HR 2926 IH
106th CONGRESS
1st Session
H. R. 2926
To provide new patient protections under group health plans and
through health insurance issuers in the group market.
IN THE HOUSE OF REPRESENTATIVES
September 23, 1999
Mr. BOEHNER (for himself, Mr. ARMEY, Mr. BLILEY, Mr. GOODLING, Mrs. NORTHUP,
Mr. MCCRERY, Mr. GREEN of Wisconsin, Mr. TALENT, Mr. OXLEY, Mr. PORTMAN, Mr.
HOBSON, Mr. BALLENGER, and Mr. SALMON) introduced the following bill; which was
referred to the Committee on Commerce, and in addition to the Committees on
Education and the Workforce, Ways and Means, and the Judiciary, for a period to
be subsequently determined by the Speaker, in each case for consideration of
such provisions as fall within the jurisdiction of the committee concerned
A BILL
To provide new patient protections under group health plans and
through health insurance issuers in the group market.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Comprehensive Access and
Responsibility in Health Care Act of 1999'.
(b) TABLE OF CONTENTS- The table of contents is as follows:
Sec. 1. Short title and table of contents.
TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Subtitle A--Patient Protections
Sec. 101. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric care, and
continuity of care.
Sec. 102. Required disclosure to network providers.
Sec. 103. Effective date and related rules.
Subtitle B--Patient Access to Information
Sec. 111. Patient access to information regarding plan coverage, managed
care procedures, health care providers, and quality of medical care.
Sec. 112. Effective date and related rules.
Subtitle C--Group Health Plan Review Standards
Sec. 121. Special rules for group health plans.
Sec. 122. Special rule for access to specialty care.
Sec. 123. Requirements for treatment of prescription drugs and medical
devices as experimental or investigational.
Sec. 124. Protection for certain information developed to reduce
mortality or morbidity or for improving patient care and safety.
Sec. 125. Effective date.
Subtitle D--Small Business Access and Choice for Entrepreneurs
Sec. 131. Rules governing association health plans.
`Part 8--Rules Governing Association Health Plans
`Sec. 801. Association health plans.
`Sec. 802. Certification of association health plans.
`Sec. 803. Requirements relating to sponsors and boards of
trustees.
`Sec. 804. Participation and coverage requirements.
`Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
`Sec. 806. Maintenance of reserves and provisions for solvency for plans
providing health benefits in addition to health insurance coverage.
`Sec. 807. Requirements for application and related requirements.
`Sec. 808. Notice requirements for voluntary termination.
`Sec. 809. Corrective actions and mandatory termination.
`Sec. 810. Trusteeship by the secretary of insolvent association health
plans providing health benefits in addition to health insurance
coverage.
`Sec. 811. State assessment authority.
`Sec. 812. Definitions and rules of construction.
Sec. 132. Clarification of treatment of single employer
arrangements.
Sec. 133. Clarification of treatment of certain collectively bargained
arrangements.
Sec. 134. Enforcement provisions relating to association health
plans.
Sec. 135. Cooperation between Federal and State authorities.
Sec. 136. Effective date and transitional and other rules.
Subtitle E--Health Care Access, Affordability, and Quality Commission
Sec. 141. Establishment of commission.
Sec. 142. Effective date.
TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
Subtitle A--Patient Protections and Point of Service Coverage
Requirements
Sec. 201. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric care, and
continuity of care.
Sec. 202. Requiring health maintenance organizations to offer option of
point-of-service coverage.
Sec. 203. Effective date and related rules.
Subtitle B--Patient Access to Information
Sec. 211. Patient access to information regarding plan coverage, managed
care procedures, health care providers, and quality of medical care.
Sec. 212. Requirements for treatment of prescription drugs and medical
devices as experimental or investigational.
Sec. 213. Effective date and related rules.
Subtitle C--HealthMarts
Sec. 221. Expansion of consumer choice through HealthMarts.
Sec. 222. Effective date.
Subtitle D--Community Health Organizations
Sec. 231. Promotion of provision of insurance by community health
organizations.
TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Patient Protections
Sec. 301. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric care, and
continuity of care.
Subtitle B--Medical Savings Accounts
Sec. 311. Expansion of availability of medical savings accounts.
Sec. 312. Effective date.
Subtitle C--Tax Incentives for Health Care
Sec. 321. Deduction for health and long-term care insurance costs of
individuals not participating in employer-subsidized health plans.
Sec. 322. Refundable credit for health insurance coverage.
Sec. 323. Study of State safety-net health insurance programs for the
medically uninsurable.
Sec. 324. Carryover of unused benefits from cafeteria plans and flexible
spending arrangements.
TITLE IV--HEALTH CARE LAWSUIT REFORM
Subtitle A--General Provisions
Sec. 401. Federal reform of health care liability actions.
Sec. 403. Effective date.
Subtitle B--Uniform Standards for Health Care Liability Actions
Sec. 411. Statute of limitations.
Sec. 412. Calculation and payment of damages.
Sec. 413. Limitations on contingent fees.
Sec. 413. Alternative dispute resolution.
Sec. 414. Reporting on fraud and abuse enforcement activities.
TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974
Subtitle A--Patient Protections
SEC. 101. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY MEDICAL
CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC CARE, AND CONTINUITY OF
CARE.
(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 adding at the
end the following new section:
`SEC. 714. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY MEDICAL
CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC CARE, AND CONTINUITY OF
CARE.
`(a) PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE-
`(1) IN GENERAL- In the case of any health care professional acting
within the lawful scope of practice in the course of carrying out a
contractual employment arrangement or other direct contractual arrangement
between such professional and a group health plan or a health insurance
issuer offering health insurance coverage in connection with a group health
plan, the plan or issuer with which such contractual employment arrangement
or other direct contractual arrangement is maintained by the professional
may not impose on such professional under such arrangement any prohibition
or restriction with respect to advice, provided to a participant or
beneficiary under the plan who is a patient, about the health status of the
participant or beneficiary or the medical care or treatment for the
condition or disease of the participant or beneficiary, regardless of
whether benefits for such care or treatment are provided under the plan or
health insurance coverage offered in connection with the plan.
`(2) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this paragraph,
the term `health care professional' means a physician (as defined in section
1861(r) of the Social Security Act) or other health care professional if
coverage for the professional's services is provided under the group health
plan for the services of the professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist, physician assistant,
physical or occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical nurse (including
nurse practitioner, clinical nurse specialist, certified registered nurse
anesthetist, and certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory therapy
technician.
`(3) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed
to require the sponsor of a group health plan or a health insurance issuer
offering health insurance coverage in connection with the group health plan
to engage in any practice that would violate its religious beliefs or moral
convictions.
`(b) PATIENT ACCESS TO EMERGENCY MEDICAL CARE-
`(1) COVERAGE OF EMERGENCY SERVICES-
`(A) IN GENERAL- If a group health plan, or health insurance coverage
offered by a health insurance issuer, provides any benefits with respect
to emergency services (as defined in subparagraph (B)(ii)), or ambulance
services, the plan or issuer shall cover emergency services (including
emergency ambulance services as defined in subparagraph (B)(iii))
furnished under the plan or coverage--
`(i) without the need for any prior authorization
determination;
`(ii) whether or not the health care provider furnishing such
services is a participating provider with respect to such
services;
`(iii) in a manner so that, if such services are provided to a
participant or beneficiary by a nonparticipating health care provider,
the participant or beneficiary is not liable for amounts that exceed the
amounts of liability that would be incurred if the services were
provided by a participating provider; and
`(iv) without regard to any other term or condition of such plan or
coverage (other than exclusion or coordination of benefits, or an
affiliation or waiting period, permitted under section 701 and other
than applicable cost sharing).
`(B) DEFINITIONS- In this subsection:
`(i) EMERGENCY MEDICAL CONDITION- The term `emergency medical
condition' means--
`(I) a medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a prudent
layperson, who possesses an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to
result in a condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security Act (42 U.S.C.
1395dd(e)(1)(A)); and
`(II) a medical condition manifesting itself in a neonate by acute
symptoms of sufficient severity (including severe pain) such that a
prudent health care professional could reasonably expect the absence
of immediate medical attention to result in a condition described in
clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social
Security Act.
`(ii) EMERGENCY SERVICES- The term `emergency services'
means--
`(I) with respect to an emergency medical condition described in
clause (i)(I), a medical screening examination (as required under
section 1867 of the Social Security Act, 42 U.S.C. 1395dd)) that is
within the capability of the emergency department of a hospital,
including ancillary services routinely available to the emergency
department to evaluate an emergency medical condition (as defined in
clause (i)) and also, within the capabilities of the staff and
facilities at the hospital, such further medical examination and
treatment as are
required under section 1867 of such Act to stabilize the patient; or
`(II) with respect to an emergency medical condition described in
clause (i)(II), medical treatment for such condition rendered by a
health care provider in a hospital to a neonate, including available
hospital ancillary services in response to an urgent request of a
health care professional and to the extent necessary to stabilize the
neonate.
`(iii) EMERGENCY AMBULANCE SERVICES- The term `emergency ambulance
services' means ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport an
individual who has an emergency medical condition (as defined in clause
(i)) to a hospital for the receipt of emergency services (as defined in
clause (ii)) in a case in which appropriate emergency medical screening
examinations are covered under the plan or coverage pursuant to
paragraph (1)(A) and a prudent layperson, with an average knowledge of
health and medicine, could reasonably expect that the absence of such
transport would result in placing the health of the individual in
serious jeopardy, serious impairment of bodily function, or serious
dysfunction of any bodily organ or part.
`(iv) STABILIZE- The term `to stabilize' means, with respect to an
emergency medical condition, to provide such medical treatment of the
condition as may be necessary to assure, within reasonable medical
probability, that no material deterioration of the condition is likely
to result from or occur during the transfer of the individual from a
facility.
`(v) NONPARTICIPATING- The term `nonparticipating' means, with
respect to a health care provider that provides health care items and
services to a participant or beneficiary under group health plan or
under group health insurance coverage, a health care provider that is
not a participating health care provider with respect to such items and
services.
`(vi) PARTICIPATING- The term `participating' means, with respect to
a health care provider that provides health care items and services to a
participant or beneficiary under group health plan or health insurance
coverage offered by a health insurance issuer in connection with such a
plan, a health care provider that furnishes such items and services
under a contract or other arrangement with the plan or
issuer.
`(c) PATIENT RIGHT TO OBSTETRIC AND GYNECOLOGICAL CARE-
`(1) IN GENERAL- In any case in which a group health plan (or a health
insurance issuer offering health insurance coverage in connection with the
plan)--
`(A) provides benefits under the terms of the plan consisting
of--
`(i) gynecological care (such as preventive women's health
examinations); or
`(ii) obstetric care (such as pregnancy-related
services),
provided by a participating health care professional who specializes
in such care (or provides
benefits consisting of payment for such care); and
`(B) requires or provides for designation by a participant or
beneficiary of a participating primary care provider,
if the primary care provider designated by such a participant or
beneficiary is not such a health care professional, then the plan (or
issuer) shall meet the requirements of paragraph (2).
`(2) REQUIREMENTS- A group health plan (or a health insurance issuer
offering health insurance coverage in connection with the plan) meets the
requirements of this paragraph, in connection with benefits described in
paragraph (1) consisting of care described in clause (i) or (ii) of
paragraph (1)(A) (or consisting of payment therefor), if the plan (or
issuer)--
`(A) does not require authorization or a referral by the primary care
provider in order to obtain such benefits; and
`(B) treats the ordering of other care of the same type, by the
participating health care professional providing the care described in
clause (i) or (ii) of paragraph (1)(A), as the authorization of the
primary care provider with respect to such care.
`(3) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this subsection,
the term `health care professional' means an individual (including, but not
limited to, a nurse midwife or nurse practitioner) who is licensed,
accredited, or certified under State law to provide obstetric and
gynecological health care services and who is operating within the scope of
such licensure, accreditation, or certification.
`(4) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
preventing a plan from offering (but not requiring a participant or
beneficiary to accept) a health care professional trained, credentialed, and
operating within the scope of their licensure to perform obstetric and
gynecological health care services. Nothing in paragraph (2)(B) shall waive
any requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of gynecological or obstetric care
so ordered.
`(5) TREATMENT OF MULTIPLE COVERAGE OPTIONS- In the case of a plan
providing benefits under two or more coverage options, the requirements of
this subsection shall apply separately with respect to each coverage
option.
`(d) PATIENT RIGHT TO PEDIATRIC CARE-
`(1) IN GENERAL- In any case in which a group health plan (or a health
insurance issuer offering health insurance coverage in connection with the
plan) provides benefits consisting of routine pediatric care provided by a
participating health care professional who specializes in pediatrics (or
consisting of payment for such care) and the plan requires or provides for
designation by a participant or beneficiary of a participating primary care
provider, the plan (or issuer) shall provide that such a participating
health care professional may be designated, if available, by a parent or
guardian of any beneficiary under the plan is who under 18 years of age, as
the primary care provider with respect to any such benefits.
`(2) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this subsection,
the term `health care professional' means an individual (including, but not
limited to, a nurse practitioner) who is licensed, accredited, or certified
under State law to provide pediatric health care services and who is
operating within the scope of such licensure, accreditation, or
certification.
`(3) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
preventing a plan from offering (but not requiring a participant or
beneficiary to accept) a health care professional trained, credentialed, and
operating within the scope of their licensure to perform pediatric health
care services. Nothing in paragraph (1) shall waive any requirements of
coverage relating to medical necessity or appropriateness with respect to
coverage of pediatric care so ordered.
`(4) TREATMENT OF MULTIPLE COVERAGE OPTIONS- In the case of a plan
providing benefits under two or more coverage options, the requirements of
this subsection shall apply separately with respect to each coverage
option.
`(A) TERMINATION OF PROVIDER- If a contract between a group health
plan, or a health insurance issuer offering health insurance coverage in
connection with a group health plan, and a health care provider is
terminated (as defined in subparagraph (D)(ii)), or benefits or coverage
provided by a health care provider are terminated because of a change in
the terms of provider participation in a group health plan, and an
individual who, at the time of such termination, is a participant or
beneficiary in the plan and is scheduled to undergo surgery (including an
organ transplantation), is undergoing treatment for pregnancy, or is
determined to be terminally ill (as defined in section 1861(dd)(3)(A) of
the Social Security Act) and is undergoing treatment for the terminal
illness, the plan or issuer shall--
`(i) notify the individual on a timely basis of such termination and
of the right to elect continuation of coverage of treatment by the
provider under this subsection; and
`(ii) subject to paragraph (3), permit the individual to elect to
continue to be covered with respect to treatment by the provider for
such surgery, pregnancy, or illness during a transitional period
(provided under paragraph (2)).
`(B) Treatment of termination of contract with health
insurance
ISSUER- If a contract for the provision of health insurance coverage between
a group health plan and a health insurance issuer is terminated and, as a result
of such termination, coverage of services of a health care provider is
terminated with respect to an individual, the provisions of subparagraph (A)
(and the succeeding provisions of this subsection) shall apply under the plan in
the same manner as if there had been a contract between the plan and the
provider that had been terminated, but only with respect to benefits that are
covered under the plan after the contract termination.
`(C) TERMINATION DEFINED- For purposes of this subsection, the term
`terminated' includes, with respect to a contract, the expiration or
nonrenewal of the contract, but does not include a termination of the
contract by the plan or issuer for failure to meet applicable quality
standards or for fraud.
`(2) TRANSITIONAL PERIOD-
`(A) IN GENERAL- Except as provided in subparagraphs (B) through (D),
the transitional period under this paragraph shall extend up to 90 days
(as determined by the treating health care professional) after the date of
the notice described in paragraph (1)(A)(i) of the provider's
termination.
`(B) SCHEDULED SURGERY- If surgery was scheduled for an individual
before the date of the announcement of the termination of the provider
status under paragraph (1)(A)(i), the transitional period under this
paragraph with respect to the surgery shall extend beyond the period under
subparagraph (A) and until the date of discharge of the individual after
completion of the surgery.
`(i) a participant or beneficiary was determined to be pregnant at
the time of a provider's termination of participation, and
`(ii) the provider was treating the pregnancy before date of the
termination,
the transitional period under this paragraph with respect to
provider's treatment of the pregnancy shall extend through the provision
of post-partum care directly related to the delivery.
`(D) TERMINAL ILLNESS- If--
`(i) a participant or beneficiary was determined to be terminally
ill (as determined under section 1861(dd)(3)(A) of the Social Security
Act) at the time of a provider's termination of participation,
and
`(ii) the provider was treating the terminal illness before the date
of termination,
the transitional period under this paragraph shall extend for the
remainder of the individual's life for care directly related to the
treatment of the terminal illness or its medical manifestations.
`(3) PERMISSIBLE TERMS AND CONDITIONS- A group health plan or health
insurance issuer may condition coverage of continued treatment by a provider
under paragraph (1)(A)(i) upon the individual notifying the plan of the
election of continued coverage and upon the provider agreeing to the
following terms and conditions:
`(A) The provider agrees to accept reimbursement from the plan or
issuer and individual involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as payment in
full (or, in the case described in paragraph (1)(B), at the rates
applicable under the replacement plan or issuer after the date of the
termination of the contract with the health insurance issuer) and not to
impose cost-sharing with respect to the individual in an amount that would
exceed the cost-sharing that could have been imposed if the contract
referred to in paragraph (1)(A) had not been terminated.
`(B) The provider agrees to adhere to the quality assurance standards
of the plan or issuer responsible for payment under subparagraph (A) and
to provide to such plan or issuer necessary medical information related to
the care provided.
`(C) The provider agrees otherwise to adhere to such plan's or
issuer's policies and procedures, including procedures regarding referrals
and obtaining prior authorization and providing services pursuant to a
treatment plan (if any) approved by the plan or issuer.
`(D) The provider agrees to provide transitional care to all
participants and beneficiaries who are eligible for and elect to have
coverage of such care from such provider.
`(E) If the provider initiates the termination, the provider has
notified the plan within 30 days prior to the effective date of the
termination of--
`(i) whether the provider agrees to permissible terms and conditions
(as set forth in this paragraph) required by the plan, and
`(ii) if the provider agrees to the terms and conditions, the
specific plan beneficiaries and participants undergoing a course of
treatment from the provider who the provider believes, at the time of
the notification, would be eligible for transitional care under this
subsection.
`(4) CONSTRUCTION- Nothing in this subsection shall be construed
to--
`(A) require the coverage of benefits which would not have been
covered if the provider involved remained a participating provider,
or
`(B) prohibit a group health plan from conditioning a provider's
participation on the provider's agreement to provide transitional care to
all participants and beneficiaries eligible
to obtain coverage of such care furnished by the provider as set forth under
this subsection.
`(f) COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CANCER CLINICAL
TRIALS-
`(A) IN GENERAL- If a group health plan (or a health insurance issuer
offering health insurance coverage in connection with the plan) provides
coverage to a qualified individual (as defined in paragraph (2)), the plan
or issuer--
`(i) may not deny the individual participation in the clinical trial
referred to in paragraph (2)(B);
`(ii) subject to paragraphs (2), (3), and (4), may not deny (or
limit or impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection with
participation in the trial; and
`(iii) may not discriminate against the individual on the basis of
the participation of the participant or beneficiary in such
trial.
`(B) EXCLUSION OF CERTAIN COSTS- For purposes of subparagraph (A)(ii),
routine patient costs do not include the cost of the tests or measurements
conducted primarily for the purpose of the clinical trial
involved.
`(C) USE OF IN-NETWORK PROVIDERS- If one or more participating
providers is participating in a clinical trial, nothing in subparagraph
(A) shall be construed as preventing a plan from requiring that a
qualified individual participate in the trial through such a participating
provider if the provider will accept the individual as a participant in
the trial.
`(2) QUALIFIED INDIVIDUAL DEFINED- For purposes of paragraph (1), the
term `qualified individual' means an individual who is a participant or
beneficiary in a group health plan and who meets the following
conditions:
`(A)(i) The individual has been diagnosed with cancer.
`(ii) The individual is eligible to participate in an approved
clinical trial according to the trial protocol with respect to treatment
of cancer.
`(iii) The individual's participation in the trial offers meaningful
potential for significant clinical benefit for the individual.
`(i) the referring physician is a participating health care
professional and has concluded that the individual's participation in
such trial would be appropriate based upon satisfaction by the
individual of the conditions described in subparagraph (A);
or
`(ii) the individual provides medical and scientific information
establishing that the individual's participation in such trial would be
appropriate based upon the satisfaction by the individual of the
conditions described in subparagraph (A).
`(A) IN GENERAL- A group health plan (or a health insurance issuer
offering health insurance coverage in connection with the plan) shall
provide for payment for routine patient costs described in paragraph
(1)(B) but is not required to pay for costs of items and services that are
reasonably expected to be paid for by the sponsors of an approved clinical
trial.
`(B) ROUTINE PATIENT CARE COSTS-
`(i) IN GENERAL- For purposes of this paragraph, the term `routine
patient care costs' shall include the costs associated with the
provision of items and services that--
`(I) would otherwise be covered under the group health plan if
such items and services were not provided in connection with an
approved clinical trial program; and
`(II) are furnished according to the protocol of an approved
clinical trial program.
`(ii) EXCLUSION- For purposes of this paragraph, `routine patient
care costs' shall not include the costs associated with the provision
of--
`(I) an investigational drug or device, unless the Secretary has
authorized the manufacturer of such drug or device to charge for such
drug or device; or
`(II) any item or service supplied without charge by the sponsor
of the approved clinical trial program.
`(C) PAYMENT RATE- For purposes of this subsection--
`(i) PARTICIPATING PROVIDERS- In the case of covered items and
services provided by a participating provider, the payment rate shall be
at the agreed upon rate.
`(ii) NONPARTICIPATING PROVIDERS- In the case of covered items and
services provided by a nonparticipating provider, the payment rate shall
be at the rate the plan would normally pay for comparable items or
services under clause (i).
`(4) APPROVED CLINICAL TRIAL DEFINED-
`(A) IN GENERAL- For purposes of this subsection, the term `approved
clinical trial' means a cancer clinical research study or cancer clinical
investigation approved by an Institutional Review Board.
`(B) CONDITIONS FOR DEPARTMENTS- The conditions described in this
paragraph, for a study or investigation conducted by a Department, are
that the study or investigation has been reviewed and approved through a
system of peer review that the Secretary determines--
`(i) to be comparable to the system of peer review of studies and
investigations used by the National Institutes of Health,
and
`(ii) assures unbiased review of the highest scientific standards by
qualified individuals who have no interest in the outcome of the
review.
`(5) CONSTRUCTION- Nothing in this subsection shall be construed to
limit a plan's coverage with respect to clinical trials.
`(6) PLAN SATISFACTION OF CERTAIN REQUIREMENTS; RESPONSIBILITIES OF
FIDUCIARIES-
`(A) IN GENERAL- For purposes of this subsection, insofar as a group
health plan provides benefits in the form of health insurance coverage
through a health insurance issuer, the plan shall be treated as meeting
the requirements of this subsection with respect to such benefits and not
be considered as failing to meet such requirements because of a failure of
the issuer to meet such requirements so long as the plan sponsor or its
representatives did not cause such failure by the issuer.
`(B) CONSTRUCTION- Nothing in this subsection shall be construed to
affect or modify the responsibilities of the fiduciaries of a group health
plan under part 4.
`(A) STUDY- The Secretary shall analyze cancer clinical research and
its cost implications for managed care, including differentiation
in--
`(i) the cost of patient care in trials versus standard
care;
`(ii) the cost effectiveness achieved in different sites of
service;
`(iii) research outcomes;
`(iv) volume of research subjects available in different sites of
service;
`(v) access to research sites and clinical trials by cancer
patients;
`(vi) patient cost sharing or copayment costs realized in different
sites of service;
`(vii) health outcomes experienced in different sites of
service;
`(viii) long term health care services and costs experienced in
different sites of service;
`(ix) morbidity and mortality experienced in different sites of
service; and
`(x) patient satisfaction and preference of sites of
service.
`(B) REPORT TO CONGRESS- Not later than January 1, 2005, the Secretary
shall submit a report to Congress that contains--
`(i) an assessment of any incremental cost to group health plans
resulting from the provisions of this section;
`(ii) a projection of expenditures to such plans resulting from this
section;
`(iii) an assessment of any impact on premiums resulting from this
section; and
`(iv) recommendations regarding action on other
diseases.'.
(b) CONFORMING AMENDMENT- The table of contents in section 1 of such Act
is amended by adding at the end of the items relating to subpart B of part 7
of subtitle B of title I of such Act the following new item:
`Sec. 714. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric care, and
continuity of care.'.
SEC. 102. REQUIRED DISCLOSURE TO NETWORK PROVIDERS.
(a) IN GENERAL- Subpart B of part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (as amended by section 101) is
amended further by adding at the end the following new section:
`SEC. 715. REQUIRED DISCLOSURE TO NETWORK PROVIDERS.
`(a) IN GENERAL- If a group health plan reimburses, through a contract or
other arrangement, a health care provider at a discounted payment rate because
the provider participates in a provider network, the plan shall disclose to
the provider the following information before the provider furnishes covered
items or services under the plan:
`(1) The identity of the plan sponsor or other entity that is to utilize
the discounted payment rates in reimbursing network providers in that
network.
`(2) The existence of any substantial benefit differentials established
for the purpose of actively encouraging participants or beneficiaries under
the plan to utilize the providers in that network.
`(3) The methods and materials by which providers in the network are
identified to such participants or beneficiaries as part of the
network.
`(b) PERMITTED MEANS OF DISCLOSURE- Disclosure required under subsection
(a) by a plan may be made--
`(1) by another entity under a contract or other arrangement between the
plan and the entity; and
`(2) by making such information available in written format, in an
electronic format, on the Internet, or on a proprietary computer network
which is readily accessible to the network providers.
`(c) CONSTRUCTION- Nothing in this section shall be construed to require,
directly or indirectly, disclosure of specific fee arrangements or other
reimbursement arrangements--
`(1) between (i) group health plans or provider networks and (ii) health
care providers, or
`(2) among health care providers.
`(d) DEFINITIONS- For purposes of this subsection:
`(1) BENEFIT DIFFERENTIAL- The term `benefit differential' means, with
respect to a group health plan, differences in the case of any participant
or beneficiary, in the financial responsibility for payment of coinsurance,
copayments, deductibles, balance billing requirements, or any other charge,
based upon whether a health care provider from whom covered items or
services are obtained is a network provider.
`(2) DISCOUNTED PAYMENT RATE- The term `discounted payment rate' means,
with respect to a provider, a payment rate that is below the charge imposed
by the provider.
`(3) NETWORK PROVIDER- The term `network provider' means, with respect
to a group health plan, a health care provider that furnishes health care
items and services to participants or beneficiaries under the plan pursuant
to a contract or other arrangement with a provider network in which the
provider is participating.
`(4) PROVIDER NETWORK- The term `provider network' means, with respect
to a group health plan offering health insurance coverage, an association of
network providers through whom the plan provides, through contract or other
arrangement, health care items and services to participants and
beneficiaries.'.
(b) CONFORMING AMENDMENT- The table of contents in section 1 of such Act
is amended by adding at the end of the items relating to subpart B of part 7
of subtitle B of title I of such Act the following new item:
`Sec. 715. Required disclosure to network providers.'.
SEC. 103. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL- The amendments made by this subtitle shall apply with
respect to plan years beginning on or after January 1 of the second calendar
year following the date of the enactment of this Act, except that the
Secretary of Labor may issue regulations before such date under such
amendments. The Secretary shall first issue regulations necessary to carry out
the amendments made by this subtitle before the effective date thereof.
(b) LIMITATION ON ENFORCEMENT ACTIONS- No enforcement action shall be
taken, pursuant to the amendments made by this subtitle, against a group
health plan or health insurance issuer with respect to a violation of a
requirement imposed by such amendments before the date of issuance of
regulations issued in connection with such requirement, if the plan or issuer
has sought to comply in good faith with such requirement.
(c) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS- In the case of a
group health plan maintained pursuant to one or more collective bargaining
agreements between employee representatives and one or more employers ratified
before the date of the enactment of this Act, the amendments made by this
subtitle shall not apply with respect to plan years beginning before the later
of--
(1) the date on which the last of the collective bargaining agreements
relating to the plan terminates (determined without regard to any extension
thereof agreed to after the date of the enactment of this Act); or
For purposes of this subsection, any plan amendment made pursuant to a
collective bargaining agreement relating to the plan which amends the plan
solely to conform to any requirement added by this subtitle shall not be
treated as a termination of such collective bargaining agreement.
Subtitle B--Patient Access to Information
SEC. 111. PATIENT ACCESS TO INFORMATION REGARDING PLAN COVERAGE, MANAGED
CARE PROCEDURES, HEALTH CARE PROVIDERS, AND QUALITY OF MEDICAL CARE.
(a) IN GENERAL- Part 1 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 is amended--
(1) by redesignating section 111 as section 112; and
(2) by inserting after section 110 the following new section:
`DISCLOSURE BY GROUP HEALTH PLANS
`SEC. 111. (a) DISCLOSURE REQUIREMENT- The administrator of each group
health plan shall take such actions as are necessary to ensure that the
summary plan description of the plan required under section 102 (or each
summary plan description in any case in which different summary plan
descriptions are appropriate under part 1 for different options of coverage)
contains, among any information otherwise required under this part, the
information required under subsections (b), (c), (d), and (e)(2)(A).
`(b) PLAN BENEFITS- The information required under subsection (a) includes
the following:
`(1) COVERED ITEMS AND SERVICES-
`(A) CATEGORIZATION OF INCLUDED BENEFITS- A description of covered
benefits, categorized by--
`(i) types of items and services (including any special disease
management program); and
`(ii) types of health care professionals providing such items and
services.
`(B) EMERGENCY MEDICAL CARE- A description of the extent to which the
plan covers emergency medical care (including the extent to which the plan
provides for access to urgent care centers), and any definitions provided
under the plan for the relevant plan terminology referring to such
care.
`(C) PREVENTATIVE SERVICES- A description of the extent to which the
plan provides benefits for preventative services.
`(D) DRUG FORMULARIES- A description of the extent to which covered
benefits are determined by the use or application of a drug formulary and
a summary of the process for determining what is included in such
formulary.
`(E) COBRA CONTINUATION COVERAGE- A description of the benefits
available under the plan pursuant to part 6.
`(2) LIMITATIONS, EXCLUSIONS, AND RESTRICTIONS ON COVERED
BENEFITS-
`(A) CATEGORIZATION OF EXCLUDED BENEFITS- A description of benefits
specifically excluded from coverage, categorized by types of items and
services.
`(B) UTILIZATION REVIEW AND PREAUTHORIZATION REQUIREMENTS- Whether
coverage for medical care is limited or excluded on the basis of
utilization review or preauthorization requirements.
`(C) LIFETIME, ANNUAL, OR OTHER PERIOD LIMITATIONS- A description of
the circumstances under which, and the extent to
which, coverage is subject to lifetime, annual, or other period limitations,
categorized by types of benefits.
`(D) CUSTODIAL CARE- A description of the circumstances under which,
and the extent to which, the coverage of benefits for custodial care is
limited or excluded, and a statement of the definition used by the plan
for custodial care.
`(E) EXPERIMENTAL TREATMENTS- Whether coverage for any medical care is
limited or excluded because it constitutes an investigational item or
experimental treatment or technology, and any definitions provided under
the plan for the relevant plan terminology referring to such limited or
excluded care.
`(F) MEDICAL APPROPRIATENESS OR NECESSITY- Whether coverage for
medical care may be limited or excluded by reason of a failure to meet the
plan's requirements for medical appropriateness or necessity, and any
definitions provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
`(G) SECOND OR SUBSEQUENT OPINIONS- A description of the circumstances
under which, and the extent to which, coverage for second or subsequent
opinions is limited or excluded.
`(H) SPECIALTY CARE- A description of the circumstances under which,
and the extent to which, coverage of benefits for specialty care is
conditioned on referral from a primary care provider.
`(I) CONTINUITY OF CARE- A description of the circumstances under
which, and the extent to which, coverage of items and services provided by
any health care professional is limited or excluded by reason of the
departure by the professional from any defined set of providers.
`(J) RESTRICTIONS ON COVERAGE OF EMERGENCY SERVICES- A description of
the circumstances under which, and the extent to which, the plan, in
covering emergency medical care furnished to a participant or beneficiary
of the plan imposes any financial responsibility described in subsection
(c) on participants or beneficiaries or limits or conditions benefits for
such care subject to any other term or condition of such plan.
`(3) NETWORK CHARACTERISTICS- If the plan (or health insurance issuer
offering health insurance coverage in connection with the plan) utilizes a
defined set of providers under contract with the plan (or issuer), a
detailed list of the names of such providers and their geographic location,
set forth separately with respect to primary care providers and with respect
to specialists.
`(c) PARTICIPANT'S FINANCIAL RESPONSIBILITIES- The information required
under subsection (a) includes an explanation of--
`(1) a participant's financial responsibility for payment of premiums,
coinsurance, copayments, deductibles, and any other charges; and
`(2) the circumstances under which, and the extent to which, the
participant's financial responsibility described in paragraph (1) may vary,
including any distinctions based on whether a health care provider from whom
covered benefits are obtained is included in a defined set of
providers.
`(d) DISPUTE RESOLUTION PROCEDURES- The information required under
subsection (a) includes a description of the processes adopted by the plan
pursuant to section 503, including--
`(1) descriptions thereof relating specifically to--
`(B) internal review of coverage decisions; and
`(C) any external review of coverage decisions; and
`(2) the procedures and time frames applicable to each step of the
processes referred to in subparagraphs (A), (B), and (C) of paragraph
(1).
`(e) INFORMATION ON PLAN PERFORMANCE- Any information required under
subsection (a) shall include information concerning the number of external
reviews under section 503 that have been completed during the prior plan year
and the number of such reviews in which a recommendation is made for
modification or reversal of an internal review decision under the plan.
`(f) INFORMATION INCLUDED WITH ADVERSE COVERAGE DECISIONS- A group health
plan shall provide to each participant and beneficiary, together with any
notification of the participant or beneficiary of an adverse coverage
decision, the following information:
`(1) PREAUTHORIZATION AND UTILIZATION REVIEW PROCEDURES- A description
of the basis on which any preauthorization requirement or any utilization
review requirement has resulted in the adverse coverage decision.
`(2) PROCEDURES FOR DETERMINING EXCLUSIONS BASED ON MEDICAL NECESSITY OR
ON INVESTIGATIONAL ITEMS OR EXPERIMENTAL TREATMENTS- If the adverse coverage
decision is based on a determination relating to medical necessity or to an
investigational item or an experimental treatment or technology, a
description of the procedures and medically-based criteria used in such
decision.
`(g) INFORMATION AVAILABLE ON REQUEST-
`(1) ACCESS TO PLAN BENEFIT INFORMATION IN ELECTRONIC FORM-
`(A) IN GENERAL- In addition to the information required to be
provided under section 104(b)(4), a group health plan may, upon written
request (made not more frequently than annually), make available to
participants and beneficiaries, in a generally recognized electronic
format--
`(i) the latest summary plan description, including the latest
summary of material modifications, and
`(ii) the actual plan provisions setting forth the benefits
available under the plan,
to the extent such information relates to the coverage options under
the plan available to the participant or beneficiary. A reasonable charge
may be made to cover the cost of providing such information in such
generally recognized electronic format. The Secretary may by regulation
prescribe a maximum amount which will constitute a reasonable charge under
the preceding sentence.
`(B) ALTERNATIVE ACCESS- The requirements of this paragraph may be met
by making such information generally available (rather than upon request)
on the Internet or on a proprietary computer network in a format which is
readily accessible to participants and beneficiaries.
`(2) ADDITIONAL INFORMATION TO BE PROVIDED ON REQUEST-
`(A) INCLUSION IN SUMMARY PLAN DESCRIPTION OF SUMMARY OF ADDITIONAL
INFORMATION- The information required under subsection (a) includes a
summary description of the types of information required by this
subsection to be made available to participants and beneficiaries on
request.
`(B) INFORMATION REQUIRED FROM PLANS AND ISSUERS ON REQUEST- In
addition to information required to be included in summary plan
descriptions under this subsection, a group health plan shall provide the
following information to a participant or beneficiary on request:
`(i) CARE MANAGEMENT INFORMATION- A description of the circumstances
under which, and the extent to which, the plan has special disease
management programs or programs for persons with disabilities,
indicating whether these programs are voluntary or mandatory and whether
a significant benefit differential results from participation in such
programs.
`(ii) INCLUSION OF DRUGS AND BIOLOGICALS IN FORMULARIES- A statement
of whether a specific drug or biological is included in a formulary used
to determine benefits under the plan and a description of the procedures
for considering requests for any patient-specific waivers.
`(iii) ACCREDITATION STATUS OF HEALTH INSURANCE ISSUERS AND SERVICE
PROVIDERS- A description of the accreditation and licensing status (if
any) of each health insurance issuer offering health insurance coverage
in connection with the plan and of any utilization review organization
utilized by the issuer or the plan, together with the name and address
of the accrediting or licensing authority.
`(iv) QUALITY PERFORMANCE MEASURES- The latest information (if any)
maintained by the plan relating to quality of performance of the
delivery of medical care with respect to coverage options offered under
the plan and of health care professionals and facilities providing
medical care under the plan.
`(C) INFORMATION REQUIRED FROM HEALTH CARE PROFESSIONALS-
`(i) QUALIFICATIONS, PRIVILEGES, AND METHOD OF COMPENSATION- Any
health care professional treating a participant or beneficiary under a
group health plan shall provide to the participant or beneficiary, on
request, a description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and a general
description by category (including salary, fee-for-service, capitation,
and such other categories as may be specified in regulations of the
Secretary) of the applicable method by which such professional is
compensated in connection with the provision of such medical
care.
`(ii) COST OF PROCEDURES- Any health care professional who
recommends an elective procedure or treatment while treating a
participant or beneficiary under a group health plan that requires a
participant or beneficiary to share in the cost of treatment shall
inform such participant or beneficiary of each cost associated with the
procedure or treatment and an estimate of the magnitude of such
costs.
`(D) INFORMATION REQUIRED FROM HEALTH CARE FACILITIES ON REQUEST- Any
health care facility from which a participant or beneficiary has sought
treatment under a group health plan shall provide to the participant or
beneficiary, on request, a description of the facility's corporate form or
other organizational form and all forms of licensing and accreditation
status (if any) assigned to the facility by standard-setting
organizations.
`(h) ACCESS TO INFORMATION RELEVANT TO THE COVERAGE OPTIONS UNDER WHICH
THE PARTICIPANT OR BENEFICIARY IS ELIGIBLE TO ENROLL- In addition to
information otherwise required to be made available under this section, a
group health plan shall, upon written request (made not more frequently than
annually), make available to a participant (and an employee who, under the
terms of the plan, is eligible for coverage but not enrolled) in connection
with a period of enrollment the summary plan description for any coverage
option under the plan under which the participant is eligible to enroll and
any information described in clauses (i), (ii), (iii), (vi), (vii), and (viii)
of subsection (e)(2)(B).
`(i) ADVANCE NOTICE OF CHANGES IN DRUG FORMULARIES- Not later than 30 days
before the effective of date of any exclusion of a specific drug or biological
from any drug formulary under the plan that is used in the treatment of a
chronic illness or disease, the plan shall take such actions as are necessary
to reasonably ensure that plan participants are informed of such exclusion.
The requirements of this subsection may be satisfied--
`(1) by inclusion of information in publications broadly distributed by
plan sponsors, employers, or employee organizations;
`(2) by electronic means of communication (including the Internet or
proprietary computer networks in a format which is readily accessible to
participants);
`(3) by timely informing participants who, under an ongoing program
maintained under the plan, have submitted their names for such notification;
or
`(4) by any other reasonable means of timely informing plan
participants.
`(j) DEFINITIONS AND RELATED RULES-
`(1) IN GENERAL- For purposes of this section--
`(A) GROUP HEALTH PLAN- The term `group health plan' has the meaning
provided such term under section 733(a)(1).
`(B) MEDICAL CARE- The term `medical care' has the meaning provided
such term under section 733(a)(2).
`(C) HEALTH INSURANCE COVERAGE- The term `health insurance coverage'
has the meaning provided such term under section 733(b)(1).
`(D) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has
the meaning provided such term under section 733(b)(2).
`(2) APPLICABILITY ONLY IN CONNECTION WITH INCLUDED GROUP HEALTH PLAN
BENEFITS-
`(A) IN GENERAL- The requirements of this section shall apply only in
connection with included group health plan benefits.
`(B) INCLUDED GROUP HEALTH PLAN BENEFIT- For purposes of subparagraph
(A), the term `included group health plan benefit' means a benefit which
is not an excepted benefit (as defined in section 733(c)).'.
(b) CONFORMING AMENDMENTS-
(1) Section 102(b) of such Act (29 U.S.C. 1022(b)) is amended by
inserting before the period at the end the following: `; and, in the case of
a group health plan (as defined in section 111(i)(1)), the information
required to be included under section 111(a)'.
(2) The table of contents in section 1 of such Act is amended by
striking the item relating to section 111 and inserting the following new
items:
`Sec. 111. Disclosure by group health plans.
`Sec. 112. Repeal and effective date.'.
SEC. 112. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL- The amendments made by this subtitle shall apply with
respect to plan years beginning on or after January 1 of the second calendar
year following the date of the enactment of this Act. The Secretary of Labor
shall first issue all regulations necessary to carry out the amendments made
by this subtitle before such date.
(b) LIMITATION ON ENFORCEMENT ACTIONS- No enforcement action shall be
taken, pursuant to the amendments made by this subtitle, against a group
health plan or health insurance issuer with respect to a violation of a
requirement imposed by such amendments before the date of issuance of final
regulations issued in connection with such requirement, if the plan or issuer
has sought to comply in good faith with such requirement.
Subtitle C--Group Health Plan Review Standards
SEC. 121. SPECIAL RULES FOR GROUP HEALTH PLANS.
(a) IN GENERAL- Section 503 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1133) is amended--
(1) by inserting `(a) IN GENERAL- ' after `SEC. 503.';
(2) by inserting (after and below paragraph (2)) the following new
flush-left sentence:
`This subsection does not apply in the case of included group health plan
benefits (as defined in subsection (b)(10)(S)).'; and
(3) by adding at the end the following new subsection:
`(b) SPECIAL RULES FOR GROUP HEALTH PLANS-
`(1) COVERAGE DETERMINATIONS- Every group health plan shall, in the case
of included group health plan benefits--
`(A) provide adequate notice in writing in accordance with this
subsection to any participant or beneficiary of any adverse coverage
decision with respect to such benefits of such participant or beneficiary
under the plan, setting forth the specific reasons for such coverage
decision and any rights of review provided under the plan, written in a
manner calculated to be understood by the average participant;
`(B) provide such notice in writing also to any treating medical care
provider of such participant or beneficiary, if such provider has claimed
reimbursement for any item or service involved in such coverage decision,
or if a claim submitted by the provider initiated the proceedings leading
to such decision;
`(C) afford a reasonable opportunity to any participant or beneficiary
who is in receipt of the notice of such adverse coverage decision, and who
files a written request for review of the initial coverage decision within
90 days after receipt of the notice of the initial decision, for a full
and fair review of the decision by an appropriate named fiduciary who did
not make the initial decision; and
`(D) meet the additional requirements of this subsection, which shall
apply solely with respect to such benefits.
`(2) Time limits for making initial coverage decisions for benefits and
completing internal appeals-
`(A) TIME LIMITS FOR DECIDING REQUESTS FOR BENEFIT PAYMENTS, REQUESTS
FOR ADVANCE DETERMINATION OF COVERAGE, AND REQUESTS FOR REQUIRED
DETERMINATION OF MEDICAL NECESSITY- Except as provided in subparagraph
(B)--
`(i) INITIAL DECISIONS- If a request for benefit payments, a request
for advance determination of coverage, or a request for required
determination of medical necessity is submitted to a group health plan
in such reasonable form as may be required under the plan, the plan
shall issue in writing an initial coverage decision on the request
before the end of the initial decision period under paragraph (10)(I)
following the filing completion date. Failure to issue a coverage
decision on such a request before the end of the period required under
this clause shall be treated as an adverse coverage decision for
purposes of internal review under clause (ii).
`(ii) INTERNAL REVIEWS OF INITIAL DENIALS- Upon the written request
of a participant or beneficiary for review of an initial adverse
coverage decision under clause (i), a review by an appropriate named
fiduciary (subject to paragraph (3)) of the initial coverage decision
shall be completed, including issuance by the plan of a written decision
affirming, reversing, or modifying the initial coverage decision,
setting forth the grounds for such decision, before the end of the
internal review period following the review filing date. Such decision
shall be treated as the final decision of the plan, subject to any
applicable reconsideration under paragraph (4). Failure to issue before
the end of such period such a written decision requested under this
clause shall be treated as a final decision affirming the initial
coverage decision.
`(B) TIME LIMITS FOR MAKING COVERAGE DECISIONS RELATING TO ACCELERATED
NEED MEDICAL CARE AND FOR COMPLETING INTERNAL APPEALS-
`(i) INITIAL DECISIONS- A group health plan shall issue in writing
an initial coverage decision on any request for expedited advance
determination of coverage or for expedited required determination of
medical necessity submitted, in such reasonable form as may be required
under the plan before the end of the accelerated need decision period
under paragraph (10)(K), in cases involving accelerated need medical
care, following the filing completion date. Failure to approve or deny
such a request before the end of the applicable decision period shall be
treated as a denial of the request for purposes of internal review under
clause (ii).
`(ii) INTERNAL REVIEWS OF INITIAL DENIALS- Upon the written request
of a participant or beneficiary for review of an initial adverse
coverage decision under clause (i), a review by an appropriate named
fiduciary (subject to paragraph (3)) of the initial coverage decision
shall be completed, including issuance by the plan of a written decision
affirming, reversing, or modifying the initial converge decision,
setting forth the grounds for the decision before the end of the
accelerated need decision period under paragraph (10)(K) following the
review filing date. Such decision shall be treated as the final decision
of the plan, subject to any applicable reconsideration under paragraph
(4). Failure to issue before the end of the applicable decision period
such a written decision requested under this clause shall be treated as
a final decision affirming the initial coverage decision.
`(3) PHYSICIANS MUST REVIEW INITIAL COVERAGE DECISIONS INVOLVING MEDICAL
APPROPRIATENESS OR NECESSITY OR INVESTIGATIONAL ITEMS OR EXPERIMENTAL
TREATMENT- If an initial coverage decision under paragraph (2)(A)(i) or
(2)(B)(i) is based on a determination that provision of a particular item or
service is excluded from coverage under the terms of the plan because the
provision of such item or service does not meet the requirements for medical
appropriateness or necessity or would constitute provision of
investigational items or experimental treatment or technology, the review
under paragraph (2)(A)(ii) or (2)(B)(ii), to the extent that it relates to
medical appropriateness or necessity or to investigational items or
experimental treatment or technology, shall be conducted by a physician who
is selected by the plan and who did not make the initial denial.
`(4) ELECTIVE EXTERNAL REVIEW BY INDEPENDENT MEDICAL EXPERT AND
RECONSIDERATION OF INITIAL REVIEW DECISION-
`(A) IN GENERAL- In any case in which a participant or beneficiary,
who has received an adverse coverage decision which is not reversed upon
review conducted pursuant to paragraph (1)(C) (including review under
paragraph (2)(A)(ii) or (2)(B)(ii)) and who has not commenced review of
the coverage decision under section 502, makes a request in writing,
within 30 days after the date of such review decision, for reconsideration
of such review decision, the requirements of subparagraphs (B), (C), (D)
and (E) shall apply in the case of such adverse coverage decision, if the
requirements of clause (i) or (ii) are met, subject to clause
(iii).
`(i) MEDICAL APPROPRIATENESS OR INVESTIGATIONAL ITEM OR EXPERIMENTAL
TREATMENT OR TECHNOLOGY- The requirements of this clause are met if such
coverage decision is based on a determination that provision of a
particular item or service that would otherwise be covered is excluded
from coverage because the provision of such item or
service--
`(I) is not medically appropriate or necessary; or
`(II) would constitute provision of an investigational item or
experimental treatment or technology.
`(ii) EXCLUSION OF ITEM OR SERVICE REQUIRING EVALUATION OF MEDICAL
FACTS OR EVIDENCE- The requirements of this clause are met
if--
`(I) such coverage decision is based on a determination that a
particular item or service is not covered under the terms of the plan
because provision of such item or service is specifically or
categorically excluded from coverage under the terms of the plan,
and
`(II) an independent contract expert finds under subparagraph (C),
in advance of any review of the decision under subparagraph (D), that
such determination primarily requires the evaluation of medical facts
or medical evidence by a health professional.
`(iii) MATTERS SPECIFICALLY NOT SUBJECT TO REVIEW- The requirements
of subparagraphs (B), (C), (D), and (E) shall not apply in the case of
any adverse coverage decision if such decision is based on--
`(I) a determination of eligibility for benefits,
`(II) the application of explicit plan limits on the number, cost,
or duration of any benefit, or
`(III) a limitation on the amount of any benefit payment or a
requirement to make copayments under the terms of the
plan.
Review under this paragraph shall not be available for any coverage
decision that has previously undergone review under this
paragraph.
`(B) LIMITS ON ALLOWABLE ADVANCE PAYMENTS- The review under this
paragraph in connection with an adverse coverage decision shall be
available subject to any requirement of the plan (unless waived by the
plan for financial or other reasons) for payment in advance to the plan by
the participant or beneficiary seeking review of an amount not to exceed
the greater of--
`(i) the lesser of $100 or 10 percent of the cost of the medical
care involved in the decision, or
with such dollar amount subject to compounded annual adjustments in
the same manner and to the same extent as apply under section 215(i) of
the Social Security Act, except that, for any calendar year, such amount
as so adjusted shall be deemed, solely for such calendar year, to be equal
to such amount rounded to the nearest $10. No such payment may be required
in the case of any participant or beneficiary whose enrollment under the
plan is paid for, in whole or in part, under a State plan under title XIX
or XXI of the Social Security Act. Any such advance payment shall be
subject to reimbursement if the recommendation of the independent medical
expert (or panel of such experts) under subparagraph (D)(ii)(IV) is to
reverse or modify the coverage decision.
`(C) REQUEST TO INDEPENDENT CONTRACT EXPERT FOR DETERMINATION OF
WHETHER COVERAGE DECISION REQUIRED EVALUATION OF MEDICAL FACTS OR
EVIDENCE-
`(i) IN GENERAL- In the case of a request for review made by a
participant or beneficiary as described in subparagraph (A), if the
requirements of subparagraph (A)(ii) are met (and review is not
otherwise precluded under subparagraph (A)(iii)), the terms of the plan
shall provide for a procedure for initial review by an independent
contract expert selected in accordance with subparagraph (H) under which
the expert will determine whether the coverage decision requires the
evaluation of medical facts or evidence by a health professional. If the
expert determines that the coverage decision requires such evaluation,
reconsideration of such adverse decision shall proceed under this
paragraph. If the expert determines that the coverage decision does not
require such evaluation, the adverse decision shall remain the final
decision of the plan.
`(ii) INDEPENDENT CONTRACT EXPERTS- For purposes of this
subparagraph, the term `independent contract expert' means a
professional--
`(I) who has appropriate credentials and has attained recognized
expertise in the applicable area of contract
interpretation;
`(II) who was not involved in the initial decision or any earlier
review thereof; and
`(III) who is selected in accordance with subparagraph (H)(i) and
meets the requirements of subparagraph (H)(iii).
`(D) RECONSIDERATION OF INITIAL REVIEW DECISION-
`(i) IN GENERAL- In the case of a request for review made by a
participant or beneficiary as described in subparagraph (A), if the
requirements of subparagraph (A)(i) are met or reconsideration proceeds
under this paragraph pursuant to subparagraph (C), the terms of the plan
shall provide for a procedure for such reconsideration in accordance
with clause (ii).
`(ii) PROCEDURE FOR RECONSIDERATION- The procedure required under
clause (i) shall include the following--
`(I) An independent medical expert (or a panel of such experts, as
determined necessary) will be selected in accordance with subparagraph
(H) to reconsider any coverage decision described in subparagraph (A)
to determine whether such decision was in accordance with the terms of
the plan and this title.
`(II) The record for review (including a specification of the
terms of the plan and other criteria serving as the basis for the
initial review decision) will be presented to such expert (or panel)
and maintained in a manner which will ensure confidentiality of such
record.
`(III) Such expert (or panel) will reconsider the initial review
decision to determine whether such decision was in accordance with the
terms of the plan and this title. The expert (or panel) in its
reconsideration will take into account the medical condition of the
patient, the recommendation of the treating physician, the initial
coverage decision (including the reasons for such decision) and the
decision upon review conducted pursuant to paragraph (1)(C) (including
review under paragraph (2)(A)(ii) or (2)(B)(ii)) , any guidelines
adopted by the plan through a process involving medical practitioners
and peer-reviewed medical literature identified as such under criteria
established by the Food and Drug Administration, and any other valid,
relevant, scientific or clinical evidence the expert (or panel)
determines appropriate for its review.
The expert (or panel) may consult the participant or beneficiary, the
treating physician, the medical director of the plan, or any other party who, in
the opinion of the expert (or panel), may have relevant information for
consideration.
`(E) ISSUANCE OF BINDING FINAL DECISION- Upon completion of the
procedure for review under subparagraph (D), the independent medical
expert (or panel of such experts) shall issue a written decision
affirming, modifying, or reversing the initial review decision, setting
forth the grounds for the decision. Such decision shall be the final
decision of the plan and shall be binding on the plan. Such decision
shall set forth specifically the determination of the expert (or panel)
of the appropriate period for timely compliance by the plan with the
decision. Such decision shall be issued concurrently to the participant
or beneficiary, to the treating physician, and to the plan, shall
constitute conclusive, written authorization for the provision of
benefits under the plan in accordance with the decision, and shall be
treated as terms of the plan for purposes of any action by the
participant or beneficiary under section 502.
`(F) TIME LIMITS FOR RECONSIDERATION- Any review under this paragraph
(including any review under subparagraph (C)) shall be completed before
the end of the reconsideration period (as defined in paragraph (10)(L))
following the review filing date in connection with such review. Failure
to issue a written decision before the end of the reconsideration period
in any reconsideration requested under this paragraph shall be treated as
a final decision affirming the initial review decision of the
plan.
`(G) INDEPENDENT MEDICAL EXPERTS-
`(i) IN GENERAL- For purposes of this paragraph, the term
`independent medical expert' means, in connection with any coverage
decision by a group health plan, a professional--
`(I) who is a physician or, if appropriate, another medical
professional,
`(II) who has appropriate credentials and has attained recognized
expertise in the applicable medical field,
`(III) who was not involved in the initial decision or any earlier
review thereof,
`(IV) who has no history of disciplinary action or sanctions
(including, but not limited to, loss of staff privileges or
participation restriction) taken or pending by any hospital, health
carrier, government, or regulatory body, and
`(V) who is selected in accordance with subparagraph (H)(i) and
meets the requirements of subparagraph (H)(iii).
`(H) SELECTION OF EXPERTS-
`(i) IN GENERAL- An independent contract expert or independent
medical expert (or each member of any panel of independent medical
experts selected under subparagraph (D)(ii)) is selected in accordance
with this clause if--
`(I) the expert is selected by an intermediary which itself meets
the requirements of clauses (ii) and (iii), by means of a method which
ensures that the identity of the expert is not disclosed to the plan,
any health insurance issuer offering health insurance coverage to the
aggrieved participant or beneficiary in connection with the plan, and
the aggrieved participant or beneficiary under the plan, and the
identities of the plan, the issuer, and the aggrieved participant or
beneficiary are not disclosed to the expert;
`(II) the expert is selected by an appropriately credentialed
panel of physicians meeting the requirements of clauses (ii) and (iii)
established by a fully accredited teaching hospital meeting such
requirements;
`(III) the expert is selected by an organization described in
section 1152(1)(A) of the Social Security Act which meets the
requirements of clauses (ii) and (iii);
`(IV) the expert is selected by an external review organization
which meets the requirements of clauses (ii) and (iii) and is
accredited by a private standard-setting organization meeting such
requirements;
`(V) the expert is selected by a State agency which is established
for the purpose of conducting independent external reviews and which
meets the requirements of clauses (ii) and (iii); or
`(VI) the expert is selected, by an intermediary or otherwise, in
a manner that is, under regulations issued pursuant to negotiated
rulemaking, sufficient to ensure the expert's independence, and the
method of selection is devised to reasonably ensure that the expert
selected meets the requirements of clauses (ii) and
(iii).
`(ii) STANDARDS OF PERFORMANCE FOR INTERMEDIARIES- The Secretary
shall prescribe by regulation standards (in addition to the requirements
of clause (iii)) which entities making selections under subclause (I),
(II), (III), (IV), (V), or (VI) of clause (ii) must meet in order to be
eligible for making such selections. Such standards shall include (but
are not limited to)--
`(I) assurance that the entity will carry out specified duties in
the course of exercising the entity's responsibilities under clause
(i)(I),
`(II) assurance that applicable deadlines will be met in the
exercise of such responsibilities, and
`(III) assurance that the entity meets appropriate indicators of
solvency and fiscal integrity.
Each such entity shall provide to the Secretary, in such manner and
at such times as the Secretary may prescribe, information relating the
volume of claims with respect to which the entity has served under this
subparagraph, the types of such claims, and such other information
regarding such claims as the Secretary may determine
appropriate.
`(iii) INDEPENDENCE REQUIREMENTS- An independent contract expert or
independent medical expert or another entity described in clause (i)
meets the independence requirements of this clause if--
`(I) the expert or entity is not affiliated with any related
party;
`(II) any compensation received by such expert or entity in
connection with the external review is reasonable and not contingent
on any decision rendered by the expert or entity;
`(III) under the terms of the plan and any health insurance
coverage offered in connection with the plan, the plan and the issuer
(if any) have no recourse against the expert or entity in connection
with the external review; and
`(IV) the expert or entity does not otherwise have a conflict of
interest with a related party as determined under any regulations
which the Secretary may prescribe.
`(iv) RELATED PARTY- For purposes of clause (i)(I), the term
`related party' means--
`(I) the plan or any health insurance issuer offering health
insurance coverage in connection with the plan (or any officer,
director, or management employee of such plan or
issuer);
`(II) the physician or other medical care provider that provided
the medical care involved in the coverage decision;
`(III) the institution at which the medical care involved in the
coverage decision is provided;
`(IV) the manufacturer of any drug or other item that was included
in the medical 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.
`(v) AFFILIATED- For purposes of clause (ii)(I), the term
`affiliated' means, in connection with any entity, having a familial,
financial, or professional relationship with, or interest in, such
entity.
`(I) MISBEHAVIOR BY EXPERTS- Any action by the expert or experts in
applying for their selection under this paragraph or in the course of
carrying out their duties under this paragraph which
constitutes--
`(i) fraud or intentional misrepresentation by such expert or
experts, or
`(ii) demonstrates failure to adhere to the standards for selection
set forth in subparagraph (H)(iii),
shall be treated as a failure to meet the requirements of this
paragraph and therefore as a cause of action which may be brought by a
fiduciary under section 502(a)(3).
`(J) BENEFIT EXCLUSIONS MAINTAINED- Nothing in this paragraph shall be
construed as providing for or requiring the coverage of items or services
for which benefits are specifically excluded under the group health plan
or any health insurance coverage offered in connection with the
plan.
`(5) PERMITTED ALTERNATIVES TO REQUIRED FORMS OF REVIEW-
`(A) IN GENERAL- In accordance with such regulations (if any) as may
be prescribed by the Secretary for purposes of this paragraph, in the case
of any initial coverage decision or any decision upon review thereof under
paragraph (2)(A)(ii) or (2)(B)(ii), a group health plan may provide an
alternative dispute resolution procedure meeting the requirements of
subparagraph (B) for use in lieu of the procedures set forth under the
preceding provisions of this subsection relating review of such decision.
Such procedure may be provided in one form for all participants and
beneficiaries or in a different form for each group of similarly situated
participants and beneficiaries. Upon voluntary election of such procedure
by the plan and by the aggrieved participant or beneficiary in connection
with the decision, the plan may provide under such procedure (in a manner
consistent with such regulations as the Secretary may prescribe to ensure
equitable procedures) for waiver of the review of the decision under
paragraph (3) or waiver of further review of the decision under paragraph
(4) or section 502 or for election by such parties of an alternative means
of external review (other than review under paragraph (4)).
`(B) REQUIREMENTS- An alternative dispute resolution procedure meets
the requirements of this subparagraph, in connection with any decision,
if--
`(i) such procedure is utilized solely--
`(I) in accordance with the applicable terms of a bona fide
collective bargaining agreement pursuant to which the plan (or the
applicable portion thereof governed by the agreement) is established
or maintained, or
`(II) upon election by both the aggrieved participant or
beneficiary and the plan,
`(ii) the procedure incorporates any otherwise applicable
requirement for review by a physician under paragraph (3), unless waived
by the participant or beneficiary (in
a manner consistent with such regulations as the Secretary may prescribe to
ensure equitable procedures); and
`(iii) the means of resolution of dispute allow for adequate
presentation by each party of scientific and medical evidence supporting
the position of such party.
`(6) REVIEW REQUIREMENTS- In any review of a decision issued under this
subsection--
`(A) the record shall be maintained for purposes of any further review
in accordance with standards which shall be prescribed in regulations of
the Secretary designed to facilitate such further review, and
`(B) any decision upon review which modifies or reverses a decision
below shall specifically set forth a determination that the record upon
review is sufficient to rebut a presumption in favor of the decision
below.
`(7) COMPLIANCE WITH FIDUCIARY STANDARDS- The issuance of a decision
under a plan upon review in good faith compliance with the requirements of
this subsection shall not be treated as a violation of part 4 of subtitle B
of title I of the Employee Retirement Income Security Act of 1974.
`(8) LIMITATION ON APPLICABILITY OF SPECIAL RULES- The preceding
provisions of this subsection shall not apply with respect to employee
benefit plans that are not group health plans or with respect to benefits
that are not included group health plan benefits (as defined in paragraph
(10)(S)).
`(9) GROUP HEALTH PLAN DEFINED- For purposes of this section--
`(A) IN GENERAL- The term `group health plan' shall have the meaning
provided in section 733(a).
`(B) TREATMENT OF PARTNERSHIPS- The provisions of paragraphs (1), (2),
and (3) of section 732(d) shall apply.
`(10) OTHER DEFINITIONS- For purposes of this subsection--
`(A) REQUEST FOR BENEFIT PAYMENTS- The term `request for benefit
payments' means a request, for payment of benefits by a group health plan
for medical care, which is made by, or (if expressly authorized) on behalf
of, a participant or beneficiary after such medical care has been
provided.
`(B) REQUIRED DETERMINATION OF MEDICAL NECESSITY- The term `required
determination of medical necessity' means a determination required under a
group health plan solely that proposed medical care meets, under the facts
and circumstances at the time of the determination, the requirements for
medical appropriateness or necessity (which may be subject to exceptions
under the plan for fraud or misrepresentation), irrespective of whether
the proposed medical care otherwise meets other terms and conditions of
coverage, but only if such determination does not constitute an advance
determination of coverage (as defined in subparagraph (C)).
`(C) ADVANCE DETERMINATION OF COVERAGE- The term `advance
determination of coverage' means a determination under a group health plan
that proposed medical care meets, under the facts and circumstances at the
time of the determination, the plan's terms and conditions of coverage
(which may be subject to exceptions under the plan for fraud or
misrepresentation).
`(D) REQUEST FOR ADVANCE DETERMINATION OF COVERAGE- The term `request
for advance determination of coverage' means a request for an advance
determination of coverage of medical care which is made by, or (if
expressly authorized) on behalf of, a participant or beneficiary before
such medical care is provided.
`(E) REQUEST FOR EXPEDITED ADVANCE DETERMINATION OF COVERAGE- The term
`request for expedited advance determination of coverage' means a request
for advance determination of coverage, in any case in which the proposed
medical care constitutes accelerated need medical care.
`(F) REQUEST FOR REQUIRED DETERMINATION OF MEDICAL NECESSITY- The term
`request for required determination of medical necessity' means a request
for a required determination of medical necessity for medical care which
is made by or on behalf of a participant or beneficiary before the medical
care is provided.
`(G) REQUEST FOR EXPEDITED REQUIRED DETERMINATION OF MEDICAL
NECESSITY- The term `request for expedited required determination of
medical necessity' means a request for required determination of medical
necessity in any case in which the proposed medical care constitutes
accelerated need medical care.
`(H) ACCELERATED NEED MEDICAL CARE- The term `accelerated need medical
care' means medical care in any case in which an appropriate physician has
certified in writing (or as otherwise provided in regulations of the
Secretary) that the participant or beneficiary is stabilized
and--
`(i) that failure to immediately provide the care to the participant
or beneficiary could reasonably be expected to result in--
`(I) placing the health of such participant or beneficiary (or,
with respect to such a participant or beneficiary who is a pregnant
woman, the health of the woman or her unborn child) in serious
jeopardy;
`(II) serious impairment to bodily functions; or
`(III) serious dysfunction of any bodily organ or part;
or
`(ii) that immediate provision of the care is necessary because the
participant or beneficiary has made or is at serious risk of making an
attempt to harm himself or herself or another individual.
`(I) INITIAL DECISION PERIOD- The term `initial decision period' means
a period of 30 days, or such period as may be prescribed in regulations of
the Secretary.
`(J) INTERNAL REVIEW PERIOD- The term `internal review period' means a
period of 30 days, or such period as may be prescribed in regulations of
the Secretary.
`(K) ACCELERATED NEED DECISION PERIOD- The term `accelerated need
decision period' means a period of 3 days, or such period as may be
prescribed in regulations of the Secretary.
`(L) RECONSIDERATION PERIOD- The term `reconsideration period' means a
period of 25 days, or such period as may be prescribed in regulations of
the Secretary, except that, in the case of a decision involving
accelerated need medical care, such term means the accelerated need
decision period.
`(M) FILING COMPLETION DATE- The term `filing completion date' means,
in connection with a group health plan, the date as of which the plan is
in receipt of all information reasonably required (in writing or in such
other reasonable form as may be specified by the plan) to make an initial
coverage decision.
`(N) REVIEW FILING DATE- The term `review filing date' means, in
connection with a group health plan, the date as of which the appropriate
named fiduciary (or the independent medical expert or panel of such
experts in the case of a review under paragraph (4)) is in receipt of all
information reasonably required (in writing or in such other reasonable
form as may be specified by the plan) to make a decision to affirm,
modify, or reverse a coverage decision.
`(O) MEDICAL CARE- The term `medical care' has the meaning provided
such term by section 733(a)(2).
`(P) HEALTH INSURANCE COVERAGE- The term `health insurance coverage'
has the meaning provided such term by section 733(b)(1).
`(Q) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has
the meaning provided such term by section 733(b)(2).
`(R) WRITTEN OR IN WRITING-
`(i) IN GENERAL- A request or decision shall be deemed to be
`written' or `in writing' if such request or decision is presented in a
generally recognized printable or electronic format. The Secretary may
by regulation provide for presentation of information otherwise required
to be in written form in such other forms as may be appropriate under
the circumstances.
`(ii) MEDICAL APPROPRIATENESS OR INVESTIGATIONAL ITEMS OR
EXPERIMENTAL TREATMENT DETERMINATIONS- For purposes of this
subparagraph, in the case of a request for advance determination of
coverage, a request for expedited advance determination of coverage, a
request for required determination of medical necessity, or a request
for expedited required determination of medical necessity, if the
decision on such request is conveyed to the provider of medical care or
to the participant or beneficiary by means of telephonic or other
electronic communications, such decision shall be treated as a written
decision.
`(S) INCLUDED GROUP HEALTH PLAN BENEFIT- The term `included group
health plan benefit' means a benefit under a group health plan which is
not an excepted benefit (as defined in section 733(c)).'.
(1) IN GENERAL- Section 502(c) of such Act (29 U.S.C. 1132(c)) is
amended by redesignating paragraphs (6) and (7) as paragraphs (7) and (8),
respectively, and by inserting after paragraph (5) the following new
paragraph:
`(6)(A)(i) In the case of any failure to timely provide an included group
health plan benefit (as defined in section 503(b)(10)(S)) to a participant or
beneficiary, which occurs after the issuance of, and in violation of, a final
decision rendered upon completion of external review (under section 503(b)(4))
of an adverse coverage decision by the plan relating to such benefit, any
person acting in the capacity of a fiduciary of the plan so as to cause such
failure may, in the court's discretion, be liable to the aggrieved participant
or beneficiary for a civil penalty.
`(ii) Except as provided in clause (iii), such civil penalty shall be in
an amount of up to $1,000 a day from the date that occurs on or after the date
of the issuance of the decision under section 503(b)(4) and upon which the
plan otherwise could have been reasonably expected to commence compliance with
the decision until the date the failure to provide the benefit is
corrected.
`(iii) In any case in which it is proven by clear and convincing evidence
that the person referred to in clause (i) acted willfully and in bad faith,
the daily penalty under clause (ii) shall be increased to an amount of up to
$5,000 a day.
`(iv) In any case in which it is further proven by clear and convincing
evidence that--
`(I) the plan is not in full compliance with the decision of the
independent medical expert (or panel of such experts) under section
503(b)(4)(E)) within the appropriate period specified in such decision,
and
`(II) the failure to be in full compliance was caused by the plan or by
a health insurance issuer offering health insurance coverage in connection
with the plan,
the plan shall pay the cost of all medical care which was not provided by
reason of such failure to fully comply and which is otherwise obtained by the
participant or beneficiary from any provider.
`(B) For purposes of subparagraph (A), the plan, and any health insurance
issuer offering health insurance coverage in connection with the plan, shall
be deemed to be in compliance with any decision of an independent medical
expert (or panel of such experts) under section 503(b)(4) with respect to any
participant or beneficiary upon transmission to such entity (or panel) and to
such participant or beneficiary by the plan or issuer of timely notice of an
authorization of coverage by the plan or issuer which is consistent with such
decision.
`(C) In any action commenced under subsection (a) by a participant or
beneficiary with respect to an included group health plan benefit in which the
plaintiff alleges that a person, in the capacity of a fiduciary and in
violation of the terms of the plan or this title, has taken an action
resulting in an adverse coverage decision in violation of the terms of the
plan, or has failed to take an action for which such person is responsible
under the plan and which is necessary under the plan for a favorable coverage
decision, upon finding in favor of the plaintiff, if such action was commenced
after a final decision of the plan upon review which included a review under
section 503(b)(4) or such action was commenced under subsection (b)(4) of this
section, the court shall cause to be served on the defendant an order
requiring the defendant--
`(i) to cease and desist from the alleged action or failure to act;
and
`(ii) to pay to the plaintiff a reasonable attorney's fee and other
reasonable costs relating to the prosecution of the action on the charges on
which the plaintiff prevails.
The remedies provided under this subparagraph shall be in addition to
remedies otherwise provided under this section.
`(D)(i) The Secretary may assess a civil penalty against a person acting
in the capacity of a fiduciary of one or more group health plans (as defined
in section 503(b)(9)) for--
`(I) any pattern or practice of repeated adverse coverage decisions in
connection with included group health plan benefits in violation of the
terms of the plan or plans or this title; or
`(II) any pattern or practice of repeated violations of the requirements
of section 503 in connection with such benefits.
Such penalty shall be payable only upon proof by clear and convincing
evidence of such pattern or practice.
`(ii) Such penalty shall be in an amount not to exceed the lesser of--
`(I) 5 percent of the aggregate value of benefits shown by the Secretary
to have not been provided, or unlawfully delayed in violation of section
503, under such pattern or practice; or
`(iii) Any person acting in the capacity of a fiduciary of a group health
plan or plans who has engaged in any such pattern or practice in connection
with included group health plan benefits, upon the petition of the Secretary,
may be removed by the court from that position, and from any other
involvement, with respect to such plan or plans, and may be precluded from
returning to any such position or involvement for a period determined by the
court.
`(E) For purposes of this paragraph, the term `included group health plan
benefit' has the meaning provided in section 503(b)(10)(S).
`(F) The preceding provisions of this paragraph shall not apply with
respect to employee benefit plans that are not group health plans or with
respect to benefits that are not included group health plan benefits (as
defined in paragraph (10)(S)).'.
(2) CONFORMING AMENDMENT- Section 502(a)(6) of such Act (29 U.S.C.
1132(a)(6)) is amended by striking `, or (6)' and inserting `, (6), or
(7)'.
(c) EXPEDITED COURT REVIEW- Section 502 of such Act (29 U.S.C. 1132) is
amended--
(1) in subsection (a)(8), by striking `or' at the end;
(2) in subsection (a)(9), by striking the period and inserting `;
or';
(3) by adding at the end of subsection (a) the following new
paragraph:
`(10) by a participant or beneficiary for appropriate relief under
subsection (b)(4).'.
(4) by adding at the end of subsection (b) the following new
paragraph:
`(4) In any case in which exhaustion of administrative remedies in
accordance with paragraph (2)(A)(ii) or (2)(B)(ii) of section 503(b) otherwise
necessary for an action for relief under paragraph (1)(B) or (3) of subsection
(a) has not been obtained and it is demonstrated to the court by means of
certification by an appropriate physician that such exhaustion is not
reasonably attainable under the facts and circumstances without undue risk of
irreparable harm to the health of the participant or beneficiary, a civil
action may be brought by a participant or beneficiary to obtain appropriate
equitable relief. Any determinations made under paragraph (2)(A)(ii) or
(2)(B)(ii) of section 503(b) made while an action under this paragraph is
pending shall be given due consideration by the court in any such action.'.
(d) ATTORNEY'S FEES- Section 502(g) of such Act (29 U.S.C. 1132(g)) is
amended--
(1) in paragraph (1), by striking `paragraph (2)' and inserting
`paragraph (2) or (3))'; and
(2) by adding at the end the following new paragraph:
`(3) In any action under this title by a participant or beneficiary in
connection with an included group health plan benefit (as defined in section
503(b)(10)(S)) in which judgment in favor of the participant or beneficiary is
awarded, the court shall allow a reasonable attorney's fee and costs of action
to the participant or beneficiary.'.
(e) STANDARD OF REVIEW UNAFFECTED- The standard of review under section
502 of the Employee Retirement Income Security Act of 1974 (as amended by this
section) shall continue on and after the date of the enactment of this Act to
be the standard of review which was applicable under such section as of
immediately before such date.
(f) CONCURRENT JURISDICTION- Section 502(e)(1) of such Act (29 U.S.C.
1132(e)(1)) is amended--
(1) in the first sentence, by striking `under subsection (a)(1)(B) of
this section' and inserting `under subsection (a)(1)(A) for relief under
subsection (c)(6), under subsection (a)(1)(B), and under subsection (b)(4)';
and
(2) in the last sentence, by striking `of actions under paragraphs
(1)(B) and (7) of subsection (a) of this section' and inserting `of actions
under paragraph (1)(A) of subsection (a) for relief under subsection (c)(6)
and of actions under paragraphs (1)(B) and (7) of subsection (a) and
paragraph (4) of subsection (b)'.
SEC. 122. SPECIAL RULE FOR ACCESS TO SPECIALTY CARE.
Section 503(b) of such Act (as added by the preceding provisions of this
subtitle) is amended by adding at the end the following new paragraph:
`(11) SPECIAL RULE FOR ACCESS TO SPECIALTY CARE-
`(A) IN GENERAL- In the case of a request for advance determination of
coverage consisting of a request by a physician for a determination of
coverage of the services of a specialist with respect to any condition, if
coverage of the services of such specialist for such condition is
otherwise provided under the plan, the initial coverage decision referred
to in subparagraph (A)(i) or (B)(i) of paragraph (2) shall be issued
within the accelerated need decision period.
`(B) SPECIALIST- For purposes of this paragraph, the term `specialist'
means, with respect to a condition, a physician who has a high level of
expertise through appropriate training and experience (including, in the
case of a patient who is a child, appropriate pediatric expertise) to
treat the condition.'.
SEC. 123. REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND MEDICAL
DEVICES AS EXPERIMENTAL OR INVESTIGATIONAL.
Section 609 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1169) is amended--
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following new
subsection:
`(e) REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND MEDICAL DEVICES
AS EXPERIMENTAL OR INVESTIGATIONAL-
`(1) IN GENERAL- No use of a prescription drug or medical device shall
be considered experimental or investigational in connection with a group
health plan if such use is included in the labeling authorized by the Food
and Drug Administration under section 505, 513, or 515 of the Federal Food,
Drug, and Cosmetic Act or under secton 351 of the Public Health Service Act,
unless clinical benefit has not been adequately demonstrated based on
analysis of reliable authoritative scientific evidence.
`(2) CONSTRUCTION- Nothing in this subsection shall be construed
as--
`(A) requiring a group health plan to provide any coverage of
prescription drugs or medical devices, or
`(B) precluding a group health plan from considering medical devices
cleared through premarket notification under section 510(k) of the Federal
Food, Drug, and Cosmetic Act as investigational.
`(3) DEFINITIONS- For purposes of this subsection--
`(A) The term `group health plan' shall have the meaning provided such
term under such section 733.
`(B) The term `clinical benefit' means improvement in net health
outcome (including but not limited to length of life or ability to
function) or in any objectively measurable criterion that is reasonably
likely to predict clinical benefit to an extent at least equivalent to the
extent that is achievable under the usual conditions of medical practice
under established alternatives.
`(C) The term `reliable authoritative evidence' means well-designed
and well-conducted investigations published in peer-reviewed scientific
journals.'.
SEC. 124. PROTECTION FOR CERTAIN INFORMATION DEVELOPED TO REDUCE MORTALITY
OR MORBIDITY OR FOR IMPROVING PATIENT CARE AND SAFETY.
(a) PROTECTION OF CERTAIN INFORMATION- Notwithstanding any other provision
of Federal or State law, health care response information shall be exempt from
any disclosure requirement (regardless of whether the requirement relates to
subpoenas, discovery, introduction of evidence, testimony, or any other form
of disclosure), in connection with a civil or administrative proceeding under
Federal or State law, to the same extent as information developed by a health
care provider with respect to any of the following:
(3) Quality management or improvement.
(6) Internal review for purposes of reducing mortality, morbidity, or
for improving patient care or safety.
(b) NO WAIVER OF PROTECTION THROUGH INTERACTION WITH ACCREDITING BODY-
Notwithstanding any other provision of Federal or State law, the protection of
health care response information from disclosure provided under subsection (a)
shall not be deemed to be modified or in any way waived by--
(1) the development of such information in connection with a request or
requirement of an accrediting body; or
(2) the transfer of such information to an accrediting body.
(c) DEFINITIONS- For purposes of this section:
(1) The term `accrediting body' means a national, not-for-profit
organization that--
(A) accredits health care providers; and
(B) is recognized as an accrediting body by statute or by a Federal or
State agency that regulates health care providers.
(2) The term `health care provider' has the meaning given such term in
section 1188 of the Social Security Act (as added by section 5001 of this
Act).
(3) The term `health care response information' means information
(including any data, report, record, memorandum, analysis, statement, or
other communication) developed by, or on behalf of, a health care provider
in response to a serious, adverse, patient-related event--
(A) during the course of analyzing or studying the event and its
causes; and
(i) reducing mortality or morbidity; or
(ii) improving patient care or safety (including the provider's
notification to an accrediting body and the provider's plans of action
in response to such event).
(5) The term `State' includes the District of Columbia, Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the Northern Mariana
Islands.
SEC. 125. EFFECTIVE DATE.
(a) IN GENERAL- The amendments made by sections 801 and 802 shall apply
with respect to grievances arising in plan years beginning on or after January
1 of the second calendar year following 12 months after the date the Secretary
of Labor issues all regulations necessary to carry out amendments made by this
title. The amendments made by section 803 shall take effect on such January
1.
(b) LIMITATION ON ENFORCEMENT ACTIONS- No enforcement action shall be
taken, pursuant to the amendments made by this title, against a group health
plan or health insurance issuer with respect to a violation of a requirement
imposed by such amendments before the date of issuance of final regulations
issued in connection with such requirement, if the plan or issuer has sought
to comply in good faith with such requirement.
(c) COLLECTIVE BARGAINING AGREEMENTS- Any plan amendment made pursuant to
a collective bargaining agreement relating to the plan which amends the plan
solely to conform to any requirement added by this title shall not be treated
as a termination of such collective bargaining agreement.
Subtitle D--Small Business Access and Choice for
Entrepreneurs
SEC. 131. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) IN GENERAL- Subtitle B of title I of the Employee Retirement Income
Security Act of 1974 is amended by adding after part 7 the following new
part:
`Part 8--Rules Governing Association Health Plans
`SEC. 801. ASSOCIATION HEALTH PLANS.
`(a) IN GENERAL- For purposes of this part, the term `association health
plan' means a group health plan--
`(1) whose sponsor is (or is deemed under this part to be) described in
subsection (b); and
`(2) under which at least two options of health insurance coverage
offered by a health insurance issuer (which may include, among other
options, managed care options, point of service options, and preferred
provider options) is provided to participants and beneficiaries, unless, for
any plan year, such coverage remains unavailable to the plan despite good
faith efforts exercised by the plan to secure such coverage.
`(b) SPONSORSHIP- The sponsor of a group health plan is described in this
subsection if such sponsor--
`(1) is organized and maintained in good faith, with a constitution and
bylaws specifically stating its purpose and providing for periodic meetings
on at least an annual basis, as a bona fide trade association, a bona fide
industry association (including a rural electric cooperative association or
a rural telephone cooperative association), a bona fide professional
association, or a bona fide chamber of commerce (or similar bona fide
business association, including a corporation or similar organization that
operates on a cooperative basis (within the meaning of section 1381 of the
Internal Revenue Code of 1986)), for substantial purposes other than that of
obtaining or providing medical care;
`(2) is established as a permanent entity which receives the active
support of its members and collects from its members on a periodic basis
dues or payments necessary to maintain eligibility for membership in the
sponsor; and
`(3) does not condition membership, such dues or payments, or coverage
under the plan on the basis of health status-related factors with respect to
the employees of its members (or affiliated members), or the dependents of
such employees, and does not condition such dues or payments on the basis of
group health plan participation.
Any sponsor consisting of an association of entities which meet the
requirements of paragraphs (1), (2), and (3) shall be deemed to be a sponsor
described in this subsection.
`SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
`(a) IN GENERAL- The applicable authority shall prescribe by regulation,
through negotiated rulemaking, a procedure under which, subject to subsection
(b), the applicable authority shall certify association health plans which
apply for certification as meeting the requirements of this part.
`(b) STANDARDS- Under the procedure prescribed pursuant to subsection (a),
in the case of an association health plan that provides at least one benefit
option which does not consist of health insurance coverage, the applicable
authority shall certify such plan as meeting the requirements of this part
only if the applicable authority is satisfied that--
`(1) such certification--
`(A) is administratively feasible;
`(B) is not adverse to the interests of the individuals covered under
the plan; and
`(C) is protective of the rights and benefits of the individuals
covered under the plan; and
`(2) the applicable requirements of this part are met (or, upon the date
on which the plan is to commence operations, will be met) with respect to
the plan.
`(c) REQUIREMENTS APPLICABLE TO CERTIFIED PLANS- An association health
plan with respect to which certification under this part is in effect shall
meet the applicable requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is to commence
operations).
`(d) REQUIREMENTS FOR CONTINUED CERTIFICATION- The applicable authority
may provide by regulation, through negotiated rulemaking, for continued
certification of association health plans under this part.
`(e) CLASS CERTIFICATION FOR FULLY INSURED PLANS- The applicable authority
shall establish a class certification procedure for association health plans
under which all benefits consist of health insurance coverage. Under such
procedure, the applicable authority shall provide for the granting of
certification under this part to the plans in each class of such association
health plans upon appropriate filing under such procedure in connection with
plans in such class and payment of the prescribed fee under section 807(a).
`(f) CERTIFICATION OF SELF-INSURED ASSOCIATION HEALTH PLANS- An
association health plan which offers one or more benefit options which do not
consist of health insurance coverage may be certified under this part only if
such plan consists of any of the following:
`(1) a plan which offered such coverage on the date of the enactment of
the Comprehensive Access and Responsibility in Health Care Act of
1999,
`(2) a plan under which the sponsor does not restrict membership to one
or more trades and businesses or industries and whose eligible participating
employers represent a broad cross-section of trades and businesses or
industries, or
`(3) a plan whose eligible participating employers represent one or more
trades or businesses, or one or more industries, which have been indicated
as having average or above-average health insurance risk or health claims
experience by reason of State rate filings, denials of coverage, proposed
premium rate levels, and other means demonstrated by such plan in accordance
with regulations which the Secretary shall prescribe through negotiated
rulemaking, including (but not limited to) the following: agriculture;
automobile dealerships; barbering and cosmetology; child care; construction;
dance, theatrical, and orchestra productions; disinfecting and pest control;
eating and drinking establishments; fishing; hospitals; labor organizations;
logging; manufacturing (metals); mining; medical and dental practices;
medical laboratories; sanitary services; transportation (local and freight);
and warehousing.
`SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.
`(a) SPONSOR- The requirements of this subsection are met with respect to
an association health plan if the sponsor has met (or is deemed under this
part to have met) the requirements of section 801(b) for a continuous period
of not less than 3 years ending with the date of the application for
certification under this part.
`(b) BOARD OF TRUSTEES- The requirements of this subsection are met with
respect to an association health plan if the following requirements are
met:
`(1) FISCAL CONTROL- The plan is operated, pursuant to a trust
agreement, by a board of trustees which has complete fiscal control over the
plan and which is responsible for all operations of the plan.
`(2) RULES OF OPERATION AND FINANCIAL CONTROLS- The board of trustees
has in effect rules of operation and financial controls, based on a 3-year
plan of operation, adequate to carry out the terms of the plan and to meet
all requirements of this title applicable to the plan.
`(3) RULES GOVERNING RELATIONSHIP TO PARTICIPATING EMPLOYERS AND TO
CONTRACTORS-
`(A) IN GENERAL- Except as provided in subparagraphs (B) and (C), the
members of the board of trustees are individuals selected from individuals
who are the owners, officers, directors, or employees of the participating
employers or who are partners in the participating employers and actively
participate in the business.
`(i) GENERAL RULE- Except as provided in clauses (ii) and (iii), no
such member is an owner, officer, director, or employee of, or partner
in, a contract administrator or other service provider to the
plan.
`(ii) Limited exception for providers of services solely on
behalf
OF THE SPONSOR- Officers or employees of a sponsor which is a service
provider (other than a contract administrator) to the plan may be members of the
board if they constitute not more than 25 percent of the membership of the board
and they do not provide services to the plan other than on behalf of the
sponsor.
`(iii) TREATMENT OF PROVIDERS OF MEDICAL CARE- In the case of a
sponsor which is an association whose membership consists primarily of
providers of medical care, clause (i) shall not apply in the case of any
service provider described in subparagraph (A) who is a provider of
medical care under the plan.
`(C) CERTAIN PLANS EXCLUDED- Subparagraph (A) shall not apply to an
association health plan which is in existence on the date of the enactment
of the Comprehensive Access and Responsibility in Health Care Act of
1999.
`(D) SOLE AUTHORITY- The board has sole authority under the plan to
approve applications for participation in the plan and to contract with a
service provider to administer the day-to-day affairs of the
plan.
`(c) TREATMENT OF FRANCHISE NETWORKS- In the case of a group health plan
which is established and maintained by a franchiser for a franchise network
consisting of its franchisees--
`(1) the requirements of subsection (a) and section 801(a)(1) shall be
deemed met if such requirements would otherwise be met if the franchiser
were deemed to be the sponsor referred to in section 801(b), such network
were deemed to be an association described in section 801(b), and each
franchisee were deemed to be a member (of the association and the sponsor)
referred to in section 801(b); and
`(2) the requirements of section 804(a)(1) shall be deemed met.
The Secretary may by regulation, through negotiated rulemaking, define for
purposes of this subsection the terms `franchiser', `franchise network', and
`franchisee'.
`(d) CERTAIN COLLECTIVELY BARGAINED PLANS-
`(1) IN GENERAL- In the case of a group health plan described in
paragraph (2)--
`(A) the requirements of subsection (a) and section 801(a)(1) shall be
deemed met;
`(B) the joint board of trustees shall be deemed a board of trustees
with respect to which the requirements of subsection (b) are met;
and
`(C) the requirements of section 804 shall be deemed met.
`(2) REQUIREMENTS- A group health plan is described in this paragraph
if--
`(A) the plan is a multiemployer plan; or
`(B) the plan is in existence on April 1, 1997, and would be described
in section 3(40)(A)(i) but solely for the failure to meet the requirements
of section 3(40)(C)(ii).
`SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
`(a) COVERED EMPLOYERS AND INDIVIDUALS- The requirements of this
subsection are met with respect to an association health plan if, under the
terms of the plan--
`(1) each participating employer must be--
`(A) a member of the sponsor,
`(C) an affiliated member of the sponsor with respect to which the
requirements of subsection (b) are met,
except that, in the case of a sponsor which is a professional
association or other individual-based association, if at least one of the
officers, directors, or employees of an employer, or at least one of the
individuals who are partners in an employer and who actively participates in
the business, is a member or such an affiliated member of the sponsor,
participating employers may also include such employer; and
`(2) all individuals commencing coverage under the plan after
certification under this part must be--
`(A) active or retired owners (including self-employed individuals),
officers, directors, or employees of, or partners in, participating
employers; or
`(B) the beneficiaries of individuals described in subparagraph
(A).
`(b) COVERAGE OF PREVIOUSLY UNINSURED EMPLOYEES- In the case of an
association health plan in existence on the date of the enactment of the
Comprehensive Access and Responsibility in Health Care Act of 1999, an
affiliated member of the sponsor of the plan may be offered coverage under the
plan as a participating employer only if--
`(1) the affiliated member was an affiliated member on the date of
certification under this part; or
`(2) during the 12-month period preceding the date of the offering of
such coverage, the affiliated member has not maintained or contributed to a
group health plan with respect to any of its employees who would otherwise
be eligible to participate in such association health plan.
`(c) INDIVIDUAL MARKET UNAFFECTED- The requirements of this subsection are
met with respect to an association health plan if, under the terms of the
plan, no participating employer may provide health insurance coverage in the
individual market for any employee not covered under the plan which is similar
to the coverage contemporaneously provided to employees of the employer under
the plan, if such exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to the employee and such
employee would, but for such exclusion on such basis, be eligible for coverage
under the plan.
`(d) PROHIBITION OF DISCRIMINATION AGAINST EMPLOYERS AND EMPLOYEES
ELIGIBLE TO PARTICIPATE- The requirements of this subsection are met with
respect to an association health plan if--
`(1) under the terms of the plan, all employers meeting the preceding
requirements of this section are eligible to qualify as participating
employers for all geographically available coverage options, unless, in the
case of any such employer, participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service Act are not
met;
`(2) all such coverage options under the plan are actively marketed to
such participating employers; and
`(3) the applicable requirements of sections 701, 702, and 703 are met
with respect to the plan.
`SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION
RATES, AND BENEFIT OPTIONS.
`(a) IN GENERAL- The requirements of this section are met with respect to
an association health plan if the following requirements are met:
`(1) CONTENTS OF GOVERNING INSTRUMENTS- The instruments governing the
plan include a written instrument, meeting the requirements of an instrument
required under section 402(a)(1), which--
`(A) provides that the board of trustees serves as the named fiduciary
required for plans under section 402(a)(1) and serves in the capacity of a
plan administrator (referred to in section 3(16)(A));
`(B) provides that the sponsor of the plan is to serve as plan sponsor
(referred to in section 3(16)(B)); and
`(C) incorporates the requirements of section 806.
`(2) CONTRIBUTION RATES MUST BE NONDISCRIMINATORY-
`(A) The contribution rates for any participating small employer do
not vary on the basis of the claims experience of such employer and do not
vary on the basis of the type of business or industry in which such
employer is engaged.
`(B) Nothing in this title or any other provision of law shall be
construed to preclude an association health plan, or a health insurance
issuer offering health insurance coverage in connection with an
association health plan, from--
`(i) setting contribution rates based on the claims experience of
the plan; or
`(ii) varying contribution rates for small employers in a State to
the extent that such rates could vary using the same methodology
employed in such State for regulating premium rates in the small group
market with respect to health insurance coverage offered in connection
with bona fide associations (within the meaning of section 2791(d)(3) of
the Public Health Service Act),
subject to the requirements of section 702(b) relating to contribution
rates.
`(3) FLOOR FOR NUMBER OF COVERED INDIVIDUALS WITH RESPECT TO CERTAIN
PLANS- If any benefit option under the plan does not consist of health
insurance coverage, the plan has as of the beginning of the plan year not
fewer than 1,000 participants and beneficiaries.
`(4) MARKETING REQUIREMENTS-
`(A) IN GENERAL- If a benefit option which consists of health
insurance coverage is offered under the plan, State-licensed insurance
agents shall be used to distribute to small employers coverage which does
not consist of health insurance coverage in a manner comparable to the
manner in which such agents are used to distribute health insurance
coverage.
`(B) STATE-LICENSED INSURANCE AGENTS- For purposes of subparagraph
(A), the term `State-licensed insurance agents' means one or more agents
who are licensed in a State and are subject to the laws of such State
relating to licensure, qualification, testing, examination, and continuing
education of persons authorized to offer, sell, or solicit health
insurance coverage in such State.
`(5) REGULATORY REQUIREMENTS- Such other requirements as the applicable
authority determines are necessary to carry out the purposes of this part,
which shall be prescribed by the applicable authority by regulation through
negotiated rulemaking.
`(b) ABILITY OF ASSOCIATION HEALTH PLANS TO DESIGN BENEFIT OPTIONS-
Subject to section 514(d), nothing in this part or any provision of State law
(as defined in section 514(c)(1)) shall be construed to preclude an
association health plan, or a health insurance issuer offering health
insurance coverage in connection with an association health plan, from
exercising its sole discretion in selecting the specific items and services
consisting of medical care to be included as benefits under such plan or
coverage, except (subject to section 514) in the case of any law to the extent
that it (1) prohibits an exclusion of a specific disease from such coverage,
or (2) is not preempted under section 731(a)(1) with respect to matters
governed by section 711 or 712.
`SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR PLANS
PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH INSURANCE COVERAGE.
`(a) IN GENERAL- The requirements of this section are met with respect to
an association health plan if--
`(1) the benefits under the plan consist solely of health insurance
coverage; or
`(2) if the plan provides any additional benefit options which do not
consist of health insurance coverage, the plan--
`(A) establishes and maintains reserves with respect to such
additional benefit options, in amounts recommended by the qualified
actuary, consisting of--
`(i) a reserve sufficient for unearned contributions;
`(ii) a reserve sufficient for benefit liabilities which have been
incurred, which have not been satisfied, and for which risk of loss has
not yet been transferred, and for expected administrative costs with
respect to such benefit liabilities;
`(iii) a reserve sufficient for any other obligations of the plan;
and
`(iv) a reserve sufficient for a margin of error and other
fluctuations, taking into account the specific circumstances of the
plan; and
`(B) establishes and maintains aggregate and specific excess/stop loss
insurance and solvency indemnification, with respect to such additional
benefit options for which risk of loss has not yet been transferred, as
follows:
`(i) The plan shall secure aggregate excess/stop loss insurance for
the plan with an attachment point which is not greater than 125 percent
of expected gross annual claims. The applicable authority may by
regulation, through negotiated rulemaking, provide for upward
adjustments in the amount of such percentage in specified circumstances
in which the plan specifically provides for and maintains reserves in
excess of the amounts required under subparagraph (A).
`(ii) The plan shall secure specific excess/stop loss insurance for
the plan with an attachment point which is at least equal to an amount
recommended by the plan's qualified actuary (but not more than
$175,000). The applicable authority may by regulation, through
negotiated rulemaking, provide for adjustments in the amount of such
insurance in specified circumstances in which the plan specifically
provides for and maintains reserves in excess of the amounts required
under subparagraph (A).
`(iii) The plan shall secure indemnification insurance for any
claims which the plan is unable to satisfy by reason of a plan
termination.
Any regulations prescribed by the applicable authority pursuant to clause
(i) or (ii) of subparagraph (B) may allow for such adjustments in the required
levels of excess/stop loss insurance as the qualified actuary may recommend,
taking into account the specific circumstances of the plan.
`(b) MINIMUM SURPLUS IN ADDITION TO CLAIMS RESERVES- In the case of any
association health plan described in subsection (a)(2), the requirements of
this subsection are met if the plan establishes and maintains surplus in an
amount at least equal to--
`(2) such greater amount (but not greater than $2,000,000) as may be set
forth in regulations prescribed by the applicable authority through
negotiated rulemaking, based on the level of aggregate and specific
excess/stop loss insurance provided with respect to such plan.
`(c) ADDITIONAL REQUIREMENTS- In the case of any association health plan
described in subsection (a)(2), the applicable authority may provide such
additional requirements relating to reserves and excess/stop loss insurance as
the applicable authority considers appropriate. Such requirements may be
provided by regulation, through negotiated rulemaking, with respect to any
such plan or any class of such plans.
`(d) ADJUSTMENTS FOR EXCESS/STOP LOSS INSURANCE- The applicable authority
may provide for adjustments to the levels of reserves otherwise required under
subsections (a) and (b) with respect to any plan or class of plans to take
into account excess/stop loss insurance provided with respect to such plan or
plans.
`(e) ALTERNATIVE MEANS OF COMPLIANCE- The applicable authority may permit
an association health plan described in subsection (a)(2) to substitute, for
all or part of the requirements of this section (except subsection
(a)(2)(B)(iii)), such security, guarantee, hold-harmless arrangement, or other
financial arrangement as the applicable authority determines to be adequate to
enable the plan to fully meet all its financial obligations on a timely basis
and is otherwise no less protective of the interests of participants and
beneficiaries than the requirements for which it is substituted. The
applicable authority may take into account, for purposes of this subsection,
evidence provided by the plan or sponsor which demonstrates an assumption of
liability with respect to the plan. Such evidence may be in the form of a
contract of indemnification, lien, bonding, insurance, letter of credit,
recourse under applicable terms of the plan in the form of assessments of
participating employers, security, or other financial arrangement.
`(f) MEASURES TO ENSURE CONTINUED PAYMENT OF BENEFITS BY CERTAIN PLANS IN
DISTRESS-
`(1) PAYMENTS BY CERTAIN PLANS TO ASSOCIATION HEALTH PLAN FUND-
`(A) IN GENERAL- In the case of an association health plan described
in subsection (a)(2), the requirements of this subsection are met if the
plan makes payments into the Association Health Plan Fund under this
subparagraph when they are due. Such payments shall consist of annual
payments in the amount of $5,000, and, in addition to such annual
payments, such supplemental payments as the Secretary may determine to be
necessary under paragraph (2). Payments under this paragraph are payable
to the Fund at the time determined by the Secretary. Initial payments are
due in advance of certification under this part. Payments shall continue
to accrue until a plan's assets are distributed pursuant to a termination
procedure.
`(B) PENALTIES FOR FAILURE TO MAKE PAYMENTS- If any payment is not
made by a plan when it is due, a late payment charge of not more than 100
percent of the payment which was not timely paid shall be payable by the
plan to the Fund.
`(C) CONTINUED DUTY OF THE SECRETARY- The Secretary shall not cease to
carry out the provisions of paragraph (2) on account of the failure of a
plan to pay any payment when due.
`(2) PAYMENTS BY SECRETARY TO CONTINUE EXCESS/STOP LOSS INSURANCE
COVERAGE AND INDEMNIFICATION INSURANCE COVERAGE FOR CERTAIN PLANS- In any
case in which the applicable authority determines that there is, or that
there is reason to believe that there will be: (A) a failure to take
necessary corrective actions under section 809(a) with respect to an
association health plan described in subsection (a)(2); or (B) a termination
of such a plan under section 809(b) or 810(b)(8) (and, if the applicable
authority is not the Secretary, certifies such determination to the
Secretary), the Secretary shall determine the amounts necessary to make
payments to an insurer (designated by the Secretary) to maintain in force
excess/stop loss insurance coverage or indemnification insurance coverage
for such plan, if the Secretary determines that there is a reasonable
expectation that, without such payments, claims would not be satisfied by
reason of termination of such coverage. The Secretary shall, to the extent
provided in advance in appropriation Acts, pay such amounts so determined to
the insurer designated by the Secretary.
`(3) ASSOCIATION HEALTH PLAN FUND-
`(A) IN GENERAL- There is established on the books of the Treasury a
fund to be known as the `Association Health Plan Fund'. The Fund shall be
available for making payments pursuant to paragraph (2). The Fund shall be
credited with payments received pursuant to paragraph (1)(A), penalties
received pursuant to paragraph (1)(B); and earnings on investments of
amounts of the Fund under subparagraph (B).
`(B) INVESTMENT- Whenever the Secretary determines that the moneys of
the fund are in excess of current needs, the Secretary may request the
investment of such amounts as the Secretary determines advisable by the
Secretary of the Treasury in obligations issued or guaranteed by the
United States.
`(g) EXCESS/STOP LOSS INSURANCE- For purposes of this section--
`(1) AGGREGATE EXCESS/STOP LOSS INSURANCE- The term `aggregate
excess/stop loss insurance' means, in connection with an association health
plan, a contract--
`(A) under which an insurer (meeting such minimum standards as the
applicable authority may prescribe by regulation through negotiated
rulemaking) provides for payment to the plan with respect to aggregate
claims under the plan in excess of an amount or amounts specified in such
contract;
`(B) which is guaranteed renewable; and
`(C) which allows for payment of premiums by any third party on behalf
of the insured plan.
`(2) SPECIFIC EXCESS/STOP LOSS INSURANCE- The term `specific excess/stop
loss insurance' means, in connection with an association health plan, a
contract--
`(A) under which an insurer (meeting such minimum standards as the
applicable authority may prescribe by regulation through negotiated
rulemaking) provides for payment to the plan with respect to claims under
the plan in connection with a covered individual in excess of an amount or
amounts specified in such contract in connection with such covered
individual;
`(B) which is guaranteed renewable; and
`(C) which allows for payment of premiums by any third party on behalf
of the insured plan.
`(h) INDEMNIFICATION INSURANCE- For purposes of this section, the term
`indemnification insurance' means, in connection with an association health
plan, a contract--
`(1) under which an insurer (meeting such minimum standards as the
applicable authority may prescribe through negotiated rulemaking) provides
for payment to the plan with respect to claims under the plan which the plan
is unable to satisfy by reason of a termination pursuant to section 809(b)
(relating to mandatory termination);
`(2) which is guaranteed renewable and noncancellable for any reason
(except as the applicable authority may prescribe by regulation through
negotiated rulemaking); and
`(3) which allows for payment of premiums by any third party on behalf
of the insured plan.
`(i) RESERVES- For purposes of this section, the term `reserves' means, in
connection with an association health plan, plan assets which meet the
fiduciary standards under part 4 and such additional requirements regarding
liquidity as the applicable authority may prescribe through negotiated
rulemaking.
`(j) SOLVENCY STANDARDS WORKING GROUP-
`(1) IN GENERAL- Within 90 days after the date of the enactment of the
Comprehensive Access and Responsibility in Health Care Act of 1999, the
applicable authority shall establish a Solvency Standards Working Group. In
prescribing the initial regulations under this section, the applicable
authority shall take into account the recommendations of such Working
Group.
`(2) MEMBERSHIP- The Working Group shall consist of not more than 15
members appointed by the applicable authority. The applicable authority
shall include among persons invited to membership on the Working Group at
least one of each of the following:
`(A) a representative of the National Association of Insurance
Commissioners;
`(B) a representative of the American Academy of Actuaries;
`(C) a representative of the State governments, or their
interests;
`(D) a representative of existing self-insured arrangements, or their
interests;
`(E) a representative of associations of the type referred to in
section 801(b)(1), or their interests; and
`(F) a representative of multiemployer plans that are group health
plans, or their interests.
`SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.
`(a) FILING FEE- Under the procedure prescribed pursuant to section
802(a), an association health plan shall pay to the applicable authority at
the time of filing an application for certification under this part a filing
fee in the amount of $5,000, which shall be available in the case of the
Secretary, to the extent provided in appropriation Acts, for the sole purpose
of administering the certification procedures applicable with respect to
association health plans.
`(b) INFORMATION TO BE INCLUDED IN APPLICATION FOR CERTIFICATION- An
application for certification under this part meets the requirements of this
section only if it includes, in a manner and form which shall be prescribed by
the applicable authority through negotiated rulemaking, at least the following
information:
`(1) IDENTIFYING INFORMATION- The names and addresses of--
`(B) the members of the board of trustees of the plan.
`(2) STATES IN WHICH PLAN INTENDS TO DO BUSINESS- The States in which
participants and beneficiaries under the plan are to be located and the
number of them expected to be located in each such State.
`(3) BONDING REQUIREMENTS- Evidence provided by the board of trustees
that the bonding requirements of section 412 will be met as of the date of
the application or (if later) commencement of operations.
`(4) PLAN DOCUMENTS- A copy of the documents governing the plan
(including any bylaws and trust agreements), the summary plan description,
and other material describing the benefits that will be provided to
participants and beneficiaries under the plan.
`(5) AGREEMENTS WITH SERVICE PROVIDERS- A copy of any agreements between
the plan and contract administrators and other service providers.
`(6) FUNDING REPORT- In the case of association health plans providing
benefits options in addition to health insurance coverage, a report setting
forth information with respect to such additional benefit options determined
as of a date within the 120-day period ending with the date of the
application, including the following:
`(A) RESERVES- A statement, certified by the board of trustees of the
plan, and a statement of actuarial opinion, signed by a qualified actuary,
that all applicable requirements of section 806 are or will be met in
accordance with regulations which the applicable authority shall prescribe
through negotiated rulemaking.
`(B) ADEQUACY OF CONTRIBUTION RATES- A statement of actuarial opinion,
signed by a qualified actuary, which sets forth a description of the
extent to which contribution rates are adequate to provide for the payment
of all obligations and the maintenance of required reserves under the plan
for the 12-month period beginning with such date within such 120-day
period, taking into account the expected coverage and experience of the
plan. If the contribution rates are not fully adequate, the statement of
actuarial opinion shall indicate the extent to which the rates are
inadequate and the changes needed to ensure adequacy.
`(C) CURRENT AND PROJECTED VALUE OF ASSETS AND LIABILITIES- A
statement of actuarial opinion signed by a qualified actuary, which sets
forth the current value of the assets and liabilities accumulated under
the plan and a projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in subparagraph (B). The
income statement shall identify separately the plan's administrative
expenses and claims.
`(D) COSTS OF COVERAGE TO BE CHARGED AND OTHER EXPENSES- A statement
of the costs of coverage to be charged, including an itemization of
amounts for administration, reserves, and other expenses associated with
the operation of the plan.
`(E) OTHER INFORMATION- Any other information as may be determined by
the applicable authority, by regulation through negotiated rulemaking, as
necessary to carry out the purposes of this part.
`(c) FILING NOTICE OF CERTIFICATION WITH STATES- A certification granted
under this part to an
association health plan shall not be effective unless written notice of such
certification is filed with the applicable State authority of each State in
which at least 25 percent of the participants and beneficiaries under the plan
are located. For purposes of this subsection, an individual shall be considered
to be located in the State in which a known address of such individual is
located or in which such individual is employed.
`(d) NOTICE OF MATERIAL CHANGES- In the case of any association health
plan certified under this part, descriptions of material changes in any
information which was required to be submitted with the application for the
certification under this part shall be filed in such form and manner as shall
be prescribed by the applicable authority by regulation through negotiated
rulemaking. The applicable authority may require by regulation, through
negotiated rulemaking, prior notice of material changes with respect to
specified matters which might serve as the basis for suspension or revocation
of the certification.
`(e) REPORTING REQUIREMENTS FOR CERTAIN ASSOCIATION HEALTH PLANS- An
association health plan certified under this part which provides benefit
options in addition to health insurance coverage for such plan year shall meet
the requirements of section 103 by filing an annual report under such section
which shall include information described in subsection (b)(6) with respect to
the plan year and, notwithstanding section 104(a)(1)(A), shall be filed with
the applicable authority not later than 90 days after the close of the plan
year (or on such later date as may be prescribed by the applicable authority).
The applicable authority may require by regulation through negotiated
rulemaking such interim reports as it considers appropriate.
`(f) ENGAGEMENT OF QUALIFIED ACTUARY- The board of trustees of each
association health plan which provides benefits options in addition to health
insurance coverage and which is applying for certification under this part or
is certified under this part shall engage, on behalf of all participants and
beneficiaries, a qualified actuary who shall be responsible for the
preparation of the materials comprising information necessary to be submitted
by a qualified actuary under this part. The qualified actuary shall utilize
such assumptions and techniques as are necessary to enable such actuary to
form an opinion as to whether the contents of the matters reported under this
part--
`(1) are in the aggregate reasonably related to the experience of the
plan and to reasonable expectations; and
`(2) represent such actuary's best estimate of anticipated experience
under the plan.
The opinion by the qualified actuary shall be made with respect to, and
shall be made a part of, the annual report.
`SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
`Except as provided in section 809(b), an association health plan which is
or has been certified under this part may terminate (upon or at any time after
cessation of accruals in benefit liabilities) only if the board of
trustees--
`(1) not less than 60 days before the proposed termination date,
provides to the participants and beneficiaries a written notice of intent to
terminate stating that such termination is intended and the proposed
termination date;
`(2) develops a plan for winding up the affairs of the plan in
connection with such termination in a manner which will result in timely
payment of all benefits for which the plan is obligated; and
`(3) submits such plan in writing to the applicable authority.
Actions required under this section shall be taken in such form and manner
as may be prescribed by the applicable authority by regulation through
negotiated rulemaking.
`SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.
`(a) ACTIONS TO AVOID DEPLETION OF RESERVES- An association health plan
which is certified under this part and which provides benefits other than
health insurance coverage shall continue to meet the requirements of section
806, irrespective of whether such certification continues in effect. The board
of trustees of such plan shall determine quarterly whether the requirements of
section 806 are met. In any case in which the board determines that there is
reason to believe that there is or will be a failure to meet such
requirements, or the applicable authority makes such a determination and so
notifies the board, the board shall immediately notify the qualified actuary
engaged by the plan, and such actuary shall, not later than the end of the
next following month, make such recommendations to the board for corrective
action as the actuary determines necessary to ensure compliance with section
806. Not later than 30 days after receiving from the actuary recommendations
for corrective actions, the board shall notify the applicable authority (in
such form and manner as the applicable authority may prescribe by regulation
through negotiated rulemaking) of such recommendations of the actuary for
corrective action, together with a description of the actions (if any) that
the board has taken or plans to take in response to such recommendations. The
board shall thereafter report to the applicable authority, in such form and
frequency as the applicable authority may specify to the board, regarding
corrective action taken by the board until the requirements of section 806 are
met.
`(b) MANDATORY TERMINATION- In any case in which--
`(1) the applicable authority has been notified under subsection (a) of
a failure of an association health plan which is or has been certified under
this part and is described in section 806(a)(2) to meet the requirements of
section 806 and has not been notified by the board of trustees of the plan
that corrective action has restored compliance with such requirements;
and
`(2) the applicable authority determines that there is a reasonable
expectation that the plan will continue to fail to meet the requirements of
section 806,
the board of trustees of the plan shall, at the direction of the
applicable authority, terminate the plan and, in the course of the
termination, take such actions as the applicable authority may require,
including satisfying any claims referred to in section 806(a)(2)(B)(iii) and
recovering for the plan any liability under subsection
(a)(2)(B)(iii) or (e) of section 806, as necessary to ensure that the affairs
of the plan will be, to the maximum extent possible, wound up in a manner which
will result in timely provision of all benefits for which the plan is obligated.
`SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION HEALTH
PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH INSURANCE COVERAGE.
`(a) APPOINTMENT OF SECRETARY AS TRUSTEE FOR INSOLVENT PLANS- Whenever the
Secretary determines that an association health plan which is or has been
certified under this part and which is described in section 806(a)(2) will be
unable to provide benefits when due or is otherwise in a financially hazardous
condition, as shall be defined by the Secretary by regulation through
negotiated rulemaking, the Secretary shall, upon notice to the plan, apply to
the appropriate United States district court for appointment of the Secretary
as trustee to administer the plan for the duration of the insolvency. The plan
may appear as a party and other interested persons may intervene in the
proceedings at the discretion of the court. The court shall appoint such
Secretary trustee if the court determines that the trusteeship is necessary to
protect the interests of the participants and beneficiaries or providers of
medical care or to avoid any unreasonable deterioration of the financial
condition of the plan. The trusteeship of such Secretary shall continue until
the conditions described in the first sentence of this subsection are remedied
or the plan is terminated.
`(b) POWERS AS TRUSTEE- The Secretary, upon appointment as trustee under
subsection (a), shall have the power--
`(1) to do any act authorized by the plan, this title, or other
applicable provisions of law to be done by the plan administrator or any
trustee of the plan;
`(2) to require the transfer of all (or any part) of the assets and
records of the plan to the Secretary as trustee;
`(3) to invest any assets of the plan which the Secretary holds in
accordance with the provisions of the plan, regulations prescribed by the
Secretary through negotiated rulemaking, and applicable provisions of
law;
`(4) to require the sponsor, the plan administrator, any participating
employer, and any employee organization representing plan participants to
furnish any information with respect to the plan which the Secretary as
trustee may reasonably need in order to administer the plan;
`(5) to collect for the plan any amounts due the plan and to recover
reasonable expenses of the trusteeship;
`(6) to commence, prosecute, or defend on behalf of the plan any suit or
proceeding involving the plan;
`(7) to issue, publish, or file such notices, statements, and reports as
may be required by the Secretary by regulation through negotiated rulemaking
or required by any order of the court;
`(8) to terminate the plan (or provide for its termination accordance
with section 809(b)) and liquidate the plan assets, to restore the plan to
the responsibility of the sponsor, or to continue the trusteeship;
`(9) to provide for the enrollment of plan participants and
beneficiaries under appropriate coverage options; and
`(10) to do such other acts as may be necessary to comply with this
title or any order of the court and to protect the interests of plan
participants and beneficiaries and providers of medical care.
`(c) NOTICE OF APPOINTMENT- As soon as practicable after the Secretary's
appointment as trustee, the Secretary shall give notice of such appointment
to--
`(1) the sponsor and plan administrator;
`(3) each participating employer; and
`(4) if applicable, each employee organization which, for purposes of
collective bargaining, represents plan participants.
`(d) ADDITIONAL DUTIES- Except to the extent inconsistent with the
provisions of this title, or as may be otherwise ordered by the court, the
Secretary, upon appointment as trustee under this section, shall be subject to
the same duties as those of a trustee under section 704 of title 11, United
States Code, and shall have the duties of a fiduciary for purposes of this
title.
`(e) OTHER PROCEEDINGS- An application by the Secretary under this
subsection may be filed notwithstanding the pendency in the same or any other
court of any bankruptcy, mortgage foreclosure, or equity receivership
proceeding, or any proceeding to reorganize, conserve, or liquidate such plan
or its property, or any proceeding to enforce a lien against property of the
plan.
`(f) JURISDICTION OF COURT-
`(1) IN GENERAL- Upon the filing of an application for the appointment
as trustee or the issuance of a decree under this section, the court to
which the application is made shall have exclusive jurisdiction of the plan
involved and its property wherever located with the powers, to the extent
consistent with the purposes of this section, of a court of the United
States having jurisdiction over cases under chapter 11 of title 11, United
States Code. Pending an adjudication under this section such court shall
stay, and upon appointment by it of the Secretary as trustee, such court
shall continue the stay of, any pending mortgage foreclosure, equity
receivership, or other proceeding to reorganize, conserve, or liquidate the
plan, the sponsor, or property of such plan or sponsor, and any other suit
against any receiver, conservator, or trustee of the plan, the sponsor, or
property of the plan or sponsor. Pending such adjudication and upon the
appointment by it of the Secretary as trustee, the court may stay any
proceeding to enforce a lien against property of the plan or the sponsor or
any other suit against the plan or the sponsor.
`(2) VENUE- An action under this section may be brought in the judicial
district where the
sponsor or the plan administrator resides or does business or where any asset
of the plan is situated. A district court in which such action is brought may
issue process with respect to such action in any other judicial district.
`(g) PERSONNEL- In accordance with regulations which shall be prescribed
by the Secretary through negotiated rulemaking, the Secretary shall appoint,
retain, and compensate accountants, actuaries, and other professional service
personnel as may be necessary in connection with the Secretary's service as
trustee under this section.
`SEC. 811. STATE ASSESSMENT AUTHORITY.
`(a) IN GENERAL- Notwithstanding section 514, a State may impose by law a
contribution tax on an association health plan described in section 806(a)(2),
if the plan commenced operations in such State after the date of the enactment
of the Comprehensive Access and Responsibility in Health Care Act of 1999.
`(b) CONTRIBUTION TAX- For purposes of this section, the term
`contribution tax' imposed by a State on an association health plan means any
tax imposed by such State if--
`(1) such tax is computed by applying a rate to the amount of premiums
or contributions, with respect to individuals covered under the plan who are
residents of such State, which are received by the plan from participating
employers located in such State or from such individuals;
`(2) the rate of such tax does not exceed the rate of any tax imposed by
such State on premiums or contributions received by insurers or health
maintenance organizations for health insurance coverage offered in such
State in connection with a group health plan;
`(3) such tax is otherwise nondiscriminatory; and
`(4) the amount of any such tax assessed on the plan is reduced by the
amount of any tax or assessment otherwise imposed by the State on premiums,
contributions, or both received by insurers or health maintenance
organizations for health insurance coverage, aggregate excess/stop loss
insurance (as defined in section 806(g)(1)), specific excess/stop loss
insurance (as defined in section 806(g)(2)), other insurance related to the
provision of medical care under the plan, or any combination thereof
provided by such insurers or health maintenance organizations in such State
in connection with such plan.
`SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.
`(a) DEFINITIONS- For purposes of this part--
`(1) GROUP HEALTH PLAN- The term `group health plan' has the meaning
provided in section 733(a)(1) (after applying subsection (b) of this
section).
`(2) MEDICAL CARE- The term `medical care' has the meaning provided in
section 733(a)(2).
`(3) HEALTH INSURANCE COVERAGE- The term `health insurance coverage' has
the meaning provided in section 733(b)(1).
`(4) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has the
meaning provided in section 733(b)(2).
`(5) APPLICABLE AUTHORITY-
`(A) IN GENERAL- Except as provided in subparagraph (B), the term
`applicable authority' means, in connection with an association health
plan--
`(i) the State recognized pursuant to subsection (c) of section 506
as the State to which authority has been delegated in connection with
such plan; or
`(ii) if there if no State referred to in clause (i), the
Secretary.
`(i) JOINT AUTHORITIES- Where such term appears in section 808(3),
section 807(e) (in the first instance), section 809(a) (in the second
instance), section 809(a) (in the fourth instance), and section
809(b)(1), such term means, in connection with an association health
plan, the Secretary and the State referred to in subparagraph (A)(i) (if
any) in connection with such plan.
`(ii) REGULATORY AUTHORITIES- Where such term appears in section
802(a) (in the first instance), section 802(d), section 802(e), section
803(d), section 805(a)(5), section 806(a)(2), section 806(b), section
806(c), section 806(d), paragraphs (1)(A) and (2)(A) of section 806(g),
section 806(h), section 806(i), section 806(j), section 807(a) (in the
second instance), section 807(b), section 807(d), section 807(e) (in the
second instance), section 808 (in the matter after paragraph (3)), and
section 809(a) (in the third instance), such term means, in connection
with an association health plan, the Secretary.
`(6) HEALTH STATUS-RELATED FACTOR- The term `health status-related
factor' has the meaning provided in section 733(d)(2).
`(A) IN GENERAL- The term `individual market' means the market for
health insurance coverage offered to individuals other than in connection
with a group health plan.
`(B) TREATMENT OF VERY SMALL GROUPS-
`(i) IN GENERAL- Subject to clause (ii), such term includes coverage
offered in connection with a group health plan that has fewer than 2
participants as current employees or participants described in section
732(d)(3) on the first day of the plan year.
`(ii) STATE EXCEPTION- Clause (i) shall not apply in the case of
health insurance coverage offered in a State if such State regulates the
coverage described in such clause in the same manner and to the same
extent as coverage in the small group
market (as defined in section 2791(e)(5) of the Public Health Service Act) is
regulated by such State.
`(8) PARTICIPATING EMPLOYER- The term `participating employer' means, in
connection with an association health plan, any employer, if any individual
who is an employee of such employer, a partner in such employer, or a
self-employed individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was covered under
such plan in connection with the status of such individual as such an
employee, partner, or self-employed individual in relation to the
plan.
`(9) APPLICABLE STATE AUTHORITY- The term `applicable State authority'
means, with respect to a health insurance issuer in a State, the State
insurance commissioner or official or officials designated by the State to
enforce the requirements of title XXVII of the Public Health Service Act for
the State involved with respect to such issuer.
`(10) QUALIFIED ACTUARY- The term `qualified actuary' means an
individual who is a member of the American Academy of Actuaries or meets
such reasonable standards and qualifications as the Secretary may provide by
regulation through negotiated rulemaking.
`(11) AFFILIATED MEMBER- The term `affiliated member' means, in
connection with a sponsor--
`(A) a person who is otherwise eligible to be a member of the sponsor
but who elects an affiliated status with the sponsor,
`(B) in the case of a sponsor with members which consist of
associations, a person who is a member of any such association and elects
an affiliated status with the sponsor, or
`(C) in the case of an association health plan in existence on the
date of the enactment of the Comprehensive Access and Responsibility in
Health Care Act of 1999, a person eligible to be a member of the sponsor
or one of its member associations.
`(12) LARGE EMPLOYER- The term `large employer' means, in connection
with a group health plan with respect to a plan year, an employer who
employed an average of at least 51 employees on business days during the
preceding calendar year and who employs at least 2 employees on the first
day of the plan year.
`(13) SMALL EMPLOYER- The term `small employer' means, in connection
with a group health plan with respect to a plan year, an employer who is not
a large employer.
`(b) RULES OF CONSTRUCTION-
`(1) EMPLOYERS AND EMPLOYEES- For purposes of determining whether a
plan, fund, or program is an employee welfare benefit plan which is an
association health plan, and for purposes of applying this title in
connection with such plan, fund, or program so determined to be such an
employee welfare benefit plan--
`(A) in the case of a partnership, the term `employer' (as defined in
section (3)(5)) includes the partnership in relation to the partners, and
the term `employee' (as defined in section (3)(6)) includes any partner in
relation to the partnership; and
`(B) in the case of a self-employed individual, the term `employer'
(as defined in section 3(5)) and the term `employee' (as defined in
section 3(6)) shall include such individual.
`(2) PLANS, FUNDS, AND PROGRAMS TREATED AS EMPLOYEE WELFARE BENEFIT
PLANS- In the case of any plan, fund, or program which was established or is
maintained for the purpose of providing medical care (through the purchase
of insurance or otherwise) for employees (or their dependents) covered
thereunder and which demonstrates to the Secretary that all requirements for
certification under this part would be met with respect to such plan, fund,
or program if such plan, fund, or program were a group health plan, such
plan, fund, or program shall be treated for purposes of this title as an
employee welfare benefit plan on and after the date of such
demonstration.
`(c) APPLICABILITY ONLY WITH RESPECT TO INCLUDED GROUP HEALTH PLAN
BENEFITS-
`(1) IN GENERAL- The requirements for certification under this part in
the case of any association health plan shall apply only in connection with
included group health plan benefits provided under such plan.
`(2) INCLUDED GROUP HEALTH PLAN BENEFITS- For purposes of paragraph (1),
the term `included group health plan benefit' means a benefit which is not
an excepted benefit (as defined in section 733(c)).'.
(b) CONFORMING AMENDMENTS TO PREEMPTION RULES-
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is amended by
adding at the end the following new subparagraph:
`(E) The preceding subparagraphs of this paragraph do not apply with
respect to any State law in the case of an association health plan which is
certified under part 8.'.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking `Subsection (a)' and inserting
`Subsections (a) and (d)';
(B) in subsection (b)(5), by striking `subsection (a)' in subparagraph
(A) and inserting `subsection (a) of this section and subsections
(a)(2)(B) and (b) of section 805', and by striking `subsection (a)' in
subparagraph (B) and inserting `subsection (a) of this section or
subsection (a)(2)(B) or (b) of section 805';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:
`(d)(1) Except as provided in subsection (b)(4), the provisions of this
title shall supersede any and all State
laws insofar as they may now or hereafter preclude, or have the effect of
precluding, a health insurance issuer from offering health insurance coverage in
connection with an association health plan which is certified under part 8.
`(2) Except as provided in paragraphs (4) and (5) of subsection (b) of
this section--
`(A) In any case in which health insurance coverage of any policy type
is offered under an association health plan certified under part 8 to a
participating employer operating in such State, the provisions of this title
shall supersede any and all laws of such State insofar as they may preclude
a health insurance issuer from offering health insurance coverage of the
same policy type to other employers operating in the State which are
eligible for coverage under such association health plan, whether or not
such other employers are participating employers in such plan.
`(B) In any case in which health insurance coverage of any policy type
is offered under an association health plan in a State and the filing, with
the applicable State authority, of the policy form in connection with such
policy type is approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in which health
insurance coverage of such type is offered, insofar as they may preclude,
upon the filing in the same form and manner of such policy form with the
applicable State authority in such other State, the approval of the filing
in such other State.
`(3) For additional provisions relating to association health plans, see
subsections (a)(2)(B) and (b) of section 805.
`(4) For purposes of this subsection, the term `association health plan'
has the meaning provided in section 801(a), and the terms `health insurance
coverage', `participating employer', and `health insurance issuer' have the
meanings provided such terms in section 811, respectively.'.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C. 1144(b)(6)(A)) is
amended--
(A) in clause (i)(II), by striking `and' at the end;
(B) in clause (ii), by inserting `and which does not provide medical
care (within the meaning of section 733(a)(2)),' after `arrangement,', and
by striking `title.' and inserting `title, and'; and
(C) by adding at the end the following new clause:
`(iii) subject to subparagraph (E), in the case of any other employee
welfare benefit plan which is a multiple employer welfare arrangement and
which provides medical care (within the meaning of section 733(a)(2)), any
law of any State which regulates insurance may apply.'.
(4) Section 514(e) of such Act (as redesignated by paragraph (2)(C)) is
amended--
(A) by striking `Nothing' and inserting `(1) Except as provided in
paragraph (2), nothing'; and
(B) by adding at the end the following new paragraph:
`(2) Nothing in any other provision of law enacted on or after the date of
the enactment of the Comprehensive Access and Responsibility in Health Care
Act of 1999 shall be construed to alter, amend, modify, invalidate, impair, or
supersede any provision of this title, except by specific cross-reference to
the affected section.'.
(c) PLAN SPONSOR- Section 3(16)(B) of such Act (29 U.S.C. 102(16)(B)) is
amended by adding at the end the following new sentence: `Such term also
includes a person serving as the sponsor of an association health plan under
part 8.'.
(d) DISCLOSURE OF SOLVENCY PROTECTIONS RELATED TO SELF-INSURED AND FULLY
INSURED OPTIONS UNDER ASSOCIATION HEALTH PLANS- Section 102(b) of such Act (29
U.S.C. 102(b)) is amended by adding at the end the following: `An association
health plan shall include in its summary plan description, in connection with
each benefit option, a description of the form of solvency or guarantee fund
protection secured pursuant to this Act or applicable State law, if any.'.
(e) SAVINGS CLAUSE- Section 731(c) of such Act is amended by inserting `or
part 8' after `this part'.
(f) REPORT TO THE CONGRESS REGARDING CERTIFICATION OF SELF-INSURED
ASSOCIATION HEALTH PLANS- Not later than January 1, 2004, the Secretary of
Labor shall report to the Committee on Education and the Workforce of the
House of Representatives and the Committee on Health, Education, Labor, and
Pensions of the Senate the effect association health plans have had, if any,
on reducing the number of uninsured individuals.
(g) 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 734 the following new items:
`Part 8--Rules Governing Association Health Plans
`Sec. 801. Association health plans.
`Sec. 802. Certification of association health plans.
`Sec. 803. Requirements relating to sponsors and boards of
trustees.
`Sec. 804. Participation and coverage requirements.
`Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
`Sec. 806. Maintenance of reserves and provisions for solvency for plans
providing health benefits in addition to health insurance coverage.
`Sec. 807. Requirements for application and related requirements.
`Sec. 808. Notice requirements for voluntary termination.
`Sec. 809. Corrective actions and mandatory termination.
`Sec. 810. Trusteeship by the Secretary of insolvent association health
plans providing health benefits in addition to health insurance
coverage.
`Sec. 811. State assessment authority.
`Sec. 812. Definitions and rules of construction.'.
SEC. 132. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting `for any plan year of any such plan, or
any fiscal year of any such other arrangement;' after `single employer', and
by inserting `during such year or at any time during the preceding 1-year
period' after `control group';
(A) by striking `common control shall not be based on an interest of
less than 25 percent' and inserting `an interest of greater than 25
percent may not be required as the minimum interest necessary for common
control'; and
(B) by striking `similar to' and inserting `consistent and coextensive
with';
(3) by redesignating clauses (iv) and (v) as clauses (v) and (vi),
respectively; and
(4) by inserting after clause (iii) the following new clause:
`(iv) in determining, after the application of clause (i), whether
benefits are provided to employees of two or more employers, the arrangement
shall be treated as having only one participating employer if, after the
application of clause (i), the number of individuals who are employees and
former employees of any one participating employer and who are covered under
the arrangement is greater than 75 percent of the aggregate number of all
individuals who are employees or former employees of participating employers
and who are covered under the arrangement;'.
SEC. 133. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY BARGAINED
ARRANGEMENTS.
(a) IN GENERAL- Section 3(40)(A)(i) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(40)(A)(i)) is amended to read as
follows:
`(i)(I) under or pursuant to one or more collective bargaining
agreements which are reached pursuant to collective bargaining described in
section 8(d) of the National Labor Relations Act (29 U.S.C. 158(d)) or
paragraph Fourth of section 2 of the Railway Labor Act (45 U.S.C. 152,
paragraph Fourth) or which are reached pursuant to labor-management
negotiations under similar provisions of State public employee relations
laws, and (II) in accordance with subparagraphs (C), (D), and (E);'.
(b) LIMITATIONS- Section 3(40) of such Act (29 U.S.C. 1002(40)) is amended
by adding at the end the following new subparagraphs:
`(C) For purposes of subparagraph (A)(i)(II), a plan or other arrangement
shall be treated as established or maintained in accordance with this
subparagraph only if the following requirements are met:
`(i) The plan or other arrangement, and the employee organization or any
other entity sponsoring the plan or other arrangement, do not--
`(I) utilize the services of any licensed insurance agent or broker
for soliciting or enrolling employers or individuals as participating
employers or covered individuals under the plan or other arrangement;
or
`(II) pay any type of compensation to a person, other than a full time
employee of the employee organization (or a member of the organization to
the extent provided in regulations prescribed by the Secretary through
negotiated rulemaking), that is related either to the volume or number of
employers or individuals solicited or enrolled as participating employers
or covered individuals under the plan or other arrangement, or to the
dollar amount or size of the contributions made by participating employers
or covered individuals to the plan or other arrangement;
except to the extent that the services used by the plan, arrangement,
organization, or other entity consist solely of preparation of documents
necessary for compliance with the reporting and disclosure requirements of
part 1 or administrative, investment, or consulting services unrelated to
solicitation or enrollment of covered individuals.
`(ii) As of the end of the preceding plan year, the number of covered
individuals under the plan or other arrangement who are neither--
`(I) employed within a bargaining unit covered by any of the
collective bargaining agreements with a participating employer (nor
covered on the basis of an individual's employment in such a bargaining
unit); nor
`(II) present employees (or former employees who were covered while
employed) of the sponsoring employee organization, of an employer who is
or was a party to any of the collective bargaining agreements, or of the
plan or other arrangement or a related plan or arrangement (nor covered on
the basis of such present or former employment);
does not exceed 15 percent of the total number of individuals who are
covered under the plan or arrangement and who are present or former
employees who are or were covered under the plan or arrangement pursuant to
a collective bargaining agreement with a participating employer. The
requirements of the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such covered
individuals are comprised solely of individuals who were covered individuals
under the plan or other arrangement as of the date of the enactment of the
Comprehensive Access and Responsibility in Health Care Act of 1999 and, as
of the end of the preceding plan year, the number of such covered
individuals does not exceed 25 percent of the total number of present and
former employees enrolled under the plan or other arrangement.
`(iii) The employee organization or other entity sponsoring the plan or
other arrangement certifies to the Secretary each year, in a form and manner
which shall be prescribed by the Secretary through negotiated rulemaking
that the plan or other arrangement meets the requirements of clauses (i) and
(ii).
`(D) For purposes of subparagraph (A)(i)(II), a plan or arrangement shall
be treated as established or maintained in accordance with this subparagraph
only if--
`(i) all of the benefits provided under the plan or arrangement consist
of health insurance coverage; or
`(ii)(I) the plan or arrangement is a multiemployer plan; and
`(II) the requirements of clause (B) of the proviso to clause (5) of
section 302(c) of the Labor Management Relations Act, 1947 (29 U.S.C.
186(c)) are met with respect to such plan or other arrangement.
`(E) For purposes of subparagraph (A)(i)(II), a plan or arrangement shall
be treated as established or maintained in accordance with this subparagraph
only if--
`(i) the plan or arrangement is in effect as of the date of the
enactment of the Comprehensive Access and Responsibility in Health Care Act
of 1999; or
`(ii) the employee organization or other entity sponsoring the plan or
arrangement--
`(I) has been in existence for at least 3 years; or
`(II) demonstrates to the satisfaction of the Secretary that the
requirements of subparagraphs (C) and (D) are met with respect to the plan
or other arrangement.'.
(c) CONFORMING AMENDMENTS TO DEFINITIONS OF PARTICIPANT AND BENEFICIARY-
Section 3(7) of such Act (29 U.S.C. 1002(7)) is amended by adding at the end
the following new sentence: `Such term includes an individual who is a covered
individual described in paragraph (40)(C)(ii).'.
SEC. 134. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH PLANS.
(a) CRIMINAL PENALTIES FOR CERTAIN WILLFUL MISREPRESENTATIONS- Section 501
of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1131) is
amended--
(1) by inserting `(a)' after `SEC. 501.'; and
(2) by adding at the end the following new subsection:
`(b) Any person who willfully falsely represents, to any employee, any
employee's beneficiary, any employer, the Secretary, or any State, a plan or
other arrangement established or maintained for the purpose of offering or
providing any benefit described in section 3(1) to employees or their
beneficiaries as--
`(1) being an association health plan which has been certified under
part 8;
`(2) having been established or maintained under or pursuant to one or
more collective bargaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the National Labor
Relations Act (29 U.S.C. 158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which are reached
pursuant to labor-management negotiations under similar provisions of State
public employee relations laws; or
`(3) being a plan or arrangement with respect to which the requirements
of subparagraph (C), (D), or (E) of section 3(40) are met;
shall, upon conviction, be imprisoned not more than 5 years, be fined
under title 18, United States Code, or both.'.
(b) CEASE ACTIVITIES ORDERS- Section 502 of such Act (29 U.S.C. 1132) is
amended by adding at the end the following new subsection:
`(n)(1) Subject to paragraph (2), upon application by the Secretary
showing the operation, promotion, or marketing of an association health plan
(or similar arrangement providing benefits consisting of medical care (as
defined in section 733(a)(2))) that--
`(A) is not certified under part 8, is subject under section 514(b)(6)
to the insurance laws of any State in which the plan or arrangement offers
or provides benefits, and is not licensed, registered, or otherwise approved
under the insurance laws of such State; or
`(B) is an association health plan certified under part 8 and is not
operating in accordance with the requirements under part 8 for such
certification,
a district court of the United States shall enter an order requiring that
the plan or arrangement cease activities.
`(2) Paragraph (1) shall not apply in the case of an association health
plan or other arrangement if the plan or arrangement shows that--
`(A) all benefits under it referred to in paragraph (1) consist of
health insurance coverage; and
`(B) with respect to each State in which the plan or arrangement offers
or provides benefits, the plan or arrangement is operating in accordance
with applicable State laws that are not superseded under section 514.
`(3) The court may grant such additional equitable relief, including any
relief available under this title, as it deems necessary to protect the
interests of the public and of persons having claims for benefits against the
plan.'.
(c) RESPONSIBILITY FOR CLAIMS PROCEDURE- Section 503 of such Act (29
U.S.C. 1133) (as amended by title I) is amended by adding at the end the
following new subsection:
`(c) ASSOCIATION HEALTH PLANS- The terms of each association health plan
which is or has been certified under part 8 shall require the board of
trustees or the named fiduciary (as applicable) to ensure that the
requirements of this section are met in connection with claims filed under the
plan.'.
SEC. 135. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1136) is amended by adding at the end the following new subsection:
`(c) RESPONSIBILITY OF STATES WITH RESPECT TO ASSOCIATION HEALTH PLANS-
`(1) AGREEMENTS WITH STATES- A State may enter into an agreement with
the Secretary for delegation to the State of some or all of--
`(A) the Secretary's authority under sections 502 and 504 to enforce
the requirements for certification under part 8;
`(B) the Secretary's authority to certify association health plans
under part 8 in accordance with regulations of the Secretary applicable to
certification under part 8; or
`(C) any combination of the Secretary's authority authorized to be
delegated under subparagraphs (A) and (B).
`(2) DELEGATIONS- Any department, agency, or instrumentality of a State
to which authority is delegated pursuant to an agreement entered into under
this paragraph may, if authorized under State law and to the extent
consistent with such agreement, exercise the powers of the Secretary under
this title which relate to such authority.
`(3) RECOGNITION OF PRIMARY DOMICILE STATE- In entering into any
agreement with a State under subparagraph (A), the Secretary shall ensure
that, as a result of such agreement and all other agreements entered into
under subparagraph (A), only one State will be recognized, with respect to
any particular association health plan, as the State to which all authority
has been delegated pursuant to such agreements in connection with such plan.
In carrying out this paragraph, the Secretary shall take into account the
places of residence of the participants and beneficiaries under the plan and
the State in which the trust is maintained.'.
SEC. 136. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.
(a) EFFECTIVE DATE- The amendments made by sections 131, 134, and 135
shall take effect on January 1, 2001. The amendments made by sections 132 and
133 shall take effect on the date of the enactment of this Act. The Secretary
of Labor shall first issue all regulations necessary to carry out the
amendments made by this subtitle before January 1, 2001. Such regulations
shall be issued through negotiated rulemaking.
(b) EXCEPTION- Section 801(a)(2) of the Employee Retirement Income
Security Act of 1974 (added by section 131) does not apply in connection with
an association health plan (certified under part 8 of subtitle B of title I of
such Act) existing on the date of the enactment of this Act, if no benefits
provided thereunder as of the date of the enactment of this Act consist of
health insurance coverage (as defined in section 733(b)(1) of such Act).
(c) TREATMENT OF CERTAIN EXISTING HEALTH BENEFITS PROGRAMS-
(1) IN GENERAL- In any case in which, as of the date of the enactment of
this Act, an arrangement is maintained in a State for the purpose of
providing benefits consisting of medical care for the employees and
beneficiaries of its participating employers, at least 200 participating
employers make contributions to such arrangement, such arrangement has been
in existence for at least 10 years, and such arrangement is licensed under
the laws of one or more States to provide such benefits to its participating
employers, upon the filing with the applicable authority (as defined in
section 812(a)(5) of the Employee Retirement Income Security Act of 1974 (as
amended by this subtitle)) by the arrangement of an application for
certification of the arrangement under part 8 of subtitle B of title I of
such Act--
(A) such arrangement shall be deemed to be a group health plan for
purposes of title I of such Act;
(B) the requirements of sections 801(a)(1) and 803(a)(1) of the
Employee Retirement Income Security Act of 1974 shall be deemed met with
respect to such arrangement;
(C) the requirements of section 803(b) of such Act shall be deemed
met, if the arrangement is operated by a board of directors
which--
(i) is elected by the participating employers, with each employer
having one vote; and
(ii) has complete fiscal control over the arrangement and which is
responsible for all operations of the arrangement;
(D) the requirements of section 804(a) of such Act shall be deemed met
with respect to such arrangement; and
(E) the arrangement may be certified by any applicable authority with
respect to its operations in any State only if it operates in such State
on the date of certification.
The provisions of this subsection shall cease to apply with respect to
any such arrangement at such time after the date of the enactment of this
Act as the applicable requirements of this subsection are not met with
respect to such arrangement.
(2) DEFINITIONS- For purposes of this subsection, the terms `group
health plan', `medical care', and `participating employer' shall have the
meanings provided in section 812 of the Employee Retirement Income Security
Act of 1974, except that the reference in paragraph (7) of such section to
an `association health plan' shall be deemed a reference to an arrangement
referred to in this subsection.
Subtitle E--Health Care Access, Affordability, and Quality
Commission
SEC. 141. ESTABLISHMENT OF COMMISSION.
Part 5 of the Employee Retirement Income Security Act of 1974 is amended
by adding at the end the following new section:
`SEC. 518. HEALTH POLICY COMMISSION.
`(a) ESTABLISHMENT- There is hereby established a commission to be known
as the Health Care Access, Affordability, and Quality Commission (hereinafter
in this Act referred to as the `Commission').
`(b) DUTIES OF COMMISSION- The duties of the Commission shall be as
follows:
`(1) STUDIES OF CRITICAL AREAS- Based on information gathered by
appropriate Federal agencies, advisory groups, and other appropriate sources
for health care information, studies, and data, the Commission shall study
and report on in each of the following areas:
`(A) Independent expert external review programs.
`(B) Consumer friendly information programs.
`(C) The extent to which the following affect patient quality and
satisfaction:
`(i) health plan enrollees' attitudes based on surveys;
`(ii) outcomes measurements; and
`(iii) accreditation by private organizations.
`(D) Available systems to ensure the timely processing of
claims.
`(2) ESTABLISHMENT OF FORM FOR REMITTANCE OF CLAIMS TO PROVIDERS- Not
later than
2 years after the date of the first meeting of the Commission, the Commission
shall develop and transmit to the Secretary a proposed form for use by health
insurance issuers (as defined in section 733(b)(2)) for the remittance of claims
to health care providers. Effective for plan years beginning after 5 years after
the date of the Comprehensive Access and Responsibility in Health Care Act of
1999, a health insurance issuer offering health insurance coverage in connection
with a group health plan shall use such form for the remittance of all claims to
providers.
`(3) EVALUATION OF HEALTH BENEFITS MANDATES- At the request of the
chairmen or ranking minority members of the appropriate committees of
Congress, the Commission shall evaluate, taking into consideration the
overall cost effect, availability of treatment, and the effect on the health
of the general population, existing and proposed benefit requirements for
group health plans.
`(4) COMMENTS ON CERTAIN SECRETARIAL REPORTS- If the Secretary submits
to Congress (or a committee of Congress) a report that is required by law
and that relates to policies under this section, the Secretary shall
transmit a copy of the report to the Commission. The Commission shall review
the report and, not later than 6 months after the date of submittal of the
Secretary's report to Congress, shall submit to the appropriate committees
of Congress written comments on such report. Such comments may include such
recommendations as the Commission deems appropriate.
`(5) AGENDA AND ADDITIONAL REVIEW- The Commission shall consult
periodically with the chairmen and ranking minority members of the
appropriate committees of Congress regarding the Commission's agenda and
progress toward achieving the agenda. The Commission may conduct additional
reviews, and submit additional reports to the appropriate committees of
Congress, from time to time on such topics as may be requested by such
chairmen and members and as the Commission deems appropriate.
`(6) AVAILABILITY OF REPORTS- The Commission shall transmit to the
Secretary a copy of each report submitted under this subsection and shall
make such reports available to the public.
`(1) NUMBER AND APPOINTMENT- The Commission shall be composed of 11
members appointed by the Comptroller General.
`(A) IN GENERAL- The membership of the Commission shall
include--
`(i) physicians and other health professionals;
`(ii) representatives of employers, including multiemployer
plans;
`(ii) representatives of insured employees;
`(iv) third-party payers; and
`(v) health services and health economics researchers with expertise
in outcomes and effectiveness research and technology
assessment.
`(B) ETHICAL DISCLOSURE- The Comptroller General shall establish a
system for public disclosure by members of the Commission of financial and
other potential conflicts of interest relating to such members.
`(A) IN GENERAL- Each member shall be appointed for a term of 3 years,
except that the Comptroller shall designate staggered terms for the
members first appointed.
`(B) VACANCIES- Any member appointed to fill a vacancy occurring
before the expiration of the term for which the member's predecessor was
appointed shall be appointed only for the remainder of that term. A member
may serve after the expiration of that member's term until a successor has
taken office. A vacancy in the Commission shall be filled in the manner in
which the original appointment was made.
`(A) RATES OF PAY- Except as provided in subparagraph (B), members
shall each be paid at a rate equal to the rate of basic pay payable for
level IV of the Executive Schedule for each day (including travel time)
during which they are engaged in the actual performance of duties vested
in the Commission.
`(B) PROHIBITION OF COMPENSATION OF FEDERAL EMPLOYEES- Members of the
Commission who are full-time officers or employees of the United States
(or Members of Congress) may not receive additional pay, allowances,
or
benefits by reason of their service on the Commission.
`(5) TRAVEL EXPENSES- Each member shall receive travel expenses,
including per diem in lieu of subsistence, in accordance with sections 5702
and 5703 of title 5, United States Code.
`(6) CHAIRPERSON- The Chairperson of the Commission shall be designated
by the Comptroller at the time of the appointment. The term of office of the
Chairperson shall be 3 years.
`(7) MEETINGS- The Commission shall meet 4 times each year.
`(d) DIRECTOR AND STAFF OF COMMISSION-
`(1) DIRECTOR- The Commission shall have a Director who shall be
appointed by the Chairperson. The Director shall be paid at a rate not to
exceed the maximum rate of basic pay payable for GS-13 of the General
Schedule.
`(2) STAFF- The Director may appoint 2 additional staff members.
`(3) APPLICABILITY OF CERTAIN CIVIL SERVICE LAWS- The Director and staff
of the Commission shall be appointed subject to the provisions of title 5,
United States Code, governing appointments in the competitive service, and
shall be paid in accordance with the provisions of chapter 51 and subchapter
III of chapter 53 of that title relating to classification and General
Schedule pay rates.
`(e) POWERS OF COMMISSION-
`(1) HEARINGS AND SESSIONS- The Commission may, for the purpose of
carrying out this Act, hold hearings, sit and act at times and places, take
testimony, and receive evidence as the Commission considers appropriate. The
Commission may administer oaths or affirmations to witnesses appearing
before it.
`(2) POWERS OF MEMBERS AND AGENTS- Any member or agent of the Commission
may, if authorized by the Commission, take any action which the Commission
is authorized to take by this section.
`(3) OBTAINING OFFICIAL DATA- The Commission may secure directly from
any department or agency of the United States information necessary to
enable it to carry out this Act. Upon request of the Chairperson of the
Commission, the head of that department or agency shall furnish that
information to the Commission.
`(4) MAILS- The Commission may use the United States mails in the same
manner and under the same conditions as other departments and agencies of
the United States.
`(5) ADMINISTRATIVE SUPPORT SERVICES- Upon the request of the
Commission, the Administrator of General Services shall provide to the
Commission, on a reimbursable basis, the administrative support services
necessary for the Commission to carry out its responsibilities under this
Act.
`(6) CONTRACT AUTHORITY- The Commission may contract with and compensate
government and private agencies or persons for services, without regard to
section 3709 of the Revised Statutes (41 U.S.C. 5).
`(f) REPORTS- Beginning December 31, 2000, and each year thereafter, the
Commission shall submit to the Congress an annual report detailing the
following information:
`(1) Access to care, affordability to employers and employees, and
quality of care under employer-sponsored health plans and recommendations
for improving such access, affordability, and quality.
`(2) Any issues the Commission deems appropriate or any issues (such as
the appropriateness and availability of particular medical treatment) that
the chairmen or ranking members of the appropriate committees of Congress
requested the Commission to evaluate.
`(g) DEFINITION OF APPROPRIATE COMMITTEES OF CONGRESS- For purposes of
this section the term `appropriate committees of Congress' means any committee
in the Senate or House of Representatives having jurisdiction over the
Employee Retirement Income Security Act of 1974.
`(h) TERMINATION- Section 14(a)(2)(B) of the Federal Advisory Committee
Act (5 U.S.C. App.; relating to the termination of advisory committees) shall
not apply to the Commission.
`(i) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be
appropriated for fiscal years 2000 through 2004 such sums as may be necessary
to carry out this section.'.
SEC. 142. EFFECTIVE DATE.
This subtitle shall be effective 6 months after the date of the enactment
of this Act.
TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
Subtitle A--Patient Protections and Point of Service Coverage
Requirements
SEC. 201. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY MEDICAL
CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC CARE, AND CONTINUITY OF
CARE.
(a) IN GENERAL- Subpart 2 of part A of title XXVII of the Public Health
Service Act is amended by adding at the end the following new section:
`SEC. 2707. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY MEDICAL
CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC CARE, AND CONTINUITY OF
CARE.
`(a) PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE-
`(1) IN GENERAL- In the case of any health care professional acting
within the lawful scope of practice in the course of carrying out a
contractual employment arrangement or other direct contractual arrangement
between such professional and a group health plan or a health insurance
issuer offering health insurance coverage in connection with a group
health plan, the plan or issuer with which such contractual employment
arrangement or other direct contractual arrangement is maintained by the
professional may not impose on such professional under such arrangement any
prohibition or restriction with respect to advice, provided to a participant or
beneficiary under the plan who is a patient, about the health status of the
participant or beneficiary or the medical care or treatment for the condition or
disease of the participant or beneficiary, regardless of whether benefits for
such care or treatment are provided under the plan or health insurance coverage
offered in connection with the plan.
`(2) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this paragraph,
the term `health care professional' means a physician (as defined in section
1861(r) of the Social Security Act) or other health care professional if
coverage for the professional's services is provided under the group health
plan for the services of the professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist, physician assistant,
physical or occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical nurse (including
nurse practitioner, clinical nurse specialist, certified registered nurse
anesthetist, and certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory therapy
technician.
`(3) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed
to require the sponsor of a group health plan or a health insurance issuer
offering health insurance coverage in connection with the group health plan
to engage in any practice that would violate its religious beliefs or moral
convictions.
`(b) PATIENT ACCESS TO EMERGENCY MEDICAL CARE-
`(1) COVERAGE OF EMERGENCY SERVICES-
`(A) IN GENERAL- If a group health plan, or health insurance coverage
offered by a health insurance issuer, provides any benefits with respect
to emergency services (as defined in subparagraph (B)(ii)), or ambulance
services, the plan or issuer shall cover emergency services (including
emergency ambulance services as defined in subparagraph (B)(iii))
furnished under the plan or coverage--
`(i) without the need for any prior authorization
determination;
`(ii) whether or not the health care provider furnishing such
services is a participating provider with respect to such
services;
`(iii) in a manner so that, if such services are provided to a
participant, beneficiary, or enrollee by a nonparticipating health care
provider, the participant, beneficiary, or enrollee is not liable for
amounts that exceed the amounts of liability that would be incurred if
the services were provided by a participating provider; and
`(iv) without regard to any other term or condition of such plan or
coverage (other than exclusion or coordination of benefits, or an
affiliation or waiting period, permitted under section 2701 and other
than applicable cost sharing).
`(B) DEFINITIONS- In this subsection:
`(i) EMERGENCY MEDICAL CONDITION- The term `emergency medical
condition' means--
`(I) a medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a prudent
layperson, who possesses an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to
result in a condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security Act (42 U.S.C.
1395dd(e)(1)(A)); and
`(II) a medical condition manifesting itself in a neonate by acute
symptoms of sufficient severity (including severe pain) such that a
prudent health care professional could reasonably expect the absence
of immediate medical attention to result in a condition described in
clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social
Security Act.
`(ii) EMERGENCY SERVICES- The term `emergency services'
means--
`(I) with respect to an emergency medical condition described in
clause (i)(I), a medical screening examination (as required under
section 1867 of the Social Security Act, 42 U.S.C. 1395dd)) that is
within the capability of the emergency department of a hospital,
including ancillary services routinely available to the emergency
department to evaluate an emergency medical condition (as defined in
clause (i)) and also, within the capabilities of the staff and
facilities at the hospital, such further medical examination and
treatment as are required under section 1867 of such Act to stabilize
the patient; or
`(II) with respect to an emergency medical condition described in
clause (i)(II), medical treatment for such condition rendered by a
health care provider in a hospital to a neonate, including available
hospital ancillary services in response to an urgent request of a
health care professional and to the extent necessary to stabilize the
neonate.
`(iii) EMERGENCY AMBULANCE SERVICES- The term `emergency
ambulance
services' means ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport an individual who
has an emergency medical condition (as defined in clause (i)) to a hospital for
the receipt of emergency services (as defined in clause (ii)) in a case in which
appropriate emergency medical screening examinations are covered under the plan
or coverage pursuant to paragraph (1)(A) and a prudent layperson, with an
average knowledge of health and medicine, could reasonably expect that the
absence of such transport would result in placing the health of the individual
in serious jeopardy, serious impairment of bodily function, or serious
dysfunction of any bodily organ or part.
`(iv) STABILIZE- The term `to stabilize' means, with respect to an
emergency medical condition, to provide such medical treatment of the
condition as may be necessary to assure, within reasonable medical
probability, that no material deterioration of the condition is likely
to result from or occur during the transfer of the individual from a
facility.
`(v) NONPARTICIPATING- The term `nonparticipating' means, with
respect to a health care provider that provides health care items and
services to a participant or beneficiary under group health plan or
under group health insurance coverage, a health care provider that is
not a participating health care provider with respect to such items and
services.
`(vi) PARTICIPATING- The term `participating' means, with respect to
a health care provider that provides health care items and services to a
participant or beneficiary under group health plan or health insurance
coverage offered by a health insurance issuer in connection with such a
plan, a health care provider that furnishes such items and services
under a contract or other arrangement with the plan or
issuer.
`(c) PATIENT RIGHT TO OBSTETRIC AND GYNECOLOGICAL CARE-
`(1) IN GENERAL- In any case in which a group health plan (or a health
insurance issuer offering health insurance coverage in connection with the
plan)--
`(A) provides benefits under the terms of the plan consisting
of--
`(i) gynecological care (such as preventive women's health
examinations); or
`(ii) obstetric care (such as pregnancy-related
services),
provided by a participating health care professional who specializes
in such care (or provides benefits consisting of payment for such care);
and
`(B) requires or provides for designation by a participant or
beneficiary of a participating primary care provider,
if the primary care provider designated by such a participant or
beneficiary is not such a health care professional, then the plan (or
issuer) shall meet the requirements of paragraph (2).
`(2) REQUIREMENTS- A group health plan (or a health insurance issuer
offering health insurance coverage in connection with the plan) meets the
requirements of this paragraph, in connection with benefits described in
paragraph (1) consisting of care described in clause (i) or (ii) of
paragraph (1)(A) (or consisting of payment therefor), if the plan (or
issuer)--
`(A) does not require authorization or a referral by the primary care
provider in order to obtain such benefits; and
`(B) treats the ordering of other care of the same type, by the
participating health care professional providing the care described in
clause (i) or (ii) of paragraph (1)(A), as the authorization of the
primary care provider with respect to such care.
`(3) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this subsection,
the term `health care professional' means an individual (including, but not
limited to, a nurse midwife or nurse practitioner) who is licensed,
accredited, or certified under State law to provide obstetric and
gynecological health care services and who is operating within the scope of
such licensure, accreditation, or certification.
`(4) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
preventing a plan from offering (but not requiring a participant or
beneficiary to accept) a health care professional trained, credentialed, and
operating within the scope of their licensure to perform obstetric and
gynecological health care services. Nothing in paragraph (2)(B) shall waive
any requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of gynecological or obstetric care
so ordered.
`(5) TREATMENT OF MULTIPLE COVERAGE OPTIONS- In the case of a plan
providing benefits under two or more coverage options, the requirements of
this subsection shall apply separately with respect to each coverage
option.
`(d) PATIENT RIGHT TO PEDIATRIC CARE-
`(1) IN GENERAL- In any case in which a group health plan (or a health
insurance issuer offering health insurance coverage in connection with the
plan) provides benefits consisting of routine pediatric care provided by a
participating health care professional who specializes in pediatrics (or
consisting of payment for such care) and the plan requires or provides for
designation by a participant or beneficiary of a participating primary care
provider, the plan (or issuer) shall provide that such a participating
health care professional may be designated, if
available, by a parent or guardian of any beneficiary under the plan who is
under 18 years of age, as the primary care provider with respect to any such
benefits.
`(2) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this subsection,
the term `health care professional' means an individual who is licensed,
accredited, or certified under State law to provide pediatric health care
services and who is operating within the scope of such licensure,
accreditation, or certification.
`(3) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
preventing a plan from offering (but not requiring a participant or
beneficiary to accept) a health care professional trained, credentialed, and
operating within the scope of their licensure to perform pediatric health
care services. Nothing in paragraph (1) shall waive any requirements of
coverage relating to medical necessity or appropriateness with respect to
coverage of pediatric care so ordered.
`(4) TREATMENT OF MULTIPLE COVERAGE OPTIONS- In the case of a plan
providing benefits under two or more coverage options, the requirements of
this subsection shall apply separately with respect to each coverage
option.
`(A) TERMINATION OF PROVIDER- If a contract between a group health
plan, or a health insurance issuer offering health insurance coverage in
connection with a group health plan, and a health care provider is
terminated (as defined in subparagraph (D)(ii)), or benefits or coverage
provided by a health care provider are terminated because of a change in
the terms of provider participation in a group health plan, and an
individual who, at the time of such termination, is a participant or
beneficiary in the plan and is scheduled to undergo surgery (including an
organ transplantation), is undergoing treatment for pregnancy, or is
determined to be terminally ill (as defined in section 1861(dd)(3)(A) of
the Social Security Act) and is undergoing treatment for the terminal
illness, the plan or issuer shall--
`(i) notify the individual on a timely basis of such termination and
of the right to elect continuation of coverage of treatment by the
provider under this subsection; and
`(ii) subject to paragraph (3), permit the individual to elect to
continue to be covered with respect to treatment by the provider for
such surgery, pregnancy, or illness during a transitional period
(provided under paragraph (2)).
`(B) TREATMENT OF TERMINATION OF CONTRACT WITH HEALTH INSURANCE
ISSUER- If a contract for the provision of health insurance coverage
between a group health plan and a health insurance issuer is terminated
and, as a result of such termination, coverage of services of a health
care provider is terminated with respect to an individual, the provisions
of subparagraph (A) (and the succeeding provisions of this subsection)
shall apply under the plan in the same manner as if there had been a
contract between the plan and the provider that had been terminated, but
only with respect to benefits that are covered under the plan after the
contract termination.
`(C) TERMINATION DEFINED- For purposes of this subsection, the term
`terminated' includes, with respect to a contract, the expiration or
nonrenewal of the contract, but does not include a termination of the
contract by the plan or issuer for failure to meet applicable quality
standards or for fraud.
`(2) TRANSITIONAL PERIOD-
`(A) IN GENERAL- Except as provided in subparagraphs (B) through (D),
the transitional period under this paragraph shall extend up to 90 days
(as determined by the treating health care professional) after the date of
the notice described in paragraph (1)(A)(i) of the provider's
termination.
`(B) SCHEDULED SURGERY- If surgery was scheduled for an individual
before the date of the announcement of the termination of the provider
status under paragraph (1)(A)(i), the transitional period under this
paragraph with respect to the surgery shall extend beyond the period under
subparagraph (A) and until the date of discharge of the individual after
completion of the surgery.
`(i) a participant or beneficiary was determined to be pregnant at
the time of a provider's termination of participation, and
`(ii) the provider was treating the pregnancy before date of the
termination,
the transitional period under this paragraph with respect to
provider's treatment of the pregnancy shall extend through the provision
of post-partum care directly related to the delivery.
`(D) TERMINAL ILLNESS- If--
`(i) a participant or beneficiary was determined to be terminally
ill (as determined under section 1861(dd)(3)(A) of the Social Security
Act) at the time of a provider's termination of participation,
and
`(ii) the provider was treating the terminal illness before the date
of termination,
the transitional period under this paragraph shall extend for the
remainder of the individual's life for care directly related to the
treatment of the terminal illness or its medical manifestations.
`(3) PERMISSIBLE TERMS AND CONDITIONS- A group health plan or health
insurance issuer may
condition coverage of continued treatment by a provider under paragraph
(1)(A)(i) upon the individual notifying the plan of the election of continued
coverage and upon the provider agreeing to the following terms and conditions:
`(A) The provider agrees to accept reimbursement from the plan or
issuer and individual involved (with respect to cost-sharing) at the rates
applicable prior to the start of the transitional period as payment in
full (or, in the case described in paragraph (1)(B), at the rates
applicable under the replacement plan or issuer after the date of the
termination of the contract with the health insurance issuer) and not to
impose cost-sharing with respect to the individual in an amount that would
exceed the cost-sharing that could have been imposed if the contract
referred to in paragraph (1)(A) had not been terminated.
`(B) The provider agrees to adhere to the quality assurance standards
of the plan or issuer responsible for payment under subparagraph (A) and
to provide to such plan or issuer necessary medical information related to
the care provided.
`(C) The provider agrees otherwise to adhere to such plan's or
issuer's policies and procedures, including procedures regarding referrals
and obtaining prior authorization and providing services pursuant to a
treatment plan (if any) approved by the plan or issuer.
`(D) The provider agrees to provide transitional care to all
participants and beneficiaries who are eligible for and elect to have
coverage of such care from such provider.
`(E) If the provider initiates the termination, the provider has
notified the plan within 30 days prior to the effective date of the
termination of--
`(i) whether the provider agrees to permissible terms and conditions
(as set forth in this paragraph) required by the plan, and
`(ii) if the provider agrees to the terms and conditions, the
specific plan beneficiaries and participants undergoing a course of
treatment from the provider who the provider believes, at the time of
the notification, would be eligible for transitional care under this
subsection.
`(4) CONSTRUCTION- Nothing in this subsection shall be construed
to--
`(A) require the coverage of benefits which would not have been
covered if the provider involved remained a participating provider,
or
`(B) prohibit a group health plan from conditioning a provider's
participation on the provider's agreement to provide transitional care to
all participants and beneficiaries eligible to obtain coverage of such
care furnished by the provider as set forth under this
subsection.
`(f) COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CANCER CLINICAL
TRIALS-
`(A) IN GENERAL- If a group health plan (or a health insurance issuer
offering health insurance coverage) provides coverage to a qualified
individual (as defined in paragraph (2)), the plan or issuer--
`(i) may not deny the individual participation in the clinical trial
referred to in paragraph (2)(B);
`(ii) subject to paragraphs (2), (3), and (4), may not deny (or
limit or impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection with
participation in the trial; and
`(iii) may not discriminate against the individual on the basis of
the participation of the participant or beneficiary in such
trial.
`(B) EXCLUSION OF CERTAIN COSTS- For purposes of subparagraph (A)(ii),
routine patient costs do not include the cost of the tests or measurements
conducted primarily for the purpose of the clinical trial
involved.
`(C) USE OF IN-NETWORK PROVIDERS- If one or more participating
providers is participating in a clinical trial, nothing in subparagraph
(A) shall be construed as preventing a plan from requiring that a
qualified individual participate in the trial through such a participating
provider if the provider will accept the individual as a participant in
the trial.
`(2) QUALIFIED INDIVIDUAL DEFINED- For purposes of paragraph (1), the
term `qualified individual' means an individual who is a participant or
beneficiary in a group health plan and who meets the following
conditions:
`(A)(i) The individual has been diagnosed with cancer.
`(ii) The individual is eligible to participate in an approved
clinical trial according to the trial protocol with respect to treatment
of cancer.
`(iii) The individual's participation in the trial offers meaningful
potential for significant clinical benefit for the individual.
`(i) the referring physician is a participating health care
professional and has concluded that the individual's participation in
such trial would be appropriate based upon satisfaction by the
individual of the conditions described in subparagraph (A);
or
`(ii) the individual provides medical and scientific information
establishing that the individual's participation in such trial would be
appropriate based upon the satisfaction by the individual of the
conditions described in subparagraph (A).
`(A) IN GENERAL- A group health plan (or a health insurance issuer
offering health insurance coverage) shall provide for payment for routine
patient costs described in paragraph (1)(B) but is not required to pay for
costs of items and services that are reasonably expected to be paid for by
the sponsors of an approved clinical trial.
`(B) ROUTINE PATIENT CARE COSTS-
`(i) IN GENERAL- For purposes of this paragraph, the term `routine
patient care costs' shall include the costs associated with the
provision of items and services that--
`(I) would otherwise be covered under the group health plan if
such items and services were not provided in connection with an
approved clinical trial program; and
`(II) are furnished according to the protocol of an approved
clinical trial program.
`(ii) EXCLUSION- For purposes of this paragraph, `routine patient
care costs' shall not include the costs associated with the provision
of--
`(I) an investigational drug or device, unless the Secretary has
authorized the manufacturer of such drug or device to charge for such
drug or device; or
`(II) any item or service supplied without charge by the sponsor
of the approved clinical trial program.
`(C) PAYMENT RATE- For purposes of this subsection--
`(i) PARTICIPATING PROVIDERS- In the case of covered items and
services provided by a participating provider, the payment rate shall be
at the agreed upon rate.
`(ii) NONPARTICIPATING PROVIDERS- In the case of covered items and
services provided by a nonparticipating provider, the payment rate shall
be at the rate the plan would normally pay for comparable items or
services under clause (i).
`(4) APPROVED CLINICAL TRIAL DEFINED-
`(A) IN GENERAL- For purposes of this subsection, the term `approved
clinical trial' means a cancer clinical research study or cancer clinical
investigation approved by an Institutional Review Board.
`(B) CONDITIONS FOR DEPARTMENTS- The conditions described in this
paragraph, for a study or investigation conducted by a Department, are
that the study or investigation has been reviewed and approved through a
system of peer review that the Secretary determines--
`(i) to be comparable to the system of peer review of studies and
investigations used by the National Institutes of Health,
and
`(ii) assures unbiased review of the highest scientific standards by
qualified individuals who have no interest in the outcome of the
review.
`(5) CONSTRUCTION- Nothing in this subsection shall be construed to
limit a plan's coverage with respect to clinical trials.
`(6) PLAN SATISFACTION OF CERTAIN REQUIREMENTS; RESPONSIBILITIES OF
FIDUCIARIES-
`(A) IN GENERAL- For purposes of this subsection, insofar as a group
health plan provides benefits in the form of health insurance coverage
through a health insurance issuer, the plan shall be treated as meeting
the requirements of this subsection with respect to such benefits and not
be considered as failing to meet such requirements because of a failure of
the issuer to meet such requirements so long as the plan sponsor or its
representatives did not cause such failure by the issuer.
`(B) CONSTRUCTION- Nothing in this subsection shall be construed to
affect or modify the responsibilities of the fiduciaries of a group health
plan under part 4 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974.
`(A) STUDY- The Secretary shall analyze cancer clinical research and
its cost implications for managed care, including differentiation
in--
`(i) the cost of patient care in trials versus standard
care;
`(ii) the cost effectiveness achieved in different sites of
service;
`(iii) research outcomes;
`(iv) volume of research subjects available in different sites of
service;
`(v) access to research sites and clinical trials by cancer
patients;
`(vi) patient cost sharing or copayment costs realized in different
sites of service;
`(vii) health outcomes experienced in different sites of
service;
`(viii) long term health care services and costs experienced in
different sites of service;
`(ix) morbidity and mortality experienced in different sites of
service; and
`(x) patient satisfaction and preference of sites of
service.
`(B) REPORT TO CONGRESS- Not later than January 1, 2005, the Secretary
shall submit a report to Congress that contains--
`(i) an assessment of any incremental cost to group health plans
resulting from the provisions of this section;
`(ii) a projection of expenditures to such plans resulting from this
section;
`(iii) an assessment of any impact on premiums resulting from this
section; and
`(iv) recommendations regarding action on other
diseases.'.
SEC. 202. REQUIRING HEALTH MAINTENANCE ORGANIZATIONS TO OFFER OPTION OF
POINT-OF-SERVICE COVERAGE.
Title XXVII of the Public Health Service Act is amended by inserting after
section 2713 the following new section:
`SEC. 2714. REQUIRING OFFERING OF OPTION OF POINT-OF-SERVICE COVERAGE.
`(a) REQUIREMENT TO OFFER COVERAGE OPTION TO CERTAIN EMPLOYERS- Except as
provided in subsection (c), any health insurance issuer which--
`(1) is a health maintenance organization (as defined in section
2791(b)(3)); and
`(2) which provides for coverage of services of one or more classes of
health care professionals under health insurance coverage offered in
connection with a group health plan only if such services are furnished
exclusively through health care professionals within such class or classes
who are members of a closed panel of health care professionals,
the issuer shall make available to the plan sponsor in connection with
such a plan a coverage option which provides for coverage of such services
which are furnished through such class (or classes) of health care
professionals regardless of whether or not the professionals are members of
such panel.
`(b) REQUIREMENT TO OFFER SUPPLEMENTAL COVERAGE TO PARTICIPANTS IN CERTAIN
CASES- Except as provided in subsection (c), if a health insurance issuer
makes available a coverage option under and described in subsection (a) to a
plan sponsor of a group health plan and the sponsor declines to contract for
such coverage option, then the issuer shall make available in the individual
insurance market to each participant in the group health plan optional
separate supplemental health insurance coverage in the individual health
insurance market which consists of services identical to those provided under
such coverage provided through the closed panel under the group health plan
but are furnished exclusively by health care professionals who are not members
of such a closed panel.
`(1) OFFERING OF NON-PANEL OPTION- Subsections (a) and (b) shall not
apply with respect to a group health plan if the plan offers a coverage
option that provides coverage for services that may be furnished by a class
or classes of health care professionals who are not in a closed panel. This
paragraph shall be applied separately to distinguishable groups of employees
under the plan.
`(2) AVAILABILITY OF COVERAGE THROUGH HEALTHMART- Subsections (a) and
(b) shall not apply to a group health plan if the health insurance coverage
under the plan is made available through a HealthMart (as defined in section
2801) and if any health insurance coverage made available through the
HealthMart provides for coverage of the services of any class of health care
professionals other than through a closed panel of professionals.
`(3) RELICENSURE EXEMPTION- Subsections (a) and (b) shall not apply to a
health maintenance organization in a State in any case in which--
`(A) the organization demonstrates to the applicable authority that
the organization has made a good faith effort to obtain (but has failed to
obtain) a contract between the organization and any other health insurance
issuer providing for the coverage option or supplemental coverage
described in subsection (a) or (b), as the case may be, within the
applicable service area of the organization; and
`(B) the State requires the organization to receive or qualify for a
separate license, as an indemnity insurer or otherwise, in order to offer
such coverage option or supplemental coverage, respectively.
The applicable authority may require that the organization demonstrate
that it meets the requirements of the previous sentence no more frequently
than once every 2 years.
`(4) INCREASED COSTS- Subsections (a) and (b) shall not apply to a
health maintenance organization if the organization demonstrates to the
applicable authority, in accordance with generally accepted actuarial
practice, that, on either a prospective or retroactive basis, the premium
for the coverage option or supplemental coverage required to be made
available under such respective subsection exceeds by more than 1 percent
the premium for the coverage consisting of services which are furnished
through a closed panel of health care professionals in the class or classes
involved. The applicable authority may require that the organization
demonstrate such an increase no more frequently than once every 2 years.
This paragraph shall be applied on an average per enrollee or similar
basis.
`(5) COLLECTIVE BARGAINING AGREEMENTS- Subsections (a) and (b) shall not
apply in connection
with a group health plan if the plan is established or maintained pursuant to
one or more collective bargaining agreements.
`(6) SMALL ISSUERS- Subsections (a) and (b) shall not apply in the case
of a health insurance issuer with 25,000 or fewer covered lives.
`(d) DEFINITIONS- For purposes of this section:
`(1) COVERAGE THROUGH CLOSED PANEL- Health insurance coverage for a
class of health care professionals shall be treated as provided through a
closed panel of such professionals only if such coverage consists of
coverage of items or services consisting of professionals services which are
reimbursed for or provided only within a limited network of such
professionals.
`(2) HEALTH CARE PROFESSIONAL- The term `health care professional' has
the meaning given such term in section 2707(a)(2).'.
SEC. 203. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL- The amendments made by this title shall apply with respect
to plan years beginning on or after January 1 of the second calendar year
following the date of the enactment of this Act, except that the Secretary of
Health and Human Services may issue regulations before such date under such
amendments. The Secretary shall first issue regulations necessary to carry out
the amendments made by this title before the effective date thereof.
(b) LIMITATION ON ENFORCEMENT ACTIONS- No enforcement action shall be
taken, pursuant to the amendments made by this title, against a group health
plan or health insurance issuer with respect to a violation of a requirement
imposed by such amendments before the date of issuance of regulations issued
in connection with such requirement, if the plan or issuer has sought to
comply in good faith with such requirement.
(c) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS- In the case of a
group health plan maintained pursuant to one or more collective bargaining
agreements between employee representatives and one or more employers ratified
before the date of the enactment of this Act, the amendments made by this
title shall not apply with respect to plan years beginning before the later
of--
(1) the date on which the last of the collective bargaining agreements
relating to the plan terminates (determined without regard to any extension
thereof agreed to after the date of the enactment of this Act); or
For purposes of this subsection, any plan amendment made pursuant to a
collective bargaining agreement relating to the plan which amends the plan
solely to conform to any requirement added by this title shall not be treated
as a termination of such collective bargaining agreement.
Subtitle B--Patient Access to Information
SEC. 111. PATIENT ACCESS TO INFORMATION REGARDING PLAN COVERAGE, MANAGED
CARE PROCEDURES, HEALTH CARE PROVIDERS, AND QUALITY OF MEDICAL CARE.
(a) IN GENERAL- Subpart 2 of part A of title XXVII of the Public Health
Service Act (as amended by subtitle A) is amended further by adding at the end
the following new section:
`SEC. 2708. DISCLOSURE BY GROUP HEALTH PLANS.
`(a) DISCLOSURE REQUIREMENT- Each health insurance issuer offering health
insurance coverage in connection with a group health plan shall provide the
plan administrator on a timely basis with the information necessary to enable
the administrator to provide participants and beneficiaries with information
in a manner and to an extent consistent with the requirements of section 111
of the Employee Retirement Income Security Act of 1974. To the extent that any
such issuer provides such information on a timely basis to plan participants
and beneficiaries, the requirements of this subsection shall be deemed
satisfied in the case of such plan with respect to such information.
`(b) PLAN BENEFITS- The information required under subsection (a) includes
the following:
`(1) COVERED ITEMS AND SERVICES-
`(A) CATEGORIZATION OF INCLUDED BENEFITS- A description of covered
benefits, categorized by--
`(i) types of items and services (including any special disease
management program); and
`(ii) types of health care professionals providing such items and
services.
`(B) EMERGENCY MEDICAL CARE- A description of the extent to which the
plan covers emergency medical care (including the extent to which the plan
provides for access to urgent care centers), and any definitions provided
under the plan for the relevant plan terminology referring to such
care.
`(C) PREVENTATIVE SERVICES- A description of the extent to which the
plan provides benefits for preventative services.
`(D) DRUG FORMULARIES- A description of the extent to which covered
benefits are determined by the use or application of a drug formulary and
a summary of the process for determining what is included in such
formulary.
`(E) COBRA CONTINUATION COVERAGE- A description of the benefits
available under the plan pursuant to part 6.
`(2) LIMITATIONS, EXCLUSIONS, AND RESTRICTIONS ON COVERED
BENEFITS-
`(A) CATEGORIZATION OF EXCLUDED BENEFITS- A description of benefits
specifically excluded from coverage, categorized by types of items and
services.
`(B) UTILIZATION REVIEW AND PREAUTHORIZATION REQUIREMENTS- Whether
coverage for medical care is limited or excluded on the basis of
utilization review or preauthorization requirements.
`(C) LIFETIME, ANNUAL, OR OTHER PERIOD LIMITATIONS- A description of
the circumstances under which, and the extent to which, coverage is
subject to lifetime, annual, or other period limitations, categorized by
types of benefits.
`(D) CUSTODIAL CARE- A description of the circumstances under which,
and the extent to which, the coverage of benefits for custodial care is
limited or excluded, and a statement of the definition used by the plan
for custodial care.
`(E) EXPERIMENTAL TREATMENTS- Whether coverage for any medical care is
limited or excluded because it constitutes an investigational item or
experimental treatment or technology, and any definitions provided under
the plan for the relevant plan terminology referring to such limited or
excluded care.
`(F) MEDICAL APPROPRIATENESS OR NECESSITY- Whether coverage for
medical care may be limited or excluded by reason of a failure to meet the
plan's requirements for medical appropriateness or necessity, and any
definitions provided under the plan for the relevant plan terminology
referring to such limited or excluded care.
`(G) SECOND OR SUBSEQUENT OPINIONS- A description of the circumstances
under which, and the extent to which, coverage for second or subsequent
opinions is limited or excluded.
`(H) SPECIALTY CARE- A description of the circumstances under which,
and the extent to which, coverage of benefits for specialty care is
conditioned on referral from a primary care provider.
`(I) CONTINUITY OF CARE- A description of the circumstances under
which, and the extent to which, coverage of items and services provided by
any health care professional is limited or excluded by reason of the
departure by the professional from any defined set of providers.
`(J) RESTRICTIONS ON COVERAGE OF EMERGENCY SERVICES- A description of
the circumstances under which, and the extent to which, the plan, in
covering emergency medical care furnished to a participant or beneficiary
of the plan imposes any financial responsibility described in subsection
(c) on participants or beneficiaries or limits or conditions benefits for
such care subject to any other term or condition of such plan.
`(3) NETWORK CHARACTERISTICS- If the plan (or issuer) utilizes a defined
set of providers under contract with the plan (or issuer), a detailed list
of the names of such providers and their geographic location, set forth
separately with respect to primary care providers and with respect to
specialists.
`(c) PARTICIPANT'S FINANCIAL RESPONSIBILITIES- The information required
under subsection (a) includes an explanation of--
`(1) a participant's financial responsibility for payment of premiums,
coinsurance, copayments, deductibles, and any other charges; and
`(2) the circumstances under which, and the extent to which, the
participant's financial responsibility described in paragraph (1) may vary,
including any distinctions based on whether a health care provider from whom
covered benefits are obtained is included in a defined set of
providers.
`(d) DISPUTE RESOLUTION PROCEDURES- The information required under
subsection (a) includes a description of the processes adopted by the plan of
the type described in section 503 of the Employee Retirement Income Security
Act of 1974, including--
`(1) descriptions thereof relating specifically to--
`(B) internal review of coverage decisions; and
`(C) any external review of coverage decisions; and
`(2) the procedures and time frames applicable to each step of the
processes referred to in subparagraphs (A), (B), and (C) of paragraph
(1).
`(e) INFORMATION ON PLAN PERFORMANCE- Any information required under
subsection (a) shall include information concerning the number of external
reviews of the type described in section 503 of the Employee Retirement Income
Security Act of 1974 that have been completed during the prior plan year and
the number of such reviews in which a recommendation is made for modification
or reversal of an internal review decision under the plan.
`(f) INFORMATION INCLUDED WITH ADVERSE COVERAGE DECISIONS- A health
insurance issuer offering health insurance coverage in connection with a group
health plan shall provide to each participant and beneficiary, together with
any notification of the participant or beneficiary of an adverse coverage
decision, the following information:
`(1) PREAUTHORIZATION AND UTILIZATION REVIEW PROCEDURES- A description
of the basis on which any preauthorization requirement or any utilization
review requirement has resulted in the adverse coverage decision.
`(2) PROCEDURES FOR DETERMINING EXCLUSIONS BASED ON MEDICAL NECESSITY OR
ON INVESTIGATIONAL ITEMS OR EXPERIMENTAL TREATMENTS- If the adverse coverage
decision is based on a determination relating to medical necessity or to an
investigational item or an experimental treatment or technology, a
description of the procedures and medically-based criteria used in such
decision.
`(g) INFORMATION AVAILABLE ON REQUEST-
`(1) ACCESS TO PLAN BENEFIT INFORMATION IN ELECTRONIC FORM-
`(A) IN GENERAL- A health insurance issuer offering health insurance
coverage in connection with a group health plan may, upon written request
(made not more frequently than annually), make available to participants
and beneficiaries, in a generally recognized electronic format--
`(i) the latest summary plan description, including the latest
summary of material modifications, and
`(ii) the actual plan provisions setting forth the benefits
available under the plan,
to the extent such information relates to the coverage options under
the plan available to the participant or beneficiary. A reasonable charge
may be made to cover the cost of providing such information in such
generally recognized electronic format. The Secretary may by regulation
prescribe a maximum amount which will constitute a reasonable charge under
the preceding sentence.
`(B) ALTERNATIVE ACCESS- The requirements of this paragraph may be met
by making such information generally available (rather than upon request)
on the Internet or on a proprietary computer network in a format which is
readily accessible to participants and beneficiaries.
`(2) ADDITIONAL INFORMATION TO BE PROVIDED ON REQUEST-
`(A) INCLUSION IN SUMMARY PLAN DESCRIPTION OF SUMMARY OF ADDITIONAL
INFORMATION- The information required under subsection (a) includes a
summary description of the types of information required by this
subsection to be made available to participants and beneficiaries on
request.
`(B) INFORMATION REQUIRED FROM PLANS AND ISSUERS ON REQUEST- In
addition to information otherwise required to be provided under this
subsection, a health insurance issuer offering health insurance coverage
in connection with a group health plan shall provide the following
information to a participant or beneficiary on request:
`(i) CARE MANAGEMENT INFORMATION- A description of the circumstances
under which, and the extent to which, the plan has special disease
management programs or programs for persons with disabilities,
indicating whether these programs are voluntary or mandatory and whether
a significant benefit differential results from participation in such
programs.
`(ii) INCLUSION OF DRUGS AND BIOLOGICALS IN FORMULARIES- A statement
of whether a specific drug or biological is included in a formulary used
to determine benefits under the plan and a description of the procedures
for considering requests for any patient-specific waivers.
`(iii) ACCREDITATION STATUS OF HEALTH INSURANCE ISSUERS AND SERVICE
PROVIDERS- A description of the accreditation and licensing status (if
any) of each health insurance issuer offering health insurance coverage
in connection with the plan and of any utilization review organization
utilized by the issuer or the plan, together with the name and address
of the accrediting or licensing authority.
`(iv) QUALITY PERFORMANCE MEASURES- The latest information (if any)
maintained by the health insurance issuer relating to quality of
performance of the delivery of medical care with respect to coverage
options offered under the plan and of health care professionals and
facilities providing medical care under the plan.
`(C) INFORMATION REQUIRED FROM HEALTH CARE PROFESSIONALS-
`(i) QUALIFICATIONS, PRIVILEGES, AND METHOD OF COMPENSATION- Any
health care professional treating a participant or beneficiary under a
group health plan shall provide to the participant or beneficiary, on
request, a description of his or her professional qualifications
(including board certification status, licensing status, and
accreditation status, if any), privileges, and experience and a general
description by category (including salary, fee-for-service, capitation,
and such other categories as may be specified in regulations of the
Secretary) of the applicable method by which such professional is
compensated in connection with the provision of such medical
care.
`(ii) COST OF PROCEDURES- Any health care professional who
recommends an elective procedure or treatment while treating a
participant or beneficiary under a group health plan that requires a
participant or beneficiary to share in the cost of treatment shall
inform such participant or beneficiary of each cost associated with
the
procedure or treatment and an estimate of the magnitude of such costs.
`(D) INFORMATION REQUIRED FROM HEALTH CARE FACILITIES ON REQUEST- Any
health care facility from which a participant or beneficiary has sought
treatment under a group health plan shall provide to the participant or
beneficiary, on request, a description of the facility's corporate form or
other organizational form and all forms of licensing and accreditation
status (if any) assigned to the facility by standard-setting
organizations.
`(h) ACCESS TO INFORMATION RELEVANT TO THE COVERAGE OPTIONS UNDER WHICH
THE PARTICIPANT OR BENEFICIARY IS ELIGIBLE TO ENROLL- In addition to
information otherwise required to be made available under this section, a
health insurance issuer offering health insurance coverage in connection with
a group health plan shall, upon written request (made not more frequently than
annually), make available to a participant (and an employee who, under the
terms of the plan, is eligible for coverage but not enrolled) in connection
with a period of enrollment the summary plan description for any coverage
option under the plan under which the participant is eligible to enroll and
any information described in clauses (i), (ii), (iii), (vi), (vii), and (viii)
of subsection (e)(2)(B).
`(i) ADVANCE NOTICE OF CHANGES IN DRUG FORMULARIES- Not later than 30 days
before the effective date of any exclusion of a specific drug or biological
from any drug formulary under health insurance coverage offered by a health
insurance issuer in connection with a group health plan that is used in the
treatment of a chronic illness or disease, the issuer shall take such actions
as are necessary to reasonably ensure that plan participants are informed of
such exclusion. The requirements of this subsection may be satisfied--
`(1) by inclusion of information in publications broadly distributed by
plan sponsors, employers, or employee organizations;
`(2) by electronic means of communication (including the Internet or
proprietary computer networks in a format which is readily accessible to
participants);
`(3) by timely informing participants who, under an ongoing program
maintained under the plan, have submitted their names for such notification;
or
`(4) by any other reasonable means of timely informing plan
participants.
`(j) DEFINITIONS AND RELATED RULES-
`(1) IN GENERAL- For purposes of this section--
`(A) GROUP HEALTH PLAN- The term `group health plan' has the meaning
provided such term under section 733(a)(1).
`(B) MEDICAL CARE- The term `medical care' has the meaning provided
such term under section 733(a)(2).
`(C) HEALTH INSURANCE COVERAGE- The term `health insurance coverage'
has the meaning provided such term under section 733(b)(1).
`(D) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has
the meaning provided such term under section 733(b)(2).
`(2) APPLICABILITY ONLY IN CONNECTION WITH INCLUDED GROUP HEALTH PLAN
BENEFITS-
`(A) IN GENERAL- The requirements of this section shall apply only in
connection with included group health plan benefits.
`(B) INCLUDED GROUP HEALTH PLAN BENEFIT- For purposes of subparagraph
(A), the term `included group health plan benefit' means a benefit which
is not an excepted benefit (as defined in section 2791(c)).'.
SEC. 212. REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND MEDICAL
DEVICES AS EXPERIMENTAL OR INVESTIGATIONAL.
Subpart 2 of part A of title XXVII of the Public Health Service Act (as
amended by 211) is amended further by adding at the end the following new
section:
`SEC. 2709. REQUIREMENTS FOR TREATMENT OF PRESCRIPTION DRUGS AND MEDICAL
DEVICES AS EXPERIMENTAL OR INVESTIGATIONAL.
`(a) IN GENERAL- No use of a prescription drug or medical device shall be
considered experimental or investigational in connection with health insurance
coverage offered by a health insurance issuer in connection with a group
health plan if such use is included in the labeling authorized by the Food and
Drug Administration under section 505, 513, or 515 of the Federal Food, Drug,
and Cosmetic Act or under secton 351 of the Public Health Service Act, unless
clinical benefit has not been adequately demonstrated based on analysis of
reliable authoritative scientific evidence.
`(b) CONSTRUCTION- Nothing in this section shall be construed as--
`(1) requiring a health insurance issuer offering health insurance
coverage in connection with a group health plan to provide any coverage of
prescription drugs or medical devices, or
`(2) precluding a health insurance offering health insurance coverage in
connection with a group health plan from considering medical devices cleared
through premarket notification under section 510(k) of the Federal Food,
Drug, and Cosmetic Act as investigational.
`(c) DEFINITIONS- For purposes of this section--
`(1) Terms used in this section which are defined in section 2791 shall
have the meanings provided such terms under such section,
respectively.
`(2) The term `clinical benefit' means improvement in net health outcome
(including but not limited to length of life or ability to function) or in
any objectively measurable criterion that is reasonably likely to predict
clinical benefit to an extent at least equivalent to the extent that is
achievable under the usual conditions of medical practice under established
alternatives.
`(3) The term `reliable authoritative evidence' means well-designed and
well-conducted investigations published in peer-reviewed scientific
journals.'.
SEC. 213. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL- The amendments made by section 211 shall apply with
respect to plan years beginning on or after January 1 of the second calendar
year following the date of the enactment of this Act. The Secretary of Labor
shall first issue all regulations necessary to carry out the amendments made
by this subtitle before such date.
(b) LIMITATION ON ENFORCEMENT ACTIONS- No enforcement action shall be
taken, pursuant to the amendments made by this subtitle, against a health
insurance issuer with respect to a violation of a requirement imposed by such
amendments before the date of issuance of final regulations issued in
connection with such requirement, if the issuer has sought to comply in good
faith with such requirement.
Subtitle C--HealthMarts
SEC. 221. EXPANSION OF CONSUMER CHOICE THROUGH HEALTHMARTS.
(a) IN GENERAL- The Public Health Service Act is amended by adding at the
end the following new title:
`TITLE XXVIII--HEALTHMARTS
`SEC. 2801. DEFINITION OF HEALTHMART.
`(a) IN GENERAL- For purposes of this title, the term `HealthMart' means a
legal entity that meets the following requirements:
`(1) ORGANIZATION- The HealthMart is an organization operated under the
direction of a board of directors which is composed of representatives of
not fewer than 2 from each of the following:
`(A) Small employers, if coverage is offered through the HealthMart to
small employers.
`(B) Employees of such small employers.
`(C) Individuals (other than those who are employees of employers) who
are eligible to participate in the HealthMart, if coverage is offered
through HealthMarts for individuals who are not employees of small
employers.
`(D) Health care providers, which may be physicians, other health care
professionals, health care facilities, or any combination
thereof.
`(E) Entities, such as insurance companies, health maintenance
organizations, and licensed provider-sponsored organizations, that
underwrite or administer health benefits coverage.
`(2) OFFERING HEALTH BENEFITS COVERAGE-
`(i) IN GENERAL- The HealthMart, in conjunction with those health
insurance issuers that offer health benefits coverage through the
HealthMart, makes available health benefits coverage in the manner
described in subsection (b) to either or both of the
following:
`(I) All small employers and eligible employees of those
employers, and the dependents of such employees.
`(II) Other individuals (including self-employed individuals), and
the dependents of such individuals, who are employees of an employer
but not including employees of employers.
`(ii) MANNER OF OFFERING- Such coverage shall be made available in
the manner described in subsection (c)(2) at rates (including employer's
and employee's share, if applicable) that are established by the health
insurance issuer on a policy or product specific basis and that may vary
only as permissible under State law. A HealthMart is deemed to be a
group health plan for purposes of applying section 702 of the Employee
Retirement Income Security Act of 1974, section 2702 of this Act, and
section 9802(b) of the Internal Revenue Code of 1986 (which limit
variation among similarly situated individuals of required premiums for
health benefits coverage on the basis of health status-related
factors).
`(iii) SEPARATE BOOKS OF BUSINESS- The coverage that is offered to
employers (and employees) described in subclause (I) of clause (i) need
not be the same as that offered to individuals described in subclause
(II) of such clause and the HealthMart shall establish premiums for
coverage under each such subclause as a separate book of
business.
`(B) NONDISCRIMINATION IN COVERAGE OFFERED-
`(i) IN GENERAL- Subject to clause (ii), if a HealthMart offers
coverage in a geographic area (as specified under paragraph (3)(A)) to
eligible employees or individuals, the HealthMart shall offer the same
coverage to all such employees or individuals in the same geographic
area. Section 2711(a)(1)(B) of this Act limits denial of enrollment of
certain eligible individuals under health benefits coverage in the small
group market.
`(ii) CONSTRUCTION- Nothing in this title shall be construed as
requiring or permitting a health insurance issuer to provide coverage
outside the service area of the issuer, as approved under State
law.
`(C) NO FINANCIAL UNDERWRITING- The HealthMart provides health
benefits coverage only through contracts with health insurance issuers and
does not assume insurance risk with respect to such coverage.
`(A) SPECIFICATION OF GEOGRAPHIC AREAS- The HealthMart shall specify
the geographic area (or areas) in which it makes available health benefits
coverage offered by health insurance issuers to employers, or individuals,
as the case may be. Any such area shall encompass at least one entire
county or equivalent area.
`(B) MULTISTATE AREAS- In the case of a HealthMart that serves more
than one State, such geographic areas may be areas that include portions
of two or more contiguous States.
`(C) MULTIPLE HEALTHMARTS PERMITTED IN SINGLE GEOGRAPHIC AREA- Nothing
in this title shall be construed as preventing the establishment and
operation of more than one HealthMart in a geographic area or as limiting
the number of HealthMarts that may operate in any area.
`(4) PROVISION OF ADMINISTRATIVE SERVICES TO PURCHASERS-
`(A) IN GENERAL- The HealthMart provides administrative services for
purchasers. Such services may include accounting, billing, enrollment
information, and employee coverage status reports.
`(B) CONSTRUCTION- Nothing in this subsection shall be construed as
preventing a HealthMart from serving as an administrative service
organization to any entity.
`(5) DISSEMINATION OF INFORMATION- The HealthMart collects and
disseminates (or arranges for the collection and dissemination of)
consumer-oriented information on the scope, cost, and enrollee satisfaction
of all coverage options offered through the HealthMart to its members and
eligible individuals. Such information shall be defined by the HealthMart
and shall be in a manner appropriate to the type of coverage offered. To the
extent practicable, such information shall include information on provider
performance, locations and hours of operation of providers, outcomes, and
similar matters. Nothing in this section shall be construed as preventing
the dissemination of such information or other information by the HealthMart
or by health insurance issuers through electronic or other means.
`(6) FILING INFORMATION- The HealthMart--
`(A) files with the applicable Federal authority information that
demonstrates the HealthMart's compliance with the applicable requirements
of this title; or
`(B) in accordance with rules established under section 2803(a), files
with a State such information as the State may require to demonstrate such
compliance.
`(b) HEALTH BENEFITS COVERAGE REQUIREMENTS-
`(1) COMPLIANCE WITH CONSUMER PROTECTION REQUIREMENTS- Any health
benefits coverage offered through a HealthMart shall--
`(A) be underwritten by a health insurance issuer that--
`(i) is licensed (or otherwise regulated) under State
law,
`(ii) meets all applicable State standards relating to consumer
protection, subject to section 2802(b), and
`(iii) offers the coverage under a contract with the
HealthMart;
`(B) subject to paragraph (2), be approved or otherwise permitted to
be offered under State law; and
`(C) provide full portability of creditable coverage for individuals
who remain members of the same HealthMart notwithstanding that they change
the employer through which they are members in accordance with the
provisions of the parts 6 and 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 and titles XXII and XXVII of this
Act, so long as both employers are purchasers in the HealthMart, and
notwithstanding that they terminate such employment, if the HealthMart
permits enrollment directly by eligible individuals.
`(2) ALTERNATIVE PROCESS FOR APPROVAL OF HEALTH BENEFITS COVERAGE IN
CASE OF DISCRIMINATION OR DELAY-
`(A) IN GENERAL- The requirement of paragraph (1)(B) shall not apply
to a policy or product of health benefits coverage offered in a State if
the health insurance issuer seeking to offer such policy or product files
an application to waive such requirement with the applicable Federal
authority, and the authority determines, based on the application and
other evidence presented to the authority, that--
`(i) either (or both) of the grounds described in subparagraph (B)
for approval of the application has been met; and
`(ii) the coverage meets the applicable State standards (other than
those that have been preempted under section 2802).
`(B) GROUNDS- The grounds described in this subparagraph with respect
to a policy or product of health benefits coverage are as
follows:
`(i) FAILURE TO ACT ON POLICY, PRODUCT, OR RATE APPLICATION ON A
TIMELY BASIS- The State has failed to complete action on the policy or
product (or rates for the policy or product) within 90 days of the date
of the State's receipt of a substantially complete application. No
period before the date of the enactment of this section shall be
included in determining such 90-day period.
`(ii) DENIAL OF APPLICATION BASED ON DISCRIMINATORY TREATMENT- The
State has denied such an application and--
`(I) the standards or review process imposed by the State as a
condition of approval of the policy or product imposes either any
material requirements, procedures, or standards to such policy or
product that are not generally applicable to other policies and
products offered or any
requirements that are preempted under section 2802; or
`(II) the State requires the issuer, as a condition of approval of
the policy or product, to offer any policy or product other than such
policy or product.
`(C) ENFORCEMENT- In the case of a waiver granted under subparagraph
(A) to an issuer with respect to a State, the Secretary may enter into an
agreement with the State under which the State agrees to provide for
monitoring and enforcement activities with respect to compliance of such
an issuer and its health insurance coverage with the applicable State
standards described in subparagraph (A)(ii). Such monitoring and
enforcement shall be conducted by the State in the same manner as the
State enforces such standards with respect to other health insurance
issuers and plans, without discrimination based on the type of issuer to
which the standards apply. Such an agreement shall specify or establish
mechanisms by which compliance activities are undertaken, while not
lengthening the time required to review and process applications for
waivers under subparagraph (A).
`(3) EXAMPLES OF TYPES OF COVERAGE- The benefits coverage made available
through a HealthMart may include, but is not limited to, any of the
following if it meets the other applicable requirements of this title:
`(A) Coverage through a health maintenance organization.
`(B) Coverage in connection with a preferred provider
organization.
`(C) Coverage in connection with a licensed provider-sponsored
organization.
`(D) Indemnity coverage through an insurance company.
`(E) Coverage offered in connection with a contribution into a medical
savings account or flexible spending account.
`(F) Coverage that includes a point-of-service option.
`(G) Any combination of such types of coverage.
`(4) WELLNESS BONUSES FOR HEALTH PROMOTION- Nothing in this title shall
be construed as precluding a health insurance issuer offering health
benefits coverage through a HealthMart from establishing premium discounts
or rebates for members or from modifying otherwise applicable copayments or
deductibles in return for adherence to programs of health promotion and
disease prevention so long as such programs are agreed to in advance by the
HealthMart and comply with all other provisions of this title and do not
discriminate among similarly situated members.
`(c) PURCHASERS; MEMBERS; HEALTH INSURANCE ISSUERS-
`(A) IN GENERAL- Subject to the provisions of this title, a HealthMart
shall permit any employer or any individual described in subsection
(a)(1)(C), if coverage is offered through the HealthMart for such employer
or individual, to contract with the HealthMart for the purchase of health
benefits coverage for its employees and dependents of those employees or
for the individual (and the individual's dependents), respectively, and
may not vary conditions of eligibility (including premium rates and
membership fees) of an employer or individual to be a purchaser.
`(B) ROLE OF ASSOCIATIONS, BROKERS, AND LICENSED HEALTH INSURANCE
AGENTS- Nothing in this section shall be construed as preventing an
association, broker, licensed health insurance agent, or other entity from
assisting or representing a HealthMart or employers or individuals from
entering into appropriate arrangements to carry out this title.
`(C) EXCLUSIVE NATURE OF CONTRACT-
`(i) IN GENERAL- Subject to clause (ii), such a contract shall
provide that the purchaser agrees not to obtain or sponsor health
benefits coverage, on behalf of any eligible employees (and their
dependents), other than through the HealthMart.
`(ii) EXCEPTION IF NO COVERAGE OFFERED IN AREA OF RESIDENCES- Clause
(i) shall not apply to an eligible individual who resides in an area for
which no coverage is offered by any health insurance issuer through the
HealthMart.
`(iii) NOTHING PRECLUDING INDIVIDUAL EMPLOYEE OPT-OUT- Nothing in
this subparagraph shall be construed as requiring an eligible employee
of an employer that is a purchaser to obtain health benefits coverage
through the HealthMart.
`(i) EMPLOYMENT BASED MEMBERSHIP- Under rules established to carry
out this title, with respect to an employer that has a purchaser
contract with a HealthMart, individuals who are employees of the
employer may enroll for group health benefits coverage (including
coverage for dependents of such enrolling employees) offered by a health
insurance issuer through the HealthMart.
`(ii) INDIVIDUALS- Under rules established to carry out this title,
with respect to an individual who has a purchaser contract with a
HealthMart for himself or herself, the individual may enroll for
individual health benefits coverage (including coverage for dependents
of such individual) offered by a health insurance issuer through the
HealthMart. Nothing in this clause shall be construed as requiring
a
HealthMart to offer coverage to individuals in any geographic area.
`(B) NONDISCRIMINATION IN ENROLLMENT- A HealthMart may not deny
enrollment as a member to an individual who is an employee or individual
(or dependent of such an employee or individual) eligible to be so
enrolled based on health status-related factors, except as may be
permitted consistent with section 2742(b).
`(C) ANNUAL OPEN ENROLLMENT PERIOD- In the case of members enrolled in
health benefits coverage offered by a health insurance issuer through a
HealthMart, subject to subparagraph (D), the HealthMart shall provide for
an annual open enrollment period of 30 days during which such members may
change the coverage option in which the members are enrolled.
`(D) RULES OF ELIGIBILITY- Nothing in this paragraph shall preclude a
HealthMart from establishing rules of employee or individual eligibility
for enrollment and reenrollment of members during the annual open
enrollment period under subparagraph (C). Such rules shall be applied
consistently to all purchasers and members within the HealthMart and shall
not be based in any manner on health status-related factors and may not
conflict with sections 2701 and 2702 of this Act.
`(3) HEALTH INSURANCE ISSUERS-
`(A) PREMIUM COLLECTION- The contract between a HealthMart and a
health insurance issuer shall provide, with respect to a member enrolled
with health benefits coverage offered by the issuer through the
HealthMart, for the payment of the premiums collected by the HealthMart
(or the issuer) for such coverage (less a pre-determined administrative
charge negotiated by the HealthMart and the issuer) to the
issuer.
`(B) SCOPE OF SERVICE AREA- Nothing in this title shall be construed
as requiring the service area of a health insurance issuer with respect to
health insurance coverage to cover the entire geographic area served by a
HealthMart.
`(C) AVAILABILITY OF COVERAGE OPTIONS- A HealthMart shall enter into
contracts with one or more health insurance issuers in a manner that
assures that at least 2 health insurance coverage options are made
available in the geographic area specified under subsection
(a)(3)(A).
`(d) PREVENTION OF CONFLICTS OF INTEREST-
`(1) FOR BOARDS OF DIRECTORS- A member of a board of directors of a
HealthMart may not serve as an employee or paid consultant to the
HealthMart, but may receive reasonable reimbursement for travel expenses for
purposes of attending meetings of the board or committees thereof.
`(2) FOR BOARDS OF DIRECTORS OR EMPLOYEES- An individual is not eligible
to serve in a paid or unpaid capacity on the board of directors of a
HealthMart or as an employee of the HealthMart, if the individual is
employed by, represents in any capacity, owns, or controls any ownership
interest in an organization from whom the HealthMart receives contributions,
grants, or other funds not connected with a contract for coverage through
the HealthMart.
`(3) EMPLOYMENT AND EMPLOYEE REPRESENTATIVES-
`(A) IN GENERAL- An individual who is serving on a board of directors
of a HealthMart as a representative described in subparagraph (A) or (B)
of section 2801(a)(1) shall not be employed by or affiliated with a health
insurance issuer or be licensed as or employed by or affiliated with a
health care provider.
`(B) CONSTRUCTION- For purposes of subparagraph (A), the term
`affiliated' does not include membership in a health benefits plan or the
obtaining of health benefits coverage offered by a health insurance
issuer.
`(1) NETWORK OF AFFILIATED HEALTHMARTS- Nothing in this section shall be
construed as preventing one or more HealthMarts serving different areas
(whether or not contiguous) from providing for some or all of the following
(through a single administrative organization or otherwise):
`(A) Coordinating the offering of the same or similar health benefits
coverage in different areas served by the different HealthMarts.
`(B) Providing for crediting of deductibles and other cost-sharing for
individuals who are provided health benefits coverage through the
HealthMarts (or affiliated HealthMarts) after--
`(i) a change of employers through which the coverage is provided,
or
`(ii) a change in place of employment to an area not served by the
previous HealthMart.
`(2) PERMITTING HEALTHMARTS TO ADJUST DISTRIBUTIONS AMONG ISSUERS TO
REFLECT RELATIVE RISK OF ENROLLEES- Nothing in this section shall be
construed as precluding a HealthMart from providing for adjustments in
amounts distributed among the health insurance issuers offering health
benefits coverage through the HealthMart based on factors such as the
relative health care risk of members enrolled under the coverage offered by
the different issuers.
`SEC. 2802. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.
`(a) AUTHORITY OF STATES- Nothing in this section shall be construed as
preempting State laws relating to the following:
`(1) The regulation of underwriters of health coverage, including
licensure and solvency requirements.
`(2) The application of premium taxes and required payments for guaranty
funds or for contributions to high-risk pools.
`(3) The application of fair marketing requirements and other consumer
protections (other than those specifically relating to an item described in
subsection (b)).
`(4) The application of requirements relating to the adjustment of rates
for health insurance coverage.
`(b) TREATMENT OF BENEFIT AND GROUPING REQUIREMENTS- State laws insofar as
they relate to any of the following are superseded and, except as provided
under section 2801(c)(3)(C), shall not apply to health benefits coverage made
available through a HealthMart:
`(1) Benefit requirements for health benefits coverage offered through a
HealthMart, including (but not limited to) requirements relating to coverage
of specific providers, specific services or conditions, or the amount,
duration, or scope of benefits, but not including requirements to the extent
required to implement title XXVII or other Federal law and to the extent the
requirement prohibits an exclusion of a specific disease from such
coverage.
`(2) Requirements (commonly referred to as fictitious group laws)
relating to grouping and similar requirements for such coverage to the
extent such requirements impede the establishment and operation of
HealthMarts pursuant to this title.
`(3) Any other requirements (including limitations on compensation
arrangements) that, directly or indirectly, preclude (or have the effect of
precluding) the offering of such coverage through a HealthMart, if the
HealthMart meets the requirements of this title.
Any State law or regulation relating to the composition or organization of
a HealthMart is preempted to the extent the law or regulation is inconsistent
with the provisions of this title.
`(c) APPLICATION OF ERISA FIDUCIARY AND DISCLOSURE REQUIREMENTS- The board
of directors of a HealthMart is deemed to be a plan administrator of an
employee welfare benefit plan which is a group health plan for purposes of
applying parts 1 and 4 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974 and those provisions of part 5 of such subtitle
which are applicable to enforcement of such parts 1 and 4, and the HealthMart
shall be treated as such a plan and the enrollees enrolled on the basis of
employment shall be treated as participants and beneficiaries for purposes of
applying such provisions pursuant to this subsection.
`(d) APPLICATION OF ERISA RENEWABILITY PROTECTION- A HealthMart is deemed
to be group health plan that is a multiple employer welfare arrangement for
purposes of applying section 703 of the Employee Retirement Income Security
Act of 1974.
`(e) APPLICATION OF RULES FOR NETWORK PLANS AND FINANCIAL CAPACITY- The
provisions of subsections (c) and (d) of section 2711 apply to health benefits
coverage offered by a health insurance issuer through a HealthMart.
`(f) CONSTRUCTION RELATING TO OFFERING REQUIREMENT- Nothing in section
2711(a) of this Act or 703 of the Employee Retirement Income Security Act of
1974 shall be construed as permitting the offering outside the HealthMart of
health benefits coverage that is only made available through a HealthMart
under this section because of the application of subsection (b).
`(g) APPLICATION TO GUARANTEED RENEWABILITY REQUIREMENTS IN CASE OF
DISCONTINUATION OF AN ISSUER- For purposes of applying section 2712 in the
case of health insurance coverage offered by a health insurance issuer through
a HealthMart, if the contract between the HealthMart and the issuer is
terminated and the HealthMart continues to make available any health insurance
coverage after the date of such termination, the following rules apply:
`(1) RENEWABILITY- The HealthMart shall fulfill the obligation under
such section of the issuer renewing and continuing in force coverage by
offering purchasers (and members and their dependents) all available health
benefits coverage that would otherwise be available to similarly-situated
purchasers and members from the remaining participating health insurance
issuers in the same manner as would be required of issuers under section
2712(c).
`(2) APPLICATION OF ASSOCIATION RULES- The HealthMart shall be
considered an association for purposes of applying section 2712(e).
`(h) CONSTRUCTION IN RELATION TO CERTAIN OTHER LAWS- Nothing in this title
shall be construed as modifying or affecting the applicability to HealthMarts
or health benefits coverage offered by a health insurance issuer through a
HealthMart of parts 6 and 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 or titles XXII and XXVII of this
Act.
`SEC. 2803. ADMINISTRATION.
`(a) IN GENERAL- The applicable Federal authority shall administer this
title and is authorized to issue such regulations as may be required to carry
out this title. Such regulations shall promote the active development of
Healthmarts and first be issued in final form not later than 6 months after
the date of the enactment of this title and shall be subject to Congressional
review under the provisions of chapter 8 of title 5, United States Code. The
applicable Federal authority shall incorporate the process of `deemed file and
use' with respect to the information filed under section 2801(a)(6)(A) and
shall determine whether information filed by a HealthMart demonstrates
compliance with the applicable requirements of this title. Such authority
shall exercise its authority under this title in a manner that fosters and
promotes the development of HealthMarts in order to improve access to health
care coverage and services.
`(b) PERIODIC REPORTS- The applicable Federal authority shall submit to
Congress a report every 30 months, during the 10-year period beginning on the
effective date of the rules promulgated by the applicable Federal authority to
carry out this title, on the effectiveness of this title in promoting coverage
of uninsured individuals. Such authority may provide for the production of
such reports through one or more contracts with appropriate private
entities.
`SEC. 2804. DEFINITIONS.
`For purposes of this title:
`(1) APPLICABLE FEDERAL AUTHORITY- The term `applicable Federal
authority' means the Secretary of Health and Human Services .
`(2) ELIGIBLE EMPLOYEE OR INDIVIDUAL- The term `eligible' means, with
respect to an employee or other individual and a HealthMart, an employee or
individual who is eligible under section 2801(c)(2) to enroll or be enrolled
in health benefits coverage offered through the HealthMart.
`(3) EMPLOYER; EMPLOYEE; DEPENDENT- Except as the applicable Federal
authority may otherwise provide, the terms `employer', `employee', and
`dependent', as applied to health insurance coverage offered by a health
insurance issuer licensed (or otherwise regulated) in a State, shall have
the meanings applied to such terms with respect to such coverage under the
laws of the State relating to such coverage and such an issuer. The term
`dependent' may include the spouse and children of the individual
involved.
`(4) HEALTH BENEFITS COVERAGE- The term `health benefits coverage' has
the meaning given the term group health insurance coverage in section
2791(b)(4).
`(5) HEALTH INSURANCE ISSUER- The term `health insurance issuer' has the
meaning given such term in section 2791(b)(2).
`(6) HEALTH STATUS-RELATED FACTOR- The term `health status-related
factor' has the meaning given such term in section 2791(d)(9).
`(7) HEALTHMART- The term `HealthMart' is defined in section
2801(a).
`(8) MEMBER- The term `member` means, with respect to a HealthMart, an
individual enrolled for health benefits coverage through the HealthMart
under section 2801(c)(2).
`(9) PURCHASER- The term `purchaser' means, with respect to a
HealthMart, an employer or individual that has contracted under section
2801(c)(1)(A) with the HealthMart for the purchase of health benefits
coverage.
`(10) SMALL EMPLOYER- The term `small employer' has the meaning given
such term in section 2791(e)(4), but also includes any employer if--
`(A) such employer met the requirements under such section for any
preceding calendar year after 1998, and
`(B) such employer employed an average of 250 or fewer employees on
business days during each preceding calendar year after 1998.'.
Subtitle D--Community Health Organizations
SEC. 231. PROMOTION OF PROVISION OF INSURANCE BY COMMUNITY HEALTH
ORGANIZATIONS.
(a) WAIVER OF STATE LICENSURE REQUIREMENT FOR COMMUNITY HEALTH
ORGANIZATIONS IN CERTAIN CASES- Subpart I of part D of title III of the Public
Health Service Act is amended by adding at the end the following new
section:
`WAIVER OF STATE LICENSURE REQUIREMENT FOR COMMUNITY HEALTH ORGANIZATIONS IN
CERTAIN CASES
`SEC. 330B. (a) WAIVER AUTHORIZED-
`(1) IN GENERAL- A community health organization may offer health
insurance coverage in a State notwithstanding that it is not licensed in
such a State to offer such coverage if--
`(A) the organization files an application for waiver of the licensure
requirement with the Secretary of Health and Human Services (in this
section referred to as the `Secretary') by not later than November 1,
2003; and
`(B) the Secretary determines, based on the application and other
evidence presented to the Secretary, that any of the grounds for approval
of the application described in subparagraph (A), (B), or (C) of paragraph
(2) has been met.
`(2) GROUNDS FOR APPROVAL OF WAIVER-
`(A) FAILURE TO ACT ON LICENSURE APPLICATION ON A TIMELY BASIS- The
ground for approval of such a waiver application described in this
subparagraph is that the State has failed to complete action on a
licensing application of the organization within 90 days of the date of
the State's receipt of a substantially complete application. No period
before the date of the enactment of this section shall be included in
determining such 90-day period.
`(B) DENIAL OF APPLICATION BASED ON DISCRIMINATORY TREATMENT- The
ground for approval of such a waiver application described in this
subparagraph is that the State has denied such a licensing application and
the standards or review process imposed by the State as a condition of
approval of the license or as the basis for such denial by the State
imposes any material requirements, procedures, or standards (other than
solvency requirements) to such organizations that are not generally
applicable to other entities engaged in a substantially similar
business.
`(C) DENIAL OF APPLICATION BASED ON APPLICATION OF SOLVENCY
REQUIREMENTS- With respect to waiver applications filed on or after the
date of publication of solvency standards established by the Secretary
under subsection (d), the ground for approval of such a waiver application
described in this subparagraph is that the State has denied such a
licensing application based (in whole or in part) on the organization's
failure to meet applicable State solvency requirements and such
requirements are not the same as the solvency standards established by the
Secretary. For purposes of this subparagraph, the term solvency
requirements means requirements relating to solvency and other matters
covered under the standards established by the Secretary under subsection
(d).
`(3) TREATMENT OF WAIVER- In the case of a waiver granted under this
subsection for a community health organization with respect to a
State--
`(A) LIMITATION TO STATE- The waiver shall be effective only with
respect to that State and does not apply to any other State.
`(B) LIMITATION TO 36-MONTH PERIOD- The waiver shall be effective only
for a 36-month period but may be renewed for up to 36 additional months if
the Secretary determines that such an extension is appropriate.
`(C) CONDITIONED ON COMPLIANCE WITH CONSUMER PROTECTION AND QUALITY
STANDARDS- The continuation of the waiver is conditioned upon the
organization's compliance with the requirements described in paragraph
(5).
`(D) PREEMPTION OF STATE LAW- Any provisions of law of that State
which relate to the licensing of the organization and which prohibit the
organization from providing health insurance coverage shall be
superseded.
`(4) PROMPT ACTION ON APPLICATION- The Secretary shall grant or deny
such a waiver application within 60 days after the date the Secretary
determines that a substantially complete waiver application has been filed.
Nothing in this section shall be construed as preventing an organization
which has had such a waiver application denied from submitting a subsequent
waiver application.
`(5) APPLICATION AND ENFORCEMENT OF STATE CONSUMER PROTECTION AND
QUALITY STANDARDS- A waiver granted under this subsection to an organization
with respect to licensing under State law is conditioned upon the
organization's compliance with all consumer protection and quality standards
insofar as such standards--
`(A) would apply in the State to the community health organization if
it were licensed as an entity offering health insurance coverage under
State law; and
`(B) are generally applicable to other risk-bearing managed care
organizations and plans in the State.
`(6) REPORT- By not later than December 31, 2002, the Secretary shall
submit to the Committee on Commerce of the House of Representatives and the
Committee on Labor and Human Resources of the Senate a report regarding
whether the waiver process under this subsection should be continued after
December 31, 2003.
`(b) ASSUMPTION OF FULL FINANCIAL RISK- To qualify for a waiver under
subsection (a), the community health organization shall assume full financial
risk on a prospective basis for the provision of covered health care services,
except that the organization--
`(1) may obtain insurance or make other arrangements for the cost of
providing to any enrolled member such services the aggregate value of which
exceeds such aggregate level as the Secretary specifies from time to
time;
`(2) may obtain insurance or make other arrangements for the cost of
such services provided to its enrolled members other than through the
organization because medical necessity required their provision before they
could be secured through the organization;
`(3) may obtain insurance or make other arrangements for not more than
90 percent of the amount by which its costs for any of its fiscal years
exceed 105 percent of its income for such fiscal year; and
`(4) may make arrangements with physicians or other health care
professionals, health care institutions, or any combination of such
individuals or institutions to assume all or part of the financial risk on a
prospective basis for the provision of health services by the physicians or
other health professionals or through the institutions.
`(c) CERTIFICATION OF PROVISION AGAINST RISK OF INSOLVENCY FOR UNLICENSED
CHO'S-
`(1) IN GENERAL- Each community health organization that is not licensed
by a State and for which a waiver application has been approved under
subsection (a)(1), shall meet standards established by the Secretary under
subsection (d) relating to the financial solvency and capital adequacy of
the organization.
`(2) CERTIFICATION PROCESS FOR SOLVENCY STANDARDS FOR CHO'S- The
Secretary shall establish a process for the receipt and approval of
applications of a community health organization described in paragraph (1)
for certification (and periodic recertification) of the organization as
meeting such solvency standards. Under such process, the Secretary shall act
upon such a certification application not later than 60 days after the date
the application has been received.
`(d) ESTABLISHMENT OF SOLVENCY STANDARDS FOR COMMUNITY HEALTH
ORGANIZATIONS-
`(1) IN GENERAL- The Secretary shall establish, on an expedited basis
and by rule pursuant to section 553 of title 5, United States Code and
through the Health Resources and Services Administration, standards
described in subsection (c)(1) (relating to financial solvency and capital
adequacy) that entities must meet to obtain a waiver under subsection
(a)(2)(C). In establishing such standards, the Secretary shall consult with
interested organizations, including the National Association of Insurance
Commissioners, the Academy of Actuaries, and organizations representing
Federally qualified health centers.
`(2) FACTORS TO CONSIDER FOR SOLVENCY STANDARDS- In establishing
solvency standards for community health organizations under paragraph (1),
the Secretary shall take into account--
`(A) the delivery system assets of such an organization and ability of
such an organization to provide services to enrollees;
`(B) alternative means of protecting against insolvency, including
reinsurance, unrestricted surplus, letters of credit, guarantees,
organizational insurance coverage, partnerships with other licensed
entities, and valuation attributable to the ability of such an
organization
to meet its service obligations through direct delivery of care; and
`(C) any standards developed by the National Association of Insurance
Commissioners specifically for risk-based health care delivery
organizations.
`(3) ENROLLEE PROTECTION AGAINST INSOLVENCY- Such standards shall
include provisions to prevent enrollees from being held liable to any person
or entity for the organization's debts in the event of the organization's
insolvency.
`(4) DEADLINE- Such standards shall be promulgated in a manner so they
are first effective by not later than April 1, 1999.
`(e) DEFINITIONS- In this section:
`(1) COMMUNITY HEALTH ORGANIZATION- The term `community health
organization' means an organization that is a Federally-qualified health
center or is controlled by one or more Federally-qualified health
centers.
`(2) FEDERALLY-QUALIFIED HEALTH CENTER- The term `Federally-qualified
health center' has the meaning given such term in section 1905(l)(2)(B) of
the Social Security Act.
`(3) HEALTH INSURANCE COVERAGE- The term `health insurance coverage' has
the meaning given such term in section 2791(b)(1).
`(4) CONTROL- The term `control' means the possession, whether direct or
indirect, of the power to direct or cause the direction of the management
and policies of the organization through membership, board representation,
or an ownership interest equal to or greater than 50.1 percent.'.
TITLE III--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986
Subtitle A--Patient Protections
SEC. 301. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY MEDICAL
CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC CARE, AND CONTINUITY OF
CARE.
Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is
amended--
(1) in the table of sections, by inserting after the item relating to
section 9812 the following new item:
`Sec. 9813. Patient access to unrestricted medical advice, emergency
medical care, obstetric and gynecological care, pediatric care, and
continuity of care.'; and
(2) by inserting after section 9812 the following:
`SEC. 9813. PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE, EMERGENCY MEDICAL
CARE, OBSTETRIC AND GYNECOLOGICAL CARE, PEDIATRIC CARE, AND CONTINUITY OF
CARE.
`(a) PATIENT ACCESS TO UNRESTRICTED MEDICAL ADVICE-
`(1) IN GENERAL- In the case of any health care professional acting
within the lawful scope of practice in the course of carrying out a
contractual employment arrangement or other direct contractual arrangement
between such professional and a group health plan, the plan with which such
contractual employment arrangement or other direct contractual arrangement
is maintained by the professional may not impose on such professional under
such arrangement any prohibition or restriction with respect to advice,
provided to a participant or beneficiary under the plan who is a patient,
about the health status of the participant or beneficiary or the medical
care or treatment for the condition or disease of the participant or
beneficiary, regardless of whether benefits for such care or treatment are
provided under the plan.
`(2) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this paragraph,
the term `health care professional' means a physician (as defined in section
1861(r) of the Social Security Act) or other health care professional if
coverage for the professional's services is provided under the group health
plan for the services of the professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist, physician assistant,
physical or occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical nurse (including
nurse practitioner, clinical nurse specialist, certified registered nurse
anesthetist, and certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory therapy
technician.
`(3) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed
to require the sponsor of a group health plan to engage in any practice that
would violate its religious beliefs or moral convictions.
`(b) PATIENT ACCESS TO EMERGENCY MEDICAL CARE-
`(1) COVERAGE OF EMERGENCY SERVICES-
`(A) IN GENERAL- If a group health plan provides any benefits with
respect to emergency services (as defined in subparagraph (B)(ii)), or
ambulance services, the plan shall cover emergency services (including
emergency ambulance services as defined in subparagraph (B)(iii))
furnished under the plan--
`(i) without the need for any prior authorization
determination;
`(ii) whether or not the health care provider furnishing such
services is a participating provider with respect to such
services;
`(iii) in a manner so that, if such services are provided to a
participant or beneficiary by a nonparticipating health care provider,
the participant or beneficiary is not liable for amounts that exceed the
amounts of liability that would be incurred if the services were
provided by a participating provider; and
`(iv) without regard to any other term or condition of such plan
(other than exclusion or coordination of benefits, or an affiliation or
waiting period, permitted
under section 701 and other than applicable cost sharing).
`(B) DEFINITIONS- In this subsection:
`(i) EMERGENCY MEDICAL CONDITION- The term `emergency medical
condition' means--
`(I) a medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a prudent
layperson, who possesses an average knowledge of health and medicine,
could reasonably expect the absence of immediate medical attention to
result in a condition described in clause (i), (ii), or (iii) of
section 1867(e)(1)(A) of the Social Security Act (42 U.S.C.
1395dd(e)(1)(A)); and
`(II) a medical condition manifesting itself in a neonate by acute
symptoms of sufficient severity (including severe pain) such that a
prudent health care professional could reasonably expect the absence
of immediate medical attention to result in a condition described in
clause (i), (ii), or (iii) of section 1867(e)(1)(A) of the Social
Security Act.
`(ii) EMERGENCY SERVICES- The term `emergency services'
means--
`(I) with respect to an emergency medical condition described in
clause (i)(I), a medical screening examination (as required under
section 1867 of the Social Security Act, 42 U.S.C. 1395dd)) that is
within the capability of the emergency department of a hospital,
including ancillary services routinely available to the emergency
department to evaluate an emergency medical condition (as defined in
clause (i)) and also, within the capabilities of the staff and
facilities at the hospital, such further medical examination and
treatment as are required under section 1867 of such Act to stabilize
the patient; or
`(II) with respect to an emergency medical condition described in
clause (i)(II), medical treatment for such condition rendered by a
health care provider in a hospital to a neonate, including available
hospital ancillary services in response to an urgent request of a
health care professional and to the extent necessary to stabilize the
neonate.
`(iii) EMERGENCY AMBULANCE SERVICES- The term `emergency ambulance
services' means ambulance services (as defined for purposes of section
1861(s)(7) of the Social Security Act) furnished to transport an
individual who has an emergency medical condition (as defined in clause
(i)) to a hospital for the receipt of emergency services (as defined in
clause (ii)) in a case in which appropriate emergency medical screening
examinations are covered under the plan pursuant to paragraph (1)(A) and
a prudent layperson, with an average knowledge of health and medicine,
could reasonably expect that the absence of such transport would result
in placing the health of the individual in serious jeopardy, serious
impairment of bodily function, or serious dysfunction of any bodily
organ or part.
`(iv) STABILIZE- The term `to stabilize' means, with respect to an
emergency medical condition, to provide such medical treatment of the
condition as may be necessary to assure, within reasonable medical
probability, that no material deterioration of the condition is likely
to result from or occur during the transfer of the individual from a
facility.
`(v) NONPARTICIPATING- The term `nonparticipating' means, with
respect to a health care provider that provides health care items and
services to a participant or beneficiary under group health plan, a
health care provider that is not a participating health care provider
with respect to such items and services.
`(vi) PARTICIPATING- The term `participating' means, with respect to
a health care provider that provides health care items and services to a
participant or beneficiary under group health plan, a health care
provider that furnishes such
items and services under a contract or other arrangement with the plan.
`(c) PATIENT RIGHT TO OBSTETRIC AND GYNECOLOGICAL CARE-
`(1) IN GENERAL- In any case in which a group health plan--
`(A) provides benefits under the terms of the plan consisting
of--
`(i) gynecological care (such as preventive women's health
examinations); or
`(ii) obstetric care (such as pregnancy-related
services),
provided by a participating health care professional who specializes
in such care (or provides benefits consisting of payment for such care);
and
`(B) requires or provides for designation by a participant or
beneficiary of a participating primary care provider,
if the primary care provider designated by such a participant or
beneficiary is not such a health care professional, then the plan shall meet
the requirements of paragraph (2).
`(2) REQUIREMENTS- A group health plan meets the requirements of this
paragraph, in connection with benefits described in paragraph (1) consisting
of care described in clause (i) or (ii) of paragraph (1)(A) (or consisting
of payment therefor), if the plan--
`(A) does not require authorization or a referral by the primary care
provider in order to obtain such benefits; and
`(B) treats the ordering of other care of the same type, by the
participating health care professional providing the care described in
clause (i) or (ii) of paragraph (1)(A), as the authorization of the
primary care provider with respect to such care.
`(3) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this subsection,
the term `health care professional' means an individual (including, but not
limited to, a nurse midwife or nurse practitioner) who is licensed,
accredited, or certified under State law to provide obstetric and
gynecological health care services and who is operating within the scope of
such licensure, accreditation, or certification.
`(4) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
preventing a plan from offering (but not requiring a participant or
beneficiary to accept) a health care professional trained, credentialed, and
operating within the scope of their licensure to perform obstetric and
gynecological health care services. Nothing in paragraph (2)(B) shall waive
any requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of gynecological or obstetric care
so ordered.
`(5) TREATMENT OF MULTIPLE COVERAGE OPTIONS- In the case of a plan
providing benefits under two or more coverage options, the requirements of
this subsection shall apply separately with respect to each coverage
option.
`(d) PATIENT RIGHT TO PEDIATRIC CARE-
`(1) IN GENERAL- In any case in which a group health plan provides
benefits consisting of routine pediatric care provided by a participating
health care professional who specializes in pediatrics (or consisting of
payment for such care) and the plan requires or provides for designation by
a participant or beneficiary of a participating primary care provider, the
plan shall provide that such a participating health care professional may be
designated, if available, by a parent or guardian of any beneficiary under
the plan is who under 18 years of age, as the primary care provider with
respect to any such benefits.
`(2) HEALTH CARE PROFESSIONAL DEFINED- For purposes of this subsection,
the term `health care professional' means an individual who is licensed,
accredited, or certified under State law to provide pediatric health care
services and who is operating within the scope of such licensure,
accreditation, or certification.
`(3) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
preventing a plan from offering (but not requiring a participant or
beneficiary to accept) a health care professional trained, credentialed, and
operating within the scope of their licensure to perform pediatric health
care services. Nothing in paragraph (1) shall waive any requirements of
coverage relating to medical necessity or appropriateness with respect to
coverage of pediatric care so ordered.
`(4) TREATMENT OF MULTIPLE COVERAGE OPTIONS- In the case of a plan
providing benefits under two or more coverage options, the requirements of
this subsection shall apply separately with respect to each coverage
option.
`(A) TERMINATION OF PROVIDER- If a contract between a group health
plan and a health care provider is terminated (as defined in subparagraph
(D)(ii)), or benefits provided by a health care provider are terminated
because of a change in the terms of provider participation in a group
health plan, and an individual who, at the time of such termination, is a
participant or beneficiary in the plan and is scheduled to undergo surgery
(including an organ transplantation), is undergoing treatment for
pregnancy, or is determined to be terminally ill (as defined in section
1861(dd)(3)(A) of the Social Security Act) and is undergoing treatment for
the terminal illness, the plan shall--
`(i) notify the individual on a timely basis of such termination and
of the right to elect continuation of coverage of treatment by the
provider under this subsection; and
`(ii) subject to paragraph (3), permit the individual to elect to
continue to be covered with respect to treatment by the provider for
such surgery, pregnancy, or
illness during a transitional period (provided under paragraph (2)).
`(B) TREATMENT OF TERMINATION OF CONTRACT WITH HEALTH INSURANCE
ISSUER- If a contract for the provision of health insurance coverage
between a group health plan and a health insurance issuer is terminated
and, as a result of such termination, coverage of services of a health
care provider is terminated with respect to an individual, the provisions
of subparagraph (A) (and the succeeding provisions of this subsection)
shall apply under the plan in the same manner as if there had been a
contract between the plan and the provider that had been terminated, but
only with respect to benefits that are covered under the plan after the
contract termination.
`(C) TERMINATION DEFINED- For purposes of this subsection, the term
`terminated' includes, with respect to a contract, the expiration or
nonrenewal of the contract, but does not include a termination of the
contract by the plan for failure to meet applicable quality standards or
for fraud.
`(2) TRANSITIONAL PERIOD-
`(A) IN GENERAL- Except as provided in subparagraphs (B) through (D),
the transitional period under this paragraph shall extend up to 90 days
(as determined by the treating health care professional) after the date of
the notice described in paragraph (1)(A)(i) of the provider's
termination.
`(B) SCHEDULED SURGERY- If surgery was scheduled for an individual
before the date of the announcement of the termination of the provider
status under paragraph (1)(A)(i), the transitional period under this
paragraph with respect to the surgery or transplantation.
`(i) a participant or beneficiary was determined to be pregnant at
the time of a provider's termination of participation, and
`(ii) the provider was treating the pregnancy before date of the
termination,
the transitional period under this paragraph with respect to
provider's treatment of the pregnancy shall extend through the provision
of post-partum care directly related to the delivery.
`(D) TERMINAL ILLNESS- If--
`(i) a participant or beneficiary was determined to be terminally
ill (as determined under section 1861(dd)(3)(A) of the Social Security
Act) at the time of a provider's termination of participation,
and
`(ii) the provider was treating the terminal illness before the date
of termination,
the transitional period under this paragraph shall extend for the
remainder of the individual's life for care directly related to the
treatment of the terminal illness or its medical manifestations.
`(3) PERMISSIBLE TERMS AND CONDITIONS- A group health plan may condition
coverage of continued treatment by a provider under paragraph (1)(A)(i) upon
the individual notifying the plan of the election of continued coverage and
upon the provider agreeing to the following terms and conditions:
`(A) The provider agrees to accept reimbursement from the plan and
individual involved (with respect to cost-sharing) at the rates applicable
prior to the start of the transitional period as payment in full (or, in
the case described in paragraph (1)(B), at the rates applicable under the
replacement plan after the date of the termination of the contract with
the health insurance issuer) and not to impose cost-sharing with respect
to the individual in an amount that would exceed the cost-sharing that
could have been imposed if the contract referred to in paragraph (1)(A)
had not been terminated.
`(B) The provider agrees to adhere to the quality assurance standards
of the plan responsible for payment under subparagraph (A) and to provide
to such plan necessary medical information related to the care
provided.
`(C) The provider agrees otherwise to adhere to such plan's policies
and procedures, including procedures regarding referrals and obtaining
prior authorization and providing services pursuant to a treatment plan
(if any) approved by the plan.
`(D) The provider agrees to provide transitional care to all
participants and beneficiaries who are eligible for and elect to have
coverage of such care from such provider.
`(E) If the provider initiates the termination, the provider has
notified the plan within 30 days prior to the effective date of the
termination of--
`(i) whether the provider agrees to permissible terms and conditions
(as set forth in this paragraph) required by the plan, and
`(ii) if the provider agrees to the terms and conditions, the
specific plan beneficiaries and participants undergoing a course of
treatment from the provider who the provider believes, at the time of
the notification, would be eligible for transitional care under this
subsection.
`(4) CONSTRUCTION- Nothing in this subsection shall be construed
to--
`(A) require the coverage of benefits which would not have been
covered if the provider involved remained a participating provider,
or
`(B) prohibit a group health plan from conditioning a provider's
participation on the provider's agreement to provide transitional care to
all participants and beneficiaries eligible
to obtain coverage of such care furnished by the provider as set forth under
this subsection.
`(f) COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CANCER CLINICAL
TRIALS-
`(A) IN GENERAL- If a group health plan provides coverage to a
qualified individual (as defined in paragraph (2)), the plan--
`(i) may not deny the individual participation in the clinical trial
referred to in paragraph (2)(B);
`(ii) subject to paragraphs (2), (3), and (4), may not deny (or
limit or impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection with
participation in the trial; and
`(iii) may not discriminate against the individual on the basis of
the participation of the participant or beneficiary in such
trial.
`(B) EXCLUSION OF CERTAIN COSTS- For purposes of subparagraph (A)(ii),
routine patient costs do not include the cost of the tests or measurements
conducted primarily for the purpose of the clinical trial
involved.
`(C) USE OF IN-NETWORK PROVIDERS- If one or more participating
providers is participating in a clinical trial, nothing in subparagraph
(A) shall be construed as preventing a plan from requiring that a
qualified individual participate in the trial through such a participating
provider if the provider will accept the individual as a participant in
the trial.
`(2) QUALIFIED INDIVIDUAL DEFINED- For purposes of paragraph (1), the
term `qualified individual' means an individual who is a participant or
beneficiary in a group health plan and who meets the following
conditions:
`(A)(i) The individual has been diagnosed with cancer.
`(ii) The individual is eligible to participate in an approved
clinical trial according to the trial protocol with respect to treatment
of cancer.
`(iii) The individual's participation in the trial offers meaningful
potential for significant clinical benefit for the individual.
`(i) the referring physician is a participating health care
professional and has concluded that the individual's participation in
such trial would be appropriate based upon satisfaction by the
individual of the conditions described in subparagraph (A);
or
`(ii) the individual provides medical and scientific information
establishing that the individual's participation in such trial would be
appropriate based upon the satisfaction by the individual of the
conditions described in subparagraph (A).
`(A) IN GENERAL- A group health plan shall provide for payment for
routine patient costs described in paragraph (1)(B) but is not required to
pay for costs of items and services that are reasonably expected to be
paid for by the sponsors of an approved clinical trial.
`(B) ROUTINE PATIENT CARE COSTS-
`(i) IN GENERAL- For purposes of this paragraph, the term `routine
patient care costs' shall include the costs associated with the
provision of items and services that--
`(I) would otherwise be covered under the group health plan if
such items and services were not provided in connection with an
approved clinical trial program; and
`(II) are furnished according to the protocol of an approved
clinical trial program.
`(ii) EXCLUSION- For purposes of this paragraph, `routine patient
care costs' shall not include the costs associated with the provision
of--
(I) an investigational drug or device, unless the Secretary has
authorized the manufacturer of such drug or device to charge for such
drug or device; or
(II) any item or service supplied without charge by the sponsor of
the approved clinical trial program.
`(C) PAYMENT RATE- For purposes of this subsection--
`(i) PARTICIPATING PROVIDERS- In the case of covered items and
services provided by a participating provider, the payment rate shall be
at the agreed upon rate.
`(ii) NONPARTICIPATING PROVIDERS- In the case of covered items and
services provided by a nonparticipating provider, the payment rate shall
be at the rate the plan would normally pay for comparable items or
services under clause (i).
`(4) APPROVED CLINICAL TRIAL DEFINED-
`(A) IN GENERAL- For purposes of this subsection, the term `approved
clinical trial' means a cancer clinical research study or cancer clinical
investigation approved by an Institutional Review Board.
`(B) CONDITIONS FOR DEPARTMENTS- The conditions described in this
paragraph, for a study or investigation conducted by a Department, are
that the study or investigation has been reviewed and approved through a
system of peer review that the Secretary determines--
`(i) to be comparable to the system of peer review of studies and
investigations
used by the National Institutes of Health, and
`(ii) assures unbiased review of the highest scientific standards by
qualified individuals who have no interest in the outcome of the
review.
`(5) CONSTRUCTION- Nothing in this subsection shall be construed to
limit a plan's coverage with respect to clinical trials.
`(6) PLAN SATISFACTION OF CERTAIN REQUIREMENTS; RESPONSIBILITIES OF
FIDUCIARIES-
`(A) IN GENERAL- For purposes of this subsection, insofar as a group
health plan provides benefits in the form of health insurance coverage
through a health insurance issuer, the plan shall be treated as meeting
the requirements of this subsection with respect to such benefits and not
be considered as failing to meet such requirements because of a failure of
the issuer to meet such requirements so long as the plan sponsor or its
representatives did not cause such failure by the issuer.
`(B) CONSTRUCTION- Nothing in this subsection shall be construed to
affect or modify the responsibilities of the fiduciaries of a group health
plan under part 4 of subtitle B of title I of the Employee Retirement
Income Security Act of 1974.
`(A) STUDY- The Secretary shall analyze cancer clinical research and
its cost implications for managed care, including differentiation
in--
`(i) the cost of patient care in trials versus standard
care;
`(ii) the cost effectiveness achieved in different sites of
service;
`(iii) research outcomes;
`(iv) volume of research subjects available in different sites of
service;
`(v) access to research sites and clinical trials by cancer
patients;
`(vi) patient cost sharing or copayment costs realized in different
sites of service;
`(vii) health outcomes experienced in different sites of
service;
`(viii) long term health care services and costs experienced in
different sites of service;
`(ix) morbidity and mortality experienced in different sites of
service; and
`(x) patient satisfaction and preference of sites of
service.
`(B) REPORT TO CONGRESS- Not later than January 1, 2005, the Secretary
shall submit a report to Congress that contains--
`(i) an assessment of any incremental cost to group health plans
resulting from the provisions of this section;
`(ii) a projection of expenditures to such plans resulting from this
section;
`(iii) an assessment of any impact on premiums resulting from this
section; and
`(iv) recommendations regarding action on other
diseases.'.
SEC. 302. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL- The amendments made by this subtitle shall apply with
respect to plan years beginning on or after January 1 of the second calendar
year following the date of the enactment of this Act, except that the
Secretary of the Treasury may issue regulations before such date under such
amendments. The Secretary shall first issue regulations necessary to carry out
the amendments made by this subtitle before the effective date thereof.
(b) LIMITATION ON ENFORCEMENT ACTIONS- No enforcement action shall be
taken, pursuant to the amendments made by this subtitle, against a group
health plan with respect to a violation of a requirement imposed by such
amendments before the date of issuance of regulations issued in connection
with such requirement, if the plan has sought to comply in good faith with
such requirement.
(c) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS- In the case of a
group health plan maintained pursuant to one or more collective bargaining
agreements between employee representatives and one or more employers ratified
before the date of the enactment of this Act, the amendments made by this
subtitle shall not apply with respect to plan years beginning before the later
of--
(1) the date on which the last of the collective bargaining agreements
relating to the plan terminates (determined without regard to any extension
thereof agreed to after the date of the enactment of this Act); or
For purposes of this subsection, any plan amendment made pursuant to a
collective bargaining agreement relating to the plan which amends the plan
solely to conform to any requirement added by this subtitle shall not be
treated as a termination of such collective bargaining agreement.
Subtitle B--Medical Savings Accounts
SEC. 311. EXPANSION OF AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.
(a) REPEAL OF LIMITATIONS ON NUMBER OF MEDICAL SAVINGS ACCOUNTS-
(1) IN GENERAL- Subsections (i) and (j) of section 220 of the Internal
Revenue Code of 1986 are hereby repealed.
(2) CONFORMING AMENDMENT- Paragraph (1) of section 220(c) of such Code
is amended by striking subparagraph (D).
(b) ALL EMPLOYERS MAY OFFER MEDICAL SAVINGS ACCOUNTS-
(1) IN GENERAL- Subclause (I) of section 220(c)(1)(A)(iii) of such Code
(defining eligible individual) is amended by striking `and such employer is
a small employer'.
(2) CONFORMING AMENDMENTS-
(A) Paragraph (1) of section 220(c) of such Code is amended by
striking subparagraph (C).
(B) Subsection (c) of section 220 of such Code is amended by striking
paragraph (4) and by redesignating paragraph (5) as paragraph
(4).
(c) INCREASE IN AMOUNT OF DEDUCTION ALLOWED FOR CONTRIBUTIONS TO MEDICAL
SAVINGS ACCOUNTS-
(1) IN GENERAL- Paragraph (2) of section 220(b) of such Code is amended
to read as follows:
`(2) MONTHLY LIMITATION- The monthly limitation for any month is the
amount equal to 1/12 of the annual deductible (as of the first day of such
month) of the individual's coverage under the high deductible health
plan.'.
(2) CONFORMING AMENDMENT- Clause (ii) of section 220(d)(1)(A) of such
Code is amended by striking `75 percent of'.
(d) BOTH EMPLOYERS AND EMPLOYEES MAY CONTRIBUTE TO MEDICAL SAVINGS
ACCOUNTS- Paragraph (5) of section 220(b) of such Code is amended to read as
follows:
`(5) COORDINATION WITH EXCLUSION FOR EMPLOYER CONTRIBUTIONS- The
limitation which would (but for this paragraph) apply under this subsection
to the taxpayer for any taxable year shall be reduced (but not below zero)
by the amount which would (but for section 106(b)) be includible in the
taxpayer's gross income for such taxable year.'.
(e) REDUCTION OF PERMITTED DEDUCTIBLES UNDER HIGH DEDUCTIBLE HEALTH
PLANS-
(1) IN GENERAL- Subparagraph (A) of section 220(c)(2) of such Code
(defining high deductible health plan) is amended--
(A) by striking `$1,500' in clause (i) and inserting `$1,000',
and
(B) by striking `$3,000' in clause (ii) and inserting
`$2,000'.
(2) CONFORMING AMENDMENT- Subsection (g) of section 220 of such Code is
amended to read as follows:
`(g) COST-OF-LIVING ADJUSTMENT-
`(1) IN GENERAL- In the case of any taxable year beginning in a calendar
year after 1998, each dollar amount in subsection (c)(2) shall be increased
by an amount equal to--
`(A) such dollar amount, multiplied by
`(B) the cost-of-living adjustment determined under section 1(f)(3)
for the calendar year in which such taxable year begins by substituting
`calendar year 1997' for `calendar year 1992' in subparagraph (B)
thereof.
`(2) SPECIAL RULES- In the case of the $1,000 amount in subsection
(c)(2)(A)(i) and the $2,000 amount in subsection (c)(2)(A)(ii), paragraph
(1)(B) shall be applied by substituting `calendar year 1999' for `calendar
year 1997'.
`(3) ROUNDING- If any increase under paragraph (1) or (2) is not a
multiple of $50, such increase shall be rounded to the nearest multiple of
$50.'.
(f) MEDICAL SAVINGS ACCOUNTS MAY BE OFFERED UNDER CAFETERIA PLANS-
Subsection (f) of section 125 of such Code is amended by striking
`106(b),'.
SEC. 312. EFFECTIVE DATE.
The amendments made by this subtitle shall apply to taxable years
beginning after December 31, 2000.
Subtitle C--Tax Incentives for Health Care
SEC. 321. DEDUCTION FOR HEALTH AND LONG-TERM CARE INSURANCE COSTS OF
INDIVIDUALS NOT PARTICIPATING IN EMPLOYER-SUBSIDIZED HEALTH PLANS.
(a) IN GENERAL- Part VII of subchapter B of chapter 1 of the Internal
Revenue Code of 1986 is amended by redesignating section 222 as section 223
and by inserting after section 221 the following new section:
`SEC. 222. HEALTH AND LONG-TERM CARE INSURANCE COSTS.
`(a) IN GENERAL- In the case of an individual, there shall be allowed as a
deduction an amount equal to the applicable percentage of the amount paid
during the taxable year for insurance which constitutes medical care for the
taxpayer and the taxpayer's spouse and dependents.
`(b) APPLICABLE PERCENTAGE- For purposes of subsection (a), the applicable
percentage shall be determined in accordance with the following table:
`For taxable years beginning
--The applicable
in calendar year--
--percentage is--
--25
--35
--65
--100.
`(c) LIMITATION BASED ON OTHER COVERAGE-
`(1) COVERAGE UNDER CERTAIN SUBSIDIZED EMPLOYER PLANS-
`(A) IN GENERAL- Subsection (a) shall not apply to any taxpayer for
any calendar month for which the taxpayer participates in any health plan
maintained by any employer of the taxpayer or of the spouse of the
taxpayer if 50 percent or more of the cost of coverage under such plan
(determined under section 4980B and without regard to payments made with
respect to any coverage described in subsection (e)) is paid or incurred
by the employer.
`(B) EMPLOYER CONTRIBUTIONS TO CAFETERIA PLANS, FLEXIBLE SPENDING
ARRANGEMENTS, AND MEDICAL SAVINGS ACCOUNTS- Employer contributions to a
cafeteria plan, a flexible spending or similar arrangement, or a medical
savings account which are excluded from gross income under section 106
shall be treated for purposes of subparagraph (A) as paid by the
employer.
`(C) AGGREGATION OF PLANS OF EMPLOYER- A health plan which is not
otherwise described in subparagraph (A) shall be treated as described in
such subparagraph if such plan
would be so described if all health plans of persons treated as a single
employer under subsection (b), (c), (m), or (o) of section 414 were treated as
one health plan.
`(D) SEPARATE APPLICATION TO HEALTH INSURANCE AND LONG-TERM CARE
INSURANCE- Subparagraphs (A) and (C) shall be applied separately with
respect to--
`(i) plans which include primarily coverage for qualified long-term
care services or are qualified long-term care insurance contracts,
and
`(ii) plans which do not include such coverage and are not such
contracts.
`(2) COVERAGE UNDER CERTAIN FEDERAL PROGRAMS-
`(A) IN GENERAL- Subsection (a) shall not apply to any amount paid for
any coverage for an individual for any calendar month if, as of the first
day of such month, the individual is covered under any medical care
program described in--
`(i) title XVIII, XIX, or XXI of the Social Security
Act,
`(ii) chapter 55 of title 10, United States Code,
`(iii) chapter 17 of title 38, United States Code,
`(iv) chapter 89 of title 5, United States Code, or
`(v) the Indian Health Care Improvement Act.
`(i) QUALIFIED LONG-TERM CARE- Subparagraph (A) shall not apply to
amounts paid for coverage under a qualified long-term care insurance
contract.
`(ii) CONTINUATION COVERAGE OF FEHBP- Subparagraph (A)(iv) shall not
apply to coverage which is comparable to continuation coverage under
section 4980B.
`(d) LONG-TERM CARE DEDUCTION LIMITED TO QUALIFIED LONG-TERM CARE
INSURANCE CONTRACTS- In the case of a qualified long-term care insurance
contract, only eligible long-term care premiums (as defined in section
213(d)(10)) may be taken into account under subsection (a).
`(e) DEDUCTION NOT AVAILABLE FOR PAYMENT OF ANCILLARY COVERAGE PREMIUMS-
Any amount paid as a premium for insurance which provides for--
`(1) coverage for accidents, disability, dental care, vision care, or a
specified illness, or
`(2) making payments of a fixed amount per day (or other period) by
reason of being hospitalized.
shall not be taken into account under subsection (a).
`(1) COORDINATION WITH DEDUCTION FOR HEALTH INSURANCE COSTS OF
SELF-EMPLOYED INDIVIDUALS- The amount taken into account by the taxpayer in
computing the deduction under section 162(l) shall not be taken into account
under this section.
`(2) COORDINATION WITH MEDICAL EXPENSE DEDUCTION- The amount taken into
account by the taxpayer in computing the deduction under this section shall
not be taken into account under section 213.
`(g) REGULATIONS- The Secretary shall prescribe such regulations as may be
appropriate to carry out this section, including regulations requiring
employers to report to their employees and the Secretary such information as
the Secretary determines to be appropriate.'.
(b) DEDUCTION ALLOWED WHETHER OR NOT TAXPAYER ITEMIZES OTHER DEDUCTIONS-
Subsection (a) of section 62 of such Code is amended by inserting after
paragraph (17) the following new item:
`(18) HEALTH AND LONG-TERM CARE INSURANCE COSTS- The deduction allowed
by section 222.'.
(c) CLERICAL AMENDMENT- The table of sections for part VII of subchapter B
of chapter 1 of such Code is amended by striking the last item and inserting
the following new items:
`Sec. 222. Health and long-term care insurance costs.
`Sec. 223. Cross reference.'.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 2000.
SEC. 322. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE.
(a) IN GENERAL- Subpart C of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to refundable credits) is amended by
redesignating section 35 as section 36 and by inserting after section 34 the
following new section:
`SEC. 35. HEALTH INSURANCE COSTS.
`(a) IN GENERAL- In the case of an individual, there shall be allowed as a
credit against the tax imposed by this subtitle an amount equal to the amount
paid during the taxable year for qualified health insurance for the taxpayer,
his spouse, and dependents.
`(1) IN GENERAL- The amount allowed as a credit under subsection (a) to
the taxpayer for the taxable year shall not exceed the sum of the monthly
limitations for coverage months during such taxable year for each individual
referred to in subsection (a) for whom the taxpayer paid during the taxable
year any amount for coverage under qualified health insurance.
`(A) IN GENERAL- The monthly limitation for an individual for each
coverage month of such individual during the taxable year is the amount
equal to 1/12 of--
`(i) $1,000 if such individual is the taxpayer,
`(I) such individual is the spouse of the taxpayer,
`(II) the taxpayer and such spouse are married as of the first day
of such month, and
`(III) the taxpayer files a joint return for the taxable year,
and
`(iii) $500 if such individual is an individual for whom a deduction
under section 151(c) is allowable to the taxpayer for such taxable
year.
`(B) LIMITATION TO 2 DEPENDENTS- Not more than 2 individuals may be
taken into account by the taxpayer under subparagraph (A)(iii).
`(C) SPECIAL RULE FOR MARRIED INDIVIDUALS- In the case of an
individual--
`(i) who is married (within the meaning of section 7703) as of the
close of the taxable year but does not file a joint return for such
year, and
`(ii) who does not live apart from such individual's spouse at all
times during the taxable year,
the limitation imposed by subparagraph (B) shall be divided equally
between the individual and the individual's spouse unless they agree on a
different division.
`(3) COVERAGE MONTH- For purposes of this subsection--
`(A) IN GENERAL- The term `coverage month' means, with respect to an
individual, any month if--
`(i) as of the first day of such month such individual is covered by
qualified health insurance, and
`(ii) the premium for coverage under such insurance for such month
is paid by the taxpayer.
`(B) EMPLOYER-SUBSIDIZED COVERAGE- Such term shall not include any
month for which such individual participates in any subsidized health plan
(within the meaning of section 162(l)(2)) maintained by any employer of
the taxpayer or of the spouse of the taxpayer.
`(C) CAFETERIA PLAN AND FLEXIBLE SPENDING ACCOUNT BENEFICIARIES- Such
term shall not include any month during a taxable year if any amount is
not includible in the gross income of the taxpayer for such year under
section 106 with respect to--
`(i) a benefit chosen under a cafeteria plan (as defined in section
125(d)), or
`(ii) a benefit provided under a flexible spending or similar
arrangement.
`(D) MEDICARE AND MEDICAID- Such term shall not include any month with
respect to an individual if, as of the first day of such month, such
individual--
`(i) is entitled to any benefits under title XVIII of the Social
Security Act, or
`(ii) is a participant in the program under title XIX of such
Act.
`(E) CERTAIN OTHER COVERAGE- Such term shall not include any month
during a taxable year with respect to an individual if, at any
time during such year, any benefit is provided to such individual under--
`(i) chapter 17 of title 38, United States Code, or
`(ii) any medical care program under the Indian Health Care
Improvement Act.
`(F) PRISONERS- Such term shall not include any month with respect to
an individual if, as of the first day of such month, such individual is
imprisoned under Federal, State, or local authority.
`(G) INSUFFICIENT PRESENCE IN UNITED STATES- Such term shall not
include any month during a taxable year with respect to an individual if
such individual is present in the United States on fewer than 183 days
during such year (determined in accordance with section
7701(b)(7)).
`(4) COORDINATION WITH DEDUCTION FOR HEALTH INSURANCE COSTS OF
SELF-EMPLOYED INDIVIDUALS- In the case of a taxpayer who is eligible to
deduct any amount under section 162(l) for the taxable year, this section
shall apply only if the taxpayer elects not to claim any amount as a
deduction under such section for such year.
`(c) QUALIFIED HEALTH INSURANCE- For purposes of this section--
`(1) IN GENERAL- The term `qualified health insurance' means insurance
which constitutes medical care as defined in section 213(d) without regard
to--
`(A) paragraph (1)(C) thereof, and
`(B) so much of paragraph (1)(D) thereof as relates to qualified
long-term care insurance contracts.
`(2) EXCLUSION OF CERTAIN OTHER CONTRACTS- Such term shall not include
insurance if a substantial portion of its benefits are excepted benefits (as
defined in section 9832(c)).
`(d) MEDICAL SAVINGS ACCOUNT CONTRIBUTIONS-
`(1) IN GENERAL- If a deduction would (but for paragraph (2)) be allowed
under section 220 to the taxpayer for a payment for the taxable year to the
medical savings account of an individual, subsection (a) shall be applied by
treating such payment as a payment for qualified health insurance for such
individual.
`(2) DENIAL OF DOUBLE BENEFIT- No deduction shall be allowed under
section 220 for that portion of the payments otherwise allowable as a
deduction under section 220 for the taxable year which is equal to the
amount of credit allowed for such taxable year by reason of this
subsection.
`(1) COORDINATION WITH MEDICAL EXPENSE DEDUCTION- The amount which would
(but for this paragraph) be taken into account by the taxpayer under section
213 for the taxable year shall be reduced by the credit (if any) allowed by
this section to the taxpayer for such year.
`(2) DENIAL OF CREDIT TO DEPENDENTS- No credit shall be allowed under
this section to any individual with respect to whom a deduction under
section 151 is allowable to another taxpayer for a taxable year beginning in
the calendar year in which such individual's taxable year begins.
`(3) INFLATION ADJUSTMENT- In the case of any taxable year beginning in
a calendar year after 2000, each dollar amount contained in subsection
(b)(2)(A) shall be increased by an amount equal to--
`(A) such dollar amount, multiplied by
`(B) the cost-of-living adjustment determined under section 1(f)(3)
for the calendar year in which the taxable year begins, determined by
substituting `calendar year 1999' for `calendar year 1992' in subparagraph
(B) thereof.
Any increase determined under the preceding sentence shall be rounded to
the nearest multiple of $50 ($25 in the case of the dollar amount in
subsection (b)(2)(A)(iii)).'.
(b) INFORMATION REPORTING-
(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 of
such Code (relating to information concerning transactions with other
persons) is amended by inserting after section 6050S the following new
section:
`SEC. 6050T. RETURNS RELATING TO PAYMENTS FOR QUALIFIED HEALTH
INSURANCE.
`(a) IN GENERAL- Any person who, in connection with a trade or business
conducted by such person, receives payments during any calendar year from any
individual for coverage of such individual or any other individual under
creditable health insurance, shall make the return described in subsection (b)
(at such time as the Secretary may by regulations prescribe) with respect to
each individual from whom such payments were received.
`(b) FORM AND MANNER OF RETURNS- A return is described in this subsection
if such return--
`(1) is in such form as the Secretary may prescribe, and
`(A) the name, address, and TIN of the individual from whom payments
described in subsection (a) were received,
`(B) the name, address, and TIN of each individual who was provided by
such person with coverage under creditable health insurance by reason of
such payments and the period of such coverage, and
`(C) such other information as the Secretary may reasonably
prescribe.
`(c) CREDITABLE HEALTH INSURANCE- For purposes of this section, the term
`creditable health insurance' means qualified health insurance (as defined in
section 35(c)) other than--
`(1) insurance under a subsidized group health plan maintained by an
employer, or
`(2) to the extent provided in regulations prescribed by the Secretary,
any other insurance covering an individual if no credit is allowable under
section 35 with respect to such coverage.
`(d) STATEMENTS TO BE FURNISHED TO INDIVIDUALS WITH RESPECT TO WHOM
INFORMATION IS REQUIRED- Every person required to make a return under
subsection (a) shall furnish to each individual whose name is required under
subsection (b)(2)(A) to be set forth in such return a written statement
showing--
`(1) the name and address of the person required to make such return and
the phone number of the information contact for such person,
`(2) the aggregate amount of payments described in subsection (a)
received by the person required to make such return from the individual to
whom the statement is required to be furnished, and
`(3) the information required under subsection (b)(2)(B) with respect to
such payments.
The written statement required under the preceding sentence shall be
furnished on or before January 31 of the year following the calendar year for
which the return under subsection (a) is required to be made.
`(e) RETURNS WHICH WOULD BE REQUIRED TO BE MADE BY 2 OR MORE PERSONS-
Except to the extent provided in regulations prescribed by the Secretary, in
the case of any amount received by any person on behalf of another person,
only the person first receiving such amount shall be required to make the
return under subsection (a).'.
(2) ASSESSABLE PENALTIES-
(A) Subparagraph (B) of section 6724(d)(1) of such Code (relating to
definitions) is amended by redesignating clauses (xi) through (xvii) as
clauses (xii) through (xviii), respectively, and by inserting after clause
(x) the following new clause:
`(xi) section 6050T (relating to returns relating to payments for
qualified health insurance),'.
(B) Paragraph (2) of section 6724(d) of such Code is amended by
striking `or' at the end of the next to last subparagraph, by striking the
period at the end of the last subparagraph and inserting `, or', and by
adding at the end the following new subparagraph:
`(BB) section 6050T(d) (relating to returns relating to payments for
qualified health insurance).'.
(3) CLERICAL AMENDMENT- The table of sections for subpart B of part III
of subchapter A of chapter 61 of such Code is amended by inserting after the
item relating to section 6050S the following new item:
`Sec. 6050T. Returns relating to payments for qualified health insurance.'.
(c) ADVANCE PAYMENT OF CREDIT FOR PURCHASERS OF QUALIFIED HEALTH
INSURANCE- Chapter 77 of the Internal Revenue Code of 1986 (relating to
miscellaneous provisions) is amended by adding at the end the following new
section:
`SEC. 7527. ADVANCE PAYMENT OF HEALTH INSURANCE CREDIT FOR PURCHASERS OF
QUALIFIED HEALTH INSURANCE.
`(a) GENERAL RULE- In the case of an eligible individual, the Secretary
shall make payments to the provider of such individual's qualified health
insurance equal to such individual's qualified health insurance credit advance
amount with respect to such provider.
`(b) ELIGIBLE INDIVIDUAL- For purposes of this section, the term `eligible
individual' means any individual--
`(1) who purchases qualified health insurance (as defined in section
35(c)), and
`(2) for whom a qualified health insurance credit eligibility
certificate is in effect.
`(c) QUALIFIED HEALTH INSURANCE CREDIT ELIGIBILITY CERTIFICATE- For
purposes of this section, a qualified health insurance credit eligibility
certificate is a statement furnished by an individual to the Secretary
which--
`(1) certifies that the individual will be eligible to receive the
credit provided by section 35 for the taxable year,
`(2) estimates the amount of such credit for such taxable year,
and
`(3) provides such other information as the Secretary may require for
purposes of this section.
`(d) QUALIFIED HEALTH INSURANCE CREDIT ADVANCE AMOUNT- For purposes of
this section, the term `qualified health insurance credit advance amount'
means, with respect to any provider of qualified health insurance, the
Secretary's estimate of the amount of credit allowable under section 35 to the
individual for the taxable year which is attributable to the insurance
provided to the individual by such provider.
`(e) REGULATIONS- The Secretary shall prescribe such regulations as may be
necessary to carry out the purposes of this section.'.
(c) CONFORMING AMENDMENTS-
(1) Paragraph (2) of section 1324(b) of title 31, United States Code, is
amended by inserting before the period `, or from section 35 of such
Code'.
(2) The table of sections for subpart C of part IV of subchapter A of
chapter 1 of such Code is amended by striking the last item and inserting
the following new items:
`Sec. 35. Health insurance costs.
`Sec. 36. Overpayments of tax.'.
(3) The table of sections for chapter 77 of such Code is amended by
adding at the end the following new item:
`Sec. 7527. Advance payment of health insurance credit for purchasers of
qualified health insurance.'.
(1) IN GENERAL- Except as provided by paragraph (2), the amendments made
by this section shall apply to taxable years beginning after December 31,
1999.
(2) ADVANCE PAYMENT OF CREDIT FOR PURCHASERS OF QUALIFIED HEALTH
INSURANCE- The amendments made by subsections (c) and (d)(3) shall take
effect on January 1, 2000.
SEC. 323. STUDY OF STATE SAFETY-NET HEALTH INSURANCE PROGRAMS FOR THE
MEDICALLY UNINSURABLE.
(1) IN GENERAL- The Secretary of Health and Human Services shall provide
for a study on the current state of all existing State safety-net health
insurance programs (as defined in subsection (c)). The study shall determine
which forms of such programs are the most successful in making health
insurance available to all willing payers regardless of their health
status.
(2) CONSULTATION- In conducting the study the Secretary shall consult
with representatives of the National Governors Association, the National
Association of Insurance Commissioners, national associations representing
health insurers, insurance companies that administer and participate in
State safety-net health insurance programs, and individuals who receive
their health insurance through such programs.
(b) REPORT- The Secretary shall submit to Congress, by not later than
October 1, 2000, a detailed report on the study conducted under subsection
(a). The report shall include recommendations on how Congress can best
strengthen State safety-net health insurance programs where they currently
exist and can encourage their establishment in States where they do not
exist.
(c) STATE SAFETY-NET HEALTH INSURANCE PROGRAM DEFINED- For purposes of
this section, the term `State safety-net health insurance program' means a
high risk pool or similar arrangement provided under State law for providing
access of medically uninsurable individuals to health insurance coverage. Such
term may include such other arrangements as the Secretary finds appropriate
for assuring the provision of health insurance coverage to such
individuals.
SEC. 324. CARRYOVER OF UNUSED BENEFITS FROM CAFETERIA PLANS AND FLEXIBLE
SPENDING ARRANGEMENTS.
(a) IN GENERAL- Section 125 of the Internal Revenue Code of 1986 (relating
to cafeteria plans) is amended by redesignating subsections (h) and (i) as
subsections (i) and (j), respectively, and by inserting after subsection (g)
the following new subsection:
`(h) ALLOWANCE OF CARRYOVERS OF UNUSED BENEFITS TO LATER TAXABLE YEARS-
`(1) IN GENERAL- For purposes of this title--
`(A) a plan or other arrangement shall not fail to be treated as a
cafeteria plan or flexible spending or similar arrangement, and
`(B) no amount shall be required to be included in gross income by
reason of this section or any other provision of this chapter,
solely because under such plan or other arrangement any nontaxable
benefit which is unused as of the close of a taxable year may be carried
forward to 1 or more succeeding taxable years.
`(2) LIMITATION- Paragraph (1) shall not apply to amounts carried from a
plan to the extent such amounts exceed $500 (applied on an annual basis).
For purposes of this paragraph, all plans and arrangements maintained by an
employer or any related person shall be treated as 1 plan.
`(3) ALLOWANCE OF ROLLOVER-
`(A) IN GENERAL- Each flexible spending or similar arrangement which
permits a carryover under paragraph (1) of an amount of unused benefit
shall provide that each participant may elect, in lieu of a carryover of
such amount, to have such amount distributed to the participant.
`(B) AMOUNTS NOT INCLUDED IN INCOME- Any distribution under
subparagraph (A) shall not be included in gross income to the extent that
such amount is transferred in a trustee-to-trustee transfer, or is
contributed within 60 days of the date of the distribution, to--
`(i) an individual retirement plan,
`(ii) a qualified cash or deferred arrangement described in section
401(k),
`(iii) a plan under which amounts are contributed by an individual's
employer for an annuity contract described in section
403(b),
`(iv) an eligible deferred compensation plan described in section
457,
`(v) a medical savings account (within the meaning of section 220),
or
`(vi) an education individual retirement account (within the meaning
of section 530(b)).
Any amount rolled over under this subparagraph shall be treated as a
rollover contribution for the taxable year from which the unused amount
would otherwise be carried.
`(C) TREATMENT OF ROLLOVER- Any amount rolled over under subparagraph
(B) shall be treated as an eligible rollover under section 219, 220,
401(k), 403(b), 457, or 530, whichever is applicable, and shall not be
taken into account in applying any limitation (or participation
requirement) on contributions under such section or any other provision of
this chapter for the taxable year of the rollover.
`(4) COST-OF-LIVING ADJUSTMENT- In the case of any taxable year
beginning in a calendar year after 1999, the $500 amount under paragraph (2)
shall be adjusted at the same time and in the same manner as under section
415(d)(2), except that the base period taken into account shall be the
calendar quarter beginning October 1, 1998, and any increase which is not a
multiple of $50 shall be rounded to the next lowest multiple of $50.'.
(b) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1998.
TITLE IV--HEALTH CARE LAWSUIT REFORM
Subtitle A--General Provisions
SEC. 401. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.
(a) APPLICABILITY- This title shall apply with respect to any health care
liability action brought in any State or Federal court, except that this title
shall not apply to--
(1) an action for damages arising from a vaccine-related injury or death
to the extent that title XXI of the Public Health Service Act applies to the
action; or
(2) an action under the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1001 et seq.).
(b) PREEMPTION- This title shall preempt any State law to the extent such
law is inconsistent with the limitations contained in this title. This title
shall not preempt any State law that provides for defenses or places
limitations on a person's liability in addition to those contained in this
title or otherwise imposes greater restrictions than those provided in this
title.
(c) EFFECT ON SOVEREIGN IMMUNITY AND CHOICE OF LAW OR VENUE- Nothing in
subsection (b) shall be construed to--
(1) waive or affect any defense of sovereign immunity asserted by any
State under any provision of law;
(2) waive or affect any defense of sovereign immunity asserted by the
United States;
(3) affect the applicability of any provision of the Foreign Sovereign
Immunities Act of 1976;
(4) preempt State choice-of-law rules with respect to claims brought by
a foreign nation or a citizen of a foreign nation; or
(5) affect the right of any court to transfer venue or to apply the law
of a foreign nation or to dismiss a claim of a foreign nation or of a
citizen of a foreign nation on the ground of inconvenient forum.
(d) AMOUNT IN CONTROVERSY- In an action to which this title applies and
which is brought under section
1332 of title 28, United States Code, the amount of non-economic damages or
punitive damages, and attorneys' fees or costs, shall not be included in
determining whether the matter in controversy exceeds the sum or value of
$50,000.
(e) FEDERAL COURT JURISDICTION NOT ESTABLISHED ON FEDERAL QUESTION
GROUNDS- Nothing in this title shall be construed to establish any
jurisdiction in the district courts of the United States over health care
liability actions on the basis of section 1331 or 1337 of title 28, United
States Code.
SEC. 402. DEFINITIONS.
(1) ACTUAL DAMAGES- The term `actual damages' means damages awarded to
pay for economic loss.
(2) ALTERNATIVE DISPUTE RESOLUTION SYSTEM; ADR- The term `alternative
dispute resolution system' or `ADR' means a system established under Federal
or State law that provides for the resolution of health care liability
claims in a manner other than through health care liability actions.
(3) CLAIMANT- The term `claimant' means any person who brings a health
care liability action and any person on whose behalf such an action is
brought. If such action is brought through or on behalf of an estate, the
term includes the claimant's decedent. If such action is brought through or
on behalf of a minor or incompetent, the term includes the claimant's legal
guardian.
(4) CLEAR AND CONVINCING EVIDENCE- The term `clear and convincing
evidence' is that measure or degree of proof that will produce in the mind
of the trier of fact a firm belief or conviction as to the truth of the
allegations sought to be established. Such measure or degree of proof is
more than that required under preponderance of the evidence but less than
that required for proof beyond a reasonable doubt.
(5) COLLATERAL SOURCE PAYMENTS- The term `collateral source payments'
means any amount paid or reasonably likely to be paid in the future to or on
behalf of a claimant, or any service, product, or other benefit provided or
reasonably likely to be provided in the future to or on behalf of a
claimant, as a result of an injury or wrongful death, pursuant to--
(A) any State or Federal health, sickness, income-disability, accident
or workers' compensation Act;
(B) any health, sickness, income-disability, or accident insurance
that provides health benefits or income-disability coverage;
(C) any contract or agreement of any group, organization, partnership,
or corporation to provide, pay for, or reimburse the cost of medical,
hospital, dental, or income disability benefits; and
(D) any other publicly or privately funded program.
(6) DRUG- The term `drug' has the meaning given such term in section
201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
321(g)(1)).
(7) ECONOMIC LOSS- The term `economic loss' means any pecuniary loss
resulting from injury (including the loss of earnings or other benefits
related to employment, medical expense loss, replacement services loss, loss
due to death, burial costs, and loss of business or employment
opportunities), to the extent recovery for such loss is allowed under
applicable State law.
(8) HARM- The term `harm' means any legally cognizable wrong or injury
for which punitive damages may be imposed.
(9) 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 Medicare+Choice plan (offered under part C of title XVIII of the
Social Security Act),
that provides benefits with respect to health care services.
(10) HEALTH CARE LIABILITY ACTION- The term `health care liability
action' means a civil action brought in a State or Federal court
against--
(A) a health care provider;
(B) an entity which is obligated to provide or pay for health benefits
under any health benefit plan (including any person or entity acting under
a contract or arrangement to provide or administer any health benefit);
or
(C) the manufacturer, distributor, supplier, marketer, promoter, or
seller of a medical product,
in which the claimant alleges a claim (including third party claims, cross
claims, counter claims, or contribution claims) based upon the provision of
(or the failure to provide or pay for) health care services or the use of a
medical product, regardless of the theory of liability on which the claim is
based or the number of plaintiffs, defendants, or causes of action.
(11) HEALTH CARE LIABILITY CLAIM- The term `health care liability claim'
means a claim in which the claimant alleges that injury was caused by the
provision of (or the failure to provide) health care services.
(12) HEALTH CARE PROVIDER- The term `health care provider' means any
person that is engaged in the delivery of health care services in a State
and that is required by the laws or regulations of the State to be licensed
or certified by the State to engage in the delivery of such services in the
State.
(13) HEALTH CARE SERVICE- The term `health care service' means any
service eligible for payment under a health benefit plan, including services
related to the delivery or administration of such service.
(14) MEDICAL DEVICE- The term `medical device' has the meaning given
such term in section 201(h) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 321(h)).
(15) NON-ECONOMIC DAMAGES- The term `non-economic damages' means damages
paid to an individual for pain and suffering, inconvenience, emotional
distress, mental anguish, loss of consortium, injury to reputation,
humiliation, and other nonpecuniary losses.
(16) PERSON- The term `person' means any individual, corporation,
company, association, firm, partnership, society, joint stock company, or
any other entity, including any governmental entity.
(A) IN GENERAL- Subject to subparagraph (B), the term `product seller'
means a person who, in the course of a business conducted for that
purpose--
(i) sells, distributes, rents, leases, prepares, blends, packages,
labels, or is otherwise involved in placing, a product in the stream of
commerce; or
(ii) installs, repairs, or maintains the harm-causing aspect of a
product.
(B) EXCLUSION- Such term does not include--
(i) a seller or lessor of real property;
(ii) a provider of professional services in any case in which the
sale or use of a product is incidental to the transaction and the
essence of the transaction is the furnishing of judgment, skill, or
services; or
(I) acts in only a financial capacity with respect to the sale of
a product; or
(II) leases a product under a lease arrangement in which the
selection, possession, maintenance, and operation of the product are
controlled by a person other than the lessor.
(18) PUNITIVE DAMAGES- The term `punitive damages' means damages awarded
against any person not to compensate for actual injury suffered, but to
punish or deter such person or others from engaging in similar behavior in
the future.
(19) STATE- The term `State' means each of the several States, the
District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa,
the Northern Mariana Islands, and any other territory or possession of the
United States.
SEC. 403. EFFECTIVE DATE.
This title will apply to--
(1) any health care liability action brought in a Federal or State
court; and
(2) any health care liability claim subject to an alternative dispute
resolution system,
that is initiated on or after the date of enactment of this title, except
that any health care liability claim or action arising from an injury
occurring before the date of enactment of this title shall be governed by the
applicable statute of limitations provisions in effect at the time the injury
occurred.
Subtitle B--Uniform Standards for Health Care Liability
Actions
SEC. 411. STATUTE OF LIMITATIONS.
A health care liability action may not be brought after the expiration of
the 2-year period that begins on the date on which the alleged injury that is
the subject of the action was discovered or should reasonably have been
discovered, but in no case after the expiration of the 5-year period that
begins on the date the alleged injury occurred.
SEC. 412. CALCULATION AND PAYMENT OF DAMAGES.
(a) TREATMENT OF NON-ECONOMIC DAMAGES-
(1) LIMITATION ON NON-ECONOMIC DAMAGES- The total amount of non-economic
damages that may be awarded to a claimant for losses resulting from the
injury which is the subject of a health care liability action may not exceed
$250,000, regardless of the number of parties against whom the action is
brought or the number of actions brought with respect to the injury. The
limitation under this paragraph shall not apply to an action for damages
based solely on intentional denial of medical treatment necessary to
preserve a patient's life that the patient is otherwise qualified to
receive, against the wishes of a patient, or if the patient is incompetent,
against the wishes of the patient's guardian, on the basis of the patient's
present or predicated age, disability, degree of medical dependency, or
quality of life.
(2) LIMIT- If, after the date of the enactment of this Act, a State
enacts a law which prescribes the amount of non-economic damages which may
be awarded in a health care liability action which is different from the
amount prescribed by section 412(a)(1), the State amount shall apply in lieu
of the amount prescribed by such section. If, after the
date of the enactment of this Act, a State enacts a law which limits the
amount of recovery in a health care liability action without delineating between
economic and non-economic damages, the State amount shall apply in lieu of the
amount prescribed by such section.
(3) JOINT AND SEVERAL LIABILITY- In any health care liability action
brought in State or Federal court, a defendant shall be liable only for the
amount of non-economic damages attributable to such defendant in direct
proportion to such defendant's share of fault or responsibility for the
claimant's actual damages, as determined by the trier of fact. In all such
cases, the liability of a defendant for non-economic damages shall be
several and not joint and a separate judgment shall be rendered against each
defendant for the amount allocated to such defendant.
(b) TREATMENT OF PUNITIVE DAMAGES-
(1) GENERAL RULE- Punitive damages may, to the extent permitted by
applicable State law, be awarded in any health care liability action for
harm in any Federal or State court against a defendant if the claimant
establishes by clear and convincing evidence that the harm suffered was the
result of conduct--
(A) specifically intended to cause harm; or
(B) conduct manifesting a conscious, flagrant indifference to the
rights or safety of others.
(2) APPLICABILITY- This subsection shall apply to any health care
liability action brought in any Federal or State court on any theory where
punitive damages are sought. This subsection does not create a cause of
action for punitive damages.
(3) LIMITATION ON PUNITIVE DAMAGES- The total amount of punitive damages
that may be awarded to a claimant for losses resulting from the injury which
is the subject of a health care liability action may not exceed the greater
of--
(A) 2 times the amount of economic damages, or
regardless of the number of parties against whom the action is brought
or the number of actions brought with respect to the injury. This subsection
does not preempt or supersede any State or Federal law to the extent that
such law would further limit the award of punitive damages.
(4) BIFURCATION- At the request of any party, the trier of fact shall
consider in a separate proceeding whether punitive damages are to be awarded
and the amount of such award. If a separate proceeding is requested,
evidence relevant only to the claim of punitive damages, as determined by
applicable State law, shall be inadmissible in any proceeding to determine
whether actual damages are to be awarded.
(i) PUNITIVE DAMAGES- Punitive damages shall not be awarded against
a manufacturer or product seller of a drug or medical device which
caused the claimant's harm where--
(I) such drug or device was subject to premarket approval by the
Food and Drug Administration with respect to the safety of the
formulation or performance of the aspect of such drug or device which
caused the claimant's harm, or the adequacy of the packaging or
labeling of such drug or device which caused the harm, and such drug,
device, packaging, or labeling was approved by the Food and Drug
Administration; or
(II) the drug is generally recognized as safe and effective
pursuant to conditions established by the Food and Drug Administration
and applicable regulations, including packaging and labeling
regulations.
(ii) APPLICATION- Clause (i) shall not apply in any case in which
the defendant, before or after premarket approval of a drug or
device--
(I) intentionally and wrongfully withheld from or misrepresented
to the Food and Drug Administration information concerning such drug
or device required to be submitted under the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 301 et seq.) or section 351 of the Public
Health Service Act (42 U.S.C. 262) that is material and relevant to
the harm suffered by the claimant; or
(II) made an illegal payment to an official or employee of the
Food and Drug Administration for the purpose of securing or
maintaining approval of such drug or device.
(B) PACKAGING- In a health care liability action for harm which is
alleged to relate to the adequacy of the packaging or labeling of a drug
which is required to have tamper-resistant packaging under regulations of
the Secretary of Health and Human Services (including labeling regulations
related to such packaging), the manufacturer or product seller of the drug
shall not be held liable for punitive damages unless such packaging or
labeling is found by the court by clear and convincing evidence to be
substantially out of compliance with such regulations.
(c) PERIODIC PAYMENTS FOR FUTURE LOSSES-
(1) GENERAL RULE- In any health care liability action in which the
damages awarded for future economic and non-economic loss exceeds $50,000, a
person shall not be required to pay such damages in a single, lump-sum
payment, but shall be permitted to make such payments periodically based on
when
the damages are likely to occur, as such payments are determined by the
court.
(2) FINALITY OF JUDGMENT- The judgment of the court awarding periodic
payments under this subsection may not, in the absence of fraud, be reopened
at any time to contest, amend, or modify the schedule or amount of the
payments.
(3) LUMP-SUM SETTLEMENTS- This subsection shall not be construed to
preclude a settlement providing for a single, lump-sum payment.
(d) TREATMENT OF COLLATERAL SOURCE PAYMENTS-
(1) INTRODUCTION INTO EVIDENCE- In any health care liability action, any
defendant may introduce evidence of collateral source payments. If any
defendant elects to introduce such evidence, the claimant may introduce
evidence of any amount paid or contributed or reasonably likely to be paid
or contributed in the future by or on behalf of the claimant to secure the
right to such collateral source payments.
(2) NO SUBROGATION- No provider of collateral source payments shall
recover any amount against the claimant or receive any lien or credit
against the claimant's recovery or be equitably or legally subrogated to the
right of the claimant in a health care liability action.
(3) APPLICATION TO SETTLEMENTS- This subsection shall apply to an action
that is settled as well as an action that is resolved by a fact
finder.
SEC. 413. LIMITATIONS ON CONTINGENT FEES.
(a) IN GENERAL- The total of all contingent fees for representing all
claimants in a health care liability claim or action shall not exceed the
following limits:
(1) 40 percent of the first $500,000 recovered by the claimant.
(2) 33 1/3 percent of the next $50,000 recovered by the claimant.
(3) 25 percent of the next $50,000 recovered by the claimant.
(4) 15 percent of any amount by which the recovery by the claimant
exceeds $600,000.
(b) APPLICABILITY- The limitations prescribed by subsection (a) shall
apply whether the recovery is by judgment, settlement, mediation, arbitration,
or any other form of ADR. A court acting in a health care liability claim or
action involving a minor or incompetent person retains the authority to
authorize or approve a fee that is less than the maximum permitted under
subsection (a).
(c) DEFINITIONS- For purposes of this section:
(1) CONTINGENT FEE- The term `contingent fee' includes all compensation
to any person which is payable only if a recovery is effected on behalf of
one or more claimants.
(2) RECOVERY- The term `recovery' means the net sum recovered after
deducting any disbursements or costs incurred in connection with prosecution
or settlement of the claim, including all costs paid or advanced by any
person. Costs of health care incurred by the plaintiff and the attorney's
office overhead costs or charges for legal services are not deductible
disbursements of costs for such purpose.
SEC. 413. ALTERNATIVE DISPUTE RESOLUTION.
Any ADR used to resolve a health care liability action or claim shall
contain provisions relating to statute of limitations, non-economic damages,
joint and several liability, punitive damages, collateral source rule, and
periodic payments which are consistent with the provisions relating to such
matters in this title.
SEC. 414. REPORTING ON FRAUD AND ABUSE ENFORCEMENT ACTIVITIES.
The General Accounting Office shall--
(A) the compliance of the Department of Justice and all United States
Attorneys-with the guideline entitled `Guidance on the Use of the False
Claims Act in Civil Health Care Matters' issued by the Department on June
3, 1998, including any revisions to that guideline; and
(B) the compliance of the Office of the Inspector General of the
Department of Health and Human Services with the protocols and guidelines
entitled `National Project Protocols--Best Practice Guidelines' issued by
the Inspector General on June 3, 1998, including any revisions to such
protocols and guidelines; and
(2) submit a report on such compliance to the Committee on Commerce, the
Committee on the Judiciary, and the Committee on Ways and Means of the House
of Representatives and the Committee on the Judiciary and the Committee on
Finance of the Senate not later than February 1, 2000, and every year
thereafter for a period of 4 years ending February 1, 2003.
END