(b) GRIEVANCE SYSTEM.—Such system shall include
the following components with respect to individuals who
are participants, beneficiaries, or enrollees:
(1) Written notification to all such individuals
and providers of the telephone numbers and business
addresses of the plan or issuer personnel responsible
for resolution of grievances and appeals.
(2) A system to record and document, over a
period of at least 3 previous years beginning two
months after the date of the enactment of this Act,
all grievances and appeals made and their status.
(3) A process providing processing and resolu-
tion of grievances within 60 days.
(4) Procedures for follow-up action, including
the methods to inform the person making the griev-
ance of the resolution of the grievance.
Grievances are not subject to appeal under the previous
provisions of this subtitle.
Subtitle B—Access to Care
SEC. 111. CONSUMER CHOICE OPTION.
(a) IN GENERAL.—If a health insurance issuer offers
to enrollees health insurance coverage in connection with
a group health plan which provides for coverage of services
only if such services are furnished through health care
professionals and providers who are members of a network
of health care professionals and providers who have en-
tered into a contract with the issuer to provide such serv-
ices, the issuer shall also offer to such enrollees (at the
time of enrollment and during an annual open season as
provided under subsection (c)) the option of health insur-
ance coverage which provides for coverage of such services
which are not furnished through health care professionals
and providers who are members of such a network unless
enrollees are offered such non-network coverage through
another health insurance issuer.
(b) ADDITIONAL COSTS.—The amount of any addi-
tional premium charged by the health insurance issuer for
the additional cost of the creation and maintenance of the
option described in subsection (a) and the amount of any
additional cost sharing imposed under such option shall
be borne by the enrollee unless it is paid by the health
plan sponsor through agreement with the health insurance
issuer.
(c) OPEN SEASON.—An enrollee may change to the
offering provided under this section only during a time pe-
riod determined by the health insurance issuer. Such time
period shall occur at least annually.
SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.
(a) PRIMARY CARE.—If a group health plan, or a
health insurance issuer that offers health insurance cov-
erage, requires or provides for designation by a partici-
pant, beneficiary, or enrollee of a participating primary
care provider, then the plan or issuer shall permit each
participant, beneficiary, and enrollee to designate any par-
ticipating primary care provider who is available to accept
such individual.
(b) SPECIALISTS.—A group health plan and a health
insurance issuer that offers health insurance coverage
shall permit each participant, beneficiary, or enrollee to
receive medically necessary or appropriate specialty care,
pursuant to appropriate referral procedures, from any
qualified participating health care professional who is
available to accept such individual for such care.
SEC. 113. ACCESS TO EMERGENCY CARE.
(a) COVERAGE OF EMERGENCY SERVICES.—
(1) IN GENERAL.—If a group health plan, or
health insurance coverage offered by a health insur-
ance issuer, provides 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 or not the health care pro-
vider furnishing such services is a participating
provider with respect to such services;
(C) in a manner so that, if such services
are provided to a participant, beneficiary, or
enrollee—
(i) by a nonparticipating health care
provider with or without prior authoriza-
tion, or
(ii) by a participating health care pro-
vider without prior authorization,
the participant, beneficiary, or enrollee is not
liable for amounts that exceed the amounts of
liability that would be incurred if the services
were provided by a participating health care
provider with prior authorization; 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’’
means, with respect to an emergency medical
condition, to provide such medical treatment of
the condition as may be necessary to assure,
within reasonable medical probability, that no
material deterioration of the condition is likely
to result from or occur during the transfer of
the individual from a facility.
(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 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 respect to such services provided
to a participant, beneficiary, or enrollee other than
through a participating health care provider 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 terms and condi-
tions under subparagraphs (A) through (D) of sub-
section (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. 114. ACCESS TO SPECIALTY CARE.
(a) SPECIALTY CARE FOR COVERED SERVICES.—
(1) IN GENERAL.—If—
(A) an individual is a participant or bene-
ficiary under a group health plan or an enrollee
who is covered under health insurance coverage
offered by a health insurance issuer,
(B) the individual has a condition or dis-
ease of sufficient seriousness and complexity to
require treatment by a specialist or the indi-
vidual requires physician pathology services,
and
(C) benefits for such treatment or services
are provided under the plan or coverage,
the plan or issuer shall make or provide for a refer-
ral to a specialist who is available and accessible
(consistent with standards developed under section
118) to provide the treatment for such condition or
disease or to provide such services.
(2) SPECIALIST
DEFINED.—For purposes of
this subsection, the term ‘‘specialist’’ means, with
respect to a condition or services, a health care prac-
titioner, facility, or center or physician pathologist
that has adequate expertise through appropriate
training and experience (including, in the case of a
child, appropriate pediatric expertise and in the case
of a pregnant woman, appropriate obstetrical exper-
tise) to provide high quality care in treating the con-
dition or to provide physician pathology services.
(3) CARE UNDER REFERRAL.—A group health
plan or health insurance issuer may require that the
care provided to an individual pursuant to such re-
ferral under paragraph (1) with respect to treatment
be—
(A) pursuant to a treatment plan, only if
the treatment plan is developed by the specialist
and approved by the plan or issuer, in consulta-
tion with the designated primary care provider
or specialist and the individual (or the individ-
ual’s designee), and
(B) in accordance with applicable quality
assurance and utilization review standards of
the plan or issuer.
Nothing in this subsection shall be construed as pre-
venting such a treatment plan for an individual from
requiring a specialist to provide the primary care
provider with regular updates on the specialty care
provided, as well as all necessary medical informa-
tion.
(4) 
REFERRALS
TO
PARTICIPATING
PRO-
VIDERS.—A group health plan or health insurance
issuer is not required under paragraph (1) to pro-
vide for a referral to a specialist that is not a par-
ticipating provider, unless the plan or issuer does
not have a specialist that is available and accessible
to treat the individual’s condition or provide physi-
cian pathology services and that is a participating
provider with respect to such treatment or services.
(5) REFERRALS
TO
NONPARTICIPATING
PRO-
VIDERS.—In a case in which a referral of an indi-
vidual to a nonparticipating specialist is required
under paragraph (1), the group health plan or
health insurance issuer shall provide the individual
the option of at least three nonparticipating special-
ists.
(6) TREATMENT
OF
NONPARTICIPATING
PRO-
VIDERS.—If a plan or issuer refers an individual to
a nonparticipating specialist pursuant to paragraph
(1), services provided pursuant to the approved
treatment plan (if any) shall be provided at no addi-
tional cost to the individual beyond what the indi-
vidual would otherwise pay for services received by
such a specialist that is a participating provider.
(b) SPECIALISTS AS GATEKEEPER FOR TREATMENT
OF ONGOING SPECIAL CONDITIONS.—
(1) IN GENERAL.—A group health plan, or a
health insurance issuer, in connection with the provi-
sion of health insurance coverage, shall have a proce-
dure by which an individual who is a participant,
beneficiary, or enrollee and who has an ongoing spe-
cial condition (as defined in paragraph (3)) may re-
quest and receive a referral to a specialist for such
condition who shall be responsible for and capable of
providing and coordinating the individual’s care with
respect to the condition. Under such procedures if
such an individual’s care would most appropriately
be coordinated by such a specialist, such plan or
issuer shall refer the individual to such specialist.
(2) TREATMENT FOR RELATED REFERRALS.—
Such specialists shall be permitted to treat the indi-
vidual without a referral from the individual’s pri-
mary care provider and may authorize such refer-
rals, procedures, tests, and other medical services as
the individual’s primary care provider would other-
wise be permitted to provide or authorize, subject to
the terms of the treatment (referred to in subsection
(a)(3)(A)) with respect to the ongoing special condi-
tion.
(3) ONGOING SPECIAL CONDITION DEFINED.—
In this subsection, the term ‘‘ongoing special condi-
tion’’ means a condition or disease that—
(A) is life-threatening, degenerative, or dis-
abling, and
(B) requires specialized medical care over
a prolonged period of time.
(4) TERMS OF REFERRAL.—The provisions of
paragraphs (3) through (5) of subsection (a) apply
with respect to referrals under paragraph (1) of this
subsection in the same manner as they apply to re-
ferrals under subsection (a)(1).
(5) CONSTRUCTION.—Nothing in this sub-
section shall be construed as preventing an indi-
vidual who is a participant, beneficiary, or enrollee
and who has an ongoing special condition from hav-
ing the individual’s primary care physician assume
the responsibilities for providing and coordinating
care described in paragraph (1).
(c) STANDING REFERRALS.—
(1) IN GENERAL.—A group health plan, and a
health insurance issuer in connection with the provi-
sion of health insurance coverage, shall have a proce-
dure by which an individual who is a participant,
beneficiary, or enrollee and who has a condition that
requires ongoing care from a specialist may receive
a standing referral to such specialist for treatment
of such condition. If the plan or issuer, or if the pri-
mary care provider in consultation with the medical
director of the plan or issuer and the specialist (if
any), determines that such a standing referral is ap-
propriate, the plan or issuer shall make such a refer-
ral to such a specialist if the individual so desires.
(2) TERMS OF REFERRAL.—The provisions of
paragraphs (3) through (5) of subsection (a) apply
with respect to referrals under paragraph (1) of this
subsection in the same manner as they apply to re-
ferrals under subsection (a)(1).
SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL
CARE.
(a) IN GENERAL.—If a group health plan, or a health
insurance issuer in connection with the provision of health
insurance coverage, requires or provides for a participant,
beneficiary, or enrollee to designate a participating pri-
mary care health care professional, the plan or issuer—
(1) may not require authorization or a referral
by the individual’s primary care health care profes-
sional or otherwise for coverage of routine gyneco-
logical care (including preventive women’s health ex-
aminations) and pregnancy-related services provided
by a participating physician (including a family
practice physician) who specializes or is trained and
experienced in obstetrics and gynecology to the ex-
tent such care is otherwise covered, and
(2) shall treat the ordering of other obstetrical
or gynecological care by such a participating physi-
cian as the authorization of the primary care health
care professional with respect to such care under the
plan or coverage.
(b) CONSTRUCTION.—Nothing in subsection (a) shall
be construed to—
(1) waive any exclusions of coverage under the
terms of the plan with respect to coverage of obstet-
rical or gynecological care; or
(2) preclude the group health plan or health in-
surance issuer involved from requiring that the ob-
stetrician or gynecologist notify the primary care
health care professional or the plan of treatment de-
cisions.
SEC. 116. ACCESS TO PEDIATRIC CARE.
(a) PEDIATRIC CARE.—If a group health plan, or a
health insurance issuer in connection with the provision
of health insurance coverage, requires or provides for an
enrollee to designate a participating primary care provider
for a child of such enrollee, the plan or issuer shall permit
the enrollee to designate a physician (including a family
practice physician) who specializes or is trained and expe-
rienced in pediatrics as the child’s primary care provider.
(b) CONSTRUCTION.—Nothing in subsection (a) shall
be construed to waive any exclusions of coverage under
the terms of the plan with respect to coverage of pediatric
care.
SEC. 117. CONTINUITY OF CARE.
(a) IN GENERAL.—
(1) TERMINATION OF PROVIDER.—If a contract
between a group health plan, or a health insurance
issuer in connection with the provision of health in-
surance coverage, and a health care provider is ter-
minated (as defined in paragraph (3)(B)), or bene-
fits or coverage provided by a health care provider
are terminated because of a change in the terms of
provider participation in a group health plan, and
an individual who is a participant, beneficiary, or en-
rollee in the plan or coverage is undergoing treat-
ment from the provider for an ongoing special condi-
tion (as defined in paragraph (3)(A)) at the time
of such termination, the plan or issuer shall—
(A) notify the individual on a timely basis
of such termination and of the right to elect
continuation of coverage of treatment by the
provider under this section; and
(B) subject to subsection (c), permit the
individual to elect to continue to be covered
with respect treatment by the provider of such
condition during a transitional period (provided
under subsection (b)).
(2) TREATMENT
OF
TERMINATION
OF
CON-
TRACT
WITH
HEALTH
INSURANCE
ISSUER.—If a
contract for the provision of health insurance cov-
erage between a group health plan and a health in-
surance issuer is terminated and, as a result of such
termination, coverage of services of a health care
provider is terminated with respect to an individual,
the provisions of paragraph (1) (and the succeeding
provisions of this section) shall apply under the plan
in the same manner as if there had been a contract
between the plan and the provider that had been ter-
minated, but only with respect to benefits that are
covered under the plan after the contract termi-
nation.
(3) DEFINITIONS.—For purposes of this sec-
tion:
(A) ONGOING
SPECIAL
CONDITION.—The
term ‘‘ongoing special condition’’ has the mean-
ing given such term in section 114(b)(3), and
also includes pregnancy.
(B) TERMINATION.—The term ‘‘termi-
nated’’ includes, with respect to a contract, the
expiration or nonrenewal of the contract, but
does not include a termination of the contract
by the plan or issuer for failure to meet applica-
ble quality standards or for fraud.
(b) TRANSITIONAL PERIOD.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) through (4), the transitional period under
this subsection shall extend up to 90 days (as deter-
mined by the treating health care professional) after
the date of the notice described in subsection
(a)(1)(A) of the provider’s termination.
(2) SCHEDULED SURGERY AND ORGAN TRANS-
PLANTATION.—If surgery or organ transplantation
was scheduled for an individual before the date of
the announcement of the termination of the provider
status under subsection (a)(1)(A) or if the individual
on such date was on an established waiting list or
otherwise scheduled to have such surgery or trans-
plantation, the transitional period under this sub-
section with respect to the surgery or transplan-
tation shall extend beyond the period under para-
graph (1) and until the date of discharge of the indi-
vidual after completion of the surgery or transplan-
tation.
(3) PREGNANCY.—If—
(A) a participant, beneficiary, or enrollee
was determined to be pregnant at the time of
a provider’s termination of participation, and
(B) the provider was treating the preg-
nancy before 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 directly related to the treatment of the terminal
illness or its medical manifestations.
(c) PERMISSIBLE
TERMS
AND
CONDITIONS.—A
group health plan or health insurance issuer may condi-
tion coverage of continued treatment by a provider under
subsection (a)(1)(B) upon the individual notifying the plan
of the election of continued coverage and upon the pro-
vider agreeing to the following terms and conditions:
(1) The provider agrees to accept reimburse-
ment from the plan or issuer and individual involved
(with respect to cost-sharing) at the rates applicable
prior to the start of the transitional period as pay-
ment in full (or, in the case described in subsection
(a)(2), at the rates applicable under the replacement
plan or issuer after the date of the termination of
the contract with the health insurance issuer) and
not to impose cost-sharing with respect to the indi-
vidual in an amount that would exceed the cost-shar-
ing that could have been imposed if the contract re-
ferred to in subsection (a)(1) had not been termi-
nated.
(2) The provider agrees to adhere to the quality
assurance standards of the plan or issuer responsible
for payment under paragraph (1) and to provide to
such plan or issuer necessary medical information
related to the care provided.
(3) The provider agrees otherwise to adhere to
such plan’s or issuer’s policies and procedures, in-
cluding procedures regarding referrals and obtaining
prior authorization and providing services pursuant
to a treatment plan (if any) approved by the plan or
issuer.
(d) CONSTRUCTION.—Nothing in this section shall be
construed to require the coverage of benefits which would
not have been covered if the provider involved remained
a participating provider.
SEC. 118. NETWORK ADEQUACY.
(a) REQUIREMENT.—A group health plan, and a
health insurance issuer providing health insurance cov-
erage, shall meet such standards for network adequacy as
are established by law pursuant to this section.
(b) DEVELOPMENT OF STANDARDS.—
(1) ESTABLISHMENT OF PANEL.—There is es-
tablished a panel to be known as the Health Care
Panel to Establish Network Adequacy Standards (in
this section referred to as the ‘‘Panel’’).
(2) DUTIES OF PANEL.—The Panel shall devise
standards for group health plans and health insur-
ance issuers that offer health insurance coverage to
ensure that—
(A) participants, beneficiaries, and enroll-
ees have access to a sufficient number, mix, and
distribution of health care professionals and
providers; and
(B) covered items and services are avail-
able and accessible to each participant, bene-
ficiary, and enrollee—
(i) in the service area of the plan or
issuer;
(ii) at a variety of sites of service;
(iii) with reasonable promptness (in-
cluding reasonable hours of operation and
after hours services);
(iv) with reasonable proximity to the
residences or workplaces of enrollees; and
(v) in a manner that takes into ac-
count the diverse needs of enrollees and
reasonably assures continuity of care.
(c) MEMBERSHIP.—
(1) SIZE AND COMPOSITION.—The Panel shall
be composed of 15 members. The Secretary of
Health and Human Services, the Majority Leader of
the Senate, and the Speaker of House of Represent-
atives shall each appoint 1 member from representa-
tives of private insurance organizations, consumer
groups, State insurance commissioners, State med-
ical societies, and State medical specialty societies.
(2) TERMS OF APPOINTMENT.—The members
of the Panel shall serve for the life of the Panel.
(3) VACANCIES.—A vacancy in the Panel shall
not affect the power of the remaining members to
execute the duties of the Panel, but any such va-
cancy shall be filled in the same manner in which
the original appointment was made.
(d) PROCEDURES.—
(1) MEETINGS.—The Panel shall meet at the
call of a majority of its members.
(2) FIRST MEETING.—The Panel shall convene
not later than 60 days after the date of the enact-
ment of the Health Care Quality and Choice Act of
1999.
(3) QUORUM.—A quorum shall consist of a ma-
jority of the members of the Panel.
(4) HEARINGS.—For the purpose of carrying
out its duties, the Panel may hold such hearings and
undertake such other activities as the Panel deter-
mines to be necessary to carry out its duties.
(e) ADMINISTRATION.—
(1) COMPENSATION.—Except as provided in
paragraph (1), members of the Panel shall receive
no additional pay, allowances, or benefits by reason
of their service on the Panel.
(2) TRAVEL EXPENSES AND PER DIEM.—Each
member of the Panel who is not an officer or em-
ployee of the Federal Government shall receive travel
expenses and per diem in lieu of subsistence in ac-
cordance with sections 5702 and 5703 of title 5,
United States Code.
(3) CONTRACT
AUTHORITY.—The Panel may
contract with and compensate government and pri-
vate agencies or persons for items and services,
without regard to section 3709 of the Revised Stat-
utes (41 U.S.C. 5).
(4) USE OF MAILS.—The Panel may use the
United States mails in the same manner and under
the same conditions as Federal agencies and shall,
for purposes of the frank, be considered a commis-
sion of Congress as described in section 3215 of title
39, United States Code.
(5) ADMINISTRATIVE
SUPPORT
SERVICES.—
Upon the request of the Panel, the Secretary of
Health and Human Services shall provide to the
Panel on a reimbursable basis such administrative
support services as the Panel may request.
(f) REPORT AND ESTABLISHMENT OF STANDARDS.—
Not later than 2 years after the first meeting, the Panel
shall submit a report to Congress and the Secretary of
Health and Human Services detailing the standards de-
vised under subsection (b) and recommendations regard-
ing the implementation of such standards. Such standards
shall take effect to the extent provided by Federal law en-
acted after the date of the submission of such report.
(g) TERMINATION.—The Panel shall terminate on
the day after submitting its report to the Secretary of
Health and Human Services under subsection (f).
SEC. 119. ACCESS TO EXPERIMENTAL OR INVESTIGA-
TIONAL PRESCRIPTION DRUGS.
No use of a prescription drug or medical device shall
be considered experimental or investigational under a
group health plan or under health insurance coverage pro-
vided by a health insurance issuer if such use is included
in the labeling authorized by the U.S. Food and Drug Ad-
ministration under section 505, 513 or 515 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355) or under
section 351 of the Public Health Service Act (42 U.S.C.
262), unless such use is demonstrated to be unsafe or inef-
fective.
Subtitle C—Access to Information
SEC. 121. PATIENT ACCESS TO INFORMATION.
(a) DISCLOSURE REQUIREMENT.—
(1) GROUP HEALTH PLANS.—A group health
plan shall—
(A) provide to participants and bene-
ficiaries at the time of initial coverage under
the plan (or the effective date of this section, in
the case of individuals who are participants or
beneficiaries as of such date), and at least an-
nually thereafter, the information described in
subsection (b);
(B) provide to participants and bene-
ficiaries, within a reasonable period (as speci-
fied by the appropriate Secretary) before or
after the date of significant changes in the in-
formation described in subsection (b), informa-
tion on such significant changes; and
(C) upon request, make available to par-
ticipants and beneficiaries, the applicable au-
thority, and prospective participants and bene-
ficiaries, the information described in sub-
section (b) or (c).
The plan may charge a reasonable fee for provision
in printed form of any of the information described
in subsection (b) or (c) more than once during any
plan year.
(2) HEALTH
INSURANCE
ISSUERS.—A health
insurance issuer in connection with the provision of
health insurance coverage shall—
(A) provide to individuals enrolled under
such coverage at the time of enrollment, and at
least annually thereafter, the information de-
scribed in subsection (b) in printed form;
(B) provide to enrollees, within a reason-
able period (as specified by the appropriate Sec-
retary) before or after the date of significant
changes in the information described in sub-
section (b), information in printed form on such
significant changes; and
(C) upon request, make available to the
applicable authority, to individuals who are pro-
spective enrollees, and to the public the infor-
mation described in subsection (b) or (c) in
printed form.
(b) INFORMATION PROVIDED.—The information de-
scribed in this subsection with respect to a group health
plan or health insurance coverage offered by a health in-
surance issuer shall be provided to a participant, bene-
ficiary, or enrollee free of charge at least once a year and
includes the following:
(1) SERVICE AREA.—The service area of the
plan or issuer.
(2) BENEFITS.—Benefits offered under the
plan or coverage, including—
(A) those that are covered benefits (by ref-
erence to relevant CPT and DRG codes), limits
and conditions on such benefits, and those ben-
efits that are explicitly excluded from coverage
(by reference to relevant CPT and DRG codes);
(B) cost sharing, such as deductibles, coin-
surance, and copayment amounts, including any
liability for balance billing, any maximum limi-
tations on out of pocket expenses, and the max-
imum out of pocket costs for services that are
provided by nonparticipating providers or that
are furnished without meeting the applicable
utilization review requirements;
(C) the extent to which benefits may be ob-
tained from nonparticipating providers;
(D) the extent to which a participant, ben-
eficiary, or enrollee may select from among par-
ticipating providers and the types of providers
participating in the plan or issuer network;
(E) process for determining experimental
coverage; and
(F) use of a prescription drug formulary.
(3) ACCESS.—A description of the following:
(A) The number, mix, and distribution of
providers under the plan or coverage.
(B) Out-of-network coverage (if any) pro-
vided by the plan or coverage.
(C) Any point-of-service option (including
any supplemental premium or cost-sharing for
such option).
(D) The procedures for participants, bene-
ficiaries, and enrollees to select, access, and
change participating primary and specialty pro-
viders.
(E) The rights and procedures for obtain-
ing referrals (including standing referrals) to
participating and nonparticipating providers.
(F) The name, address, and telephone
number of participating health care providers
and an indication of whether each such provider
is available to accept new patients.
(G) Any limitations imposed on the selec-
tion of qualifying participating health care pro-
viders, including any limitations imposed under
section 112(b)(2).
(4) OUT-OF-AREA COVERAGE.—Out-of-area cov-
erage provided by the plan or issuer.
(5) 
EMERGENCY
COVERAGE.—Coverage 
of
emergency services, including—
(A) the appropriate use of emergency serv-
ices, including use of the 911 telephone system
or its local equivalent in emergency situations
and an explanation of what constitutes an
emergency situation;
(B) the process and procedures of the plan
or issuer for obtaining emergency services; and
(C) the locations of (i) emergency depart-
ments, and (ii) other settings, in which plan
physicians and hospitals provide emergency
services and post-stabilization care.
(6) PRIOR AUTHORIZATION RULES.—Rules re-
garding prior authorization or other review require-
ments that could result in noncoverage or non-
payment.
(7) GRIEVANCE AND APPEALS PROCEDURES.—
All appeal or grievance rights and procedures under
the plan or coverage, including the method for filing
grievances and the time frames and circumstances
for acting on grievances and appeals, who is the ap-
plicable authority with respect to the plan or issuer.
(8) ACCOUNTABILITY.—A description of the
legal recourse options available for participants and
beneficiaries under the plan including—
(A) the preemption that applies under sec-
tion 514 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1144) to cer-
tain actions arising out of the provision of
health benefits; and
(B) the extent to which coverage decisions
made by the plan are subject to internal review
or any external review and the proper time
frames under.
(9) QUALITY
ASSURANCE.—Any information
made public by an accrediting organization in the
process of accreditation of the plan or issuer or any
additional quality indicators the plan or issuer
makes available.
(10) INFORMATION ON ISSUER.—Notice of ap-
propriate mailing addresses and telephone numbers
to be used by participants, beneficiaries, and enroll-
ees in seeking information or authorization for treat-
ment.
(11) AVAILABILITY OF INFORMATION ON RE-
QUEST.—Notice that the information described in
subsection (c) is available upon request.
(c) INFORMATION MADE AVAILABLE UPON RE-
QUEST.—The information described in this subsection is
the following:
(1) UTILIZATION REVIEW ACTIVITIES.—A de-
scription of procedures used and requirements (in-
cluding circumstances, time frames, and appeal
rights) under any utilization review program under
section 101.
(2) GRIEVANCE AND APPEALS INFORMATION.—
Information on the number of grievances and ap-
peals and on the disposition in the aggregate of such
matters.
(3) FORMULARY RESTRICTIONS.—A description
of the nature of any drug formula restrictions.
(4) PARTICIPATING PROVIDER LIST.—A list of
current participating health care providers.
(d) CONSTRUCTION.—Nothing in this section shall be
construed as requiring public disclosure of individual con-
tracts or financial arrangements between a group health
plan or health insurance issuer and any provider.
Subtitle D—Protecting the Doctor-
Patient Relationship
SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN
MEDICAL COMMUNICATIONS.
(a) GENERAL RULE.—The provisions of any contract
or agreement, or the operation of any contract or agree-
ment, between a group health plan or health insurance
issuer in relation to health insurance coverage (including
any partnership, association, or other organization that
enters into or administers such a contract or agreement)
and a health care provider (or group of health care pro-
viders) shall not prohibit or otherwise restrict a health
care professional from advising such a participant, bene-
ficiary, or enrollee who is a patient of the professional
about the health status of the individual or medical care
or treatment for the individual’s condition or disease, re-
gardless of whether benefits for such care or treatment
are provided under the plan or coverage, if the professional
is acting within the lawful scope of practice.
(b) NULLIFICATION.—Any contract provision or
agreement that restricts or prohibits medical communica-
tions in violation of subsection (a) shall be null and void.
(c) CONSTRUCTION.—Nothing in this title shall be
construed to require the sponsor of a group health plan,
or a health insurance issuer offering health insurance cov-
erage in connection with the group health plan, to provide,
reimburse for, or provide coverage of, a counseling or re-
ferral service if the plan or issuer objects to the provision
of such service on moral or religious grounds.
SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PRO-
VIDERS BASED ON LICENSURE.
(a) IN GENERAL.—A group health plan and a health
insurance issuer offering health insurance coverage shall
not discriminate with respect to participation or indem-
nification as to any provider who is acting within the scope
of the provider’s license or certification under applicable
State law, solely on the basis of such license or certifi-
cation.
(b) CONSTRUCTION.—Subsection (a) shall not be
construed—
(1) as requiring the coverage under a group
health plan or health insurance coverage of par-
ticular benefits or services 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 issuer; or
(4) as prohibiting a family practice physician
with appropriate expertise from providing pediatric
or obstetrical or gynecological care.
SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE
ARRANGEMENTS.
(a) IN GENERAL.—A group health plan and a health
insurance issuer offering health insurance coverage may
not operate any physician incentive plan (as defined in
subparagraph (B) of section 1876(i)(8) of the Social Secu-
rity Act) unless the requirements described in clauses (i),
(ii)(I), and (iii) of subparagraph (A) of such section are
met with respect to such a plan.
(b) APPLICATION.—For purposes of carrying out
paragraph (1), any reference in section 1876(i)(8) of the
Social Security Act to the Secretary, an eligible organiza-
tion, or an individual enrolled with the organization shall
be treated as a reference to the applicable authority, a
group health plan or health insurance issuer, respectively,
and a participant, beneficiary, or enrollee with the plan
or organization, respectively.
(c) CONSTRUCTION.—Nothing in this section shall be
construed as prohibiting all capitation and similar ar-
rangements or all provider discount arrangements.
SEC. 134. PAYMENT OF CLEAN CLAIMS.
A group health plan, and a health insurance issuer
offering group health insurance coverage, shall provide for
prompt payment of claims submitted for health care serv-
ices or supplies furnished to a participant, beneficiary, or
enrollee with respect to benefits covered by the plan or
issuer, in a manner consistent with the provisions of sec-
tions 1816(c)(2) and 1842(c)(2) of the Social Security Act
(42 U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), ex-
cept that for purposes of this section, subparagraph (C)
of section 1816(c)(2) of the Social Security Act shall be
treated as applying to claims received from a participant,
beneficiary, or enrollee as well as claims referred to in
such subparagraph.
Subtitle E—Definitions
SEC. 151. DEFINITIONS.
(a) INCORPORATION OF GENERAL DEFINITIONS.—
Except as otherwise provided, the provisions of section
2971 of the Public Health Service Act shall apply for pur-
poses of this title in the same manner as they apply for
purposes of title XXVII of such Act.
(b) SECRETARY.—Except as otherwise provided, the
term ‘‘Secretary’’ means the Secretary of Health and
Human Services, in consultation with the Secretary of
Labor and the term ‘‘appropriate Secretary’’ means the
Secretary of Health and Human Services in relation to
carrying out this title under sections 2706 and 2751 of
the Public Health Service Act and the Secretary of Labor
in relation to carrying out this title under section 713 of
the Employee Retirement Income Security Act of 1974.
(c) ADDITIONAL DEFINITIONS.—For purposes of this
title:
(1) APPLICABLE AUTHORITY.—The term ‘‘ap-
plicable authority’’ means—
(A) in the case of a group health plan, the
Secretary of Health and Human Services and
the Secretary of Labor; and
(B) in the case of a health insurance issuer
with respect to a specific provision of this title,
the applicable State authority (as defined in
section 2791(d) of the Public Health Service
Act), or the Secretary of Health and Human
Services, if such Secretary is enforcing such
provision 
under 
section 
2722(a)(2) 
or
2761(a)(2) of the Public Health Service Act.
(2) CLINICAL PEER.—The term ‘‘clinical peer’’
means, with respect to a review or appeal, a prac-
ticing physician or other health care professional
who holds a nonrestricted license and who is—
(A) appropriately certified by a nationally
recognized, peer reviewed accrediting body in
the same or similar specialty as typically man-
ages the medical condition, procedure, or treat-
ment under review or appeal, or
(B) is trained and experienced in man-
aging such condition, procedure, or treatment,
and includes a pediatric specialist where appropriate;
except that only a physician may be a clinical peer
with respect to the review or appeal of treatment
recommended or rendered by a physician.
(3) ENROLLEE.—The term ‘‘enrollee’’ means,
with respect to health insurance coverage offered by
a health insurance issuer, an individual enrolled with
the issuer to receive such coverage.
(4) GROUP HEALTH PLAN.—The term ‘‘group
health plan’’ has the meaning given such term in
section 733(a) of the Employee Retirement Income
Security Act of 1974.
(5) HEALTH CARE PROFESSIONAL.—The term
‘‘health care professional’’ means an individual who
is licensed, accredited, or certified under State law
to provide specified health care services and who is
operating within the scope of such licensure, accredi-
tation, or certification.
(6) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ includes a physician or other
health care professional, as well as an institutional
or other facility or agency that provides health care
services and that is licensed, accredited, or certified
to provide health care items and services under ap-
plicable State law.
(7) NETWORK.—The term ‘‘network’’ means,
with respect to a group health plan or health insur-
ance issuer offering health insurance coverage, the
participating health care professionals and providers
through whom the plan or issuer provides health
care items and services to participants, beneficiaries,
or enrollees.
(8) 
NONPARTICIPATING.—The 
term 
‘‘non-
participating’’ means, with respect to a health care
provider that provides health care items and services
to a participant, beneficiary, or enrollee under group
health plan or health insurance coverage, a health
care provider that is not a participating health care
provider with respect to such items and services.
(9) PARTICIPATING.—The term ‘‘participating’’
means, with respect to a health care provider that
provides health care items and services to a partici-
pant, beneficiary, or enrollee under group health
plan or health insurance coverage offered by a
health insurance issuer, a health care provider that
furnishes such items and services under a contract
or other arrangement with the plan or issuer.
(10) PHYSICIAN.—The term ‘‘physician’’ means
an allopathic or osteopathic physician.
(11) PRACTICING PHYSICIAN.—The term ‘‘prac-
ticing physician’’ means a physician who is licensed
in the State in which the physician furnishes profes-
sional services and who provides professional services
to individual patients on average at least two full
days per week.
(12) PRIOR AUTHORIZATION.—The term ‘‘prior
authorization’’ means the process of obtaining prior
approval from a health insurance issuer or group
health plan for the provision or coverage of medical
services.
SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUC-
TION.
(a) CONTINUED APPLICABILITY
OF STATE LAW
WITH RESPECT TO HEALTH INSURANCE ISSUERS.—
(1) IN GENERAL.—Subject to paragraph (2),
this title shall not be construed to supersede any
provision of State law which establishes, implements,
or continues in effect any standard or requirement
solely relating to health insurance issuers (in connec-
tion with group health insurance coverage or other-
wise) except to the extent that such standard or re-
quirement prevents the application of a requirement
of this title.
(2) CONTINUED
PREEMPTION
WITH
RESPECT
TO GROUP HEALTH PLANS.—Nothing in this title
shall be construed to affect or modify the provisions
of section 514 of the Employee Retirement Income
Security Act of 1974 with respect to group health
plans.
(b) DEFINITIONS.—For purposes of this section:
(1) STATE
LAW.—The term ‘‘State law’’ in-
cludes all laws, decisions, rules, regulations, or other
State action having the effect of law, of any State.
A law of the United States applicable only to the
District of Columbia shall be treated as a State law
rather than a law of the United States.
(2) STATE.—The term ‘‘State’’ includes a
State, the District of Columbia, the Northern Mar-
iana Islands, any political subdivisions of a State or
such Islands, or any agency or instrumentality of ei-
ther.
SEC. 153. EXCLUSIONS.
(a) NO BENEFIT REQUIREMENTS.—Nothing in this
title shall be construed to require a group health plan or
a health insurance issuer offering health insurance cov-
erage to provide specific benefits under the terms of such
plan or coverage, other than those provided under the
terms of such plan or coverage.
(b) EXCLUSION FROM ACCESS TO CARE MANAGED
CARE PROVISIONS FOR FEE-FOR-SERVICE COVERAGE.—
(1) IN GENERAL.—The provisions of sections
111 through 117 shall not apply to a group health
plan or health insurance coverage if the only cov-
erage offered under the plan or coverage is fee-for-
service coverage (as defined in paragraph (2)).
(2) FEE-FOR-SERVICE
COVERAGE
DEFINED.—
For purposes of this subsection, the term ‘‘fee-for-
service coverage’’ means coverage under a group
health plan or health insurance coverage that—
(A) reimburses hospitals, health profes-
sionals, and other providers on the basis of a
rate determined by the plan or issuer on a fee-
for-service basis without placing the provider at
financial risk;
(B) does not vary reimbursement for such
a provider based on an agreement to contract
terms and conditions or the utilization of health
care items or services relating to such provider;
(C) does not restrict the selection of pro-
viders among those who are lawfully authorized
to provide the covered services and agree to ac-
cept the terms and conditions of payment estab-
lished under the plan or by the issuer; and
(D) for which the plan or issuer does not
require prior authorization before providing cov-
erage for any services.
SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.
Only for purposes of applying the requirements of
this title under sections 2707 and 2753 of the Public
Health Service Act and section 714 of the Employee Re-
tirement 
Income 
Security 
Act 
of 
1974, 
section
2791(c)(2)(A), and section 733(c)(2)(A) of the Employee
Retirement Income Security Act of 1974 shall be deemed
not to apply.
SEC. 155. REGULATIONS; COORDINATION; APPLICATION
UNDER DIFFERENT LAWS.
(a) REGULATIONS.—The Secretaries of Health and
Human Services, Labor, and the Treasury shall each issue
such regulations as may be necessary or appropriate to
carry out this title under sections 2707 and 2753 of the
Public Health Service Act, under section 714 of the Em-
ployee Retirement Income Security Act of 1974, and
under section 9813 of the Internal Revenue Code of 1986,
respectively. Such Secretaries may promulgate such regu-
lations in the form of interim final rules as may be nec-
essary to carry out this Act in a timely manner.
(b) ASSURING
COORDINATION.—Such Secretaries
shall ensure, through the execution of an interagency
memorandum of understanding among such Secretaries,
that—
(1) regulations, rulings, and interpretations
issued by such Secretaries relating to the same mat-
ter over which two or more such Secretaries have re-
sponsibility under this title (and the amendments
made by titles II, III, and IV) are administered so
as to have the same effect at all times; and
(2) coordination of policies relating to enforcing
the same requirements through such Secretaries in
order to have a coordinated enforcement strategy
that avoids duplication of enforcement efforts and
assigns priorities in enforcement.
(c) APPLICATION OF SUBTITLE UNDER DIFFERENT
LAWS.—The provisions of this subtitle shall be applied—
(1) by the Secretary of Health and Human
Services under (and only under) title XXVII of the
Public Health Service Act (and not under Employee
Retirement Income Security Act of 1974 or the In-
ternal Revenue Code of 1986);
(2) by the Secretary of Labor under (and only
under) part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (and not
under the Public Health Service Act or the Internal
Revenue Code of 1986); and
(3) by the Secretary of the Treasury under
(and only under) chapter 100 of the Internal Rev-
enue Code of 1986 (and not under the Public Health
Service Act or the Employee Retirement Income Se-
curity Act of 1974).
(d) CONSTRUCTION.—Nothing in this subtitle shall
be construed as preventing the Congress from providing
for different quality care policies for application under the
different titles, parts, and chapters referenced in sub-
section (c).
TITLE 
II—APPLICATION 
OF
QUALITY CARE STANDARDS
TO GROUP HEALTH PLANS
AND 
HEALTH 
INSURANCE
COVERAGE UNDER THE PUB-
LIC HEALTH SERVICE ACT
SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND
GROUP HEALTH INSURANCE COVERAGE.
(a) IN GENERAL.—Subpart 2 of part A of title
XXVII of the Public Health Service Act is amended by
adding at the end the following new section:
‘‘SEC. 2707. PATIENT PROTECTION STANDARDS.
‘‘(a) IN GENERAL.—Each group health plan shall
comply with patient protection requirements under title I
of the Health Care Quality and Choice Act of 1999 (as
in effect on the date of the enactment of such Act), and
each health insurance issuer shall comply with patient pro-
tection requirements under such title with respect to group
health insurance coverage it offers, and such requirements
shall be deemed to be incorporated into this subsection.
‘‘(b) NOTICE.—A group health plan shall comply with
the notice requirement under section 711(d) of the Em-
ployee Retirement Income Security Act of 1974 (as in ef-
fect on the date of the enactment of the Health Care Qual-
ity and Choice Act of 1999) with respect to the require-
ments referred to in subsection (a) and a health insurance
issuer shall comply with such notice requirement as if such
section applied to such issuer and such issuer were a
group health plan.’’.
(b) 
CONFORMING
AMENDMENT.—Section
2721(b)(2)(A) of such Act (42 U.S.C. 300gg–21(b)(2)(A))
is amended by inserting ‘‘(other than section 2707)’’ after
‘‘requirements of such subparts’’.
SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSUR-
ANCE COVERAGE.
Part B of title XXVII of the Public Health Service
Act is amended by inserting after section 2752 the fol-
lowing new section:
‘‘SEC. 2753. PATIENT PROTECTION STANDARDS.
‘‘(a) IN GENERAL.—Each health insurance issuer
shall comply with patient protection requirements under
title I of the Health Care Quality and Choice Act of 1999
(as in effect on the date of the enactment of such Act)
with respect to individual health insurance coverage it of-
fers, and such requirements shall be deemed to be incor-
porated into this subsection.
‘‘(b) NOTICE.—A health insurance issuer under this
part shall comply with the notice requirement under sec-
tion 711(d) of the Employee Retirement Income Security
Act of 1974 with respect to the requirements of such title
as if such section applied to such issuer and such issuer
were a group health plan.’’.
TITLE 
III—AMENDMENTS 
TO
THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF
1974
SEC. 301. APPLICATION OF PATIENT PROTECTION STAND-
ARDS TO GROUP HEALTH PLANS AND GROUP
HEALTH INSURANCE COVERAGE UNDER THE
EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.
(a) IN GENERAL.—Subpart B of part 7 of subtitle
B of title I of the Employee Retirement Income Security
Act of 1974 is amended by adding at the end the following
new section:
‘‘SEC. 714. PATIENT PROTECTION STANDARDS.
‘‘A group health plan (and a health insurance issuer
offering group health insurance coverage in connection
with such a plan) shall comply with the requirements of
title I of the Health Care Quality and Choice Act of 1999
(as in effect as of the date of the enactment of such Act),
and such requirements shall be deemed to be incorporated
into this section.’’.
(b) SATISFACTION OF ERISA CLAIMS PROCEDURE
REQUIREMENT.—Section 503 of such Act (29 U.S.C.
1133) is amended by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’
and by adding at the end the following new subsection:
‘‘(b) In the case of a group health plan (as defined
in section 733) compliance with the requirements of sub-
title A of title I of the Health Care Quality and Choice
Act of 1999 (as in effect on the date of the enactment
of such Act) in the case of a claims denial shall be deemed
compliance with subsection (a) with respect to such claims
denial.’’.
(c) CONFORMING AMENDMENTS.—(1) Section 732(a)
of such Act (29 U.S.C. 1185(a)) is amended by striking
‘‘section 711’’ and inserting ‘‘sections 711 and 714’’.
(2) The table of contents in section 1 of such Act
is amended by inserting after the item relating to section
713 the following new item:
‘‘Sec. 714. Patient protection standards.’’.
SEC. 302. AVAILABILITY OF COURT REMEDIES.
(a) IN GENERAL.—Section 502 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1132)
is amended by adding at the end the following new sub-
section:
‘‘(n) CAUSE OF ACTION RELATING TO PROVISION OF
HEALTH BENEFITS.—
‘‘(1) IN GENERAL.—In any case in which—
‘‘(A) a person who is a fiduciary of a
group health plan, a health insurance issuer of-
fering health insurance coverage in connection
with the plan, or an agent of the plan or plan
sponsor and who, under the plan, has authority
to make final decisions under section 102 of the
Health Care Quality and Choice Act of 1999—
‘‘(i) fails to exercise ordinary care in
making an incorrect determination in the
case of a participant or beneficiary that an
item or service is excluded from coverage
under the terms of the plan based on the
fact that the item or service—
‘‘(I) does not meet the require-
ments for medical appropriateness or
necessity,
‘‘(II) would constitute experi-
mental treatment or technology (as
defined under the plan), or
‘‘(III) is not a covered benefit, or
‘‘(ii) fails to exercise ordinary care to
ensure that—
‘‘(I) any denial of claim for bene-
fits (within the meaning of section
101(f) of the Health Care Quality and
Choice Act of 1999), or
‘‘(II) any decision by the plan on
a request, made by a participant or
beneficiary under section 102 or 103
of the Health Care Quality and
Choice Act of 1999, for a reversal of
an earlier decision of the plan,
is made and issued to the participant or
beneficiary (in such form and manner as
may be prescribed in regulations of the
Secretary) before the end of the applicable
period specified in section 101, 102, or 103
of the Health Care Quality and Choice Act
of 1999, and
‘‘(B) such failure is the proximate cause of
personal injury to, or wrongful death of, the
participant or beneficiary,
such person shall be liable to the participant or ben-
eficiary (or the estate of such participant or bene-
ficiary) for economic and noneconomic damages in
connection with such failure and such injury or
death (subject to paragraph (10)).
For purposes of this subsection, the term ‘final deci-
sion’ means, with respect to a group health plan, a
final decision of the plan under section 102 of the
Health Care Quality and Choice Act of 1999.
‘‘(2) ORDINARY CARE.—For purposes of this
subsection, the term ‘ordinary care’ means the care,
skill, prudence, and diligence under the cir-
cumstances then prevailing that a prudent individual
acting in a like capacity and familiar with such mat-
ters would use in the conduct of an enterprise of a
like character and with like aims.
‘‘(3) PERSONAL INJURY.—For purposes of this
subsection, the term ‘personal injury’ means a phys-
ical injury and includes a physical injury arising out
of a failure to treat a mental illness or disease.
‘‘(4) EXCEPTION FOR EMPLOYERS AND OTHER
PLAN SPONSORS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), paragraph (1) does not authorize—
‘‘(i) any cause of action against an
employer or other plan sponsor maintain-
ing the group health plan (or against an
employee of such an employer or sponsor
acting within the scope of employment), or
‘‘(ii) a right of recovery or indemnity
by a person against an employer or other
plan sponsor (or such an employee) for
damages assessed against the person pur-
suant to a cause of action under paragraph
(1).
‘‘(B) SPECIAL RULE.—Subparagraph (A)
shall not preclude any cause of action described
in paragraph (1) commenced against an em-
ployer or other plan sponsor (or against an em-
ployee of such an employer or sponsor acting
within the scope of employment), but only if—
‘‘(i) such action is based on the direct
participation of the employer or other plan
sponsor (or employee of the employer or
plan sponsor) in the final decision of the
plan with respect to a specific participant
or beneficiary on a claim for benefits cov-
ered under the plan or health insurance
coverage in the case at issue; and
‘‘(ii) the decision on the claim resulted
in personal injury to, or the wrongful
death of, such participant or beneficiary.
‘‘(C) DIRECT
PARTICIPATION.—For pur-
poses of this subsection, in determining whether
an employer or other plan sponsor (or employee
of an employer or other plan sponsor) is en-
gaged in direct participation in the final deci-
sion of the plan on a claim, the employer or
plan sponsor (or employee) shall not be con-
strued to be engaged in such direct participa-
tion (and to be liable for any damages whatso-
ever) because of—
‘‘(i) any participation by the employer
or other plan sponsor (or employee) in the
selection of the group health plan or health
insurance coverage involved or the third
party administrator or other agent;
‘‘(ii) any engagement by the employer
or other plan sponsor (or employee) in any
cost-benefit analysis undertaken in connec-
tion with the selection of, or continued
maintenance of, the plan or coverage in-
volved;
‘‘(iii) any decision to increase or de-
crease coverage or benefits affecting all
plan participants or beneficiaries made in
the initial purchase or regular renewal of
coverage by the employer or plan sponsor
(or employee);
‘‘(iv) any action by an agent of the
employer or plan sponsor in making such
a final decision on behalf of such employer
or plan sponsor;
‘‘(v) any decision by an employer or
plan sponsor (or employee) or agent acting
on behalf of an employer or plan sponsor
either to authorize coverage for, or to in-
tercede or not to intercede as an advocate
for or on behalf of, any specific participant
or beneficiary (or group of participants or
beneficiaries) under the plan; or
‘‘(vi) any other form of decision-
making or other conduct performed by the
employer or other plan sponsor (or em-
ployee) in connection with the plan or cov-
erage involved unless it involves the mak-
ing of a final decision of the plan con-
sisting of a failure described in clause (i)
or (ii) of paragraph (1)(A) as to specific
participants or beneficiaries who suffer
personal injury or wrongful death as a
proximate cause of such decision.
‘‘(5) REQUIRED
DEMONSTRATION
OF
DIRECT
PARTICIPATION.—An action against an employer or
plan sponsor (or employee thereof) under this sub-
section shall be immediately dismissed—
‘‘(A) in the absence of an allegation in the
complaint of direct participation by the em-
ployer or plan sponsor in the final decision of
the plan with respect to a specific participant or
beneficiary who suffers personal injury or
wrongful death, or
‘‘(B) upon a demonstration to the court
that such employer or plan sponsor (or em-
ployee) did not directly participate in the final
decision of the plan.
‘‘(6) TREATMENT OF THIRD-PARTY PROVIDERS
OF
NONDISCRETIONARY
ADMINISTRATIVE
SERV-
ICES.—Paragraph (1) does not authorize any action
against any person providing nondiscretionary ad-
ministrative services to employers or other plan
sponsors.
‘‘(7) REQUIREMENT
OF
EXHAUSTION
OF
AD-
MINISTRATIVE REMEDIES.—
‘‘(A) IN GENERAL.—Paragraph (1) applies
in the case of any cause of action only if all
remedies under section 503 (including remedies
under sections 102 and 103 of the Health Care
Quality and Choice Act of 1999 made applica-
ble under section 714) with respect to such
cause of action have been exhausted.
‘‘(B) EXTERNAL REVIEW REQUIRED.—For
purposes of subparagraph (A), administrative
remedies under section 503 shall not be deemed
exhausted until available remedies under section
103 of the Health Care Quality and Choice Act
of 1999 have been elected and are exhausted.
‘‘(C) CONSIDERATION OF ADMINISTRATIVE
DETERMINATIONS.—Any determinations made
under section 102 or 103 of the Health Care
Quality and Choice Act of 1999 made while an
action under this paragraph is pending shall be
given due consideration by the court in such ac-
tion.
‘‘(8) USE OF EXTERNAL APPEAL ENTITY IN ES-
TABLISHING
ABSENCE
OF
PERSONAL
INJURY
OR
CAUSATION IN LITIGATION.—
‘‘(A) IN GENERAL.—In any action under
this subsection by an individual in which dam-
ages are sought on the basis of a personal in-
jury to the individual, the defendant may obtain
(at its own expense), under procedures similar
to procedures applicable under section 103 of
the Health Care Quality and Choice Act of
1999, a determination by a qualified external
appeal entity (as defined in section 103(c)(1) of
the Health Care Quality and Choice Act of
1999) that has not been involved in any stage
of the grievance or appeals process which re-
sulted in such action as to—
‘‘(i) whether or not such a personal
injury has been sustained, or
‘‘(ii) whether or not the proximate
cause of such injury was the result of the
failure of the defendant to exercise ordi-
nary care, as described in paragraph
(1)(A).
‘‘(B) EFFECT OF FINDING IN FAVOR OF
DEFENDANT.—If the external appeal entity de-
termines that such an injury has not been sus-
tained or was not proximately caused by such
a failure, such a finding shall be an affirmative
defense, the action shall be dismissed forthwith,
and all liability based upon the alleged injury
shall be precluded.
‘‘(9) REBUTTABLE PRESUMPTION.—In the case
of any action commenced pursuant to paragraph (1),
there shall be a rebuttable presumption in favor of
the decision of the external appeal entity rendered
upon completion of any review elected under section
103 of the Health Care Quality and Choice Act of
1999 and such presumption may be overcome only
upon a showing of clear and convincing evidence to
the contrary.
‘‘(10) MAXIMUM
NONECONOMIC
DAMAGES.—
Total liability for noneconomic loss under this sub-
section in connection with any failure with respect to
any participant or beneficiary may not exceed the
greater of—
‘‘(A) $250,000, or
‘‘(B) 2 times the amount of economic loss.
‘‘(11) PROHIBITION
OF
AWARD
OF
PUNITIVE
DAMAGES.—
‘‘(A) GENERAL RULE.—Except as provided
in this paragraph, nothing in this subsection
shall be construed as authorizing a cause of ac-
tion for punitive, exemplary, or similar dam-
ages.
‘‘(B) EXCEPTION.—Punitive damages are
authorized in any case described in paragraph
(1)(A)(ii) in which the plaintiff establishes by
clear and convincing evidence that conduct car-
ried out by the defendant with a conscious, fla-
grant indifference to the rights or safety of oth-
ers was the proximate cause of the harm that
is the subject of the action and that such con-
duct was contrary to the recommendations of
an external appeal entity issued in any deter-
mination (if any) in such case rendered pursu-
ant to section 103 of the Health Care Quality
and Choice Act of 1999.
‘‘(C) LIMITATION ON AMOUNT.—
‘‘(i) IN
GENERAL.—The amount of
punitive damages that may be awarded in
an action described in subparagraph (B)
may not exceed the greater of—
‘‘(I) 2 times the sum of the
amount awarded to the claimant for
economic loss; or
‘‘(II) $250,000.
‘‘(ii) 
SPECIAL
RULE.—Notwith-
standing clause (i), in any action described
in subparagraph (B) against an individual
whose net worth does not exceed $500,000
or against an owner of an unincorporated
business, or any partnership, corporation,
association, unit of local government, or
organization which has fewer that 25 em-
ployees, the punitive damages shall not ex-
ceed the lesser of—
‘‘(I) 2 times the amount awarded
to the claimant for economic loss; or
100
‘‘(II) $250,000.
‘‘(iii) CONTROLLED GROUPS.—
‘‘(I) IN GENERAL.—For the pur-
pose of determining the applicability
of clause (ii) to any employer, in de-
termining the number of employees of
an employer who is a member of a
controlled group, the employees of any
person in such group shall be deemed
to be employees of the employer.
‘‘(II) CONTROLLED GROUP.—For
purposes of subclause (I), the term
‘controlled group’ means any group
treated as a single employer under
subsection (b), (c), (m), or (o) of sec-
tion 414 of the Internal Revenue Code
of 1986.
‘‘(D) 
EXCEPTION
FOR
INSUFFICIENT
AWARD IN CASES OF EGREGIOUS CONDUCT.—
‘‘(i) DETERMINATION BY COURT.—If
the court makes a determination, after
considering each of the factors in subpara-
graph (E), that the application of subpara-
graph (B) would result in an award of pu-
nitive damages that is insufficient to pun-
101
ish the egregious conduct of the defendant
against whom the punitive damages are to
be awarded or to deter such conduct in the
future, the court shall determine the addi-
tional amount of punitive damages (re-
ferred to in this subparagraph as the ‘addi-
tional amount’) in excess of the amount
determined in accordance with subpara-
graph (B) to be awarded against the de-
fendant in a separate proceeding in accord-
ance with this subparagraph.
‘‘(ii) REQUIREMENTS FOR AWARDING
ADDITIONAL
AMOUNT.—If 
the 
court
awards an additional amount pursuant to
this subparagraph, the court shall state its
reasons for setting the amount of the addi-
tional amount in findings of fact and con-
clusions of law.
‘‘(E) FACTORS
FOR
CONSIDERATION
IN
CASES OF EGREGIOUS CONDUCT.—In any pro-
ceeding under subparagraph (D), the matters to
be considered by the court shall include (but
are not limited to)—
‘‘(i) the extent to which the defendant
acted with actual malice;
102
‘‘(ii) the likelihood that serious harm
would arise from the conduct of the de-
fendant;
‘‘(iii) the degree of the awareness of
the defendant of that likelihood;
‘‘(iv) the profitability of the mis-
conduct to the defendant;
‘‘(v) the duration of the misconduct
and any concurrent or subsequent conceal-
ment of the conduct by the defendant;
‘‘(vi) the attitude and conduct of the
defendant upon the discovery of the mis-
conduct and whether the misconduct has
terminated;
‘‘(vii) the financial condition of the
defendant; and
‘‘(viii) the cumulative deterrent effect
of other losses, damages, and punishment
suffered by the defendant as a result of the
misconduct, reducing the amount of puni-
tive damages on the basis of the economic
impact and severity of all measures to
which the defendant has been or may be
subjected, including—
103
‘‘(I) compensatory and punitive
damage awards to similarly situated
claimants;
‘‘(II) the adverse economic effect
of stigma or loss of reputation;
‘‘(III) civil fines and criminal and
administrative penalties; and
‘‘(IV) stop sale, cease and desist,
and other remedial or enforcement or-
ders.
‘‘(F) APPLICATION BY COURT.—This para-
graph shall be applied by the court and, in the
case of a trial by jury, application of this para-
graph shall not be disclosed to the jury. Noth-
ing in this paragraph shall authorize the court
to enter an additional award of punitive dam-
ages in excess of the amount of the jury’s initial
award of punitive damages.
‘‘(G) LIMITATION
ON
PUNITIVE
DAM-
AGES.—No person shall be liable for punitive,
exemplary, or similar damages in an action
under this subsection based on any failure de-
scribed in paragraph (1) if such failure was in
compliance with the recommendations of an ex-
ternal appeal entity issued in a determination
104
under section 103 of the Health Care Quality
and Choice Act of 1999.
‘‘(H) BIFURCATION AT REQUEST OF ANY
PARTY.—
‘‘(i) IN GENERAL.—At the request of
any party the trier of fact in any action
that is subject to this paragraph shall con-
sider in a separate proceeding, held subse-
quent to the determination of the amount
of compensatory damages, whether puni-
tive damages are to be awarded for the
harm that is the subject of the action and
the amount of the award.
‘‘(ii) INADMISSIBILITY OF EVIDENCE
RELATIVE ONLY TO A CLAIM OF PUNITIVE
DAMAGES IN A PROCEEDING CONCERNING
COMPENSATORY
DAMAGES.—If any party
requests a separate proceeding under
clause (i), in a proceeding to determine
whether the claimant may be awarded
compensatory damages, any evidence, ar-
gument, or contention that is relevant only
to the claim of punitive damages, as deter-
mined by applicable State law, shall be in-
admissible.