I
107TH CONGRESS
1ST SESSION
H. R. 2315
To protect consumers in managed care plans and in other health coverage.
IN THE HOUSE OF REPRESENTATIVES
JUNE 26, 2001
Mr. FLETCHER (for himself, Mr. PETERSON of Minnesota, Mrs. JOHNSON of
Connecticut, Mr. BURR of North Carolina, Mr. THOMAS, Mr. TAUZIN,
Mr. BOEHNER, Mr. BILIRAKIS, Mr. SAM JOHNSON of Texas, Mr.
COOKSEY, Mr. WELDON of Florida, Mr. HAYES, Mr. PENCE, Mr.
PLATTS, Ms. PRYCE of Ohio, Mr. GOSS, Mr. HOUGHTON, Mr. GREEN-
WOOD, Mr. PORTMAN, Mr. HOBSON, Mr. HILLEARY, Mr. RADANOVICH,
Mr. SIMMONS, Mr. CRENSHAW, Mr. BALLENGER, Mr. GIBBONS, Mr.
BUYER, Mr. COLLINS, Mr. PITTS, Mr. ROGERS of Kentucky, Mr. SIMP-
SON, Mr. LINDER, Mr. SHAW, Mr. WATTS of Oklahoma, Mr. SKEEN, Mr.
STEARNS, Mr. BACHUS, Mr. KIRK, Mr. BARTLETT of Maryland, Mr.
ENGLISH, Mr. WELLER, Mr. RAMSTAD, Mr. OTTER, Mr. SUNUNU, Mr.
LEWIS of Kentucky, Mrs. CUBIN, Mr. ISAKSON, Mr. SHAYS, Mr. WICKER,
Mr. PICKERING, Mr. MCINNIS, Mr. MCCRERY, and Mr. CAMP) introduced
the following bill; which was referred to the Committee on Energy and
Commerce, and in addition to the Committees on Education and the
Workforce, and Ways and Means, 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 protect consumers in managed care plans and in 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
‘‘Patients’ Bill of Rights Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—PATIENTS’ BILL OF RIGHTS
Subtitle A—Right to Advice and Care
Sec. 101. Access to emergency medical care.
Sec. 102. Offering of choice of coverage options.
Sec. 103. Patient access to obstetric and gynecological care.
Sec. 104. Access to pediatric care.
Sec. 105. Timely access to specialists.
Sec. 106. Continuity of care.
Sec. 107. Protection of patient-provider communications.
Sec. 108. Patient access to prescription drugs.
Sec. 109. Coverage for individuals participating in approved clinical trials.
Sec. 110. Prohibition of discrimination against providers based on licensure.
Sec. 111. Generally applicable provision.
Subtitle B—Right to Information About Plans and Providers
Sec. 121. Health plan information.
Sec. 122. Study on the effect of physician compensation methods.
Subtitle C—Right to Hold Health Plans Accountable
Sec. 131. Amendments to Employee Retirement Income Security Act of 1974.
Sec. 132. Enforcement.
‘‘Sec. 503A. Claims and internal appeals procedures for group health
plans.
‘‘Sec. 503B. Independent external appeals procedures for group health
plans.
Subtitle D—Remedies
Sec. 141. Availability of court remedies.
Sec. 142. Treatment of State causes of action with respect to certain claims de-
nials by group health plans.
Sec. 143. Limitation on certain class action litigation.
Subtitle E—State Flexibility
Sec. 151. State flexibility in applying requirements to health insurance issuers
and non-Federal Governmental group health plans.
Subtitle F—Miscellaneous Provisions
Sec. 161. Definitions.
Sec. 162. Exclusions.
TITLE II—AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
Sec. 201. Application to certain health insurance coverage.
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.
TITLE IV—AMENDMENTS TO THE INTERNAL REVENUE CODE OF
1986
Sec. 401. Application to group health plans under the Internal Revenue Code
of 1986.
TITLE V—EFFECTIVE DATE; SEVERABILITY
Sec. 501. Effective date and related rules.
Sec. 502. Severability.
TITLE VI—INCREASING ACCESS TO AFFORDABLE HEALTH
INSURANCE
Subtitle A—Tax Incentives
Sec. 601. Expansion of availability of Archer medical savings accounts.
Subtitle B—Association Health Plans
Sec. 621. Rules governing association health plans.
‘‘PART 8—RULES GOVERNING ASSOCIATION HEALTH PLANS
‘‘Sec. 801. Association health plans.
‘‘Sec. 802. Certification of association health plans.
‘‘Sec. 803. Requirements relating to sponsors and boards of trustees.
‘‘Sec. 804. Participation and coverage requirements.
‘‘Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
‘‘Sec. 806. Maintenance of reserves and provisions for solvency for plans
providing health benefits in addition to health insurance
coverage.
‘‘Sec. 807. Requirements for application and related requirements.
‘‘Sec. 808. Notice requirements for voluntary termination.
‘‘Sec. 809. Corrective actions and mandatory termination.
‘‘Sec. 810. Trusteeship by the Secretary of insolvent association health
plans providing health benefits in addition to health insur-
ance coverage.
‘‘Sec. 811. State assessment authority.
‘‘Sec. 812. Definitions and rules of construction.
Sec. 622. Clarification of treatment of single employer arrangements.
Sec. 623. Clarification of treatment of certain collectively bargained arrange-
ments.
Sec. 624. Enforcement provisions relating to association health plans.
Sec. 625. Cooperation between Federal and State authorities.
Sec. 626. Effective date and transitional and other rules.
TITLE I—PATIENTS’ BILL OF
RIGHTS
Subtitle A—Right to Advice and
Care
SEC. 101. ACCESS TO EMERGENCY MEDICAL 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 or covers any benefits with re-
spect to services in an emergency department of a
hospital, the plan or issuer shall cover emergency
services (as defined in paragraph (2)(B))—
(A) without the need for any prior author-
ization determination;
(B) whether the health care provider fur-
nishing 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 or beneficiary by
a nonparticipating health care provider, the
participant or beneficiary is not liable for
amounts that exceed the amounts of liability
that would be incurred if the services were pro-
vided 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 Rev-
enue Code of 1986, and other than applicable
cost-sharing).
(2) DEFINITIONS.—In this section:
(A) EMERGENCY
MEDICAL
CONDITION.—
The 
term 
‘‘emergency 
medical 
condition’’
means—
(i) a medical condition manifesting
itself by acute symptoms of sufficient se-
verity (including severe pain) such that a
prudent layperson, who possesses an aver-
age knowledge of health and medicine,
could reasonably expect the absence of im-
mediate 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; and
(ii) a medical condition manifesting
itself in a neonate by acute symptoms of
sufficient severity (including severe pain)
such that a prudent health care profes-
sional 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) with respect to an emergency med-
ical condition described in subparagraph
(A)(i)—
(I) a medical screening examina-
tion (as required under section 1867
of the Social Security Act) that is
within the capability of the emergency
department of a hospital, including
ancillary services routinely available to
the emergency department to evaluate
such emergency medical condition,
and
(II) within the capabilities of the
staff and facilities available at the
hospital, such further medical exam-
ination and treatment as are required
under section 1867 of such Act to sta-
bilize the patient; or
(ii) with respect to an emergency med-
ical condition described in subparagraph
(A)(ii), medical treatment for such condi-
tion rendered by a health care provider in
a hospital to a neonate, including available
hospital ancillary services in response to an
urgent request of a health care profes-
sional and to the extent necessary to sta-
bilize the neonate.
(C) STABILIZE.—The term ‘‘to stabilize’’,
with respect to an emergency medical condition,
has the meaning given in section 1867(e)(3) of
the 
Social 
Security 
Act 
(42 
U.S.C.
1395dd(e)(3)).
(b) REIMBURSEMENT FOR MAINTENANCE CARE AND
POST-STABILIZATION CARE.—If benefits are available
under a group health plan, or under health insurance cov-
erage offered by a health insurance issuer, with respect
to services that are provided as maintenance care or post-
stabilization care covered under the guidelines established
under section 1852(d)(2) of the Social Security Act, the
plan or issuer shall provide for reimbursement with re-
spect to such services provided to a participant or bene-
ficiary other than through a participating health care pro-
vider in a manner consistent with subsection (a)(1)(C)
(and shall otherwise comply with such guidelines).
(c) COVERAGE OF EMERGENCY AMBULANCE SERV-
ICES.—
(1) IN GENERAL.—If a group health plan, or
health insurance coverage provided by a health in-
surance issuer, provides any benefits with respect to
ambulance services and emergency services, the plan
or issuer shall cover emergency ambulance services
(as defined in paragraph (2))) furnished under the
plan or coverage under the same conditions under
subparagraphs (A) through (D) of subsection (a)(1)
under which coverage is provided for emergency
services.
(2) EMERGENCY AMBULANCE SERVICES.—For
purposes of this subsection, the term ‘‘emergency
ambulance services’’ means ambulance services (as
defined for purposes of section 1861(s)(7) of the So-
cial Security Act) furnished to transport an indi-
vidual who has an emergency medical condition (as
defined in subsection (a)(2)(A)) to a hospital for the
receipt of emergency services (as defined in sub-
section (a)(2)(B)) in a case in which the emergency
services are covered under the plan or coverage pur-
suant to subsection (a)(1) and a prudent layperson,
with an average knowledge of health and medicine,
could reasonably expect that the absence of such
transport would result in placing the health of the
individual in serious jeopardy, serious impairment of
bodily function, or serious dysfunction of any bodily
organ or part.
SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS.
(a) REQUIREMENT.—If a group health plan provides
coverage for benefits only through a defined set of partici-
pating health care professionals, the plan shall offer the
participant the option to purchase point-of-service cov-
erage (as defined in subsection (b)) for all such benefits
(including physician pathology services) for which cov-
erage 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 respect to benefits (including physician pathology
services) covered under a 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 with respect to a small em-
ployer.
(2) SMALL EMPLOYER.—For purposes of para-
graph (1), the term ‘‘small employer’’ means, in con-
nection with a group health plan with respect to a
calendar year and a plan year, an employer who em-
ployed an average of at least 2 but not more than
25 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 em-
ployer 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;
(2) as preventing a group health plan from im-
posing higher premiums or cost-sharing on a partici-
pant for the exercise of a point-of-service coverage
option; or
(3) to require that a group health plan include
coverage of health care professionals that the plan
excludes because of fraud, quality of care, or other
similar reasons with respect to such professionals.
SEC. 103. PATIENT ACCESS TO OBSTETRIC AND GYNECO-
LOGICAL CARE.
(a) GENERAL RIGHTS.—
(1) DIRECT ACCESS.—A group health plan, and
health insurance coverage offered by a health insur-
ance issuer, described in subsection (b) may not re-
quire authorization or referral by the primary care
provider described in subsection (b)(2) in the case of
a female participant or beneficiary who seeks cov-
erage for obstetric or gynecological care provided by
a participating physician or by a participating health
care professional who specializes in obstetrics or
gynecology and is operating within State licensure
and scope of practice laws.
(2) OBSTETRIC AND GYNECOLOGICAL CARE.—
Such a plan or issuer shall treat the provision of ob-
stetric and gynecological care, and the ordering of
related obstetric and gynecological items and serv-
ices, pursuant to the direct access described under
paragraph (1), by a participating physician or other
health care professional who specializes in obstetrics
or gynecology as the authorization of the primary
care provider.
(b) APPLICATION OF SECTION.—A group health plan,
or health insurance coverage offered by a health insurance
issuer, described in this subsection is a plan or coverage
that—
(1) provides coverage for obstetric or gyneco-
logical care; and
(2) requires the designation by a participant or
beneficiary of a participating primary care provider
other than a physician who specializes in obstetrics
or gynecology.
(c) RULES OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed—
(1) to require that a group health plan or
health insurance issuer approve or provide coverage
for—
(A) any items or services that are not cov-
ered under the terms and conditions of the
group health plan or the health insurance cov-
erage;
(B) any items or services that are not
medically necessary and appropriate; or
(C) any items or services that are pro-
vided, ordered, or otherwise authorized under
subsection (a)(2) by a physician or other health
care professional unless such items or services
are related to obstetric or gynecological care;
(2) to preclude a group health plan or health
insurance issuer from requiring that the physician or
health care professional described in subsection (a)
notify the designated primary care professional or
case manager of treatment decisions in accordance
with a process implemented by the plan, except that
the group health plan or issuer shall not impose
such a notification requirement on the participant or
beneficiary involved in the treatment decision; or
(3) to preclude a group health plan or health
insurance issuer from requiring authorization, in-
cluding prior authorization, for items and services
(other than routine items and services) from the
physician or health care professional described in
subsection (a) who specializes in obstetrics and gyne-
cology if the designated primary care provider of the
participant or beneficiary would otherwise be re-
quired to obtain authorization for such items or
services.
For purposes of paragraph (3), routine items and services
includes annual, prenatal, and perinatal examinations.
SEC. 104. ACCESS TO PEDIATRIC CARE.
(a) PEDIATRIC CARE.—If a group health plan, and
a health insurance issuer that offers health insurance cov-
erage, requires or provides for a participant, beneficiary,
or enrollee to designate a participating primary care pro-
vider for a child of such participant, beneficiary, or en-
rollee, the plan or issuer shall permit the participant, ben-
eficiary, or enrollee to designate a physician who special-
izes in pediatrics as the child’s primary care provider if
such provider participates in the network of the plan or
issuer.
(b) RULES OF CONSTRUCTION.—With respect to the
child of a participant, beneficiary, or enrollee, nothing in
subsection (a) shall be construed to—
(1) require that the participant, beneficiary, or
enrollee obtain prior authorization or a referral from
a primary care provider in order to obtain pediatric
care from a health care professional other than a
physician if the provision of pediatric care by such
professional is permitted by the plan or issuer and
consistent with State licensure, credentialing, and
scope of practice laws and regulations; or
(2) preclude the participant, beneficiary, or en-
rollee 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 or issuer and the treatment by such profes-
sional 
is 
consistent 
with 
State 
licensure,
credentialing, and scope of practice laws.
SEC. 105. TIMELY ACCESS TO SPECIALISTS.
(a) TIMELY ACCESS.—
(1) IN GENERAL.—A group health plan, or a
health insurance issuer offering health insurance
coverage, shall ensure that participants and bene-
ficiaries receive timely coverage for access to special-
ists with respect to the medical condition of the par-
ticipant or beneficiary, when such specialty care is a
covered benefit under the plan or coverage.
(2) RULE
OF
CONSTRUCTION.—Nothing in
paragraph (1) shall be construed—
(A) to require the coverage under a group
health plan or health insurance coverage of ben-
efits or services;
(B) to prohibit a plan or issuer from in-
cluding providers in the network only to the ex-
tent necessary to meet the needs of the plan’s
participants and beneficiaries;
(C) to prohibit a plan or issuer from estab-
lishing measures designed to maintain quality
and control costs consistent with the respon-
sibilities of the plan or issuer; 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 or health insurance issuer
from requiring that a participant or beneficiary
obtain specialty care from a participating spe-
cialist.
(B) NONPARTICIPATING PROVIDERS.—
(i) IN
GENERAL.—With respect to
specialty care under this section, if a group
health plan or health insurance issuer de-
termines that a participating specialist is
not available to provide such care to the
participant or beneficiary, the plan or
issuer shall provide for coverage of such
care by a nonparticipating specialist.
(ii) TREATMENT
OF
NONPARTICI-
PATING
PROVIDERS.—If a group health
plan or health insurance issuer refers a
participant or beneficiary to a nonpartici-
pating specialist pursuant to clause (i),
such specialty care shall be provided at no
additional cost to the participant or bene-
ficiary beyond what the participant or ben-
eficiary would otherwise pay for such spe-
cialty care if provided by a participating
specialist.
(b) REFERRALS.—
(1) AUTHORIZATION.—Nothing in this section
shall be construed to prohibit a group health plan or
health insurance issuer from requiring an authoriza-
tion in order to obtain coverage for specialty services
so long as such authorization is for an appropriate
duration or number of referrals.
(2) REFERRALS FOR ONGOING SPECIAL CONDI-
TIONS.—
(A) IN GENERAL.—A group health plan, or
a health insurance issuer offering health insur-
ance coverage, shall permit a participant or
beneficiary who has an ongoing special condi-
tion (as defined in subparagraph (B)) to receive
a referral to a specialist for the treatment of
such condition and such specialist may author-
ize such referrals, procedures, tests, and other
medical services with respect to such condition,
or coordinate the care for such condition, sub-
ject to the terms of a treatment plan referred
to in subsection (c) with respect to the condi-
tion.
(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.
(c) TREATMENT PLANS.—
(1) IN GENERAL.—Nothing in this section shall
be construed to prohibit a group health plan or
health insurance issuer from requiring that specialty
care be provided pursuant to a treatment plan so
long as the treatment plan is—
(A) developed by the specialist, in consulta-
tion with the case manager or primary care pro-
vider, and the participant or beneficiary;
(B) approved by the plan or issuer in a
timely manner if the plan or issuer requires
such approval; and
(C) in accordance with the applicable qual-
ity assurance and utilization review standards
of the plan or issuer.
(2) NOTIFICATION.—Nothing in paragraph (1)
shall be construed as prohibiting a group health plan
or health insurance issuer from requiring the spe-
cialist to provide the plan or issuer 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 med-
ical condition of the participant or beneficiary, a physician
(including an allopathic or osteopathic physician) or health
care professional who is appropriately credentialed or li-
censed in 1 or more States, who has adequate expertise,
appropriate training and experience, and routinely treats
the diagnosis or condition of the participant or beneficiary.
SEC. 106. CONTINUITY OF CARE.
(a) TERMINATION OF PROVIDER.—If a contract be-
tween a group health plan, and a health insurance issuer
that offers health insurance coverage, as appropriate, and
a treating health care provider is terminated (as defined
in paragraph (e)(4)), or benefits or coverage provided by
a health care provider are terminated because of a change
in the terms of provider participation in such plan or cov-
erage, and an individual who is a participant, beneficiary
or enrollee under such plan or coverage is undergoing an
active course of treatment for a serious and complex condi-
tion, institutional care, pregnancy, or terminal illness from
the provider at the time the plan or issuer receives or pro-
vides notice of such termination, the plan or issuer shall—
(1) notify the individual, or arrange to have the
individual notified pursuant to subsection (d)(2), on
a timely basis of such termination;
(2) provide the individual with an opportunity
to notify the plan or issuer of the individual’s need
for transitional 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)).
Nothing in this section shall be construed as preventing
a plan or issuer from providing the notice under para-
graph (1) before the effective date of the provider’s termi-
nation.
(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
(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, beneficiary, or enrollee
was pregnant at the time of a provider’s termi-
nation of participation; 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, 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 that is directly related to the treatment of the
terminal illness.
(c) PERMISSIBLE
TERMS
AND
CONDITIONS.—A
group health plan, and a health insurance issuer that of-
fers health insurance coverage, may condition coverage of
continued treatment by a provider under this section upon
the provider agreeing, in advance in writing, to the fol-
lowing:
(1) The treating health care provider agrees to
accept reimbursement from the plan or issuer and
individual involved (with respect to cost-sharing) at
the rates applicable prior to the start of the transi-
tional period as payment in full (or at the rates ap-
plicable under the replacement plan after the date of
the termination of the contract with the plan or
issuer) 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 ter-
minated (or, if applicable, at the cost-sharing appli-
cable under the replacement plan).
(2) The treating health care provider agrees to
adhere to the quality assurance standards of the
plan or issuer responsible for payment under para-
graph (1) and to provide to such plan or issuer nec-
essary medical information related to the care pro-
vided.
(3) The treating health care provider agrees
otherwise to adhere to such plan’s or issuer’s policies
and procedures, including procedures regarding re-
ferrals and obtaining prior authorization and pro-
viding services pursuant to a treatment plan (if any)
approved by the plan or issuer.
(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 con-
tract under subsection (a) to prevent a group health
plan or health insurance issuer from requiring that
the health care provider—
(A) notify participants, beneficiaries, or en-
rollees of their rights under this section; or
(B) provide the plan or issuer with the
name of each participant, beneficiary, or en-
rollee who the provider believes is eligible for
transitional care under this section.
(e) DEFINITIONS.—In this section:
(1) CONTRACT.—The term ‘‘contract between a
group health plan, and a health insurance issuer
that offers health insurance coverage, and a treating
health care provider’’ shall include a contract be-
tween such a plan or issuer and an organized net-
work 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 deliv-
ery 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
licensed.
(3) SERIOUS AND COMPLEX CONDITION.—The
term ‘‘serious and complex condition’’ means, with
respect to a participant, beneficiary, or enrollee
under the plan or coverage, a condition that is medi-
cally determinable and—
(A) in the case of an acute illness, is a
condition serious enough to require specialized
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 manage;
(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
paragraph (1)), the expiration or nonrenewal of the
contract with the provider by the group health plan
or health insurance issuer, but does not include a
termination of the contract by the plan or issuer for
failure to meet applicable quality standards or for
fraud.
SEC. 107. PROTECTION OF PATIENT-PROVIDER COMMU-
NICATIONS.
(a) IN GENERAL.—Subject to subsection (b), a group
health plan, and a health insurance issuer that offers
health insurance coverage, (in relation to a participant,
beneficiary, or enrollee) shall not prohibit or otherwise re-
strict a health care professional from advising such a par-
ticipant, beneficiary, or enrollee who is a patient of the
professional about the health status of the participant,
beneficiary, or enrollee or medical care or treatment for
the condition or disease of the participant, beneficiary, or
enrollee, regardless of whether coverage for such care or
treatment are provided under the contract, if the profes-
sional 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,
or a health insurance issuer that offers health insurance
coverage, to provide specific benefits under the terms of
such plan or coverage.
(c) NULLIFICATION.—Any contract provision that re-
stricts or prohibits medical communications in violation of
subsection (a) shall be null and void.
SEC. 108. PATIENT ACCESS TO PRESCRIPTION DRUGS.
(a) IN GENERAL.—To the extent that a group health
plan, and a health insurance issuer that offers health in-
surance coverage, provides coverage for benefits with re-
spect to prescription drugs, and limits such coverage to
drugs included in a formulary, the plan or issuer shall—
(1) ensure the establishment of a pharma-
ceutical and therapeutic committee that develops the
formulary, the majority of the members of which
must be individuals who are physicians or phar-
macists; and
(2) in accordance with the applicable quality as-
surance and utilization review standards of the plan
or issuer, provide for exceptions from the formulary
limitation when—
(A) the prescribing physician (or the pre-
scribing health care professional) requests such
an exception;
(B) the drugs on the formulary within a
therapeutic class—
(i) are (or are likely to be) not as ef-
fective for the specific patient as the non-
formulary drug, or
(ii) in comparison with the non-for-
mulary drug, have (or are likely to have)
greater significant adverse side-effects for
the specific patient; and
(C) the non-formulary drug is medically
necessary and appropriate for the specific pa-
tient.
(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit a group health plan,
or a health insurance issuer that offers health insurance
coverage, from excluding coverage for a specific drug or
class of drugs if such drugs or class of drugs is expressly
excluded under the terms and conditions of the plan or
coverage.
(c) INFORMATION DISCLOSURE REQUIRED.—Disclo-
sure to patients and physicians of information on for-
mulary restrictions is required under subsections (a),
(b)(10), and (c)(2) of section 121(a).
SEC. 109. COVERAGE FOR INDIVIDUALS PARTICIPATING IN
APPROVED CLINICAL TRIALS.
(a) COVERAGE.—
(1) IN GENERAL.—If a group health plan, and
a health insurance issuer that offers health insur-
ance coverage, provides coverage to a qualified indi-
vidual (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 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 con-
nection with participation in the trial; and
(C) may not discriminate against the indi-
vidual on the basis of the participant’s, bene-
ficiaries, or enrollee’s participation in such trial.
(2) EXCLUSION OF CERTAIN COSTS.—For pur-
poses of this section, routine patient costs do not in-
clude costs of items and services (including transpor-
tation, tests, measurements, and procedures) that
are provided primarily for the purpose of the clinical
trial involved or that otherwise are reasonably ex-
pected (as determined by the Secretary) to be paid
for by the sponsors of an approved clinical trial.
(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 an enrollee in health insurance
coverage and who meets all the following conditions:
(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 partici-
pating health care professional and has con-
cluded 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, and a health insurance issuer offering
health insurance coverage, shall provide for payment
for routine patient costs consistent with subsection
(a)(2).
(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 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 or 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) The Food and Drug Administration,
but only with respect to cancer clinical research
studies or cancer clinical investigations.
(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
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 preclude a plan or issuer from offering cov-
erage that is broader than the coverage required under
this section with respect to clinical trials.
(f) PLAN SATISFACTION
OF CERTAIN REQUIRE-
MENTS; 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 insurance 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 respon-
sibilities of the fiduciaries of a group health plan
under part 4 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974.
(g) STUDY AND REPORT.—
(1) STUDY.—The Secretary shall study the im-
pact on group health plans and health insurance
issuers for covering routine patient care costs for in-
dividuals who are entitled to benefits under this sec-
tion and who are enrolled in an approved clinical
trial program.
(2) REPORT
TO
CONGRESS.—Not later than
January 1, 2006, the Secretary shall submit a re-
port to Congress that contains an assessment of—
(A) any incremental cost to group health
plans and health insurance issuers resulting
from the provisions of this section;
(B) a projection of expenditures to such
plans and issuers resulting from this section;
and
(C) any impact on premiums resulting
from this section.
SEC. 110. PROHIBITION OF DISCRIMINATION AGAINST PRO-
VIDERS BASED ON LICENSURE.
(a) IN GENERAL.—A group health plan, and a health
insurance issuer that offers health insurance coverage,
shall not discriminate with respect to participation or in-
demnification as to any provider who is acting within the
scope of the provider’s license or certification under appli-
cable State law, solely on the basis of such license or cer-
tification.
(b) CONSTRUCTION.—Subsection (a) shall not be
construed—
(1) as requiring the coverage under a group
health plan or health insurance coverage of a par-
ticular benefit or service or to prohibit a plan or
issuer from including providers only to the extent
necessary to meet the needs of the plan’s or issuer’s
participants, beneficiaries, or enrollees or from es-
tablishing any measure designed to maintain quality
and control costs consistent with the responsibilities
of the plan or issuer;
(2) to override any State licensure or scope-of-
practice law;
(3) as requiring a plan or issuer that offers net-
work coverage to include for participation every will-
ing provider who meets the terms and conditions of
the plan or coverage; or
(4) as prohibiting a family practice physician
with appropriate expertise from providing pediatric,
obstetric, gynecological, or other appropriate care.
SEC. 111. GENERALLY APPLICABLE PROVISION.
Notwithstanding section 102, in the case of a group
health plan, and a health insurance issuer that offers
health insurance coverage, that provides benefits under 2
or more coverage options, the requirements of this subtitle
shall apply separately with respect to each coverage op-
tion.
Subtitle B—Right to Information
About Plans and Providers
SEC. 121. HEALTH PLAN INFORMATION.
(a) REQUIREMENT.—
(1) DISCLOSURE.—
(A) IN GENERAL.—A group health plan,
and a health insurance issuer that offers health
insurance coverage, shall provide for the disclo-
sure of the information described in subsection
(b) 
to 
participants, 
beneficiaries, 
and
enrollees—
(i) at the time of the initial enrollment
of the participant, beneficiary, or enrollee
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
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
period, in conjunction with the begin-
ning of the plan or coverage year; and
(iii) in the case of any material reduc-
tion 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, BENEFICIARIES, OR
ENROLLEES.—The disclosure required under
subparagraph (A) shall be provided—
(i)(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; and
(ii) to each enrollee.
(2) DISCLOSURE OF PRESCRIPTION DRUG IN-
FORMATION
TO
PARTICIPATING
PHYSICIANS.—A
group health plan, and a health insurance issuer
that offers health insurance coverage, shall provide
for the disclosure of the information described in
subsection (b)(10) and in subsection (c)(2) to par-
ticipating physicians upon request.
(3) PROVISION OF INFORMATION.—Information
shall be provided to participants, beneficiaries, and
enrollees under this section at the last known ad-
dress maintained by the plan or issuer with respect
to such participants, beneficiaries, or enrollees, to
the extent that such information is provided to par-
ticipants, beneficiaries, or enrollees via the United
States Postal Service or other private delivery serv-
ice.
(4) RULE OF CONSTRUCTION.—Nothing in this
section shall be construed to prevent a group health
plan sponsor and health insurance issuer from enter-
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
responsibility is released from liability for compli-
ance with the requirements that are assumed by the
other party, to the extent the party delegating such
responsibility did not cause such noncompliance.
(b) REQUIRED INFORMATION.—The informational
materials to be distributed under this section shall include
for each option available under the group health plan and
health insurance coverage the following:
(1) BENEFITS.—A description of the covered
benefits, including—
(A) any in- and out-of-network benefits;
(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 cus-
tomary charges, for which the participant, bene-
ficiary, or enrollee will be responsible under
each option available under the plan;
(B) any maximum out-of-pocket expense
for which the participant, beneficiary, or en-
rollee may be liable;
(C) any cost-sharing requirements for out-
of-network benefits or services received from
nonparticipating providers; and
(D) any additional cost-sharing or charges
for benefits and services that are furnished
without meeting applicable plan or coverage re-
quirements, 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 pro-
viders) that includes, at a minimum, the name, ad-
dress, and telephone number of each participating
provider, and information about how to inquire
whether a participating provider is currently accept-
ing new patients.
(5) CHOICE OF PRIMARY CARE PROVIDER.—A
description of any requirements and procedures to
be used by participants, beneficiaries, and enrollees
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 pe-
diatrician as a primary care provider under section
104 for a participant, beneficiary, or enrollee who is
a child if such section applies.
(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 de-
termining whether a particular item, service, or
treatment is considered experimental or investiga-
tional, 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 partici-
pants, beneficiaries, and enrollees in accessing spe-
cialty care and obtaining referrals to participating
and nonparticipating specialists, including the right
to timely coverage for access to specialists care
under section 105 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 109 if such section applies.
(10) PRESCRIPTION DRUGS.—To the extent the
plan or issuer provides coverage for prescription
drugs, a statement of whether such coverage is lim-
ited to drugs included in a formulary, a description
of any provisions and cost-sharing required for ob-
taining on- and off-formulary medications, and a de-
scription of the rights of participants, beneficiaries,
and enrollees in obtaining access to access to pre-
scription drugs under section 107 if such section ap-
plies.
(11) EMERGENCY
SERVICES.—A summary of
the rules and procedures for accessing emergency
services, including the right of a participant, bene-
ficiary, or enrollee to obtain emergency services
under the prudent layperson standard under section
101, if such section applies, and any educational in-
formation that the plan or issuer may provide re-
garding the appropriate 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, beneficiaries, or enrollees under sec-
tions 503, 503A and 503B of the Employee Retire-
ment Income Security Act of 1974 (or sections
2707(b) and 2753(b) of the Public Health Service
with respect to non-Federal governmental plans and
individual health insurance coverage) in obtaining
covered benefits, filing a claim for benefits, and ap-
pealing coverage determinations internally and exter-
nally (including telephone numbers and mailing ad-
dresses of the appropriate authority), and a descrip-
tion of any additional legal rights and remedies
available under section 502 of the Employee Retire-
ment Income Security Act of 1974.
(13) ADVANCE DIRECTIVES AND ORGAN DONA-
TION.—A description of procedures for advance di-
rectives 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, beneficiaries, and enroll-
ees seeking information about plan or coverage bene-
fits and services, payment of a claim, or authoriza-
tion for services and treatment. The name of the
designated decisionmaker (or decisionmakers) ap-
pointed under section 502(n)(2) of the Employee
Retirement Income Security Act of 1974 for pur-
poses of making final determinations under section
503A of such Act and approving coverage pursuant
to the written determination of an independent med-
ical reviewer under section 503B of such Act. 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
speakers and participants, beneficiaries, and enroll-
ees with communication 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, beneficiaries, and enrollees.
(17) NOTICE OF REQUIREMENTS.—A descrip-
tion of any rights of participants, beneficiaries, and
enrollees that are established by this Act (excluding
those described in paragraphs (1) through (16)) if
such rights apply. The description required under
this paragraph may be combined with the notices re-
quired under sections 711(d), 713(b), or 606(a)(1)
of the Employee Retirement Income Security Act of
1974, and with any other notice provision that the
Secretary determines may be combined.
(18) COMPENSATION
METHODS.—A summary
description of the methods (including capitation, fee-
for-service, salary, withholds, bonuses, bundled pay-
ments, per diem, or a combination thereof) used for
compensating participating health care professionals
(including primary care providers and specialists)
and facilities in connection with the provision of
health care under the plan or coverage. The require-
ment of this paragraph shall not be construed as re-
quiring plans or issuers to provide information con-
cerning proprietary payment methodology.
(19) AVAILABILITY OF ADDITIONAL INFORMA-
TION.—A statement that the information described
in subsection (c), and instructions on obtaining such
information (including telephone numbers and, if
available, Internet websites), shall be made available
upon request.
(c) ADDITIONAL INFORMATION.—The informational
materials to be provided upon the request of a participant,
beneficiary, or enrollees shall include for each option avail-
able under a group health plan and health insurance cov-
erage the following:
(1) STATUS OF PROVIDERS.—The State licen-
sure status of the plan or issuer’s participating
health care professionals and participating health
care facilities, and, if available, the education, train-
ing, specialty qualifications or certifications of such
professionals.
(2) PRESCRIPTION DRUGS.—Information about
whether a specific prescription medication is in-
cluded in the formulary of the plan or issuer, if the
plan or issuer uses a defined formulary.
(3) EXTERNAL
APPEALS
INFORMATION.—Ag-
gregate information on the number and outcomes of
external 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
medium 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 that offers health insurance
coverage, from—
(1) distributing any other additional informa-
tion determined by the plan or issuer to be impor-
tant or necessary in assisting participants, bene-
ficiaries, and enrollees in the selection of a health
plan; and
(2) complying with the provisions of this section
by providing information in brochures, through the
Internet or other electronic media, or through other
similar means, so long as participants, beneficiaries,
and enrollees are provided with an opportunity to re-
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 duplication with respect to any information that
is required to be provided under any such requirements.
(g) SECRETARIAL ENFORCEMENT AUTHORITY.—
(1) IN GENERAL.—The Secretary of Health and
Human Services or the Secretary of Labor (as ap-
propriate) may assess a civil monetary penalty
against the administrator of a plan or issuer in con-
nection with the failure of the plan or issuer to com-
ply with the requirements of this section.
(2) AMOUNT OF PENALTY.—The amount of the
penalty to be imposed under paragraph (1) shall not
exceed $100 for each day for each participant, bene-
ficiary, or enrollee with respect to which the failure
to comply with the requirements of this section oc-
curs.
(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 re-
spect to a participant, beneficiary, or enrollee 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).
(h) 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
‘‘section 711 and section 121 of the Patients’ Bill of
Rights Act of 2001’’.
(2) 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
requirements of section 121 of the Patients’ Bill of
Rights Act of 2001’’.
SEC. 122. STUDY ON THE EFFECT OF PHYSICIAN COM-
PENSATION METHODS.
(a) STUDY AND REPORT.—
(1) IN
GENERAL.—The Secretary shall enter
into a contract with the Institute of Medicine for the
conduct of a study in accordance with this section,
to be submitted to the Secretary and the Secretary
of Labor as provided for in paragraph (4).
(2) MATTERS
TO
BE
STUDIED.—The study
under paragraph (1) shall include—
(A) a study, including a survey if nec-
essary, of physician compensation arrangements
that are utilized in employer-sponsored group
health plans (including group health plans
sponsored by government and non-government
employers) and commercial health insurance
products, including—
(i) all types of compensation arrange-
ments, including financial incentive and
risk sharing arrangements and arrange-
ments that do not contain such incentives
and risk sharing, that reflect the com-
plexity of organizational relationships be-
tween health plans and physicians;
(ii) arrangements that are based on
factors such as utilization management,
cost control, quality improvement, and pa-
tient or enrollee satisfaction; and
(iii) arrangements between the plan or
issuer and provider, as well as down-
stream arrangements between providers
and sub-contracted providers;
(B) an analysis of the effect of such dif-
fering arrangements on physician behavior with
respect to the provision of medical care to pa-
tients, including whether and how such arrange-
ments affect the quality of patient care and the
ability of physicians to provide care that is
medically necessary and appropriate.
(3) STUDY DESIGN.—The Secretary shall con-
sult with the Director of the Agency for Healthcare
Research and Quality in preparing the scope of work
and study design with respect to the contract under
paragraph (1).
(4) REPORT.—Not later than 24 months after
the date of enactment of this Act, the Secretary
shall forward to the appropriate committees of Con-
gress a copy of the report and study conducted
under subsection (a).
(b) RESEARCH.—
(1) 
IN
GENERAL.—The 
Secretary, 
acting
through the Director of the Agency for Healthcare
Research and Quality, shall conduct and support re-
search to develop scientific evidence regarding the
effects of differing physician compensation methods
on physician behavior with respect to the provision
of medical care to patients, particularly issues relat-
ing to the quality of patient care and whether pa-
tients receive medically necessary and appropriate
care.
(2) AUTHORIZATION OF APPROPRIATIONS.—For
purposes of carrying out this section, there are au-
thorized to be appropriated such sums as may be
necessary.
Subtitle C—Right to Hold Health
Plans Accountable
SEC. 131. 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,
and a health insurance issuer that offers health
insurance coverage in connection with a group
health plan, shall ensure that procedures are in
place for—
‘‘(i) making a determination on an
initial claim for benefits by a participant
or beneficiary (or authorized representa-
tive) regarding payment or coverage for
items or services under the terms and con-
ditions of the plan or coverage involved, in-
cluding any cost-sharing amount that the
participant 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 cov-
erage, including any cost-sharing amounts
that the participant or beneficiary may be
required to make with respect to such
claim for benefits, 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 any) shall provide the plan or issuer with ac-
cess to information requested by the plan or
issuer that is necessary to make a determina-
tion relating to the claim, not later than 5 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 that of-
fers health insurance coverage in connection
with a group health plan, may require that the
participant or beneficiary (or authorized rep-
resentative) provide written confirmation of
such request in a timely manner.
‘‘(2) TIMELINE
FOR
MAKING
DETERMINA-
TIONS.—
‘‘(A) PRIOR AUTHORIZATION DETERMINA-
TION.—
‘‘(i) IN
GENERAL.—A group health
plan, and a health insurance issuer that of-
fers health insurance coverage in connec-
tion with a group health plan, shall main-
tain procedures to ensure that a prior au-
thorization determination on a claim for
benefits is made within 14 days from the
date on which the plan or issuer receives
information that is reasonably necessary to
enable the plan or issuer to make a deter-
mination on the request for prior author-
ization, but in no case shall such deter-
mination be made later than 21 days after
the receipt of the claim for benefits.
‘‘(ii) EXPEDITED DETERMINATION.—
Notwithstanding clause (i), a group health
plan, and a health insurance issuer that of-
fers health insurance coverage in connec-
tion with a group health plan, shall main-
tain procedures for expediting a prior au-
thorization determination on a claim for
benefits described in such clause when a
request for such an expedited determina-
tion is made by a participant or beneficiary
(or authorized representative) at any time
during the process for making a deter-
mination and the treating health care pro-
fessional 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 within 72 hours after a request is re-
ceived by the plan or issuer under this
clause.
‘‘(iii) 
CONCURRENT
DETERMINA-
TIONS.—A group health plan, and a health
insurance issuer that offers health insur-
ance coverage 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 dis-
continuation of inpatient care is made
within 24 hours after the receipt of the
claim for benefits.
‘‘(B) RETROSPECTIVE DETERMINATION.—
A group health plan, and a health insurance
issuer that offers health insurance coverage in
connection with a group health plan, shall
maintain procedures to ensure that a retrospec-
tive determination on a claim for benefits is
made within 30 days of the date on which the
plan or issuer receives information that is rea-
sonably 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 days after the receipt of the claim for
benefits.
‘‘(3) NOTICE OF A DENIAL OF A CLAIM FOR
BENEFITS.—Written notice of a denial made under
an initial claim for benefits shall be issued to the
participant or beneficiary (or authorized representa-
tive) and the treating health care professional not
later than 2 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
DETER-
MINATIONS.—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 determina-
tion; and
‘‘(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, and a health insurance issuer that offers
health insurance coverage in connection with a
group health plan, shall ensure that a partici-
pant or beneficiary (or authorized representa-
tive) has a period of not less than 90 days be-
ginning 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
determination under such subsection shall be
treated as a denial of a claim for benefits for
purposes of proceeding to internal review under
this subsection.
‘‘(D) PLAN
WAIVER
OF
INTERNAL
RE-
VIEW.—A group health plan, and a health in-
surance issuer that offers health insurance cov-
erage in connection with a group health plan,
may waive the internal review process under
this subsection and permit a participant or ben-
eficiary (or authorized representative) to pro-
ceed directly to external 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
concurrent determination, a participant or ben-
eficiary (or authorized representative) may re-
quest such appeal orally, but a group health
plan, and a health insurance issuer that offers
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.
‘‘(B) ACCESS TO INFORMATION.—With re-
spect to an appeal of a denial of a claim for
benefits, the participant or beneficiary (or au-
thorized representative) and the treating health
care professional (if any) shall provide the plan
or issuer with access to information requested
by the plan or issuer that is necessary to make
a determination relating to the appeal, not later
than 5 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 subpara-
graph (C).
‘‘(C) PRIOR AUTHORIZATION DETERMINA-
TIONS.—
‘‘(i) IN
GENERAL.—A group health
plan, and a health insurance issuer that of-
fers health insurance coverage in connec-
tion with a group health plan, shall main-
tain procedures to ensure that a deter-
mination on an appeal of a denial of a
claim for benefits under this subsection is
made within 14 days after the date on
which the plan or issuer receives informa-
tion that is reasonably necessary to enable
the plan or issuer to make a determination
on the appeal, but in no case shall such de-
termination be made later than 21 days
after the receipt of the request for the ap-
peal.
‘‘(ii) EXPEDITED DETERMINATION.—
Notwithstanding clause (i), a group health
plan, and a health insurance issuer that of-
fers health insurance coverage in connec-
tion with a group health plan, shall main-
tain procedures for expediting a prior au-
thorization determination on an appeal of
a denial of a claim for benefits described in
clause (i), when a request for such an ex-
pedited determination is made by a partici-
pant or beneficiary (or authorized rep-
resentative) at any time during the process
for making a determination and the treat-
ing health care professional substantiates,
with the request, that a determination
under the procedures described in clause
(i) would seriously jeopardize the life or
health of the participant or beneficiary.
Such determination shall be made not later
than 72 hours after the request for such
appeal is received by the plan or issuer
under this clause.
‘‘(iii) 
CONCURRENT
DETERMINA-
TIONS.—A group health plan, and a health
insurance issuer that offers health insur-
ance coverage in connection with a group
health plan, shall maintain procedures to
ensure that a concurrent determination on
an appeal of a denial of a claim for bene-
fits that results in a discontinuation of in-
patient care is made within 24 hours after
the receipt of the request for appeal.
‘‘(B) RETROSPECTIVE DETERMINATION.—
A group health plan, and a health insurance
issuer that offers health insurance coverage in
connection with a group health plan, shall
maintain procedures to ensure that a retrospec-
tive determination on an appeal of a claim for
benefits is made within 30 days of the date on
which the plan or issuer receives necessary in-
formation 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 days after the receipt of
the request for the appeal.
‘‘(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 appro-
priate expertise who was not directly involved in
the initial determination.
‘‘(B) REVIEW
OF
MEDICAL
DETERMINA-
TIONS 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 appropriate-
ness, or based on an experimental or investiga-
tional treatment, or requires an evaluation of
medical facts, shall be made by a physician with
appropriate expertise, including pediatric exper-
tise where necessary, to evaluate the relevant
conditions, who was not involved in the initial
determination.
law) to recover only the amount of any such re-
imbursement that is unpaid and any necessary
legal costs or expenses (including attorneys’
fees) incurred in recovering such reimburse-
ment.
‘‘(g) QUALIFICATIONS OF INDEPENDENT MEDICAL
REVIEWERS.—
‘‘(1) IN GENERAL.—In referring a denial to 1
or more individuals to conduct independent medical
review under subsection (c), the qualified external
review 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.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each independent medical reviewer
shall be a physician (who is an allopathic or os-
‘‘(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
medical 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;
‘‘(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; and
‘‘(IV) the affiliated individual is
not an employee of the plan or issuer
and does not provide services exclu-
sively or primarily to or on behalf of
the plan or issuer;