applicable).
‘‘(4) REQUIREMENTS OF NOTICE OF DETERMINA-
TIONS.—The written notice of a denial of a claim for
benefits determination under paragraph (3) shall
include—
‘‘(A) the reasons for the determination (in-
cluding a summary of the clinical or scientific-
evidence based rationale used in making the de-
termination and instruction on obtaining a
more complete description written in a manner
calculated to be understood by the average par-
ticipant);
‘‘(B) the procedures for obtaining addi-
tional information concerning the determination;
and
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‘‘(C) notification of the right to appeal the
determination and instructions on how to ini-
tiate an appeal in accordance with subsection
(b).
‘‘(b) INTERNAL APPEAL OF A DENIAL OF A CLAIM FOR
BENEFITS.—
‘‘(1) RIGHT TO INTERNAL APPEAL.—
‘‘(A) IN GENERAL.—A participant or bene-
ficiary (or authorized representative) may ap-
peal any denial of a claim for benefits under
subsection (a) under the procedures described in
this subsection.
‘‘(B) TIME FOR APPEAL.—A group health
plan, or health insurance issuer offering health
insurance coverage in connection with a group
health plan, shall ensure that a participant or
beneficiary (or authorized representative) has a
period of not less than 60 days beginning on the
date of a denial of a claim for benefits under
subsection (a) in which to appeal such denial
under this subsection.
‘‘(C) FAILURE TO ACT.—The failure of a
plan or issuer to issue a determination on a
claim for benefits under subsection (a) within the
applicable timeline established for such a deter-
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mination under such subsection shall be treated
as a denial of a claim for benefits for purposes
of proceeding to internal review under this sub-
section.
‘‘(D) PLAN
WAIVER
OF
INTERNAL
RE-
VIEW.—A group health plan, or health insurance
issuer offering health insurance coverage in con-
nection with a group health plan, may waive the
internal review process under this subsection and
permit a participant or beneficiary (or author-
ized representative) to proceed directly to exter-
nal review under section 503B.
‘‘(2) 
TIMELINES
FOR
MAKING
DETERMINA-
TIONS.—
‘‘(A) ORAL REQUESTS.—In the case of an
appeal of a denial of a claim for benefits under
this subsection that involves an expedited or con-
current determination, a participant or bene-
ficiary (or authorized representative) may re-
quest such appeal orally, but a group health
plan, or health insurance issuer offering health
insurance coverage in connection with a group
health plan, may require that the participant or
beneficiary (or authorized representative) pro-
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vide written confirmation of such request in a
timely manner.
‘‘(B) ACCESS TO INFORMATION.—With re-
spect to an appeal of a denial of a claim for ben-
efits, the participant or beneficiary (or author-
ized representative) and the treating health care
professional (if any) shall provide the plan or
issuer with access to information necessary to
make a determination relating to the appeal, not
later than 5 business days after the date on
which the request for the appeal is filed or to
meet the applicable timelines under clauses (ii)
and (iii) of subparagraph (C).
‘‘(C) PRIOR
AUTHORIZATION
DETERMINA-
TIONS.—
‘‘(i) IN
GENERAL.—A group health
plan, or health insurance issuer offering
health insurance coverage in connection
with a group health plan, shall maintain
procedures to ensure that a determination
on an appeal of a denial of a claim for ben-
efits under this subsection is made within
14 business days after the date on which the
plan or issuer receives information that is
reasonably necessary to enable the plan or
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issuer to make a determination on the ap-
peal, but in no case shall such determina-
tion be made later than 28 business days
after the receipt of the request for the ap-
peal.
‘‘(ii) EXPEDITED
DETERMINATION.—
Notwithstanding clause (i), a group health
plan, or health insurance issuer offering
health insurance coverage in connection
with a group health plan, shall maintain
procedures for expediting a prior authoriza-
tion determination on an appeal of a denial
of a claim for benefits described in clause
(i), when a request for such an expedited de-
termination is made by a participant or
beneficiary (or authorized representative) at
any time during the process for making a
determination and the treating health care
professional substantiates, with the request,
that a determination under the procedures
described in clause (i) would seriously jeop-
ardize the life or health of the participant
or beneficiary. Such determination shall be
made not later than 72 hours after the re-
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quest for such appeal is received by the plan
or issuer under this clause.
‘‘(iii) 
CONCURRENT
DETERMINA-
TIONS.—A group health plan, or health in-
surance issuer offering health insurance cov-
erage in connection with a group health
plan, shall maintain procedures to ensure
that a concurrent determination on an ap-
peal of a denial of a claim for benefits that
results in a discontinuation of inpatient
care is made within 24 hours after the re-
ceipt of the request for appeal.
‘‘(B) RETROSPECTIVE DETERMINATION.—A
group health plan, or health insurance issuer of-
fering health insurance coverage in connection
with a group health plan, shall maintain proce-
dures to ensure that a retrospective determina-
tion on an appeal of a claim for benefits is made
within 30 business days of the date on which the
plan or issuer receives necessary information
that is reasonably required by the plan or issuer
to make a determination on the appeal, but in
no case shall such determination be made later
than 60 business days after the receipt of the re-
quest for the appeal.
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‘‘(3) CONDUCT OF REVIEW.—
‘‘(A) IN GENERAL.—A review of a denial of
a claim for benefits under this subsection shall be
conducted by an individual with appropriate ex-
pertise who was not directly involved in the ini-
tial determination.
‘‘(B) REVIEW OF MEDICAL DECISIONS BY
PHYSICIANS.—A review of an appeal of a denial
of a claim for benefits that is based on a lack of
medical necessity and appropriateness, or based
on an experimental or investigational treatment,
or requires an evaluation of medical facts, shall
be made by a physician with appropriate exper-
tise, including age-appropriate expertise, who
was not involved in the initial determination.
‘‘(4) NOTICE OF DETERMINATION.—
‘‘(A) IN GENERAL.—Written notice of a de-
termination made under an internal appeal of a
denial of a claim for benefits shall be issued to
the participant or beneficiary (or authorized rep-
resentative) and the treating health care profes-
sional not later than 2 business days after the
completion of the review (or within the 72-hour
or 24-hour period referred to in paragraph (2)
if applicable).
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‘‘(B) FINAL DETERMINATION.—The decision
by a plan or issuer under this subsection shall
be treated as the final determination of the plan
or issuer on a denial of a claim for benefits. The
failure of a plan or issuer to issue a determina-
tion on an appeal of a denial of a claim for ben-
efits under this subsection within the applicable
timeline established for such a determination
shall be treated as a final determination on an
appeal of a denial of a claim for benefits for
purposes of proceeding to external review under
section 503B.
‘‘(C) REQUIREMENTS OF NOTICE.—With re-
spect to a determination made under this sub-
section, the notice described in subparagraph (A)
shall include—
‘‘(i) the reasons for the determination
(including a summary of the clinical or sci-
entific-evidence based rationale used in
making the determination and instruction
on obtaining a more complete description
written in a manner calculated to be under-
stood by the average participant);
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‘‘(ii) the procedures for obtaining addi-
tional information concerning the deter-
mination; and
‘‘(iii) notification of the right to an
independent external review under section
503B and instructions on how to initiate
such a review.
‘‘(c) DEFINITIONS.—The definitions contained in sec-
tion 503B(i) shall apply for purposes of this section.
‘‘SEC. 503B. INDEPENDENT EXTERNAL APPEALS PROCE-
DURES FOR GROUP HEALTH PLANS.
‘‘(a) RIGHT TO EXTERNAL APPEAL.—A group health
plan, and a health insurance issuer offering health insur-
ance coverage in connection with a group health plan, shall
provide in accordance with this section participants and
beneficiaries (or authorized representatives) with access to
an independent external review for any denial of a claim
for benefits.
‘‘(b) INITIATION
OF
THE INDEPENDENT EXTERNAL
REVIEW PROCESS.—
‘‘(1) TIME
TO
FILE.—A request for an inde-
pendent external review under this section shall be
filed with the plan or issuer not later than 60 busi-
ness days after the date on which the participant or
beneficiary receives notice of the denial under section
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503A(b)(4) or the date on which the internal review
is waived by the plan or issuer under section
503A(b)(1)(D).
‘‘(2) FILING OF REQUEST.—
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this subsection, a group
health plan, and a health insurance issuer offer-
ing health insurance coverage in connection with
a group health plan, may—
‘‘(i) except as provided in subpara-
graph (B)(i), require that a request for re-
view be in writing;
‘‘(ii) limit the filing of such a request
to the participant or beneficiary involved
(or an authorized representative);
‘‘(iii) except if waived by the plan or
issuer under section 503A(b)(1)(D), condi-
tion access to an independent external re-
view under this section upon a final deter-
mination of a denial of a claim for benefits
under the internal review procedure under
section 503A;
‘‘(iv) except as provided in subpara-
graph (B)(ii), require payment of a filing
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fee to the plan or issuer of a sum that does
not exceed $50; and
‘‘(v) require that a request for review
include the consent of the participant or
beneficiary (or authorized representative)
for the release of medical information or
records of the participant or beneficiary to
the qualified external review entity for pur-
poses of conducting external review activi-
ties.
‘‘(B) REQUIREMENTS AND EXCEPTION RE-
LATING TO GENERAL RULE.—
‘‘(i) ORAL
REQUESTS
PERMITTED
IN
EXPEDITED
OR
CONCURRENT
CASES.—In
the case of an expedited or concurrent exter-
nal review as provided for under subsection
(e), the request may be made orally. In such
case a written confirmation of such request
shall be made in a timely manner. Such
written confirmation shall be treated as a
consent 
for 
purposes 
of 
subparagraph
(A)(v).
‘‘(ii) EXCEPTION TO FILING FEE RE-
QUIREMENT.—
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‘‘(I) INDIGENCY.—Payment of a
filing fee shall not be required under
subparagraph (A)(iv) where there is a
certification (in a form and manner
specified in guidelines established by
the Secretary) that the participant or
beneficiary is indigent (as defined in
such guidelines). In establishing guide-
lines under this subclause, the Sec-
retary shall ensure that the guidelines
relating to indigency are consistent
with the poverty guidelines used by the
Secretary of Health and Human Serv-
ices under title XIX of the Social Secu-
rity Act.
‘‘(II) FEE NOT REQUIRED.—Pay-
ment of a filing fee shall not be re-
quired under subparagraph (A)(iv) if
the plan or issuer waives the internal
appeals 
process 
under 
section
503A(b)(1)(D).
‘‘(III) REFUNDING OF FEE.—The
filing fee paid under subparagraph
(A)(iv) shall be refunded if the deter-
mination under the independent exter-
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nal review is to reverse the denial
which is the subject of the review.
‘‘(IV) INCREASE
IN
AMOUNT.—
The amount referred to in subclause (I)
shall be increased or decreased, for each
calendar year that ends after December
31, 2001, by the same percentage as the
percentage by which the Consumer
Price Index for All Urban Consumers
(United States city average), published
by the Bureau of Labor Statistics, for
September of the preceding calendar
year has increased or decreased from
the such Index for September of 2001.
‘‘(c) REFERRAL TO QUALIFIED EXTERNAL REVIEW
ENTITY UPON REQUEST.—
‘‘(1) IN GENERAL.—Upon the filing of a request
for independent external review with the group health
plan, or health insurance issuer offering coverage in
connection with a group health plan, the plan or
issuer shall refer such request to a qualified external
review entity selected in accordance with this section.
‘‘(2) ACCESS TO PLAN OR ISSUER AND HEALTH
PROFESSIONAL
INFORMATION.—With respect to an
independent external review conducted under this sec-
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tion, the participant or beneficiary (or authorized
representative), the plan or issuer, and the treating
health care professional (if any) shall provide the ex-
ternal review entity with access to information that
is necessary to conduct a review under this section, as
determined by the entity, not later than 5 business
days after the date on which a request is referred to
the qualified external review entity under paragraph
(1), or earlier as determined appropriate by the enti-
ty to meet the applicable timelines under clauses (ii)
and (iii) of subsection (e)(1)(A).
‘‘(3) SCREENING OF REQUESTS BY QUALIFIED
EXTERNAL REVIEW ENTITIES.—
‘‘(A) IN GENERAL.—With respect to a re-
quest referred to a qualified external review enti-
ty under paragraph (1) relating to a denial of
a claim for benefits, the entity shall refer such
request for the conduct of an independent med-
ical review unless the entity determines that—
‘‘(i) any of the conditions described in
subsection (b)(2)(A) have not been met;
‘‘(ii) the thresholds described in sub-
paragraph (B) have not been met;
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‘‘(iii) the denial of the claim for bene-
fits does not involve a medically reviewable
decision under subsection (d)(2);
‘‘(iv) the denial of the claim for bene-
fits relates to a decision regarding whether
an individual is a participant or bene-
ficiary who is enrolled under the terms of
the plan or coverage (including the applica-
bility of any waiting period under the plan
or coverage); or
‘‘(v) the denial of the claim for benefits
is a decision as to the application of cost-
sharing requirements or the application of a
specific exclusion or express limitation on
the amount, duration, or scope of coverage
of items or services under the terms and
conditions of the plan or coverage unless the
decision is a denial described in subsection
(d)(2)(C);
Upon making a determination that any of
clauses (i) through (v) applies with respect to the
request, the entity shall determine that the denial
of a claim for benefits involved is not eligible for
independent medical review under subsection (d),
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and shall provide notice in accordance with sub-
paragraph (D).
‘‘(B) THRESHOLDS.—
‘‘(i) IN GENERAL.—The thresholds de-
scribed in this subparagraph are that—
‘‘(I) the total amount payable
under the plan or coverage for the item
or service that was the subject of such
denial exceeds a significant financial
threshold (as determined under guide-
lines established by the Secretary); or
‘‘(II) a physician has asserted in
writing that there is a significant risk
of placing the life, health, or develop-
ment of the participant or beneficiary
in jeopardy if the denial of the claim
for benefits is sustained.
‘‘(ii) THRESHOLDS
NOT
APPLIED.—
The thresholds described in this subpara-
graph shall not apply if the plan or issuer
involved waives the internal appeals process
with respect to the denial of a claim for
benefits 
involved 
under 
section
503A(b)(1)(D).
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‘‘(C) PROCESS
FOR
MAKING
DETERMINA-
TIONS.—
‘‘(i) NO DEFERENCE TO PRIOR DETER-
MINATIONS.—In 
making 
determinations
under subparagraph (A), there shall be no
deference given to determinations made by
the plan or issuer under section 503A or the
recommendation of a treating health care
professional (if any).
‘‘(ii) USE
OF
APPROPRIATE
PER-
SONNEL.—A qualified external review entity
shall use appropriately qualified personnel
to make determinations under this section.
‘‘(D) NOTICES
AND
GENERAL
TIMELINES
FOR DETERMINATION.—
‘‘(i) NOTICE IN CASE OF DENIAL OF
REFERRAL.—If the entity under this para-
graph does not make a referral to an inde-
pendent medical reviewer, the entity shall
provide notice to the plan or issuer, the par-
ticipant or beneficiary (or authorized rep-
resentative) filing the request, and the treat-
ing health care professional (if any) that
the denial is not subject to independent
medical review. Such notice—
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‘‘(I) shall be written (and, in ad-
dition, may be provided orally) in a
manner calculated to be understood by
an average participant;
‘‘(II) shall include the reasons for
the determination; and
‘‘(III) include any relevant terms
and conditions of the plan or coverage.
‘‘(ii) GENERAL TIMELINE FOR DETER-
MINATIONS.—Upon receipt of information
under paragraph (2), the qualified external
review entity, and if required the inde-
pendent medical reviewer, shall make a de-
termination within the overall timeline that
is applicable to the case under review as de-
scribed in subsection (e), except that if the
entity determines that a referral to an inde-
pendent medical reviewer is not required,
the entity shall provide notice of such deter-
mination to the participant or beneficiary
(or authorized representative) within 2
business days of such determination.
‘‘(d) INDEPENDENT MEDICAL REVIEW.—
‘‘(1) IN GENERAL.—If a qualified external review
entity determines under subsection (c) that a denial
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of a claim for benefits is eligible for independent med-
ical review, the entity shall refer the denial involved
to an independent medical reviewer for the conduct of
an independent medical review under this subsection.
‘‘(2) MEDICALLY
REVIEWABLE
DECISIONS.—A
denial described in this paragraph is one for which
the item or service that is the subject of the denial
would be a covered benefit under the terms and condi-
tions of the plan or coverage but for one (or more) of
the following determinations:
‘‘(A) DENIALS BASED ON MEDICAL NECES-
SITY AND APPROPRIATENESS.—The basis of the
determination is that the item or service is not
medically necessary and appropriate.
‘‘(B) DENIALS
BASED
ON
EXPERIMENTAL
OR INVESTIGATIONAL TREATMENT.—The basis of
the determination is that the item or service is
experimental or investigational.
‘‘(C) DENIALS
OTHERWISE
BASED
ON
AN
EVALUATION OF MEDICAL FACTS.—A determina-
tion that the item or service or condition is not
covered but an evaluation of the medical facts by
a health care professional in the specific case in-
volved is necessary to determine whether the item
or service or condition is required to be provided
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under the terms and conditions of the plan or
coverage.
‘‘(3) INDEPENDENT
MEDICAL
REVIEW
DETER-
MINATION.—
‘‘(A) IN GENERAL.—An independent med-
ical reviewer under this section shall make a new
independent determination with respect to—
‘‘(i) whether the item or service or con-
dition that is the subject of the denial is
covered under the terms and conditions of
the plan or coverage; and
‘‘(ii) based upon an affirmative deter-
mination under clause (i), whether or not
the denial of a claim for a benefit that is
the subject of the review should be upheld or
reversed.
‘‘(B) STANDARD FOR DETERMINATION.—The
independent medical reviewer’s determination re-
lating to the medical necessity and appropriate-
ness, or the experimental or investigation nature,
or the evaluation of the medical facts of the item,
service, or condition shall be based on the med-
ical condition of the participant or beneficiary
(including the medical records of the participant
or beneficiary) and the valid, relevant scientific
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evidence and clinical evidence, including peer-re-
viewed medical literature or findings and in-
cluding expert consensus.
‘‘(C) NO COVERAGE FOR EXCLUDED BENE-
FITS.—Nothing in this subsection shall be con-
strued to permit an independent medical re-
viewer to require that a group health plan, or
health insurance issuer offering health insurance
coverage in connection with a group health plan,
provide coverage for items or services that are
specifically excluded or expressly limited under
the plan or coverage and that are not covered re-
gardless of any determination relating to med-
ical necessity and appropriateness, experimental
or investigational nature of the treatment, or an
evaluation of the medical facts in the case in-
volved.
‘‘(D) EVIDENCE AND INFORMATION TO BE
USED IN MEDICAL REVIEWS.—In making a de-
termination under this subsection, the inde-
pendent medical reviewer shall also consider ap-
propriate and available evidence and informa-
tion, including the following:
‘‘(i) The determination made by the
plan or issuer with respect to the claim
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upon internal review and the evidence or
guidelines used by the plan or issuer in
reaching such determination.
‘‘(ii) The recommendation of the treat-
ing health care professional and the evi-
dence, guidelines, and rationale used by the
treating health care professional in reaching
such recommendation.
‘‘(iii) Additional evidence or informa-
tion obtained by the reviewer or submitted
by the plan, issuer, participant or bene-
ficiary (or an authorized representative), or
treating health care professional.
‘‘(iv) The plan or coverage document.
‘‘(E) INDEPENDENT
DETERMINATION.—In
making the determination, the independent med-
ical reviewer shall—
‘‘(i) consider the claim under review
without deference to the determinations
made by the plan or issuer under section
503A or the recommendation of the treating
health care professional (if any);
‘‘(ii) consider, but not be bound by the
definition used by the plan or issuer of
‘medically necessary and appropriate’, or
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‘experimental or investigational’, or other
equivalent terms that are used by the plan
or issuer to describe medical necessity and
appropriateness or experimental or inves-
tigational nature of the treatment; and
‘‘(iii) notwithstanding clause (ii), ad-
here to the definition used by the plan or
issuer of ‘medically necessary and appro-
priate’, or ‘experimental or investigational’
if such definition is the same as the defini-
tion of such term—
‘‘(I) that has been adopted pursu-
ant to a State statute or regulation; or
‘‘(II) that is used for purposes of
the program established under titles
XVIII or XIX of the Social Security
Act or under chapter 89 of title 5,
United States Code.
‘‘(F) DETERMINATION
OF
INDEPENDENT
MEDICAL
REVIEWER.—An independent medical
reviewer shall, in accordance with the deadlines
described in subsection (e), prepare a written de-
termination to uphold or reverse the denial
under review. Such written determination shall
include the specific reasons of the reviewer for
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such determination, including a summary of the
clinical or scientific-evidence based rationale
used in making the determination. The reviewer
may provide the plan or issuer and the treating
health care professional with additional rec-
ommendations in connection with such a deter-
mination, but any such recommendations shall
not be treated as part of the determination.
‘‘(e) TIMELINES AND NOTIFICATIONS.—
‘‘(1) TIMELINES FOR INDEPENDENT MEDICAL RE-
VIEW.—
‘‘(A) PRIOR
AUTHORIZATION
DETERMINA-
TION.—
‘‘(i) IN
GENERAL.—The independent
medical reviewer (or reviewers) shall make
a determination on a denial of a claim for
benefits that is referred to the reviewer
under subsection (c)(3) not later than 14
business days after the receipt of informa-
tion under subsection (c)(2) if the review
involves a prior authorization of items or
services.
‘‘(ii) EXPEDITED
DETERMINATION.—
Notwithstanding clause (i), the independent
medical reviewer (or reviewers) shall make
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a claim for benefits that is referred to the re-
viewer under subsection (c)(3) not later than 30
business days after the receipt of information
under subsection (c)(2).
‘‘(2) NOTIFICATION
OF
DETERMINATION.—The
external review entity shall ensure that the plan or
issuer, the participant or beneficiary (or authorized
representative) and the treating health care profes-
sional (if any) receives a copy of the written deter-
mination of the independent medical reviewer pre-
pared under subsection (d)(3)(F). Nothing in this
paragraph shall be construed as preventing an entity
or reviewer from providing an initial oral notice of
the reviewer’s determination.
‘‘(3) FORM
OF
NOTICES.—Determinations and
notices under this subsection shall be written in a
manner calculated to be understood by an average
participant.
‘‘(4) TERMINATION OF EXTERNAL REVIEW PROC-
ESS IF APPROVAL OF A CLAIM FOR BENEFITS DURING
PROCESS.—
‘‘(A) IN GENERAL.—If a plan or issuer—
‘‘(i) reverses a determination on a de-
nial of a claim for benefits that is the sub-
ject of an external review under this section
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and authorizes coverage for the claim or
provides payment of the claim; and
‘‘(ii) provides notice of such reversal to
the participant or beneficiary (or author-
ized representative) and the treating health
care professional (if any), and the external
review entity responsible for such review,
the external review process shall be terminated
with respect to such denial and any filing fee
paid under subsection (b)(2)(A)(iv) shall be re-
funded.
‘‘(B) TREATMENT
OF
TERMINATION.—An
authorization of coverage under subparagraph
(A) by the plan or issuer shall be treated as a
written determination to reverse a denial under
section (d)(3)(F) for purposes of liability under
section 502(n)(1)(B).
‘‘(f) COMPLIANCE.—
‘‘(1) APPLICATION OF DETERMINATIONS.—
‘‘(A) EXTERNAL REVIEW DETERMINATIONS
BINDING ON PLAN.—The determinations of an
external review entity and an independent med-
ical reviewer under this section shall be binding
upon the plan or issuer involved.
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‘‘(B) COMPLIANCE WITH DETERMINATION.—
If the determination of an independent medical
reviewer is to reverse the denial, the plan or
issuer, upon the receipt of such determination,
shall authorize coverage to comply with the med-
ical reviewer’s determination in accordance with
the timeframe established by the medical re-
viewer.
‘‘(2) FAILURE TO COMPLY.—If a plan or issuer
fails to comply with the timeframe established under
paragraph (1)(B)(i) with respect to a participant or
beneficiary, where such failure to comply is caused by
the plan or issuer, the participant or beneficiary may
obtain the items or services involved (in a manner
consistent with the determination of the independent
external reviewer) from any provider regardless of
whether such provider is a participating provider
under the plan or coverage.
‘‘(3) REIMBURSEMENT.—
‘‘(A) IN GENERAL.—Where a participant or
beneficiary obtains items or services in accord-
ance with paragraph (2), the plan or issuer in-
volved shall provide for reimbursement of the
costs of such items of services. Such reimburse-
ment shall be made to the treating health care
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professional or to the participant or beneficiary
(in the case of a participant or beneficiary who
pays for the costs of such items or services).
‘‘(B) AMOUNT.—The plan or issuer shall
fully reimburse a professional, participant or
beneficiary under subparagraph (A) for the total
costs of the items or services provided (regardless
of any plan limitations that may apply to the
coverage of such items of services) so long as—
‘‘(i) the items or services would have
been covered under the terms of the plan or
coverage if provided by the plan or issuer;
and
‘‘(ii) the items or services were pro-
vided in a manner consistent with the de-
termination of the independent medical re-
viewer.
‘‘(4) FAILURE TO REIMBURSE.—Where a plan or
issuer fails to provide reimbursement to a profes-
sional, participant or beneficiary in accordance with
this subsection, the professional, participant or bene-
ficiary may commence a civil action (or utilize other
remedies available under law) to recover only the
amount of any such reimbursement that is unpaid
and any necessary legal costs or expenses (including
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attorneys’ fees) incurred in recovering such reimburse-
ment.
‘‘(g) QUALIFICATIONS OF INDEPENDENT MEDICAL RE-
VIEWERS.—
‘‘(1) IN GENERAL.—In referring a denial to 1 or
more individuals to conduct independent medical re-
view under subsection (c), the qualified external re-
view entity shall ensure that—
‘‘(A) each independent medical reviewer
meets the qualifications described in paragraphs
(2) and (3);
‘‘(B) with respect to each review at least 1
such reviewer meets the requirements described
in paragraphs (4) and (5); and
‘‘(C) compensation provided by the entity to
the reviewer is consistent with paragraph (6).
‘‘(2) LICENSURE AND EXPERTISE.—Each inde-
pendent medical reviewer shall be a physician or
health care professional who—
‘‘(A) is appropriately credentialed or li-
censed in 1 or more States to deliver health care
services; and
‘‘(B) typically treats the diagnosis or condi-
tion or provides the type or treatment under re-
view.
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‘‘(3) INDEPENDENCE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each independent medical reviewer in
a case shall—
‘‘(i) not be a related party (as defined
in paragraph (7));
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with
such a party; and
‘‘(iii) not otherwise have a conflict of
interest with such a party (as determined
under regulations).
‘‘(B) EXCEPTION.—Nothing in this sub-
paragraph (A) shall be construed to—
‘‘(i) prohibit an individual, solely on
the basis of affiliation with the plan or
issuer, from serving as an independent med-
ical reviewer if—
‘‘(I) a non-affiliated individual is
not reasonably available;
‘‘(II) the affiliated individual is
not involved in the provision of items
or services in the case under review;
and
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‘‘(III) the fact of such an affili-
ation is disclosed to the plan or issuer
and the participant or beneficiary (or
authorized representative) and neither
party objects;
‘‘(ii) prohibit an individual who has
staff privileges at the institution where the
treatment involved takes place from serving
as an independent medical reviewer if the
affiliation is disclosed to the plan or issuer
and the participant or beneficiary (or au-
thorized representative), and neither party
objects;
‘‘(iii) permit an employee of a plan or
issuer, or an individual who provides serv-
ices exclusively or primarily to or on behalf
of a plan or issuer, from serving as an inde-
pendent medical reviewer; or
‘‘(iv) prohibit receipt of compensation
by an independent medical reviewer from
an entity if the compensation is provided
consistent with paragraph (6).
‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL
IN SAME FIELD.—
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‘‘(A) IN GENERAL.—The requirement of this
paragraph with respect to a reviewer in a case
involving treatment, or the provision of items or
services, by—
‘‘(i) a physician, is that the reviewer
be a practicing physician of the same or
similar specialty, when reasonably avail-
able, as a physician who typically treats the
diagnosis or condition or provides such
treatment in the case under review; or
‘‘(ii) a health care professional (other
than a physician), is that the reviewer be a
practicing physician or, if determined ap-
propriate by the qualified external review
entity, a health care professional (other
than a physician), of the same or similar
specialty as the health care professional who
typically treats the diagnosis or condition
or provides the treatment in the case under
review.
‘‘(B) PRACTICING DEFINED.—For pur-
poses of this paragraph, the term ‘prac-
ticing’ means, with respect to an individual
who is a physician or other health care pro-
fessional that the individual provides health
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care services to individual patients on aver-
age at least 1 day per week.
‘‘(5) AGE-APPROPRIATE EXPERTISE.—The inde-
pendent medical reviewer shall have expertise under
paragraph (2) that is age-appropriate to the partici-
pant or beneficiary involved.
‘‘(6) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by a qualified exter-
nal review entity to an independent medical reviewer
in connection with a review under this section shall—
‘‘(A) not exceed a reasonable level; and
‘‘(B) not be contingent on the decision ren-
dered by the reviewer.
‘‘(7) RELATED PARTY DEFINED.—For purposes
of this section, the term ‘related party’ means, with
respect to a denial of a claim under a plan or cov-
erage relating to a participant or beneficiary, any of
the following:
‘‘(A) The plan, plan sponsor, or issuer in-
volved, or any fiduciary, officer, director, or em-
ployee of such plan, plan sponsor, or issuer.
‘‘(B) The participant or beneficiary (or au-
thorized representative).
‘‘(C) The health care professional that pro-
vides the items of services involved in the denial.
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‘‘(D) The institution at which the items or
services (or treatment) involved in the denial are
provided.
‘‘(E) The manufacturer of any drug or
other item that is included in the items or serv-
ices involved in the denial.
‘‘(F) Any other party determined under any
regulations to have a substantial interest in the
denial involved.
‘‘(h) QUALIFIED EXTERNAL REVIEW ENTITIES.—
‘‘(1) SELECTION OF QUALIFIED EXTERNAL RE-
VIEW ENTITIES.—
‘‘(A) LIMITATION ON PLAN OR ISSUER SE-
LECTION.—The Secretary shall implement proce-
dures with respect to the selection of qualified ex-
ternal review entities by a plan or issuer to as-
sure that the selection process among qualified
external review entities will not create any in-
centives for external review entities to make a de-
cision in a biased manner.
‘‘(B) STATE AUTHORITY WITH RESPECT TO
QUALIFIED
EXTERNAL
REVIEW
ENTITIES
FOR
HEALTH INSURANCE ISSUERS.—With respect to
health insurance issuers offering health insur-
ance coverage in connection with a group health
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plan in a State, the State may, pursuant to a
State law that is enacted after the date of enact-
ment of the Patients’ Bill of Rights Plus Act,
provide for the designation or selection of quali-
fied external review entities in a manner deter-
mined by the State to assure an unbiased deter-
mination in conducting external review activi-
ties. In conducting reviews under this section, an
entity designated or selected under this subpara-
graph shall comply with the provision of this
section.
‘‘(2) CONTRACT WITH QUALIFIED EXTERNAL RE-
VIEW
ENTITY.—Except as provided in paragraph
(1)(B), the external review process of a plan or issuer
under this section shall be conducted under a contract
between the plan or issuer and 1 or more qualified ex-
ternal review entities (as defined in paragraph
(4)(A)).
‘‘(3) TERMS AND CONDITIONS OF CONTRACT.—
The terms and conditions of a contract under para-
graph (2) shall—
‘‘(A) be consistent with the standards the
Secretary shall establish to assure there is no
real or apparent conflict of interest in the con-
duct of external review activities; and
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‘‘(B) provide that the costs of the external
review process shall be borne by the plan or
issuer.
Subparagraph (B) shall not be construed as applying
to the imposition of a filing fee under subsection
(b)(2)(A)(iv) or costs incurred by the participant or
beneficiary (or authorized representative) or treating
health care professional (if any) in support of the re-
view, including the provision of additional evidence
or information.
‘‘(4) QUALIFICATIONS.—
‘‘(A) IN
GENERAL.—In this section, the
term ‘qualified external review entity’ means, in
relation to a plan or issuer, an entity that is
initially certified (and periodically recertified)
under subparagraph (C) as meeting the following
requirements:
‘‘(i) The entity has (directly or through
contracts or other arrangements) sufficient
medical, legal, and other expertise and suffi-
cient staffing to carry out duties of a quali-
fied external review entity under this sec-
tion on a timely basis, including making
determinations under subsection (b)(2)(A)
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and providing for independent medical re-
views under subsection (d).
‘‘(ii) The entity is not a plan or issuer
or an affiliate or a subsidiary of a plan or
issuer, and is not an affiliate or subsidiary
of a professional or trade association of
plans or issuers or of health care providers.
‘‘(iii) The entity has provided assur-
ances that it will conduct external review
activities consistent with the applicable re-
quirements of this section and standards
specified in subparagraph (C), including
that it will not conduct any external review
activities in a case unless the independence
requirements of subparagraph (B) are met
with respect to the case.
‘‘(iv) The entity has provided assur-
ances that it will provide information in a
timely manner under subparagraph (D).
‘‘(v) The entity meets such other re-
quirements as the Secretary provides by reg-
ulation.
‘‘(B) INDEPENDENCE REQUIREMENTS.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii), an entity meets the independence re-
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quirements of this subparagraph with re-
spect to any case if the entity—
‘‘(I) is not a related party (as de-
fined in subsection (g)(7));
‘‘(II) does not have a material fa-
milial, financial, or professional rela-
tionship with such a party; and
‘‘(III) does not otherwise have a
conflict of interest with such a party
(as determined under regulations).
‘‘(ii) EXCEPTION
FOR
REASONABLE
COMPENSATION.—Nothing in clause (i) shall
be construed to prohibit receipt by a quali-
fied external review entity of compensation
from a plan or issuer for the conduct of ex-
ternal review activities under this section if
the compensation is provided consistent
with clause (iii).
‘‘(iii) LIMITATIONS
ON
ENTITY
COM-
PENSATION.—Compensation provided by a
plan or issuer to a qualified external review
entity in connection with reviews under this
section shall—
‘‘(I) not exceed a reasonable level;
and
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‘‘(II) not be contingent on the de-
cision rendered by the entity or by any
independent medical reviewer.
‘‘(C) CERTIFICATION AND RECERTIFICATION
PROCESS.—
‘‘(i) IN GENERAL.—The initial certifi-
cation and recertification of a qualified ex-
ternal review entity shall be made—
‘‘(I) under a process that is recog-
nized or approved by the Secretary; or
‘‘(II) by a qualified private stand-
ard-setting organization that is ap-
proved by the Secretary under clause
(iii).
‘‘(ii) PROCESS.—The Secretary shall
not recognize or approve a process under
clause (i)(I) unless the process applies
standards (as promulgated in regulations)
that ensure that a qualified external review
entity—
‘‘(I) will carry out (and has car-
ried out, in the case of recertification)
the responsibilities of such an entity in
accordance with this section, including
meeting applicable deadlines;
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‘‘(II) will meet (and has met, in
the case of recertification) appropriate
indicators of fiscal integrity;
‘‘(III) will maintain (and has
maintained, in the case of recertifi-
cation) 
appropriate 
confidentiality
with respect to individually identifi-
able health information obtained in the
course of conducting external review
activities; and
‘‘(IV) in the case recertification,
shall review the matters described in
clause (iv).
‘‘(iii) APPROVAL
OF
QUALIFIED
PRI-
VATE
STANDARD-SETTING
ORGANIZA-
TIONS.—For purposes of clause (i)(II), the
Secretary may approve a qualified private
standard-setting organization if the Sec-
retary finds that the organization only cer-
tifies (or recertifies) external review entities
that meet at least the standards required for
the certification (or recertification) of exter-
nal review entities under clause (ii).
‘‘(iv) CONSIDERATIONS IN RECERTIFI-
CATIONS.—In conducting recertifications of
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a qualified external review entity under this
paragraph, the Secretary or organization
conducting the recertification shall review
compliance of the entity with the require-
ments for conducting external review activi-
ties under this section, including the fol-
lowing:
‘‘(I) Provision of information
under subparagraph (D).
‘‘(II) 
Adherence 
to 
applicable
deadlines (both by the entity and by
independent medical reviewers it refers
cases to).
‘‘(III) Compliance with limita-
tions on compensation (with respect to
both the entity and independent med-
ical reviewers it refers cases to).
‘‘(IV) Compliance with applicable
independence requirements.
‘‘(v) PERIOD OF CERTIFICATION OR RE-
CERTIFICATION.—A certification or recer-
tification provided under this paragraph
shall extend for a period not to exceed 5
years.
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‘‘(vi) REVOCATION.—A certification or
recertification under this paragraph may be
revoked by the Secretary or by the organiza-
tion providing such certification upon a
showing of cause.
‘‘(D) PROVISION OF INFORMATION.—
‘‘(i) IN GENERAL.—A qualified exter-
nal review entity shall provide to the Sec-
retary, in such manner and at such times
as the Secretary may require, such informa-
tion (relating to the denials which have been
referred to the entity for the conduct of ex-
ternal review under this section) as the Sec-
retary determines appropriate to assure
compliance with the independence and other
requirements of this section to monitor and
assess the quality of its external review ac-
tivities and lack of bias in making deter-
minations. Such information shall include
information described in clause (ii) but
shall not include individually identifiable
medical information.
‘‘(ii) 
INFORMATION
TO
BE
IN-
CLUDED.—The information described in
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this subclause with respect to an entity is as
follows:
‘‘(I) The number and types of de-
nials for which a request for review has
been received by the entity.
‘‘(II) The disposition by the entity
of such denials, including the number
referred to a independent medical re-
viewer and the reasons for such dis-
positions (including the application of
exclusions), on a plan or issuer-specific
basis and on a health care specialty-
specific basis.
‘‘(III) The length of time in mak-
ing determinations with respect to such
denials.
‘‘(IV) Updated information on the
information required to be submitted
as a condition of certification with re-
spect to the entity’s performance of ex-
ternal review activities.
‘‘(iii) INFORMATION TO BE PROVIDED
TO CERTIFYING ORGANIZATION.—
‘‘(I) IN GENERAL.—In the case of
a qualified external review entity
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which is certified (or recertified) under
this subsection by a qualified private
standard-setting organization, at the
request of the organization, the entity
shall provide the organization with the
information provided to the Secretary
under clause (i).
‘‘(II) 
ADDITIONAL
INFORMA-
TION.—Nothing in this subparagraph
shall be construed as preventing such
an organization from requiring addi-
tional information as a condition of
certification or recertification of an en-
tity.
‘‘(iv) USE OF INFORMATION.—Informa-
tion provided under this subparagraph may
be used by the Secretary and qualified pri-
vate standard-setting organizations to con-
duct oversight of qualified external review
entities, including recertification of such en-
tities, and shall be made available to the
public in an appropriate manner.
‘‘(E) LIMITATION ON LIABILITY.—No quali-
fied external review entity having a contract
with a plan or issuer, and no person who is em-
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ployed by any such entity or who furnishes pro-
fessional services to such entity (including as an
independent medical reviewer), shall be held by
reason of the performance of any duty, function,
or activity required or authorized pursuant to
this section, to be civilly liable under any law of
the United States or of any State (or political
subdivision thereof) if there was no actual malice
or gross misconduct in the performance of such
duty, function, or activity.
‘‘(i) DEFINITIONS.—In this section:
‘‘(1) AUTHORIZED REPRESENTATIVE.—The term
‘authorized representative’ means, with respect to a
participant or beneficiary—
‘‘(A) a person to whom a participant or
beneficiary has given express written consent to
represent the participant or beneficiary in any
proceeding under this section;
‘‘(B) a person authorized by law to provide
substituted consent for the participant or bene-
ficiary; or
‘‘(C) a family member of the participant or
beneficiary (or the estate of the participant or
beneficiary) or the participant’s or beneficiary’s
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treating health care professional when the partic-
ipant or beneficiary is unable to provide consent.
‘‘(2) CLAIM FOR BENEFITS.—The term ‘claim for
benefits’ means any request by a participant or bene-
ficiary (or authorized representative) for benefits (in-
cluding requests that are subject to authorization of
coverage or utilization review), for eligibility, or for
payment in whole or in part, for an item or service
under a group health plan or health insurance cov-
erage offered by a health insurance issuer in connec-
tion with a group health plan.
‘‘(3) GROUP HEALTH PLAN.—The term ‘group
health plan’ shall have the meaning given such term
in section 733(a). In applying this paragraph, ex-
cepted benefits described in section 733(c) shall not be
treated as benefits consisting of medical care.
‘‘(4) HEALTH INSURANCE COVERAGE.—The term
‘health insurance coverage’ has the meaning given
such term in section 733(b)(1). In applying this
paragraph, excepted benefits described in section
733(c) shall not be treated as benefits consisting of
medical care.
‘‘(5) HEALTH
INSURANCE
ISSUER.—The term
‘health insurance issuer’ has the meaning given such
term in section 733(b)(2).
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‘‘(6) PRIOR AUTHORIZATION DETERMINATION.—
The term ‘prior authorization determination’ means a
determination by the group health plan or health in-
surance issuer offering health insurance coverage in
connection with a group health plan prior to the pro-
vision of the items and services as a condition of cov-
erage of the items and services under the terms and
conditions of the plan or coverage.
‘‘(7) TREATING HEALTH CARE PROFESSIONAL.—
The term ‘treating health care professional’ with re-
spect to a group health plan, health insurance issuer
or provider sponsored organization means a physi-
cian (medical doctor or doctor of osteopathy) or other
health care practitioner who is acting within the
scope of his or her State licensure or certification for
the delivery of health care services and who is pri-
marily responsible for delivering those services to the
participant or beneficiary.
‘‘(8) UTILIZATION REVIEW.—The term ‘utiliza-
tion review’ with respect to a group health plan or
health insurance coverage means procedures used in
the determination of coverage for a participant or
beneficiary, such as procedures to evaluate the med-
ical necessity, appropriateness, efficacy, quality, or ef-
ficiency of health care services, procedures or settings,
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and includes prospective review, concurrent review,
second opinions, case management, discharge plan-
ning, or retrospective review.’’.
(b) CONFORMING AMENDMENT.—The table of contents
in section 1 of the Employee Retirement Income Security
Act of 1974 is amended by inserting after the item relating
to section 503 the following:
‘‘Sec. 503A. Claims and internal appeals procedures for group health plans.
‘‘Sec. 503B. Independent external appeals procedures for group health plans.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to plan years beginning on
or after 2 years after the date of enactment of this Act. The
Secretary shall issue all regulations necessary to carry out
the amendments made by this section before the effective
date thereof.
SEC. 2222. ENFORCEMENT.
Section 502(c) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1132(c)) is amended by add-
ing at the end the following:
‘‘(8) The Secretary may assess a civil penalty against
any plan of up to $10,000 for the plan’s failure or refusal
to comply with any deadline applicable under section 503B
or any determination under such section, except that in any
case in which treatment was not commenced by the plan
in accordance with the determination of an independent ex-
ternal reviewer, the Secretary shall assess a civil penalty
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of $10,000 against the plan and the plan shall pay such
penalty to the participant or beneficiary involved.’’.
Subtitle D—Remedies
SEC. 2231. 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:
‘‘(n) CAUSE OF ACTION RELATING TO DENIAL OF A
CLAIM FOR HEALTH BENEFITS.—
‘‘(1) IN GENERAL.—
‘‘(A) FAILURE TO COMPLY WITH EXTERNAL
MEDICAL REVIEW.—In any case in which—
‘‘(i) a designated decision-maker de-
scribed in paragraph (2) fails to exercise or-
dinary care in approving coverage pursuant
to the written determination of an inde-
pendent medical reviewer under section
503B(d)(3)(F) that reverses a denial of a
claim for benefits; and
‘‘(ii) the failure described in clause (i)
is the proximate cause of substantial harm
to, or the wrongful death of, the participant
or beneficiary;
such designated decision-maker shall be liable to
the participant or beneficiary (or the estate of
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such participant or beneficiary) for economic
and noneconomic damages in connection with
such failure and such injury or death (subject to
paragraph (4)).
‘‘(B) WRONGFUL DETERMINATION RESULT-
ING IN DELAY IN PROVIDING BENEFITS.—In any
case in which—
‘‘(i) a designated decision-maker de-
scribed in paragraph (2) acts in bad faith
in making a final determination denying a
claim for benefits under section 503A(b);
‘‘(ii) the denial described in clause (i)
is reversed by an independent medical re-
viewer under section 503B(d); and
‘‘(iii) the delay attributable to the fail-
ure described in clause (i) is the proximate
cause of substantial harm to, or the wrong-
ful death of, the participant or beneficiary;
such designated decision-maker shall be liable to
the participant or beneficiary (or the estate of
such participant or beneficiary) for economic
and noneconomic damages in connection with
such failure and such injury or death (subject to
paragraph (4)).
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‘‘(2) DESIGNATED DECISION-MAKERS FOR PUR-
POSES OF LIABILITY.—An employer or plan sponsor
shall not be liable under any cause of action described
in paragraph (1) if the employer or plan sponsor
complies with the following provisions:
‘‘(A) APPOINTMENT.—A group health plan
may designate one or more persons to serve as
the designated decision-maker for purposes of
paragraph (1). Such designated decision-makers
shall have the exclusive authority under the
group health plan (or under the health insurance
coverage in the case of a health insurance issuer
offering coverage in connection with a group
health plan) to make determinations described in
section 503A with respect to claims for benefits
and determination to approve coverage pursuant
to written determination of independent medical
reviewers under section 503B, except that the
plan documents may expressly provide that the
designated decision-maker is subject to the direc-
tion of a named fiduciary.
‘‘(B) PROCEDURES.—A designated decision-
maker shall—
‘‘(i) be a person who is named in the
plan or coverage documents, or who, pursu-
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ant to procedures specified in the plan or
coverage documents, is identified as the des-
ignated decision-maker by—
‘‘(I) a person who is an employer
or employee organization with respect
to the plan or issuer;
‘‘(II) a person who is such an em-
ployer and such an employee organiza-
tion acting jointly; or
‘‘(III) a person who is a named
fiduciary;
‘‘(ii) agree to accept appointment as a
designated decision-maker; and
‘‘(iii) be identified in the plan or cov-
erage documents as required under section
714(b)(14).
‘‘(C) QUALIFICATIONS.—To be appointed as
a designated decision-maker under this para-
graph, a person shall be—
‘‘(i) a plan sponsor;
‘‘(ii) a group health plan;
‘‘(iii) a health insurance issuer; or
‘‘(iv) any other person who can pro-
vide adequate evidence, in accordance with
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regulations promulgated by the Secretary, of
the ability of the person to—
‘‘(I) carry out the responsibilities
set forth in the plan or coverage docu-
ments;
‘‘(II) carry out the applicable re-
quirements of this subsection; and
‘‘(III) meet other applicable re-
quirements under this Act, including
any financial obligation for liability
under this subsection.
‘‘(D) FLEXIBILITY IN ADMINISTRATION.—A
group health plan, or health insurance issuer of-
fering coverage in connection with a group
health plan, may provide—
‘‘(i) that any person or group of per-
sons may serve in more than one capacity
with respect to the plan or coverage (includ-
ing service as a designated decision-maker,
administrator, and named fiduciary); or
‘‘(ii) that a designated decision-maker
may employ one or more persons to provide
advice with respect to any responsibility of
such decision-maker under the plan or cov-
erage.
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‘‘(E) FAILURE TO DESIGNATE.—In any case
in which a designated decision-maker is not ap-
pointed under this paragraph, the group health
plan (or health insurance issuer offering coverage
in connection with the group health plan), the
administrator, or the party or parties that bears
the sole responsibility for making the final deter-
mination under section 503A(b) (with respect to
an internal review), or for approving coverage
pursuant to the written determination of an
independent medical reviewer under section
503B, with respect to a denial of a claim for
benefits shall be treated as the designated deci-
sion-maker for purposes of liability under this
section.
‘‘(3) REQUIREMENT OF EXHAUSTION OF INDE-
PENDENT
MEDICAL
REVIEW.—Paragraph (1) shall
apply only if a final determination denying a claim
for benefits under section 503A(b) has been referred
for independent medical review under section 503B(d)
and a written determination by an independent med-
ical reviewer to reverse such final determination has
been issued with respect to such review.
‘‘(4) LIMITATIONS ON RECOVERY OF DAMAGES.—
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‘‘(A) MAXIMUM
AWARD
OF
NONECONOMIC
DAMAGES.—The aggregate amount of liability
for noneconomic loss in an action under para-
graph (1) may not exceed $350,000.
‘‘(B) INCREASE IN AMOUNT.—The amount
referred to in subparagraph (A) shall be in-
creased or decreased, for each calendar year that
ends after December 31, 2001, by the same per-
centage as the percentage by which the Consumer
Price Index for All Urban Consumers (United
States city average), published by the Bureau of
Labor Statistics, for September of the preceding
calendar year has increased or decreased from
the such Index for September of 2001.
‘‘(C) JOINT
AND
SEVERAL
LIABILITY.—In
the case of any action commenced pursuant to
paragraph (1), the defendant shall be liable only
for the amount of noneconomic damages attrib-
utable to such defendant in direct proportion to
such defendant’s share of fault or responsibility
for the injury suffered by the participant or ben-
eficiary. In all such cases, the liability of a de-
fendant for noneconomic damages shall be several
and not joint.
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‘‘(D) TREATMENT OF COLLATERAL SOURCE
PAYMENTS.—
‘‘(i) IN GENERAL.—In the case of any
action commenced pursuant to paragraph
(1), the total amount of damages received by
a participant or beneficiary under such ac-
tion shall be reduced, in accordance with
clause (ii), by any other payment that has
been, or will be, made to such participant
or beneficiary to compensate such partici-
pant or beneficiary for the injury that was
the subject of such action.
‘‘(ii) AMOUNT
OF
REDUCTION.—The
amount by which an award of damages to
a participant or beneficiary for an injury
shall be reduced under clause (i) shall be—
‘‘(I) the total amount of any pay-
ments (other than such award) that
have been made or that will be made to
such participant or beneficiary to pay
costs of or compensate such participant
or beneficiary for the injury that was
the subject of the action; less
‘‘(II) the amount paid by such
participant or beneficiary (or by the
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spouse, parent, or legal guardian of
such participant or beneficiary) to se-
cure the payments described in sub-
clause (I).
‘‘(iii) DETERMINATION
OF
AMOUNTS
FROM COLLATERAL SOURCES.—The reduc-
tion required under clause (ii) shall be de-
termined by the court in a pretrial pro-
ceeding. At the subsequent trial no evidence
shall be admitted as to the amount of any
charge, payments, or damage for which a
participant or beneficiary—
‘‘(I) has received payment from a
collateral source or the obligation for
which has been assured by a third
party; or
‘‘(II) is, or with reasonable cer-
tainty, will be eligible to receive from
a collateral source which will, with
reasonable certainty, be assumed by a
third party.
‘‘(5) AFFIRMATIVE DEFENSES.—In the case of
any cause of action under paragraph (1), it shall be
an affirmative defense that—
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‘‘(A) the group health plan, or health insur-
ance issuer offering health insurance coverage in
connection with a group health plan, involved
did not receive from the participant or bene-
ficiary (or authorized representative) or the
treating health care professional (if any), suffi-
cient information regarding the medical condi-
tion of the participant or beneficiary that was
necessary to make a final determination on a
claim for benefits under section 503A(b);
‘‘(B) the participant or beneficiary (or au-
thorized representative)—
‘‘(i) was in possession of facts that
were sufficient to enable the participant or
beneficiary (or authorized representative) to
know that an expedited review under sec-
tion 503A or 503B would have prevented
the harm that is the subject of the action;
and
‘‘(ii) failed to notify the plan or issuer
of the need for such an expedited review; or
‘‘(C) the cause of action is based solely on
the failure of a qualified external review entity
or an independent medical reviewer to meet the
timelines applicable under section 503B.
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Nothing in this paragraph shall be construed to limit
the application of any other affirmative defense that
may be applicable to the cause of action involved.
‘‘(6) WAIVER OF INTERNAL REVIEW.—In the case
of any cause of action under paragraph (1), the waiv-
er or nonwaiver of internal review under section
503A(b)(1)(D) by the group health plan, or health in-
surance issuer offering health insurance coverage in
connection with a group health plan, shall not be used
in determining liability.
‘‘(7) LIMITATIONS ON ACTIONS.—Paragraph (1)
shall not apply in connection with any action that is
commenced more than 1 year after—
‘‘(A) the date on which the last act occurred
which constituted a part of the failure referred to
in such paragraph; or
‘‘(B) in the case of an omission, the last
date on which the decision-maker could have
cured the failure.
‘‘(8) LIMITATION ON RELIEF WHERE DEFEND-
ANT’S POSITION PREVIOUSLY SUPPORTED UPON EX-
TERNAL REVIEW.—In any case in which the court
finds the defendant to be liable in an action under
this subsection, to the extent that such liability is
based on a finding by the court of a particular failure
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described in paragraph (1) and such finding is con-
trary to a previous determination by an independent
medical reviewer under section 503B(d) with respect
to such defendant, no relief shall be available under
this subsection in addition to the relief otherwise
available under subsection (a)(1)(B).
‘‘(9) CONSTRUCTION.—Nothing in this subsection
shall be construed as authorizing a cause of action
under paragraph (1) for—
‘‘(A) the failure of a group health plan or
health insurance issuer to provide an item or
service that is specifically excluded under the
plan or coverage; or
‘‘(B) any denial of a claim for benefits that
was not eligible for independent medical review
under section 503B(d).
‘‘(10) FEDERAL JURISDICTION.—In the case of
any action commenced pursuant to paragraph (1) the
district courts of the United States shall have exclu-
sive jurisdiction.
‘‘(11) DEFINITIONS.—In this subsection:
‘‘(A) AUTHORIZED REPRESENTATIVE.—The
term ‘authorized representative’ has the meaning
given such term in section 503B(i).
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‘‘(B) CLAIM
FOR
BENEFITS.—The term
‘claim for benefits’ shall have the meaning given
such term in section 503B(i), except that such
term shall only include claims for prior author-
ization determinations (as such term is defined
in section 503B(i)).
‘‘(C) GROUP
HEALTH
PLAN.—The term
‘group health plan’ shall have the meaning given
such term in section 733(a).
‘‘(D) HEALTH INSURANCE COVERAGE.—The
term ‘health insurance coverage’ has the meaning
given such term in section 733(b)(1).
‘‘(E) HEALTH
INSURANCE
ISSUER.—The
term ‘health insurance issuer’ has the meaning
given such term in section 733(b)(2) (including
health maintenance organizations as defined in
section 733(b)(3)).
‘‘(F) ORDINARY CARE.—The term ‘ordinary
care’ means the care, skill, prudence, and dili-
gence under the circumstances prevailing at the
time the care is provided that a prudent indi-
vidual acting in a like capacity and familiar
with the care being provided would use in pro-
viding care of a similar character.
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‘‘(G) SUBSTANTIAL HARM.—The term ‘sub-
stantial harm’ means the loss of life, loss or sig-
nificant impairment of limb or bodily function,
significant disfigurement, or severe and chronic
physical pain.
‘‘(12) EFFECTIVE DATE.—The provisions of this
subsection shall apply to acts and omissions occurring
on or after the date of enactment of this subsection.’’.
(b) IMMUNITY FROM LIABILITY FOR PROVISION OF IN-
SURANCE OPTIONS.—
(1) IN GENERAL.—Section 502 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1132), as amended by subsection (a), is further
amended by adding at the end the following:
‘‘(o) IMMUNITY FROM LIABILITY FOR PROVISION OF
INSURANCE OPTIONS.—
‘‘(1) IN GENERAL.—No liability shall arise under
subsection (n) with respect to a participant or bene-
ficiary against a group health plan (other than a
fully insured group health plan) if such plan offers
the participant or beneficiary the coverage option de-
scribed in paragraph (2).
‘‘(2) COVERAGE
OPTION.—The coverage option
described in this paragraph is one under which the
group health plan (other than a fully insured group
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health plan), at the time of enrollment or as provided
for in paragraph (3), provides the participant or ben-
eficiary with the option to—
‘‘(A) enroll for coverage under a fully in-
sured health plan; or
‘‘(B) receive an individual benefit payment,
in an amount equal to the amount that would be
contributed on behalf of the participant or bene-
ficiary by the plan sponsor for enrollment in the
group health plan, for use by the participant or
beneficiary in obtaining health insurance cov-
erage in the individual market.
‘‘(3) TIME OF OFFERING OF OPTION.—The cov-
erage option described in paragraph (2) shall be of-
fered to a participant or beneficiary—
‘‘(A) during the first period in which the
individual is eligible to enroll under the group
health plan; or
‘‘(B) during any special enrollment period
provided by the group health plan after the date
of enactment of the Patients’ Bill of Rights Plus
Act for purposes of offering such coverage op-
tion.’’.
(2) 
AMENDMENTS
TO
INTERNAL
REVENUE
CODE.—
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(A) EXCLUSION
FROM
INCOME.—Section
106 of the Internal Revenue Code of 1986 (relat-
ing to contributions by employer to accident and
health plans) is amended by adding at the end
the following:
‘‘(d) TREATMENT
OF CERTAIN COVERAGE OPTION
UNDER SELF-INSURED PLANS.—No amount shall be in-
cluded in the gross income of an individual by reason of—
‘‘(1) the individual’s right to elect a coverage op-
tion described in section 502(o)(2) of the Employee
Retirement Income Security Act of 1974, or
‘‘(2) the receipt by the individual of an indi-
vidual 
benefit 
payment 
described 
in 
section
502(o)(2)(A) of such Act.’’
(B) NONDISCRIMINATION
RULES.—Section
105(h) of such Code (relating to self-insured
medical expense reimbursement plans) is amend-
ed by adding at the end the following:
‘‘(11) TREATMENT OF CERTAIN COVERAGE OP-
TIONS.—If a self-insured medical reimbursement plan
offers the coverage option described in section
502(o)(2) of the Employee Retirement Income Secu-
rity Act of 1974, employees who elect such option
shall be treated as eligible to benefit under the plan
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and the plan shall be treated as benefiting such em-
ployees.’’
(c) CONFORMING AMENDMENT.—Section 502(a)(1)(A)
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1132(a)(1)(A)) is amended by inserting ‘‘or (n)’’
after ‘‘subsection (c)’’.
SEC. 2232. LIMITATION ON CERTAIN CLASS ACTION LITIGA-
TION.
(a) ERISA.—Section 502 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132), as amended
by section 2231, is further amended by adding at the end
the following:
‘‘(p) LIMITATION ON CLASS ACTION LITIGATION.—A
claim or cause of action under section 502(n) may not be
maintained as a class action.’’.
(b) RICO.—Section 1964(c) of title 18, United States
Code, is amended—
(1) by inserting ‘‘(1)’’ after the subsection des-
ignation; and
(2) by adding at the end the following:
‘‘(2) No action may be brought under this subsection,
or alleging any violation of section 1962, against any per-
son where the action seeks relief for which a remedy may
be provided under section 502 of the Employee Retirement
Income Security Act of 1974.’’.
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(c) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to all civil actions that are
filed on or after the date of enactment of this Act.
(2) PENDING CIVIL ACTIONS.—Notwithstanding
section 502(p) of the Employee Retirement Income
Security Act of 1974 and section 1964(c)(2) of title
18, United States Code, such sections 502(p) and
1964(c)(2) shall apply to civil actions that are pend-
ing and have not been finally determined by judg-
ment or settlement prior to the date of enactment of
this Act if such actions are substantially similar in
nature to the claims or causes of actions referred to
in such sections 502(p) and 1964(c)(2).
SEC. 2233. SEVERABILITY.
If any provision of this subtitle, an amendment made
by this subtitle, or the application of such provision or
amendment to any person or circumstance is held to be un-
constitutional, the remainder of this subtitle, the amend-
ments made by this subtitle, and the application of the pro-
visions of such to any person or circumstance shall not be
affected thereby.
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TITLE XXIII—WOMEN’S HEALTH
AND CANCER RIGHTS
SEC. 2301. WOMEN’S HEALTH AND CANCER RIGHTS.
(a) SHORT TITLE.—This section may be cited as the
‘‘Women’s Health and Cancer Rights Act of 2000’’.
(b) FINDINGS.—Congress finds that—
(1) the offering and operation of health plans af-
fect commerce among the States;
(2) health care providers located in a State serve
patients who reside in the State and patients who re-
side in other States; and
(3) in order to provide for uniform treatment of
health care providers and patients among the States,
it is necessary to cover health plans operating in 1
State as well as health plans operating among the
several States.
(c) AMENDMENTS TO ERISA.—
(1) IN GENERAL.—Subpart B of part 7 of sub-
title B of title I of the Employee Retirement Income
Security Act of 1974, as amended by section 2211(a),
is further amended by adding at the end the fol-
lowing:
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‘‘SEC. 715. REQUIRED COVERAGE FOR MINIMUM HOSPITAL
STAY FOR MASTECTOMIES AND LYMPH NODE
DISSECTIONS 
FOR 
THE 
TREATMENT 
OF
BREAST CANCER AND COVERAGE FOR SEC-
ONDARY CONSULTATIONS.
‘‘(a) INPATIENT CARE.—
‘‘(1) IN GENERAL.—A group health plan, and a
health insurance issuer providing health insurance
coverage in connection with a group health plan, that
provides medical and surgical benefits shall ensure
that inpatient coverage with respect to the treatment
of breast cancer is provided for a period of time as
is determined by the attending physician, in consulta-
tion with the patient, to be medically necessary and
appropriate following—
‘‘(A) a mastectomy;
‘‘(B) a lumpectomy; or
‘‘(C) a lymph node dissection for the treat-
ment of breast cancer.
‘‘(2) EXCEPTION.—Nothing in this section shall
be construed as requiring the provision of inpatient
coverage if the attending physician and patient deter-
mine that a shorter period of hospital stay is medi-
cally appropriate.
‘‘(b) PROHIBITION ON CERTAIN MODIFICATIONS.—In
implementing the requirements of this section, a group
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health plan, and a health insurance issuer providing health
insurance coverage in connection with a group health plan,
may not modify the terms and conditions of coverage based
on the determination by a participant or beneficiary to re-
quest less than the minimum coverage required under sub-
section (a).
‘‘(c) NOTICE.—A group health plan, and a health in-
surance issuer providing health insurance coverage in con-
nection with a group health plan shall provide notice to
each participant and beneficiary under such plan regarding
the coverage required by this section in accordance with reg-
ulations promulgated by the Secretary. Such notice shall
be in writing and prominently positioned in any literature
or correspondence made available or distributed by the plan
or issuer and shall be transmitted—
‘‘(1) in the next mailing made by the plan or
issuer to the participant or beneficiary;
‘‘(2) as part of any yearly informational packet
sent to the participant or beneficiary; or
‘‘(3) not later than January 1, 2001;
whichever is earlier.
‘‘(d) SECONDARY CONSULTATIONS.—
‘‘(1) IN GENERAL.—A group health plan, and a
health insurance issuer providing health insurance
coverage in connection with a group health plan, that
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provides coverage with respect to medical and sur-
gical services provided in relation to the diagnosis
and treatment of cancer shall ensure that full coverage
is provided for secondary consultations by specialists
in the appropriate medical fields (including pathol-
ogy, radiology, and oncology) to confirm or refute
such diagnosis. Such plan or issuer shall ensure that
full coverage is provided for such secondary consulta-
tion whether such consultation is based on a positive
or negative initial diagnosis. In any case in which
the attending physician certifies in writing that serv-
ices necessary for such a secondary consultation are
not sufficiently available from specialists operating
under the plan with respect to whose services coverage
is otherwise provided under such plan or by such
issuer, such plan or issuer shall ensure that coverage
is provided with respect to the services necessary for
the secondary consultation with any other specialist
selected by the attending physician for such purpose
at no additional cost to the individual beyond that
which the individual would have paid if the specialist
was participating in the network of the plan.
‘‘(2) EXCEPTION.—Nothing in paragraph (1)
shall be construed as requiring the provision of sec-
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ondary consultations where the patient determines not
to seek such a consultation.
‘‘(e) PROHIBITION ON PENALTIES OR INCENTIVES.—
A group health plan, and a health insurance issuer pro-
viding health insurance coverage in connection with a
group health plan, may not—
‘‘(1) penalize or otherwise reduce or limit the re-
imbursement of a provider or specialist because the
provider or specialist provided care to a participant
or beneficiary in accordance with this section;
‘‘(2) provide financial or other incentives to a
physician or specialist to induce the physician or spe-
cialist to keep the length of inpatient stays of patients
following a mastectomy, lumpectomy, or a lymph
node dissection for the treatment of breast cancer
below certain limits or to limit referrals for secondary
consultations; or
‘‘(3) provide financial or other incentives to a
physician or specialist to induce the physician or spe-
cialist to refrain from referring a participant or bene-
ficiary for a secondary consultation that would other-
wise be covered by the plan or coverage involved
under subsection (d).’’.
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of the Employee Retirement Income
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Security Act of 1974 is amended by inserting after
the item relating to section 714 the following new
item:
‘‘Sec. 715. Required coverage for minimum hospital stay for mastectomies and
lymph node dissections for the treatment of breast cancer and
coverage for secondary consultations.’’.
(d) AMENDMENTS
TO PHSA RELATING
TO
THE
GROUP MARKET.—Subpart 2 of part A of title XXVII of
the Public Health Service Act (42 U.S.C. 300gg–4 et seq.)
is amended by adding at the end the following new section:
‘‘SEC. 2707. REQUIRED COVERAGE FOR MINIMUM HOSPITAL
STAY FOR MASTECTOMIES AND LYMPH NODE
DISSECTIONS 
FOR 
THE 
TREATMENT 
OF
BREAST CANCER AND COVERAGE FOR SEC-
ONDARY CONSULTATIONS.
‘‘(a) INPATIENT CARE.—
‘‘(1) IN GENERAL.—A group health plan, and a
health insurance issuer providing health insurance
coverage in connection with a group health plan, that
provides medical and surgical benefits shall ensure
that inpatient coverage with respect to the treatment
of breast cancer is provided for a period of time as
is determined by the attending physician, in consulta-
tion with the patient, to be medically necessary and
appropriate following—
‘‘(A) a mastectomy;
‘‘(B) a lumpectomy; or
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‘‘(C) a lymph node dissection for the treat-
ment of breast cancer.
‘‘(2) EXCEPTION.—Nothing in this section shall
be construed as requiring the provision of inpatient
coverage if the attending physician and patient deter-
mine that a shorter period of hospital stay is medi-
cally appropriate.
‘‘(b) PROHIBITION ON CERTAIN MODIFICATIONS.—In
implementing the requirements of this section, a group
health plan, and a health insurance issuer providing health
insurance coverage in connection with a group health plan,
may not modify the terms and conditions of coverage based
on the determination by a participant or beneficiary to re-
quest less than the minimum coverage required under sub-
section (a).
‘‘(c) NOTICE.—A group health plan, and a health in-
surance issuer providing health insurance coverage in con-
nection with a group health plan shall provide notice to
each participant and beneficiary under such plan regarding
the coverage required by this section in accordance with reg-
ulations promulgated by the Secretary. Such notice shall
be in writing and prominently positioned in any literature
or correspondence made available or distributed by the plan
or issuer and shall be transmitted—
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‘‘(1) in the next mailing made by the plan or
issuer to the participant or beneficiary;
‘‘(2) as part of any yearly informational packet
sent to the participant or beneficiary; or
‘‘(3) not later than January 1, 2001;
whichever is earlier.
‘‘(d) SECONDARY CONSULTATIONS.—
‘‘(1) IN GENERAL.—A group health plan, and a
health insurance issuer providing health insurance
coverage in connection with a group health plan that
provides coverage with respect to medical and sur-
gical services provided in relation to the diagnosis
and treatment of cancer shall ensure that full coverage
is provided for secondary consultations by specialists
in the appropriate medical fields (including pathol-
ogy, radiology, and oncology) to confirm or refute
such diagnosis. Such plan or issuer shall ensure that
full coverage is provided for such secondary consulta-
tion whether such consultation is based on a positive
or negative initial diagnosis. In any case in which
the attending physician certifies in writing that serv-
ices necessary for such a secondary consultation are
not sufficiently available from specialists operating
under the plan with respect to whose services coverage
is otherwise provided under such plan or by such
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issuer, such plan or issuer shall ensure that coverage
is provided with respect to the services necessary for
the secondary consultation with any other specialist
selected by the attending physician for such purpose
at no additional cost to the individual beyond that
which the individual would have paid if the specialist
was participating in the network of the plan.
‘‘(2) EXCEPTION.—Nothing in paragraph (1)
shall be construed as requiring the provision of sec-
ondary consultations where the patient determines not
to seek such a consultation.
‘‘(e) PROHIBITION ON PENALTIES OR INCENTIVES.—
A group health plan, and a health insurance issuer pro-
viding health insurance coverage in connection with a
group health plan, may not—
‘‘(1) penalize or otherwise reduce or limit the re-
imbursement of a provider or specialist because the
provider or specialist provided care to a participant
or beneficiary in accordance with this section;
‘‘(2) provide financial or other incentives to a
physician or specialist to induce the physician or spe-
cialist to keep the length of inpatient stays of patients
following a mastectomy, lumpectomy, or a lymph
node dissection for the treatment of breast cancer
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below certain limits or to limit referrals for secondary
consultations; or
‘‘(3) provide financial or other incentives to a
physician or specialist to induce the physician or spe-
cialist to refrain from referring a participant or bene-
ficiary for a secondary consultation that would other-
wise be covered by the plan or coverage involved
under subsection (d).’’.
(e) AMENDMENTS TO PHSA RELATING TO THE INDI-
VIDUAL MARKET.—The first subpart 3 of part B of title
XXVII of the Public Health Service Act (42 U.S.C. 300gg–
51 et seq.) (relating to other requirements) (42 U.S.C.
300gg–51 et seq.) is amended—
(1) by redesignating such subpart as subpart 2;
and
(2) by adding at the end the following:
‘‘SEC. 2753. REQUIRED COVERAGE FOR MINIMUM HOSPITAL
STAY FOR MASTECTOMIES AND LYMPH NODE
DISSECTIONS 
FOR 
THE 
TREATMENT 
OF
BREAST 
CANCER 
AND 
SECONDARY 
CON-
SULTATIONS.
‘‘The provisions of section 2707 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
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issuer in connection with a group health plan in the small
or large group market.’’.
(f) AMENDMENTS TO THE IRC.—
(1) IN GENERAL.—Subchapter B of chapter 100
of the Internal Revenue Code of 1986, as amended by
section 2202, is further amended by inserting after
section 9813 the following:
‘‘SEC. 9814. REQUIRED COVERAGE FOR MINIMUM HOSPITAL
STAY FOR MASTECTOMIES AND LYMPH NODE
DISSECTIONS 
FOR 
THE 
TREATMENT 
OF
BREAST CANCER AND COVERAGE FOR SEC-
ONDARY CONSULTATIONS.
‘‘(a) INPATIENT CARE.—
‘‘(1) IN GENERAL.—A group health plan that
provides medical and surgical benefits shall ensure
that inpatient coverage with respect to the treatment
of breast cancer is provided for a period of time as
is determined by the attending physician, in consulta-
tion with the patient, to be medically necessary and
appropriate following—
‘‘(A) a mastectomy;
‘‘(B) a lumpectomy; or
‘‘(C) a lymph node dissection for the treat-
ment of breast cancer.
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‘‘(2) EXCEPTION.—Nothing in this section shall
be construed as requiring the provision of inpatient
coverage if the attending physician and patient deter-
mine that a shorter period of hospital stay is medi-
cally appropriate.
‘‘(b) PROHIBITION ON CERTAIN MODIFICATIONS.—In
implementing the requirements of this section, a group
health plan may not modify the terms and conditions of
coverage based on the determination by a participant or
beneficiary to request less than the minimum coverage re-
quired under subsection (a).
‘‘(c) NOTICE.—A group health plan shall provide no-
tice to each participant and beneficiary under such plan
regarding the coverage required by this section in accord-
ance with regulations promulgated by the Secretary. Such
notice shall be in writing and prominently positioned in
any literature or correspondence made available or distrib-
uted by the plan and shall be transmitted—
‘‘(1) in the next mailing made by the plan to the
participant or beneficiary;
‘‘(2) as part of any yearly informational packet
sent to the participant or beneficiary; or
‘‘(3) not later than January 1, 2000;
whichever is earlier.
‘‘(d) SECONDARY CONSULTATIONS.—
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‘‘(1) IN GENERAL.—A group health plan that
provides coverage with respect to medical and sur-
gical services provided in relation to the diagnosis
and treatment of cancer shall ensure that full coverage
is provided for secondary consultations by specialists
in the appropriate medical fields (including pathol-
ogy, radiology, and oncology) to confirm or refute
such diagnosis. Such plan or issuer shall ensure that
full coverage is provided for such secondary consulta-
tion whether such consultation is based on a positive
or negative initial diagnosis. In any case in which
the attending physician certifies in writing that serv-
ices necessary for such a secondary consultation are
not sufficiently available from specialists operating
under the plan with respect to whose services coverage
is otherwise provided under such plan or by such
issuer, such plan or issuer shall ensure that coverage
is provided with respect to the services necessary for
the secondary consultation with any other specialist
selected by the attending physician for such purpose
at no additional cost to the individual beyond that
which the individual would have paid if the specialist
was participating in the network of the plan.
‘‘(2) EXCEPTION.—Nothing in paragraph (1)
shall be construed as requiring the provision of sec-
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ondary consultations where the patient determines not
to seek such a consultation.
‘‘(e) PROHIBITION ON PENALTIES.—A group health
plan may not—
‘‘(1) penalize or otherwise reduce or limit the re-
imbursement of a provider or specialist because the
provider or specialist provided care to a participant
or beneficiary in accordance with this section;
‘‘(2) provide financial or other incentives to a
physician or specialist to induce the physician or spe-
cialist to keep the length of inpatient stays of patients
following a mastectomy, lumpectomy, or a lymph
node dissection for the treatment of breast cancer
below certain limits or to limit referrals for secondary
consultations; or
‘‘(3) provide financial or other incentives to a
physician or specialist to induce the physician or spe-
cialist to refrain from referring a participant or bene-
ficiary for a secondary consultation that would other-
wise be covered by the plan involved under subsection
(d).’’.
(2) CLERICAL AMENDMENT.—The table of con-
tents for chapter 100 of such Code is amended by in-
serting after the item relating to section 9813 the fol-
lowing new item:
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‘‘Sec. 9814. Required coverage for minimum hospital stay for mastectomies and
lymph node dissections for the treatment of breast cancer and
coverage for secondary consultations.’’.
TITLE XXIV—GENETIC
INFORMATION AND SERVICES
SEC. 2401. SHORT TITLE.
This title may be cited as the ‘‘Genetic Information
Nondiscrimination in Health Insurance Act of 2000’’.
SEC. 2402. AMENDMENTS TO EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.
(a) PROHIBITION OF HEALTH DISCRIMINATION ON
THE BASIS OF GENETIC INFORMATION OR GENETIC SERV-
ICES.—
(1) NO ENROLLMENT RESTRICTION FOR GENETIC
SERVICES.—Section 702(a)(1)(F) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1182(a)(1)(F)) is amended by inserting before the pe-
riod the following: ‘‘(including information about a
request for or receipt of genetic services)’’.
(2) NO
DISCRIMINATION
IN
GROUP
PREMIUMS
BASED ON PREDICTIVE GENETIC INFORMATION.—Sub-
part B of part 7 of subtitle B of title I of the Em-
ployee Retirement Income Security Act of 1974, as
amended by section 2301(c), is further amended by
adding at the end the following:
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‘‘SEC. 
716. 
PROHIBITING 
PREMIUM 
DISCRIMINATION
AGAINST GROUPS ON THE BASIS OF PRE-
DICTIVE GENETIC INFORMATION.
‘‘A group health plan, or a health insurance issuer of-
fering group health insurance coverage in connection with
a group health plan, shall not adjust premium or contribu-
tion amounts for a group on the basis of predictive genetic
information concerning any individual (including a de-
pendent) or family member of the individual (including in-
formation about a request for or receipt of genetic serv-
ices).’’.
(3) CONFORMING AMENDMENTS.—
(A) IN
GENERAL.—Section 702(b) of the
Employee Retirement Income Security Act of
1974 (29 U.S.C. 1182(b)) is amended by adding
at the end the following:
‘‘(3) REFERENCE TO RELATED PROVISION.—For
a provision prohibiting the adjustment of premium or
contribution amounts for a group under a group
health plan on the basis of predictive genetic informa-
tion (including information about a request for or re-
ceipt of genetic services), see section 716.’’.
(B) TABLE
OF
CONTENTS.—The table of
contents in section 1 of the Employee Retirement
Income Security Act of 1974, as amended by sec-
tion 2301, is further amended by inserting after
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the item relating to section 715 the following new
item:
‘‘Sec. 716. Prohibiting premium discrimination against groups on the basis of
predictive genetic information.’’.
(b) LIMITATION ON COLLECTION OF PREDICTIVE GE-
NETIC INFORMATION.—Section 702 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1182) is
amended by adding at the end the following:
‘‘(c) COLLECTION OF PREDICTIVE GENETIC INFORMA-
TION.—
‘‘(1) LIMITATION ON REQUESTING OR REQUIRING
PREDICTIVE GENETIC INFORMATION.—Except as pro-
vided in paragraph (2), a group health plan, or a
health insurance issuer offering health insurance cov-
erage in connection with a group health plan, shall
not request or require predictive genetic information
concerning any individual (including a dependent) or
family member of the individual (including informa-
tion about a request for or receipt of genetic services).
‘‘(2) INFORMATION
NEEDED
FOR
DIAGNOSIS,
TREATMENT, OR PAYMENT.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a group health plan, or a health in-
surance issuer offering health insurance coverage
in connection with a group health plan, that
provides health care items and services to an in-
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dividual or dependent may request (but may not
require) that such individual or dependent dis-
close, or authorize the collection or disclosure of,
predictive genetic information for purposes of di-
agnosis, treatment, or payment relating to the
provision of health care items and services to
such individual or dependent.
‘‘(B) NOTICE
OF
CONFIDENTIALITY
PRAC-
TICES AND DESCRIPTION OF SAFEGUARDS.—As a
part of a request under subparagraph (A), the
group health plan, or a health insurance issuer
offering health insurance coverage in connection
with a group health plan, shall provide to the in-
dividual or dependent a description of the proce-
dures in place to safeguard the confidentiality,
as described in subsection (d), of such predictive
genetic information.
‘‘(d) CONFIDENTIALITY
WITH
RESPECT
TO
PRE-
DICTIVE GENETIC INFORMATION.—
‘‘(1) NOTICE OF CONFIDENTIALITY PRACTICES.—
‘‘(A) PREPARATION OF WRITTEN NOTICE.—
A group health plan, or a health insurance
issuer offering health insurance coverage in con-
nection with a group health plan, shall post or
provide, in writing and in a clear and con-
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spicuous manner, notice of the plan or issuer’s
confidentiality practices, that shall include—
‘‘(i) a description of an individual’s
rights with respect to predictive genetic in-
formation;
‘‘(ii) the procedures established by the
plan or issuer for the exercise of the individ-
ual’s rights; and
‘‘(iii) the right to obtain a copy of the
notice of the confidentiality practices re-
quired under this subsection.
‘‘(B) MODEL
NOTICE.—The Secretary, in
consultation with the National Committee on
Vital and Health Statistics and the National As-
sociation of Insurance Commissioners, and after
notice and opportunity for public comment, shall
develop and disseminate model notices of con-
fidentiality practices. Use of the model notice
shall serve as a defense against claims of receiv-
ing inappropriate notice.
‘‘(2) 
ESTABLISHMENT
OF
SAFEGUARDS.—A
group health plan, or a health insurance issuer offer-
ing health insurance coverage in connection with a
group health plan, shall establish and maintain ap-
propriate administrative, technical, and physical
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safeguards to protect the confidentiality, security, ac-
curacy, and integrity of predictive genetic informa-
tion created, received, obtained, maintained, used,
transmitted, or disposed of by such plan or issuer.’’.
(c) DEFINITIONS.—Section 733(d) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1191b(d))
is amended by adding at the end the following:
‘‘(5) FAMILY MEMBER.—The term ‘family mem-
ber’ means with respect to an individual—
‘‘(A) the spouse of the individual;
‘‘(B) a dependent child of the individual,
including a child who is born to or placed for
adoption with the individual; and
‘‘(C) all other individuals related by blood
to the individual or the spouse or child described
in subparagraph (A) or (B).
‘‘(6) GENETIC INFORMATION.—The term ‘genetic
information’ means information about genes, gene
products, or inherited characteristics that may derive
from an individual or a family member (including
information about a request for or receipt of genetic
services).
‘‘(7) GENETIC
SERVICES.—The term ‘genetic
services’ means health services provided to obtain, as-
sess, or interpret genetic information for diagnostic
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and therapeutic purposes, and for genetic education
and counseling.
‘‘(8) PREDICTIVE GENETIC INFORMATION.—
‘‘(A) IN GENERAL.—The term ‘predictive ge-
netic information’ means, in the absence of
symptoms, clinical signs, or a diagnosis of the
condition related to such information—
‘‘(i) information about an individual’s
genetic tests;
‘‘(ii) information about genetic tests of
family members of the individual; or
‘‘(iii) information about the occurrence
of a disease or disorder in family members.
‘‘(B) EXCEPTIONS.—The term ‘predictive
genetic information’ shall not include—
‘‘(i) information about the sex or age of
the individual;
‘‘(ii) information derived from phys-
ical tests, such as the chemical, blood, or
urine analyses of the individual including
cholesterol tests; and
‘‘(iii) 
information 
about 
physical
exams of the individual.
‘‘(9) GENETIC
TEST.—The term ‘genetic test’
means the analysis of human DNA, RNA, chro-
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mosomes, proteins, and certain metabolites, including
analysis of genotypes, mutations, phenotypes, or
karyotypes, for the purpose of predicting risk of dis-
ease in asymptomatic or undiagnosed individuals.
Such term does not include physical tests, such as the
chemical, blood, or urine analyses of the individual
including cholesterol tests, and physical exams of the
individual, in order to detect symptoms, clinical
signs, or a diagnosis of disease.’’.
(d) EFFECTIVE DATE.—Except as provided in this sec-
tion, this section and the amendments made by this section
shall apply with respect to group health plans for plan
years beginning 1 year after the date of the enactment of
this Act.
SEC. 2403. AMENDMENTS TO THE PUBLIC HEALTH SERVICE
ACT.
(a) AMENDMENTS RELATING TO THE GROUP MAR-
KET.—
(1) PROHIBITION
OF
HEALTH
DISCRIMINATION
ON
THE
BASIS
OF
GENETIC
INFORMATION
IN
THE
GROUP MARKET.—
(A) NO ENROLLMENT RESTRICTION FOR GE-
NETIC SERVICES.—Section 2702(a)(1)(F) of the
Public Health Service Act (42 U.S.C. 300gg–
1(a)(1)(F)) is amended by inserting before the
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period the following: ‘‘(including information
about a request for or receipt of genetic serv-
ices)’’.
(B) NO
DISCRIMINATION
IN
PREMIUMS
BASED ON PREDICTIVE GENETIC INFORMATION.—
Subpart 2 of part A of title XXVII of the Public
Health Service Act (42 U.S.C. 300gg–4 et seq.),
as amended by section 2301(d), is amended by
adding at the end the following new section:
‘‘SEC. 
2708. 
PROHIBITING 
PREMIUM 
DISCRIMINATION
AGAINST GROUPS ON THE BASIS OF PRE-
DICTIVE 
GENETIC 
INFORMATION 
IN 
THE
GROUP MARKET.
‘‘A group health plan, or a health insurance issuer of-
fering group health insurance coverage in connection with
a group health plan shall not adjust premium or contribu-
tion amounts for a group on the basis of predictive genetic
information concerning any individual (including a de-
pendent) or family member of the individual (including in-
formation about a request for or receipt of genetic serv-
ices).’’.
(C) 
CONFORMING
AMENDMENT.—Section
2702(b) of the Public Health Service Act (42
U.S.C. 300gg–1(b)) is amended by adding at the
end the following:
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‘‘(3) REFERENCE TO RELATED PROVISION.—For
a provision prohibiting the adjustment of premium or
contribution amounts for a group under a group
health plan on the basis of predictive genetic informa-
tion (including information about a request for or re-
ceipt of genetic services), see section 2708.’’.
(D) LIMITATION ON COLLECTION AND DIS-
CLOSURE
OF
PREDICTIVE
GENETIC
INFORMA-
TION.—Section 2702 of the Public Health Service
Act (42 U.S.C. 300gg–1) is amended by adding
at the end the following:
‘‘(c) COLLECTION OF PREDICTIVE GENETIC INFORMA-
TION.—
‘‘(1) LIMITATION ON REQUESTING OR REQUIRING
PREDICTIVE GENETIC INFORMATION.—Except as pro-
vided in paragraph (2), a group health plan, or a
health insurance issuer offering health insurance cov-
erage in connection with a group health plan, shall
not request or require predictive genetic information
concerning any individual (including a dependent) or
a family member of the individual (including infor-
mation about a request for or receipt of genetic serv-
ices).
‘‘(2) INFORMATION
NEEDED
FOR
DIAGNOSIS,
TREATMENT, OR PAYMENT.—
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‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a group health plan, or a health in-
surance issuer offering health insurance coverage
in connection with a group health plan, that
provides health care items and services to an in-
dividual or dependent may request (but may not
require) that such individual or dependent dis-
close, or authorize the collection or disclosure of,
predictive genetic information for purposes of di-
agnosis, treatment, or payment relating to the
provision of health care items and services to
such individual or dependent.
‘‘(B) NOTICE
OF
CONFIDENTIALITY
PRAC-
TICES AND DESCRIPTION OF SAFEGUARDS.—As a
part of a request under subparagraph (A), the
group health plan, or a health insurance issuer
offering health insurance coverage in connection
with a group health plan, shall provide to the in-
dividual or dependent a description of the proce-
dures in place to safeguard the confidentiality,
as described in subsection (d), of such predictive
genetic information.
‘‘(d) CONFIDENTIALITY
WITH
RESPECT
TO
PRE-
DICTIVE GENETIC INFORMATION.—
‘‘(1) NOTICE OF CONFIDENTIALITY PRACTICES.—
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‘‘(A) PREPARATION OF WRITTEN NOTICE.—
A group health plan, or a health insurance
issuer offering health insurance coverage in con-
nection with a group health plan, shall post or
provide, in writing and in a clear and con-
spicuous manner, notice of the plan or issuer’s
confidentiality practices, that shall include—
‘‘(i) a description of an individual’s
rights with respect to predictive genetic in-
formation;
‘‘(ii) the procedures established by the
plan or issuer for the exercise of the individ-
ual’s rights; and
‘‘(iii) the right to obtain a copy of the
notice of the confidentiality practices re-
quired under this subsection.
‘‘(B) MODEL
NOTICE.—The Secretary, in
consultation with the National Committee on
Vital and Health Statistics and the National As-
sociation of Insurance Commissioners, and after
notice and opportunity for public comment, shall
develop and disseminate model notices of con-
fidentiality practices. Use of the model notice
shall serve as a defense against claims of receiv-
ing inappropriate notice.
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‘‘(2) 
ESTABLISHMENT
OF
SAFEGUARDS.—A
group health plan, or a health insurance issuer offer-
ing health insurance coverage in connection with a
group health plan, shall establish and maintain ap-
propriate administrative, technical, and physical
safeguards to protect the confidentiality, security, ac-
curacy, and integrity of predictive genetic informa-
tion created, received, obtained, maintained, used,
transmitted, or disposed of by such plan or issuer.’’.
(2) DEFINITIONS.—Section 2791(d) of the Public
Health Service Act (42 U.S.C. 300gg–91(d)) is
amended by adding at the end the following:
‘‘(15) FAMILY MEMBER.—The term ‘family mem-
ber’ means, with respect to an individual—
‘‘(A) the spouse of the individual;
‘‘(B) a dependent child of the individual,
including a child who is born to or placed for
adoption with the individual; and
‘‘(C) all other individuals related by blood
to the individual or the spouse or child described
in subparagraph (A) or (B).
‘‘(16) GENETIC
INFORMATION.—The term ‘ge-
netic information’ means information about genes,
gene products, or inherited characteristics that may
derive from an individual or a family member (in-
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cluding information about a request for or receipt of
genetic services).
‘‘(17) GENETIC
SERVICES.—The term ‘genetic
services’ means health services provided to obtain, as-
sess, or interpret genetic information for diagnostic
and therapeutic purposes, and for genetic education
and counseling.
‘‘(18) PREDICTIVE GENETIC INFORMATION.—
‘‘(A) IN GENERAL.—The term ‘predictive ge-
netic information’ means, in the absence of
symptoms, clinical signs, or a diagnosis of the
condition related to such information—
‘‘(i) information about an individual’s
genetic tests;
‘‘(ii) information about genetic tests of
family members of the individual; or
‘‘(iii) information about the occurrence
of a disease or disorder in family members.
‘‘(B) EXCEPTIONS.—The term ‘predictive
genetic information’ shall not include—
‘‘(i) information about the sex or age of
the individual;
‘‘(ii) information derived from phys-
ical tests, such as the chemical, blood, or
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urine analyses of the individual including
cholesterol tests; and
‘‘(iii) 
information 
about 
physical
exams of the individual.
‘‘(19) GENETIC TEST.—The term ‘genetic test’
means the analysis of human DNA, RNA, chro-
mosomes, proteins, and certain metabolites, including
analysis of genotypes, mutations, phenotypes, or
karyotypes, for the purpose of predicting risk of dis-
ease in asymptomatic or undiagnosed individuals.
Such term does not include physical tests, such as the
chemical, blood, or urine analyses of the individual
including cholesterol tests, and physical exams of the
individual, in order to detect symptoms, clinical
signs, or a diagnosis of disease.’’.
(e) AMENDMENTS TO PHSA RELATING TO THE INDI-
VIDUAL MARKET.—The first subpart 3 of part B of title
XXVII of the Public Health Service Act (42 U.S.C. 300gg–
51 et seq.) (relating to other requirements) (42 U.S.C.
300gg–51 et seq.), as amended by section 2301(e), is further
amended by adding at the end the following:
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‘‘SEC. 2754. PROHIBITION OF HEALTH DISCRIMINATION ON
THE BASIS OF PREDICTIVE GENETIC INFOR-
MATION.
‘‘(a) PROHIBITION ON PREDICTIVE GENETIC INFORMA-
TION AS A CONDITION OF ELIGIBILITY.—A health insurance
issuer offering health insurance coverage in the individual
market may not use predictive genetic information as a
condition of eligibility of an individual to enroll in indi-
vidual health insurance coverage (including information
about a request for or receipt of genetic services).
‘‘(b) PROHIBITION ON PREDICTIVE GENETIC INFORMA-
TION IN SETTING PREMIUM RATES.—A health insurance
issuer offering health insurance coverage in the individual
market shall not adjust premium rates for individuals on
the basis of predictive genetic information concerning such
an individual (including a dependent) or a family member
of the individual (including information about a request
for or receipt of genetic services).
‘‘(c) COLLECTION OF PREDICTIVE GENETIC INFORMA-
TION.—
‘‘(1) LIMITATION ON REQUESTING OR REQUIRING
PREDICTIVE GENETIC INFORMATION.—Except as pro-
vided in paragraph (2), a health insurance issuer of-
fering health insurance coverage in the individual
market shall not request or require predictive genetic
information concerning any individual (including a
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dependent) or a family member of the individual (in-
cluding information about a request for or receipt of
genetic services).
‘‘(2) INFORMATION
NEEDED
FOR
DIAGNOSIS,
TREATMENT, OR PAYMENT.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a health insurance issuer offering
health insurance coverage in the individual mar-
ket that provides health care items and services
to an individual or dependent may request (but
may not require) that such individual or de-
pendent disclose, or authorize the collection or
disclosure of, predictive genetic information for
purposes of diagnosis, treatment, or payment re-
lating to the provision of health care items and
services to such individual or dependent.
‘‘(B) NOTICE
OF
CONFIDENTIALITY
PRAC-
TICES AND DESCRIPTION OF SAFEGUARDS.—As a
part of a request under subparagraph (A), the
health insurance issuer offering health insurance
coverage in the individual market shall provide
to the individual or dependent a description of
the procedures in place to safeguard the con-
fidentiality, as described in subsection (d), of
such predictive genetic information.
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‘‘(d) CONFIDENTIALITY
WITH
RESPECT
TO
PRE-
DICTIVE GENETIC INFORMATION.—
‘‘(1) NOTICE OF CONFIDENTIALITY PRACTICES.—
‘‘(A) PREPARATION OF WRITTEN NOTICE.—
A health insurance issuer offering health insur-
ance coverage in the individual market shall post
or provide, in writing and in a clear and con-
spicuous manner, notice of the issuer’s confiden-
tiality practices, that shall include—
‘‘(i) a description of an individual’s
rights with respect to predictive genetic in-
formation;
‘‘(ii) the procedures established by the
issuer for the exercise of the individual’s
rights; and
‘‘(iii) the right to obtain a copy of the
notice of the confidentiality practices re-
quired under this subsection.
‘‘(B) MODEL
NOTICE.—The Secretary, in
consultation with the National Committee on
Vital and Health Statistics and the National As-
sociation of Insurance Commissioners, and after
notice and opportunity for public comment, shall
develop and disseminate model notices of con-
fidentiality practices. Use of the model notice
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shall serve as a defense against claims of receiv-
ing inappropriate notice.
‘‘(2) 
ESTABLISHMENT
OF
SAFEGUARDS.—A
health insurance issuer offering health insurance cov-
erage in the individual market shall establish and
maintain appropriate administrative, technical, and
physical safeguards to protect the confidentiality, se-
curity, accuracy, and integrity of predictive genetic
information created, received, obtained, maintained,
used, transmitted, or disposed of by such issuer.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply with respect to—
(1) group health plans, and health insurance
coverage offered in connection with group health
plans, for plan years beginning after 1 year after the
date of enactment of this Act; and
(2) health insurance coverage offered, sold,
issued, renewed, in effect, or operated in the indi-
vidual market after 1 year after the date of enactment
of this Act.
SEC. 2404. AMENDMENTS TO THE INTERNAL REVENUE
CODE OF 1986.
(a) PROHIBITION OF HEALTH DISCRIMINATION ON
THE BASIS OF GENETIC INFORMATION OR GENETIC SERV-
ICES.—
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(1) NO ENROLLMENT RESTRICTION FOR GENETIC
SERVICES.—Section 9802(a)(1)(F) of the Internal
Revenue Code of 1986 is amended by inserting before
the period the following: ‘‘(including information
about a request for or receipt of genetic services)’’.
(2) NO
DISCRIMINATION
IN
GROUP
PREMIUMS
BASED ON PREDICTIVE GENETIC INFORMATION.—
(A) IN GENERAL.—Subchapter B of chapter
100 of the Internal Revenue Code of 1986, as
amended by section 2301(f), is further amended
by adding at the end the following:
‘‘SEC. 
9815. 
PROHIBITING 
PREMIUM 
DISCRIMINATION
AGAINST GROUPS ON THE BASIS OF PRE-
DICTIVE GENETIC INFORMATION.
‘‘A group health plan shall not adjust premium or con-
tribution amounts for a group on the basis of predictive
genetic information concerning any individual (including
a dependent) or a family member of the individual (includ-
ing information about a request for or receipt of genetic
services).’’.
(B) 
CONFORMING
AMENDMENT.—Section
9802(b) of the Internal Revenue Code of 1986 is
amended by adding at the end the following:
‘‘(3) REFERENCE TO RELATED PROVISION.—For
a provision prohibiting the adjustment of premium or
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contribution amounts for a group under a group
health plan on the basis of predictive genetic informa-
tion (including information about a request for or the
receipt of genetic services), see section 9815.’’.
(C) AMENDMENT TO TABLE OF SECTIONS.—
The table of sections for subchapter B of chapter
100 of the Internal Revenue Code of 1986, as
amended by section 2301(f), is further amended
by adding at the end the following:
‘‘Sec. 9815. Prohibiting premium discrimination against groups on the basis of
predictive genetic information.’’.
(b) LIMITATION ON COLLECTION OF PREDICTIVE GE-
NETIC INFORMATION.—Section 9802 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the
following:
‘‘(d) COLLECTION OF PREDICTIVE GENETIC INFORMA-
TION.—
‘‘(1) LIMITATION ON REQUESTING OR REQUIRING
PREDICTIVE GENETIC INFORMATION.—Except as pro-
vided in paragraph (2), a group health plan shall not
request or require predictive genetic information con-
cerning any individual (including a dependent) or a
family member of the individual (including informa-
tion about a request for or receipt of genetic services).
‘‘(2) INFORMATION
NEEDED
FOR
DIAGNOSIS,
TREATMENT, OR PAYMENT.—
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‘‘(A) IN GENERAL.—Notwithstanding para-
graph (1), a group health plan that provides
health care items and services to an individual
or dependent may request (but may not require)
that such individual or dependent disclose, or
authorize the collection or disclosure of, pre-
dictive genetic information for purposes of diag-
nosis, treatment, or payment relating to the pro-
vision of health care items and services to such
individual or dependent.
‘‘(B) NOTICE
OF
CONFIDENTIALITY
PRAC-
TICES; DESCRIPTION
OF
SAFEGUARDS.—As a
part of a request under subparagraph (A), the
group health plan shall provide to the individual
or dependent a description of the procedures in
place to safeguard the confidentiality, as de-
scribed in subsection (e), of such predictive ge-
netic information.
‘‘(e) CONFIDENTIALITY WITH RESPECT TO PREDICTIVE
GENETIC INFORMATION.—
‘‘(1) NOTICE OF CONFIDENTIALITY PRACTICES.—
‘‘(A) PREPARATION OF WRITTEN NOTICE.—
A group health plan shall post or provide, in
writing and in a clear and conspicuous manner,
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notice of the plan’s confidentiality practices, that
shall include—
‘‘(i) a description of an individual’s
rights with respect to predictive genetic in-
formation;
‘‘(ii) the procedures established by the
plan for the exercise of the individual’s
rights; and
‘‘(iii) the right to obtain a copy of the
notice of the confidentiality practices re-
quired under this subsection.
‘‘(B) MODEL
NOTICE.—The Secretary, in
consultation with the National Committee on
Vital and Health Statistics and the National As-
sociation of Insurance Commissioners, and after
notice and opportunity for public comment, shall
develop and disseminate model notices of con-
fidentiality practices. Use of the model notice
shall serve as a defense against claims of receiv-
ing inappropriate notice.
‘‘(2) 
ESTABLISHMENT
OF
SAFEGUARDS.—A
group health plan shall establish and maintain ap-
propriate administrative, technical, and physical
safeguards to protect the confidentiality, security, ac-
curacy, and integrity of predictive genetic informa-
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tion created, received, obtained, maintained, used,
transmitted, or disposed of by such plan.’’.
(c) DEFINITIONS.—Section 9832(d) of the Internal
Revenue Code of 1986 is amended by adding at the end
the following:
‘‘(6) FAMILY MEMBER.—The term ‘family mem-
ber’ means, with respect to an individual—
‘‘(A) the spouse of the individual;
‘‘(B) a dependent child of the individual,
including a child who is born to or placed for
adoption with the individual; and
‘‘(C) all other individuals related by blood
to the individual or the spouse or child described
in subparagraph (A) or (B).
‘‘(7) GENETIC INFORMATION.—The term ‘genetic
information’ means information about genes, gene
products, or inherited characteristics that may derive
from an individual or a family member (including
information about a request for or receipt of genetic
services).
‘‘(8) GENETIC
SERVICES.—The term ‘genetic
services’ means health services provided to obtain, as-
sess, or interpret genetic information for diagnostic
and therapeutic purposes, and for genetic education
and counseling.
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‘‘(9) PREDICTIVE GENETIC INFORMATION.—
‘‘(A) IN GENERAL.—The term ‘predictive ge-
netic information’ means, in the absence of
symptoms, clinical signs, or a diagnosis of the
condition related to such information—
‘‘(i) information about an individual’s
genetic tests;
‘‘(ii) information about genetic tests of
family members of the individual; or
‘‘(iii) information about the occurrence
of a disease or disorder in family members.
‘‘(B) EXCEPTIONS.—The term ‘predictive
genetic information’ shall not include—
‘‘(i) information about the sex or age of
the individual;
‘‘(ii) information derived from phys-
ical tests, such as the chemical, blood, or
urine analyses of the individual including
cholesterol tests; and
‘‘(iii) 
information 
about 
physical
exams of the individual.
‘‘(10) GENETIC TEST.—The term ‘genetic test’
means the analysis of human DNA, RNA, chro-
mosomes, proteins, and certain metabolites, including
analysis of genotypes, mutations, phenotypes, or
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karyotypes, for the purpose of predicting risk of dis-
ease in asymptomatic or undiagnosed individuals.
Such term does not include physical tests, such as the
chemical, blood, or urine analyses of the individual
including cholesterol tests, and physical exams of the
individual, in order to detect symptoms, clinical
signs, or a diagnosis of disease.’’.
(d) EFFECTIVE DATE.—Except as provided in this sec-
tion, this section and the amendments made by this section
shall apply with respect to group health plans for plan
years beginning after 1 year after the date of the enactment
of this Act.
TITLE XXV—PATIENT SAFETY
AND ERRORS REDUCTION
SEC. 2501. SHORT TITLE.
This title may be cited as the ‘‘Patient Safety and Er-
rors Reduction Act’’.
SEC. 2502. PURPOSES.
It is the purpose of this title to—
(1) promote the identification, evaluation, and
reporting of medical errors;
(2) raise standards and expectations for im-
provements in patient safety;
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(3) reduce deaths, serious injuries, and other
medical errors through the implementation of safe
practices at the delivery level;
(4) develop error reduction systems with legal
protections to support the collection of information
under such systems;
(5) extend existing confidentiality and peer re-
view protections to the reports relating to medical er-
rors that are reported under such systems that are de-
veloped for safety and quality improvement purposes;
and
(6) provide for the establishment of systems of
information collection, analysis, and dissemination to
enhance the knowledge base concerning patient safety.
SEC. 2503. AMENDMENT TO PUBLIC HEALTH SERVICE ACT.
Title IX of the Public Health Service Act (42 U.S.C.
299 et seq.) is amended—
(1) by redesignating part C as part D;
(2) by redesignating sections 921 through 928, as
sections 931 through 938, respectively;
(3) in section 938(1) (as so redesignated), by
striking ‘‘921’’ and inserting ‘‘931’’; and
(4) by inserting after part B the following:
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‘‘PART C—REDUCING ERRORS IN HEALTH CARE
‘‘SEC. 921. DEFINITIONS.
‘‘In this part:
‘‘(1) ADVERSE EVENT.—The term ‘adverse event’
means, with respect to the patient of a provider of
services, an untoward incident, therapeutic misadven-
ture, or iatrogenic injury directly associated with the
provision of health care items and services by a health
care provider or provider of services.
‘‘(2) CENTER.—The term ‘Center’ means the
Center for Quality Improvement and Patient Safety
established under section 922(b).
‘‘(3) CLOSE CALL.—The term ‘close call’ means,
with respect to the patient of a provider of services,
any event or situation that—
‘‘(A) but for chance or a timely interven-
tion, could have resulted in an accident, injury,
or illness; and
‘‘(B) is directly associated with the provi-
sion of health care items and services by a pro-
vider of services.
‘‘(4) EXPERT ORGANIZATION.—The term ‘expert
organization’ means a third party acting on behalf of,
or in conjunction with, a provider of services to col-
lect information about, or evaluate, a medical event.
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‘‘(5) HEALTH CARE OVERSIGHT AGENCY.—The
term ‘health care oversight agency’ means an agency,
entity, or person, including the employees and agents
thereof, that performs or oversees the performance of
any activities necessary to ensure the safety of the
health care system.
‘‘(6) 
HEALTH
CARE
PROVIDER.—The 
term
‘health care provider’ means—
‘‘(A) any provider of services (as defined in
section 1861(u) of the Social Security Act); and
‘‘(B) any person furnishing any medical or
other health care services as defined in section
1861(s)(1) and (2) of such Act through, or under
the authority of, a provider of services described
in subparagraph (A).
‘‘(7) PROVIDER OF SERVICES.—The term ‘pro-
vider of services’ means a hospital, skilled nursing fa-
cility, comprehensive outpatient rehabilitation facil-
ity, home health agency, renal dialysis facility, ambu-
latory surgical center, or hospice program, and any
other entity specified in regulations promulgated by
the Secretary after public notice and comment.
‘‘(8) PUBLIC
HEALTH
AUTHORITY.—The term
‘public health authority’ means an agency or author-
ity of the United States, a State, a territory, a polit-
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ical subdivision of a State or territory, and an In-
dian tribe that is responsible for public health matters
as part of its official mandate.
‘‘(9) MEDICAL EVENT.—The term ‘medical event’
means, with respect to the patient of a provider of
services, any sentinel event, adverse event, or close
call.
‘‘(10) MEDICAL EVENT ANALYSIS ENTITY.—The
term ‘medical event analysis entity’ means an entity
certified under section 923(a).
‘‘(11) ROOT CAUSE ANALYSIS.—
‘‘(A) IN GENERAL.—The term ‘root cause
analysis’ means a process for identifying the
basic or contributing causal factors that underlie
variation in performance associated with med-
ical events that—
‘‘(i) has the characteristics described in
subparagraph (B);
‘‘(ii) includes participation by the
leadership of the provider of services and in-
dividuals most closely involved in the proc-
esses and systems under review;
‘‘(iii) is internally consistent; and
‘‘(iv) includes the consideration of rel-
evant literature.
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‘‘(B) CHARACTERISTICS.—The characteris-
tics described in this subparagraph include the
following:
‘‘(i) The analysis is interdisciplinary
in nature and involves those individuals
who are responsible for administering the
reporting systems.
‘‘(ii) The analysis focuses primarily on
systems and processes rather than indi-
vidual performance.
‘‘(iii) The analysis involves a thorough
review of all aspects of the process and all
contributing factors involved.
‘‘(iv) The analysis identifies changes
that could be made in systems and proc-
esses, through either redesign or development
of new processes or systems, that would im-
prove performance and reduce the risk of
medical events.
‘‘(12) SENTINEL
EVENT.—The term ‘sentinel
event’ means, with respect to the patient of a provider
of services, an unexpected occurrence that—
‘‘(A) involves death or serious physical or
psychological injury (including loss of a limb);
and
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‘‘(B) is directly associated with the provi-
sion of health care items and services by a health
care provider or provider of services.
‘‘SEC. 922. RESEARCH TO IMPROVE THE QUALITY AND SAFE-
TY OF PATIENT CARE.
‘‘(a) IN GENERAL.—To improve the quality and safety
of patient care, the Director shall—
‘‘(1) conduct and support research, evaluations
and training, support demonstration projects, provide
technical assistance, and develop and support part-
nerships that will identify and determine the causes
of medical errors and other threats to the quality and
safety of patient care;
‘‘(2) identify and evaluate interventions and
strategies for preventing or reducing medical errors
and threats to the quality and safety of patient care;
‘‘(3) identify, in collaboration with experts from
the public and private sector, reporting parameters to
provide consistency throughout the errors reporting
system;
‘‘(4) identify approaches for the clinical manage-
ment of complications from medical errors; and
‘‘(5) establish mechanisms for the rapid dissemi-
nation of interventions and strategies identified under
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this section for which there is scientific evidence of ef-
fectiveness.
‘‘(b) CENTER FOR QUALITY IMPROVEMENT AND PA-
TIENT SAFETY.—
‘‘(1) ESTABLISHMENT.—The Director shall estab-
lish a center to be known as the Center for Quality
Improvement and Patient Safety to assist the Direc-
tor in carrying out the requirements of subsection (a).
‘‘(2) MISSION.—The Center shall—
‘‘(A) provide national leadership for re-
search and other initiatives to improve the qual-
ity and safety of patient care;
‘‘(B) build public-private sector partner-
ships to improve the quality and safety of pa-
tient care; and
‘‘(C) serve as a national resource for re-
search and learning from medical errors.
‘‘(3) DUTIES.—
‘‘(A) IN
GENERAL.—In carrying out this
section, the Director, acting through the Center,
shall consult and build partnerships, as appro-
priate, with all segments of the health care in-
dustry, including health care practitioners and
patients, those who manage health care facilities,
systems and plans, peer review organizations,
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health care purchasers and policymakers, and
other users of health care research.
‘‘(B) REQUIRED
DUTIES.—In addition to
the broad responsibilities that the Director may
assign to the Center for research and related ac-
tivities that are designed to improve the quality
of health care, the Director shall ensure that the
Center—
‘‘(i) builds scientific knowledge and
understanding of the causes of medical er-
rors in all health care settings and identi-
fies or develops and validates effective inter-
ventions and strategies to reduce errors and
improve the safety and quality of patient
care;
‘‘(ii) promotes public and private sec-
tor research on patient safety by—
‘‘(I) developing a national patient
safety research agenda;
‘‘(II) identifying promising op-
portunities for preventing or reducing
medical errors; and
‘‘(III) tracking the progress made
in addressing the highest priority re-
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search questions with respect to patient
safety;
‘‘(iii) facilitates the development of vol-
untary national patient safety goals by con-
vening all segments of the health care indus-
try and tracks the progress made in meeting
those goals;
‘‘(iv) analyzes national patient safety
data for inclusion in the annual report on
the quality of health care required under
section 913(b)(2);
‘‘(v) strengthens the ability of the
United States to learn from medical errors
by—
‘‘(I) developing the necessary tools
and advancing the scientific techniques
for analysis of errors;
‘‘(II) providing technical assist-
ance as appropriate to reporting sys-
tems; and
‘‘(III) entering into contracts to
receive and analyze aggregate data
from public and private sector report-
ing systems;
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‘‘(vi) supports dissemination and com-
munication activities to improve patient
safety, including the development of tools
and methods for educating consumers about
patient safety; and
‘‘(vii) undertakes related activities that
the Director determines are necessary to en-
able the Center to fulfill its mission.
‘‘(C) LIMITATION.—Aggregate data gathered
for the purposes described in this section shall
not include specific patient, health care provider,
or provider of service identifiers.
‘‘(c) LEARNING FROM MEDICAL ERRORS.—
‘‘(1) IN GENERAL.—To enhance the ability of the
health care community in the United States to learn
from medical events, the Director shall—
‘‘(A) carry out activities to increase sci-
entific knowledge and understanding regarding
medical error reporting systems;
‘‘(B) carry out activities to advance the sci-
entific knowledge regarding the tools and tech-
niques for analyzing medical events and deter-
mining their root causes;
‘‘(C) carry out activities in partnership
with experts in the field to increase the capacity
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of the health care community in the United
States to analyze patient safety data;
‘‘(D) develop a confidential national safety
database of medical event reports;
‘‘(E) conduct and support research, using
the database developed under subparagraph (D),
into the causes and potential interventions to de-
crease the incidence of medical errors and close
calls; and
‘‘(F) ensure that information contained in
the national database developed under subpara-
graph (D) does not include specific patient,
health care provider, or provider of service iden-
tifiers.
‘‘(2) NATIONAL
PATIENT
SAFETY
DATABASE.—
The Director shall, in accordance with paragraph
(1)(D), establish a confidential national safety data-
base (to be known as the National Patient Safety
Database) of reports of medical events that can be
used only for research to improve the quality and
safety of patient care. In developing and managing
the National Patient Safety Database, the Director
shall—
‘‘(A) ensure that the database is only used
for its intended purpose;
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‘‘(B) ensure that the database is only used
by the Agency, medical event analysis entities,
and other qualified entities or individuals as de-
termined appropriate by the Director and in ac-
cordance with paragraph (3) or other criteria
applied by the Director;
‘‘(C) ensure that the database is as com-
prehensive as possible by aggregating data from
Federal, State, and private sector patient safety
reporting systems;
‘‘(D) conduct and support research on the
most common medical errors and close calls,
their causes, and potential interventions to re-
duce medical errors and improve the quality and
safety of patient care;
‘‘(E) disseminate findings made by the Di-
rector, based on the data in the database, to cli-
nicians, individuals who manage health care fa-
cilities, systems, and plans, patients, and other
individuals who can act appropriately to im-
prove patient safety; and
‘‘(F) develop a rapid response capacity to
provide alerts when specific health care practices
pose an imminent threat to patients or health