157
beneficiary to pay when a non-plan provider is used
on a non-emergency basis.
(3) RESTRICTIONS
ON
UTILIZATION
REVIEW
METHODS.—Any law that—
(A) prohibits utilization review of any or
all treatments and conditions,
(B) requires that such review be made (i)
by a resident of the State in which the treat-
ment is to be offered or by an individual li-
censed in such State, or (ii) by a physician in
any particular specialty or with any board cer-
tified specialty of the same medical specialty as
the provider whose services are being reviewed,
(C) requires the use of specified standards
of health care practice in such reviews or re-
quires the disclosure of the specific criteria used
in such reviews,
(D) requires payments to providers for the
expenses of responding to utilization review re-
quests, or
(E) imposes liability for delays in perform-
ing such review.
Nothing in subparagraph (B) shall be construed as
prohibiting a State from (i) requiring that utilization
review be conducted by a licensed health care profes-
158
sional or (ii) requiring that any appeal from such a
review be made by a licensed physician or by a li-
censed physician in any particular specialty or with
any board certified specialty of the same medical
specialty as the provider whose services are being re-
viewed.
(b) GAO STUDY.—
(1) IN
GENERAL.—The Comptroller General
shall conduct a study of the benefits and cost effec-
tiveness of the use of managed care in the delivery
of health services.
(2) REPORT.—By not later than 4 years after
the date of the enactment of this Act, the Comptrol-
ler General shall submit a report to Congress on the
study conducted under paragraph (1) and shall in-
clude in the report such recommendations (including
whether the provisions of subsection (a) should be
extended) as may be appropriate.
(c) SUNSET.—Unless otherwise provided, subsection
(a) shall not apply 5 years after the date of the enactment
of this Act.
159
TITLE 
VII—MODIFICATION 
OF
THE 
OPERATION 
OF 
THE
ANTITRUST LAWS TO HOS-
PITALS
SEC. 701. PURPOSE.
The purpose of this title is to encourage cooperation
among hospitals in order to contain costs and achieve a
more efficient health care delivery system through the
elimination of unnecessary duplication and proliferation of
expensive medical services or expensive high technology
equipment.
SEC. 702. EXEMPTIONS FROM THE OPERATION OF THE
ANTITRUST LAWS.
(a) GENERAL EXEMPTION.—It shall not be unlawful
under the antitrust laws for 2 or more hospitals to engage
in conduct solely for the purpose of negotiating a proposed
agreement, to be submitted under subsection (b), to share
expensive medical services or expensive high technology
equipment.
(b) SPECIFIC EXEMPTIONS.—
(1) AUTHORITY TO GRANT WAIVER.—The Sec-
retary of Health and Human Services shall issue
waivers in accordance with paragraph (4) to exempt
from the operation of the antitrust laws conduct en-
160
gaged in by hospitals to carry out agreements con-
tained in applications approved under paragraph (3).
(2) ELIGIBILITY.—To be eligible to receive a
waiver under paragraph (1), 2 or more hospitals
shall submit to the Secretary an application that
contains (in accordance with guidelines established
by the Secretary)—
(A) a proposed agreement that only—
(i) provides that such hospitals shall
share the expensive medical services or ex-
pensive high technology equipment identi-
fied in such agreement,
(ii) specifies the period of time during
which such agreement shall be in effect,
(iii) describes the particular medical
services or high technology equipment to
be shared under such agreement, and
(iv) contains such other terms and
conditions as the Secretary may reasonably
require, and
(B) such information and assurances as
the Secretary may reasonably require.
(3) APPROVAL.—For purposes of determining
whether to approve an application submitted under
161
paragraph (2), the Secretary shall consider wheth-
er—
(A) the proposed agreement contained in
such application satisfies the guidelines issued
under paragraph (6), and
(B) implementation of such agreement will
result in—
(i) enhancement of the quality of hos-
pital care or hospital-related care,
(ii) the preservation of hospital serv-
ices in geographical proximity to the com-
munities traditionally served by the appli-
cants,
(iii) improvement in the cost-effective-
ness of high-technology services provided
by the applicants,
(iv) improvement in the efficient utili-
zation of hospital resources and capital
equipment,
(v) the provision of services that
would not otherwise be available, or
(vi) the avoidance of duplication of
hospital resources.
(4) ISSUANCE AND EFFECT OF WAIVER.—If—
162
(A) the Secretary approves under para-
graph (3) an application submitted under para-
graph (2), and
(B) the applicants enter into the proposed
agreement contained in such application, modi-
fied as the Secretary may require as a condition
for approval,
then the Secretary shall issue a waiver with respect
to the agreement entered into. Except as provided in
paragraph (5), such waiver shall exempt the appli-
cants from the operation of the antitrust laws for
conduct the applicants engage in during the period
specified in such waiver and solely to carry out the
agreement with respect to which such waiver is is-
sued.
(5) REVOCATION OF WAIVER.—(A) If the Sec-
retary determines that a hospital with respect to
which a waiver is in effect under paragraph (4) is
not carrying out, or has not carried out, fully the
terms of the agreement with respect to which a
waiver is issued under paragraph (4), the Secretary
may revoke such waiver.
(B) If the Secretary revokes such waiver—
164
mentation of the agreement to which such waiver
applies, and
(2) such other information as the Secretary
may require for purposes of determining compliance
with section 702.
(b) REPORT TO COMMITTEES OF THE CONGRESS.—
(1) CHAIRMEN
OF
COMMITTEES.—Not later
than 7 years after the date of the enactment of this
Act, the Secretary shall submit the report described
in paragraph (2) to—
(A) the chairman of the Committee on the
Judiciary of the House of Representatives,
(B) the chairman of the Committee on
Ways and Means of the House of Representa-
tives,
(C) the chairman of the Committee on En-
ergy and Commerce of the House of Represent-
atives,
(D) the chairman of the Committee on the
Judiciary of the Senate,
(E) the chairman of the Committee on Fi-
nance of the Senate, and
(F) the chairman of the Committee on
Labor and Human Resources of the Senate.
165
(2) CONTENTS
OF
REPORT.—The report re-
quired by paragraph (1) shall contain a description
of the nature of the agreements with respect to
which the Secretary issued waivers under section
702(b)(4) and of the results of implementing such
agreements, including an assessment of whether
such agreements caused—
(A) a reduction in health care costs,
(B) an increase in access to medical serv-
ices, and
(C) improvement in the quality of health
care.
Such report shall also contain the recommendations
of the Secretary with respect to other arrangements
to facilitate cooperative activities to achieve the re-
sults specified in subparagraphs (A), (B), and (C).
SEC. 704. DEFINITIONS.
For purposes of this title:
(1) The term ‘‘antitrust laws’’ has the meaning
given it in subsection (a) of the first section of the
Clayton Act (15 U.S.C. 12(a)), except that such
term includes—
(A) section 5 of the Federal Trade Com-
mission Act (15 U.S.C. 45) to the extent such
166
section applies to unfair methods of competi-
tion, and
(B) any State law similar to the antitrust
laws.
(2) The term ‘‘high technology equipment’’ in-
cludes drugs, devices, equipment, and medical and
surgical procedures utilized in medical care, and the
organizational and support systems within which
such care is provided, that—
(A) have high capital costs or extremely
high annual operating costs, and
(B) use technologies with respect to which
there is a reasonable expectation that shared
ownership will avoid a significant degree of the
potential excess capacity of service in the geo-
graphical area to be served.
(3) The term ‘‘medical services’’ includes serv-
ices that—
(A) either have high capital costs or ex-
tremely high annual operating costs, and
(B) with respect to which there is a rea-
sonable expectation that shared ownership will
avoid a significant degree of the potential ex-
cess capacity of such services in the geographi-
cal area to be served,
167
and may include mobile services.
(4) The term ‘‘hospital’’ means a hospital
that—
(A) has entered into, and has in effect, a
participation agreement under section 1866(a)
of the Social Security Act, or
(B) which has in effect a participation
agreement under title XIX of such Act with the
State in which the hospital is located.
(5) The term ‘‘Secretary’’ means the Secretary
of Health and Human Services.
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