I
104TH CONGRESS
2D SESSION
H. R. 4315
To provide patients with information and rights to promote better health
care.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 28, 1996
Mr. OWENS (for himself, Ms. NORTON, Ms. MCKINNEY, Mr. FRAZER, Mr.
YATES, Mr. DELLUMS, Mr. PAYNE of New Jersey, Mr. HILLIARD, Mr.
KILDEE, and Mrs. MINK of Hawaii) introduced the following bill; which
was referred to the Committee on Commerce, and in addition to the Com-
mittee on Ways and Means, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
A BILL
To provide patients with information and rights to promote
better health care.
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
‘‘Patient and Health Care Provider Protection Act of
1996’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
TITLE I—HEALTH PLAN REQUIREMENTS
Sec. 101. Interference with medical communication prohibited.
Sec. 102. Improper incentive plan prohibited.
Sec. 103. Provisions regarding denial of care.
Sec. 104. Quality of care.
Sec. 105. Privacy.
Sec. 106. Fee.
Sec. 107. Enforcement through civil penalties.
Sec. 108. Prohibition on adverse action.
TITLE II—OFFICE OF CONSUMER ADVOCACY FOR HEALTH
Sec. 201. Establishment of office.
Sec. 202. Assistance to individuals with grievances against a health plan.
Sec. 203. Assurance of access by all individuals to quality health care.
Sec. 204. Federal investigation and emergency intervention.
Sec. 205. Annual report to the secretary.
Sec. 206. Office administration.
Sec. 207. Oversight.
Sec. 208. Funding of office.
TITLE III—INDEPENDENT CONSUMER ADVISORY COMMITTEES
Sec. 301. Establishment of committees.
Sec. 302. Membership and chair.
Sec. 303. Functions of committee.
Sec. 304. Liability of members of committee.
Sec. 305. Annual report to office.
Sec. 306. Funding for committees.
TITLE IV—COORDINATION AMONG OFFICE, COMMITTEES, AND
SECRETARY
Sec. 401. Interaction among office and other organizations.
Sec. 402. Assistance to committees.
Sec. 403. Coordinated data analysis and dissemination procedure.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The largest category of health spending is
hospital services; in 1994, 35 percent of national
health spending was for hospital services worth
$338,500,000,000.
(2) The hospital industry exhibits the fastest
rising costs in the health care sector.
(3) The largest expenditures for the hospital in-
dustry are payroll (wages and salaries) and employee
benefits; in 1992, payroll and employee benefits ac-
counted for almost 55 percent of total hospital ex-
penses.
(4) Because registered nurses comprise the ma-
jority of a hospital’s expenses, in an effort to remain
competitive, hospitals are restructuring their oper-
ations by decreasing payroll and benefit outlays for
registered nurses and either decreasing their number
or replacing them with unlicensed aides to care di-
rectly for patients.
(5) While this reorganization is taking place, no
mandatory, national, and systematic compilation of
data is being undertaken to determine the correla-
tion between skilled nursing care and patient safety.
(6) Several studies, however, have noted a basic
relationship between skilled nursing care and patient
safety: increased deaths result when inadequate
nursing and lower levels of registered nurses in com-
bination with higher levels of unlicensed aides are
utilized by health care facilities.
(7) A comprehensive effort is needed at the na-
tional level to collect data and develop a research
and evaluation agenda so that informed policy devel-
opment, implementation and evaluation are under-
taken in a timely manner to protect the safety of pa-
tients, the well being of health care workers, and the
integrity of the United States medical system.
(8) The quality of available health care will suf-
fer in the United States if health care delivery is al-
lowed to set priorities in which profit is made at the
expense of patient care quality and safety.
(9) Core clinical staff, such as registered
nurses, are a key component in increasing quality,
understanding patient care needs, and balancing
costs in any reformed health care system.
(10) Health care is a basic and universal need;
therefore, the right of any consumer to have access
to one’s own confidential medical records and perti-
nent information on the health care facility that is
delivering health care and to participate effectively
in the process of improving the delivery and quality
of such care should not be impaired.
SEC. 3. DEFINITIONS.
In this Act:
(1) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means an individual or entity
licensed or certified under State law to provide
health care services.
(2) HEALTH PLAN.—The term ‘‘health plan’’
means any private health plan or arrangement (in-
cluding an employee welfare benefit plan) which pro-
vides, or pays the cost of, health care services.
(3) SECRETARY.—Except as otherwise expressly
provided, the term ‘‘Secretary’’ means Secretary of
Health and Human Services.
(4) COVERAGE OF THIRD PARTY ADMINISTRA-
TORS.—In the case of a health plan that is an em-
ployee welfare benefit plan (as defined in section
3(1) of the Employee Retirement Income Security
Act of 1974), any third party administrator or other
person with responsibility for contracts with health
care providers under the plan shall be considered,
for purposes of this Act, to be an entity offering
such health plan.
(5) ENROLLEE.—The term ‘‘enrollee’’ means a
person enrolled under a health plan.
(6) OFFICE.—The term ‘‘Office’’ means the Of-
fice of Consumer Advocacy for Health as described
in title II of this Act.
(7) 
COMMITTEE.—The 
term 
‘‘Committee’’
means an Independent Consumer Advisory Commit-
tee as described in title III of this Act.
TITLE I—HEALTH PLAN
REQUIREMENTS
SEC. 101. INTERFERENCE WITH MEDICAL COMMUNICATION
PROHIBITED.
(a) IN GENERAL.—A health plan may not as part of
any contract or agreement with a health care provider pro-
vide any restriction on or interference with any medical
communication, as defined in subsection (b).
(b) MEDICAL COMMUNICATION DEFINED.—For pur-
poses of subsection (a), the term ‘‘medical communica-
tion’’—
(1) means any communication, other than a
knowing misrepresentation, made by the health care
provider—
(A) regarding the mental or physical
health care needs or treatment of a patient and
the provisions, terms, or requirements of the
health plan or another health plan relating to
such needs or treatment; and
(B) between—
(i) the provider and a current, former,
or prospective patient (or the guardian or
legal representative of a patient);
(ii) the provider and any employee or
representative of the such plan; or
(iii) the provider and any employee or
representative of any State or Federal au-
thority with responsibility for the licensing
or oversight with respect to such plan; and
(2) includes communications concerning—
(A) any tests, consultations, and treatment
options;
(B) any risks or benefits associated with
such test, consultations, and options;
(C) variation among any health care pro-
viders and any institutions providing such serv-
ices in experience, quality, or outcomes;
(D) the basis or standard for the decision
of a health plan to authorize or deny health
care services or benefits;
(E) the process used by such a plan to de-
termine whether to authorize or deny health
care services or benefits; and
(F) any financial incentives or disincen-
tives provided by such a plan to a health care
provider that are based on service utilization.
(c) NON-PREEMPTION OF STATE LAW.—A State may
establish or enforce requirements with respect to the sub-
ject matter of this section, but only if such requirements
are more protective of a medical communication than the
requirements established under this section.
(d) EFFECTIVE DATE.—Subsection (a) shall apply to
contracts or agreements entered into or renewed on or
after the date of the enactment of this Act, and to con-
tracts and agreements entered into before such date as
of 30 days after the date of the enactment of this Act.
SEC. 102. IMPROPER INCENTIVE PLAN PROHIBITED.
(a) IN GENERAL.—A health plan may not as part of
any contract or agreement with a health care provider op-
erate an improper health care provider incentive plan as
described in subsection (b).
(b) IMPROPER INCENTIVE PLAN.—For purposes of
subsection (a), a health care provider incentive plan is im-
proper, unless such plan meets the requirements of section
1876(i)(8)(A) of the Social Security Act (42 U.S.C.
1395mm(i)(8)(A)) for physician incentive plans in con-
tracts with eligible organizations under section 1876 of
such Act.
(c) INCENTIVE PLAN DEFINED.—In this section, the
term ‘‘health care provider incentive plan’’ means any
compensation or other financial arrangement between a
health plan and a health care provider that may directly
or indirectly have the effect of limiting services provided
with respect to an enrollee.
(d) EFFECTIVE DATE.—Subsection (a) shall apply to
contracts or agreements entered into or renewed on or
after the date of the enactment of this Act, and to con-
tracts and agreements entered into before such date as
of 30 days after the date of the enactment of this Act.
SEC. 103. PROVISIONS REGARDING DENIAL OF CARE.
(a) CRITERIA FOR DENIAL OF CARE.—A health plan
shall establish criteria, in consultation with the health care
providers who provide services under the plan, for the de-
nial of services under the plan.
(b) PRELIMINARY
PHYSICAL
EXAMINATION.—A
health plan shall provide for an initial physical examina-
tion of an enrollee in a timely manner before denying serv-
ices under the plan to the enrollee. Such examination shall
not constitute services under the health plan.
(c) REASON FOR DENIAL OF CARE PROVIDED TO
ENROLLEE.—A health plan shall provide in writing to an
enrollee, and to the health care provider recommending
care for the enrollee, the reason for the denial of services
under the plan to the enrollee.
(d) PUBLICATION
OF CRITERIA
FOR DENIAL
OF
CARE.—A health plan shall put in writing, annually up-
date, and make available to its enrollees through the Of-
fice and its Committee the written criteria established
under subsection (a).
(e) EFFECTIVE DATE.—The criteria under this sec-
tion shall apply to plan years beginning on or after 180
days after the date of the enactment of this Act.
SEC. 104. QUALITY OF CARE.
(a) CRITERIA FOR QUALITY OF CARE.—
(1) IN GENERAL.—A health plan, in consulta-
tion with the health care providers who provide
health services under the plan, shall establish cri-
teria to assure the quality of care provided under the
plan. Such plan shall establish such criteria utilizing
the data collected and analyzed under subsection (c)
and (d), and under section 403.
(2) DEADLINE.—The criteria under paragraph
(1) shall apply to plan years beginning on or after
2 years after the date of the enactment of this Act.
(b) PUBLIC ACCESS TO INFORMATION.—
(1) PUBLICATION
OF
CRITERIA
TO
ASSURE
QUALITY OF CARE.—A health plan shall put in writ-
ing, annually update, and make available the written
criteria established under subsection (a) to its enroll-
ees through the plan’s Committee.
(2) SAFE STAFFING LEVELS.—
(A) IN GENERAL.—Not later than 1 year
after the date of the enactment of this Act, the
Secretary shall, by rule, establish guidelines
that determine the number and classifications
of health care providers necessary to ensure
safe and adequate staffing in relation to enroll-
ees under a health plan.
(B) FACTORS.—Such guidelines shall be
based on—
(i) the severity of illness of each en-
rollee;
(ii) factors affecting the period and
quality of recovery of each enrollee; and
(iii) any other factor substantially re-
lated to the condition and health care
needs of each enrollee.
(3) SAFE AND ADEQUATE STAFFING LEVELS.—
(A) IN
GENERAL.—Not later than 180
days after the date the Secretary establishes the
guidelines under paragraph (2), a health plan
may not provide or pay for health care services
provided to an enrollee at an institution unless
such institution complies with such guidelines.
(B) SUBMISSION
OF
PROPOSED
STAND-
ARDS TO COMMITTEE.—In the case of an insti-
tution that elects not to adopt the guidelines es-
tablished under paragraph (2), such institution
shall submit proposed staffing levels to the
health plan and its Committee for review. Such
institution shall include with its submission an
explanation of the method and criteria used in
developing the proposed staffing levels.
(C) DEFAULT FEDERAL GUIDELINES.—If
the health plan’s Committee determines that
the staffing levels proposed by such institution
fail to meet the guidelines established under
paragraph (2), then the health plan may not
provide or pay for health care services provided
to an enrollee at such institution unless such in-
stitution adopts such guidelines as its staffing
levels.
(D) CRITERIA AND CERTIFICATE OF COM-
PLIANCE.—Such plan shall file with the Sec-
retary and the Office of the State in which the
plan offers health care services a certificate of
compliance with the staffing levels adopted by
the institutions where the plan provides or pays
for health care services for its enrollees.
(E) PUBLIC
INSPECTION.—Such institu-
tions shall keep on file, available for public in-
spection during regular business hours, daily re-
ports of staffing levels by department and of
patient census.
(4) IDENTIFICATION TAG.—
(A) IN GENERAL.—A health plan may not
provide or pay for health care services provided
to an enrollee at an institution unless such in-
stitution prohibits a health care provider who is
not wearing an identification tag from providing
care to an enrollee.
(B) LICENSURE
STATUS.—An identifica-
tion tag under subparagraph (A) shall state the
health care provider’s name and the health care
position for which such provider has been li-
censed or certified by the State.
(C) VISIBILITY.—Such tag shall be visible
to the enrollee.
(D) EXCEPTION.—The requirement under
subparagraph (A) shall not apply where wear-
ing such tag poses a threat to the health of a
patient (such as in an operating room).
(c) DATA COLLECTION.—
(1) MEDICAL
DATA.—Except as provided in
section 105(a), a health plan, in conjunction with its
Committee, shall compile data on health care serv-
ices provided to enrollees under the health plan in-
cluding—
(A) enrollee outcome information, includ-
ing nosocomial infections, medication errors, en-
rollee injury, enrollee mortality, and rate of en-
rollee readmission;
(B) structure of care provided, including
nurse to enrollee ratios, general staffing ratios,
injuries to nurses and other staff, and quality
of staff; and
(C) process of care, including the planning
and delivery of care, an assessment of the deliv-
ery mechanisms, and safety measures.
(2) FINANCIAL DATA.—
(A) FINANCIAL REPORT.—Not later than
December 31st of each year, a health plan that
employs more than 150 individuals shall file,
with the Office of the State in which such plan
offers health care services, a copy of—
(i) any financial report or return filed
under Federal or State tax or securities
laws;
(ii) a statement of any financial inter-
est greater than 5% or $5,000, whichever
is less, in any other health plan; and
(iii) a statement of the nature and
outcome of any complaint, lawsuit, arbitra-
tion, or other legal proceeding brought
against the plan, unless such disclosure is
prohibited by court order or law.
(B) QUALITY
REPORT.—Not later than
December 31st of each year, a health plan shall
file, with the Office of the State in which that
plan offers health care services, a report of all
health care quality indicators, criteria, data, or
studies used to evaluate, assess, or determine
the nature, scope, quality, or staffing of health
care services, and for reductions in or modifica-
tions of the provision of health care services.
(C) FIRST REPORT.— Such plan shall file
its first report not later than December 31st of
its first plan year beginning on or after the
date of the enactment of this Act.
(d) DATA ANALYSIS AND DISSEMINATION.—
(1) INFORMATION
SUBMITTED
TO
COMMIT-
TEE.—For purposes of section 403, a health plan
shall provide the data collected under subsection
(c)(1) to its Committee.
(2) DISCLOSURE OF NURSING CARE DATA TO
ENROLLEES.—Such plan shall provide information
to an enrollee about the ratio of nurses to enrollees
provided under the plan.
SEC. 105. PRIVACY.
(a) ENROLLEE’S PRIVACY RIGHTS.—Prior to the col-
lection of data under section 104(c), a health plan shall
establish standards and procedures to protect from public
disclosure information that identifies an individual and re-
lates to such individual’s physical or mental health. Such
standards and procedures may not adversely affect the in-
tegrity of the data.
(b) ENROLLEE’S MEDICAL RECORDS.—A health plan
shall protect the privacy of a enrollee’s medical records,
and may only release such records—
(1) to a third party with the informed written
consent of the enrollee given at the time the release
is sought;
(2) to a law enforcement agency pursuant to a
warrant issued under the Federal Rules of Criminal
Procedure, an equivalent State warrant, a grand
jury subpoena, or a court order; or
(3) pursuant to a court order, in a civil pro-
ceeding upon a showing of compelling need for the
information that cannot be accommodated by any
other means, if—
(A) the enrollee is given reasonable notice,
by the person seeking the release, of the court
proceeding relevant to the issuance of the court
order; and
(B) the enrollee is afforded the opportunity
to appear and contest the claim of the person
seeking the release.
(c) EFFECTIVE DATE.—Subsection (b) takes effect
30 days after the date of the enactment of this Act.
SEC. 106. FEE.
(a) IN GENERAL.—A health plan, in each State
where the plan offers health care services, shall pay to the
State 1 percent of the total amount of the annual pre-
miums for each year with respect to enrollment in the
health plan for such year of individuals residing in the
State, as described in section 208.
(b) FIRST PAYMENT.—
(1) IN GENERAL.—A health plan shall make the
first payment under subsection (a) not later than 6
months after the first day of the first full month
after the date of the enactment of this Act.
(2) PAYMENTS PRORATED FROM DATE OF EN-
ACTMENT.—Payments due under subsection (a) for
the year in which this Act is enacted shall be pro-
rated to apply only with respect to months beginning
on or after the date of the enactment of this Act.
(c) STATE DEFINED.—As used in subsection (a), the
term ‘‘State’’ includes the District of Columbia, Puerto
Rico, the Virgin Islands, Guam, American Samoa, and the
Northern Mariana Islands.
SEC. 107. ENFORCEMENT THROUGH CIVIL PENALTIES.
(a) ENFORCEMENT THROUGH IMPOSITION OF CIVIL
MONEY PENALTY.—A health plan that violates any provi-
sion of sections 101 through 106 shall be subject to a civil
money penalty of—
(1) up to $25,000 for each violation; or
(2) up to $100,000 for each violation if the Sec-
retary determines that the plan has engaged, within
the 5 years immediately preceding such violation, in
a pattern of such violations.
(b) PROCEDURES.—The provisions of subsections (c)
through (l) of section 1128A of the Social Security Act
(42 U.S.C. 1320a–7a) shall apply to civil money penalties
under this section in the same manner as they apply to
a penalty or proceeding under section 1128A(a) of such
Act.
SEC. 108. PROHIBITION ON ADVERSE ACTION.
(a) IN GENERAL.—No health plan may terminate or
take other adverse action against any health care provider
for actions taken for the purpose of—
(1) notifying such plan of conditions which the
identifies, in communications with the plan, as dan-
gerous or potentially dangerous or injurious to—
(A) enrollees who currently receive health
care services under the plan;
(B) individuals who are likely to receive
such services; or
(C) health care providers who provide such
services;
(2) notifying a Federal or State agency or an
accreditation agency, compliance with the standards
of which have been deemed to demonstrate compli-
ance with conditions of participation under the Med-
icare program, of such conditions as are identified in
paragraph (1);
(3) notifying other individuals of conditions
which the provider or group of providers reasonably
believe to be such as are described in paragraph (1);
(4) discussing such conditions as are identified
in paragraph (1) with other providers for the pur-
poses of initiating action described in paragraph (1),
(2), or (3);
(5) a medical communication, as defined in sec-
tion 101(b); or
(6) other related activities as specified in rules
made by the Secretary.
(b) EXCEPTION.—The protections of this section
shall not apply to any health care provider who knowingly
or recklessly provides substantially false information to
the Secretary.
(c) SANCTION.—A determination by the Secretary
that a health plan has taken such action as described in
subsection (a) shall result in termination from participa-
tion in the Medicare program for a period of time to be
specified by the Secretary, such period to be not less than
1 month.
(d) CIVIL ACTION.—A health care provider aggrieved
by a violation of subsection (a) may in a civil action obtain
appropriate relief. Such relief may include, with respect
to a provider, the reinstatement of the provider to his or
her former position under the health plan together with
the compensation (including back pay), terms, conditions,
and privileges associated with such position.
(e) EFFECTIVE DATE.—Subsection (a) shall apply to
actions taken on or after the date of the enactment of this
Act, regardless of when the communication on which the
action is based occurred.
TITLE II—OFFICE OF CONSUMER
ADVOCACY FOR HEALTH
SEC. 201. ESTABLISHMENT OF OFFICE.
(a) IN GENERAL.—The Secretary, in consultation
with the Secretary of Labor, shall establish for each State
an independent Office for such State to assist consumers
in dealing with problems that arise with respect to health
plans and health care providers operating in such State.
(b) ESTABLISHMENT THROUGH GRANT PROCESS.—
(1) IN
GENERAL.—The Secretary shall carry
out the requirements of subsection (a) with respect
to each State by designating a non-profit organiza-
tion located in the State to serve as the Office for
the State, under a grant awarded, in consultation
with the Secretary of Labor, under a competitive se-
lection process. The grant may be awarded only to
organizations headed by an individual with expertise
and experience in the fields of health care and
consumer advocacy, who shall be designated the
Consumer Advocate for Health for the State. In
awarding such grant, the Secretary, in consultation
with the Secretary of Labor, shall—
(A) consider any nominations submitted by
consumer advocacy organizations in the State;
and
(B) give preference to organizations that
represent a broad spectrum of the diverse
consumer interests in the State and that have
demonstrated a capability of representing, and
working with, a broad diversity of consumers,
including members of medically underserved
communities.
(2) REQUIREMENTS.—Each grant awarded
under this subsection shall provide as follows:
(A) CENTRAL OFFICE.—A central office of
the organization awarded the grant which is lo-
cated in the State shall be designated as the
Office.
(B) LOCAL
OFFICES.—The organization
awarded the grant shall establish and maintain
local offices of the Office in accordance with
subsection (c).
(C) PERFORMANCE OF SPECIFIED FUNC-
TIONS.—The organization shall perform the
functions of the Office specified in this title and
otherwise ensure that the requirements of this
section applicable to the Office are met.
(D) EVALUATION OF QUALITY AND EFFEC-
TIVENESS
OF
GRANTEE.—The Secretary, in
consultation with the Secretary of Labor, shall
evaluate the quality and effectiveness of the or-
ganization in carrying out the functions of the
Office.
(E) TERM
OF
GRANT
AND
RENEWABIL-
ITY.—Each grant shall be awarded for a term
of 4 years and shall be renewable for succeeding
4-year terms without reopening the competitive
selection process if the grantee has performed
properly pursuant to this section and the terms
of the grant.
(F) NOTICE OF INTENT NOT TO RENEW;
RECONSIDERATION.—Not later than 180 days
before the expiration of any term under a grant
awarded to an organization, if the Secretary at
such time intends not to renew the grant with
such organization, the Secretary shall notify
such organization of such intent, and shall pro-
vide such organization an opportunity for recon-
sideration by the Secretary, in consultation with
the Secretary of Labor, of the Secretary’s in-
tent not to renew and to present information in
support of renewal.
(G) TERMINATION BY GRANTEE.—The or-
ganization may terminate the grant prior to its
expiration upon 180 days notice to the Sec-
retary.
(H) TERMINATION BY THE SECRETARY.—
The Secretary, in consultation with the Sec-
retary of Labor, may terminate the grant prior
to its expiration upon 180 days notice to the or-
ganization if the Secretary, in consultation with
the Secretary of Labor, determines that the or-
ganization is not meeting the requirements of
this section or that the organization is failing
substantially to carry out the grant. The Sec-
retary, in consultation with the Secretary of
Labor, shall provide for an appropriate appeals
mechanism, including establishment of a panel
of peers, to implement this subparagraph.
(c) DELEGATIONS TO LOCAL OFFICES.—
(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Labor, shall provide for
appropriate delegation by the Consumer Advocate
for Health of the authority and responsibilities of
the Office to local offices to the extent necessary to
effectively carry out the duties and responsibilities of
the Consumer Advocate for Health throughout the
State.
(2) MONITORING.—The Secretary, in consulta-
tion with the Secretary of Labor, shall develop and
maintain policies and procedures for monitoring
such local offices and ensuring compliance by such
local offices with the terms of such delegation.
(3) PLACEMENT
OF
LOCAL
OFFICE
IN
EACH
COMMUNITY RATING AREA.—
(A) IN GENERAL.—Pursuant to such dele-
gation, the Consumer Advocate for Health shall
ensure that there is located in each community
rating area in the State an officer or employee
of the Office who is designated to assist individ-
uals residing in the area with respect to matters
relating to health plans and health care provid-
ers operating in the area.
(B) ASSIGNMENT
OF
STAFF
FOR
EACH
PLAN.—Each such office for such area shall
have an individual who is assigned with respect
to each health plan that enrolls individuals re-
siding in the area. Such an individual may be
assigned to more than one plan.
(C) APPROPRIATE STAFFING.—The Office
shall ensure that sufficient staff in each local
office is assigned to work with respect to mat-
ters relating to each health plan whose enrollees
are served by the local office so as to ensure ef-
fective and efficient service in such local office
with respect to matters relating to such plan.
(d) 
ESTABLISHMENT
OF
COMMUNITY
RATING
AREAS.—
(1) IN GENERAL.—The Secretary shall provide
for the division of each State into 1 or more commu-
nity rating areas. Each portion of the State shall be
within 1, and only 1, community rating area. The
Secretary may revise the boundaries of such areas
from time to time consistent with this subsection.
(2) MULTIPLE AREAS.—With respect to a com-
munity rating area—
(A) no metropolitan statistical area in a
State may be incorporated into more than 1
such area in the State;
(B) the number of individuals residing
within such an area may not be less than
250,000; and
(C) no area incorporated in a community
rating area may be incorporated into another
such area.
(3) BOUNDARIES.—
(A) IN GENERAL.—In establishing bound-
aries for community rating areas, the Secretary
may not discriminate on the basis of or other-
wise take into account race, age, language, reli-
gion, national origin, socio-economic status, sex-
ual orientation, disability, or perceived health
status.
(B) TREATMENT OF CONSOLIDATED MET-
ROPOLITAN STATISTICAL AREAS.—A community
rating area that includes all of a Consolidated
Metropolitan Statistical Area that is within a
State is presumed to meet the requirement of
subparagraph (A).
SEC. 202. ASSISTANCE TO INDIVIDUALS WITH GRIEVANCES
AGAINST A HEALTH PLAN.
(a) IN GENERAL.—An Office shall provide an individ-
ual assistance with determining, in connection with any
stated grievance against a health plan, the manner and
extent to which such grievance may be presented as—
(1) an issue of denial of items or services, or re-
imbursement therefor;
(2) an issue of denial of medical records;
(3) an issue of malpractice;
(4) an issue of discrimination;
(5) an issue of eligibility and payment of sub-
sidies for premium payments and cost sharing;
(6) an issue of enrollment; or
(7) any other violation actionable under this
Act.
(b) GRIEVANCE ASSISTANCE.—Such Office shall pro-
vide, in person and by toll–free telephone access, assist-
ance to an individual with a grievance under subsection
(a).
(c) COMPLAINT FORMS.—Such Office shall create an
instruction sheet that explains how to file, maintain, and
resolve a complaint against a health plan, and provide
such sheet to an individual seeking to file a complaint
against a health plan. Such instruction sheet shall be writ-
ten in plain language understandable by a layperson, and
it shall use a step-by-step format to guide the layperson
through each stage of the complaint process.
SEC. 203. ASSURANCE OF ACCESS BY ALL INDIVIDUALS TO
QUALITY HEALTH CARE.
(a) IN GENERAL.—An Office shall identify, inves-
tigate, publicize, promote solutions to, and resolve griev-
ances stemming from, any practice, policy, law, or regula-
tion of a health plan that may adversely affect access by
an individual to quality health care, including a practice,
policy, law, or regulation relating to—
(1) marketing of the plan;
(2) availability of premium and cost sharing
subsidies;
(3) accessibility of services and resources in tra-
ditionally underserved areas;
(4) targeting of resources to traditionally un-
derserved areas; and
(5) elimination of practices that impede access
to available choices for individuals at health risk, in-
cluding the proper implementation of community
rating and risk adjustments.
(b) MONITORING OF HEALTH PLAN DENIAL PROCE-
DURES.—Such Office shall monitor procedures used by
health plans for denial of services and for reconsideration
of such denials.
SEC. 204. FEDERAL INVESTIGATION AND EMERGENCY
INTERVENTION.
(a) IN GENERAL.—An Office shall provide, in person
and by toll–free telephone access, assistance to an individ-
ual who seeks to report dangerous conditions in health
care services offered under a health plan.
(b) FEDERAL INTERVENTION.—The Secretary may,
in cases of compromised safety that are life threatening,
initiate emergency investigation of or remedial interven-
tion in services provided or practices undertaken by a
health plan.
(c) RULES.—
(1) IN GENERAL.—For purposes of subsection
(b), the Secretary shall, by rule, establish guidelines
for safety.
(2) CONSIDERATION OF DATA.—In establishing
and reviewing the guidelines under paragraph (1),
the Secretary shall base the guidelines to the maxi-
mum extent practicable on the data collected and the
analysis performed under this Act.
SEC. 205. ANNUAL REPORT TO THE SECRETARY.
(a) IN GENERAL.—Not later than December 31st of
each year, an Office shall submit a report to the Secretary.
(b) CONTENT OF REPORT.—The report required by
subsection (a) shall include—
(1) the nature of consumer complaints against
health plans;
(2) the percentage of unresolved or outstanding
complaints against health plans;
(3) discernible patterns from the data collected;
(4) recommendations for resolution of unre-
solved or outstanding complaints;
(5) recommendations to sanction a certain
health plan;
(6) a copy of any report received from a health
plan; and
(7) a copy of any report received from the Com-
mittee which reports to such Office.
(c) DATE OF FIRST REPORT.—An Office shall file its
first report not later than December 31st of the first full
calendar year after such Office is established.
SEC. 206. OFFICE ADMINISTRATION.
(a) IN GENERAL.—An Office shall ensure that indi-
viduals in each community rating area, as defined in sec-
tion 201(d), have regular and timely access to the services
provided through the Office and that the individual re-
ceives timely responses from a representative of the Office
to a request for assistance with a complaint against a
health plan.
(b) CONFIDENTIALITY OF COMPLAINANTS.—An Of-
fice shall provide for a system in the Office to treat as
confidential any identifying information regarding com-
plainants and other individuals with respect to whom the
Office maintain files or records.
(c) PERSONNEL QUALIFICATIONS.—An Office shall
establish and implement minimum qualification and train-
ing requirements for personnel, including volunteers.
SEC. 207. OVERSIGHT.
The Secretary shall ensure that an Office carries out
the functions under this title, and such other activities as
the Office and the Secretary determine to be appropriate.
SEC. 208. FUNDING OF OFFICE.
(a) FUNDS HELD IN ESCROW.—In accordance with
procedures which shall be made by rule under subsection
(d), each State shall provide for a mechanism under which
the State shall hold in an escrow account 1 percent of the
total amount of the annual premiums for each year with
respect to enrollment in a health plan for such year of
individuals residing in the State. Any funds held in such
escrow account shall be available solely for remittance to
the Secretary under subsection (b).
(b) REMITTANCE TO SECRETARY.—Not later than
December 31 of each calendar year, each State shall remit
to the Secretary, in such form and manner as shall be
prescribed in regulations, the amounts held in escrow pur-
suant to subsection (a) for the applicable fiscal year end-
ing with or during such calendar year.
(c) ALLOCATIONS.—The amounts remitted by each
State to the Secretary for each year under subsection (b)
shall be applied towards the establishment and operation
of the Office for such State under section 201 (including
amounts to be distributed to escrow accounts for Commit-
tees pursuant to section 306).
(d) RULES.—Not later than 180 days after the date
of the enactment of this Act, the Secretary shall make
rules to carry out this section.
TITLE 
III—INDEPENDENT
CONSUMER ADVISORY COM-
MITTEES
SEC. 301. ESTABLISHMENT OF COMMITTEES.
Each health plan shall establish and maintain an
Committee.
SEC. 302. MEMBERSHIP AND CHAIR.
(a) MEMBERSHIP.—
(1) IN GENERAL.—A Committee shall consist of
not fewer than 25 and not more than 50 members.
(2) QUALIFICATIONS.—Except as provided in
paragraph (3)(B), members of a Committee shall be
selected from enrollees who indicate interest in such
positions and who are not health care providers, offi-
cers or employees of any health plan, or employees
of a health care provider.
(3) METHOD OF SELECTION.—
(A) ENROLLEES.—Except as provided in
subparagraph (B), members of a Committee
shall be selected biennially at random from each
of 4 categories of enrollees, in proportion to
their numbers among enrollees represented by
the Committee, as follows: senior citizens; par-
ents of children under 18 years of age; individ-
uals with disabilities; and all other enrollees.
(B) EMPLOYEES OF HEALTH PLAN.—Each
committee shall have as members at least 3, but
in no case more than 5, employees of the health
plan selected biennially at random from each of
3 categories as follows: staff nurses; physicians;
and administrators of the health plan.
(b) CHAIR.—Each Committee shall be headed by a
chair who shall be—
(1) a member of the Committee other than a
member who is an employee of a health plan; and
(2) elected by the Committee at its first meet-
ing.
(c) COMPENSATION AND EXPENDITURES FOR SERV-
ICES.—
(1) COMPENSATION OF MEMBERS.—Members of
each Committee shall serve without compensation,
except that the members shall be reimbursed by the