Antitrust Health Care Advancement Act of 1996

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Antitrust Health Care Advancement 
Act of 1996''.

SEC. 2. APPLICATION OF ANTITRUST RULE OF REASON TO HEALTH CARE PROVIDER 
              NETWORKS.

    (a) Rule of Reason Standard.--In any action under the antitrust 
laws, or under any State law similar to the antitrust laws--
            (1) the conduct of a health care provider in exchanging 
        with 1 or more other health care providers information relating 
        to costs, sales, profitability, marketing, prices, or fees of 
        any health care service if--
                    (A) the exchange of such information is solely for 
                the purpose of establishing a health care provider 
                network and is reasonably required for such purpose, 
                and
                    (B) such information is not used for any other 
                purpose,
            (2) the conduct of a health care provider network 
        (including any health care provider who is a member of such 
        network and who is acting on behalf of such network) in 
        negotiating, making, or performing a contract (including the 
        establishment and modification of a fee schedule and the 
        development of a panel of physicians), to the extent such 
        contract is for the purpose of providing health care services 
        to individuals under the terms of a health benefit plan, and
            (3) the conduct of any member of such network for the 
        purpose of providing such health care services under such 
        contract to such extent,
shall not be deemed illegal per se. Such conduct shall be judged on the 
basis of its reasonableness, taking into account all relevant factors 
affecting competition, including the effects on competition in properly 
defined markets.
    (b) Definitions.--For purposes of subsection (a):
            (1) Antitrust laws.--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), except that such term includes 
        section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to 
        the extent that such section 5 applies to unfair methods of 
        competition.
            (2) Health benefit plan.--The term ``health benefit plan'' 
        means--
                    (A) a hospital or medical expense-incurred policy 
                or certificate,
                    (B) a hospital or medical service plan contract,
                    (C) a health maintenance subscriber contract, or
                    (D) a multiple employer welfare arrangement or 
                employee benefit plan (as defined under the Employee 
                Retirement Income Security Act of 1974).
        Such term includes a contract to provide health care services 
        under section 1876 or 1903(m) of the Social Security Act.
            (3) Health care provider.--The term ``health care 
        provider'' means any individual or entity that is engaged in 
        the delivery of health care services in a State and that is 
        required by State law or regulation to be licensed or certified 
        by the State to engage in the delivery of such services in the 
        State.
            (4) Health care service.--The term ``health care service'' 
        means any health care service for which payment may be made 
        under a health benefit plan, including services related to the 
        delivery or administration of such service.
            (5) Health care provider network.--The term ``health care 
        provider network'' means an organization that--
                    (A) is organized by, operated by, and composed of 
                members who are health care providers and for purposes 
                that include providing health care services,
                    (B) is funded in part by capital contributions made 
                by the members of such organization,
                    (C) with respect to each contract made by such 
                organization for the purpose of providing a type of 
                health care service to individuals under the terms of a 
                health benefit plan--
                            (i) requires all members of such 
                        organization who engage in providing such type 
                        of health care service to agree to provide 
                        health care services of such type under such 
                        contract,
                            (ii) receives the compensation paid for the 
                        health care services of such type provided 
                        under such contract by such members, and
                            (iii) provides for the distribution of such 
                        compensation,
                    (D) has established a program to review, pursuant 
                to written guidelines, the quality, efficiency, and 
                appropriateness of treatment methods and setting of 
                services for all health care providers and all patients 
                participating in such health benefit plan, along with 
                internal procedures to correct identified deficiencies 
                relating to such methods and such services,
                    (E) has established a program to monitor and 
                control utilization of health care services provided 
                under such health benefit plan, for the purpose of 
                improving efficient, appropriate care and eliminating 
                the provision of unnecessary health care services,
                    (F) has established a management program to 
                coordinate the delivery of health care services for all 
                health care providers and all patients participating in 
                such health benefit plan, for the purpose of achieving 
                efficiencies and enhancing the quality of health care 
                services provided, and
                    (G) has established a grievance and appeal process 
                for such organization designed to review and promptly 
                resolve beneficiary or patient grievances and 
                complaints.
            (6) State.--The term ``State'' has the meaning given it in 
        section 4G(2) of the Clayton Act (15 U.S.C. 15g(2)).

SEC. 3. ISSUANCE OF GUIDELINES.

    Not later than 180 days after the date of the enactment of this 
Act, the Attorney General and the Federal Trade Commission jointly 
shall issue guidelines specifying the enforcement policies and 
analytical principles that will be applied by the Department of Justice 
and the Commission with respect to the operation of section 2.

Summary: Antitrust Health Care Advancement Act of 1996 - Provides that the following activities shall not be deemed illegal per se in any action under the Federal antitrust laws or similar State law, but shall be judged based on reasonableness:  (1) the exchange of information relating to costs, sales, profitability, marketing, prices, or fees of any health care service health care providers solely for, and reasonably required for, establishing a health care provider network (HCPN); (2) the conduct of an HCPN in negotiating, making, or performing a contract for providing health care services to individuals under the terms of a health benefit plan; and (3) the conduct of any HCPN member for the purpose of providing such services under such contract. 
Directs the Attorney General and the Federal Trade Commission to jointly issue guidelines specifying the enforcement policies and analytical principles that will be applied by the Department of Justice and the Commission with respect to the operation of this Act.