A bill to amend the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to provide parity under group health plans and group health insurance coverage for the provision of benefits for prosthetic devices and components and benefits for other medical and surgical services.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prosthetics Parity Act of 2008''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (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 procedures.
            (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 the 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 to unrealistic levels or not at 
        all and often restrict coverage over an individual's lifetime, 
        which shifts costs onto the Medicare and Medicaid programs.
            (8) Eleven States have addressed this problem and have 
        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 and 
        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.
    (b) Purpose.--It is te purpose of this Act 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 that the terms 
and conditions under which such benefits are provided for other 
benefits under such plan.

SEC. 3. PROSTHETICS PARITY.

    (a) ERISA.--
            (1) In general.--Subpart B of part 7 of subtitle B of title 
        I of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1185 et seq.) is amended by adding at the end the 
        following:

``SEC. 714. PROSTHETICS PARITY.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with a group health plan) that 
provides both medical and surgical benefits for prosthetic devices and 
components (as defined under subsection (d)(1))--
            ``(1) such benefits for prosthetic devices and components 
        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 
        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 shall 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 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 a group 
        health plan) that provides both medical and surgical benefits 
        and benefits for prosthetic devices and components, 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 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 a group health 
        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 a 
        group health plan) that requires, as a condition of coverage or 
        payment for prosthetic devices and components 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.--Coverage for 
        required benefits for prosthetic devices and components under 
        this section shall be limited to coverage of the most 
        appropriate device or component model that adequately meets the 
        medical requirements of the patient, as determined by the 
        treating physician of the patient involved.
            ``(3) Coverage for repair or replacement.--Benefits for 
        prosthetic devices and components required under this section 
        shall include coverage for the 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 a group health plan) shall not impose any annual or 
        lifetime dollar limitation on benefits for prosthetic devices 
        and components required to be covered under this section unless 
        such limitation applies in the aggregate to all medical and 
        surgical benefits provided under the plan (or coverage) and 
        benefits for prosthetic devices components.
    ``(d) Definitions.--In this section:
            ``(1) Prosthetic devices and components.--The term 
        `prosthetic devices and components' means those devices and 
        components that 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) 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.
            ``(3) 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.''.
            (2) Clerical amendment.--The table of contents in section 1 
        of the Employee Retirement Income Security Act of 1974 is 
        amended by inserting after the item relating to section 713 the 
        following:

``Sec. 714. Prosthetics parity.''.
    (b) PHSA.--Subpart 2 of part A of title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg-4 et seq.) is amended by adding at the end 
the following:

``SEC. 2707. PROSTHETICS PARITY.

    ``(a) In General.--In the case of a group health plan (or health 
insurance coverage offered in connection with a group health plan) that 
provides both medical and surgical benefits for prosthetic devices and 
components (as defined under subsection (d)(1))--
            ``(1) such benefits for prosthetic devices and components 
        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 
        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 shall 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 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 a group 
        health plan) that provides both medical and surgical benefits 
        and benefits for prosthetic devices and components, 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 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 a group health 
        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 a 
        group health plan) that requires, as a condition of coverage or 
        payment for prosthetic devices and components 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.--Coverage for 
        required benefits for prosthetic devices and components under 
        this section shall be limited to coverage of the most 
        appropriate device or component model that adequately meets the 
        medical requirements of the patient, as determined by the 
        treating physician of the patient involved.
            ``(3) Coverage for repair or replacement.--Benefits for 
        prosthetic devices and components required under this section 
        shall include coverage for the 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 a group health plan) shall not impose any annual or 
        lifetime dollar limitation on benefits for prosthetic devices 
        and components required to be covered under this section unless 
        such limitation applies in the aggregate to all medical and 
        surgical benefits provided under the plan (or coverage) and 
        benefits for prosthetic devices components.
    ``(d) Definitions.--In this section:
            ``(1) Prosthetic devices and components.--The term 
        `prosthetic devices and components' means those devices and 
        components that 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) 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 an enrollee with respect to benefits under the 
        plan or health insurance coverage and also includes the 
        application of annual and lifetime limits.
            ``(3) 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.''.
    (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 Enrollees.--The Secretary of Labor, in 
consultation with the Secretary of Health and Human Services, shall 
provide assistance to enrollees under plans or coverage to which the 
amendment made by section 3 apply with any questions or problems with 
respect to compliance with the requirements of such amendment.
    (b) Audits.--The Secretary of Labor, in consultation with the 
Secretary of Health and Human Services, 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 (or 
coverage) are in compliance with the amendments made 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 the 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 
        prosthetics 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 committee 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, in consultation with the 
Secretary of Health and Human Services, shall promulgate final 
regulations to carry out this Act and the amendments made by this Act.

Summary: Prosthetics Parity Act of 2008 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act to require a group health plan that provides both medical and surgical benefits and benefits for prosthetic devices and components to provide prosthetics coverage under terms and conditions that are no less favorable than those applicable to substantially all medical and surgical benefits provided under the plan.

Prohibits the prosthetics benefit from being subject to separate or more restrictive financial requirements or more restrictive treatment limitations.

Applies the requirements of this Act separately with respect to in-network and out-of-network benefits.

Requires a group health plan to apply the same prior authorization requirements to the prosthetics benefit as apply for all similar benefits under the plan.

Limits the required prosthetics benefit to the most appropriate device or component that adequately meets the medical requirements of the patient. Includes repair or replacement of prosthetic devices and components within such coverage.

Prohibits a group health plan from imposing any annual or lifetime dollar limitation on benefits for prosthetic devices and components required to be covered under this Act that is not applied in the aggregate to all medical and surgical benefits provided under the plan.

Requires the Secretary of Labor to: (1) assist enrollees with any questions or problems regarding compliance with the requirements of this Act; and (2) conduct random audits of group health plans to ensure compliance.

Requires the Comptroller General to evaluate the effects of this Act, including on the cost of and access to heath insurance coverage.