I
106TH CONGRESS
1ST SESSION
H. R. 719
To amend the Public Health Service Act and the Employee Retirement
Income Security Act of 1974 to protect consumers in managed care
plans and other health coverage.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 11, 1999
Mr. GANSKE (for himself, Mrs. ROUKEMA, Mr. LEACH, Mr. WAMP, Mr.
FORBES, Mr. PETRI, Mr. SHAYS, Mr. HORN, Mr. FRELINGHUYSEN, Mr.
FOLEY, and Mr. COOKSEY) introduced the following bill; which was re-
ferred to the Committee on Commerce, and in addition to the Committee
on Education and the Workforce, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend the Public Health Service Act and the Employee
Retirement Income Security Act of 1974 to protect con-
sumers in managed care plans and other health coverage.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Managed Care Reform Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—MANAGED CARE CONSUMER PROTECTIONS
Subtitle A—Access to Care
Sec. 101. Access to emergency care.
Sec. 102. Offering of choice of coverage options under group health plans.
Sec. 103. Choice of providers.
Sec. 104. Access to specialty care.
Sec. 105. Continuity of care.
Sec. 106. Coverage for individuals participating in approved clinical trials.
Sec. 107. Access to needed prescription drugs.
Sec. 108. Adequacy of provider network.
Subtitle B—Quality Assurance
Sec. 111. Standards for utilization review activities.
Subtitle C—Patient Information
Sec. 121. Patient information.
Sec. 122. Protection of patient confidentiality.
Sec. 123. Health insurance ombudsmen.
Subtitle D—Grievance and Appeals Procedures
Sec. 131. Establishment of grievance process.
Sec. 132. Internal appeals of adverse determinations.
Sec. 133. External appeals of adverse determinations.
Subtitle E—Protecting the Doctor-Patient Relationship
Sec. 141. Prohibition of interference with certain medical communications.
Sec. 142. Prohibition against transfer of indemnification or improper incentive
arrangements.
Sec. 143. Additional rules regarding participation of health care professionals.
Sec. 144. Protection for patient advocacy.
Subtitle F—Promoting Good Medical Practice
Sec. 151. Promoting good medical practice.
Sec. 152. Standards relating to benefits for certain breast cancer treatment.
Subtitle G—Definitions
Sec. 191. Definitions.
Sec. 192. Preemption; State flexibility; construction.
Sec. 193. Regulations.
TITLE II—APPLICATION OF PATIENT PROTECTION STANDARDS
TO GROUP HEALTH PLANS AND HEALTH INSURANCE COV-
ERAGE UNDER PUBLIC HEALTH SERVICE ACT
Sec. 201. Application to group health plans and group health insurance cov-
erage.
Sec. 202. Application to individual health insurance coverage.
TITLE III—AMENDMENTS TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974
Sec. 301. Application of patient protection standards to group health plans and
group health insurance coverage under the Employee Retire-
ment Income Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving health in-
surance policyholders.
TITLE IV—EFFECTIVE DATES; COORDINATION IN
IMPLEMENTATION
Sec. 401. Effective dates.
Sec. 402. Coordination in implementation.
TITLE I—MANAGED CARE
CONSUMER PROTECTIONS
Subtitle A—Access to Care
SEC. 101. ACCESS TO EMERGENCY CARE.
(a) COVERAGE OF EMERGENCY SERVICES.—
(1) IN GENERAL.—If a group health plan, or
health insurance coverage offered by a health insur-
ance issuer, provides any benefits with respect to
emergency services (as defined in paragraph (2)(B)),
the plan or issuer shall cover emergency services fur-
nished under the plan or coverage—
(A) without the need for any prior author-
ization determination;
(B) whether or not the health care pro-
vider furnishing such services is a participating
provider with respect to such services;
(C) in a manner so that, if such services
are provided to a participant, beneficiary, or en-
rollee by a nonparticipating health care provider
the participant, beneficiary, or enrollee is not
liable for amounts that exceed the amounts of
liability that would be incurred if the services
were provided by a participating health care
provider; and
(D) without regard to any other term or
condition of such coverage (other than exclusion
or coordination of benefits, or an affiliation or
waiting period, permitted under section 2701 of
the Public Health Service Act, section 701 of
the Employee Retirement Income Security Act
of 1974, or section 9801 of the Internal Reve-
nue Code of 1986, and other than applicable
cost-sharing).
(2) DEFINITIONS.—In this section:
(A) EMERGENCY
MEDICAL
CONDITION
BASED ON PRUDENT LAYPERSON STANDARD.—
The term ‘‘emergency medical condition’’ means
a medical condition manifesting itself by acute
symptoms of sufficient severity (including se-
vere pain) such that a prudent layperson, who
possesses an average knowledge of health and
medicine, could reasonably expect the absence
of immediate medical attention to result in a
condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security
Act.
(B) EMERGENCY
SERVICES.—The term
‘‘emergency services’’ means—
(i) a medical screening examination
(as required under section 1867 of the So-
cial Security Act) that is within the capa-
bility of the emergency department of a
hospital, including ancillary services rou-
tinely available to the emergency depart-
ment to evaluate an emergency medical
condition (as defined in subparagraph
(A)), and
(ii) within the capabilities of the staff
and facilities available at the hospital, such
further medical examination and treatment
as are required under section 1867 of such
Act to stabilize the patient.
(b) REIMBURSEMENT FOR MAINTENANCE CARE AND
POST-STABILIZATION CARE.—In the case of services
(other than emergency services) for which benefits are
available under a group health plan, or under health insur-
ance coverage offered by a health insurance issuer, the
plan or issuer shall provide for reimbursement with re-
spect to such services provided to a participant, bene-
ficiary, or enrollee other than through a participating
health care provider in a manner consistent with sub-
section (a)(1)(C) (and shall otherwise comply with the
guidelines established under section 1852(d)(2) of the So-
cial Security Act (relating to promoting efficient and time-
ly coordination of appropriate maintenance and post-sta-
bilization care of an enrollee after an enrollee has been
determined to be stable), or, in the absence of guidelines
under such section, such guidelines as the Secretary shall
establish to carry out this subsection), if the services are
maintenance care or post-stabilization care covered under
such guidelines.
SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS
UNDER GROUP HEALTH PLANS.
(a) REQUIREMENT.—
(1) OFFERING
OF
POINT-OF-SERVICE
COV-
ERAGE OPTION.—Except as provided in paragraph
(2), if a group health plan (or health insurance cov-
erage offered by a health insurance issuer in connec-
tion with a group health plan) provides benefits only
through participating health care providers, the plan
or issuer shall offer the participant the option to
purchase point-of-service coverage (as defined in
subsection (b)) for all such benefits for which cov-
erage is otherwise so limited. Such option shall be
made available to the participant at the time of en-
rollment under the plan or coverage and at such
other times as the plan or issuer offers the partici-
pant a choice of coverage options.
(2) EXCEPTION.—Paragraph (1) shall not
apply with respect to a participant in a group health
plan if the plan offers the participant—
(A) a choice of health insurance coverage;
and
(B) one or more coverage options which do
not provide benefits only through participating
health care providers and which provide for
payment for nonparticipating providers in an
amount that is not less than the amount paid
to a participating provider for the same serv-
ices.
(b) POINT-OF-SERVICE COVERAGE DEFINED.—In
this section, the term ‘‘point-of-service coverage’’ means,
with respect to benefits covered under a group health plan
or health insurance issuer, coverage of such benefits when
provided by a nonparticipating health care provider
through payment of an amount that is not less than the
amount paid to a participating health care provider for
the same services. Such coverage need not include cov-
erage of providers that the plan or issuer excludes because
of fraud, quality, or similar reasons.
(c) CONSTRUCTION.—Nothing in this section shall be
construed—
(1) as requiring coverage for benefits for a par-
ticular type of health care provider;
(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 op-
tions; or
(3) as preventing a group health plan or health
insurance issuer from imposing higher premiums or
cost-sharing on a participant for the exercise of a
point-of-service coverage option.
(d) NO REQUIREMENT
FOR GUARANTEED AVAIL-
ABILITY.—If a health insurance issuer offers health insur-
ance coverage that includes point-of-service coverage with
respect to an employer solely in order to meet the require-
ment of subsection (a), nothing in section 2711(a)(1)(A)
of the Public Health Service Act shall be construed as re-
quiring the offering of such coverage with respect to an-
other employer.
SEC. 103. CHOICE OF PROVIDERS.
(a) PRIMARY CARE.—A group health plan, and a
health insurance issuer that offers health insurance cov-
erage, shall permit each participant, beneficiary, and en-
rollee to receive primary care from any participating pri-
mary care provider who is available to accept such individ-
ual.
(b) SPECIALISTS.—
(1) IN GENERAL.—Subject to paragraph (2), a
group health plan and a health insurance issuer that
offers health insurance coverage shall permit each
participant, beneficiary, or enrollee to receive medi-
cally necessary or appropriate specialty care, pursu-
ant to appropriate referral procedures, from any
qualified participating health care provider who is
available to accept such individual for such care.
(2) LIMITATION.—Paragraph (1) shall not
apply to specialty care if the plan or issuer clearly
informs participants, beneficiaries, and enrollees of
the limitations on choice of participating providers
with respect to such care.
SEC. 104. ACCESS TO SPECIALTY CARE.
(a) OBSTETRICAL AND GYNECOLOGICAL CARE.—
(1) IN GENERAL.—If a group health plan, or a
health insurance issuer in connection with the provi-
sion of health insurance coverage, requires or pro-
vides for a participant, beneficiary, or enrollee to
designate a participating primary care provider, the
plan or issuer—
(A) may not require authorization or a re-
ferral by the individual’s primary care provider
or otherwise for coverage of routine gyneco-
logical care (such as preventive women’s health
examinations) and pregnancy-related services
provided by a participating health care profes-
sional who specializes in obstetrics and gyne-
cology to the extent such care is otherwise cov-
ered, and
(B) may treat the ordering of other gyne-
cological care by such a participating physician
as the authorization of the primary care pro-
vider with respect to such care under the plan
or coverage.
(2) CONSTRUCTION.—Nothing in paragraph
(1)(B) shall waive any requirements of coverage re-
lating to medical necessity or appropriateness with
respect to coverage of gynecological care so ordered.
(b) PEDIATRIC CARE.—If a group health plan, or a
health insurance issuer in connection with the provision
of health insurance coverage, requires or providers for an
enrollee to designate a participating primary care provider
for a child of such enrollee, the plan or issuer shall permit
the enrollee to designate a physician who specializes in pe-
diatrics as the child’s primary care provider.
(c) SPECIALTY CARE.—
(1) SPECIALTY
CARE
FOR
COVERED
SERV-
ICES.—
(A) IN GENERAL.—If—
(i) an individual is a participant or
beneficiary under a group health plan or
an enrollee who is covered under health in-
surance coverage offered by a health insur-
ance issuer,
(ii) the individual has a condition or
disease of sufficient seriousness and com-
plexity to require treatment by a specialist,
and
(iii) benefits for such treatment are
provided under the plan or coverage,
the plan or issuer shall make or provide for a
referral to a specialist who is available and ac-
cessible to provide the treatment for such condi-
tion or disease.
(B) SPECIALIST DEFINED.—For purposes
of this subsection, the term ‘‘specialist’’ means,
with respect to a condition, a health care practi-
tioner, facility, or center (such as a center of
excellence) that has adequate expertise through
appropriate training and experience (including,
in the case of a child, appropriate pediatric ex-
pertise) to provide high quality care in treating
the condition.
(C) CARE
UNDER
REFERRAL.—A group
health plan or health insurance issuer may re-
quire that the care provided to an individual
pursuant to such referral under subparagraph
(A) be—
(i) pursuant to a treatment plan, only
if the treatment plan is developed by the
specialist and approved by the plan or
issuer, in consultation with the designated
primary care provider or specialist and the
individual (or the individual’s designee),
and
(ii) in accordance with applicable
quality assurance and utilization review
standards of the plan or issuer.
Nothing in this subsection shall be construed as
preventing such a treatment plan for an individ-
ual from requiring a specialist to provide the
primary care provider with regular updates on
the specialty care provided, as well as all nec-
essary medical information.
(D) REFERRALS TO PARTICIPATING PRO-
VIDERS.—A group health plan or health insur-
ance issuer is not required under subparagraph
(A) to provide for a referral to a specialist that
is not a participating provider, unless the plan
or issuer does not have an appropriate specialist
that is available and accessible to treat the indi-
vidual’s condition and that is a participating
provider with respect to such treatment.
(E) TREATMENT
OF
NONPARTICIPATING
PROVIDERS.—If a plan or issuer refers an indi-
vidual to a nonparticipating specialist pursuant
to subparagraph (A), services provided pursu-
ant to the approved treatment plan (if any)
shall be provided at no additional cost to the in-
dividual beyond what the individual would oth-
erwise pay for services received by such a spe-
cialist that is a participating provider.
(2) SPECIALISTS AS GATEKEEPER FOR TREAT-
MENT OF ONGOING SPECIAL CONDITIONS.—
(A) IN GENERAL.—A group health plan, or
a health insurance issuer, in connection with
the provision of health insurance coverage, shall
have a procedure by which an individual who is
a participant, beneficiary, or enrollee and who
has an ongoing special condition (as defined in
subparagraph (C)) may receive a referral to a
specialist for such condition who shall be re-
sponsible for and capable of providing and co-
ordinating the individual’s care with respect to
the condition. If such an individual’s care would
most appropriately be coordinated by such a
specialist, such plan or issuer shall refer the in-
dividual to such specialist.
(B) TREATMENT AS PRIMARY CARE PRO-
VIDER FOR RELATED REFERRALS.—Such spe-
cialist shall be permitted to treat the individual
without a referral from the individual’s primary
care provider and may authorize such referrals,
procedures, tests, and other medical services as
the individual’s primary care provider would
otherwise be permitted to provide or authorize,
subject to the terms of the treatment plan (re-
ferred to in paragraph (1)(C)(i)) with respect to
the ongoing special condition.
(C) ONGOING
SPECIAL
CONDITION
DE-
FINED.—In this paragraph, 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.
(D) TERMS
OF
REFERRAL.—The provi-
sions of subparagraphs (C) through (E) of
paragraph (1) apply with respect to referrals
under subparagraph (A) of this paragraph in
the same manner as they apply to referrals
under paragraph (1)(A).
(3) STANDING REFERRALS.—
(A) IN GENERAL.—A group health plan,
and a health insurance issuer in connection
with the provision of health insurance coverage,
shall have a procedure by which an individual
who is a participant, beneficiary, or enrollee
and who has a condition that requires ongoing
care from a specialist may receive a standing
referral to such specialist for treatment of such
condition. If the plan or issuer, or if the pri-
mary care provider in consultation with the
medical director of the plan or issuer and the
specialist (if any), determines that such a
standing referral is appropriate, the plan or
issuer shall make such a referral to such a spe-
cialist.
(B) TERMS
OF
REFERRAL.—The provi-
sions of subparagraphs (C) through (E) of
paragraph (1) apply with respect to referrals
under subparagraph (A) of this paragraph in
the same manner as they apply to referrals
under paragraph (1)(A).
SEC. 105. CONTINUITY OF CARE.
(a) IN GENERAL.—
(1) TERMINATION OF PROVIDER.—If a contract
between a group health plan, or a health insurance
issuer in connection with the provision of health in-
surance coverage, and a health care provider is ter-
minated (as defined in paragraph (3)), or benefits or
coverage provided by a health care provider are ter-
minated because of a change in the terms of pro-
vider participation in a group health plan, and an in-
dividual who is a participant, beneficiary, or enrollee
in the plan or coverage is undergoing a course of
treatment from the provider at the time of such ter-
mination, the plan or issuer shall—
(A) notify the individual on a timely basis
of such termination, and
(B) subject to subsection (c), permit the
individual to continue or be covered with re-
spect to the course of treatment with the pro-
vider during a transitional period (provided
under subsection (b)).
(2) TREATMENT
OF
TERMINATION
OF
CON-
TRACT
WITH
HEALTH
INSURANCE
ISSUER.—If a
contract for the provision of health insurance cov-
erage between a group health plan and a health in-
surance issuer is terminated and, as a result of such
termination, coverage of services of a health care
provider is terminated with respect to an individual,
the provisions of paragraph (1) (and the succeeding
provisions of this section) shall apply under the plan
in the same manner as if there had been a contract
between the plan and the provider that had been ter-
minated, but only with respect to benefits that are
covered under the plan after the contract termi-
nation.
(3) TERMINATION.—In this section, the term
‘‘terminated’’ includes, with respect to a contract,
the expiration or nonrenewal of the contract, but
does not include a termination of the contract by the
plan or issuer for failure to meet applicable quality
standards or for fraud.
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, beneficiary, or enrollee
was determined to be terminally ill (as deter-
mined under section 1861(dd)(3)(A) of the So-
cial Security 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
extend for the remainder of the individual’s life for
care directly related to the treatment of the terminal
illness or its medical manifestations.
(c) PERMISSIBLE
TERMS
AND
CONDITIONS.—A
group health plan or health insurance issuer may condi-
tion coverage of continued treatment by a provider under
subsection (a)(1)(B) upon the provider agreeing to the fol-
lowing terms and conditions:
(1) The provider agrees to accept reimburse-
ment from the plan or issuer and individual involved
(with respect to cost-sharing) at the rates applicable
prior to the start of the transitional period as pay-
ment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement
plan or issuer after the date of the termination of
the contract with the health insurance issuer) and
not to impose cost-sharing with respect to the indi-
vidual in an amount that would exceed the cost-shar-
ing that could have been imposed if the contract re-
ferred to in subsection (a)(1) had not been termi-
nated.
(2) The provider agrees to adhere to the quality
assurance standards of the plan or issuer responsible
for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information
related to the care provided.
(3) The provider agrees otherwise to adhere to
such plan’s or issuer’s policies and procedures, in-
cluding procedures regarding referrals and obtaining
prior authorization and providing services pursuant
to a treatment plan (if any) approved by the plan or
issuer.
(d) CONSTRUCTION.—Nothing in this section shall be
construed to require the coverage of benefits which would
not have been covered if the provider involved remained
a participating provider.
SEC. 106. COVERAGE FOR INDIVIDUALS PARTICIPATING IN
APPROVED CLINICAL TRIALS.
(a) COVERAGE.—
(1) IN GENERAL.—If a group health plan, or
health insurance issuer that is providing health in-
surance coverage, provides coverage to a qualified in-
dividual (as defined in subsection (b)), the plan or
issuer—
(A) may not deny the individual participa-
tion in the clinical trial referred to in subsection
(b)(2);
(B) subject to subsection (c), may not deny
(or limit or impose additional conditions on) the
coverage of routine patient costs for items and
services furnished in connection with participa-
tion in the trial; and
(C) may not discriminate against the indi-
vidual on the basis of the enrollee’s participa-
tion 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
conducted 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 or issuer from requiring
that a qualified individual participate in the trial
through such a participating provider if the provider
will accept the individual as a participant in the
trial.
(b) QUALIFIED INDIVIDUAL DEFINED.—For pur-
poses of subsection (a), the term ‘‘qualified individual’’
means an individual who is a participant or beneficiary
in a group health plan, or who is an enrollee under health
insurance coverage, and who meets the following condi-
tions:
(1)(A) The individual has a life-threatening or
serious illness for which no standard treatment is ef-
fective.
(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.
(C) The individual’s participation in the trial
offers meaningful potential for significant clinical
benefit for the individual.
(2) Either—
(A) the referring physician is a participat-
ing health care professional and has concluded
that the individual’s participation in such trial
would be appropriate based upon the individual
meeting the conditions described in paragraph
(1); or
(B) the participant, beneficiary, or enrollee
provides medical and scientific information es-
tablishing that the individual’s participation in
such trial would be appropriate based upon the
individual meeting the conditions described in
paragraph (1).
(c) PAYMENT.—
(1) IN GENERAL.—Under this section a group
health plan or health insurance issuer shall provide
for payment for routine patient costs described in
subsection (a)(2) but is not required to pay for costs
of items and services that are reasonably expected
(as determined by the Secretary) to be paid for by
the sponsors of an approved clinical trial.
(2) 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 or issuer
would normally pay for comparable services
under subparagraph (A).
(d) APPROVED CLINICAL TRIAL DEFINED.—
(1) IN
GENERAL.—In this section, the term
‘‘approved clinical trial’’ means a clinical research
study or clinical investigation approved and funded
(which may include funding through in-kind con-
tributions) 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) 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
conditions described in this paragraph, for a study
or investigation conducted by a Department, are
that the study or investigation has been reviewed
and approved through a system of peer review that
the Secretary determines—
(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 or issuer’s coverage with re-
spect to clinical trials.
SEC. 107. ACCESS TO NEEDED PRESCRIPTION DRUGS.
(a) IN GENERAL.—If a group health plan, or health
insurance issuer that offers health insurance coverage,
provides benefits with respect to prescription drugs but
the coverage limits such benefits to drugs included in a
formulary, the plan or issuer shall—
(1) ensure participation of participating physi-
cians and pharmacists in the development of the for-
mulary;
(2) disclose to providers and, disclose upon re-
quest under section 121(c)(6) to participants, bene-
ficiaries, and enrollees, the nature of the formulary
restrictions; and
(3) consistent with the standards for a utiliza-
tion review program under section 111, provide for
exceptions from the formulary limitation when a
non-formulary alternative is medically indicated.
(b) COVERAGE OF APPROVED DRUGS AND MEDICAL
DEVICES.—
(1) IN
GENERAL.—A group health plan (or
health insurance coverage offered in connection with
such a plan) that provides any coverage of prescrip-
tion drugs or medical devices shall not deny coverage
of such a drug or device on the basis that the use
is investigational, if the use—
(A) in the case of a prescription drug—
(i) is included in the labeling author-
ized by the application in effect for the
drug pursuant to subsection (b) or (j) of
section 505 of the Federal Food, Drug,
and Cosmetic Act, without regard to any
postmarketing 
requirements 
that 
may
apply under such Act; or
(ii) is included in the labeling author-
ized by the application in effect for the
drug under section 351 of the Public
Health Service Act, without regard to any
postmarketing 
requirements 
that 
may
apply pursuant to such section; or
(B) in the case of a medical device, is in-
cluded in the labeling authorized by a regula-
tion under subsection (d) or (3) of section 513
of the Federal Food, Drug, and Cosmetic Act,
an order under subsection (f) of such section, or
an application approved under section 515 of
such Act, without regard to any postmarketing
requirements that may apply under such Act.
(2) CONSTRUCTION.—Nothing in this sub-
section shall be construed as requiring a group
health plan (or health insurance coverage offered in
connection with such a plan) to provide any coverage
of prescription drugs or medical devices.
SEC. 108. ADEQUACY OF PROVIDER NETWORK.
(a) IN GENERAL.—Each group health plan, and each
health insurance issuer offering health insurance coverage,
that provides benefits, in whole or in part, through partici-
pating health care providers shall have (in relation to the
coverage) a sufficient number, distribution, and variety of
qualified participating health care providers to ensure that
all covered health care services, including specialty serv-
ices, will be available and accessible in a timely manner
to all participants, beneficiaries, and enrollees under the
plan or coverage. This subsection shall only apply to a
plan’s or issuer’s application of restrictions on the partici-
pation of health care providers in a network and shall not
be construed as requiring a plan or issuer to create or
establish new health care providers in an area.
(b) TREATMENT
OF
CERTAIN
PROVIDERS.—The
qualified health care providers under subsection (a) may
include Federally qualified health centers, rural health
clinics, migrant health centers, and other essential com-
munity providers located in the service area of the plan
or issuer and shall include such providers if necessary to
meet the standards established to carry out such sub-
section.
Subtitle B—Quality Assurance
SEC. 111. STANDARDS FOR UTILIZATION REVIEW ACTIVI-
TIES.
(a) COMPLIANCE WITH REQUIREMENTS.—
(1) IN GENERAL.—A group health plan, and a
health insurance issuer that provides health insur-
ance coverage, shall conduct utilization review activi-
ties in connection with the provision of benefits
under such plan or coverage only in accordance with
a utilization review program that meets the require-
ments of this section.
(2) USE OF OUTSIDE AGENTS.—Nothing in this
section shall be construed as preventing a group
health plan or health insurance issuer from arrang-
ing through a contract or otherwise for persons or
entities to conduct utilization review activities on be-
half of the plan or issuer, so long as such activities
are conducted in accordance with a utilization review
program that meets the requirements of this section.
(3) UTILIZATION REVIEW DEFINED.—For pur-
poses of this section, the terms ‘‘utilization review’’
and ‘‘utilization review activities’’ mean procedures
used to monitor or evaluate the clinical necessity,
appropriateness, efficacy, or efficiency of health care
services, procedures or settings, and includes pro-
spective review, concurrent review, second opinions,
case management, discharge planning, or retrospec-
tive review.
(b) WRITTEN POLICIES AND CRITERIA.—
(1) WRITTEN POLICIES.—A utilization review
program shall be conducted consistent with written
policies and procedures that govern all aspects of the
program.
(2) USE OF WRITTEN CRITERIA.—
(A) IN GENERAL.—Such a program shall
utilize written clinical review criteria developed
pursuant to the program with the input of ap-
propriate physicians.
(B) CONTINUING USE OF STANDARDS IN
RETROSPECTIVE
REVIEW.—If a health care
service has been specifically pre-authorized or
approved for an enrollee under such a program,
the program shall not, pursuant to retrospective
review, revise or modify the specific standards,
criteria, or procedures used for the utilization
review for procedures, treatment, and services
delivered to the enrollee during the same course
of treatment.
(c) CONDUCT OF PROGRAM ACTIVITIES.—
(1) ADMINISTRATION BY HEALTH CARE PRO-
FESSIONALS.—A utilization review program shall be
administered by qualified health care professionals
who shall oversee review decisions. In this sub-
section, the term ‘‘health care professional’’ means a
physician or other health care practitioner licensed,
accredited, or certified to perform specified health
services consistent with State law.
(2) USE
OF
QUALIFIED, INDEPENDENT
PER-
SONNEL.—
(A) IN
GENERAL.—A utilization review
program shall provide for the conduct of utiliza-
tion review activities only through personnel
who are qualified and, to the extent required,
who have received appropriate training in the
conduct of such activities under the program.
(B) PEER
REVIEW
OF
SAMPLE
OF
AD-
VERSE
CLINICAL
DETERMINATIONS.—Such a
program shall provide that clinical peers (as de-
fined in section 191(c)(2)) shall evaluate the
clinical appropriateness of at least a sample of
adverse clinical determinations.
(C) PROHIBITION
OF
CONTINGENT
COM-
PENSATION ARRANGEMENTS.—Such a program
shall not, with respect to utilization review ac-
tivities, permit or provide compensation or any-
thing of value to its employees, agents, or con-
tractors in a manner that—
(i) provides incentives, direct or indi-
rect, for such persons to make inappropri-
ate review decisions, or
(ii) is based, directly or indirectly, on
the quantity or type of adverse determina-
tions rendered.
(D) PROHIBITION OF CONFLICTS.—Such a
program shall not permit a health care profes-
sional who provides health care services to an
individual to perform utilization review activi-
ties in connection with the health care services
being provided to the individual.
(3) ACCESSIBILITY OF REVIEW.—Such a pro-
gram shall provide that appropriate personnel per-
forming utilization review activities under the pro-
gram are reasonably accessible by toll-free telephone
during normal business hours to discuss patient care
and allow response to telephone requests, and that
appropriate provision is made to receive and respond
promptly to calls received during other hours.
(4) LIMITS ON FREQUENCY.—Such a program
shall not provide for the performance of utilization
review activities with respect to a class of services
furnished to an individual more frequently than is
reasonably required to assess whether the services
under review are medically necessary or appropriate.
(5) LIMITATION ON INFORMATION REQUESTS.—
Under such a program, information shall be required
to be provided by health care providers only to the
extent it is necessary to perform the utilization re-
view activity involved.
(d) DEADLINE FOR DETERMINATIONS.—
(1) PRIOR AUTHORIZATION SERVICES.—Except
as provided in paragraph (2), in the case of a utili-
zation review activity involving the prior authoriza-
tion of health care items and services for an individ-
ual, the utilization review program shall make a de-
termination concerning such authorization, and pro-
vide notice of the determination to the individual or
the individual’s designee and the individual’s health
care provider by telephone and in printed form, as
soon as possible in accordance with the medical ex-
igencies of the cases, and in no event later than 3
business days after the date of receipt of information
that is reasonably necessary to make such deter-
mination.
(2) CONTINUED CARE.—In the case of a utiliza-
tion review activity involving authorization for con-
tinued or extended health care services for an indi-
vidual, or additional services for an individual under-
going a course of continued treatment prescribed by
a health care provider, the utilization review pro-
gram shall make a determination concerning such
authorization, and provide notice of the determina-
tion to the individual or the individual’s designee
and the individual’s health care provider by tele-
phone and in printed form, as soon as possible in ac-
cordance with the medical exigencies of the cases,
and in no event later than 1 business day after the
date of receipt of information that is reasonably nec-
essary to make such determination. Such notice shall
include, with respect to continued or extended health
care services, the number of extended services ap-
proved, the new total of approved services, the date
of onset of services, and the next review date, if any.
(3) PREVIOUSLY PROVIDED SERVICES.—In the
case of a utilization review activity involving retro-
spective review of health care services previously pro-
vided for an individual, the utilization review pro-
gram shall make a determination concerning such
services, and provide notice of the determination to
the individual or the individual’s designee and the
individual’s health care provider by telephone and in
printed form, within 30 days of the date of receipt
of information that is reasonably necessary to make
such determination.
(4) REFERENCE TO SPECIAL RULES FOR EMER-
GENCY SERVICES, MAINTENANCE CARE, AND POST-
STABILIZATION CARE.—For waiver of prior author-
ization requirements in certain cases involving emer-
gency services and maintenance care and post-sta-
bilization care, see subsections (a)(1) and (b) of sec-
tion 101, respectively.
(e) NOTICE OF ADVERSE DETERMINATIONS.—
(1) IN GENERAL.—Notice of an adverse deter-
mination under a utilization review program shall be
provided in printed form and shall include—
(A) the reasons for the determination (in-
cluding the clinical rationale);
(B) instructions on how to initiate an ap-
peal under section 132; and
(C) notice of the availability, upon request
of the individual (or the individual’s designee)
of the clinical review criteria relied upon to
make such determination.
(2) SPECIFICATION OF ANY ADDITIONAL INFOR-
MATION.—Such a notice shall also specify what (if
any) additional necessary information must be pro-
vided to, or obtained by, the person making the de-
termination in order to make a decision on such an
appeal.
Subtitle C—Patient Information
SEC. 121. PATIENT INFORMATION.
(a) DISCLOSURE REQUIREMENT.—
(1) GROUP HEALTH PLANS.—A group health
plan shall—
(A) provide to participants and bene-
ficiaries at the time of initial coverage under
the plan (or the effective date of this section, in
the case of individuals who are participants or
beneficiaries as of such date), and at least an-
nually thereafter, the information described in
subsection (b) in printed form;
(B) provide to participants and bene-
ficiaries, within a reasonable period (as speci-
fied by the appropriate Secretary) before or
after the date of significant changes in the in-
formation described in subsection (b), informa-
tion in printed form on such significant
changes; and
(C) upon request, make available to par-
ticipants and beneficiaries, the applicable au-
thority, and prospective participants and bene-
ficiaries, the information described in sub-
section (b) or (c) in printed form.
(2) HEALTH
INSURANCE
ISSUERS.—A health
insurance issuer in connection with the provision of
health insurance coverage shall—
(A) provide to individuals enrolled under
such coverage at the time of enrollment, and at
least annually thereafter, the information de-
scribed in subsection (b) in printed form;
(B) provide to enrollees, within a reason-
able period (as specified by the appropriate Sec-
retary) before or after the date of significant
changes in the information described in sub-
section (b), information in printed form on such
significant changes; and
(C) upon request, make available to the
applicable authority, to individuals who are pro-
spective enrollees, and to the public the infor-
mation described in subsection (b) or (c) in
printed form.
(b) INFORMATION PROVIDED.—The information de-
scribed in this subsection with respect to a group health
plan or health insurance coverage offered by a health in-
surance issuer includes the following:
(1) SERVICE AREA.—The service area of the
plan or issuer.
(2) BENEFITS.—Benefits offered under the
plan or coverage, including—
(A) covered benefits, including benefit lim-
its and coverage exclusions;
(B) cost sharing, such as deductibles, coin-
surance, and copayment amounts, including any
liability for balance billing, any maximum limi-
tations on out of pocket expenses, and the max-
imum out of pocket costs for services that are
provided by nonparticipating providers or that
are furnished without meeting the applicable
utilization review requirements;
(C) the extent to which benefits may be ob-
tained from nonparticipating providers;
(D) the extent to which a participant, ben-
eficiary, or enrollee may select from among par-
ticipating providers and the types of providers
participating in the plan or issuer network;
(E) process for determining experimental
coverage; and
(F) use of a prescription drug formulary.
(3) ACCESS.—A description of the following:
(A) The number, mix, and distribution of
providers under the plan or coverage.
(B) Out-of-network coverage (if any) pro-
vided by the plan or coverage.
(C) Any point-of-service option (including
any supplemental premium or cost-sharing for
such option).
(D) The procedures for participants, bene-
ficiaries, and enrollees to select, access, and
change participating primary and specialty pro-
viders.
(E) The rights and procedures for obtain-
ing referrals (including standing referrals) to
participating and nonparticipating providers.
(F) The name, address, and telephone
number of participating health care providers
and an indication of whether each such provider
is available to accept new patients.
(G) Any limitations imposed on the selec-
tion of qualifying participating health care pro-
viders, including any limitations imposed under
section 103(b)(2).
(H) How the plan or issuer addresses the
needs of participants, beneficiaries, and enroll-
ees and others who do not speak English or
who have other special communications needs in
accessing providers under the plan or coverage,
including the provision of information described
in this subsection and subsection (c) to such in-
dividuals and including the provision of infor-
mation in a language other than English if 5
percent of the number of participants, bene-
ficiaries, and enrollees communicate in that lan-
guage instead of English.
(4) OUT-OF-AREA COVERAGE.—Out-of-area cov-
erage provided by the plan or issuer.
(5) 
EMERGENCY
COVERAGE.—Coverage 
of
emergency services, including—
(A) the appropriate use of emergency serv-
ices, including use of the 911 telephone system
or its local equivalent in emergency situations
and an explanation of what constitutes an
emergency situation;
(B) the process and procedures of the plan
or issuer for obtaining emergency services; and
(C) the locations of (i) emergency depart-
ments, and (ii) other settings, in which plan
physicians and hospitals provide emergency
services and post-stabilization care.
(6) PERCENTAGE
OF
PREMIUMS
USED
FOR
BENEFITS (LOSS-RATIOS).—In the case of health in-
surance coverage only (and not with respect to group
health plans that do not provide coverage through
health insurance coverage), a description of the over-
all loss-ratio for the coverage (as defined in accord-
ance with rules established or recognized by the Sec-
retary of Health and Human Services).
(7) PRIOR AUTHORIZATION RULES.—Rules re-
garding prior authorization or other review require-
ments that could result in noncoverage or non-
payment.
(8) GRIEVANCE AND APPEALS PROCEDURES.—
All appeal or grievance rights and procedures under
the plan or coverage, including the method for filing
grievances and the time frames and circumstances
for acting on grievances and appeals, who is the ap-
plicable authority with respect to the plan or issuer,
and the availability of assistance through an om-
budsman to individuals in relation to group health
plans and health insurance coverage.
(9) SUMMARY OF PROVIDER FINANCIAL INCEN-
TIVES.—A summary description of the information
on the types of financial payment incentives (de-
scribed in section 1852(j)(4) of the Social Security
Act) provided by the plan or issuer under the cov-
erage.
(10) INFORMATION ON ISSUER.—Notice of ap-
propriate mailing addresses and telephone numbers
to be used by participants, beneficiaries, and enroll-
ees in seeking information or authorization for treat-
ment.
(11) AVAILABILITY OF INFORMATION ON RE-
QUEST.—Notice that the information described in
subsection (c) is available upon request.
(c) INFORMATION MADE AVAILABLE UPON RE-
QUEST.—The information described in this subsection is
the following:
(1) UTILIZATION REVIEW ACTIVITIES.—A de-
scription of procedures used and requirements (in-
cluding circumstances, time frames, and appeal
rights) under any utilization review program under
section 111, including under any drug formulary
program under section 107.
(2) GRIEVANCE AND APPEALS INFORMATION.—
Information on the number of grievances and ap-
peals and on the disposition in the aggregate of such
matters.
(3) METHOD OF PHYSICIAN COMPENSATION.—
An overall summary description as to the method of
compensation of participating physicians, including
information on the types of financial payment incen-
tives (described in section 1852(j)(4) of the Social
Security Act) provided by the plan or issuer under
the coverage.
(4) SPECIFIC INFORMATION ON CREDENTIALS
OF PARTICIPATING PROVIDERS.—In the case of each
participating provider, a description of the creden-
tials of the provider as they relate to education,
training, specialty qualifications, and national ac-
creditation.
(5) CONFIDENTIALITY
POLICIES
AND
PROCE-
DURES.—A description of the policies and proce-
dures established to carry out section 122.
(6) FORMULARY RESTRICTIONS.—A description
of the nature of any drug formula restrictions.
(7) PARTICIPATING PROVIDER LIST.—A list of
current participating health care providers.
(d) FORM OF DISCLOSURE.—
(1) UNIFORMITY.—Information required to be
disclosed under this section shall be provided in ac-
cordance with uniform, national reporting standards
specified by the Secretary, after consultation with
applicable State authorities, so that prospective en-
rollees may compare the attributes of different
issuers and coverage offered within an area.
(2) INFORMATION INTO HANDBOOK.—Nothing
in this section shall be construed as preventing a
group health plan or health insurance issuer from
making the information under subsections (b) and
(c) available to participants, beneficiaries, and en-
rollees through an enrollee handbook or similar pub-
lication.
(3) UPDATING
PARTICIPATING
PROVIDER
IN-
FORMATION.—The 
information 
on 
participating
health care providers described in subsection
(b)(3)(C) shall be updated within such reasonable
period as determined appropriate by the Secretary.
Nothing in this section shall prevent an issuer from
changing or updating other information made avail-
able under this section.
(e) CONSTRUCTION.—Nothing in this section shall be
construed as requiring public disclosure of individual con-