HR 5628 IH

To amend the Employee Retirement Income Security Act of 1974, the Public Health Service Act, and the Internal Revenue Code of 1986 to provide for a patients' bill of rights, patient access to information, and accountability of health plans, and to expand access to health care coverage through tax incentives.

November 3, 2000

Mr. SHADEGG (for himself, Mr. COBURN, Mr. SALMON, and Mr. ADERHOLT) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on Education and the Workforce, and Ways and Means, 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

To amend the Employee Retirement Income Security Act of 1974, the Public Health Service Act, and the Internal Revenue Code of 1986 to provide for a patients' bill of rights, patient access to information, and accountability of health plans, and to expand access to health care coverage through tax incentives.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Common Sense Patients' Bill of Rights Act'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--PATIENTS' BILL OF RIGHTS

Subtitle A--Right to Advice and Care

Sec. 101. Patient right to medical advice and care under ERISA.

`SUBPART C--PATIENT RIGHT TO MEDICAL ADVICE AND CARE

Sec. 102. Conforming amendments to the Public Health Service Act.

Sec. 103. Conforming amendments to the Internal Revenue Code of 1986.

Subtitle B--Right to Information About Plans and Providers

Sec. 111. Information about plans and coverage under ERISA.

Sec. 112. Conforming amendments to Public Health Service Act.

Sec. 113. Conforming amendments to the Internal Revenue Code of 1986.

Subtitle C--Right to Hold Health Plans Accountable

Sec. 121. Amendments to Employee Retirement Income Security Act of 1974.

Sec. 122. Conforming amendments to Public Health Service Act.

Sec. 123. Conforming amendments to the Internal Revenue Code of 1986.

Subtitle D--State Flexibility in Applying Requirements to Health Insurance Issuers

Sec. 141. State flexibility in applying requirements to health insurance issuers under ERISA; plan satisfaction of certain requirements.

Sec. 142. State flexibility in applying requirements to health insurance issuers under the Public Health Service Act.

Subtitle E--Effective Dates; Coordination in Implementation; Miscellaneous Provisions

Sec. 151. Effective dates.

Sec. 152. Regulations; coordination.

Sec. 153. No benefit requirements.

Sec. 154. Severability.

TITLE II--REMEDIES

Sec. 201. Availability of court remedies.

Sec. 202. Severability.

TITLE III--HEALTH CARE COVERAGE ACCESS TAX INCENTIVES

Sec. 301. Expanded availability of medical savings accounts.

Sec. 302. Deduction for 100 percent of health insurance costs of self-employed individuals.

TITLE IV--HEALTH CARE PAPERWORK

Sec. 401. Health care paperwork simplification.

TITLE I--PATIENTS' BILL OF RIGHTS

Subtitle A--Right to Advice and Care

SEC. 101. PATIENT RIGHT TO MEDICAL ADVICE AND CARE UNDER ERISA.

(a) IN GENERAL- Part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1181 et seq.) is amended--

(1) by redesignating subpart C as subpart D; and

(2) by inserting after subpart B the following:

`Subpart C--Patient Right to Medical Advice and Care

`SEC. 721. ACCESS TO EMERGENCY CARE.

`(a) COVERAGE OF EMERGENCY SERVICES-

`(1) IN GENERAL- If a group health plan, or health insurance coverage offered by a health insurance issuer in connection with such a plan, provides or covers any benefits with respect to services in an emergency department of a hospital, the plan or issuer shall cover emergency services (as defined in paragraph (2)(B))--

`(A) without the need for any prior authorization determination;

`(B) whether the health care provider furnishing such services is a participating provider with respect to such services;

`(C) in a manner so that, if such services are provided to a participant or beneficiary--

`(i) by a nonparticipating health care provider with or without prior authorization, or

`(ii) by a participating health care provider without prior authorization,

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 health care provider with prior authorization; and

`(D) without regard to any other term or condition of such coverage (other than exclusion or coordination of benefits, or an affiliation or waiting period, permitted under section 2701 of the Public Health Service Act, section 701, or section 9801 of the Internal Revenue Code of 1986, and other than applicable cost-sharing).

`(2) DEFINITIONS- In this section:

`(A) EMERGENCY MEDICAL CONDITION- The term `emergency medical condition' means 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)).

`(B) EMERGENCY SERVICES- The term `emergency services' means with respect to an emergency medical condition--

`(i) a medical screening examination (as required under section 1867 of the Social Security Act) that is within the capability of the emergency department of a hospital, including ancillary services routinely available to the emergency department to evaluate such emergency medical condition, and

`(ii) within the capabilities of the staff and facilities available at the hospital, such further medical examination and treatment as are required under section 1867 of such Act to stabilize the patient.

`(C) 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.

`(b) REIMBURSEMENT FOR MAINTENANCE CARE AND POST-STABILIZATION CARE- If benefits are available under a group health plan, or under health insurance coverage offered by a health insurance issuer in connection with such a plan, with respect to maintenance care or post-stabilization care covered under the guidelines established under section 1852(d)(2) of the Social Security Act, the plan or issuer shall provide for reimbursement with respect to such services provided to a participant or beneficiary other than through a participating health care provider in a manner consistent with subsection (a)(1)(C) (and shall otherwise comply with such guidelines).

`(c) COVERAGE OF EMERGENCY AMBULANCE SERVICES-

`(1) IN GENERAL- If a group health plan, or health insurance coverage provided by a health insurance issuer in connection with such a plan, provides any benefits with respect to ambulance services and emergency services, the plan or issuer shall cover emergency ambulance services (as defined in paragraph (2)) furnished under the plan or coverage under the same terms and conditions under subparagraphs (A) through (D) of subsection (a)(1) under which coverage is provided for emergency services.

`(2) EMERGENCY AMBULANCE SERVICES- For purposes of this subsection, 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 subsection (a)(2)(A)) to a hospital for the receipt of emergency services (as defined in subsection (a)(2)(B)) in a case in which the emergency services are covered under the plan or coverage pursuant to subsection (a)(1) 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.

`(d) RULE OF CONSTRUCTION- Nothing in this section shall be construed to prohibit a group health plan or a health insurance issuer from negotiating reimbursement rates with a nonparticipating provider for items or services provided under this section.

`SEC. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.

`(a) REQUIREMENT- If a group health plan provides coverage for benefits only through a defined set of participating health care professionals, the plan shall offer each participant the option to purchase point-of-service coverage (as defined in subsection (b)) for all such benefits for which coverage is otherwise so limited. Such option shall be made available to the participant at the time of enrollment under the plan and at such other times as the plan offers the participant a choice of coverage options.

`(b) POINT-OF-SERVICE COVERAGE DEFINED- In this section, the term `point-of-service coverage' means, with respect to benefits covered under a group health plan, coverage of such benefits when provided by a nonparticipating health care professional.

`(c) SMALL EMPLOYER EXEMPTION-

`(1) IN GENERAL- The requirement of subsection (a) shall not apply to a group health plan with respect to a small employer if the employer demonstrates that compliance with such requirement would result in an increase in overall costs to the employer.

`(2) SMALL EMPLOYER DEFINED- For purposes of subparagraph (A), the term `small employer' means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of fewer than 25 employees on days during the preceding calendar year and fewer than 25 employees on the first day of the plan year.

`(3) DETERMINATION OF EMPLOYER SIZE- For purposes of this subsection, the provisions of subparagraph (C) of section 712(c)(1) shall apply in determining employer size.

`(d) RULE OF CONSTRUCTION- Nothing in this section shall be construed--

`(1) as requiring coverage for benefits for a particular type of health care professional;

`(2) as requiring an increase in the level of employer contributions or as permitting an employer to comply with the requirements of this section by means of reducing the level of employer contributions attributable to coverage with respect to any participant or group of participants in relation to the level that would otherwise be maintained if such requirements did not apply;

`(3) as preventing a group health plan from imposing, on a participant who exercises the point-of-service coverage option under subsection (a), the additional cost of creation and maintenance of the option as well as any additional other costs (including additional cost-sharing) attributable to the option; or

`(4) to require that a group health plan include coverage of health care professionals that the plan excludes because of fraud, quality of care, or other similar reasons with respect to such professionals.

`SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

`(a) GENERAL RIGHTS-

`(1) DIRECT ACCESS- A group health plan, or health insurance coverage offered by a health insurance issuer in connection with such a plan, described in subsection (b) may not require authorization or referral by the plan, issuer, or any other person, including the primary care provider described in subsection (b)(2), in the case of a female participant or beneficiary who seeks coverage for obstetric or gynecological care provided by a participating physician who specializes in obstetrics or gynecology.

`(2) OBSTETRIC AND GYNECOLOGICAL CARE- Such a plan or issuer shall treat the provision of obstetric and gynecological care, and the ordering of related obstetric and gynecological items and services, pursuant to the direct access described under paragraph (1), by a participating physician who specializes in obstetrics or gynecology as the authorization of the primary care provider.

`(b) APPLICATION OF SECTION- A group health plan, or health insurance coverage offered by a health insurance issuer in connection with such a plan, described in this subsection is a plan or coverage that--

`(1) provides coverage for obstetric or gynecologic care; and

`(2) requires the designation by a participant or beneficiary of a participating primary care provider other than a physician who specializes in obstetrics or gynecology.

`(c) RULES OF CONSTRUCTION- Nothing in this section shall be construed--

`(1) to require that a group health plan or health insurance issuer approve or provide coverage for--

`(A) any items or services that are not covered under the terms and conditions of the group health plan or the health insurance coverage;

`(B) any items or services that are not medically necessary and appropriate; or

`(C) any items or services that are provided, ordered, or otherwise authorized under subsection (a)(2) by a physician unless such items or services are related to obstetric or gynecologic care; or

`(2) to preclude a group health plan or a health insurance issuer from requiring that the physician described in subsection (a) notify the designated primary care professional or case manager of treatment decisions in accordance with a process implemented by the plan or issuer, except that the plan or issuer shall not impose such a notification requirement on the participant or beneficiary involved in the treatment decision.

`SEC. 724. ACCESS TO PEDIATRIC CARE.

`If a group health plan, or health insurance coverage offered by a health insurance issuer in connection with such a plan, requires or provides for a participant or beneficiary to designate a participating primary care provider for a child of such participant or beneficiary, the plan or issuer shall permit the participant or beneficiary to designate a physician who specializes in pediatrics as the child's primary care provider if such provider participates in the network of the plan or issuer.

`SEC. 725. TIMELY ACCESS TO SPECIALISTS.

`(a) TIMELY ACCESS-

`(1) IN GENERAL- A group health plan, and a health insurance issuer that offers health insurance coverage in connection with such a plan, shall ensure that participants and beneficiaries receive timely coverage for access to specialists who are appropriate to the medical condition of the participant or beneficiary, when such specialty care is a covered benefit under the plan or coverage.

`(2) RULE OF CONSTRUCTION- Nothing in paragraph (1) shall be construed--

`(A) to require the coverage under a group health plan or health insurance coverage of benefits or services;

`(B) to prohibit a plan or issuer from including providers in the network only to the extent necessary

to meet the needs of the plan's participants and beneficiaries; or

`(C) to override any State licensure or scope-of-practice law.

`(3) ACCESS TO CERTAIN PROVIDERS-

`(A) PARTICIPATING PROVIDERS- Nothing in this section shall be construed to prohibit a group health plan or health insurance issuer from requiring that a participant or beneficiary obtain specialty care from a participating specialist.

`(B) NONPARTICIPATING PROVIDERS-

`(i) IN GENERAL- With respect to specialty care under this section, if a group health plan or health insurance issuer determines that a participating specialist is not available to provide such care to the participant or beneficiary, the plan or issuer shall provide for coverage of such care by a nonparticipating specialist.

`(ii) TREATMENT OF NONPARTICIPATING PROVIDERS- If a group health plan or health insurance issuer refers a participant or beneficiary to a nonparticipating specialist pursuant to clause (i), such specialty care shall be provided at no additional cost to the participant or beneficiary beyond what the participant or beneficiary would otherwise pay for such specialty care if provided by a participating specialist.

`(b) REFERRALS-

`(1) AUTHORIZATION- Nothing in this section shall be construed to prohibit a group health plan or health insurance issuer from requiring an authorization in order to obtain coverage for specialty services so long as such authorization is for an appropriate duration or number of referrals.

`(2) SPECIALISTS AS GATEKEEPER FOR TREATMENT OF ONGOING SPECIAL CONDITIONS-

`(A) IN GENERAL- A group health plan, or a health insurance issuer in connection with the provision of group health insurance coverage, shall have a procedure by which an individual who is a participant or beneficiary and who has an ongoing special condition (as defined in subparagraph (C)) may request and receive a referral to a specialist for such condition who shall be responsible for and capable of providing and coordinating the individual's care with respect to the condition. Under such procedures if such an individual's care would most appropriately be coordinated by such a specialist, such plan or issuer shall refer the individual to such specialist.

`(B) TREATMENT FOR RELATED REFERRALS- Such specialists shall be permitted to treat the individual without a referral from the individual's primary care provider and may authorize such referrals, procedures, tests, and other medical services as the individual's primary care provider would otherwise be permitted to provide or authorize, subject to the terms of the treatment (referred to in subsection (a)(3)(A)) with respect to the ongoing special condition.

`(C) ONGOING SPECIAL CONDITION DEFINED- In this paragraph, the term `ongoing special condition' means a condition or disease that--

`(i) is life-threatening, degenerative, congenital, or disabling, and

`(ii) requires specialized medical care over a prolonged period of time.

`(D) TERMS OF REFERRAL- The provisions of paragraphs (3) through (5) of subsection (a) apply with respect to referrals under subparagraph (A) in the same manner as they apply to referrals under subsection (a)(1).

`(E) CONSTRUCTION- Nothing in this paragraph shall be construed as preventing an individual who is a participant or beneficiary and who has an ongoing special condition from having the individual's primary care physician assume the responsibilities for providing and coordinating care described in subparagraph (A).

`(c) TREATMENT PLANS-

`(1) IN GENERAL- Nothing in this section shall be construed to prohibit a group health plan or health insurance issuer from requiring that specialty care be provided pursuant to a treatment plan so long as the treatment plan is--

`(A) developed by the specialist, in consultation with the case manager or primary care provider, and the participant or beneficiary;

`(B) approved by the plan or issuer in a timely manner if the plan requires such approval; and

`(C) in accordance with the applicable quality assurance and utilization review standards of the plan or issuer.

`(2) NOTIFICATION- Nothing in paragraph (1) shall be construed as prohibiting a plan or issuer from requiring the specialist to provide the plan or issuer with regular updates on the specialty care provided, as well as all other necessary medical information.

`(d) SPECIALIST DEFINED- For purposes of this section, the term `specialist' means, with respect to the medical condition of the participant or beneficiary, a health care professional, facility, or center that has adequate expertise (including age-appropriate expertise) through appropriate training and experience or a physician pathologist who has adequate expertise through appropriate training and experience.

`SEC. 726. CONTINUITY OF CARE.

`(a) TERMINATION OF PROVIDER- If a contract between a group health plan, or health insurance issuer that offers health insurance coverage in connection with such a plan, and a treating health care provider is terminated (as defined in paragraph (e)(4)), or benefits or coverage provided by a health care provider are terminated because of a change in the terms of provider participation in such plan or coverage, and an

individual who is a participant or beneficiary in the plan is undergoing an active course of treatment for a serious and complex condition, institutional care, pregnancy, or terminal illness from the provider at the time the plan or issuer receives or provides notice of such termination, the plan or issuer shall--

`(1) notify the individual, or arrange to have the individual notified pursuant to subsection (d)(2), on a timely basis of such termination;

`(2) provide the individual with an opportunity to notify the plan or issuer of the individual's need for transitional care; and

`(3) subject to subsection (c), permit the individual to elect to continue to be covered with respect to the active course of treatment with the provider's consent during a transitional period (as provided for under subsection (b)).

`(b) TRANSITIONAL PERIOD-

`(1) SERIOUS AND COMPLEX CONDITIONS- The transitional period under this section with respect to a serious and complex condition shall extend for up to 90 days from the date of the notice described in subsection (a)(1) of the provider's termination.

`(2) INSTITUTIONAL OR INPATIENT CARE-

`(A) IN GENERAL- The transitional period under this section for institutional or non-elective inpatient care from a provider shall extend until the earlier of--

`(i) the expiration of the 90-day period beginning on the date on which the notice described in subsection (a)(1) of the provider's termination is provided; or

`(ii) the date of discharge of the individual from such care or the termination of the period of institutionalization.

`(B) SCHEDULED CARE- The 90 day limitation described in subparagraph (A)(i) shall include post-surgical follow-up care relating to non-elective surgery that has been scheduled before the date of the notice of the termination of the provider under subsection (a)(1).

`(3) PREGNANCY- If--

`(A) a participant or beneficiary was determined to be pregnant at the time of a provider's termination of participation, and

`(B) the provider was treating the pregnancy before date of the termination,

the transitional period under this subsection with respect to provider's treatment of the pregnancy shall extend through the provision of post-partum care directly related to the delivery.

`(4) TERMINAL ILLNESS- If--

`(A) 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

`(B) the provider was treating the terminal illness before the date of termination;

the transitional period under this subsection shall extend for the remainder of the individual's life for care that is directly related to the treatment of the terminal illness.

`(c) PERMISSIBLE TERMS AND CONDITIONS- A group health plan, and a health insurance issuer that offers health insurance coverage in connection with such a plan, may condition coverage of continued treatment by a provider under this section upon the provider agreeing to the following terms and conditions:

`(1) The treating health care 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 at the rates applicable under the replacement plan or coverage after the date of the termination of the contract with the group health plan or 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 this section had not been terminated.

`(2) The treating health care provider agrees to adhere to the quality assurance standards of the plan or issuer responsible for payment under paragraph (1) (to the extent such quality assurance standards meet the professionally accepted standards of care) and to provide to such plan or issuer necessary medical information related to the care provided.

`(3) The treating health care provider agrees otherwise to adhere to such plan's or issuer's policies and procedures (to the extent such policies and procedures meet the professionally accepted standards of care), 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) RULES OF CONSTRUCTION- Nothing in this section shall be construed--

`(1) to require the coverage of benefits which would not have been covered if the provider involved remained a participating provider; or

`(2) with respect to the termination of a contract under subsection (a) to prevent a group health plan or health insurance issuer from requiring that the health care provider--

`(A) notify participants or beneficiaries of their rights under this section; or

`(B) provide the plan or issuer with the name of each participant or beneficiary who the provider believes is eligible for transitional care under this section.

`(e) DEFINITIONS- In this section:

`(1) CONTRACT- The term `contract between a plan or issuer and a treating health care provider' shall include a contract between such a plan or issuer and an organized network of providers.

`(2) HEALTH CARE PROVIDER- The term `health care provider' or `provider' means--

`(A) any individual who is engaged in the delivery of health care services in a State and who is required

by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State; and

`(B) any entity that is engaged in the delivery of health care services in a State and that, if it is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, is so licensed.

`(3) SERIOUS AND COMPLEX CONDITION- The term `serious and complex condition' means, with respect to a participant or beneficiary under the plan or coverage, a condition that is medically determinable and--

`(A) in the case of an acute illness, is a condition serious enough to require specialized medical treatment to avoid the reasonable possibility of death or permanent harm; or

`(B) in the case of a chronic illness or condition, is an illness or condition that--

`(i) is complex and difficult to manage;

`(ii) is disabling or life-threatening; and

`(iii) requires--

`(I) frequent monitoring over a prolonged period of time and requires substantial on-going specialized medical care; or

`(II) frequent ongoing specialized medical care across a variety of domains of care.

`(4) TERMINATED- The term `terminated' includes, with respect to a contract (as defined in paragraph (1)), the expiration or nonrenewal of the contract by the group health plan or the health insurance issuer, but does not include a termination of the contract by the plan or issuer for failure to meet applicable quality standards or for fraud.

SEC. 727. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL COMMUNICATIONS.

(a) GENERAL RULE- The provisions of any contract or agreement, or the operation of any contract or agreement, between a group health plan or health insurance issuer in relation to health insurance coverage (including any partnership, association, or other organization that enters into or administers such a contract or agreement) and a health care provider (or group of health care providers) shall not prohibit or otherwise restrict a health care professional from advising such a participant, beneficiary, or enrollee who is a patient of the professional about the health status of the individual or medical care or treatment for the individual's condition or disease, regardless of whether benefits for such care or treatment are provided under the plan or coverage, if the professional is acting within the lawful scope of practice.

(b) NULLIFICATION- Any contract provision or agreement that restricts or prohibits medical communications in violation of subsection (a) shall be null and void.

`SEC. 728. PATIENT'S RIGHT TO PRESCRIPTION DRUGS.

`To the extent that a group health plan, or health insurance coverage offered by a health insurance issuer in connection with such a plan, provides coverage for benefits with respect to prescription drugs, and limits such coverage to drugs included in a formulary, the plan or issuer shall--

`(1) ensure the participation of physicians and pharmacists in developing and reviewing such formulary;

`(2) disclose the nature of such limits on such coverage to providers whose services (or reimbursement therefor) are included under the coverage of the plan (in addition to disclosure to participants and beneficiaries upon request in accordance with section 714(c)(3)), and

`(3) in accordance with the applicable quality assurance and utilization review standards of the plan or issuer, provide for exceptions from the formulary limitation when a non-formulary alternative is medically necessary and appropriate.

`SEC. 729. SELF-PAYMENT FOR BEHAVIORAL HEALTH CARE SERVICES.

`(a) IN GENERAL- A group health plan, and a health insurance issuer in relation to its offering of health insurance coverage in connection with such a plan, may not--

`(1) prohibit or otherwise discourage a participant or beneficiary from self-paying for behavioral health care services once the plan or issuer has denied coverage for such services; or

`(2) terminate a health care provider because such provider permits participants or beneficiaries to self-pay for behavioral health care services--

`(A) that are not otherwise covered under the plan or coverage; or

`(B) for which the group health plan or coverage provides limited coverage, to the extent that the plan or issuer denies coverage of the services.

`(b) RULE OF CONSTRUCTION- Nothing in subsection (a)(2)(B) shall be construed as prohibiting a group health plan or health insurance issuer from terminating a contract with a health care provider for failure to meet applicable quality standards or for fraud.

`SEC. 730. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CANCER CLINICAL TRIALS.

`(a) COVERAGE-

`(1) IN GENERAL- If a group health plan, or a health insurance issuer offering health insurance coverage in connection with such a plan, provides coverage to a qualified individual (as defined in subsection (b)), the plan or issuer--

`(A) may not deny the individual participation in the clinical trial referred to in subsection (b)(2);

`(B) subject to subsections (b), (c), and (d), 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

`(C) may not discriminate against the individual on the basis of the individual's participation in such trial.

`(2) EXCLUSION OF CERTAIN COSTS- For purposes of paragraph (1)(B), routine patient costs do not include the cost of the tests or measurements conducted primarily for the purpose of the clinical trial involved.

`(3) USE OF IN-NETWORK PROVIDERS- If one or more participating providers is participating in a clinical trial, nothing in paragraph (1) shall be construed as preventing a plan or issuer 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.

`(b) QUALIFIED INDIVIDUAL DEFINED- For purposes of subsection (a), the term `qualified individual' means an individual who is a participant or beneficiary in a group health plan who meets the following conditions:

`(1)(A) The individual has been diagnosed with cancer.

`(B) The individual is eligible to participate in an approved clinical trial according to the trial protocol with respect to treatment of such illness.

`(C) The individual's participation in the trial offers meaningful potential for significant clinical benefit for the individual.

`(2) Either--

`(A) 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 the individual meeting the conditions described in paragraph (1); or

`(B) the individual provides medical and scientific information establishing that the individual's participation in such trial would be appropriate based upon the individual meeting the conditions described in paragraph (1).

`(c) PAYMENT-

`(1) IN GENERAL- Under this section a group health plan (or health insurance issuer offering health insurance) shall provide for payment for routine patient costs described in subsection (a)(2) 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.

`(2) ROUTINE PATIENT CARE COSTS- For purposes of this section--

`(A) IN GENERAL- The term `routine patient care costs' includes 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.

`(B) EXCLUSION- Such term does 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.

`(3) PAYMENT RATE- In the case of covered items and services provided by--

`(A) a participating provider, the payment rate shall be at the agreed upon rate, or

`(B) a nonparticipating provider, the payment rate shall be at the rate the plan or issuer would normally pay for comparable items or services under subparagraph (A).

`(d) APPROVED CLINICAL TRIAL DEFINED- In this section, the term `approved clinical trial' means a cancer clinical research study or cancer clinical investigation approved by an Institutional Review Board.

`(e) CONSTRUCTION- Nothing in this section shall be construed to limit a plan's or issuer's coverage with respect to clinical trials.

`(f) PLAN SATISFACTION OF CERTAIN REQUIREMENTS; RESPONSIBILITIES OF FIDUCIARIES-

`(1) IN GENERAL- For purposes of this section, 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 section 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.

`(2) CONSTRUCTION- Nothing in this section shall be construed to affect or modify the responsibilities of the fiduciaries of a group health plan under part 4 of subtitle B.

`SEC. 730A. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS BASED ON LICENSURE.

`(a) IN GENERAL- A group health plan, and a health insurance issuer in relation to its offering of health insurance coverage in connection with such a plan, shall not discriminate with respect to participation or indemnification as to any provider who is acting within the scope of the provider's license or certification under applicable State law, solely on the basis of such license or certification.

`(b) CONSTRUCTION- Subsection (a) shall not be construed--

`(1) as requiring the coverage under a group health plan or health insurance coverage of a particular benefit or service or to prohibit a plan or issuer from including providers only to the extent necessary to meet the needs of the

plan's participants or beneficiaries or from establishing any measure designed to maintain quality and control costs consistent with the responsibilities of the plan or issuer;

`(2) to override any State licensure or scope-of-practice law;

`(3) as requiring a plan or issuer that offers network coverage to include for participation every willing provider who meets the terms and conditions of the plan or issuer; or

`(4) as prohibiting a family practice physician with appropriate expertise from providing pediatric or obstetric or gynecological care.

`SEC. 730B. PROHIBITION AGAINST IMPROPER INCENTIVE ARRANGEMENTS.

`(a) IN GENERAL- A group health plan and a health insurance issuer offering health insurance coverage in connection with such a plan may not operate any physician incentive plan (as defined in subparagraph (B) of section 1876(i)(8) of the Social Security Act) unless the requirements described in clauses (i), (ii)(I), and (iii) of subparagraph (A) of such section are met with respect to such a plan.

`(b) APPLICATION- For purposes of carrying out paragraph (1), any reference in section 1876(i)(8) of the Social Security Act to the Secretary, an eligible organization, or an individual enrolled with the organization shall be treated as a reference to the applicable authority, a group health plan or health insurance issuer, respectively, and a participant or beneficiary with the plan or organization, respectively.

`(c) CONSTRUCTION- Nothing in this section shall be construed as prohibiting all capitation and similar arrangements or all provider discount arrangements.

`SEC. 730C. PAYMENT OF CLEAN CLAIMS.

`A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide for prompt payment of claims submitted for health care services or supplies furnished to a participant or beneficiary with respect to benefits covered by the plan or issuer, in a manner consistent with the provisions of sections 1816(c)(2) and 1842(c)(2) of the Social Security Act (42 U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for purposes of this section, subparagraph (C) of section 1816(c)(2) of the Social Security Act shall be treated as applying to claims received from a participant or beneficiary as well as claims referred to in such subparagraph.

`SEC. 730D. GENERALLY APPLICABLE PROVISION.

`In the case of a group health plan or health insurance coverage that provides benefits under 2 or more coverage options, the requirements of this subpart shall apply separately with respect to each coverage option.

`SEC. 730E. EXCLUSION FROM ACCESS TO MANAGED CARE PROVISIONS FOR FEE-FOR-SERVICE COVERAGE.

`(a) IN GENERAL- The provisions of sections 721 through 730D shall not apply to a group health plan or health insurance coverage if the only coverage offered under the plan or coverage is fee-for-service coverage (as defined in subsection (b)).

`(b) FEE-FOR-SERVICE COVERAGE DEFINED- For purposes of this section, the term `fee-for-service coverage' means coverage under a group health plan or health insurance coverage that--

`(1) reimburses hospitals, health professionals, and other providers on a fee-for-service basis without placing the provider at financial risk;

`(2) does not vary reimbursement for such a provider based on an agreement to contract terms and conditions or the utilization of health care items or services relating to such provider;

`(3) allows access to any provider that is lawfully authorized to provide the covered services and that agrees to accept the terms and conditions of payment established under the plan or by the issuer; and

`(4) for which the plan or issuer does not require prior authorization before providing for any health care services.

`SEC. 730F. ADDITIONAL DEFINITIONS.

`For purposes of this subpart, section 714, and sections 503A through 503D:

`(1) APPLICABLE AUTHORITY- The term `applicable authority' means--

`(A) in the case of a group health plan, the Secretary of Health and Human Services and the Secretary of Labor; and

`(B) in the case of a health insurance issuer with respect to a specific provision of this subpart, the applicable State authority (as defined in section 2791(d) of the Public Health Service Act), or the Secretary of Health and Human Services, if such Secretary is enforcing such provision under section 2722(a)(2) or 2761(a)(2) of the Public Health Service Act.

`(2) GROUP HEALTH PLAN- The term `group health plan' has the meaning given such term in section 733(a), except that such term includes a employee welfare benefit plan treated as a group health plan under section 732(d) or defined as such a plan under section 607(1).

`(3) HEALTH CARE PROFESSIONAL- The term `health care professional' means an individual who is licensed, accredited, or certified under State law to provide specified health care services and who is operating within the scope of such licensure, accreditation, or certification.

`(4) HEALTH CARE PROVIDER- The term `health care provider' includes an allopathic or osteopathic physician or other health care professional, as well as an institutional or other facility or agency that provides health care services and that is licensed, accredited, or certified to provide health care items and services under applicable State law.

`(5) NETWORK- The term `network' means, with respect to a group health plan or health insurance issuer offering health insurance coverage, the participating health care professionals and providers through whom the plan or

issuer provides health care items and services to participants or beneficiaries.

`(6) 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 health insurance coverage, a health care provider that is not a participating health care provider with respect to such items and services.

`(7) 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, a health care provider that furnishes such items and services under a contract or other arrangement with the plan or issuer.

`(8) PRIOR AUTHORIZATION- The term `prior authorization' means the process of obtaining prior approval from a health insurance issuer or group health plan for the provision or coverage of medical services.

`(9) TERMS AND CONDITIONS- The term `terms and conditions' includes, with respect to a group health plan or health insurance coverage, requirements imposed under this subpart (and section 714 and sections 503A through 503D) with respect to the plan or coverage.'.

(b) RULE WITH RESPECT TO CERTAIN PLANS-

(1) IN GENERAL- Notwithstanding any other provision of law, health insurance issuers may offer, and eligible individuals may purchase, high deductible health plans described in section 220(c)(2)(A) of the Internal Revenue Code of 1986. Effective for the 5-year period beginning on the date of the enactment of this Act, such health plans shall not be required to provide payment for any health care items or services that are exempt from the plan's deductible.

(2) EXISTING STATE LAWS- A State law relating to payment for health care items and services in effect on the date of enactment of this Act that is preempted under paragraph (1), shall not apply to high deductible health plans after the expiration of the 5-year period described in such paragraph unless the State reenacts such law after such period.

(c) CONFORMING AMENDMENT- The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended--

(1) in the item relating to subpart C of part 7 of subtitle B of title I, by striking `Subpart C' and inserting `Subpart D'; and

(2) by adding at the end of the items relating to subpart B of part 7 of subtitle B of title I, the following:

`SUBPART C--PATIENT RIGHT TO MEDICAL ADVICE AND CARE

`Sec. 721. Access to emergency medical care.

`Sec. 722. Offering of choice of coverage options.

`Sec. 723. Patient access to obstetric and gynecological care.

`Sec. 724. Access to pediatric care.

`Sec. 725. Timely access to specialists.

`Sec. 726. Continuity of care.

`Sec. 727. Protection of patient-provider communications.

`Sec. 728. Patient's right to prescription drugs.

`Sec. 729. Self-payment for behavioral health care services.

`Sec. 730. Coverage for individuals participating in approved cancer clinical trials.

`Sec. 730B. Prohibition against improper incentive arrangements.

`Sec. 730C. Payment of clean claims.

`Sec. 730D. Generally applicable provision.'.

SEC. 102. CONFORMING AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

(a) GROUP HEALTH PLANS- Title XXVII of the Public Health Service Act is amended by inserting after section 2706 the following new section:

`SEC. 2707. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

`Subject to section 2724, a group health plan, and health insurance coverage offered in connection with a group health plan, shall comply with the requirements of subpart C of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as in effect as of the date of the enactment of such Act) and such requirements shall be deemed to be incorporated into this section.'.

(b) INDIVIDUAL HEALTH PLANS- Title XXVII of the Public Health Service Act is amended by inserting after section 2752 the following new section:

`SEC. 2753. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

`The provisions of section 2706 shall apply to health insurance coverage offered by a health insurance issuer in the individual market for an enrollee in the same manner as they apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan for a participant or beneficiary in the small or large group market and the requirements referred to in such section shall be deemed to be incorporated into this section.'.

SEC. 103. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

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. Standard relating to patients' bill of rights.';

and

(2) by inserting after section 9812 the following:

`SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

`A group health plan shall comply with the requirements of subpart C of part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (as in effect as of the date of the enactment of such Act) and such requirements shall be deemed to be incorporated into this section.'.

Subtitle B--Right to Information About Plans and Providers

SEC. 111. INFORMATION ABOUT PLANS AND COVERAGE UNDER ERISA.

(a) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974- Subpart B of part 7 of subtitle B of title I of the

Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.) is amended by adding at the end the following:

`SEC. 714. PATIENT ACCESS TO INFORMATION.

`(a) DISCLOSURE REQUIREMENT-

`(1) GROUP HEALTH PLANS- A group health plan shall--

`(A) provide to participants and beneficiaries at the time of initial coverage under the plan (or the effective date of this section, in the case of individuals who are participants or beneficiaries as of such date), and at least annually thereafter, the information described in subsection (b);

`(B) provide to participants and beneficiaries, within a reasonable period (as specified by the Secretary) before or after the date of significant changes in the information described in subsection (b), information on such significant changes; and

`(C) upon request, make available to participants and beneficiaries, the Secretary, and prospective participants and beneficiaries, the information described in subsection (b) or (c).

The plan may charge a reasonable fee for provision in printed form of any of the information described in subsection (b) or (c) more than once during any plan year.

`(2) HEALTH INSURANCE ISSUERS- A health insurance issuer in connection with the provision of health insurance coverage in connection with a group health plan shall--

`(A) provide to participants and beneficiaries enrolled under such coverage at the time of enrollment, and at least annually thereafter, the information described in subsection (b);

`(B) provide to such participants and beneficiaries, within a reasonable period (as specified by the Secretary) before or after the date of significant changes in the information described in subsection (b), information in printed form on such significant changes; and

`(C) upon request, make available to the Secretary, to individuals who are prospective participants and beneficiaries, and to the public the information described in subsection (b) or (c).

`(3) EMPLOYERS- Effective 5 years after the date this part first becomes effective, each employer (other than an employer described in paragraph (1) of subsection (d)) shall provide to each employee at least annually information (consistent with such subsection) on the amount that the employer contributes on behalf of the employee (and any dependents of the employee) for health benefits coverage.

`(b) INFORMATION PROVIDED- The information described in this subsection with respect to a group health plan or health insurance coverage offered by a health insurance issuer shall be provided to a participant or beneficiary free of charge at least once a year and includes the following:

`(1) SERVICE AREA- The service area of the plan or issuer.

`(2) BENEFITS- Benefits offered under the plan or coverage, including--

`(A) those that are covered benefits, limits and conditions on such benefits, and those benefits that are explicitly excluded from coverage;

`(B) cost sharing, such as deductibles, coinsurance, and copayment amounts, including any liability for balance billing, any maximum limitations on out of pocket expenses, and the maximum out of pocket costs for services that are provided by nonparticipating providers or that are furnished without meeting the applicable utilization review requirements;

`(C) the extent to which benefits may be obtained from nonparticipating providers;

`(D) the extent to which a participant or beneficiary may select from among participating providers and the types of providers participating in the plan or issuer network;

`(E) process for determining experimental coverage;

`(F) use of a prescription drug formulary (if any); and

`(G) any definition of medical necessity used in making coverage determinations by the plan, issuer, or claims administrator.

`(3) ACCESS- A description of the following:

`(A) The number, mix, and distribution of providers under the plan or coverage.

`(B) Out-of-network coverage (if any) provided by the plan or coverage.

`(C) Any point-of-service option (including any supplemental premium or cost-sharing for such option).

`(D) The procedures for participants and beneficiaries to select, access, and change participating primary and specialty providers.

`(E) The rights and procedures for obtaining referrals (including standing referrals) to participating and nonparticipating providers.

`(F) The name, address, and telephone number of participating health care providers and an indication of whether each such provider is available to accept new patients.

`(G) Any limitations imposed on the selection of qualifying participating health care providers, including any limitations imposed under section 812(b)(2).

`(4) OUT-OF-AREA COVERAGE- Out-of-area coverage provided by the plan or issuer.

`(5) EMERGENCY COVERAGE- Coverage of emergency services, including--

`(A) the appropriate use of emergency services, including use of the 911 telephone system or its local equivalent in emergency situations and an explanation of what constitutes an emergency situation;

`(B) the process and procedures of the plan or issuer for obtaining emergency services; and

`(C) the locations of (i) emergency departments, and (ii) other settings, in which plan physicians and hospitals provide emergency services and post-stabilization care.

`(6) PRIOR AUTHORIZATION RULES- Rules regarding prior authorization or other review requirements that could result in noncoverage or nonpayment.

`(7) GRIEVANCE AND APPEALS PROCEDURES- All appeal or grievance rights and procedures under the plan or coverage, including the method for filing grievances and the time frames and circumstances for acting on grievances and appeals, who is the applicable authority with respect to the plan or issuer.

`(8) ACCOUNTABILITY- A description of the legal recourse options available for participants and beneficiaries under the plan including--

`(A) the preemption that applies under section 514 to certain actions arising out of the provision of health benefits; and

`(B) the extent to which coverage decisions made by the plan are subject to internal review or any external review and the proper time frames under

`(9) QUALITY ASSURANCE- Any information made public by an accrediting organization in the process of accreditation of the plan or issuer or any additional quality indicators the plan or issuer makes available.

`(10) INFORMATION ON ISSUER- Notice of appropriate mailing addresses and telephone numbers to be used by participants and beneficiaries in seeking information or authorization for treatment.

`(11) AVAILABILITY OF INFORMATION ON REQUEST- Notice that the information described in subsection (c) is available upon request.

`(c) INFORMATION MADE AVAILABLE UPON REQUEST- The information described in this subsection is the following:

`(1) UTILIZATION REVIEW ACTIVITIES- A description of procedures used and requirements (including circumstances, time frames, and appeal rights) under any utilization review program under section 801.

`(2) GRIEVANCE AND APPEALS INFORMATION- Information on the number of grievances and appeals and on the disposition in the aggregate of such matters.

`(3) FORMULARY RESTRICTIONS- A description of the nature of any drug formulary restrictions.

`(4) PARTICIPATING PROVIDER LIST- A list of current participating health care providers.

`(d) EMPLOYER INFORMATION-

`(1) SMALL EMPLOYER EXEMPTION- Subsection (a)(3) shall not apply to an employer that is a small employer (as defined in section 712(c)(1)(B)) or would be such an employer if `100' were substituted for `50' in such section.

`(2) COMPUTATION- The amount described in subsection (a)(3) may be computed on an average, per employee basis, and may be based on rules similar to the rules applied in computing the applicable premium under section 604.

`(3) FORM OF DISCLOSURE- The information under subsection (a)(3) may be provided in any reasonable form, including as part of the summary plan description, a letter, or information accompanying a W-2 form.

`(e) CONSTRUCTION- Nothing in this section shall be construed as requiring public disclosure of individual contracts or financial arrangements between a group health plan or health insurance issuer and any provider.'.

(b) CONFORMING AMENDMENTS-

(1) Section 732(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by striking `section 711' and inserting `sections 711 and 714'.

(2) The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001) is amended by inserting after the item relating to section 713, the following:

`Sec 714. Patient access to information.'.

(3) Section 502(b)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended by striking `733(a)(1))' and inserting `733(a)(1)), except with respect to the requirements of section 714'.

SEC. 112. CONFORMING AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

(a) GROUP HEALTH PLANS- Title XXVII of the Public Health Service Act, as amended by section 102(a), is amended by inserting after section 2707 the following new section:

`SEC. 2708. STANDARD RELATING TO PATIENT ACCESS TO INFORMATION.

`A group health plan, and health insurance coverage offered in connection with a group health plan, shall comply with the requirements of section 714 of the Employee Retirement Income Security Act of 1974 (as in effect as of the date of the enactment of such Act) and such requirements shall be deemed to be incorporated into this section.'.

(b) INDIVIDUAL HEALTH PLANS- Title XXVII of the Public Health Service Act, as amended by section 102(b), is amended by inserting after section 2753 the following new section:

`SEC. 2754. STANDARD RELATING TO PATIENT ACCESS TO INFORMATION.

`The provisions of section 2707 shall apply to health insurance coverage offered by a health insurance issuer in the individual market for an enrollee in the same manner as they apply to health insurance coverage offered by a health insurance issuer in connection with a group health plan for a participant or beneficiary in the small or large group market and the requirements referred to in such section shall be deemed to be incorporated into this section.'.

SEC. 113. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

Subchapter B of chapter 100 of the Internal Revenue Code of 1986, as amended by section 103, is amended--

(1) in the table of sections, by inserting after the item relating to section 9813 the following new item:

`Sec. 9814. Standard relating to patient access to information.';

and

(2) by inserting after section 9812 the following:

`SEC. 9814. STANDARD RELATING TO PATIENT ACCESS TO INFORMATION.

`A group health plan shall comply with the requirements of section 714 of the Employee Retirement Income Security Act of 1974 (as in effect as of the day after the date of the enactment of such Act) and such requirements shall be deemed to be incorporated into this section.'.

Subtitle C--Right to Hold Health Plans Accountable

SEC. 121. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

(a) IN GENERAL- Part 5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by inserting after section 503 (29 U.S.C. 1133) the following new sections:

`SEC. 503A. UTILIZATION REVIEW ACTIVITIES.

`(a) COMPLIANCE WITH REQUIREMENTS-

`(1) IN GENERAL- A group health plan, and a health insurance issuer that provides health insurance coverage, shall conduct utilization review activities in connection with the provision of benefits under such plan or coverage only in accordance with a utilization review program that meets the requirements of this section and section 503B.

`(2) USE OF OUTSIDE AGENTS- Nothing in this section shall be construed as preventing a group health plan or health insurance issuer from arranging through a contract or otherwise for persons or entities to conduct utilization review activities on behalf of the plan or issuer, so long as such activities are conducted in accordance with a utilization review program that meets the requirements of this section.

`(3) UTILIZATION REVIEW DEFINED- For purposes of this section, the terms `utilization review' and `utilization review activities' mean procedures used to monitor or evaluate the use or coverage, clinical necessity, appropriateness, efficacy, or efficiency of health care services, procedures or settings, and includes prospective review, concurrent review, second opinions, case management, discharge planning, or retrospective review.

`(b) WRITTEN POLICIES AND CRITERIA-

`(1) WRITTEN POLICIES- A utilization review program shall be conducted consistent with written policies and procedures that govern all aspects of the program.

`(2) USE OF WRITTEN CRITERIA-

`(A) IN GENERAL- Such a program shall utilize written clinical review criteria developed with input from a range of appropriate actively practicing physicians or dentists, as determined by the plan, pursuant to the program. Such criteria shall include written clinical review criteria that are based on valid clinical evidence where available and that are directed specifically at meeting the needs of at-risk populations and covered individuals with chronic conditions or severe illnesses, including gender-specific criteria and pediatric-specific criteria where available and appropriate.

`(B) CONTINUING USE OF STANDARDS IN RETROSPECTIVE REVIEW- If a health care service has been specifically pre-authorized or approved for a participant or beneficiary under such a program, the program shall not, pursuant to retrospective review, revise or modify the specific standards, criteria, or procedures used for the utilization review for procedures, treatment, and services delivered to the participant or beneficiary during the same course of treatment.

`(C) REVIEW OF SAMPLE OF CLAIMS DENIALS- Such a program shall provide for an evaluation of the clinical appropriateness of at least a sample of denials of claims for benefits.

`(c) CONDUCT OF PROGRAM ACTIVITIES-

`(1) ADMINISTRATION BY PHYSICIANS OR DENTISTS- A utilization review program shall be administered by qualified physicians or dentists who shall oversee review decisions.

`(2) USE OF QUALIFIED, INDEPENDENT PERSONNEL-

`(A) IN GENERAL- A utilization review program shall provide for the conduct of utilization review activities only through personnel who are qualified and have received appropriate training in the conduct of such activities under the program.

`(B) PROHIBITION OF CONTINGENT COMPENSATION ARRANGEMENTS- Such a program shall not, with respect to utilization review activities, permit or provide compensation or anything of value to its employees, agents, or contractors in a manner that encourages denials of claims for benefits.

`(C) PROHIBITION OF CONFLICTS- Such a program shall not permit a health care professional who is providing health care services to an individual to perform utilization review activities in connection with the health care services being provided to the individual.

`(3) ACCESSIBILITY OF REVIEW- Such a program shall provide that appropriate personnel performing utilization review activities under the program, including the utilization review administrator, are reasonably accessible by toll-free telephone during normal business hours to discuss patient care and allow response to telephone requests, and that appropriate provision is made to receive and respond promptly to calls received during other hours.

`(4) LIMITS ON FREQUENCY- Such a program shall not provide for the performance of utilization review

activities with respect to a class of services furnished to an individual more frequently than is reasonably required to assess whether the services under review are medically necessary or appropriate.

`SEC. 503B. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND PRIOR AUTHORIZATION DETERMINATIONS.

`(a) PROCEDURES OF INITIAL CLAIMS FOR BENEFITS-

`(1) IN GENERAL- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall--

`(A) make a determination on an initial claim for benefits by a participant or beneficiary (or authorized representative) regarding payment or coverage for items or services under the terms and conditions of the plan or coverage involved, including any cost-sharing amount that the participant or beneficiary is required to pay with respect to such claim for benefits; and

`(B) notify a participant or beneficiary (or authorized representative) and the treating health care professional involved regarding a determination on an initial claim for benefits made under the terms and conditions of the plan or coverage, including any cost-sharing amounts that the participant or beneficiary may be required to make with respect to such claim for benefits, and of the right of the participant or beneficiary to an internal appeal under section 503C.

`(2) ACCESS TO INFORMATION- With respect to an initial claim for benefits, the participant or beneficiary (or authorized representative) and the treating health care professional (if any) shall provide the plan or issuer with access to information requested by the plan or issuer that is necessary to make a determination relating to the claim. Such access shall be provided not later than 5 days after the date on which the request for information is received, or, in a case described in subparagraph (B) or (C) of subsection (b)(1), by such earlier time as may be necessary to comply with the applicable timeline under such subparagraph.

`(3) ORAL REQUESTS- In the case of a claim for benefits involving an expedited or concurrent determination, a participant or beneficiary (or authorized representative) may make an initial claim for benefits orally, but a group health plan, or health insurance issuer offering health insurance coverage, may require that the participant or beneficiary (or authorized representative) provide written confirmation of such request in a timely manner on a form provided by the plan or issuer. In the case of such an oral request for benefits, the making of the request (and the timing of such request) shall be treated as the making at that time of a claim for such benefits without regard to whether and when a written confirmation of such request is made.

`(b) TIMELINE FOR MAKING DETERMINATIONS-

`(1) PRIOR AUTHORIZATION DETERMINATION-

`(A) IN GENERAL- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall make a prior authorization determination on a claim for benefits (whether oral or written) as soon as possible in accordance with the medical exigencies of the case but in no case later than 14 days from the date on which the plan or issuer receives information that is reasonably necessary to enable the plan or issuer to make a determination on the request for prior authorization and in no case later than 28 days after the date of the claim for benefits is received.

`(B) EXPEDITED DETERMINATION- Notwithstanding subparagraph (A), a group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall expedite a prior authorization determination on a claim for benefits described in such subparagraph when a request for such an expedited determination is made by a participant or beneficiary (or authorized representative) at any time during the process for making a determination and a health care professional certifies, with the request, that a determination under the procedures described in subparagraph (A) would seriously jeopardize the life or health of the participant or beneficiary or the ability of the participant or beneficiary to maintain or regain maximum function. Such determination shall be made as soon as possible based on the medical exigencies of the case involved and in no case later than 72 hours after the time the request is received by the plan or issuer under this subparagraph.

`(C) ONGOING CARE-

`(i) CONCURRENT REVIEW-

`(I) IN GENERAL- Subject to clause (ii), in the case of a concurrent review of ongoing care (including hospitalization), which results in a termination or reduction of such care, the plan or issuer must provide by telephone and in printed form notice of the concurrent review determination to the individual or the individual's designee and the individual's health care provider as soon as possible in accordance with the medical exigencies of the case, with sufficient time prior to the termination or reduction to allow for an appeal under section 503C(b)(3) to be completed before the termination or reduction takes effect.

`(II) CONTENTS OF NOTICE- Such notice shall include, with respect to ongoing health care items and services, the number of ongoing services approved, the new total of approved services, the date of onset of services, and the next review date, if any, as well as a statement of the individual's rights to further appeal.

`(ii) RULE OF CONSTRUCTION- Clause (i) shall not be construed as requiring plans or issuers

to provide coverage of care that would exceed the coverage limitations for such care.

`(2) RETROSPECTIVE DETERMINATION- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall make a retrospective determination on a claim for benefits as soon as possible in accordance with the medical exigencies of the case but not later than 30 days after the date on which the plan or issuer receives information that is reasonably necessary to enable the plan or issuer to make a determination on the claim, or, if earlier, 60 days after the date of receipt of the claim for benefits.

`(c) NOTICE OF A DENIAL OF A CLAIM FOR BENEFITS- Written notice of a denial made under an initial claim for benefits shall be issued to the participant or beneficiary (or authorized representative) and the treating health care professional as soon as possible in accordance with the medical exigencies of the case and in no case later than 2 days after the date of the determination (or, in the case described in subparagraph (B) or (C) of subsection (b)(1), within the 72-hour or applicable period referred to in such subparagraph).

`(d) REQUIREMENTS OF NOTICE OF DETERMINATIONS- The written notice of a denial of a claim for benefits determination under subsection (c) shall be provided in printed form and written in a manner calculated to be understood by the average participant or beneficiary and shall include--

`(1) the specific reasons for the determination (including a summary of the clinical or scientific evidence used in making the determination);

`(2) the procedures for obtaining additional information concerning the determination; and

`(3) notification of the right to appeal the determination and instructions on how to initiate an appeal in accordance with section 503C.

`(e) DEFINITIONS- For purposes of this part:

`(1) AUTHORIZED REPRESENTATIVE- The term `authorized representative' means, with respect to an individual who is a participant or beneficiary, any health care professional or other person acting on behalf of the individual with the individual's consent or without such consent if the individual is medically unable to provide such consent.

`(2) CLAIM FOR BENEFITS- The term `claim for benefits' means any request for coverage (including authorization of coverage), for eligibility, or for payment in whole or in part, for an item or service under a group health plan or health insurance coverage.

`(3) DENIAL OF CLAIM FOR BENEFITS- The term `denial' means, with respect to a claim for benefits, a denial (in whole or in part) of, or a failure to act on a timely basis upon, the claim for benefits and includes a failure to provide benefits (including items and services) required to be provided under this title.

`(4) TREATING HEALTH CARE PROFESSIONAL- The term `treating health care professional' means, with respect to services to be provided to a participant or beneficiary, a health care professional who is primarily responsible for delivering those services to the participant or beneficiary.

`SEC. 503C. INTERNAL APPEALS OF CLAIMS DENIALS.

`(a) RIGHT TO INTERNAL APPEAL-

`(1) IN GENERAL- A participant or beneficiary of a group health plan (or authorized representative) may appeal any denial of a claim for benefits under section 503B under the procedures described in this section.

`(2) TIME FOR APPEAL-

`(A) IN GENERAL- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall ensure that a participant or beneficiary (or authorized representative) has a period of not less than 180 days beginning on the date of a denial of a claim for benefits under section 503B in which to appeal such denial under this section.

`(B) DATE OF DENIAL- For purposes of subparagraph (A), the date of the denial shall be deemed to be the date as of which the participant or beneficiary knew of the denial of the claim for benefits.

`(3) FAILURE TO ACT- The failure of a plan or issuer to issue a determination on a claim for benefits under section 503B within the applicable timeline established for such a determination under such section is a denial of a claim for benefits for purposes this section and section 503D as of the date of the applicable deadline.

`(4) PLAN WAIVER OF INTERNAL REVIEW- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, may waive the internal review process under this section. In such case the plan or issuer shall provide notice to the participant or beneficiary (or authorized representative) involved, the participant or beneficiary (or authorized representative) involved shall be relieved of any obligation to complete the internal review involved, and may, at the option of such participant, beneficiary, or representative proceed directly to seek further appeal through external review under section 503D or otherwise.

`(b) TIMELINES FOR MAKING DETERMINATIONS-

`(1) ORAL REQUESTS- In the case of an appeal of a denial of a claim for benefits under this section that involves an expedited or concurrent determination, a participant or beneficiary (or authorized representative) may request such appeal orally. A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, may require that the participant or beneficiary (or authorized representative) provide written confirmation of such request in a timely manner on a form provided by the plan or issuer. In the case of such an oral request for an appeal of a denial, the making of the request (and the timing of such request) shall be treated as the making at that time of a request for an

appeal without regard to whether and when a written confirmation of such request is made.

`(2) ACCESS TO INFORMATION- With respect to an appeal of a denial of a claim for benefits, the participant or beneficiary (or authorized representative) and the treating health care professional (if any) shall provide the plan or issuer with access to information requested by the plan or issuer that is necessary to make a determination relating to the appeal. Such access shall be provided not later than 5 days after the date on which the request for information is received, or, in a case described in subparagraph (B) or (C) of paragraph (3), by such earlier time as may be necessary to comply with the applicable timeline under such subparagraph.

`(3) PRIOR AUTHORIZATION DETERMINATIONS-

`(A) IN GENERAL- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall make a determination on an appeal of a denial of a claim for benefits under this subsection as soon as possible in accordance with the medical exigencies of the case but in no case later than 14 days from the date on which the plan or issuer receives information that is reasonably necessary to enable the plan or issuer to make a determination on the appeal and in no case later than 28 days after the date the request for the appeal is received.

`(B) EXPEDITED DETERMINATION- Notwithstanding subparagraph (A), a group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall expedite a prior authorization determination on an appeal of a denial of a claim for benefits described in subparagraph (A), when a request for such an expedited determination is made by a participant or beneficiary (or authorized representative) at any time during the process for making a determination and a health care professional certifies, with the request, that a determination under the procedures described in subparagraph (A) would seriously jeopardize the life or health of the participant or beneficiary or the ability of the participant or beneficiary to maintain or regain maximum function. Such determination shall be made as soon as possible based on the medical exigencies of the case involved and in no case later than 72 hours after the time the request for such appeal is received by the plan or issuer under this subparagraph.

`(C) ONGOING CARE DETERMINATIONS-

`(i) IN GENERAL- Subject to clause (ii), in the case of a concurrent review determination described in section 503B(b)(1)(C)(i)(I), which results in a termination or reduction of such care, the plan or issuer must provide notice of the determination on the appeal under this section by telephone and in printed form to the individual or the individual's designee and the individual's health care provider as soon as possible in accordance with the medical exigencies of the case, with sufficient time prior to the termination or reduction to allow for an external appeal under section 503D to be completed before the termination or reduction takes effect.

`(ii) RULE OF CONSTRUCTION- Clause (i) shall not be construed as requiring plans or issuers to provide coverage of care that would exceed the coverage limitations for such care.

`(4) RETROSPECTIVE DETERMINATION- A group health plan, or health insurance issuer offering health insurance coverage in connection with a group health plan, shall make a retrospective determination on an appeal of a claim for benefits in no case later than 30 days after the date on which the plan or issuer receives necessary information that is reasonably necessary to enable the plan or issuer to make a determination on the appeal and in no case later than 60 days after the date the request for the appeal is received.

`(c) CONDUCT OF REVIEW-

`(1) IN GENERAL- A review of a denial of a claim for benefits under this section shall be conducted by an individual with appropriate expertise who was not involved in the initial determination.

`(2) APPROPRIATE REVIEW OF MEDICAL DECISIONS- A review of an appeal of a denial of a claim for benefits that is based on a lack of medical necessity and appropriateness, or based on an experimental or investigational treatment, or requires an evaluation of medical facts, shall be made by a physician (allopathic or osteopathic) or dentist with appropriate expertise (including, in the case of a child, appropriate pediatric expertise) who was not involved in the initial determination.

`(d) NOTICE OF DETERMINATION-

`(1) IN GENERAL- Written notice of a determination made under an internal appeal of a denial of a claim for benefits shall be issued to the participant or beneficiary (or authorized representative) and the treating health care professional as soon as possible in accordance with the medical exigencies of the case and in no case later than 2 days after the date of completion of the review (or, in the case described in subparagraph (B) or (C) of subsection (b)(3), within the 72-hour or applicable period referred to in such subparagraph).

`(2) FINAL DETERMINATION- The decision by a plan or issuer under this section shall be treated as the final determination of the plan or issuer on a denial of a claim for benefits. The failure of a plan or issuer to issue a determination on an appeal of a denial of a claim for benefits under this section within the applicable timeline established for such a determination shall be treated as a final determination on an appeal of a denial of a claim for benefits for purposes of proceeding to external review under section 503D.

`(3) REQUIREMENTS OF NOTICE- With respect to a determination made under this section, the notice described in paragraph (1) shall be provided in printed form and written in a manner calculated to be understood by the average participant or beneficiary and shall include--

`(A) the specific reasons for the determination (including a summary of the clinical or scientific evidence used in making the determination);

`(B) the procedures for obtaining additional information concerning the determination; and

`(C) notification of the right to an independent external review under section 503D and instructions on how to initiate such a review.

`SEC. 503D. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

`(a) RIGHT TO EXTERNAL APPEAL- A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, shall provide in accordance with this section participants and beneficiaries (or authorized representatives) with access to an independent external review for any denial of a claim for benefits in any case in which the amount involved exceeds $100.

`(b) INITIATION OF THE INDEPENDENT EXTERNAL REVIEW PROCESS-

`(1) TIME TO FILE- A request for an independent external review under this section shall be filed with the plan or issuer not later than 180 days after the date on which the participant or beneficiary receives notice of the denial under section 503C(d) or notice of waiver of internal review under section 503C(a)(4) or the date on which the plan or issuer has failed to make a timely decision under section 503C(d)(2).

`(2) FILING OF REQUEST-

`(A) IN GENERAL- Subject to the succeeding provisions of this subsection, a group health plan, and a health insurance issuer offering health insurance coverage, may--

`(i) except as provided in subparagraph (B)(i), require that a request for review be in writing;

`(ii) limit the filing of such a request to the participant or beneficiary involved (or an authorized representative);

`(iii) except if waived by the plan or issuer under section 503C(a)(4), condition access to an independent external review under this section upon a final determination of a denial of a claim for benefits under the internal review procedure under section 503C;

`(iv) except as provided in subparagraph (B)(ii), require payment of a filing fee to the plan or issuer of a sum that does not exceed $25; and

`(v) require that a request for review include the consent of the participant or beneficiary (or authorized representative) for the release of medical information or records of the participant or beneficiary to the qualified external review entity for the sole purpose of conducting external review activities.

`(B) REQUIREMENTS AND EXCEPTION RELATING TO GENERAL RULE-

`(i) ORAL REQUESTS PERMITTED IN EXPEDITED OR CONCURRENT CASES- In the case of an expedited or concurrent external review as provided for under subsection (e), the request may be made orally. A group health plan, or health insurance issuer offering health insurance coverage, may require that the participant or beneficiary (or authorized representative) provide written confirmation of such request in a timely manner on a form provided by the plan or issuer. Such written confirmation shall be treated as a consent for purposes of subparagraph (A)(v). In the case of such an oral request for such a review, the making of the request (and the timing of such request) shall be treated as the making at that time of a request for such an external review without regard to whether and when a written confirmation of such request is made.

`(ii) EXCEPTION TO FILING FEE REQUIREMENT-

`(I) INDIGENCY- Payment of a filing fee shall not be required under subparagraph (A)(iv) where there is a certification (in a form and manner specified in guidelines established by the Secretary) that the participant or beneficiary is indigent (as defined in such guidelines).

`(II) FEE NOT REQUIRED- Payment of a filing fee shall not be required under subparagraph (A)(iv) if the plan or issuer waives the internal appeals process under section 503C(a)(4).

`(III) REFUNDING OF FEE- The filing fee paid under subparagraph (A)(iv) shall be refunded if the determination under the independent external review is to reverse the denial which is the subject of the review.

`(IV) COLLECTION OF FILING FEE- The failure to pay such a filing fee shall not prevent the consideration of a request for review but, subject to the preceding provisions of this clause, shall constitute a legal liability to pay.

`(c) REFERRAL TO QUALIFIED EXTERNAL REVIEW ENTITY UPON REQUEST-

`(1) IN GENERAL- Upon the filing of a request for independent external review with the group health plan, or health insurance issuer offering health insurance coverage, the plan or issuer shall immediately refer such request, and forward the plan or issuer's initial decision (including the information described in section 503C(d)(3)(A)), to a

qualified external review entity selected in accordance with this section.

`(2) ACCESS TO PLAN OR ISSUER AND HEALTH PROFESSIONAL INFORMATION- With respect to an independent external review conducted under this section, the participant or beneficiary (or authorized representative), the plan or issuer, and the treating health care professional (if any) shall provide the external review entity with information that is necessary to conduct a review under this section, as determined and requested by the entity. Such information shall be provided not later than 5 days after the date on which the request for information is received, or, in a case described in clause (ii) or (iii) of subsection (e)(1)(A), by such earlier time as may be necessary to comply with the applicable timeline under such clause.

`(3) SCREENING OF REQUESTS BY QUALIFIED EXTERNAL REVIEW ENTITIES-

`(A) IN GENERAL- With respect to a request referred to a qualified external review entity under paragraph (1) relating to a denial of a claim for benefits, the entity shall refer such request for the conduct of an independent medical review unless the entity determines that--

`(i) any of the conditions described in clauses (ii) or (iii) of subsection (b)(2)(A) have not been met;

`(ii) the denial of the claim for benefits does not involve a medically reviewable decision under subsection (d)(2);

`(iii) the denial of the claim for benefits relates to a decision regarding whether an individual is a participant or beneficiary who is enrolled under the terms and conditions of the plan or coverage (including the applicability of any waiting period under the plan or coverage); or

`(iv) the denial of the claim for benefits is a decision as to the application of cost-sharing requirements or the application of a specific exclusion or express limitation on the amount, duration, or scope of coverage of items or services under the terms and conditions of the plan or coverage unless the decision is a denial described in subsection (d)(2).

Upon making a determination that any of clauses (i) through (iv) applies with respect to the request, the entity shall determine that the denial of a claim for benefits involved is not eligible for independent medical review under subsection (d), and shall provide notice in accordance with subparagraph (C).

`(B) PROCESS FOR MAKING DETERMINATIONS-

`(i) NO DEFERENCE TO PRIOR DETERMINATIONS- In making determinations under subparagraph (A), there shall be no deference given to determinations made by the plan or issuer or the recommendation of a treating health care professional (if any).

`(ii) USE OF APPROPRIATE PERSONNEL- A qualified external review entity shall use appropriately qualified personnel to make determinations under this section.

`(C) NOTICES AND GENERAL TIMELINES FOR DETERMINATION-

`(i) NOTICE IN CASE OF DENIAL OF REFERRAL- If the entity under this paragraph does not make a referral for the conduct of an independent medical review, the entity shall provide notice to the plan or issuer, the participant or beneficiary (or authorized representative) filing the request, and the treating health care professional (if any) that the denial is not subject to independent medical review. Such notice--

`(I) shall be written (and, in addition, may be provided orally) in a manner calculated to be understood by an average participant or beneficiary;

`(II) shall include the reasons for the determination;

`(III) include any relevant terms and conditions of the plan or coverage; and

`(IV) include a description of any further recourse available to the individual.

`(ii) GENERAL TIMELINE FOR DETERMINATIONS- Upon receipt of information under paragraph (2), the qualified external review entity, and if required the independent medical review panel conducting independent medical review under subsection (d), shall make a determination within the overall timeline that is applicable to the case under review as described in subsection (e), except that if the entity determines that a referral to an independent medical review panel is not required, the entity shall provide notice of such determination to the participant or beneficiary (or authorized representative) within such timeline and within 2 days of the date of such determination.

`(d) INDEPENDENT MEDICAL REVIEW-

`(1) IN GENERAL- If a qualified external review entity determines under subsection (c) that a denial of a claim for benefits is eligible for independent medical review, the entity shall refer the denial involved to an independent medical review panel comprised of 3 members meeting the requirements of subsection (g) for the conduct of an independent medical review under this subsection.

`(2) MEDICALLY REVIEWABLE DECISIONS- A denial of a claim for benefits is eligible for independent medical review if the benefit for the item or service for which the claim is made would be a covered benefit under the terms and conditions of the plan or coverage but for one (or more) of the following determinations:

`(A) DENIALS BASED ON MEDICAL NECESSITY AND APPROPRIATENESS- A determination that the item or service is not covered because it is not medically necessary and appropriate or based on the application of substantially equivalent terms.

`(B) DENIALS BASED ON EXPERIMENTAL OR INVESTIGATIONAL TREATMENT- A determination that the item or service is not covered because it is experimental or investigational or based on the application of substantially equivalent terms.

`(C) DENIALS OTHERWISE BASED ON AN EVALUATION OF MEDICAL FACTS- A determination that the item or service or condition is not covered based on grounds that require an evaluation of the medical facts by a health care professional in the specific case involved to determine the coverage and extent of coverage of the item or service or condition.

`(3) INDEPENDENT MEDICAL REVIEW DETERMINATION-

`(A) IN GENERAL- An independent medical review panel under this section shall make a new independent determination with respect to whether or not the denial of a claim for a benefit that is the subject of the review should be upheld, reversed, or modified.

`(B) STANDARD FOR DETERMINATION- The independent medical review panel's determination relating to the medical necessity and appropriateness, or the experimental or investigation nature, or the evaluation of the medical facts of the item, service, or condition shall be based on the medical condition of the participant or beneficiary (including the medical records of the participant or beneficiary) and valid, relevant scientific evidence and clinical evidence, including peer-reviewed medical literature or findings and including expert opinion.

`(C) NO COVERAGE FOR EXCLUDED BENEFITS- Nothing in this subsection shall be construed to permit an independent medical review panel to require that a group health plan, or health insurance issuer offering health insurance coverage, provide coverage for items or services for which benefits are specifically excluded or expressly limited under the plan or coverage in the plain language of the plan document (and which are disclosed under section 121(b)(1)(C)) except to the extent that the application or interpretation of the exclusion or limitation involves a determination described in paragraph (2).

`(D) EVIDENCE AND INFORMATION TO BE USED IN MEDICAL REVIEWS- In making a determination under this subsection, the independent medical review panel shall also consider appropriate and available evidence and information, including the following:

`(i) The determination made by the plan or issuer with respect to the claim upon internal review and the evidence, guidelines, or rationale used by the plan or issuer in reaching such determination.

`(ii) The recommendation of the treating health care professional and the evidence, guidelines, and rationale used by the treating health care professional in reaching such recommendation.

`(iii) Additional relevant evidence or information obtained by the independent medical review panel or submitted by the plan, issuer, participant or beneficiary (or an authorized representative), or treating health care professional.

`(iv) The plan or coverage document.

`(E) INDEPENDENT DETERMINATION- In making determinations under this subtitle, a qualified external review entity and an independent medical review panel shall--

`(i) consider the claim under review without deference to the determinations made by the plan or issuer or the recommendation of the treating health care professional (if any); and

`(ii) consider, but not be bound by the definition used by the plan or issuer of `medically necessary and appropriate', or `experimental or investigational', or other substantially equivalent terms that are used by the plan or issuer to describe medical necessity and appropriateness or experimental or investigational nature of the treatment.

`(F) DETERMINATION OF INDEPENDENT MEDICAL REVIEW PANEL- An independent medical review panel shall, in accordance with the deadlines described in subsection (e), prepare a written determination to uphold or reverse the denial under review. Such written determination shall include--

`(i) the determination of the panel;

`(ii) the specific reasons of the panel for such determination, including a summary of the clinical or scientific evidence used in making the determination; and

`(iii) with respect to a determination to reverse the denial under review, a timeframe within which the plan or issuer must comply with such determination.

`(G) NONBINDING NATURE OF ADDITIONAL RECOMMENDATIONS- In addition to the determination under subparagraph (F), the independent medical review panel may provide the plan or issuer and the treating health care professional with additional recommendations in connection with such a determination, but any such recommendations shall not affect (or be treated as part of) the determination and shall not be binding on the plan or issuer.

`(e) TIMELINES AND NOTIFICATIONS-

`(1) TIMELINES FOR INDEPENDENT MEDICAL REVIEW-

`(A) PRIOR AUTHORIZATION DETERMINATION-

`(i) IN GENERAL- The independent medical review panel shall make a determination under subsection (d) on a denial of a claim for benefits in accordance with the medical exigencies of the case but not later than 14 days after the date of receipt of information under subsection (c)(2) if the review involves a prior authorization of items or services and in no case later than 21 days after the date the request for external review is received.

`(ii) EXPEDITED DETERMINATION- Notwithstanding clause (i) and subject to clause (iii), the independent medical review panel shall make an expedited determination under subsection (d) on a denial of a claim for benefits described in clause (i), when a request for such an expedited determination is made by a participant or beneficiary (or authorized representative) at any time during the process for making a determination, and a health care professional certifies, with the request, that a determination under the timeline described in clause (i) would seriously jeopardize the life or health of the participant or beneficiary or the ability of the participant or beneficiary to maintain or regain maximum function. Such determination shall be made as soon as possible based on the medical exigencies of the case involved and in no case later than 72 hours after the time the request for external review is received by the qualified external review entity.

`(iii) ONGOING CARE DETERMINATION- Notwithstanding clause (i), in the case of a review described in such subclause that involves a termination or reduction of care, the notice of the determination shall be completed not later than 24 hours after the time the request for external review is received by the qualified external review entity and before the end of the approved period of care.

`(B) RETROSPECTIVE DETERMINATION- The independent medical review panel shall complete a review under subsection (d) in the case of a retrospective determination concerting a denial of a claim for benefits not later than 30 days after the date of receipt of information under subsection (c)(2) and in no case later than 60 days after the date the request for external review is received by the qualified external review entity.

`(2) NOTIFICATION OF DETERMINATION- The external review entity shall ensure that the plan or issuer, the participant or beneficiary (or authorized representative) and the treating health care professional (if any) receives a copy of the written determination of the independent medical review panel prepared under subsection (d)(3)(F). Nothing in this paragraph shall be construed as preventing an entity or panel from providing an initial oral notice of the determination.

`(3) FORM OF NOTICES- Determinations and notices under this subsection shall be written in a manner calculated to be understood by an average participant.

`(f) COMPLIANCE-

`(1) APPLICATION OF DETERMINATIONS-

`(A) EXTERNAL REVIEW DETERMINATIONS BINDING ON PLAN- The determinations of an external review entity and an independent medical review panel under this section shall be binding upon the plan or issuer involved.

`(B) COMPLIANCE WITH DETERMINATION- If the determination of an independent medical review panel is to reverse the denial, the plan or issuer, upon the receipt of such determination, shall authorize coverage to comply with the panel's determination in accordance with the timeframe established by the panel.

`(2) FAILURE TO COMPLY-

`(A) IN GENERAL- If a plan or issuer fails to comply with the timeframe established under paragraph (1)(B) with respect to a participant or beneficiary, where such failure to comply is caused by the plan or issuer, the participant or beneficiary may obtain the items or services involved (in a manner consistent with the determination of the independent external review entity) from any provider regardless of whether such provider is a participating provider under the plan or coverage.

`(B) REIMBURSEMENT-

`(i) IN GENERAL- Where a participant or beneficiary obtains items or services in accordance with subparagraph (A), the plan or issuer involved shall provide for reimbursement of the costs of such items or services. Such reimbursement shall be made to the treating health care professional or to the participant or beneficiary (in the case of a participant or beneficiary who pays for the costs of such items or services).

`(ii) AMOUNT- The plan or issuer shall fully reimburse a professional, participant or beneficiary under clause (i) for the total costs of the items or services provided (regardless of any plan limitations that may apply to the coverage of such items or services) so long as the items or services were provided in a manner consistent with the determination of the independent medical review panel.

`(C) FAILURE TO REIMBURSE- Where a plan or issuer fails to provide reimbursement to a professional, participant or beneficiary in accordance with this paragraph, the professional, participant or beneficiary may commence a civil action (or utilize other remedies available under law) to recover only the amount of any such reimbursement that is owed by the plan or issuer and any necessary legal costs or expenses (including attorney's fees) incurred in recovering such reimbursement.

`(D) AVAILABLE REMEDIES- The remedies provided under this paragraph are in addition to any other available remedies.

`(3) PENALTIES AGAINST AUTHORIZED OFFICIALS FOR REFUSING TO AUTHORIZE THE DETERMINATION OF AN INDEPENDENT MEDICAL REVIEW PANEL-

`(A) MONETARY PENALTIES-

`(i) IN GENERAL- In any case in which the determination of an independent medical review panel under this section is not followed by a group health plan, or by a health insurance issuer offering health insurance coverage, any person who, acting in the capacity of authorizing the benefit, causes such refusal may, in the discretion in a court of competent jurisdiction, be liable to an aggrieved participant or beneficiary for a civil penalty in an amount of up to $1,000 a day from the date on which the determination was transmitted to the plan or issuer by the external review entity until the date the refusal to provide the benefit is corrected.

`(ii) ADDITIONAL PENALTY FOR FAILING TO FOLLOW TIMELINE- In any case in which treatment was not commenced by the plan in accordance with the determination of an independent external review entity, the Secretary shall assess a civil penalty of $10,000 against the plan and the plan shall pay such penalty to the participant or beneficiary involved.

`(B) CEASE AND DESIST ORDER AND ORDER OF ATTORNEY'S FEES- In any action described in subparagraph (A) brought by a participant or beneficiary with respect to a group health plan, or a health insurance issuer offering health insurance coverage, in which a plaintiff alleges that a person referred to in such subparagraph has taken an action resulting in a refusal of a benefit determined by an external appeal entity to be covered, or has failed to take an action for which such person is responsible under the terms and conditions of the plan or coverage and which is necessary under the plan or coverage for authorizing a benefit, the court shall cause to be served on the defendant an order 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.

`(C) ADDITIONAL CIVIL PENALTIES-

`(i) IN GENERAL- In addition to any penalty imposed under subparagraph (A) or (B), the Secretary may assess a civil penalty against a person acting in the capacity of authorizing a benefit determined by an external review entity for one or more group health plans, or health insurance issuers offering health insurance coverage, for--

`(I) any pattern or practice of repeated refusal to authorize a benefit determined by an external appeal entity to be covered; or

`(II) any pattern or practice of repeated violations of the requirements of this section with respect to such plan or coverage.

`(ii) STANDARD OF PROOF AND AMOUNT OF PENALTY- Such penalty shall be payable only upon proof by clear and convincing evidence of such pattern or practice and shall be in an amount not to exceed the lesser of--

`(I) 25 percent of the aggregate value of benefits shown by the Secretary to have not been provided, or unlawfully delayed, in violation of this section under such pattern or practice; or

`(II) $500,000.

`(4) PROTECTION OF LEGAL RIGHTS- Nothing in this subsection or subtitle shall be construed as altering or eliminating any cause of action or legal rights or remedies of participants, beneficiaries, and others under State or Federal law (including sections 502 and 503), including the right to file judicial actions to enforce rights.

`(g) QUALIFICATIONS OF MEMBERS OF INDEPENDENT MEDICAL REVIEW PANELS-

`(1) IN GENERAL- In referring a denial to an independent medical review panel to conduct independent medical review under subsection (c), the qualified external review entity shall ensure that--

`(A) each member of the panel meets the qualifications described in paragraphs (2) and (3);

`(B) with respect to each review the requirements described in paragraphs (4) and (5) for the panel are met; and

`(C) compensation provided by the entity to each member of the panel is consistent with paragraph (6).

`(2) LICENSURE AND EXPERTISE- Each member of the independent medical review panel shall be a physician (allopathic or osteopathic) or health care professional who--

`(A) is appropriately credentialed or licensed in 1 or more States to deliver health care services; and

`(B) typically treats the condition, makes the diagnosis, or provides the type of treatment under review.

`(3) INDEPENDENCE-

`(A) IN GENERAL- Subject to subparagraph (B), each member of the independent medical review panel in a case shall--

`(i) not be a related party (as defined in paragraph (7));

`(ii) not have a material familial, financial, or professional relationship with such a party; and

`(iii) not otherwise have a conflict of interest with such a party (as determined under regulations).

`(B) EXCEPTION- Nothing in subparagraph (A) shall be construed to--

`(i) prohibit an individual, solely on the basis of affiliation with the plan or issuer, from serving as a member of an independent medical review panel if--

`(I) a non-affiliated individual is not reasonably available;

`(II) the affiliated individual is not involved in the provision of items or services in the case under review;

`(III) the fact of such an affiliation is disclosed to the plan or issuer and the participant or beneficiary (or authorized representative) and neither party objects; and

`(IV) the affiliated individual is not an employee of the plan or issuer and does not provide services exclusively or primarily to or on behalf of the plan or issuer;

`(ii) prohibit an individual who has staff privileges at the institution where the treatment involved takes place from serving as a member of an independent medical review panel merely on the basis of such affiliation if the affiliation is disclosed to the plan or issuer and the participant or beneficiary (or authorized representative), and neither party objects; or

`(iii) prohibit receipt of compensation by a member of an independent medical review panel from an entity if the compensation is provided consistent with paragraph (6).

`(4) PRACTICING HEALTH CARE PROFESSIONAL IN SAME FIELD-

`(A) IN GENERAL- In a case involving treatment, or the provision of items or services--

`(i) by a physician, the members of an independent medical review panel shall be practicing physicians (allopathic or osteopathic) of the same or similar specialty as a physician who typically treats the condition, makes the diagnosis, or provides the type of treatment under review; or

`(ii) by a health care professional (other than a physician), at least two of the members of an independent medical review panel shall be practicing physicians (allopathic or osteopathic) of the same or similar specialty as the health care professional who typically treats the condition, makes the diagnosis, or provides the type of treatment under review, and, if determined appropriate by the qualified external review entity, the third member of such panel shall be a practicing health care professional (other than such a physician) of such a same or similar specialty.

`(B) PRACTICING DEFINED- For purposes of this paragraph, the term `practicing' means, with respect to an individual who is a physician or other health care professional that the individual provides health care services to individual patients on average at least 2 days per week.

`(5) PEDIATRIC EXPERTISE- In the case of an external review relating to a child, a member of an independent medical review panel shall have expertise under paragraph (2) in pediatrics.

`(6) LIMITATIONS ON REVIEWER COMPENSATION- Compensation provided by a qualified external review entity to a member of an independent medical review panel in connection with a review under this section shall--

`(A) not exceed a reasonable level; and

`(B) not be contingent on the decision rendered by the reviewer.

`(7) RELATED PARTY DEFINED- For purposes of this section, the term `related party' means, with respect to a denial of a claim under a plan or coverage relating to a participant or beneficiary, any of the following:

`(A) The plan, plan sponsor, or issuer involved, or any fiduciary, officer, director, or employee of such plan, plan sponsor, or issuer.

`(B) The participant or beneficiary (or authorized representative).

`(C) The health care professional that provides the items or services involved in the denial.

`(D) The institution at which the items or services (or treatment) involved in the denial are provided.

`(E) The manufacturer of any drug or other item that is included in the items or services involved in the denial.

`(F) Any other party determined under any regulations to have a substantial interest in the denial involved.

`(h) QUALIFIED EXTERNAL REVIEW ENTITIES-

`(1) SELECTION OF QUALIFIED EXTERNAL REVIEW ENTITIES-

`(A) LIMITATION ON PLAN OR ISSUER SELECTION- The Secretary shall implement procedures--

`(i) to assure that the selection process among qualified external review entities will not create any incentives for external review entities to make a decision in a biased manner; and

`(ii) for auditing a sample of decisions by such entities to assure that no such decisions are made in a biased manner.

`(B) STATE AUTHORITY WITH RESPECT TO QUALIFIED EXTERNAL REVIEW ENTITIES FOR HEALTH INSURANCE ISSUERS- With respect to health insurance issuers offering health insurance coverage in a State, the State may provide for external review activities to be conducted by a qualified external appeal entity that

is designated by the State or that is selected by the State in a manner determined by the State to assure an unbiased determination.

`(2) CONTRACT WITH QUALIFIED EXTERNAL REVIEW ENTITY- Except as provided in paragraph (1)(B), the external review process of a plan or issuer under this section shall be conducted under a contract between the plan or issuer and 1 or more qualified external review entities (as defined in paragraph (4)(A)).

`(3) TERMS AND CONDITIONS OF CONTRACT- The terms and conditions of a contract under paragraph (2) shall--

`(A) be consistent with the standards the Secretary shall establish to assure there is no real or apparent conflict of interest in the conduct of external review activities; and

`(B) provide that the costs of the external review process shall be borne by the plan or issuer.

Subparagraph (B) shall not be construed as applying to the imposition of a filing fee under subsection (b)(2)(A)(iv) or costs incurred by the participant or beneficiary (or authorized representative) or treating health care professional (if any) in support of the review, including the provision of additional evidence or information.

`(4) QUALIFICATIONS-

`(A) IN GENERAL- In this section, the term `qualified external review entity' means, in relation to a plan or issuer, an entity that is initially certified (and periodically recertified) under subparagraph (C) as meeting the following requirements:

`(i) The entity has (directly or through contracts or other arrangements) sufficient medical, legal, and other expertise and sufficient staffing to carry out duties of a qualified external review entity under this section on a timely basis, including making determinations under subsection (b)(2)(A) and providing for independent medical reviews under subsection (d).

`(ii) The entity is not a plan or issuer or an affiliate or a subsidiary of a plan or issuer, and is not an affiliate or subsidiary of a professional or trade association of plans or issuers or of health care providers.

`(iii) The entity has provided assurances that it will conduct external review activities consistent with the applicable requirements of this section and standards specified in subparagraph (C), including that it will not conduct any external review activities in a case unless the independence requirements of subparagraph (B) are met with respect to the case.

`(iv) The entity has provided assurances that it will provide information in a timely manner under subparagraph (D).

`(v) The entity meets such other requirements as the Secretary provides by regulation.

`(B) INDEPENDENCE REQUIREMENTS-

`(i) IN GENERAL- Subject to clause (ii), an entity meets the independence requirements of this subparagraph with respect to any case if the entity--

`(I) is not a related party (as defined in subsection (g)(7));

`(II) does not have a material familial, financial, or professional relationship with such a party; and

`(III) does not otherwise have a conflict of interest with such a party (as determined under regulations).

`(ii) EXCEPTION FOR REASONABLE COMPENSATION- Nothing in clause (i) shall be construed to prohibit receipt by a qualified external review entity of compensation from a plan or issuer for the conduct of external review activities under this section if the compensation is provided consistent with clause (iii).

`(iii) LIMITATIONS ON ENTITY COMPENSATION- Compensation provided by a plan or issuer to a qualified external review entity in connection with reviews under this section shall--

`(I) not exceed a reasonable level; and

`(II) not be contingent on any decision rendered by the entity or by any independent medical review panel.

`(C) CERTIFICATION AND RECERTIFICATION PROCESS-

`(i) IN GENERAL- The initial certification and recertification of a qualified external review entity shall be made--

`(I) under a process that is recognized or approved by the Secretary; or

`(II) by a qualified private standard-setting organization that is approved by the Secretary under clause (iii).

In taking action under subclause (I), the Secretary shall give deference to entities that are under contract with the Federal Government or with an applicable State authority to perform functions of the type performed by qualified external review entities.

`(ii) PROCESS- The Secretary shall not recognize or approve a process under clause (i)(I) unless the process applies standards (as promulgated in regulations) that ensure that a qualified external review entity--

`(I) will carry out (and has carried out, in the case of recertification) the responsibilities of such an entity in accordance with this section, including meeting applicable deadlines;

`(II) will meet (and has met, in the case of recertification) appropriate indicators of fiscal integrity;

`(III) will maintain (and has maintained, in the case of recertification) appropriate confidentiality with respect to individually identifiable health information obtained in the course of conducting external review activities; and

`(IV) in the case recertification, shall review the matters described in clause (iv).

`(iii) APPROVAL OF QUALIFIED PRIVATE STANDARD-SETTING ORGANIZATIONS- For purposes of clause (i)(II), the Secretary may approve a qualified private standard-setting organization if such Secretary finds that the organization only certifies (or recertifies) external review entities that meet at least the standards required for the certification (or recertification) of external review entities under clause (ii).

`(iv) CONSIDERATIONS IN RECERTIFICATIONS- In conducting recertifications of a qualified external review entity under this paragraph, the Secretary or organization conducting the recertification shall review compliance of the entity with the requirements for conducting external review activities under this section, including the following:

`(I) Provision of information under subparagraph (D).

`(II) Adherence to applicable deadlines (both by the entity and by independent medical review panels it refers cases to).

`(III) Compliance with limitations on compensation (with respect to both the entity and independent medical review panels it refers cases to).

`(IV) Compliance with applicable independence requirements.

`(v) PERIOD OF CERTIFICATION OR RECERTIFICATION- A certification or recertification provided under this paragraph shall extend for a period not to exceed 2 years.

`(vi) REVOCATION- A certification or recertification under this paragraph may be revoked by the Secretary or by the organization providing such certification upon a showing of cause.

`(D) PROVISION OF INFORMATION-

`(i) IN GENERAL- A qualified external review entity shall provide to the Secretary (or the State in the case of external review activities provided for by a State pursuant to paragraph (1)(B)), in such manner and at such times as such Secretary (or State) may require, such information (relating to the denials which have been referred to the entity for the conduct of external review under this section) as such Secretary (or State) determines appropriate to assure compliance with the independence and other requirements of this section to monitor and assess the quality of its external review activities and lack of bias in making determinations. Such information shall include information described in clause (ii) but shall not include individually identifiable medical information.

`(ii) INFORMATION TO BE INCLUDED- The information described in this subclause with respect to an entity is as follows:

`(I) The number and types of denials for which a request for review has been received by the entity.

`(II) The disposition by the entity of such denials, including the number referred to an independent medical review panel and the reasons for such dispositions (including the application of exclusions), on a plan or issuer-specific basis and on a health care specialty-specific basis.

`(III) The length of time in making determinations with respect to such denials.

`(IV) Updated information on the information required to be submitted as a condition of certification with respect to the entity's performance of external review activities.

`(iii) INFORMATION TO BE PROVIDED TO CERTIFYING ORGANIZATION-

`(I) IN GENERAL- In the case of a qualified external review entity which is certified (or recertified) under this subsection by a qualified private standard-setting organization, at the request of the organization, the entity shall provide the organization with the information provided to the Secretary under clause (i).

`(II) ADDITIONAL INFORMATION- Nothing in this subparagraph shall be construed as preventing such an organization from requiring additional information as a condition of certification or recertification of an entity.

`(iv) USE OF INFORMATION- Information provided under this subparagraph may be used by the Secretary and qualified private standard-setting organizations to conduct oversight of qualified external review entities, including recertification of such entities, and shall be made available to the public in an appropriate manner.

`(E) LIMITATION ON LIABILITY- No qualified external review entity having a contract with a plan or issuer, and no person who is employed by any such entity or who furnishes professional services to such entity (including as a member of an independent medical review panel), shall be held by reason of the performance of any duty, function, or activity required or authorized pursuant to this section, to be civilly liable

under any law of the United States or of any State (or political subdivision thereof) if there was no actual malice or gross misconduct in the performance of such duty, function, or activity.'.

(b) CONFORMING 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 503 the following:

`Sec. 503A. Utilization review activities.

`Sec. 503B. Procedures for initial claims for benefits and prior authorization determinations.

`Sec. 503C. Internal appeals of claims denials.

`Sec. 503D. Independent external appeals procedures.'.

SEC. 122. CONFORMING AMENDMENTS TO PUBLIC HEALTH SERVICE ACT.

(a) GROUP HEALTH PLANS- Title XXVII of the Public Health Service Act, as amended by sections 102(a) and 112(a), is amended by inserting after section 2708 the following new section:

`SEC. 2709. STANDARD RELATING TO ACCOUNTABILITY.

`Subject to section 2724(c), a group health plan, and health insurance coverage offered in connection with a group health plan, shall comply with the requirements of sections 503A through 503D of the Employee Retirement Income Security Act of 1974 (as in effect as of the day after the date of the enactment of such Act) and such requirements shall be deemed to be incorporated into this section. For purposes of this section, references in such sections 503A through 503D to the Secretary shall be deemed references to the Secretary of Health and Human Services.'.

(b) INDIVIDUAL HEALTH PLANS- Title XXVII of the Public Health Service Act, as amended by sections 102(b) and 112(b), is amended by inserting after section 2754 the following new section:

`SEC. 2755. STANDARD RELATING TO ACCOUNTABILITY.

`Subject to section 2762A(c), the provisions of sections 503A through 503D of the Employee Retirement Income Security Act of 1974 (as in effect as of the day after the date of the enactment of such Act) shall apply to health insurance coverage offered by a health insurance issuer in the individual market for an enrollee in the same manner as they apply to health insurance coverage offered by a health insurance issuer for a participant or beneficiary in connection with a group health plan in the small or large group market and the requirements referred to in such section shall be deemed to be incorporated into this section. For purposes of this section, references in such sections 503A through 503D to the Secretary shall be deemed references to the Secretary of Health and Human Services.'.

SEC. 123. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

Subchapter B of chapter 100 of the Internal Revenue Code of 1986, as amended by sections 103 and 113, is amended--

(1) in the table of sections, by inserting after the item relating to section 9814 the following new item:

`Sec. 9815. Standard relating to plan accountability.';

and

(2) by inserting after section 9814 the following:

`SEC. 9815. STANDARD RELATING TO PLAN ACCOUNTABILITY.

`A group health plan shall comply with the requirements of sections 503A through 503D of the Employee Retirement Income Security Act of 1974 (as in effect as of the day after the date of the enactment of such Act) and such requirements shall be deemed to be incorporated into this section. For purposes of this section, references in such sections 503A through 503D to the Secretary shall be deemed references to the Secretary of the Treasury.'.

Subtitle D--State Flexibility in Applying Requirements to Health Insurance Issuers

SEC. 141. STATE FLEXIBILITY IN APPLYING REQUIREMENTS TO HEALTH INSURANCE ISSUERS UNDER ERISA; PLAN SATISFACTION OF CERTAIN REQUIREMENTS.

(a) IN GENERAL- Section 731(a) of the Employee Retirement Income Security Act of 1974 is amended--

(1) in section 731(a)(1) (29 U.S.C. 1191(a)), by inserting `and section 731A' after `Subject to paragraph (2)'; and

(2) by inserting after section 731 the following new section:

`SEC. 731A. STATE FLEXIBILITY IN APPLYING PATIENTS' BILL OF RIGHTS AND PATIENT ACCESS TO INFORMATION REQUIREMENTS; PLAN SATISFACTION OF CERTAIN REQUIREMENTS.

`(a) STATE FLEXIBILITY- The requirements of a section of subpart C (relating to patients' bill of rights) and of section 714 (relating to patient access to information) shall not apply with respect to health insurance coverage (and to a group health plan insofar as it provides benefits in the form of health insurance coverage) in a State--

`(1) before January 1, 2003; and

`(2) on or after such date, during any period for which the State certifies to the Patients' Protection Certification Board (established under subsection (c)) that the State has in effect a State law (as defined in section 2723(d)(1) of the Public Health Service Act) that--

`(A) addresses the patient protections or access to information in such section; and

`(B)(i) adopts the Federal standard under such section with respect to the requirements; or

`(ii) is consistent with the purposes of the section and the Board has not found such certification invalid under subsection (b)(2)(A).

`(b) PATIENTS' PROTECTION CERTIFICATION BOARD; CERTIFICATION REVIEW PROCESS-

`(1) ESTABLISHMENT OF BOARD-

`(A) IN GENERAL- There is hereby established in the Health Resources and Services Administration of the Department of Health and Human Services a Patients' Protection Certification Board (in this section referred to as the `Board').

`(B) COMPOSITION- The Board shall be composed of 13 members appointed by the President, by and with the advice and consent of the Senate, from among individuals who represent consumers and employers or have expertise in law, medicine, insurance, employee benefits, and related fields. Members shall first be appointed to the Board not earlier than February 1, 2001, and no later than May 1, 2001.

`(C) TERMS- The terms of members of the Board shall be for 3 years except that for the members first appointed the President shall designate staggered terms of 3 years for 2 members, 2 years for 2 members, and 1 year for one member. A vacancy in the Board shall be filled in the same manner in which the original appointment was made and a 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.

`(D) COMPENSATION- To the extent provided in advance in appropriations Acts, while serving on the business of the Board (including travel time), each member of the Board--

`(i) shall be entitled to receive compensation at the daily equivalent of the annual rate of basic pay provided for level IV of the Executive Schedule under section 5315 of title 5, United States Code for each day (including travel time) during which the member is engaged in the actual performance of duties as such a member; and

`(ii) while so serving away from home and the member's regular place of business, may be allowed travel expenses, as authorized by the Board.

`(2) DUTIES-

`(A) REVIEW OF CERTIFICATIONS SUBMITTED-

`(i) IN GENERAL- The Board shall review certifications submitted under subsection (a)(2).

`(ii) DEFERENCE TO STATES- Such a certification submitted for a State law with respect to the requirements of a section is deemed valid unless, within 90 days after the date of its submittal to the Board, the Board finds that there is clear and convincing evidence of substantial non-compliance of the State law with the requirements of such section.

`(B) ANNUAL CONGRESSIONAL REPORTS- The Board shall submit to Congress an annual report on its activities. The first annual report shall focus specifically on the development by the Board of criteria for the evaluation of State laws and any other activities of the Board during its first year of operation.

`(3) ORGANIZATION-

`(A) CHAIR- The Board shall elect a member of the Board to serve as chair.

`(B) MEETINGS- The Board shall meet at least quarterly and otherwise at the call of the chair or upon the written request of a majority of its members.

`(C) QUORUM- Seven members of the Board shall constitute a quorum thereof, but a lesser number may hold hearings and take testimony.

`(4) DIRECTOR AND STAFF; EXPERTS AND CONSULTANTS- To the extent provided in advance in appropriations Acts, the Board may--

`(A) employ and fix the compensation of an Executive Director and such other personnel as may be necessary to carry out the Board's duties, without regard to the provisions of title 5, United States Code, governing appointments in the competitive service;

`(B) procure temporary and intermittent services under section 3109(b) of title 5, United States Code; and

`(C) provide transportation and subsistence for persons serving the Board without compensation.

`(5) POWERS-

`(A) OBTAINING OFFICIAL DATA-

`(i) IN GENERAL- The Board may secure directly from any department or agency of the United States information necessary to enable it to carry out its duties.

`(ii) REQUEST OF CHAIR- Upon request of the chair, the head of that department or agency shall furnish that information to the Board on an agreed upon schedule.

`(B) AGENCY ASSISTANCE- The Board may seek such assistance and support as may be required in the performance of its duties from the Secretary of Health and Human Services, acting through the Health Resources and Services Administration. Any employee of such Administration may be detailed to the Board to assist the Board in carrying out its duties.

`(C) CONTRACT AUTHORITY- To the extent provided in advance in appropriations Act, the Board may enter into contracts or make other arrangements for facilities and services as may be necessary for the conduct of the work of the Board (without regard to section 3709 of the Revised Statutes (41 U.S.C. 5)).

`(D) HEARINGS- The Board may, for the purpose of carrying out its duties, hold hearings, sit and act at times and places, take testimony, and receive evidence as the Board considers appropriate. The Board may administer oaths or affirmations to witnesses appearing before it. To the extent provided in advance in

appropriation Acts, the Board may pay reasonable travel expenses to witnesses for travel incident to hearings held by the Board. Nothing in this subsection shall be construed as authorizing the issuance of subpoenas in support of its duties.

`(E) RULES- The Board may prescribe such rules and regulations as it deems necessary to carry out this subsection.

`(6) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subsection--

`(A) for fiscal year 2001, $500,000,

`(B) for fiscal year 2002, $1,000,000, and

`(C) for subsequent fiscal years, such sums as may be necessary.

`(c) RELATIONSHIP TO GROUP HEALTH PLAN REQUIREMENTS- Nothing in this section shall be construed to affect or modify the provisions of section 514 with respect to group health plans (insofar as it provides benefits other than in the form of health insurance coverage).

`(d) PLAN SATISFACTION OF CERTAIN REQUIREMENTS-

`(1) SATISFACTION OF CERTAIN REQUIREMENTS THROUGH INSURANCE- For purposes of this part, insofar as a group health plan provides benefits in the form of health insurance coverage through a health insurance issuer and, under the arrangement to offer such coverage, the issuer is legally responsible for compliance with any of the following requirements of this subpart (or of section 714), the plan shall be treated as meeting such requirements 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:

`(A) Section 721 (relating to access to emergency care).

`(B) Section 722 (relating to offering of choice of coverage options).

`(C) Section 723 (relating to access to obstetric and gynecological care).

`(D) Section 724 (relating to access to pediatric care).

`(E) Section 725 (relating to access to specialty care).

`(F) Section 726(a)(1) (relating to continuity in case of termination of provider contract) and section 726(a)(2) (relating to continuity in case of termination of issuer contract), but only insofar as a replacement issuer assumes the obligation for continuity of care.

`(G) Section 728 (relating to access to needed prescription drugs).

`(H) Section 730 (relating to coverage for individuals participating in approved clinical trials.)

`(I) Section 730C (relating to payment of claims).

`(J) Section 714 (relating to access to information).

`(2) APPLICATION TO PROHIBITIONS- If a health insurance issuer offers health insurance coverage in connection with a group health plan and takes an action in violation of any of the following sections, the group health plan shall not be liable for such violation unless the plan caused such violation:

`(A) Section 727 (relating to prohibition of interference with certain medical communications).

`(B) Section 729 (relating to self-payment for behavioral health).

`(C) Section 730A (relating to prohibition of discrimination against providers based on licensure).

`(D) Section 730B (relating to prohibition against improper incentive arrangements).

`(3) 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.

`(e) CONFORMING REGULATIONS- The Secretary may issue regulations to coordinate the requirements on group health plans under subpart C, section 714, and sections 503A through 503D with the requirements imposed under the other provisions of this title.'.

(b) SATISFACTION OF ERISA CLAIMS PROCEDURE REQUIREMENT- Section 503 of such Act (29 U.S.C. 1133) is amended by inserting `(a)' after `SEC. 503.' and by adding at the end the following new subsection:

`(b) In the case of a group health plan (as defined in section 733) compliance with the requirements of sections 503A through 503D in the case of a claims denial shall be deemed compliance with subsection (a) with respect to such claims denial.'.

(c) CLERICAL AMENDMENT- The table of contents in section 1 of such Act (29 U.S.C. 1001) is amended by inserting after the item relating to section 731, the following:

`Sec. 731A. State flexibility in applying patients' bill of rights and patient access to information requirements; plan satisfaction of certain requirements.'.

SEC. 142. STATE FLEXIBILITY IN APPLYING REQUIREMENTS UNDER THE PUBLIC HEALTH SERVICE ACT.

(a) GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE COVERAGE- Title XXVII of the Public Health Service Act is amended--

(1) in section 2723(a)(1) (42 U.S.C. 300gg-23(a)(1)), by inserting `and section 2724' after `Subject to paragraph (2)'; and

(2) by inserting after section 2723 the following new section:

`SEC. 2724. STATE FLEXIBILITY IN APPLYING PATIENTS' BILL OF RIGHTS, PATIENT ACCESS TO INFORMATION, AND ACCOUNTABILITY REQUIREMENTS.

`(a) IN GENERAL- The provisions of section 731A of the Employee Retirement Income Security Act of 1974, apply to the requirements of section 2707 (relating to patients' bill of

rights), section 2708 (relating to access to information), and (only with respect to group health plans as applied under section 2721(b)) section 2709 (relating to accountability) in the same manner as such provisions apply to comparable requirements with respect to health insurance coverage provided in connection with a group health plan.

`(b) RELATIONSHIP TO GROUP HEALTH PLAN REQUIREMENTS- Nothing in this section shall be construed to affect or modify the provisions of section 514 of the Employee Retirement Income Security Act of 1974 with respect to group health plans (insofar as it provides benefits other than in the form of health insurance coverage).'.

(b) INDIVIDUAL HEALTH INSURANCE COVERAGE- Title XXVII of the Public Health Service Act is amended--

(1) in section 2762(a) (42 U.S.C. 300gg-62(a)(1)), by inserting `and section 2762A' after `Subject to subsection (b)'; and

(2) by inserting after section 2762 the following new section:

`SEC. 2762A. STATE FLEXIBILITY IN APPLYING PATIENTS' BILL OF RIGHTS, PATIENT ACCESS TO INFORMATION, AND ACCOUNTABILITY REQUIREMENTS.

`The provisions of section 2724 apply in relation to the requirements of section 2753 (relating to patients' bill of rights), section 2754 (relating to access to information), and section 2755 (relating to accountability) with respect to individual health insurance coverage in the same manner as those provisions apply in relation to the requirements of sections 2707, 2708, and 2709, respectively, as applied to group health plans under section 2721(b).'.

Subtitle E--Effective Dates; Coordination in Implementation; Miscellaneous Provisions

SEC. 151. EFFECTIVE DATES.

(a) GROUP HEALTH COVERAGE-

(1) IN GENERAL- Subject to paragraph (2) and subsection (d), the amendments made by sections 101, 102(a), 103, 111, 112(a), 113, 121, 122(a), and 123 shall apply with respect to group health plans, and health insurance coverage offered in connection with group health plans, for plan years beginning on or after January 1, 2002 (in this section referred to as the `general effective date') and also shall apply to portions of plan years occurring on and after such date.

(2) TREATMENT OF 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 the provisions referred to in paragraph (1) shall not apply to plan years beginning before the later of--

(A) the date on which the last 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

(B) the general effective date.

For purposes of subparagraph (A), 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.

(b) INDIVIDUAL HEALTH INSURANCE COVERAGE- Subject to subsection (d), the amendments made by section 102(b), 112(b), and 122(b) shall apply with respect to individual health insurance coverage offered, sold, issued, renewed, in effect, or operated in the individual market on or after the general effective date.

(c) TREATMENT OF RELIGIOUS NONMEDICAL PROVIDERS-

(1) IN GENERAL- Nothing in this Act (or the amendments made thereby) shall be construed to--

(A) restrict or limit the right of group health plans, and of health insurance issuers offering health insurance coverage, to include as providers religious nonmedical providers;

(B) require such plans or issuers to--

(i) utilize medically based eligibility standards or criteria in deciding provider status of religious nonmedical providers;

(ii) use medical professionals or criteria to decide patient access to religious nonmedical providers;

(iii) utilize medical professionals or criteria in making decisions in internal or external appeals regarding coverage for care by religious nonmedical providers; or

(iv) compel a participant or beneficiary to undergo a medical examination or test as a condition of receiving health insurance coverage for treatment by a religious nonmedical provider; or

(C) require such plans or issuers to exclude religious nonmedical providers because they do not provide medical or other required data, if such data is inconsistent with the religious nonmedical treatment or nursing care provided by the provider.

(2) RELIGIOUS NONMEDICAL PROVIDER- For purposes of this subsection, the term `religious nonmedical provider' means a provider who provides no medical care but who provides only religious nonmedical treatment or religious nonmedical nursing care.

(d) TRANSITION FOR NOTICE REQUIREMENT- The disclosure of information required under the amendments made by subtitle B of this title shall first be provided pursuant to--

(1) subsection (a) with respect to a group health plan that is maintained as of the general effective date, not later than 30 days before the beginning of the first plan year to

which the amendments made by such subtitle apply in connection with the plan under such subsection; or

(2) subsection (b) with respect to an individual health insurance coverage that is in effect as of the general effective date, not later than 30 days before the first date as of which the amendments made by such subtitle apply to the coverage under such subsection.

(e) CONSTRUCTION- In applying section 731(a) of the Employee Retirement Income Security Act of 1974 and sections 2723(a) and 2762 of the Public Health Service Act, a State law that provides for equal access to, and availability of, all categories of licensed health care providers and services shall not be treated as preventing the application of any requirement of either such Act.

(f) COVERAGE OF LIMITED SCOPE PLANS- Section 2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 300gg-91(c)(2)(A)) and section 733(c)(2)(A) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1186(c)(2)(A)) shall be deemed not to apply for purposes of applying the requirements imposed by the amendments made by this title.

SEC. 152. REGULATIONS; COORDINATION.

(a) AUTHORITY- The Secretaries of Health and Human Services, Labor, and the Treasury shall issue such regulations as may be necessary or appropriate to carry out the amendments made by this title before the effective date thereof.

(b) COORDINATION IN IMPLEMENTATION- The Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury shall ensure, through the execution of an interagency memorandum of understanding among such Secretaries, that--

(1) regulations, rulings, and interpretations issued by such Secretaries relating to the same matter over which such Secretaries have responsibility under the amendments made by this title are administered so as to have the same effect at all times; and

(2) coordination of policies relating to enforcing the same requirements through such Secretaries in order to have a coordinated enforcement strategy that avoids duplication of enforcement efforts and assigns priorities in enforcement.

(c) USE OF INTERIM FINAL RULES- Such Secretaries may promulgate any interim final rules as the Secretaries determine are appropriate to carry out this title.

(d) 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.

SEC. 153. NO BENEFIT REQUIREMENTS.

Nothing in the amendments made by this title shall be construed to require a group health plan or a health insurance issuer offering health insurance coverage to include specific items and services under the terms of such a plan or coverage, other than those provided under the terms and conditions of such plan or coverage.

SEC. 154. SEVERABILITY.

If any provision of this title, an amendment made by this title, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this title, the amendments made by this title, and the application of the provisions of such to any person or circumstance shall not be affected thereby.

TITLE II--REMEDIES

SEC. 201. AVAILABILITY OF COURT REMEDIES.

(a) CAUSE OF ACTION RELATING TO MEDICALLY REVIEWABLE DETERMINATIONS AND TIMELY REVIEW OF CLAIMS- Section 502 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132) is amended--

(1) in subsection (a)(1), by striking `or' at the end of subparagraph (A), by striking `plan;' in subparagraph (B) and inserting `plan, or', and by adding after subparagraph (B) the following new subparagraph:

`(C) in the case of a group health plan, for the relief provided for in subsection (n) of this section;'; and

(2) by adding at the end the following:

`(n) CAUSE OF ACTION RELATING TO MEDICALLY REVIEWABLE DETERMINATIONS AND TIMELY REVIEW OF CLAIMS-

`(1) IN GENERAL- In any case in which--

`(A) a person who is a designated health care decision-maker of a group health plan breaches the covenant of good faith and fair dealing in--

`(i) making a medically reviewable determination regarding a benefit for items or services under the plan, or

`(ii) failing to ensure that--

`(I) any denial of claim for benefits, or

`(II) any decision by the plan on a request, made by a participant or beneficiary under section 503C or 503D, for a reversal of an earlier decision of the plan,

is made and issued to the participant or beneficiary (in such form and manner as may be prescribed in regulations of the Secretary) before the end of the applicable period specified in section 503B, 503C, or 503D, and

`(B) such breach is the proximate cause of substantial harm to, or wrongful death of, the participant or beneficiary,

such person shall be liable to the participant or beneficiary (or the estate of such participant or beneficiary) for economic and noneconomic damages in connection with such breach and such substantial harm or death (subject to paragraphs (5) and (6)).

`(2) DESIGNATED HEALTH CARE DECISION-MAKER-

`(A) IN GENERAL- A group health plan shall name a designated health care decision-maker for purposes of paragraph (1) with respect to any benefits that are not provided through group health insurance coverage.

`(B) DEFINITION- For purposes of this subsection, the term `designated health care decision-maker' means a person who--

`(i) is named in the plan as the designated health care decision-maker,

`(ii) agrees in writing to accept appointment as a designated health care decision-maker,

`(iii) is any of the following:

`(I) the plan sponsor,

`(II) a health insurance issuer, or

`(III) any other person who can satisfy requirements set forth in regulations promulgated by the Secretary, including the abilities specified in subparagraph (C), and

`(iv) is not the treating physician or other health care professional in the case involved.

`(C) ABILITIES- The abilities specified in this subparagraph are the abilities to--

`(i) carry out the responsibilities set forth in the plan,

`(ii) carry out the applicable requirements of this subsection, and

`(iii) meet other applicable requirements, including any financial obligation for liability under this subsection.

`(D) GROUP HEALTH INSURANCE COVERAGE- With respect to benefits provided through group health insurance coverage, the health insurance issuer providing the group health insurance coverage shall be deemed the designated health care decision-maker of the plan.

`(E) ABSENCE OF NAMED DESIGNATED HEALTH CARE DECISION-MAKER- In any case in which a designated health care decision-maker is not named in the plan with respect to benefits that are not provided through group health insurance coverage, the plan sponsor shall be treated as the designated health care decision-maker for purposes of liability under this section with respect to such benefits.

`(3) DEFINITIONS- For purposes of this section--

`(A) MEDICALLY REVIEWABLE DETERMINATION- The term `medically reviewable determination' means a determination described in section 503D(d)(2).

`(B) SUBSTANTIAL HARM- The term `substantial harm' means loss of life, loss or significant impairment of limb, bodily, or mental function, significant disfigurement, or severe and chronic pain.

`(C) CLAIM FOR BENEFITS; DENIAL- The terms `claim for benefits' and `denial of a claim for benefits', in connection with a group health plan or health insurance coverage, have the meanings provided such terms in section 503B(e).

`(D) TERMS AND CONDITIONS- The term `terms and conditions' includes, with respect to a group health plan or health insurance coverage, requirements imposed under section 714 and subpart C of part 7.

`(E) GROUP HEALTH PLAN AND OTHER RELATED TERMS- The provisions of sections 732(d) and 733 apply for purposes of this subsection in the same manner as they apply for purposes of part 7, except that the term `group health plan' includes a group health plan (as defined in section 607(1)).

`(F) ECONOMIC AND NONECONOMIC DAMAGES- The terms `economic damages' and `noneconomic damages' do not include punitive damages.

`(4) REQUIREMENT OF EXHAUSTION OF ADMINISTRATIVE REMEDIES-

`(A) IN GENERAL- In the case of a cause of action described in paragraph (1)(A)(i), paragraph (1) applies only if all remedies under sections 503C and 503D with respect to such cause of action have been exhausted.

`(B) EXTERNAL REVIEW REQUIRED WHERE AVAILABLE- For purposes of subparagraph (A), all remedies described in subparagraph (A) shall be deemed not to be exhausted until such remedies under section 503D (to the extent they are available) have been elected and are exhausted by issuance of a final determination by a qualified external review entity or an independent medical reviewer under such section.

`(C) RECEIPT OF BENEFITS DURING APPEALS PROCESS- Receipt by the participant or beneficiary of the benefits involved in the claim for benefits during the pendency of any administrative processes referred to in subparagraph (A) or of any action commenced under this subsection--

`(i) shall not preclude continuation of all such administrative processes to their conclusion if so moved by any party, and

`(ii) shall not preclude any liability under subsection (a)(1)(C) and this subsection in connection with such claim.

The court in any action commenced under this subsection shall take into account any receipt of benefits during such administrative processes or such action in determining the amount of the damages awarded.

`(D) CONSIDERATION OF ADMINISTRATIVE DETERMINATIONS- Any determinations made under section 503C or 503D regarding matters before the court in an action under this section shall be given due consideration by the court in such action.

`(5) LIMITATIONS ON RECOVERY OF DAMAGES-

`(A) MAXIMUM AWARD OF NONECONOMIC DAMAGES- The aggregate amount of liability for

noneconomic damages in an action under paragraph (1) may not exceed $500,000.

`(B) INCREASE IN AMOUNT- The amount referred to in subparagraph (A) shall be increased or decreased, for each calendar year that ends after December 31, 2001, by the same percentage as the percentage by which the Consumer Price Index for All Urban Consumers (United States city average), published by the Bureau of Labor Statistics, for September of the preceding calendar year has increased or decreased from the such Index for September of 2001.

`(6) PROHIBITION OF AWARD OF PUNITIVE DAMAGES-

`(A) GENERAL RULE- Except as provided in this paragraph, nothing in this subsection shall be construed as authorizing a cause of action for punitive, exemplary, or similar damages.

`(B) EXCEPTION- In addition other damages authorized under paragraph (1), punitive damages are authorized in any case described in such paragraph in which such other damages are authorized and the plaintiff establishes by clear and convincing evidence that conduct carried out by the defendant with willful or wanton disregard for the rights or safety of others was the proximate cause of the substantial harm that is the subject of the action.

`(C) LIMITATION ON AMOUNT-

`(i) IN GENERAL- The aggregate amount of liability for punitive damages in an action under paragraph (1) may not exceed $5,000,000.

`(ii) INCREASE IN AMOUNT- The amount referred to in clause (i) shall be increased or decreased, for each calendar year that ends after December 31, 2001, by the same percentage as the percentage by which the Consumer Price Index for All Urban Consumers (United States city average), published by the Bureau of Labor Statistics, for September of the preceding calendar year has increased or decreased from the such Index for September of 2001.

`(D) NO PUNITIVE DAMAGES WHERE DEFENDANT'S POSITION PREVIOUSLY SUPPORTED BY MEDICAL REVIEW PANEL UPON EXTERNAL REVIEW- In any case in which the court finds the defendant to be liable in an action under this subsection, to the extent that--

`(i) such liability is based on a finding by the court of a particular breach described in paragraph (1), and

`(ii) such finding is contrary to a determination by a medical review panel in a decision previously rendered under section 503D with respect to such defendant,

the defendant shall not be liable for punitive damages under this subsection in connection with such breach.

`(7) LIMITATION OF ACTION- Paragraph (1) shall not apply in connection with any action commenced after 2 years after the later of--

`(A) the date on which the plaintiff first knew, or reasonably should have known, of the personal injury or death resulting from the failure described in paragraph (1), or

`(B) the date as of which the requirements of paragraph (4), if applicable, are first met.

`(8) PURCHASE OF INSURANCE TO COVER LIABILITY- Nothing in section 410 shall be construed to preclude the purchase by a group health plan of insurance to cover any liability or losses arising under a cause of action under subsection (a)(1)(C) and this subsection.

`(9) EXCLUSION OF DIRECTED RECORDKEEPERS-

`(A) IN GENERAL- Subject to subparagraph (C), paragraph (1) shall not apply with respect to a directed recordkeeper in connection with a group health plan.

`(B) DIRECTED RECORDKEEPER- For purposes of this paragraph, the term `directed recordkeeper' means, in connection with a group health plan, a person engaged in directed recordkeeping activities pursuant to the specific instructions of the plan or the employer or other plan sponsor, including the distribution of enrollment information and distribution of disclosure materials under this title and whose duties do not include making decisions on claims for benefits.

`(C) LIMITATION- Subparagraph (A) does not apply in connection with any directed recordkeeper to the extent that the directed recordkeeper fails to follow the specific instruction of the plan or the employer or other plan sponsor.

`(10) CONSTRUCTION- Nothing in this subsection shall be construed as authorizing a cause of action for the failure to provide an item or service which is not covered under the group health plan involved.

`(11) APPLICABILITY OF STATE LAW- No provision of State law (as defined in section 514(c)(1)) relating to the regulation of quality of care shall be treated as superseded, preempted, or modified by reason of the provisions of subsection (a)(1)(C) and this subsection, nor shall anything in this subsection be construed to supersede, preempt, or modify section 514 with respect to group health plans or the preemptive effect of this section or section 503D with respect to such plans.

`(12) LIMITATION ON CLASS ACTION LITIGATION- A claim or cause of action under this subsection may not be maintained as a class action.'.

(b) EXPANDED REMEDIES FOR EXISTING CAUSES OF ACTION-

(1) IN GENERAL- Section 502 of such Act (as amended by subsection (a)) is amended further--

(A) in subsection (a)(1)(B), by striking `or' before `to clarify' and by striking `plan;' and inserting `plan, or, in the case of a group health plan, for the additional relief provided in subsection (o);'; and

(B) by adding after subsection (n) the following new subsection:

`(o) EXPANDED REMEDIES RELATING TO GROUP HEALTH PLAN DETERMINATIONS THAT ARE NOT MEDICALLY REVIEWABLE- In the case of any determination under a group health plan constituting a denial of a claim for benefits by a participant or beneficiary under the plan which is not a medically reviewable determination, if such determination is the proximate cause of substantial harm to, or wrongful death of, the participant or beneficiary, the relief for which the civil action may be brought under subsection (a)(1)(B) shall include liability of the designated health care decision-maker of the plan for economic and noneconomic damages in connection with such determination and such substantial harm or death, except that the aggregate amount of such liability for noneconomic damages may not exceed the maximum amount allowable under subsection (n)(5).'.

(2) SPECIAL RULE- Nothing in the amendment made by paragraph (1) shall affect the standard of review applicable under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(a)(1)(B)).

(c) EFFECTIVE DATE- The amendments made by this section shall apply to acts and omissions (from which a cause of action arises) occurring on or after the date of the enactment of this Act.

SEC. 202. SEVERABILITY.

If any provision of this title, an amendment made by this title, or the application of such provision or amendment to any person or circumstance is held to be unconstitutional, the remainder of this title, the amendments made by this title, and the application of the provisions of such to any person or circumstance shall not be affected thereby.

TITLE III--HEALTH CARE COVERAGE ACCESS TAX INCENTIVES

SEC. 301. EXPANDED 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 AMENDMENTS-

(A) Paragraph (1) of section 220(c) of such Code is amended by striking subparagraph (D).

(B) Section 138 of such Code is amended by striking subsection (f).

(b) AVAILABILITY NOT LIMITED TO ACCOUNTS FOR EMPLOYEES OF SMALL EMPLOYERS AND SELF-EMPLOYED INDIVIDUALS-

(1) IN GENERAL- Section 220(c)(1)(A) of such Code (relating to eligible individual) is amended to read as follows:

`(A) IN GENERAL- The term `eligible individual' means, with respect to any month, any individual if--

`(i) such individual is covered under a high deductible health plan as of the 1st day of such month, and

`(ii) such individual is not, while covered under a high deductible health plan, covered under any health plan--

`(I) which is not a high deductible health plan, and

`(II) which provides coverage for any benefit which is covered under the high deductible health plan.'.

(2) CONFORMING AMENDMENTS-

(A) Section 220(c)(1) of such Code is amended by striking subparagraph (C).

(B) Section 220(c) of such Code is amended by striking paragraph (4) (defining small employer) and by redesignating paragraph (5) as paragraph (4).

(C) Section 220(b) of such Code is amended by striking paragraph (4) (relating to deduction limited by compensation) and by redesignating paragraphs (5), (6), and (7) as paragraphs (4), (5), and (6), respectively.

(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 (4) of section 220(b) of such Code (as redesignated by subsection (b)(2)(C)) is amended to read as follows:

`(4) 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),'.

(g) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

(h) GAO STUDY- Not later than 1 year after the date of the enactment of this Act, the Comptroller General of the United States shall prepare and submit a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate on the impact of medical savings accounts on the cost of conventional insurance (especially in those areas where there are higher numbers of such accounts) and on adverse selection and health care costs.

SEC. 302. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.

(a) IN GENERAL- Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 is amended to read as follows:

`(1) ALLOWANCE OF DEDUCTION- In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to 100 percent 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) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 2000.

TITLE IV--HEALTH CARE PAPERWORK

SEC. 401. HEALTH CARE PAPERWORK SIMPLIFICATION.

(a) ESTABLISHMENT OF PANEL-

(1) ESTABLISHMENT- There is established a panel to be known as the Health Care Panel to Devise a Uniform Explanation of Benefits (in this section referred to as the `Panel').

(2) DUTIES OF PANEL-

(A) IN GENERAL- The Panel shall devise a single form for use by third-party health care payers for the remittance of claims to providers.

(B) DEFINITION- For purposes of this section, the term `third-party health care payer' means any entity that contractually pays health care bills for an individual.

(3) MEMBERSHIP-

(A) SIZE AND COMPOSITION- The Secretary of Health and Human Services, in consultation with the Majority Leader of the Senate and the Speaker of the House of Representatives, shall determine the number of members and the composition of the Panel. Such Panel shall include equal numbers of representatives of private insurance organizations, consumer groups, State insurance commissioners, State medical societies, State hospital associations, and State medical specialty societies.

(B) TERMS OF APPOINTMENT- The members of the Panel shall serve for the life of the Panel.

(C) VACANCIES- A vacancy in the Panel shall not affect the power of the remaining members to execute the duties of the Panel, but any such vacancy shall be filled in the same manner in which the original appointment was made.

(4) PROCEDURES-

(A) MEETINGS- The Panel shall meet at the call of a majority of its members.

(B) FIRST MEETING- The Panel shall convene not later than 60 days after the date of the enactment of this Act.

(C) QUORUM- A quorum shall consist of a majority of the members of the Panel.

(D) HEARINGS- For the purpose of carrying out its duties, the Panel may hold such hearings and undertake such other activities as the Panel determines to be necessary to carry out its duties.

(5) ADMINISTRATION-

(A) COMPENSATION- Except as provided in subparagraph (B), members of the Panel shall receive no additional pay, allowances, or benefits by reason of their service on the Panel.

(B) TRAVEL EXPENSES AND PER DIEM- Each member of the Panel who is not an officer or employee of the Federal Government shall receive travel expenses and per diem in lieu of subsistence in accordance with sections 5702 and 5703 of title 5, United States Code.

(C) CONTRACT AUTHORITY- The Panel may contract with and compensate government and private agencies or persons for items and services, without regard to section 3709 of the Revised Statutes (41 U.S.C. 5).

(D) USE OF MAILS- The Panel may use the United States mails in the same manner and under the same conditions as Federal agencies and shall, for purposes of the frank, be considered a commission of Congress as described in section 3215 of title 39, United States Code.

(E) ADMINISTRATIVE SUPPORT SERVICES- Upon the request of the Panel, the Secretary of Health and Human Services shall provide to the Panel on a reimbursable basis such administrative support services as the Panel may request.

(6) SUBMISSION OF FORM- Not later than 2 years after the first meeting, the Panel shall submit a form to the Secretary of Health and Human Services for use by third-party health care payers.

(7) TERMINATION- The Panel shall terminate on the day after submitting its the form under paragraph (6).

(b) REQUIREMENT FOR USE OF FORM BY THIRD-PARTY CARE PAYERS- A third-party health care payer shall be required to use the form devised under subsection (a) for plan years beginning on or after 5 years following the date of the enactment of this Act.

END