I
105TH CONGRESS
1ST SESSION
H. R. 1222
To amend the Employee Retirement Income Security Act of 1974 and the
Public Health Service Act to require managed care group health plans
and managed care health insurance coverage to meet certain consumer
protection requirements.
IN THE HOUSE OF REPRESENTATIVES
MARCH 21, 1997
Mrs. ROUKEMA introduced the following bill; which was referred to the Com-
mittee on Education and the Workforce, and in addition to the Commit-
tee on Commerce, 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 amend the Employee Retirement Income Security Act
of 1974 and the Public Health Service Act to require
managed care group health plans and managed care
health insurance coverage to meet certain consumer pro-
tection requirements.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Quality Health Care
and Consumer Protection Act’’.
SEC. 2. PURPOSE.
The purpose of this Act is to ensure that enrollees
in managed care group health plans and managed care
health insurance coverage receive adequate health care
services by ensuring that—
(1) enrollees have full and timely access to clini-
cally appropriate health care personnel and facilities;
(2) enrollees have adequate choice among health
care professionals who are accessible and qualified;
(3) there is open communication between physi-
cians and enrollees;
(4) enrollees have access to comprehensive
pharmaceutical services;
(5) enrollees have access to information regard-
ing limits on coverage of experimental treatments;
(6) there is high quality care provided within
the plan or coverage;
(7) medical decisions are made by the appro-
priate medical personnel;
(8) participating health care professionals are
practitioners in good standing;
(9) data on the plan or coverage are available
as appropriate;
(10) there is full public access to information
regarding health care service delivery within the plan
or coverage;
‘‘(i) An adequate number of accessible
acute care hospital services, within a rea-
sonable distance and travel time for enroll-
ees.
‘‘(ii) An adequate number of acces-
sible primary care practitioners, within a
reasonable distance and travel time for en-
rollees.
‘‘(iii) An adequate number of acces-
sible specialists and subspecialists, within a
reasonable distance and travel time for en-
rollees.
‘‘(iv) The availability of specialty med-
ical services, including physical therapy,
occupational therapy, and rehabilitation
services.
‘‘(v) The availability of specialists who
are not participating providers or profes-
sionals, when a patient’s unique medical
circumstances warrant it.
Clause (iii) shall be construed as requiring ac-
cess to nonparticipating health care profes-
sionals who are specialists for treatment of a
specific condition if and when there are not suf-
ficient number of such specialists who are par-
ticipating health care professionals.
‘‘(2) CONTINUITY OF CARE.—A managed care
group health plan (and a health insurance issuer of-
fering managed care group health insurance) shall—
‘‘(A) provide for continuity of care with es-
tablished primary care practitioners, when the
health care professional’s contract is termi-
nated, and
‘‘(B) allow enrollees, at no additional out-
of-pocket cost, to continue receiving services
from a primary care practitioner whose contract
with the plan or issuer is terminated without
cause for a period of at least 60 days if the en-
rollee requests such continuation.
‘‘(3) TELEPHONE
ACCESS.—A managed care
group health plan (and a health insurance issuer of-
fering managed care group health insurance) shall
provide telephone access to the plan or issuer for
sufficient time during business and evening hours to
ensure enrollee access for routine care, and 24 hour
telephone access to either the plan, issuer, or a par-
ticipating provider or professional, for emergency
care or authorization for such care.
‘‘(4) STANDARDS
FOR
WAITING
TIMES.—A
managed care group health plan (and a health insur-
ance issuer offering managed care group health in-
surance) shall establish reasonable standards for
waiting times for enrollees to obtain appointments,
subject to special rules for emergency services under
paragraph (5). Such standards shall include appoint-
ment scheduling guidelines based on the type of
health care service, including prenatal care appoint-
ments, well-child visits and immunizations, routine
physicals, follow-up appointments for chronic condi-
tions, and urgent care.
‘‘(5) COVERAGE OF EMERGENCY SERVICES.—
‘‘(A) IN
GENERAL.—A managed care
group health plan (and a health insurance is-
suer offering managed care group health insur-
ance) shall cover and reimburse expenses for
treatment of an emergency medical condition if
the treatment is obtained, without prior author-
ization.
‘‘(B) EMERGENCY
MEDICAL
CONDITION
DEFINED.—The term ‘emergency medical con-
dition’ means a medical condition, the onset of
which is sudden and unexpected, that manifests
itself by symptoms of sufficient severity, that a
prudent layperson, who possesses an average
knowledge of health and medicine, could reason-
ably assume that the condition requires imme-
diate medical treatment, and could expect the
absence of medical attention to result in serious
impairment to bodily functions or place the per-
son’s health in serious jeopardy.
‘‘(C) PRUDENT LAYPERSON DEFINED.—In
this paragraph, the term ‘prudent layperson’
means a person without specific medical train-
ing for the illness or condition in question who
acts as a reasonable person would under similar
circumstances.
‘‘(b) ASSURING ADEQUATE CHOICE
OF HEALTH
CARE PROFESSIONALS.—
‘‘(1) IN
GENERAL.—A managed care group
health plan (and a health insurance issuer offering
managed care group health insurance) shall provide
that each enrollee shall have adequate choice among
participating health care professionals who are ac-
cessible and qualified.
‘‘(2) CHOICE.—A managed care group health
plan (and a health insurance issuer offering man-
aged care group health insurance) shall permit en-
rollees to choose their own primary care practitioner
from a list of health care professionals within the
plan or coverage. Such list shall be updated as
health care professionals are added or removed and
shall include—
‘‘(A) a sufficient number of primary care
practitioners who are accepting new enrollees;
and
‘‘(B) a sufficient mix of primary care prac-
titioners that reflects a diversity that is ade-
quate to meet the needs of the enrollees’ varied
characteristics, including age, gender, race, and
health status.
‘‘(3) MEDICAL SPECIALISTS.—A managed care
group health plan (and a health insurance issuer of-
fering managed care group health insurance) shall
develop a system to permit enrollees to use a medical
specialist primary care practitioner, when the enroll-
ee’s medical conditions (including suffering from a
chronic disease or medical condition) warrant it.
‘‘(4) CONTINUITY OF CARE.—A managed care
group health plan (and a health insurance issuer of-
fering managed care group health insurance) shall
provide—
‘‘(A) continuity of care and appropriate re-
ferral to specialists within the plan or coverage,
when specialty care is warranted,
‘‘(B) enrollees with access to medical spe-
cialists on a timely basis, and
‘‘(C) enrollees with a choice of specialists
when a referral is made.
‘‘(5) REQUIREMENT FOR POINT OF SERVICE OP-
TION.—A managed care group health plan (and a
health insurance issuer offering managed care group
health insurance) shall offer each enrollee with an
enrollment option under which the enrollee may re-
ceive benefits for services provided by nonparticipat-
ing health care professional or provider. The plan or
issuer may require that the enrollee pay a reasonable
premium to reflect the cost of such option.
‘‘(6) CONSULTATION FOR SECOND OPINIONS.—
A managed care group health plan (and a health in-
surance issuer offering managed care group health
insurance) shall provide enrollees with access to a
consultation for a second option.
‘‘(c) PROHIBITION OF GAG RULES.—A managed care
group health plan (and a health insurance issuer offering
managed care group health insurance)—
‘‘(1) shall not have any contract provision with
a health care professional that limits the health care
professional’s disclosure to an enrollee or on behalf
of an enrollee of any information relating to the en-
rollee’s medical condition or treatment options; and
‘‘(2) shall not penalize (through contract termi-
nation or otherwise) a health care professional—
‘‘(A) because the professional offers refer-
rals, or discusses any or all medically necessary
or appropriate care or treatment options (in-
cluding disclosing any information, determined
by the health care professional to be in the best
interest of the enrollee) with, or on behalf of,
an enrollee; or
‘‘(B) for discussing financial incentives and
financial arrangements between the health care
professional and the plan or issuer.
‘‘(d) COVERAGE OF DRUGS AND DEVICES.—
‘‘(1) IN
GENERAL.—A managed care group
health plan (and a health insurance issuer offering
managed care group health insurance) that provides
benefits with respect to drugs and medical devices
shall provide coverage for all drugs and medical de-
vices approved by the Food and Drug Administra-
tion, whether or not that drug or device has been
approved for the specific treatment or condition, so
long as the primary care practitioner or other medi-
cal specialist treating the enrollee determines the
drug or device is medically necessary and appro-
priate for the enrollee’s condition.
‘‘(2) OPERATION
OF
DRUG
UTILIZATION
RE-
VIEW PROGRAM.—A managed care group health plan
(and a health insurance issuer offering managed
care group health insurance) that provides benefits
with respect to prescription drugs shall establish and
operate a drug utilization review program that in-
cludes the following:
‘‘(A) Retrospective review of prescription
drugs furnished to enrollees.
‘‘(B) Education of physicians, enrollees,
and pharmacists regarding the appropriate use
of prescription drugs.
‘‘(C) An ongoing periodic examination of
data on outpatient prescription drugs to ensure
quality therapeutic outcomes for enrollees.
‘‘(D) A primary emphasis on enhancing
quality of care for enrollees by assuring appro-
priate drug therapy.
‘‘(E) Clinically relevant criteria and stand-
ards for drug therapy.
‘‘(F) Application of nonproprietary criteria
and standards, developed and revised through
an open, professional consensus process.
‘‘(G) Interventions which focus on improv-
ing therapeutic outcomes.
‘‘(H) An educational outreach program
that—
‘‘(i) is directed to enrollees, phar-
macists, and other health care profes-
sionals, and
‘‘(ii) emphasizes the appropriate use
of prescription drugs.
‘‘(I) Denial of services under prospective
review of drug therapy only in cases of enrollee
ineligibility, coverage limitations, or fraud.
‘‘(J) Determination of the appropriate
drug therapy for the enrollee by the prescribing
health care professional and prohibitions of sub-
stitutions without the direct approval of such
professional.
‘‘(e) COVERAGE OF EXPERIMENTAL TREATMENTS.—
‘‘(1) IN
GENERAL.—A managed care group
health plan (and a health insurance issuer offering
managed care group health insurance) that limits
coverage for services shall define the limitation and
disclose the limits in any agreement or certificate of
coverage. Such disclosure shall include—
‘‘(A) who is authorized to make such a de-
termination, and
‘‘(B) the criteria the plan or issuer uses to
determine whether a service is experimental.
‘‘(2) DENIALS.—A managed care group health
plan (and a health insurance issuer offering man-
aged care group health insurance) that denies cov-
erage for an experimental treatment, procedure,
drug, or device, for an enrollee who has a terminal
condition or illness shall provide the enrollee with a
denial letter within 20 working days of the submit-
ted request. The letter shall include—
‘‘(A) the name and title of the individual
making the decision;
‘‘(B) a statement setting forth the specific
medical and scientific reasons for denying cov-
erage;
‘‘(C) a description of alternative treatment,
services, or supplies covered by the plan or
under the coverage, if any; and
‘‘(D) a copy of the plan’s or issuer’s griev-
ance and appeal procedure.
‘‘(3) EXPERIMENTAL TREATMENT DEFINED.—
In this subsection, the term ‘experimental treatment’
means treatment that, while not commonly used for
a particular condition or illness, nevertheless is rec-
ognized for treatment of the particular condition or
illness, and there is no clearly superior, nonexperi-
mental treatment alternative available to the en-
rollee.
‘‘(f) QUALITY ASSURANCE PROGRAM.—
‘‘(1) IN
GENERAL.—A managed care group
health plan (and a health insurance issuer offering
managed care group health insurance) shall develop
comprehensive quality assurance standards, ade-
quate to identify, evaluate, and remedy problems re-
lating to access, continuity, and quality of care. The
standards shall include—
‘‘(A) an ongoing, written, internal quality
assurance program;
‘‘(B) specific written guidelines for quality
of care studies and monitoring, including atten-
tion to vulnerable populations;
‘‘(C) performance and clinical outcomes-
based criteria;
‘‘(D) a procedure for remedial action to
correct quality problems, including written pro-
cedures for taking appropriate corrective action;
‘‘(E) a plan for data gathering and assess-
ment under subsection (g); and
‘‘(F) a peer review process.
‘‘(2) PROCESS
FOR
SELECTION
OF
PROFES-
SIONALS.—A managed care group health plan (and
a health insurance issuer offering managed care
group health insurance) shall have a process for se-
lection of health care professionals who will be par-
ticipating professionals, with written policies and
procedures for standards used by the plan or issuer.
Such process shall meet the following requirements:
‘‘(A) The plan or issuer shall establish
minimum professional requirements.
‘‘(B) The plan or issuer shall demonstrate
that it has consulted with appropriately quali-
fied health care professionals to establish the
requirements.
‘‘(C) The process shall include verification
of the individual practitioner’s license, history
of suspension or revocation, and liability claims
history.
‘‘(D) The plan or issuer shall establish a
formal, written, ongoing, process for the re-
evaluation of all participating health care pro-
fessionals within a specified number of years
after the initial acceptance. Such reevaluations
shall include updates of the previous review cri-
teria and an assessment of the performance
pattern based on criteria including enrollee clin-
ical outcomes, number of complaints, and mal-
practice actions.
‘‘(3) 
LIMITATION
ON
USE
OF
PROFES-
SIONALS.—A managed care group health plan (and
a health insurance issuer offering managed care
group health insurance) shall not use a health care
professional beyond, or outside of, the professional’s
legally authorized scope of practice.
‘‘(g) DATA SYSTEMS AND CONFIDENTIALITY.—
‘‘(1) IN
GENERAL.—A managed care group
health plan (and a health insurance issuer offering
managed care group health insurance) shall provide
information on the plan’s or issuer’s structure, deci-
sion making process, health care benefits and exclu-
sions, cost and cost-sharing requirements, list of
participating providers and health care professionals
as well as grievance and appeal procedures, to all
of Labor and to the Secretary of Health and Human
Services (or, in the case of a health insurance issuer,
the State oversight agency) and shall be available to
the public on a timely basis.
‘‘(4) MEDICAL RECORDS AND CONFIDENTIAL-
ITY.—A managed care group health plan (and a
health insurance issuer offering managed care group
health insurance) shall—
‘‘(A) establish written policies and proce-
dures for the handling of medical records and
enrollee communications to ensure enrollee con-
fidentiality;
‘‘(B) ensure the confidentiality of specified
enrollee information, including, prior medical
history, medical record information and claims
information, except where disclosure of this in-
formation is required by law; and
‘‘(C) not release any individual patient
record information, unless such a release is au-
thorized in writing by the enrollee or otherwise
required be law.
‘‘(h) CLINICAL DECISION MAKING.—
‘‘(1) APPOINTMENT OF MEDICAL DIRECTOR.—A
managed care group health plan (and a health insur-
ance issuer offering managed care group health in-
surance) shall appoint a medical director who is a li-
censed physician in the State in which the plan or
issuer operates, who shall be responsible for treat-
ment policies protocols, quality assurance activities,
and utilization management decisions of the plan or
issuer.
‘‘(2) DISCLOSURE ABOUT FINANCIAL ARRANGE-
MENTS.—A managed care group health plan (and a
health insurance issuer offering managed care group
health insurance) shall inform enrollees of the finan-
cial arrangements between the plan or issuer and
participating providers and professionals (including
pharmacists), if those arrangements include incen-
tives or bonuses for restriction of services.
‘‘(3) QUALITY ASSURANCE DEFINED.—In this
subsection, the term ‘quality assurance’ means the
ongoing evaluation of the quality of health care pro-
vided to enrollees.
‘‘(4) OVERSIGHT.—The Secretary of Labor and
the Secretary of Health and Human Services are re-
sponsible for performance of annual audits of man-
aged care group health plans and, in the case of a
health insurance issuer, the State oversight agency
is responsible for performance of annual audits of
managed care health insurance coverage offered by
such issuers, in order to review enrollee clinical out-
come data, enrollee service data, and operational and
other financial data.
‘‘(i) GRIEVANCE PROCEDURES, REVIEWS, AND AP-
PEALS.—
‘‘(1) IN
GENERAL.—A managed care group
health plan (and a health insurance issuer offering
managed care group health insurance) shall provide
written notification to enrollees, in a language en-
rollees understand, regarding the right to file a
grievance concerning denials or limitations of cov-
erage under the plan or coverage. At a minimum,
such notification shall be given—
‘‘(A) prior to enrollment in the plan or
under the coverage; and
‘‘(B) at the time care is denied or limited
under the plan or coverage.
‘‘(2) NOTICE OF RIGHT TO FILE GRIEVANCE.—
At the time of such a denial, such a plan or issuer
shall notify the enrollee of the right to file a griev-
ance. Such notice shall be in writing and shall in-
clude the reason for denial, the name of the individ-
ual responsible for the decision, the criteria for de-
termination, and the enrollee’s right to file a griev-
ance.
‘‘(3) GRIEVANCE PROCEDURES.—The grievance
procedures under the plan or coverage shall in-
clude—
‘‘(A) identification of the reviewing body
and an explanation of the process of review;
‘‘(B) an initial investigation and review;
‘‘(C) notification within a reasonable
amount of time of the outcome of the grievance;
and
‘‘(D) an appeal procedure.
‘‘(4) TIME LIMITS.—
‘‘(A) IN GENERAL.—Such a plan or issuer
shall set reasonable time limits for each part of
the review process, but in no case shall the re-
view extend beyond 30 days.
‘‘(B) EXPEDITED REVIEW.—Such a plan
or issuer shall provide for expedited review for
cases involving an imminent, emergent, or seri-
ous threat to the health of an enrollee. In such
case the plan or issuer shall—
‘‘(i) immediately inform the enrollee
of this right, and
‘‘(ii) provide the enrollee with a writ-
ten statement of the disposition or pending
status of the grievance within 72 hours of
the commencement of the review process.
‘‘(5) REPORTING.—Such a plan or issuer shall
report to the Secretary of Labor and to the Sec-
retary of Health and Human Services (or, in the
case of a health insurance issuer, the State oversight
agency), the number of grievances and appeals re-
ceived by the plan or issuer within a specified time
period, including if applicable, the outcomes or cur-
rent status of the grievance and appeals as well as
the average time taken to resolve both grievances
and appeals.
‘‘(6) DEFINITIONS.—In this subsection:
‘‘(A) APPEAL.—The term ‘appeal’ means a
formal process whereby an enrollee whose care
has been reduced, denied, or terminated, or
whereby the enrollee deems the care inappropri-
ate, can contest an adverse grievance decision
by the plan or issuer.
‘‘(B) The term ‘expedited review’ means a
review process which takes no more than 72
hours after the review is commenced.
‘‘(C) The term ‘grievance’ means a written
complaint submitted by or on behalf of the en-
rollee.
‘‘(j) NOTICE UNDER GROUP HEALTH PLAN.—The
imposition of the requirements of this section shall be
treated as a material modification in the terms of the plan
described in section 102(a)(1), for purposes of assuring
notice of such requirements under the plan; except that
the summary description required to be provided under the
last sentence of section 104(b)(1) with respect to such
modification shall be provided by not later than 60 days
after the first day of the first plan year in which such
requirements apply.
‘‘(k) GENERAL DEFINITIONS.—For purposes of this
section:
‘‘(1) The term ‘enrollee’ means an individual
who is entitled to benefits under a managed care
group health plan or under managed care health in-
surance coverage offered in connection with such a
plan.
‘‘(2) The term ‘health care provider’ means a
clinic, hospital physician organization, preferred pro-
vider organization, independent practice association,
or other appropriately licensed provider of health
care services or supplies.
‘‘(3) The term ‘health care professional’ means
a physician or other health care practitioner provid-
ing health care services.
‘‘(4) The term ‘managed care’ means, with re-
spect to a group health plan or health insurance cov-
erage, a plan or coverage that provides financial in-
centives for enrollees to obtain benefits through par-
ticipating health care providers or professionals.
‘‘(5) The term ‘participating’ means, with re-
spect to a health care provider or professional and
a group health plan or health insurance coverage of-
fered by a health insurance issuer, such a provider
or professional that has entered into an agreement
with the plan or issuer with respect to the provision
of health care services to enrollees under the plan or
coverage.
‘‘(6) The term ‘primary care practitioner’
means, with respect to a group health plan or health
insurance coverage offered by a health insurance is-
suer, a health care professional (who may be a fam-
ily practice physician, general practice physician, in-
ternist, obstetrician/gynecologist, or pediatrician)
designated by the plan or issuer to coordinate, su-
pervise, or provide ongoing care to enrollees.
‘‘(7) The term ‘State oversight agency’ means,
with respect to a health insurance issuer, the State
agency responsible for the regulation of the issuer.’’.