To provide parity under group health plans and group health insurance coverage in the provision of benefits for prosthetic devices and orthotics devices, components and benefits for other medical and surgical services.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prosthetic and Custom Orthotic 
Parity Act of 2009''.

SEC. 2. FINDINGS; PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) There are more than 1,800,000 people in the United 
        States living with limb loss.
            (2) Every year, there are more than 130,000 people in the 
        United States who undergo amputation.
            (3) In addition, United States military personnel serving 
        in Iraq and Afghanistan and around the world have sustained 
        traumatic injuries resulting in amputation.
            (4) The number of amputations in the United States is 
        projected to increase in the years ahead due to rising 
        incidence of diabetes and other chronic illness.
            (5) Those suffering from limb loss can and want to regain 
        their lives as productive members of society.
            (6) Prosthetic devices enable amputees to continue working 
        and living productive lives.
            (7) Insurance companies have begun to limit reimbursement 
        of prosthetic equipment costs at unrealistic levels or not at 
        all and often restrict coverage over a person's lifetime, which 
        shifts costs onto the Medicare and Medicaid programs.
            (8) Eleven States have addressed this problem and have 
        enacted prosthetic parity legislation.
            (9) Prosthetic parity legislation has been introduced and 
        is being actively considered in 30 States.
            (10) The States in which prosthetic parity laws have been 
        enacted have found there to be minimal or no increases in 
        insurance premiums and have reduced Medicare and Medicaid 
        costs.
            (11) Prosthetic parity legislation will not add to the size 
        of government or to the costs associated with the Medicare or 
        Medicaid programs.
            (12) If coverage for prosthetic devices and components are 
        offered by a group health insurance policy, then providing such 
        coverage of prosthetic devices on par with other medical and 
        surgical benefits will not increase the incidence of 
        amputations or the number of individuals for which a prosthetic 
        device would be medically necessary and appropriate.
            (13) In States where prosthetic parity legislation has been 
        enacted, amputees are able to return to a productive life, 
        State funds have been saved, and the health insurance industry 
        has continued to prosper.
            (14) Prosthetic services allow people to return more 
        quickly to their preexisting work.
            (15) Spina bifida occurs in 7 out of every 10,000 live 
        births in the United States.
            (16) For children with spina bifida, access to a custom 
        orthotic device impacts both their short and long term 
        mobility, their muscle strength, and overall quality of life. 
        As they mature, the orthotic device allows them to maintain 
        their maximum level of functionality. This has a profound 
        impact on their ability to become and remain independent and 
        productive members of the community.
            (17) Cerebral palsy is one of the most common congenital 
        (existing before birth or at birth) disorders of childhood. 
        About 10,000 babies per year in the United States will develop 
        cerebral palsy.
            (18) The purpose of a custom orthotic device for people 
        with cerebral palsy is to protect, such as stabilizing a 
        fracture during healing; to prevent deformity, such as 
        stretching braces worn while the person sleeps, to help prevent 
        muscle contractures; and to improve function. This can help 
        kids with cerebral palsy achieve maximum potential in growth 
        and development.
            (19) If coverage for prosthetic and custom orthotic devices 
        and related services is offered to individuals by a group 
        health insurance policy, then providing such coverage of 
        prosthetic and orthotic devices on par with other medical and 
        surgical benefits will not increase the incidence of 
        amputations or the number of individuals for which a prosthetic 
        or custom orthotic device would be medically necessary and 
        appropriate.
    (b) Purpose.--The purpose of this Act is to require that each group 
health plan that provides both coverage for prosthetic devices and 
components and medical and surgical benefits, provide such coverage 
under terms and conditions that are no less favorable than the terms 
and conditions under which such benefits are provided under such plan.

SEC. 3. PROSTHETICS AND CUSTOM ORTHOTIC DEVICE PARITY UNDER ERISA.

    (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 
inserting after section 713 (29 U.S.C. 1185b) the following new 
section:

``SEC. 715. PROSTHETICS AND CUSTOM ORTHOTIC DEVICE PARITY.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with such a plan) that 
provides both medical and surgical benefits and benefits for prosthetic 
devices and components and orthotic devices (as defined under 
subsection (d)(1))--
            ``(1) such benefits for prosthetic devices and components 
        and custom orthotic devices and related services under the plan 
        (or coverage) shall be provided under terms and conditions that 
        are no less favorable than the terms and conditions applicable 
        to substantially all medical and surgical benefits provided 
        under the plan (or coverage);
            ``(2) such benefits for prosthetic devices and components 
        and custom orthotic devices and related services under the plan 
        (or coverage) may not be subject to separate financial 
        requirements (as defined in subsection (d)(2)) that are 
        applicable only with respect to such benefits, and any 
        financial requirements applicable to such benefits may be no 
        more restrictive than the financial requirements applicable to 
        substantially all medical and surgical benefits provided under 
        the plan (or coverage); and
            ``(3) any treatment limitations (as defined in subsection 
        (d)(3)) applicable to such benefits for prosthetic devices and 
        components and custom orthotic devices and related services 
        under the plan (or coverage) may not be more restrictive than 
        the treatment limitations applicable to substantially all 
        medical and surgical benefits provided under the plan (or 
        coverage).
    ``(b) In-Network and Out-of-Network Standards.--
            ``(1) In general.--In the case of a group health plan (or 
        health insurance coverage offered in connection with such a 
        plan) that provides both medical and surgical benefits and 
        benefits for prosthetic devices and components and custom 
        orthotic devices and related services, and that provides both 
        in-network benefits for prosthetic devices and components and 
        out-of-network benefits for prosthetic devices and components, 
        the requirements of this section shall apply separately with 
        respect to benefits provided under the plan (or coverage) on an 
        in-network basis and benefits provided under the plan (or 
        coverage) on an out-of-network basis.
            ``(2) Clarification.--Nothing in paragraph (1) shall be 
        construed as requiring that a group health plan (or health 
        insurance coverage offered in connection with such a plan) 
        eliminate an out-of-network provider option from such plan (or 
        coverage) pursuant to the terms of the plan (or coverage).
    ``(c) Additional Requirements.--
            ``(1) Prior authorization.--In the case of a group health 
        plan (or health insurance coverage offered in connection with 
        such a plan) that requires, as a condition of coverage or 
        payment for prosthetic devices and custom orthotic devices and 
        related services under the plan (or coverage), prior 
        authorization, such prior authorization must be required in the 
        same manner as prior authorization is required by the plan (or 
        coverage) as a condition of coverage or payment for all similar 
        benefits provided under the plan (or coverage).
            ``(2) Limitation on mandated benefits.--Required benefits 
        for prosthetic devices and custom orthotic devices and related 
        services under this section are limited to the most appropriate 
        model that adequately meets the medical requirements of the 
        patient, as determined by the treating physician of the 
        patient.
            ``(3) Coverage for repair or replacement.--Benefits for 
        prosthetic devices and custom orthotic devices and related 
        services required under this section shall include coverage for 
        repair or replacement of prosthetic devices and components, if 
        the repair or replacement is determined appropriate by the 
        treating physician of the patient involved.
            ``(4) Annual or lifetime dollar limitations.--A group 
        health plan (or health insurance coverage offered in connection 
        with such a plan) may not impose any annual or lifetime dollar 
        limitation on benefits for prosthetic devices and custom 
        orthotic devices and related services unless such limitation 
        applies in the aggregate to all medical and surgical benefits 
        provided under the plan (or coverage) and benefits for 
        prosthetic devices and components.
    ``(d) Definitions.--For the purposes of this section:
            ``(1) Prosthetic devices and components.--The term 
        `prosthetic devices and components' means such devices and 
        components which may be used to replace, in whole or in part, 
        an arm or leg, as well as the services required to do so, and 
        includes external breast prostheses incident to mastectomy 
        resulting from breast cancer.
            ``(2) Custom orthotic devices and related services.--The 
        term `custom orthotic devices and related services' means the 
        following:
                    ``(A) Custom-fabricated orthotics and related 
                services, which include custom-fabricated devices that 
                are individually made for a specific patient, as well 
                as all services and supplies medically necessary for 
                the effective use of the orthotic device, including 
                formulating its design, fabrication, material and 
                component selection, measurements, fittings, and static 
                and dynamic alignments, and instructing the patient in 
                the use of the device. No other patient would be able 
                to use this item. A custom fabricated item is a device 
                which is fabricated based on clinically derived and 
                rectified castings, tracings, measurements, and/or 
                other images (such as x-rays) of the body part. The 
                fabrication may involve using calculations, templates 
                and components. This process requires the use of basic 
                materials including, but not limited to plastic, metal, 
                leather or cloth in the form of uncut or unshaped 
                sheets, bars, or other basic forms and involves 
                substantial work such as vacuum forming, cutting, 
                bending, molding, sewing, drilling and finishing prior 
                to fitting on the patient. Custom-fabricated devices 
                may be furnished only by an appropriately credentialed 
                (certified or licensed) practitioner or accredited 
                supplier in orthotics and/or prosthetics. These devices 
                and services are represented by the existing set of L-
                codes describing this care currently listed in Centers 
                for Medicare and Medicaid Services Transmittal 656.
                    ``(B) Custom-fitted high orthotics and related 
                services, which include prefabricated devices that are 
                manufactured with no specific patient in mind, but that 
                are appropriately sized, adapted, modified, and 
                configured (with the required tools and equipment) to a 
                specific patient in accordance with a prescription, and 
                which no other patient would be able to use, as well as 
                all services and supplies medically necessary for the 
                effective use of the orthotic device, including 
                formulating its design, fabrication, material and 
                component selection, measurements, fittings, and static 
                and dynamic alignments, and instructing the patient in 
                the use of the device. Custom-fitted high devices may 
                be furnished only by an appropriately credentialed 
                (certified or licensed) practitioner or accredited 
                supplier in orthotics and/or prosthetics. These devices 
                and services are represented by the existing set of L-
                codes describing this care currently listed in Centers 
                for Medicare and Medicaid Services Transmittal 656.
            ``(3) Financial requirements.--The term `financial 
        requirements' includes deductibles, coinsurance, co-payments, 
        other cost sharing, and limitations on the total amount that 
        may be paid by a participant or beneficiary with respect to 
        benefits under the plan or health insurance coverage and also 
        includes the application of annual and lifetime limits.
            ``(4) Treatment limitations.--The term `treatment 
        limitations' includes limits on the frequency of treatment, 
        number of visits, days of coverage, or other similar limits on 
        the scope or duration of treatment.''.
    (b) Clerical Amendment.--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. 715. Prosthetics and custom orthotic device parity.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to group health plans (and health insurance coverage 
offered in connection with group health plans) for plan years beginning 
on or after the date of the enactment of this Act.

SEC. 4. FEDERAL ADMINISTRATIVE RESPONSIBILITIES.

    (a) Assistance to Plan Participants and Beneficiaries.--The 
Secretary of Labor shall provide for assistance to participants and 
beneficiaries under such plans with any questions or problems regarding 
compliance with the requirements of this section.
    (b) Audits.--The Secretary of Labor shall provide for the conduct 
of random audits of group health plans (and health insurance coverage 
offered in connection with such plans) to ensure that such plans are in 
compliance with section 715 of the Employee Retirement Income Security 
Act of 1974, as added by section 3.
    (c) GAO Study.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study that evaluates the effect of the 
        implementation of the amendments made by this Act on the cost 
        of health insurance coverage, on access to health insurance 
        coverage (including the availability of in-network providers), 
        on the quality of health care, on benefits and coverage for 
        prosthetic devices and components, on any additional cost or 
        savings to group health plans, on State prosthetic devices and 
        components benefit mandate laws, on the business community and 
        the Federal Government, and on other issues as determined 
        appropriate by the Comptroller General.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Comptroller General of the United 
        States shall prepare and submit to the appropriate committees 
        of Congress a report containing the results of the study 
        conducted under paragraph (1).
    (d) Regulations.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Labor shall promulgate final 
regulations to carry out this Act and the amendments made by this Act.

Summary: Prosthetic and Custom Orthotic Parity Act of 2009 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require a group health plan that provides medical and surgical benefits as well as benefits for prosthetic devices and components and orthotic devices to offer such prosthetic and orthotic coverage in the same manner as applicable to medical and surgical benefits. Prohibits separate financial requirements or more restrictive treatment limitations.

Limits required benefits for prosthetic devices and custom orthotic devices and related services to the most appropriate model that adequately meets the medical requirements of the patient. Requires benefits to include repairs and replacements as determined appropriate by the treating physician.

Prohibits any annual or lifetime dollar limitation on benefits for prosthetic devices and custom orthotic devices and related services unless such limitation applies in the aggregate to all benefits.