(1) ADMINISTRATION BY HEALTH CARE PROFES-
SIONALS.—A utilization review program shall be ad-
ministered by qualified health care professionals who 
shall oversee review decisions. 
(2) USE
OF
QUALIFIED, INDEPENDENT
PER-
SONNEL.— 
(A) IN GENERAL.—A utilization review pro-
gram shall provide for the conduct of utilization 
review activities only through personnel who are 
qualified and have received appropriate training 
in the conduct of such activities under the pro-
gram. 
(B) PROHIBITION
OF
CONTINGENT
COM-
PENSATION
ARRANGEMENTS.—Such a program 
shall not, with respect to utilization review ac-
tivities, permit or provide compensation or any-
thing of value to its employees, agents, or con-
tractors in a manner that encourages denials of 
claims for benefits. 
(C) PROHIBITION OF CONFLICTS.—Such a 
program shall not permit a health care profes-
sional who is providing health care services to 
an individual to perform utilization review ac-
tivities in connection with the health care serv-
ices being provided to the individual. 
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(3) ACCESSIBILITY
OF
REVIEW.—Such a pro-
gram shall provide that appropriate personnel per-
forming utilization review activities under the pro-
gram, including the utilization review administrator, 
are reasonably accessible by toll-free telephone during 
normal business hours to discuss patient care and 
allow response to telephone requests, and that appro-
priate provision is made to receive and respond 
promptly to calls received during other hours. 
(4) LIMITS ON FREQUENCY.—Such a program 
shall not provide for the performance of utilization re-
view activities with respect to a class of services fur-
nished to an individual more frequently than is rea-
sonably required to assess whether the services under 
review are medically necessary or appropriate. 
(d) DEADLINE FOR DETERMINATIONS.— 
(1) PRIOR AUTHORIZATION SERVICES.— 
(A) IN GENERAL.—Except as provided in 
paragraph (2), in the case of a utilization review 
activity involving the prior authorization of 
health care items and services for an individual, 
the utilization review program shall make a de-
termination concerning such authorization, and 
provide notice of the determination to the indi-
vidual or the individual’s designee and the indi-
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vidual’s health care provider by telephone and in 
printed form, as soon as possible in accordance 
with the medical exigencies of the case, and in 
no event later than the deadline specified in sub-
paragraph (B). 
(B) DEADLINE.— 
(i) IN
GENERAL.—Subject to clauses 
(ii), (iii), and (iv), the deadline specified in 
this subparagraph is 14 days after the date 
of receipt of the request for prior authoriza-
tion, but in no event later than 3 business 
days after the date of receipt of information 
that is reasonably necessary to make such 
determination. 
(ii) EXTENSION
PERMITTED
WHERE 
NOTICE OF ADDITIONAL INFORMATION RE-
QUIRED.—If a utilization review pro-
gram— 
(I) receives a request for a prior 
authorization; 
(II) determines that additional 
information is necessary to complete 
the review and make the determination 
on the request; and 
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(III) notifies the requester, not 
later than 5 business days after the 
date of receiving the request, of the 
need for such specified additional in-
formation; 
the deadline specified in this subparagraph 
is 14 days after the date the program re-
ceives the specified additional information, 
but in no case later than 28 days after the 
date of receipt of the request for the prior 
authorization. This clause shall not apply if 
the deadline is specified in clause (iii). 
(iii) EXPEDITED CASES.—In the case 
of 
a 
situation 
described 
in 
section 
139A(c)(1)(A), the deadline specified in this 
subparagraph is 72 hours after the time of 
the request for prior authorization. 
(iv) 
EXCEPTION
FOR
EMERGENCY 
SERVICES.—No prior approval shall be re-
quired in the case of emergency services pro-
vided by a hospital. 
(2) ONGOING CARE.— 
(A) CONCURRENT REVIEW.— 
(i) IN GENERAL.—Subject to subpara-
graph (B), in the case of a concurrent re-
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view of ongoing care (including hospitaliza-
tion), which results in a termination or re-
duction of such care, the plan must provide 
by telephone and in printed form notice of 
the concurrent review determination to the 
individual or the individual’s designee and 
the individual’s health care provider as soon 
as possible in accordance with the medical 
exigencies of the case, and in no event later 
than 1 business day after the date of receipt 
of information that is reasonably necessary 
to make such determination, with sufficient 
time prior to the termination or reduction 
to allow for an appeal under section 
139A(c)(1)(A) to be completed before the ter-
mination or reduction takes effect. 
(ii) CONTENTS OF NOTICE.—Such no-
tice shall include, with respect to ongoing 
health care items and services, the number 
of ongoing services approved, the new total 
of approved services, the date of onset of 
services, and the next review date, if any, as 
well as a statement of the individual″s 
rights to further appeal. 
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(B) EXCEPTION.—Subparagraph (A) shall 
not be interpreted as requiring plans or issuers 
to provide coverage of care that would exceed the 
coverage limitations for such care. 
(3) PREVIOUSLY
PROVIDED
SERVICES.—In the 
case of a utilization review activity involving retro-
spective review of health care services previously pro-
vided for an individual, the utilization review pro-
gram shall make a determination concerning such 
services, and provide notice of the determination to 
the individual or the individual’s designee and the in-
dividual’s health care provider by telephone and in 
printed form, within 30 days of the date of receipt of 
information that is reasonably necessary to make such 
determination, but in no case later than 60 days after 
the date of receipt of the claim for benefits. 
(4) FAILURE TO MEET DEADLINE.—In a case in 
which a qualified health benefits plan or QHBP offer-
ing entity fails to make a determination on a claim 
for benefit under paragraph (1), (2)(A), or (3) by the 
applicable deadline established under the respective 
paragraph, the failure shall be treated under this sub-
title as a denial of the claim as of the date of the 
deadline. 
(e) NOTICE OF DENIALS OF CLAIMS FOR BENEFITS.— 
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(1) IN GENERAL.—Notice of a denial of claims 
for benefits under a utilization review program shall 
be provided in printed form and written in a manner 
calculated to be understood by the participant, bene-
ficiary, or enrollee and shall include— 
(A) the reasons for the denial (including the 
clinical rationale); 
(B) instructions on how to initiate an ap-
peal under section 139A; and 
(C) notice of the availability, upon request 
of the individual (or the individual″s designee) 
of the clinical review criteria relied upon to 
make such denial. 
(2) SPECIFICATION OF ANY ADDITIONAL INFOR-
MATION.—Such a notice shall also specify what (if 
any) additional necessary information must be pro-
vided to, or obtained by, the person making the denial 
in order to make a decision on such an appeal. 
(f) CLAIM FOR BENEFITS AND DENIAL OF CLAIM FOR 
BENEFITS DEFINED.—For purposes of this subtitle: 
(1) CLAIM FOR BENEFITS.—The term ‘‘claim for 
benefits’’ means any request for coverage (including 
authorization of coverage), for eligibility, or for pay-
ment in whole or in part, for an item or service 
under a qualified health benefits plan. 
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(2) DENIAL OF CLAIM FOR BENEFITS.—The term 
‘‘denial’’ means, with respect to a claim for benefits, 
means a denial, or a failure to act on a timely basis 
upon, in whole or in part, the claim for benefits and 
includes a failure to provide benefits (including items 
and services) required to be provided under this title. 
SEC. 139A. INTERNAL APPEALS PROCEDURES. 
(a) RIGHT OF REVIEW.— 
(1) IN GENERAL.—Each qualified health benefits 
plan, and each QHBP offering entity offering such 
plan— 
(A) shall provide adequate notice in writing 
to any participant or beneficiary under such 
plan, or enrollee under such coverage, whose 
claim for benefits under the plan has been denied 
(within the meaning of section 139(f)(2)), setting 
forth the specific reasons for such denial of claim 
for benefits and rights to any further review or 
appeal, written in a manner calculated to be un-
derstood by the participant, beneficiary, or en-
rollee; and 
(B) shall afford such a participant, bene-
ficiary, or enrollee (and any provider or other 
person acting on behalf of such an individual 
with the individual″s consent or without such 
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consent if the individual is medically unable to 
provide such consent) who is dissatisfied with 
such a denial of claim for benefits a reasonable 
opportunity (of not less than 180 days) to re-
quest and obtain a full and fair review by a 
named fiduciary (with respect to such plan) or 
named appropriate individual (with respect to 
such coverage) of the decision denying the claim. 
(2) TREATMENT OF ORAL REQUESTS.—The re-
quest for review under paragraph (1)(B) may be 
made orally, but, in the case of an oral request, shall 
be followed by a request in writing. 
(b) INTERNAL REVIEW PROCESS.— 
(1) CONDUCT OF REVIEW.— 
(A) IN GENERAL.—A review of a denial of 
claim under this section shall be made by an in-
dividual who— 
(i) in a case involving medical judg-
ment, shall be a physician or, in the case of 
limited scope coverage (as defined in sub-
paragraph (B), shall be an appropriate spe-
cialist; 
(ii) has been selected by the plan or en-
tity; and 
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(iii) did not make the initial denial in 
the internally appealable decision. 
(B) LIMITED SCOPE COVERAGE DEFINED.— 
For purposes of subparagraph (A), the term 
‘‘limited scope coverage’’ means a qualified 
health benefits plan the only benefits under 
which are for benefits described in section 
2791(c)(2)(A) of the Public Health Service Act 
(42 U.S.C. 300gg-91(c)(2)). 
(2) TIME LIMITS FOR INTERNAL REVIEWS.— 
(A) IN GENERAL.—Having received such a 
request for review of a denial of claim, the 
QHBP offering entity offering a qualified health 
benefits plan, in accordance with the medical ex-
igencies of the case but not later than the dead-
line specified in subparagraph (B), complete the 
review on the denial and transmit to the partici-
pant, beneficiary, enrollee, or other person in-
volved a decision that affirms, reverses, or modi-
fies the denial. If the decision does not reverse the 
denial, the plan or issuer shall transmit, in 
printed form, a notice that sets forth the grounds 
for such decision and that includes a description 
of rights to any further appeal. Such decision 
shall be treated as the final decision of the plan. 
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receives the specified additional informa-
tion, but in no case later than 28 days after 
the date of receipt of the request for the in-
ternal review. This clause shall not apply if 
the deadline is specified in clause (iii). 
(iii) EXPEDITED CASES.—In the case 
of a situation described in subsection 
(c)(1)(A), the deadline specified in this sub-
paragraph is 72 hours after the time of the 
request for review. 
(c) EXPEDITED REVIEW PROCESS.— 
(1) IN
GENERAL.—A qualified health benefits 
plan, and a QHBP offering entity, shall establish 
procedures in writing for the expedited consideration 
of requests for review under subsection (b) in situa-
tions— 
(A) in which, as determined by the plan or 
issuer or as certified in writing by a treating 
health care professional, the application of the 
normal timeframe for making a determination 
could seriously jeopardize the life or health of the 
participant, beneficiary, or enrollee or such an 
individual″s ability to regain maximum func-
tion; or 
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(B) described in section 139(d)(2) (relating 
to requests for continuation of ongoing care 
which would otherwise be reduced or termi-
nated). 
(2) PROCESS.—Under such procedures— 
(A) the request for expedited review may be 
submitted orally or in writing by an individual 
or provider who is otherwise entitled to request 
the review; 
(B) all necessary information, including the 
plan’s or entity’s decision, shall be transmitted 
between the plan or issuer and the requester by 
telephone, facsimile, or other similarly expedi-
tious available method; and 
(C) the plan or issuer shall expedite the re-
view in the case of any of the situations de-
scribed in subparagraph (A) or (B) of paragraph 
(1). 
(3) DEADLINE FOR DECISION.—The decision on 
the expedited review must be made and communicated 
to the parties as soon as possible in accordance with 
the medical exigencies of the case, and in no event 
later than 72 hours after the time of receipt of the re-
quest for expedited review, except that in a case de-
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scribed in paragraph (1)(B), the decision must be 
made before the end of the approved period of care. 
(d) WAIVER OF PROCESS.—A plan or entity may 
waive its rights for an internal review under subsection (b). 
In such case the participant, beneficiary, or enrollee in-
volved (and any designee or provider involved) shall be re-
lieved of any obligation to complete the review involved and 
may, at the option of such participant, beneficiary, enrollee, 
designee, or provider, proceed directly to seek further appeal 
through any applicable external appeals process. 
SEC. 139B. EXTERNAL APPEALS PROCEDURES. 
(a) RIGHT TO EXTERNAL APPEAL.— 
(1) IN
GENERAL.—A qualified health benefits 
plan, and a QHBP offering entity, shall provide for 
an external appeals process that meets the require-
ments of this section in the case of an externally ap-
pealable decision described in paragraph (2), for 
which a timely appeal is made either by the plan or 
entity or by the participant, beneficiary, or enrollee 
(and any provider or other person acting on behalf of 
such an individual with the individual’s consent or 
without such consent if such an individual is medi-
cally unable to provide such consent). The appro-
priate Secretary shall establish standards to carry out 
such requirements. 
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(2) EXTERNALLY
APPEALABLE
DECISION
DE-
FINED.— 
(A) IN GENERAL.—For purposes of this sec-
tion, the term ‘‘externally appealable decision’’ 
means a denial of claim for benefits (as defined 
in section 139(f)(2))— 
(i) that is based in whole or in part on 
a decision that the item or service is not 
medically necessary or appropriate or is in-
vestigational or experimental; or 
(ii) in which the decision as to whether 
a benefit is covered involves a medical judg-
ment. 
(B) INCLUSION.—Such term also includes a 
failure to meet an applicable deadline for inter-
nal review under section 139A. 
(C) EXCLUSIONS.—Such term does not in-
clude— 
(i) specific exclusions or express limi-
tations on the amount, duration, or scope of 
coverage that do not involve medical judg-
ment; or 
(ii) a decision regarding whether an 
individual is a participant, beneficiary, or 
enrollee under the plan. 
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(3) EXHAUSTION OF INTERNAL REVIEW PROC-
ESS.—Except as provided under section 139A(d), a 
plan or entity may condition the use of an external 
appeal process in the case of an externally appealable 
decision upon a final decision in an internal review 
under section 140, but only if the decision is made in 
a timely basis consistent with the deadlines provided 
under this subtitle. 
(4) FILING FEE REQUIREMENT.— 
(A) IN GENERAL.—Subject to subparagraph 
(B), a plan or entity may condition the use of 
an external appeal process upon payment to the 
plan or entity of a filing fee that does not exceed 
$25. 
(B) EXCEPTION FOR INDIGENCY.—The plan 
or issuer may not require payment of the filing 
fee in the case of an individual participant, ben-
eficiary, or enrollee who certifies (in a form and 
manner specified in guidelines established by the 
Secretary of Health and Human Services) that 
the individual is indigent (as defined in such 
guidelines). 
(C) REFUNDING FEE IN CASE OF SUCCESS-
FUL APPEALS.—The plan or entity shall refund 
payment of the filing fee under this paragraph 
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if the recommendation of the external appeal en-
tity is to reverse or modify the denial of a claim 
for benefits which is the subject of the appeal. 
(b) GENERAL ELEMENTS
OF EXTERNAL APPEALS 
PROCESS.— 
(1) CONTRACT WITH QUALIFIED EXTERNAL AP-
PEAL ENTITY.— 
(A) CONTRACT REQUIREMENT.—Except as 
provided in subparagraph (D), the external ap-
peal process under this section of a plan or enti-
ty shall be conducted under a contract between 
the plan or issuer and one or more qualified ex-
ternal appeal entities (as defined in subsection 
(c)). 
(B) LIMITATION ON PLAN OR ISSUER SE-
LECTION.—The applicable authority shall imple-
ment procedures— 
(i) to assure that the selection process 
among qualified external appeal entities 
will not create any incentives for external 
appeal entities to make a decision in a bi-
ased manner, and 
(ii) for auditing a sample of decisions 
by such entities to assure that no such deci-
sions are made in a biased manner. 
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(C) OTHER TERMS AND CONDITIONS.—The 
terms and conditions of a contract under this 
paragraph shall be consistent with the standards 
the appropriate Secretary shall establish to as-
sure there is no real or apparent conflict of in-
terest in the conduct of external appeal activities. 
Such contract shall provide that all costs of the 
process (except those incurred by the participant, 
beneficiary, enrollee, or treating professional in 
support of the appeal) shall be paid by the plan 
or entity, and not by the participant, bene-
ficiary, or enrollee. The previous sentence shall 
not be construed as applying to the imposition 
of a filing fee under subsection (a)(4). 
(D) STATE AUTHORITY WITH RESPECT TO 
QUALIFIED
EXTERNAL
APPEAL
ENTITY
FOR 
HEALTH INSURANCE ISSUERS.—With respect to 
QHBP offering entities offering qualified health 
benefits plans in a State, the State may provide 
for external review activities to be conducted by 
a qualified external appeal entity that is des-
ignated by the State or that is selected by the 
State in a manner determined by the State to 
assure an unbiased determination. 
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(2) ELEMENTS OF PROCESS.—An external ap-
peal process shall be conducted consistent with stand-
ards established by the appropriate Secretary that in-
clude at least the following: 
(A) FAIR AND DE NOVO DETERMINATION.— 
The process shall provide for a fair, de novo de-
termination. However, nothing in this para-
graph shall be construed as providing for cov-
erage of items and services for which benefits are 
specifically excluded under the plan. 
(B) STANDARD
OF
REVIEW.—An external 
appeal entity shall determine whether the plan’s 
or issuer’s decision is in accordance with the 
medical needs of the patient involved (as deter-
mined by the entity) taking into account, as of 
the time of the entity’s determination, the pa-
tient’s medical condition and any relevant and 
reliable evidence the entity obtains under sub-
paragraph (D). If the entity determines the deci-
sion is in accordance with such needs, the entity 
shall affirm the decision and to the extent that 
the entity determines the decision is not in ac-
cordance with such needs, the entity shall reverse 
or modify the decision. 
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(C) CONSIDERATION OF PLAN OR COVERAGE 
DEFINITIONS.—In making such determination, 
the external appeal entity shall consider (but not 
be bound by) any language in the plan or cov-
erage document relating to the definitions of the 
terms medical necessity, medically necessary or 
appropriate, or experimental, investigational, or 
related terms. 
(D) EVIDENCE.— 
(i) IN GENERAL.—An external appeal 
entity shall include, among the evidence 
taken into consideration— 
(I) the decision made by the plan 
or QHBP offering entity upon internal 
review under section 140 and any 
guidelines or standards used by the 
plan or QHBP offering entity in 
reaching such decision; 
(II) any personal health and med-
ical information supplied with respect 
to the individual whose denial of claim 
for benefits has been appealed; and 
(III) the opinion of the individ-
ual’s treating physician or health care 
professional. 
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(ii) ADDITIONAL EVIDENCE.—Such ex-
ternal appeal entity may also take into con-
sideration but not be limited to the fol-
lowing evidence (to the extent available): 
(I) The results of studies that meet 
professionally recognized standards of 
validity and replicability or that have 
been published in peer-reviewed jour-
nals. 
(II) The results of professional 
consensus conferences conducted or fi-
nanced in whole or in part by one or 
more government agencies. 
(III) 
Practice 
and 
treatment 
guidelines prepared or financed in 
whole or in part by government agen-
cies. 
(IV) Government-issued coverage 
and treatment policies. 
(V) Community standard of care 
and generally accepted principles of 
professional medical practice. 
(VI) To the extent that the entity 
determines it to be free of any conflict 
of interest, the opinions of individuals 
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who are qualified as experts in one or 
more fields of health care which are di-
rectly related to the matters under ap-
peal. 
(VII) To the extent that the entity 
determines it to be free of any conflict 
of interest, the results of peer reviews 
conducted by the plan involved. 
(E) DETERMINATION
CONCERNING
EXTER-
NALLY APPEALABLE DECISIONS.—A qualified ex-
ternal appeal entity shall determine— 
(i) whether a denial of claim for bene-
fits is an externally appealable decision 
(within the meaning of subsection (a)(2)); 
(ii) whether an externally appealable 
decision involves an expedited appeal; and 
(iii) for purposes of initiating an ex-
ternal review, whether the internal review 
process has been completed. 
(F) OPPORTUNITY TO SUBMIT EVIDENCE.— 
Each party to an externally appealable decision 
may submit evidence related to the issues in dis-
pute. 
(G) PROVISION
OF
INFORMATION.—The 
plan or issuer involved shall provide timely ac-
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cess to the external appeal entity to information 
and to provisions of the plan relating to the mat-
ter of the externally appealable decision, as de-
termined by the entity. 
(H) TIMELY DECISIONS.—A determination 
by the external appeal entity on the decision 
shall— 
(i) be made orally or in writing and, 
if it is made orally, shall be supplied to the 
parties in writing as soon as possible; 
(ii) be made in accordance with the 
medical exigencies of the case involved, but 
in no event later than 21 days after the 
date (or, in the case of an expedited appeal, 
72 hours after the time) of requesting an ex-
ternal appeal of the decision; 
(iii) state, in layperson’s language, the 
basis for the determination, including, if 
relevant, any basis in the terms or condi-
tions of the plan; and 
(iv) inform the participant, bene-
ficiary, or enrollee of the individual’s rights 
(including any limitation on such rights) to 
seek further review by the courts (or other 
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(B) The entity conducts external appeal ac-
tivities through a panel of not fewer than 3 clin-
ical peers. 
(C) The entity has sufficient medical, legal, 
and other expertise and sufficient staffing to con-
duct external appeal activities for the plan on a 
timely basis consistent with subsection (b)(2)(G). 
(D) The entity meets such other require-
ments as the appropriate Secretary may impose. 
(2) INITIAL
CERTIFICATION
OF
EXTERNAL
AP-
PEAL ENTITIES.— 
(A) IN GENERAL.—In order to be treated as 
a qualified external appeal entity with respect 
to— 
(i) a qualified health benefits plan that 
is a group health plan, the entity must be 
certified (and, in accordance with subpara-
graph (B), periodically recertified) as meet-
ing the requirements of paragraph (1)— 
(I) by the Secretary of Labor; 
(II) under a process recognized or 
approved by the Secretary of Labor; or 
(III) to the extent provided in 
subparagraph (C)(i), by a qualified 
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private standard-setting organization 
(certified under such subparagraph); or 
(ii) a QHBP offering entity that is a 
health insurance issuer operating in a 
State, the qualified external appeal entity 
must be certified (and, in accordance with 
subparagraph (B), periodically recertified) 
as meeting such requirements— 
(I) by the applicable State author-
ity (or under a process recognized or 
approved by such authority); or 
(II) if the State has not estab-
lished a certification and recertifi-
cation process for such entities, by the 
Secretary of Health and Human Serv-
ices, under a process recognized or ap-
proved by such Secretary, or to the ex-
tent provided in subparagraph (C)(ii), 
by a qualified private standard-setting 
organization (certified under such sub-
paragraph). 
(B) RECERTIFICATION PROCESS.—The ap-
propriate Secretary shall develop standards for 
the recertification of external appeal entities. 
Such standards shall include a review of— 
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(i) the number of cases reviewed; 
(ii) a summary of the disposition of 
those cases; 
(iii) the length of time in making de-
terminations on those cases; 
(iv) updated information of what was 
required to be submitted as a condition of 
certification for the entity’s performance of 
external appeal activities; and 
(v) such information as may be nec-
essary to assure the independence of the en-
tity from the plans or issuers for which ex-
ternal appeal activities are being conducted. 
(C) CERTIFICATION OF QUALIFIED PRIVATE 
STANDARD-SETTING ORGANIZATIONS.— 
(i) FOR EXTERNAL REVIEWS OF GROUP 
HEALTH PLANS.—For purposes of subpara-
graph (A)(i)(III), the Secretary of Labor 
may provide for a process for certification 
(and periodic recertification) of qualified 
private 
standard-setting 
organizations 
which provide for certification of external 
review entities. Such an organization shall 
only be certified if the organization does not 
certify an external review entity unless it 
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meets standards required for certification of 
such an entity by such Secretary under sub-
paragraph (A)(i)(I). 
(ii) 
FOR
EXTERNAL
REVIEWS
OF 
HEALTH
INSURANCE
ISSUERS.—For pur-
poses of subparagraph (A)(ii)(II), the Sec-
retary of Health and Human Services may 
provide for a process for certification (and 
periodic recertification) of qualified private 
standard-setting organizations which pro-
vide for certification of external review enti-
ties. Such an organization shall only be cer-
tified if the organization does not certify an 
external review entity unless it meets stand-
ards required for certification of such an 
entity by such Secretary under subpara-
graph (A)(ii)(II). 
(3) INDEPENDENCE REQUIREMENTS.— 
(A) IN GENERAL.—A clinical peer or other 
entity meets the independence requirements of 
this paragraph if— 
(i) the peer or entity does not have a 
familial, financial, or professional relation-
ship with any related party; 
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(ii) any compensation received by such 
peer or entity in connection with the exter-
nal review is reasonable and not contingent 
on any decision rendered by the peer or en-
tity; 
(iii) except as provided in paragraph 
(4), the plan and the issuer have no re-
course against the peer or entity in connec-
tion with the external review; and 
(iv) the peer or entity does not other-
wise have a conflict of interest with a re-
lated party as determined under any regu-
lations which the Secretary may prescribe. 
(B) RELATED PARTY.—For purposes of this 
paragraph, the term ‘‘related party’’ means— 
(i) with respect to— 
(I) a qualified health benefits plan 
that is a group health plan, the plan 
or QHBP offering entity of such plan; 
or 
(II) a qualified health benefits 
plan that is individual health insur-
ance coverage, the health insurance 
issuer offering such coverage, or any 
plan sponsor, fiduciary, officer, direc-
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tor, or management employee of such 
plan or issuer; 
(ii) the health care professional that 
provided the health care involved in the cov-
erage decision; 
(iii) the institution at which the health 
care involved in the coverage decision is 
provided; 
(iv) the manufacturer of any drug or 
other item that was included in the health 
care involved in the coverage decision; or 
(v) any other party determined under 
any regulations which the Secretary may 
prescribe to have a substantial interest in 
the coverage decision. 
(4) LIMITATION ON LIABILITY OF REVIEWERS.— 
No qualified external appeal entity having a contract 
with a qualified health benefits plan under this part 
and no person who is employed by any such entity 
or who furnishes professional services to such entity, 
shall be held by reason of the performance of any 
duty, function, or activity required or authorized pur-
suant to this section, to have violated any criminal 
law, or to be civilly liable under any law of the 
United States or of any State (or political subdivi-
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sion thereof) if due care was exercised in the perform-
ance of such duty, function, or activity and there was 
no actual malice or gross misconduct in the perform-
ance of such duty, function, or activity. 
(d) EXTERNAL APPEAL DETERMINATION BINDING ON 
PLAN.—The determination by an external appeal entity 
under this section is binding on the plan involved in the 
determination. 
(e) PENALTIES AGAINST AUTHORIZED OFFICIALS FOR 
REFUSING TO AUTHORIZE THE DETERMINATION OF AN EX-
TERNAL REVIEW ENTITY.— 
(1) MONETARY
PENALTIES.—In any case in 
which the determination of an external review entity 
is not followed by a qualified health benefits plan, 
any person who, acting in the capacity of authorizing 
the benefit, causes such refusal may, in the discretion 
in a court of competent jurisdiction, be liable to an 
aggrieved participant, beneficiary, or enrollee for a 
civil penalty in an amount of up to $1,000 a day 
from the date on which the determination was trans-
mitted to the plan by the external review entity until 
the date the refusal to provide the benefit is corrected. 
(2) CEASE AND DESIST ORDER AND ORDER OF 
ATTORNEY″S FEES.—In any action described in para-
graph (1) brought by a participant, beneficiary, or 
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enrollee with respect to a qualified health benefits 
plan, in which a plaintiff alleges that a person re-
ferred to in such paragraph has taken an action re-
sulting in a refusal of a benefit determined by an ex-
ternal appeal entity in violation of such terms of the 
plan, coverage, or this subtitle, or has failed to take 
an action for which such person is responsible under 
the plan or this title and which is necessary under the 
plan or coverage for authorizing a benefit, the court 
shall cause to be served on the defendant an order re-
quiring the defendant— 
(A) to cease and desist from the alleged ac-
tion or failure to act; and 
(B) to pay to the plaintiff a reasonable at-
torney’s fee and other reasonable costs relating to 
the prosecution of the action on the charges on 
which the plaintiff prevails. 
(3) ADDITIONAL CIVIL PENALTIES.— 
(A) IN GENERAL.—In addition to any pen-
alty imposed under paragraph (1) or (2), the ap-
propriate Secretary may assess a civil penalty 
against a person acting in the capacity of au-
thorizing a benefit determined by an external re-
view entity for one or more qualified health bene-
fits plans, for— 
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(i) any pattern or practice of repeated 
refusal to authorize a benefit determined by 
an external appeal entity in violation of the 
terms of such a plan, or this title; or 
(ii) any pattern or practice of repeated 
violations of the requirements of this section 
with respect to such plan or plans. 
(B) STANDARD OF PROOF AND AMOUNT OF 
PENALTY.—Such penalty shall be payable only 
upon proof by clear and convincing evidence of 
such pattern or practice and shall be in an 
amount not to exceed the lesser of— 
(i) 25 percent of the aggregate value of 
benefits shown by the appropriate Secretary 
to have not been provided, or unlawfully de-
layed, in violation of this section under 
such pattern or practice, or 
(ii) $500,000. 
(4) REMOVAL AND DISQUALIFICATION.—Any per-
son acting in the capacity of authorizing benefits who 
has engaged in any such pattern or practice described 
in paragraph (3)(A) with respect to a plan or cov-
erage, upon the petition of the appropriate Secretary, 
may be removed by the court from such position, and 
from any other involvement, with respect to such a 
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plan or coverage, and may be precluded from return-
ing to any such position or involvement for a period 
determined by the court. 
(f) PROTECTION OF LEGAL RIGHTS.—Nothing in this 
subtitle shall be construed as altering or eliminating any 
cause of action or legal rights or remedies of participants, 
beneficiaries, enrollees, and others under State or Federal 
law (including sections 502 and 503 of the Employee Re-
tirement Income Security Act of 1974), including the right 
to file judicial actions to enforce actions. 
(g) APPLICATION TO ALL ACCEPTABLE COVERAGE.— 
The provisions of this section shall apply with respect to 
all acceptable coverage in the same manner as such provi-
sions apply with respect to qualified health benefits plans 
under this section. 
Subtitle E—Governance 
SEC. 141. HEALTH CHOICES ADMINISTRATION; HEALTH 
CHOICES COMMISSIONER. 
(a) IN GENERAL.—There is hereby established, as an 
independent agency in the executive branch of the Govern-
ment, a Health Choices Administration (in this division 
referred to as the ‘‘Administration’’). 
(b) COMMISSIONER.— 
(1) IN GENERAL.—The Administration shall be 
headed by a Health Choices Commissioner (in this di-
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vision referred to as the ‘‘Commissioner’’) who shall 
be appointed by the President, by and with the advice 
and consent of the Senate. 
(2) COMPENSATION; ETC.—The provisions of 
paragraphs (2), (5), and (7) of subsection (a) (relat-
ing to compensation, terms, general powers, rule-
making, and delegation) of section 702 of the Social 
Security Act (42 U.S.C. 902) shall apply to the Com-
missioner and the Administration in the same man-
ner as such provisions apply to the Commissioner of 
Social Security and the Social Security Administra-
tion. 
SEC. 142. DUTIES AND AUTHORITY OF COMMISSIONER. 
(a) DUTIES.—The Commissioner is responsible for 
carrying out the following functions under this division: 
(1) QUALIFIED
PLAN
STANDARDS.—The estab-
lishment of qualified health benefits plan standards 
under this title, including the enforcement of such 
standards in coordination with State insurance regu-
lators and the Secretaries of Labor and the Treasury. 
(2) HEALTH INSURANCE EXCHANGE.—The estab-
lishment and operation of a Health Insurance Ex-
change under subtitle A of title II. 
(3) INDIVIDUAL AFFORDABILITY CREDITS.—The 
administration of individual affordability credits 
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under subtitle C of title II, including determination 
of eligibility for such credits. 
(4) ADDITIONAL
FUNCTIONS.—Such additional 
functions as may be specified in this division. 
(b) PROMOTING ACCOUNTABILITY.— 
(1) IN GENERAL.—The Commissioner shall un-
dertake activities in accordance with this subtitle to 
promote accountability of QHBP offering entities in 
meeting Federal health insurance requirements, re-
gardless of whether such accountability is with respect 
to qualified health benefits plans offered through the 
Health Insurance Exchange or outside of such Ex-
change. 
(2) COMPLIANCE EXAMINATION AND AUDITS.— 
(A) IN GENERAL.—The commissioner shall, 
in coordination with States, conduct audits of 
qualified health benefits plan compliance with 
Federal requirements.
Such audits may include 
random compliance audits and targeted audits 
in response to complaints or other suspected non- 
compliance. 
(B) RECOUPMENT OF COSTS IN CONNECTION 
WITH EXAMINATION AND AUDITS.—The Commis-
sioner is authorized to recoup from qualified 
health benefits plans reimbursement for the costs 
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of such examinations and audit of such QHBP 
offering entities. 
(c) DATA COLLECTION.—The Commissioner shall col-
lect data for purposes of carrying out the Commissioner’s 
duties, including for purposes of promoting quality and 
value, protecting consumers, and addressing disparities in 
health and health care and may share such data with the 
Secretary of Health and Human Services. 
(d) SANCTIONS AUTHORITY.— 
(1) IN GENERAL.—In the case that the Commis-
sioner determines that a QHBP offering entity vio-
lates a requirement of this title, the Commissioner 
may, in coordination with State insurance regulators 
and the Secretary of Labor, provide, in addition to 
any other remedies authorized by law, for any of the 
remedies described in paragraph (2). 
(2) REMEDIES.—The remedies described in this 
paragraph, with respect to a qualified health benefits 
plan offered by a QHBP offering entity, are— 
(A) civil money penalties of not more than 
the amount that would be applicable under simi-
lar circumstances for similar violations under 
section 1857(g) of the Social Security Act; 
(B) suspension of enrollment of individuals 
under such plan after the date the Commissioner 
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notifies the entity of a determination under 
paragraph (1) and until the Commissioner is 
satisfied that the basis for such determination 
has been corrected and is not likely to recur; 
(C) in the case of an Exchange-partici-
pating health benefits plan, suspension of pay-
ment to the entity under the Health Insurance 
Exchange for individuals enrolled in such plan 
after the date the Commissioner notifies the enti-
ty of a determination under paragraph (1) and 
until the Secretary is satisfied that the basis for 
such determination has been corrected and is not 
likely to recur; or 
(D) working with State insurance regu-
lators to terminate plans for repeated failure by 
the offering entity to meet the requirements of 
this title. 
(e) STANDARD DEFINITIONS OF INSURANCE AND MED-
ICAL TERMS.—The Commissioner shall provide for the de-
velopment of standards for the definitions of terms used in 
health insurance coverage, including insurance-related 
terms. 
(f) EFFICIENCY IN ADMINISTRATION.—The Commis-
sioner shall issue regulations for the effective and efficient 
administration of the Health Insurance Exchange and af-
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fordability credits under subtitle C, including, with respect 
to the determination of eligibility for affordability credits, 
the use of personnel who are employed in accordance with 
the requirements of title 5, United States Code, to carry 
out the duties of the Commissioner or, in the case of sections 
208 and 241(b)(2), the use of State personnel who are em-
ployed in accordance with standards prescribed by the Of-
fice of Personnel Management pursuant to section 208 of 
the Intergovernmental Personnel Act of 1970 (42 U.S.C. 
4728). 
SEC. 143. CONSULTATION AND COORDINATION. 
(a) CONSULTATION.—In carrying out the Commis-
sioner’s duties under this division, the Commissioner, as 
appropriate, shall consult with at least with the following: 
(1) The National Association of Insurance Com-
missioners, State attorneys general, and State insur-
ance regulators, including concerning the standards 
for insured qualified health benefits plans under this 
title and enforcement of such standards. 
(2) Appropriate State agencies, specifically con-
cerning the administration of individual affordability 
credits under subtitle C of title II and the offering of 
Exchange-participating health benefits plans, to Med-
icaid eligible individuals under subtitle A of such 
title. 
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(3) Other appropriate Federal agencies. 
(4) Indian tribes and tribal organizations. 
(5) The National Association of Insurance Com-
missioners for purposes of using model guidelines es-
tablished by such association for purposes of subtitles 
B and D. 
(b) COORDINATION.— 
(1) IN GENERAL.—In carrying out the functions 
of the Commissioner, including with respect to the en-
forcement of the provisions of this division, the Com-
missioner shall work in coordination with existing 
Federal and State entities to the maximum extent 
feasible consistent with this division and in a manner 
that prevents conflicts of interest in duties and en-
sures effective enforcement. 
(2) UNIFORM STANDARDS.—The Commissioner, 
in coordination with such entities, shall seek to 
achieve uniform standards that adequately protect 
consumers in a manner that does not unreasonably 
affect employers and insurers. 
SEC. 144. HEALTH INSURANCE OMBUDSMAN. 
(a) IN GENERAL.—The Commissioner shall appoint 
within the Health Choices Administration a Qualified 
Health Benefits Plan Ombudsman who shall have expertise 
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and experience in the fields of health care and education 
of (and assistance to) individuals. 
(b) DUTIES.—The Qualified Health Benefits Plan Om-
budsman shall, in a linguistically appropriate manner— 
(1) receive complaints, grievances, and requests 
for information submitted by individuals; 
(2) provide assistance with respect to complaints, 
grievances, and requests referred to in paragraph (1), 
including— 
(A) helping individuals determine the rel-
evant information needed to seek an appeal of a 
decision or determination; 
(B) assistance to such individuals with any 
problems arising from disenrollment from such a 
plan; 
(C) assistance to such individuals in choos-
ing a qualified health benefits plan in which to 
enroll; and 
(D) assistance to such individuals in pre-
senting information under subtitle C (relating to 
affordability credits); and 
(3) submit annual reports to Congress and the 
Commissioner that describe the activities of the Om-
budsman and that include such recommendations for 
improvement in the administration of this division as 
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the Ombudsman determines appropriate. The Om-
budsman shall not serve as an advocate for any in-
creases in payments or new coverage of services, but 
may identify issues and problems in payment or cov-
erage policies. 
Subtitle F—Relation to Other 
Requirements; Miscellaneous 
SEC. 151. RELATION TO OTHER REQUIREMENTS. 
(a) 
COVERAGE
NOT
OFFERED
THROUGH
EX-
CHANGE.— 
(1) IN GENERAL.—In the case of health insur-
ance coverage not offered through the Health Insur-
ance Exchange (whether or not offered in connection 
with an employment-based health plan), and in the 
case of employment-based health plans, the require-
ments of this title do not supercede any requirements 
applicable under titles XXII and XXVII of the Public 
Health Service Act, parts 6 and 7 of subtitle B of title 
I of the Employee Retirement Income Security Act of 
1974, or State law, except insofar as such require-
ments prevent the application of a requirement of this 
division, as determined by the Commissioner. 
(2) CONSTRUCTION.—Nothing in paragraph (1) 
shall be construed as affecting the application of sec-
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tion 514 of the Employee Retirement Income Security 
Act of 1974. 
(b) COVERAGE OFFERED THROUGH EXCHANGE.— 
(1) IN GENERAL.—In the case of health insur-
ance coverage offered through the Health Insurance 
Exchange— 
(A) the requirements of this title do not 
supercede any requirements (including require-
ments relating to genetic information non-
discrimination and mental health) applicable 
under title XXVII of the Public Health Service 
Act or under State law, except insofar as such 
requirements prevent the application of a re-
quirement of this division, as determined by the 
Commissioner; and 
(B) individual rights and remedies under 
State laws shall apply. 
(2) CONSTRUCTION.—In the case of coverage de-
scribed in paragraph (1), nothing in such paragraph 
shall be construed as preventing the application of 
rights and remedies under State laws with respect to 
any requirement referred to in paragraph (1)(A). 
SEC. 152. PROHIBITING DISCRIMINATION IN HEALTH CARE. 
(a) IN GENERAL.—Except as otherwise explicitly per-
mitted by this Act and by subsequent regulations consistent 
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with this Act, all health care and related services (including 
insurance coverage and public health activities) covered by 
this Act shall be provided without regard to personal char-
acteristics extraneous to the provision of high quality health 
care or related services. 
(b) IMPLEMENTATION.—To implement the requirement 
set forth in subsection (a), the Secretary of Health and 
Human Services shall, not later than 18 months after the 
date of the enactment of this Act, promulgate such regula-
tions as are necessary or appropriate to insure that all 
health care and related services (including insurance cov-
erage and public health activities) covered by this Act are 
provided (whether directly or through contractual, licens-
ing, or other arrangements) without regard to personal 
characteristics extraneous to the provision of high quality 
health care or related services. 
SEC. 153. WHISTLEBLOWER PROTECTION. 
(a) RETALIATION PROHIBITED.—No employer may 
discharge any employee or otherwise discriminate against 
any employee with respect to his compensation, terms, con-
ditions, or other privileges of employment because the em-
ployee (or any person acting pursuant to a request of the 
employee)— 
(1) provided, caused to be provided, or is about 
to provide or cause to be provided to the employer, the 
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Federal Government, or the attorney general of a 
State information relating to any violation of, or any 
act or omission the employee reasonably believes to be 
a violation of any provision of this Act or any order, 
rule, or regulation promulgated under this Act; 
(2) testified or is about to testify in a proceeding 
concerning such violation; 
(3) assisted or participated or is about to assist 
or participate in such a proceeding; or 
(4) objected to, or refused to participate in, any 
activity, policy, practice, or assigned task that the 
employee (or other such person) reasonably believed to 
be in violation of any provision of this Act or any 
order, rule, or regulation promulgated under this Act. 
(b) ENFORCEMENT ACTION.—An employee covered by 
this section who alleges discrimination by an employer in 
violation of subsection (a) may bring an action governed 
by the rules, procedures, legal burdens of proof, and rem-
edies set forth in section 40(b) of the Consumer Product 
Safety Act (15 U.S.C. 2087(b)). 
(c) EMPLOYER DEFINED.—As used in this section, the 
term ‘‘employer’’ means any person (including one or more 
individuals, partnerships, associations, corporations, trusts, 
professional membership organization including a certifi-
cation, disciplinary, or other professional body, unincor-
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porated organizations, nongovernmental organizations, or 
trustees) engaged in profit or nonprofit business or industry 
whose activities are governed by this Act, and any agent, 
contractor, subcontractor, grantee, or consultant of such 
person. 
(d) RULE OF CONSTRUCTION.—The rule of construc-
tion set forth in section 20109(h) of title 49, United States 
Code, shall also apply to this section. 
SEC. 154. CONSTRUCTION REGARDING COLLECTIVE BAR-
GAINING. 
Nothing in this division shall be construed to alter of 
supercede any statutory or other obligation to engage in col-
lective bargaining over the terms and conditions of employ-
ment related to health care. 
SEC. 155. SEVERABILITY. 
If any provision of this Act, or any application of such 
provision to any person or circumstance, is held to be un-
constitutional, the remainder of the provisions of this Act 
and the application of the provision to any other person 
or circumstance shall not be affected. 
SEC. 156. APPLICATION OF STATE AND FEDERAL LAWS RE-
GARDING ABORTION. 
(a) NO PREEMPTION OF STATE LAWS REGARDING 
ABORTION.—Nothing in this Act shall be construed to pre-
empt or otherwise have any effect on State laws regarding 
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148 
Exchange-participating health benefits plan, the 
benefits under a basic plan are modified to pro-
vide for the reduced cost-sharing for the income 
tier applicable to the individual under section 
244(c). 
(3) ENHANCED PLAN.—An enhanced plan shall 
offer, in addition to the level of benefits under the 
basic plan, a lower level of cost-sharing as provided 
under title I consistent with section 123(b)(5)(A). 
(4) PREMIUM
PLAN.—A premium plan shall 
offer, in addition to the level of benefits under the 
basic plan, a lower level of cost-sharing as provided 
under title I consistent with section 123(b)(5)(B). 
(5) PREMIUM-PLUS
PLAN.—A premium-plus 
plan is a premium plan that also provides additional 
benefits, such as adult oral health and vision care, 
approved by the Commissioner. The portion of the 
premium that is attributable to such additional bene-
fits shall be separately specified. 
(6) RANGE OF PERMISSIBLE VARIATION IN COST- 
SHARING.—The Commissioner shall establish a per-
missible range of variation of cost-sharing for each 
basic, enhanced, and premium plan, except with re-
spect to any benefit for which there is no cost-sharing 
permitted under the essential benefits package. Such 
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