[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 191 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 191

To reform the United States health care delivery and financing system, 
 to increase access to health care and affordable health insurance, to 
contain costs of health care in a manner that improves health care, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

Mr. Gekas introduced the following bill; which was referred jointly to 
 the Committees on Energy and Commerce, Ways and Means, the Judiciary, 
                     Education and Labor, and Rules

_______________________________________________________________________

                                 A BILL


 
To reform the United States health care delivery and financing system, 
 to increase access to health care and affordable health insurance, to 
contain costs of health care in a manner that improves health care, and 
                          for other purposes.

    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 ``American Consumers 
Health Care Reform Act of 1993''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                 TITLE I--IMMEDIATE HEALTH CARE REFORMS

               Subtitle A--Expansion of Medicaid Program

Sec. 101. Transition of State medicaid programs to State long-term care 
                            programs.
Sec. 102. Establishment of Federal medical assistance program for acute 
                            care.
                      Subtitle B--Medicare Reform

Sec. 111. Improved efficiency through consolidation of administration 
                            of parts A and B.
Sec. 112. Provider payment reforms to address inconsistent incentives.
                 Subtitle C--Health Benefit Plan Reform

  Part 1--Preemption of State Mandatory Benefit Laws and Anti-managed 
                               Care Laws

Sec. 121. Preemption from insurance mandates for qualified small 
                            employer purchasing groups.
Sec. 122. Removing restrictions on managed care.
 Part 2--Restriction on Pre-existing Condition Provisions for Employer 
                            Health Insurance

Sec. 123. Limitation on pre-existing condition clauses; assurance of 
                            continuity of coverage.
            Part 3--Small Employer Insurance Market Reforms

Sec. 124. Acceptance of all small employers seeking coverage; offering 
                            of minimum benefit package.
Sec. 125. Use of community-rated premiums.
  Part 4--Establishment of Standards; Enforcement; General Definitions

Sec. 126. Establishment of standards.
Sec. 127. Enforcement.
                 Subtitle D--Medical Malpractice Reform

                       Part 1--General Provisions

Sec. 131. Federal reform of medical malpractice liability actions.
Sec. 132. Definitions.
Sec. 133. Effective date.
  Part 2--Uniform Standards for Medical Malpractice Liability Actions

Sec. 141. Statute of limitations.
Sec. 142. Requirement for initial resolution of action through 
                            alternative dispute resolution.
Sec. 143. Relation to alternative dispute resolution of Federal 
                            agencies.
Sec. 144. Mandatory pre-trial settlement conference.
Sec. 145. Calculation and payment of damages.
Sec. 146. Treatment of attorney's fees and other costs.
Sec. 147. Joint and several liability.
Sec. 148. Uniform standard for determining negligence.
Sec. 149. Application of medical practice guidelines in malpractice 
                            liability actions.
Sec. 150. Special provision for certain obstetric services.
Sec. 151. Preemption.
 Part 3--Requirements for State Alternative Dispute Resolution Systems 
                                 (ADR)

Sec. 161. Basic requirements for ADR.
Sec. 162. Certification of State systems.
Sec. 163. Reports on implementation and effectiveness of alternative 
                            dispute resolution systems.
                Part 4--Other Requirements and Programs

Sec. 171. Facilitating development and use of medical practice 
                            guidelines.
Sec. 172. Permitting State professional societies to participate in 
                            disciplinary activities.
Sec. 173. Requirements for risk management programs.
Sec. 174. Grants for medical safety promotion.
Sec. 175. Study of barriers to voluntary service by physicians.
                  Subtitle E--Medical Education Reform

Sec. 181. Limitation on medicare hospital payment for direct and 
                            indirect graduate medical education support 
                            and Federal assistance for insured medical 
                            student loans for non-primary care 
                            physicians.
Sec. 182. State comprehensive health professions education plans.
                   Subtitle F--Public Delivery System

Sec. 183. Identification of medically underserved populations.
Sec. 184. State comprehensive plans for medically underserved 
                            populations.
Sec. 185. Publicly-funded health centers serving medically underserved 
                            areas.
Sec. 186. Office of disease prevention and health promotion.
Sec. 187. Consolidation of Federal activities relating to nutrition.
Sec. 188. Demonstration projects on health care decisionmaking.
Sec. 189. Action plan on health promotion and disease prevention.
                     Subtitle G--Public Disclosure

Sec. 191. Development of national standards for disclosure of health 
                            care information; implementation by States.
Sec. 192. Data submission and collection.
Sec. 193. Data dissemination and publication.
Sec. 194. Access to data.
Sec. 195. Definitions.
      Subtitle H--Tax Incentives to Provide Only Minimum Benefits

Sec. 198. Denial of employer tax deduction for providing health care 
                            coverage in excess of minimum benefits and 
                            denial of employee exclusion for such 
                            excess coverage.
Sec. 199. Deduction for health insurance costs of self-employed 
                            individuals made permanent and increased to 
                            extent of costs for minimum benefits.
            TITLE II--NATIONAL HEALTH CARE REFORM PROPOSALS

           Subtitle A--National Health Care Reform Commission

Sec. 201. Establishment.
Sec. 202. Establishment of national goals; consultations; improved 
                            coordination; evaluation and 
                            recommendations on demonstration projects.
Sec. 203. Establishment of minimum benefit package.
    Subtitle B--Demonstration Projects on Alternative Financing and 
                            Delivery Systems

Sec. 211. Establishment of demonstration projects.
Sec. 212. Process.
Sec. 213. Priorities.
Sec. 214. Scope and duration of projects.
Sec. 215. Waivers of certain laws.
Sec. 216. Reports and evaluations.

                 TITLE I--IMMEDIATE HEALTH CARE REFORMS

               Subtitle A--Expansion of Medicaid Program

SEC. 101. TRANSITION OF STATE MEDICAID PROGRAMS TO STATE LONG-TERM CARE 
              PROGRAMS.

    (a) In General.--Title XIX of the Social Security Act is amended by 
adding at the end the following new section:

     ``acute care transition to federal medical assistance program

    ``Sec. 1931. (a) Phase-In of Expanded Eligibility.--
            ``(1) 2-year phase in.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, subject to subsection (e), for 
                calendar quarters beginning on or after the first day 
                of the first effective fiscal year (as defined in 
                subparagraph (C)), each State medical assistance plan 
                under section 1902 shall provide for medical assistance 
                under the plan to all eligible individuals (as defined 
                in paragraph (2)) who are residents of the State.
                    ``(B) Transfer of coverage.--Notwithstanding any 
                other provision of this title, effective on the first 
                day of the third effective fiscal year--
                            ``(i) no payment shall be made to a State 
                        under section 1903(a) for medical assistance, 
                        other than--
                                    ``(I) medical assistance with 
                                respect to outpatient prescription 
                                drugs and biologicals, and
                                    ``(II) medical assistance with 
                                respect to home health care services, 
                                nursing facility services, home and 
                                community care (under section 1929), 
                                community supported living arrangements 
                                services (described in section 1930), 
                                home and community-based services 
                                (described in section 1915), and other 
                                items and services that relate to long-
                                term care and are not covered under 
                                part B of this title; and
                            ``(ii) no State is obligated to make 
                        available medical assistance under this part 
                        for items and services for which payment may 
                        not be made under clause (i).
                    ``(C) First, second, and third effective fiscal 
                years defined.--In this section, the terms `first 
                effective fiscal year', `second effective fiscal year', 
                and `third effective fiscal year' means the first, 
                second, and third fiscal years, respectively, that 
                begin more than 180 days after the date of the 
                enactment of this section.
            ``(2) Eligible individual defined.--
                    ``(A) In general.--In this section, the term 
                `eligible individual' means an individual--
                            ``(i) is a citizen or national of the 
                        United States, an alien lawfully admitted for 
                        permanent residence, or an alien otherwise 
                        permanently residing in the United States under 
                        color of law;
                            ``(ii) whose income (as determined under 
                        section 1612 for purposes of the supplemental 
                        security income program, subject to 
                        subparagraph (C)) does not exceed the 
                        applicable income level (specified in 
                        subparagraph (B)); and
                            ``(iii) whose resources (as determined 
                        under section 1613 for purposes of the 
                        supplemental security income program) do not 
                        exceed the maximum amount of resources that an 
                        individual may have and obtain benefits under 
                        that program.
                    ``(B) Applicable income level.--
                            ``(i) In general.--Subject to clause (ii), 
                        the applicable income level is, for services 
                        furnished in--
                                    ``(I) the first effective fiscal 
                                year, 60 percent of the Federal poverty 
                                level (as defined in subparagraph (D)), 
                                and
                                    ``(II) the second effective fiscal 
                                year, 70 percent of the Federal poverty 
                                level.
                            ``(ii) Special rules for pregnant women and 
                        children.--With respect to services related to 
                        pregnancy and children under 19 years of age, 
                        the applicable income level is, for services 
                        furnished in--
                                    ``(I) the first effective fiscal 
                                year, 150 percent of the Federal 
                                poverty level (as defined in 
                                subparagraph (C)), and
                                    ``(II) the second effective fiscal 
                                year, 170 percent of the Federal 
                                poverty level.
                    ``(C) Income determination.--In determining income, 
                costs incurred for medical care or for any other type 
                of remedial care shall be taken into account and 
                deducted from income otherwise determined.
                    ``(D) Federal poverty level defined.--In this 
                section, the term `Federal poverty level' means the 
                official poverty line (as defined by the Office of 
                Management and Budget, and revised annually in 
                accordance with section 673(2) of the Omnibus Budget 
                Reconciliation Act of 1981) applicable to a family of 
                the size involved.
            ``(3) Relation to alternative eligibility.--Nothing in this 
        section shall be construed as restricting the eligibility under 
        other provisions of this title of individuals for medical 
        assistance under this part.
    ``(b) Services for Which Medical Assistance Provided.--
Notwithstanding any other provision of this title, the medical 
assistance made available under this section--
            ``(1) subject to paragraph (2), shall include medical 
        assistance for the same amount, duration, and scope of services 
        as are provided under the State plan to individuals described 
        in section 1902(a)(10)(A)(i), but
            ``(2) shall not include medical assistance for nursing 
        facility services or home health care services.
    ``(c) Cost-Sharing.--
            ``(1) No cost-sharing for pregnancy-related services, 
        preventive services, and children.--There shall be no cost-
        sharing imposed with respect to--
                    ``(A) services related to pregnancy,
                    ``(B) preventive services, or
                    ``(C) services furnished to children under 19 years 
                of age.
            ``(2) Nominal cost-sharing for the poorest individuals.--
        There shall be no cost-sharing (other than nominal cost-
        sharing, within the meaning of section 1916(a)(3)) imposed with 
        respect to services furnished to individuals whose income is 
        determined to be less than 50 percent of the Federal poverty 
        level.
            ``(3) Cost-sharing for other services and populations.--
                    ``(A) In general.--With respect to eligible 
                individuals not described in paragraph (2) with respect 
                to services not described in paragraph (1), there shall 
                be imposed the following cost-sharing:
                            ``(i) For outpatient services, there shall 
                        be a copayment of $5 for each visit, or $10 in 
                        the case of a nonemergency visit to a hospital 
                        emergency room.
                            ``(ii) For inpatient hospital services, 
                        there shall be a copayment of $50 for each 
                        inpatient hospital admission.
                    ``(B) Limit on cost-sharing.--In no case shall the 
                cost-sharing imposed under subparagraph (A)--
                            ``(i) for an individual (whether or not the 
                        individual is a member of a family) exceed $500 
                        in any calendar year, or
                            ``(ii) collectively for all members of a 
                        family exceed $1,000 in any calendar year.
    ``(d) Changes in Federal Medical Assistance Percentage.--
            ``(1) Increase for acute care services.--Subject to 
        subsection (e), the Federal medical assistance percentage for 
        each of the 50 States and the District of Columbia for medical 
        assistance for acute care services (described in paragraph (3)) 
        shall be increased, for calendar quarters occurring in--
                    ``(A) the first effective fiscal year, by a 
                percentage equal to 20 percent of the difference 
                between 100 percentage points and the Federal medical 
                assistance percentage otherwise applicable (without 
                regard to this subsection), or
                    ``(B) the second effective fiscal year, by a 
                percentage equal to 40 percent of the difference 
                between 100 percentage points and the Federal medical 
                assistance percentage otherwise applicable (without 
                regard to this subsection).
            ``(2) Decrease in fmap for outpatient prescription drugs 
        and long-term care services.--The Federal medical assistance 
        percentage for each of the 50 States and the District of 
        Columbia for medical assistance for items and services (other 
        than assistance for acute care services), for calendar quarters 
        occurring in--
                    ``(A) the first effective fiscal year, by a 
                percentage equal to 5 percent of the Federal medical 
                assistance percentage otherwise applicable (without 
                regard to this subsection), or
                    ``(B) the second effective fiscal year, by a 
                percentage equal to 10 percent of the Federal medical 
                assistance percentage otherwise applicable (without 
                regard to this subsection).
            ``(3) Assistance for acute care services defined.--In this 
        subsection, the term `assistance for acute care services' 
        means--
                    ``(A) medical assistance for services described in 
                section 1905(a), other than for services described in 
                subclause (I) or (II) of subsection (a)(1)(B)(i) of 
                this section, and
                    ``(B) medical assistance relating to medicare cost-
                sharing.
            ``(4) Construction.--The changes in the Federal medical 
        assistance percentage provided under this subsection shall only 
        apply for purposes of this title.
    ``(e) Requirement for Continuation of Long-Term Care Assistance.--
No individual residing in a State shall be eligible for medical 
assistance under this section, and the State shall not be eligible for 
an increase in the Federal medical assistance percentage under 
subsection (d)(1) for a calendar quarter, unless--
            ``(1) the State continues to provide for medical assistance 
        under this part with respect to home health care services and 
        nursing facility services, and
            ``(2) such assistance is provided consistent with standards 
        adopted under section 205 of the American Consumers Health Care 
        Reform Act of 1992.''.
    (b) Federal Standards for State Long-Term Care Programs.--The 
Secretary of Health and Human Services, in consultation with 
representatives of States, industry, and the beneficiary community, 
shall develop standards that shall apply, pursuant to section 
1931(e)(2) of the Social Security Act, to State long-term care plans 
under part A of title XIX of such Act at the end of the 10-year 
transition period provided under the amendment made by subsection (a).
    (c) Report on Impact of Decrease in FMAP for Outpatient 
Prescription Drugs.--The Secretary of Health and Human Services shall 
submit to Congress, not later than 2 years after the date of the 
enactment of this Act, a report that--
            (1) evaluates the impact on the States of the decrease, 
        provided under the amendment made by subsection (a), in the 
        Federal medical assistance percentage for medical assistance 
        for outpatient prescription drugs, and
            (2) makes such recommendations for changes in this Act 
        (including the amendments made by this Act) in order to avoid 
        any significant adverse impact on States that continue to 
        provide medical assistance for outpatient prescription drugs to 
        individuals in need of such assistance.
    (d) Conforming Amendments.--
            (1) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is 
        amended, in the matter before paragraph (1), by striking ``or'' 
        at the end of clause (ix), by inserting ``or'' at the end of 
        clause (x), and by inserting after clause (x) the following new 
        clause:
            ``(xi) individuals described in section 1931(a),''.
            (2) Section 1905(b) of such Act is amended by striking 
        ``The term'' and inserting ``Subject to section 1931(d), the 
        term''.

SEC. 102. ESTABLISHMENT OF FEDERAL MEDICAL ASSISTANCE PROGRAM FOR ACUTE 
              CARE.

    (a) In General.--Title XIX of the Social Security Act is amended--
            (1) by inserting after the heading the following:

           ``Part A--State Medical Assistance Programs''; and

            (2) by adding at the end the following new part:

              ``Part B--Federal Medical Assistance Program

                       ``establishment of program

    ``Sec. 1951. (a) In General.--This part establishes a Federal 
medical assistance program to provide medical assistance for acute care 
services to all poor individuals in the United States and to provide 
medical assistance for medicare cost-sharing for certain medicare 
beneficiaries.
    ``(b) Appropriations.--There are authorized to be appropriated, 
without fiscal year limitation, such sums as may be necessary to carry 
out this part.
    ``(c) Effective Date.--The provisions of this part shall first 
apply to medical assistance for services or medicare cost-sharing 
furnished during calendar quarters beginning on or after the first day 
of the third effective fiscal year (as defined in subsection (d)).
    ``(d) Third and Fourth Effective Fiscal Years Defined.--In this 
part, the terms `third effective fiscal year' and `fourth effective 
fiscal year' mean the third and fourth fiscal years, respectively, that 
begin more than 180 days after the date of the enactment of this part.

                             ``eligibility

    ``Sec. 1952. (a) In General.--
            ``(1) General medical assistance.--Subject to section 1957, 
        the Secretary shall provide for payment under this part for 
        costs of the items and services described in section 1953 
        furnished to eligible individuals (as defined in subsection 
        (b)).
            ``(2) Medical assistance with medicare cost-sharing for 
        certain medicare beneficiaries.--
                    ``(A) In general.--The Secretary shall provide for 
                payment under this part for--
                            ``(i) medicare cost-sharing (as defined in 
                        section 1905(p)(3)) for qualified medicare 
                        beneficiaries who reside in one of the 50 
                        States or the District of Columbia;
                            ``(ii) medicare cost-sharing described in 
                        section 1905(p)(3)(A)(i) for qualified disabled 
                        and working individuals described in section 
                        1905(s) residing in one of the 50 States or the 
                        District of Columbia; and
                            ``(iii) for medicare cost-sharing described 
                        in section 1905(p)(3)(A)(ii) for individuals 
                        residing in one of the 50 States or the 
                        District of Columbia who would be qualified 
                        medicare beneficiaries described in section 
                        1905(p)(1) but for the fact that their income 
                        exceeds 100 percent, but is less than 120 
                        percent, of the official poverty line (referred 
                        to in such section) for a family of the size 
                        involved.
                    ``(B) Special rules.--In applying subparagraph 
                (A)--
                            ``(i) the income level that is deemed to be 
                        applied under section 1905(p)(1)(B) is 100 
                        percent of the official poverty line (as 
                        defined by the Office of Management and Budget, 
                        and revised annually in accordance with section 
                        673(2) of the Omnibus Budget Reconciliation Act 
                        of 1981) applicable to a family of the size 
                        involved, and
                            ``(ii) the term `medicare cost-sharing' 
                        described in section 1905(p)(3)(A) may include, 
                        as determined by the Secretary and for purposes 
                        of clauses (i) and (iii) of subparagraph (A) 
                        only, premiums for enrollment of a qualified 
                        medicare beneficiary with an eligible 
                        organization under section 1876.
    ``(b) Eligible Individual Defined.--
            ``(1) In general.--In this section, the term `eligible 
        individual' means an individual--
                    ``(A) is a citizen or national of the United 
                States, an alien lawfully admitted for permanent 
                residence, or an alien otherwise permanently residing 
                in the United States under color of law;
                    ``(B) whose income (as determined under section 
                1612 for purposes of the supplemental security income 
                program, subject to paragraph (3)) does not exceed the 
                applicable income level (specified in paragraph (2)); 
                and
                    ``(C) whose resources (as determined under section 
                1613 for purposes of the supplemental security income 
                program) do not exceed the maximum amount of resources 
                that an individual may have and obtain benefits under 
                that program.
            ``(2) Applicable income level.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                applicable income level is, for services furnished in--
                            ``(i) the third effective fiscal year, 80 
                        percent of the Federal poverty level (as 
                        defined in paragraph (4)),
                            ``(ii) the fourth effective fiscal year, 90 
                        percent of the Federal poverty level, or
                            ``(iii) any subsequent fiscal year, is 100 
                        percent of the Federal poverty level.
                    ``(B) Special rules for pregnant women and 
                children.--With respect to services related to 
                pregnancy and children under 19 years of age, the 
                applicable income level is 185 percent of the Federal 
                poverty level (as defined in paragraph (4)).
            ``(3) Income determination.--In determining income, costs 
        incurred for medical care or for any other type of remedial 
        care (recognized by the Secretary) shall be taken into account 
        and deducted from income otherwise determined.
            ``(4) Federal poverty level defined.--In this section, the 
        term `Federal poverty level' means the official poverty line 
        (as defined by the Office of Management and Budget, and revised 
        annually in accordance with section 673(2) of the Omnibus 
        Budget Reconciliation Act of 1981) applicable to a family of 
        the size involved.

                           ``services covered

    ``Sec. 1953. (a) In General.--Subject to subsection (b), items and 
services described in this section are the care and services listed in 
paragraphs (1) through (5), (17), and (21) of section 1905(a).
    ``(b) Exclusion of Long-Term Care Services.--Items and services 
described in this section do not include--
            ``(1) nursing facility services described in section 
        1905(a)(4)(A), and
            ``(2) home health care services described in section 
        1905(a)(7).
    ``(c) Amount, Duration, and Scope.--There shall be no fixed 
limitation on the amount, duration, and scope of medically necessary 
services described in subsection (a).

                        ``payments; cost-sharing

    ``Sec. 1954. (a) Payment Level.--
            ``(1) In general.--Subject to cost-sharing under subsection 
        (c) and the succeeding provisions of this subsection, the 
        payment amount for services under this part for medical 
        assistance under section 1952(a)(1) shall be the same as the 
        payment amount that would be made under title XVIII for such 
        services (determined without regard to deductibles and 
        coinsurance and copayments under such title).
            ``(2) Phase-in of payment rates.--During the first 2 fiscal 
        years in which this part applies, the Secretary shall provide 
        for such adjustment in payment rates so that--
                    ``(A) during the first fiscal year, the rates are 
                based--
                            ``(i) \2/3\ on the rates applied under part 
                        A during the previous fiscal year (increased by 
                        the same percentage as the percentage increase 
                        in payment rates under title XVIII from the 
                        previous fiscal year to such first fiscal 
                        year), and
                            ``(ii) \1/3\ on the rates applied under 
                        title XVIII (as adjusted under paragraph (3)) 
                        during such first fiscal year; and
                    ``(B) during the second fiscal year, the rates are 
                based--
                            ``(i) \1/3\ on the rates applied under part 
                        A during the second previous fiscal year 
                        (increased by the same percentage as the 
                        percentage increase in payment rates under 
                        title XVIII from the second previous fiscal 
                        year to such second), and
                            ``(ii) \2/3\ on the rates applied under 
                        title XVIII (as adjusted under paragraph (3)) 
                        during such second fiscal year.
            ``(3) Adjustment of medicare payment rates.--The Secretary 
        shall adjust the payment rates established under title XVIII 
        and applied under this part in order to take into account 
        differences in the demographic and geographic characteristics 
        between the individuals covered under such title and the 
        individuals covered under this part.
    ``(b) Participation and Mandatory Assignment.--In the case of 
medical assistance made available under section 1952(a)(1), payment may 
only be made under this part for services furnished by a provider 
that--
            ``(1) meets such conditions as the Secretary establishes, 
        based on conditions of participation of providers, physicians, 
        and suppliers established for purposes of title XVIII, and
            ``(2) has entered into a participation agreement under 
        which the provider agrees to accept the payment amounts 
        established under this section (including cost-sharing under 
        subsection (c)) as payment in full for covered services.
    ``(c) Cost-Sharing.--In the case of medical assistance made 
available under section 1952(a)(1)--
            ``(1) No cost-sharing for pregnancy-related services, 
        preventive services, and children.--There shall be no cost-
        sharing imposed with respect to--
                    ``(A) services related to pregnancy,
                    ``(B) preventive services, or
                    ``(C) services furnished to children under 19 years 
                of age.
            ``(2) Nominal cost-sharing for the poorest individuals.--
        There shall be no cost-sharing (other than nominal cost-
        sharing, within the meaning of section 1916(a)(3)) imposed with 
        respect to services furnished to individuals whose income is 
        determined to be less than 50 percent of the Federal poverty 
        level.
            ``(3) Cost-sharing for other services and populations.--
                    ``(A) In general.--With respect to eligible 
                individuals not described in paragraph (2) with respect 
                to services not described in paragraph (1), there shall 
                be imposed the following cost-sharing:
                            ``(i) For outpatient services, there shall 
                        be a copayment of $5 for each visit, or $10 in 
                        the case of a nonemergency visit to a hospital 
                        emergency room.
                            ``(ii) For inpatient hospital services, 
                        there shall be a copayment of $50 for each 
                        inpatient hospital admission.
                    ``(B) Limit on cost-sharing.--In no case shall the 
                cost-sharing imposed under subparagraph (A)--
                            ``(i) for an individual (whether or not the 
                        individual is a member of a family) exceed $500 
                        in any calendar year, or
                            ``(ii) collectively for all members of a 
                        family exceed $1,000 in any calendar year.

                            ``administration

    ``Sec. 1955. (a) Eligibility Determinations.--The Secretary shall 
provide for determinations of eligibility for benefits under this part 
for individuals residing in a State to be made through the same 
administrative entity that provides for determinations of eligibility 
for supplemental security income benefits under title XVI for residents 
of that State.
    ``(b) Payments.--The Secretary shall provide for payments to 
providers under this part through the single entity (or entities) 
responsible under section 111 of the American Consumers Health Care 
Reform Act of 1992 for administrative functions under title XVIII, in 
the same manner as such entities provide for payments to providers 
under such title.

                 ``use of alternative delivery systems

    ``Sec. 1956. (a) In General.--The Secretary shall take such steps 
as may be appropriate to encourage the development and application of 
managed care arrangements to the provision of covered services under 
this part to individuals eligible under section 1952(a)(1).
    ``(b) Types of Managed Care Arrangements.--
            ``(1) In general.--Managed care arrangements under this 
        section shall include--
                    ``(A) primary care case-management arrangements 
                (which meet standards established by the Secretary), 
                and
                    ``(B) health maintenance organizations and 
                competitive medical plans (which meet standards 
                established by the Secretary).
        In establishing standards for primary care case-management 
        arrangements and for maintenance organizations and competitive 
        medical plans, the Secretary shall take into account the 
        standards established for such arrangements and for such 
        organizations and plans under this title and title XVIII, 
        respectively.
            ``(2) Capitation payments.--Comprehensive managed care 
        arrangements (including health maintenance organizations and 
        competitive medical plans) shall include capitation payments at 
        a level equivalent to the level of payments which would be made 
        for individuals covered under this part and not enrolled under 
        such an arrangement.
            ``(3) Construction.--Nothing in this subsection shall be 
        construed as limiting the number or proportion of individuals 
        covered under this part who may be enrolled under a managed 
        care arrangement under this subsection.

``state maintenance of effort required; reduction in fmap for long-term 
                             care services

    ``Sec. 1957. (a) In General.--No individual residing in a State 
shall be eligible for medical assistance under this part (other than 
under section 1952(a)(2)), unless--
            ``(1) the State continues to provide for medical assistance 
        under part A with respect to home health care services and 
        nursing facility services; and
            ``(2) the State provides for payment to the Secretary of 
        the amount specified under subsection (b).
Payments shall be made under paragraph (2) by States on a quarterly 
basis based on estimates made by the Secretary and subsequent payments 
shall be adjusted to reflect amounts by which previous payments were 
greater, or less than, the amount of payment which should have been 
made.
    ``(b) Maintenance of Effort Amount.--
            ``(1) In general.--The amount specified under this 
        subsection for a State for a calendar quarter is the greater 
        of--
                    ``(A) the State share (as specified under paragraph 
                (2)) of the total amount of expenditures made by the 
                Secretary for residents of the State during the quarter 
                under this part, or
                    ``(B) the State amount specified under paragraph 
                (3), reduced by the amount of payments made by the 
                State (less any Federal payments to the State) under 
                part A for the quarter.
            ``(2) State share.--
                    ``(A) In general.--Subject to subparagraph (C), the 
                `State share' for a State for a calendar quarter is 100 
                percent less the Federal percentage specified in 
                subparagraph (B) for the State for the quarter.
                    ``(B) Federal percentage defined.--The Federal 
                percentage specified in this subparagraph for a State 
                or the District of Columbia for a quarter is--
                            ``(i) the Federal medical assistance 
                        percentage specified in section 1905(b) 
                        (determined without regard to section 1931(d)) 
                        for the State for the quarter, increased by
                            ``(ii) a percentage equal to the percentage 
                        specified in subparagraph (C) of the difference 
                        between 100 percentage points and the Federal 
                        medical assistance percentage described in 
                        clause (i).
                    ``(C) Phase in.--The percentage specified in this 
                subparagraph for calendar quarters occurring in--
                            ``(i) the third effective fiscal year is 50 
                        percent;
                            ``(ii) each of the next 3 succeeding fiscal 
                        years, is the percentage specified in this 
                        subparagraph for the calendar quarters 
                        occurring in the previous fiscal year increased 
                        by 10 percent;
                            ``(iii) each of the next 3 succeeding 
                        fiscal years, is the percentage specified in 
                        this subparagraph for the calendar quarters 
                        occurring in the previous fiscal year increased 
                        by 5 percent; and
                            ``(iv) each succeeding fiscal year, is 100 
                        percent.
            ``(3) Payment amount.--
                    ``(A) In general.--The payment amount specified 
                under this paragraph for a State for a quarter in a 
                fiscal year is equal to the product of--
                            ``(i) the average, per capita payment level 
                        made under this title for the last full fiscal 
                        year before the first effective fiscal year, 
                        increased by the percentage specified in 
                        subparagraph (B), and
                            ``(ii) the population of the State.
                    ``(B) Percentage increase.--The percentage 
                specified in this subparagraph for a fiscal year is the 
                percentage increase in the consumer price index for all 
                urban consumers (all items; U.S. city average) between 
                the midpoint of the fiscal year described in 
                subparagraph (A)(i) to the midpoint of the fiscal year 
                involved.
    ``(c) Decrease in FMAP for Services Not Covered Under Part.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Federal medical assistance percentage for each of the 
        50 States and the District of Columbia for medical assistance 
        for services for which benefits are not available under this 
        part shall be, for calendar quarters occurring in a fiscal year 
        (beginning with the third effective fiscal year), the 
        percentage specified in paragraph (2) of the Federal medical 
        assistance percentage otherwise applicable (without regard to 
        this part).
            ``(2) Phase out percentage.--The percentage specified in 
        this paragraph for calendar quarters occurring in--
                    ``(A) the third and fourth effective fiscal years 
                is 85 and 80 percent, respectively;
                    ``(B) each of the next 4 succeeding fiscal years, 
                is the percentage specified in this paragraph for the 
                calendar quarters occurring in the previous fiscal year 
                decreased by 10 percentage points;
                    ``(C) the next succeeding fiscal year, is 20 
                percent; and
                    ``(D) each succeeding fiscal year, is 0 percent.''.
    (b) Study and Report Maintenance of Effort Formula.--
            (1) Study.--The Secretary of Health and Human Services 
        shall provide for a study on the effect of the State 
        maintenance-of-effort requirements (under subsections (a) and 
        (b) of section 1957(b) of the Social Security Act, as added by 
        subsection (a)) on different States and on the relation of the 
        total amount of maintenance of effort to the long-term care 
        needs in each State.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on such study. The Secretary shall include in such 
        report such recommendations for adjustments in the requirements 
        of such subsections as may be appropriate to limit the effort 
        required of States to some indicator based on the needs for 
        long-term care services in each State.

                      Subtitle B--Medicare Reform

SEC. 111. IMPROVED EFFICIENCY THROUGH CONSOLIDATION OF ADMINISTRATION 
              OF PARTS A AND B.

    (a) In General.--The Secretary of Health and Human Services shall 
take such steps as may be necessary to consolidate the administration 
of parts A and B of the medicare program over a 5-year period.
    (b) Combination of Intermediary and Carrier Functions.--In taking 
such steps, the Secretary shall contract with a single entity that 
combines the intermediary and carrier functions in each area except 
where the Secretary finds that special regional or national contracts 
are appropriate.
    (c) Report on Legislation Required.--Not later than 1 year after 
the date of the enactment of this Act, the Secretary shall submit to 
Congress a report specifying such legislative changes as may be 
required in order to carry out this section.

SEC. 112. PROVIDER PAYMENT REFORMS TO ADDRESS INCONSISTENT INCENTIVES.

    (a) Development of Payment Proposals.--The Secretary of Health and 
Human Services shall develop payment proposals that eliminate 
inconsistent incentives that now exist under the medicare program. Such 
payment proposals shall include the following:
            (1) Proposals that ensure appropriate, consistent, and 
        complimentary payment incentives for payments for hospital 
        services and payments for physician services.
            (2) Proposals that eliminate inconsistent payment policies 
        for the same service at different sites.
            (3) Proposals that instill appropriate incentives as 
        regards the growth in service capacity and appropriate use of 
        services.
            (4) Proposals that are consistent with the goals of 
        ensuring both access to appropriate high quality of care 
        throughout an episode of illness and cost efficiency in the 
        care delivered.
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Secretary shall submit to Congress a description of 
such proposals. The Secretary shall include in the report such 
recommendations with respect to such proposals as the Secretary 
determines to be appropriate and shall specify such legislative changes 
as may be required in order to implement such recommendations.

                 Subtitle C--Health Benefit Plan Reform

  Part 1--Preemption of State Mandatory Benefit Laws and Anti-Managed 
                               Care Laws

SEC. 121. PREEMPTION FROM INSURANCE MANDATES FOR QUALIFIED SMALL 
              EMPLOYER PURCHASING GROUPS.

    (a) Qualified Small Employer Purchasing Group Defined.--For 
purposes of this section, an association is a qualified small employer 
purchasing group if--
            (1) the association submits an application to the Secretary 
        of Health and Human Services at such time and in such form as 
        the Secretary may require; and
            (2) on the basis of information contained in the 
        application and any other information the Secretary may 
        require, the Secretary determines that--
                    (A) the association is administered solely under 
                the authority and control of its member employers,
                    (B) the association's membership consists solely of 
                employers with not more than 100 employees (except that 
                an employer member of the group may retain its 
                membership in the group if, after the Secretary 
                determines that the association meets the requirements 
                of this paragraph, the number of employees of the 
                employer member increases to more than 100),
                    (C) with respect to each State in which its members 
                are located, the association consists of not fewer than 
                100 employers, and
                    (D) at the time the association submits its 
                application, the health benefit plans with respect to 
                the employer members of the association are in 
                compliance with applicable State laws relating to 
                health benefit plans.
    (b) Preemption From Insurance Mandates.--
            (1) Finding.--Congress finds that employer purchasing 
        groups organized for the purpose of obtaining health insurance 
        for employer members affect interstate commerce.
            (2) Preemption of state mandates.--In the case of a 
        qualified small employer purchasing group described in 
        subsection (a), no provision of State law shall apply that 
        requires the offering, as part of the health benefit plan with 
        respect to an employer member of such a group, of any services, 
        category of care, or services of any class or type of provider.
            (3) Preemption of provisions prohibiting employer groups 
        from purchasing health insurance.--In the case of a qualified 
        small employer purchasing group described in subsection (a), no 
        provision of State or local law shall apply that prohibits a 
        group of employers from purchasing health insurance with 
        respect to member employers of the group or their employees.
    (c) Effective Date.--This section shall take effect 60 days after 
the date of the enactment of this Act.

SEC. 122. REMOVING RESTRICTIONS ON MANAGED CARE.

    (a) Preemption of State Law Provisions.--Subject to subsection (c), 
the following provisions of State law are preempted and may not be 
enforced:
            (1) Restrictions on reimbursement rates or selective 
        contracting.--Any law that restricts the ability of a carrier 
        to negotiate reimbursement rates with providers or to contract 
        selectively with one provider or a limited number of providers.
            (2) Restrictions on differential financial incentives.--Any 
        law that limits the financial incentives that a health benefit 
        plan may require a beneficiary to pay when a non-plan provider 
        is used on a non-emergency basis.
            (3) Restrictions on utilization review methods.--Any law 
        that--
                    (A) prohibits utilization review of any or all 
                treatments and conditions,
                    (B) requires that such review be made (i) by a 
                resident of the State in which the treatment is to be 
                offered or by an individual licensed in such State, or 
                (ii) by a physician in any particular specialty or with 
                any board certified specialty of the same medical 
                specialty as the provider whose services are being 
                reviewed,
                    (C) requires the use of specified standards of 
                health care practice in such reviews or requires the 
                disclosure of the specific criteria used in such 
                reviews,
                    (D) requires payments to providers for the expenses 
                of responding to utilization review requests, or
                    (E) imposes liability for delays in performing such 
                review.
        Nothing in subparagraph (B) shall be construed as prohibiting a 
        State from (i) requiring that utilization review be conducted 
        by a licensed health care professional or (ii) requiring that 
        any appeal from such a review be made by a licensed physician 
        or by a licensed physician in any particular specialty or with 
        any board certified specialty of the same medical specialty as 
        the provider whose services are being reviewed.
    (b) GAO Study.--
            (1) In general.--The Comptroller General shall conduct a 
        study of the benefits and cost effectiveness of the use of 
        managed care in the delivery of health services.
            (2) Report.--By not later than 4 years after the date of 
        the enactment of this Act, the Comptroller General shall submit 
        a report to Congress on the study conducted under paragraph (1) 
        and shall include in the report such recommendations (including 
        whether the provisions of subsection (a) should be extended) as 
        may be appropriate.
    (c) Sunset.--Unless otherwise provided, subsection (a) shall not 
apply 5 years after the date of the enactment of this Act.

 Part 2--Restriction on Pre-existing Condition Provisions for Employer 
                            Health Insurance

SEC. 123. LIMITATION ON PRE-EXISTING CONDITION CLAUSES; ASSURANCE OF 
              CONTINUITY OF COVERAGE.

    (a) Limitations on Treatment of Pre-Existing Conditions.--A carrier 
may not impose (or require an employer to impose through a waiting 
period for coverage under a health benefit policy or similar 
requirement) a limitation or exclusion of benefits under an employer 
health benefit plan relating to treatment of a condition based on the 
fact that the condition pre-existed the effectiveness of the policy 
if--
            (1) the condition relates to a condition that was not 
        diagnosed or treated within 6 months before the date of 
        coverage under the plan;
            (2) the limitation or exclusion extends over more than 6 
        months after the date of coverage under the plan;
            (3) the limitation or exclusion applies to an individual 
        who, as of the date of birth, was covered under the plan or is 
        under 19 years of age; or
            (4) the limitation or exclusion relates to pregnancy.
In the case of an individual who is eligible for coverage under an 
employer health benefit plan but for a waiting period imposed by the 
employer, in applying paragraphs (1) and (2), the individual shall be 
treated as have been covered under the plan as of the earliest date of 
the beginning of the waiting period.
    (b) Assurance of Continuity of Coverage Through Previous 
Satisfaction of Pre-Existing Condition Requirement.--
            (1) In general.--Each carrier shall waive any period 
        applicable to a pre-existing condition for similar benefits 
        with respect to an individual to the extent that the individual 
        was covered for the condition under any health benefit plan (as 
        defined in paragraph (3)) that was in effect before the date of 
        the enrollment under the carrier's plan.
            (2) Continuous coverage required.--
                    (A) In general.--Paragraph (1) shall no longer 
                apply if there is a continuous period of more than 60 
                days (or, in the case of an individual described in 
                subparagraph (C), 6 months) on which the individual was 
                not covered under a health benefit plan.
                    (B) Treatment of waiting periods.--In applying 
                subparagraph (A), any waiting period imposed by an 
                employer before an employee is eligible to be covered 
                under a policy shall be treated as a period in which 
                the employee was covered under a health benefit plan.
                    (C) Job termination.--An individual is described in 
                this subparagraph if the individual loses coverage 
                under an employer health plan due to termination of 
                employment.
            (3) Exclusion of cash-only and dread disease policies.--In 
        this subsection, the term ``health benefit plan'' does not 
        include any insurance which is offered primarily to provide--
                    (A) coverage for a specified disease or illness, or
                    (B) hospital or fixed indemnity policy, unless the 
                Secretary (or in the case of a plan in a State, the 
                State) determines that such a policy provides 
                sufficiently comprehensive coverage of a benefit so 
                that it should be treated as a health benefit plan 
                under this subsection.

            Part 3--Small Employer Insurance Market Reforms

SEC. 124. ACCEPTANCE OF ALL SMALL EMPLOYER SEEKING COVERAGE; OFFERING 
              OF MINIMUM BENEFIT PACKAGE.

    (a) Acceptance of All Small Employer Groups Seeking Coverage.--
Subject to the succeeding provisions of this section, a carrier that 
offers a small employer health plan to small employers located in a 
State--
            (1) must offer the same plan to any other small employer 
        located in the State, and
            (2) may refuse to issue or renew or terminate such a plan 
        for a small employer only for--
                    (A) nonpayment of premiums, or
                    (B) fraud or misrepresentation.
The requirement of paragraph (1) shall apply on a continuous, year-
round basis.
    (b) Offering of Minimum Benefit Package.--At such time as a minimum 
benefit package is established under section 203, each carrier that 
makes available in a State any small employer health benefit plan shall 
make available to each small employer in the State such a plan that 
only provides benefits for the minimum benefit package established 
under such section.
    (c) Restrictions of Enrollment Permitted in the Case of Certain 
Association Coverage.--In the case of an health benefit plan offered 
through an association which is composed exclusively of employers 
(which may include self-employed individuals) and which has been formed 
for purposes other than obtaining health insurance, the carrier is not 
required to offer the plan with respect to individuals who are not 
employees of such employers or self-employed members of the 
association, or their dependents.
    (d)  Treatment of Health Maintenance Organizations.--
            (1) Geographic limitations.--A health maintenance 
        organization may deny enrollment with respect to an individual 
        if the individual is residing outside the service area of the 
        organization, but only if such denial is applied uniformly 
        without regard to health status or insurability.
            (2) Size limits.--A health maintenance organization may 
        apply to the Secretary to cease enrolling new employer groups 
        or individuals in its insured health benefit plan (or in a 
        geographic area served by the plan) if--
                    (A) it ceases to enroll any new employer groups or 
                individuals, and
                    (B) it can demonstrate that its financial or 
                administrative capacity to serve previously enrolled 
                groups and individuals (and additional individuals who 
                will be expected to enroll because of affiliation with 
                such previously enrolled groups) will be impaired if it 
                is required to enroll new employer groups or 
                individuals.

SEC. 125. USE OF COMMUNITY-RATED PREMIUMS.

    (a) Cohesive Rating System and Actuarial Certification.--
            (1) In general.--The premiums (including reference premium 
        rate, as defined in subsection (b)(2)) and age-sex adjustments 
        under subsection (c) for all small employer health plans of the 
        same carrier shall--
                    (A) be established based on a single cohesive 
                rating system which is applied consistently for all 
                small employers and is designed not to treat small 
                employers differently based on health status or risk 
                status; and
                    (B) be actuarially certified annually.
            (2) Actuarial certified defined.--For purposes of paragraph 
        (1)(B), a plan is considered to be ``actuarially certified'' if 
        there is a written statement, by a member of the American 
        Academy of Actuaries or other individual acceptable to the 
        Secretary that a small employer carrier is in compliance with 
        this section, based upon the individual's examination, 
        including a review of the appropriate records and of the 
        actuarial assumptions and methods utilized by the carrier in 
        establishing premium rates for applicable health plans.
    (b) Use of Community-Rated Reference Premium Rates.--
            (1) In general.--The reference premium rate charged for a 
        small employer health plan with similar benefits in a community 
        for a type of family enrollment (described in subsection (d)) 
        shall be the same for all small employers.
            (2) Reference premium rate.--In this section, the term 
        ``reference premium rate'' means, for a rating period in a 
        community, the lowest premium rate charged or which could have 
        been charged by the small employer carrier to small employers 
        under a rating system in the community for health plans with 
        the same or similar coverage. The reference premium rate is 
        determined without regard to any adjustment for age or sex 
        described in subsection (c).
    (c) Age and Sex Adjustment to Community-Rating.--
            (1) In general.--Subject to paragraph (2), a small employer 
        health plan may provide for an adjustment to the reference 
        premium rate based on age and gender of covered individuals. 
        Any such adjustment shall be applied consistently to all small 
        employers.
            (2) Limitation on adjustment.--The adjustment under 
        paragraph (1) may not result, with respect to small employer 
        health plans with similar benefits in a community, in a premium 
        rate for the most expensive age-sex group exceeding 133 percent 
        of the premium rate for the least expensive age-sex group.
    (d) Types of Family Enrollment.--Each small employer health plan 
shall permit enrollment of (and shall compute premiums separately for) 
individuals based on each of the following beneficiary classes:
            (1) 1 adult.
            (2) A married couple without children.
            (3) A married couple with 1 or more children, or 1 adult 
        with 1 or more children.
    (e) Community.--For purposes of this section, the term 
``community'' means a geographic area designated by the Secretary as--
            (1) encompassing one or more adjacent metropolitan 
        statistical areas, or
            (2) the remaining area within each State (that is not 
        designated within any community under paragraph (1));
except that the Secretary may designate an entire State as a community 
if such a designation would better carry out the purposes of this 
title. The Secretary from time to time may change the boundaries of 
communities designated under paragraph (1) or (2) for such purposes. 
There shall be no administrative or judicial review of the designation 
of communities under this subsection.

  Part 4--Establishment of Standards; Enforcement; General Definitions

SEC. 126. ESTABLISHMENT OF STANDARDS.

    (a) Role of NAIC.--The Secretary shall request the National 
Association of Insurance Commissioners to develop, within 9 months 
after the date of the enactment of this Act, model regulations that 
specify standards to carry out parts 2 and 3 of this subtitle. If the 
Association develops such regulations specifying such standards within 
such period, the Secretary shall review such standards to determine if 
they meet such requirements. Such review shall be completed within 30 
days after the date the regulations are developed. Unless the Secretary 
determines within such period that the standards do not meet the 
requirements, such standards shall serve as the standards under section 
127.
    (b) Contingency.--If the Association does not develop such model 
regulations within such period or the Secretary determines that such 
regulations do not meet the requirements described in subsection (a), 
the Secretary shall specify, within 15 months after the date of the 
enactment of this Act, standards to carry out parts 2 and 3 of this 
subtitle.
    (c) Effective Date.--The standards provided under this section 
shall apply to small employer health benefit plans offered in a State 
on or after the date the standards are implemented in the State under 
section 127 and to such plans renewed on or after 4 years after the 
date such standards are implemented in the State under such section.

SEC. 127. ENFORCEMENT.

    (a) Primary Application of Standards to Insured Plans Through 
States.--
            (1) In general.--Each State shall submit to the Secretary, 
        by the deadline specified in paragraph (B), a report on the 
        implementation and enforcement of the standards established 
        under section 126 with respect to insured employer health 
        benefit plans offered not later than such deadline.
            (2) Deadline for report.--
                    (A) 1 year after standards established.--Subject to 
                subparagraph (B), the deadline under this paragraph is 
                1 year after the date standards are established under 
                section 126.
                    (B) Exception for legislation.--In the case of a 
                State which the Secretary identifies, in consultation 
                with the National Association of Insurance 
                Commissioners, as--
                            (i) requiring State legislation (other than 
                        legislation appropriating funds) in order for 
                        carriers and health benefit plans offered to 
                        small employers to meet the standards 
                        established under section 126, but
                            (ii) having a legislature which is not 
                        scheduled to meet in 1993 in a legislative 
                        session in which such legislation may be 
                        considered,
                the date specified in this paragraph is the first day 
                of the first calendar quarter beginning after the close 
                of the first legislative session of the State 
                legislature that begins on or after January 1, 1993. 
                For purposes of the previous sentence, in the case of a 
                State that has a 2-year legislative session, each year 
                of such session shall be deemed to be a separate 
                regular session of the State legislature.
    (b) More Stringent State Standards Permitted.--A State may, under 
this section, implement standards that are more stringent than the 
standards established under section 126.
    (c) Federal Role.--
            (1) Insured plans.--If the Secretary determines that a 
        State has failed to submit a report by the deadline specified 
        under subsection (a) or finds that the State no longer is 
        carrying out its responsibility under the respective 
        subsection, the Secretary shall notify the State and provide 
        the State a period of 30 days in which to submit such report or 
        to carry out its responsibilities under the respective 
        subsection. If, after such 30-day period, the Secretary finds 
        that such a failure has not been corrected, the Secretary shall 
        provide for such mechanism for the implementation and 
        enforcement of the standards established under section 126 in 
        the State with respect to insured employer health benefit plans 
        as the Secretary determines to be appropriate. Such standards 
        shall apply to health benefit plans offered or renewed on or 
        after 3 months after the applicable deadlines established under 
        section 126(c).
            (2) Self-insured plans.--The Secretary shall provide for 
        such mechanism for the implementation and enforcement of the 
        standards established under section 126 in the State with 
        respect to employer health benefit plans that are not subject 
        to regulation by a State (or by the Secretary under paragraph 
        (1)) as the Secretary determines to be appropriate. Such 
        standards shall apply to such health benefit plans offered or 
        renewed on or after 1 year after the date standards are 
        established under section 126.
    (d) Federal Enforcement Through Excise Tax.--
            (1) In general.--Chapter 43 of the Internal Revenue Code of 
        1986 (relating to qualified pension, etc., plans) is amended by 
        adding at the end thereof the following new section:

``SEC. 4980C. FAILURE BY CARRIER TO COMPLY WITH EMPLOYER HEALTH 
              INSURANCE STANDARDS.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on the 
failure of--
            ``(1) any carrier to comply with the standards established 
        under section 126 of the American Consumers Health Care Reform 
        Act of 1993 to carry out part 2 of subtitle B of such Act, or
            ``(2) any small employer carrier in any Federal standard 
        State to comply with the standards established under such 
        section to carry out part 3 of such subtitle.
    ``(b) Amount of Tax.--The tax imposed by--
            ``(1) subsection (a)(1) shall be equal to 25 percent of the 
        amounts received by the health benefit plan (during the period 
        such failure persists), or
            ``(2) subsection (a)(2) shall be equal to 25 percent of the 
        amounts received by the carrier (during the period such failure 
        persists) for providing any health benefit plan with respect to 
        any employer in the Federal standard State.
    ``(c) Liability for Tax.--The tax imposed by--
            ``(1) subsection (a)(1) shall be paid by the person issuing 
        the health benefit plan, or
            ``(2) subsection (a)(2) shall be paid by the carrier.
    ``(d) Exceptions.--
            ``(1) Corrections within 30 days.--No tax shall be imposed 
        by subsection (a) by reason of any failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected within the 30-day 
                period beginning on earliest date the carrier knew, or 
                exercising reasonable diligence would have known, that 
                such failure existed.
            ``(2) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that payment of such tax would be 
        excessive relative to the failure involved.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Carrier; etc.--The terms `carrier', `small employer 
        carrier', `health benefit plan', and `small employer' have the 
        meanings given such terms in section 128 of the American 
        Consumers Health Care Reform Act of 1993.
            ``(2) Federal standard state.--The term `Federal standard 
        State' means any State with respect to which a determination is 
        in effect under section 127(c)(1)) of the American Consumers 
        Health Care Reform Act of 1993.''.
            (2) Clerical amendment.--The table of sections for chapter 
        43 of such Code is amended by adding at the end thereof the 
        following new items:

                              ``Sec. 4980C. Failure by carrier to 
                                        comply with employer health 
                                        insurance standards in 
                                        States.''.

SEC. 128. DEFINITIONS.

    In this subtitle (except as otherwise provided):
            (1) The term ``carrier'' means any entity which provides 
        health insurance or health benefits in a State, and includes a 
        licensed insurance company, a prepaid hospital or medical 
        service plan, a health maintenance organization, the plan 
        sponsor of a multiple employer welfare arrangement or an 
        employee benefit plan (as defined under the Employee Retirement 
        Income Security Act of 1974), or any other entity providing a 
        plan of health insurance subject to State insurance regulation.
            (2)(A) Subject to subparagraph (B), the term ``employer 
        health benefit plan'' means a health benefit plan (including an 
        employee welfare benefit plan, as defined in section 3(1) of 
        the Employee Retirement Income Security Act of 1974) which is 
        offered to employees through an employer and for which the 
        employer provides for any contribution to such plan or any 
        premium for such plan are deducted by the employer from 
        compensation to the employee.
            (B) A State may provide (for a plan in a State) that the 
        term ``employer health benefit plan'' does not include an 
        association plan (as defined in subparagraph (C)).
            (C) For purposes of subparagraph (B), the term 
        ``association plan'' means a health benefit plan offered by an 
        organization to its members if the organization was formed 
        other than for purposes of purchasing insurance.
            (3) The term ``full-time employee'' means, with respect to 
        an employer, an individual who normally is employed for at 
        least 30 hours per week by the employer.
            (4) The term ``health benefit plan'' means any hospital or 
        medical expense incurred policy or certificate, hospital or 
        medical service plan contract, or health maintenance subscriber 
        contract, or a multiple employer welfare arrangement or 
        employee benefit plan (as defined under the Employee Retirement 
        Income Security Act of 1974) which provides benefits with 
        respect to health care services, but does not include--
                    (A) coverage only for accident, dental, vision, 
                disability income, or long-term care insurance, or any 
                combination thereof,
                    (B) medicare supplemental health insurance,
                    (C) coverage issued as a supplement to liability 
                insurance,
                    (D) worker's compensation or similar insurance, or
                    (E) automobile medical-payment insurance,
        or any combination thereof.
            (5) The term ``health maintenance organization'' includes a 
        carrier that meets specified standards and that offers to 
        provide health services on a prepaid, at-risk basis primarily 
        through a defined set of providers.
            (6) The term ``insured health benefit plan'' means any 
        health benefit plan provided through insurance, and includes a 
        prepaid hospital or medical service plan, the health benefit 
        plan of a health maintenance organization, and a multiple 
        employer welfare arrangement.
            (7) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
            (8) The term ``small employer'' means an entity actively 
        engaged in business which, on at least 50 percent of its 
        working days during the preceding year, employed fewer than 100 
        full-time employees, and includes a self-employed individual. 
        For purposes of determining if an employer is a small employer, 
        rules similar to the rules of subsection (b) and (c) of section 
        414 of the Internal Revenue Code of 1986 shall apply.
            (9) The term ``small employer carrier'' means a carrier 
        with respect to the issuance of a small employer health benefit 
        plan.
            (10) The term ``small employer health benefit plan'' means 
        an employer health benefit plan which provides coverage to one 
        or more full-time employees of a small employer.
            (11) The term ``State'' means the 50 States, the District 
        of Columbia, Puerto Rico, the Virgin Islands, Guam, and 
        American Samoa.
            (12) The term ``State commissioner of insurance'' includes 
        a State superintendent of insurance.

                 Subtitle D--Medical Malpractice Reform

                       Part 1--General Provisions

SEC. 131. FEDERAL REFORM OF MEDICAL MALPRACTICE LIABILITY ACTIONS.

    (a) Congressional Findings.--
            (1) Effect on interstate commerce.--Congress finds that the 
        health care and insurance industries are industries affecting 
        interstate commerce and the medical malpractice litigation 
        systems existing throughout the United States affect interstate 
        commerce by contributing to the high cost of health care and 
        premiums for malpractice insurance purchased by health care 
        providers.
            (2) Effect on federal spending.--Congress finds that the 
        medical malpractice litigation systems existing throughout the 
        United States have a significant effect on the amount, 
        distribution, and use of Federal funds because of--
                    (A) the large number of individuals who receive 
                health care benefits under programs operated or 
                financed by the Federal Government;
                    (B) the large number of individuals who benefit 
                because of the exclusion from Federal taxes of the 
                amounts spent by their employers to provide them with 
                health insurance benefits;
                    (C) the large number of health care providers and 
                health care professionals who provide items or services 
                for which the Federal Government makes payments; and
                    (D) the large number of such providers and 
                professionals who have received direct or indirect 
                financial assistance from the Federal Government 
                because of their status as such professionals or 
                providers.
    (b) Applicability.--This subtitle shall apply with respect to any 
medical malpractice liability claim and to any medical malpractice 
liability action brought in any State or Federal court, except that 
this subtitle shall not apply to--
            (1) a claim or action for damages arising from a vaccine-
        related injury or death to the extent that title XXI of the 
        Public Health Service Act applies to the action; or
            (2) a claim or action in which the plaintiff's sole 
        allegation is an allegation of an injury arising from the use 
        of a medical product.
    (c) Preemption of State Law.--Subject to section 151, this subtitle 
supersedes State law only to the extent that State law differs from any 
provision of law established by or under this subtitle. Any issue that 
is not governed by any provision of law established by or under this 
subtitle shall be governed by otherwise applicable State or Federal 
law.
    (d) Federal Court Jurisdiction Not Established on Federal Question 
Grounds.--Nothing in this subtitle shall be construed to establish any 
jurisdiction in the district courts of the United States over medical 
malpractice liability actions on the basis of sections 1331 or 1337 of 
title 28, United States Code.

SEC. 132. DEFINITIONS.

    As used in this subtitle:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system established by a State that provides for the resolution 
        of medical malpractice liability claims in a manner other than 
        through medical malpractice liability actions.
            (2) Claimant.--The term ``claimant'' means any person who 
        alleges a medical malpractice liability claim, or, in the case 
        of an individual who is deceased, incompetent, or a minor, the 
        person on whose behalf such a claim is alleged.
            (3) Economic damages.--The term ``economic damages'' means 
        damages paid to compensate an individual for losses for 
        hospital and other medical expenses, lost wages, lost 
        employment, and other pecuniary losses.
            (4) Health care professional.--The term ``health care 
        professional'' means any individual who provides health care 
        services in a State and who is required by State law or 
        regulation to be licensed or certified by the State to provide 
        such services in the State.
            (5) Health care provider.--The term ``health care 
        provider'' means any organization or institution that is 
        engaged in the delivery of health care services in a State and 
        that is required by State law or regulation to be licensed or 
        certified by the State to engage in the delivery of such 
        services in the State.
            (6) Injury.--The term ``injury'' means any illness, 
        disease, or other harm that is the subject of a medical 
        malpractice liability action or claim.
            (7) Medical malpractice liability action.--The term 
        ``medical malpractice liability action'' means a civil action 
        (other than an action in which the plaintiff's sole allegation 
        is an allegation of an intentional tort) brought in a State or 
        Federal court against a health care provider or health care 
        professional (regardless of the theory of liability on which 
        the action is based) in which the plaintiff alleges a medical 
        malpractice liability claim.
            (8) Medical malpractice liability claim.--The term 
        ``medical malpractice liability claim'' means a claim in which 
        the claimant alleges that injury was caused by the provision of 
        (or the failure to provide) health care services.
            (9) Medical product.--The term ``medical product'' means a 
        device (as defined in section 201(h) of the Federal Food, Drug, 
        and Cosmetic Act) or a drug (as defined in section 201(g)(1) of 
        the Federal Food, Drug, and Cosmetic Act).
            (10) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages paid to compensate an individual for losses for 
        physical and emotional pain, suffering, inconvenience, physical 
        impairment, mental anguish, disfigurement, loss of enjoyment of 
        life, loss of consortium, and other nonpecuniary losses, but 
        does not include punitive damages.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (12) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, and American Samoa.

SEC. 133. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b) and sections 
149, 172, and 173, this subtitle shall apply with respect to claims 
accruing or actions brought on or after the expiration of the 3-year 
period that begins on the date of the enactment of this Act.
    (b) Exception for States Requesting Earlier Implementation of 
Reforms.--
            (1) Application.--A State may submit an application to the 
        Secretary requesting the early implementation of this subtitle 
        with respect to claims or actions brought in the State.
            (2) Decision by secretary.--The Secretary shall issue a 
        response to a State's application under paragraph (1) not later 
        than 90 days after receiving the application. If the Secretary 
        determines that the State meets the requirements of this 
        subtitle at the time of submitting its application, the 
        Secretary shall approve the State's application, and this 
        subtitle shall apply with respect to actions brought in the 
        State on or after the expiration of the 90-day period that 
        begins on the date the Secretary issues the response. If the 
        Secretary denies the State's application, the Secretary shall 
        provide the State with a written explanation of the grounds for 
        the decision.

  Part 2--Uniform Standards For Medical Malpractice Liability Actions

SEC. 141. STATUTE OF LIMITATIONS.

    (a) In General.--No medical malpractice liability claim may be 
brought after the expiration of the 2-year period that begins on the 
date the alleged injury that is the subject of the action should 
reasonably have been discovered, but in no event after the expiration 
of the 4-year period that begins on the date the alleged injury 
occurred.
    (b) Exception for Minors.--In the case of an alleged injury 
suffered by a minor who has not attained 6 years of age, no medical 
malpractice liability claim may be brought after the expiration of the 
2-year period that begins on the date the alleged injury that is the 
subject of the action should reasonably have been discovered, but in no 
event after the date on which the minor attains 10 years of age.

SEC. 142. REQUIREMENT FOR INITIAL RESOLUTION OF ACTION THROUGH 
              ALTERNATIVE DISPUTE RESOLUTION.

    (a) In General.--No medical malpractice liability action may be 
brought in any State court unless the medical malpractice liability 
claim that is the subject of the action has been initially resolved 
under an alternative dispute resolution system certified by the 
Secretary under section 162(b).
    (b) Initial Resolution of Claims Under ADR.--For purposes of 
subsection (a), an action is ``initially resolved'' under an 
alternative dispute resolution system if--
            (1) the ADR reaches a decision on whether the defendant is 
        liable to the plaintiff for damages; and
            (2) if the ADR determines that the defendant is liable, the 
        ADR determines the amount of damages assessed against the 
        defendant.
    (c) Procedures for Filing Actions.--
            (1) Deadline.--No medical malpractice liability action may 
        be brought unless the action is filed in a court of competent 
        jurisdiction not later than 90 days after an opinion resolving 
        the medical malpractice liability claim that is the subject of 
        the action is issued under the applicable alternative dispute 
        resolution system.
            (2) Court of competent jurisdiction.--For purposes of 
        paragraph (1), the term ``court of competent jurisdiction'' 
        means--
                    (A) with respect to actions filed in a State court, 
                the appropriate State trial court; and
                    (B) with respect to actions filed in a Federal 
                court, the appropriate United States district court.
    (d) Status of ADR Decision.--The decision reached under an 
alternative dispute resolution system shall, for purposes of 
enforcement by a court of competent jurisdiction, have the same status 
in the court as the verdict of a medical malpractice liability action 
adjudicated in a State or Federal trial court.
    (e) Treatment of ADR Decision.--
            (1) Requirements for going forward with action.--In order 
        to bring a medical malpractice liability action to contest the 
        decision made under the previous alternative dispute resolution 
        system with respect to a medical malpractice liability claim, 
        the party contesting the decision must--
                    (A) show that--
                            (i) the decision was procured by 
                        corruption, fraud, or undue means,
                            (ii) there was partiality or corruption 
                        under the system,
                            (iii) there was other misconduct under the 
                        system that materially prejudiced the party's 
                        rights, or
                            (iv) the decision was based on an error of 
                        law; or
                    (B) present new evidence before the trier of fact 
                that was not available for presentation under the ADR 
                system.
            (2) Burden of proof.--In any medical malpractice liability 
        action, the trier of fact shall uphold the decision made under 
        the previous alternative dispute resolution system with respect 
        to the claim that is the subject of the action unless the party 
        contesting the decision proves by a preponderance of the 
        evidence that the decision was incorrect.

SEC. 143. RELATION TO ALTERNATIVE DISPUTE RESOLUTION OF FEDERAL 
              AGENCIES.

    (a) Mandatory Application of Federal ADR in Malpractice Claims 
Against United States.--Section 2672 of title 28, United States Code, 
is amended by striking the period at the end of the first paragraph and 
inserting the following: ``, except that each Federal agency shall use 
arbitration or such alternative means of dispute resolution to settle 
any tort claim against the United States consisting of a medical 
malpractice liability claim (as defined in section 132(8) of the 
American Consumers Health Care Reform Act of 1992).''.
    (b) Transmittal of Information of Malpractice Claims Resolved Under 
Federal ADR.--Section 584 of title 5, United States Code, as added by 
section 4(b) of the Administrative Dispute Resolution Act (Public Law 
101-552), is amended by adding at the end the following new subsection:
    ``(k) Each agency shall transmit on a regular basis to the 
Administrator for Health Care Policy and Research information on issues 
in controversy consisting of medical malpractice liability claims (as 
defined in section 132(8) of the American Consumers Health Care Reform 
Act of 1992) that are resolved under the agency's dispute resolution 
proceeding under this subchapter, in a manner that assures that the 
identity of the parties to such proceedings shall not be revealed.''.

SEC. 144. MANDATORY PRE-TRIAL SETTLEMENT CONFERENCE.

    (a) In General.--Before the beginning of the trial phase of any 
medical malpractice liability action, the parties shall attend a 
conference called by the court for purposes of determining whether 
grounds exist upon which the parties may negotiate a settlement for the 
action.
    (b) Requiring Parties to Submit Settlement Offers.--At the 
conference called pursuant to subsection (a), each party to a medical 
malpractice liability action shall present an offer of settlement for 
the action.

SEC. 145. CALCULATION AND PAYMENT OF DAMAGES.

    (a) Limitation on Noneconomic Damages.--The total amount of 
noneconomic damages that may be awarded to a plaintiff and the members 
of the plaintiff's family for losses resulting from the injury which is 
the subject of a medical malpractice liability action may not exceed 
$250,000, regardless of the number of parties against whom the action 
is brought or the number of actions brought with respect to the injury.
    (b) Treatment of Punitive Damages.--
            (1) Limitation on amount.--The total amount of punitive 
        damages that may be imposed under a medical malpractice 
        liability action may not exceed twice the total of the damages 
        awarded to the plaintiff and the members of the plaintiff's 
        family.
            (2) Payments to state for medical quality assurance 
        activities.--
                    (A) In general.--Any punitive damages imposed under 
                a medical malpractice liability action shall be paid to 
                the State in which the action is brought.
                    (B) Activities described.--A State shall use amount 
                paid pursuant to subparagraph (A) to carry out 
                activities to assure the safety and quality of health 
                care services provided in the State, including (but not 
                limited to)--
                            (i) licensing or certifying health care 
                        professionals and health care providers in the 
                        State;
                            (ii) operating alternative dispute 
                        resolution systems;
                            (iii) carrying out public education 
                        programs relating to medical malpractice and 
                        the availability of alternative dispute 
                        resolution systems in the State; and
                            (iv) carrying out programs to reduce 
                        malpractice-related costs for retired providers 
                        or other providers volunteering to provide 
                        services in medically underserved areas.
                    (C) Maintenance of effort.--A State shall use any 
                amounts paid pursuant to subparagraph (A) to supplement 
                and not to replace amounts spent by the State for the 
                activities described in subparagraph (B).
    (c) Periodic Payments for Future Losses.--If more than $100,000 in 
damages for expenses to be incurred in the future is awarded to the 
plaintiff in a medical malpractice liability action, the defendant 
shall provide for payment for such damages on a periodic basis 
determined appropriate by the court (based upon projections of when 
such expenses are likely to be incurred), unless the court determines 
that it is not in the plaintiff's best interests to receive payments 
for such damages on such a periodic basis.
    (d) Mandatory Offsets for Damages Paid by a Collateral Source.--
            (1) In general.--The total amount of damages received by a 
        plaintiff in a medical malpractice liability action shall be 
        reduced (in accordance with paragraph (2)) by any other payment 
        that has been or will be made to the individual to compensate 
        the plaintiff for the injury that was the subject of the 
        action, including payment under--
                    (A) Federal or State disability or sickness 
                programs;
                    (B) Federal, State, or private health insurance 
                programs;
                    (C) private disability insurance programs;
                    (D) employer wage continuation programs; and
                    (E) any other source of payment intended to 
                compensate the plaintiff for such injury.
            (2) Amount of reduction.--The amount by which an award of 
        damages to a plaintiff shall be reduced under paragraph (1) 
        shall be--
                    (A) the total amount of any payments (other than 
                such award) that have been made or that will be made to 
                the plaintiff to compensate the plaintiff for the 
                injury that was the subject of the action; minus
                    (B) the amount paid by the plaintiff (or by the 
                spouse, parent, or legal guardian of the plaintiff) to 
                secure the payments described in subparagraph (A).

SEC. 146. TREATMENT OF ATTORNEY'S FEES AND OTHER COSTS.

    (a) Limitation on Attorney's Fees.--If the plaintiff in a medical 
malpractice liability action has entered into an agreement with the 
plaintiff's attorney to pay the attorney's fees on a contingency basis, 
the attorney's fees for the action may not exceed--
            (1) 25 percent of the first $150,000 of any award or 
        settlement paid to the plaintiff; or
            (2) 15 percent of any additional amounts paid to the 
        plaintiff.
    (b) Awarding Attorney's Fees and Other Costs to Winning Party.--
            (1) In general.--If the court in a medical malpractice 
        liability action upholds a ruling of the alternative dispute 
        resolution system with respect to whether or not a health care 
        professional or health care provider committed malpractice or 
        with respect to the amount of damages awarded, the court shall 
        require the party that contested the ruling to pay to the 
        opposing party the costs incurred by the opposing party under 
        the action, including attorney's fees, fees paid to expert 
        witnesses, and other litigation expenses (but not including 
        court costs, filing fees, or other expenses paid directly by 
        the party to the court, or any fees or costs associated with 
        the resolution of the claim that is the subject of the action 
        under the alternative dispute resolution system).
            (2) Permitting court to waive or modify imposition of 
        costs.--A court may issue a written order waiving or modifying 
        the application of paragraph (1) to a party if the court finds 
        that the application of such paragraph to the party would 
        constitute an undue hardship, or if the medical malpractice 
        liability action raised a novel issue of law. The order shall 
        specify the grounds for the court's decision to waive or modify 
        the application of such paragraph.

SEC. 147. JOINT AND SEVERAL LIABILITY.

    The liability of each defendant in a medical malpractice liability 
action shall be several only and shall not be joint, and each defendant 
shall be liable only for the amount of damages allocated to the 
defendant in direct proportion to the defendant's percentage of 
responsibility (as determined by the trier of fact).

SEC. 148. UNIFORM STANDARD FOR DETERMINING NEGLIGENCE.

    A defendant in a medical malpractice liability action may not be 
found to have acted negligently unless the defendant's conduct at the 
time of providing the health care services that are the subject of the 
action was not reasonable.

SEC. 149. APPLICATION OF MEDICAL PRACTICE GUIDELINES IN MALPRACTICE 
              LIABILITY ACTIONS.

    (a) Use of Guidelines as Affirmative Defense.--In any medical 
malpractice liability action, it shall be a complete defense to any 
allegation that the defendant was negligent that, in the provision of 
(or the failure to provide) the services that are the subject of the 
action, the defendant followed the appropriate practice guideline.
    (b) Restriction on Guidelines Considered Appropriate.--
            (1) Guidelines sanctioned by secretary.--For purposes of 
        subsection (a), a practice guideline may not be considered 
        appropriate with respect to actions brought during a year 
        unless the Secretary has sanctioned the use of the guideline 
        for purposes of an affirmative defense to medical malpractice 
        liability actions brought during the year in accordance with 
        paragraph (2) or (3).
            (2) Process for sanctioning guidelines.--Not less 
        frequently than October 1 of each year (beginning with 1993), 
        the Secretary, shall review the practice guidelines and 
        standards developed by the Administrator for Health Care Policy 
        and Research pursuant to section 1142 of the Social Security 
        Act, and shall sanction those guidelines which the Secretary 
        considers appropriate for purposes of an affirmative defense to 
        medical malpractice liability actions brought during the next 
        calendar year as appropriate practice guidelines for purposes 
        of subsection (a).
            (3) Use of state guidelines.--Upon the application of a 
        State, the Secretary may sanction practice guidelines selected 
        by the State for purposes of an affirmative defense to medical 
        malpractice liability actions brought in the State as 
        appropriate practice guidelines for purposes of subsection (a) 
        if the guidelines meet such requirements as the Secretary may 
        impose.
    (c) Prohibiting Application of Failure To Follow Guidelines as 
Prima Facie Evidence of Negligence.--No plaintiff in a medical 
malpractice liability action may be deemed to have presented prima 
facie evidence that a defendant was negligent solely by showing that 
the defendant failed to follow the appropriate practice guideline.

SEC. 150. SPECIAL PROVISION FOR CERTAIN OBSTETRIC SERVICES.

    (a) Imposition of Higher Standard of Proof.--
            (1) In general.--In the case of a medical malpractice 
        liability action relating to services provided during labor or 
        the delivery of a baby, if the defendant health care 
        professional did not previously treat the plaintiff for the 
        pregnancy, the trier of fact may not find that the defendant 
        committed malpractice and may not assess damages against the 
        defendant unless the malpractice is proven by clear and 
        convincing evidence.
            (2) Applicability to group practices or agreements among 
        providers.--For purposes of paragraph (1), a health care 
        professional shall be considered to have previously treated an 
        individual for a pregnancy if the professional is a member of a 
        group practice whose members previously treated the individual 
        for the pregnancy or is providing services to the individual 
        during labor or the delivery of a baby pursuant to an agreement 
        with another professional.
    (b) Clear and Convincing Evidence Defined.--In subsection (a), the 
term ``clear and convincing evidence'' is that measure or degree of 
proof that will produce in the mind of the trier of fact a firm belief 
or conviction as to the truth of the allegations sought to be 
established, except that such measure or degree of proof is more than 
that required under preponderance of the evidence, but less than that 
required for proof beyond a reasonable doubt.
    (c) Effective Date.--This section shall apply to claims accruing or 
actions brought on or after the expiration of the 2-year period that 
begins on the date of the enactment of this Act.

SEC. 151. PREEMPTION.

    (a) In General.--This part supersedes any State law only to the 
extent that State law--
            (1) permits the recovery of a greater amount of damages by 
        a plaintiff;
            (2) permits the collection of a greater amount of 
        attorneys' fees by a plaintiff's attorney;
            (3) establishes a longer period during which a medical 
        malpractice liability claim may be initiated; or
            (4) establishes a stricter standard for determining whether 
        a defendant was negligent or for determining the liability of 
        defendants described in section 150(a) in actions described in 
        such section.
    (b) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in subsection (a) shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976;
            (4) preempt State choice-of-law rules with respect to 
        claims brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss a claim of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.

 Part 3--Requirements for State Alternative Dispute Resolution Systems 
                                 (ADR)

SEC. 161. BASIC REQUIREMENTS FOR ADR.

    (a) In General.--A State's alternative dispute resolution system 
meets the requirements of this section if the system--
            (1) applies to all medical malpractice liability claims 
        under the jurisdiction of the State courts;
            (2) requires that a written opinion resolving the dispute 
        be issued that contains findings of fact relating to the 
        dispute;
            (3) requires individuals who hear and resolve claims under 
        the system to meet such qualifications as the State may require 
        (in accordance with regulations of the Secretary);
            (4) is approved by the State or by local governments in the 
        State;
            (5) with respect to a State system that consists of 
        multiple dispute resolution procedures--
                    (A) permits the parties to a dispute to select the 
                procedure to be used for the resolution of the dispute 
                under the system, and
                    (B) if the parties do not agree on the procedure to 
                be used for the resolution of the dispute, assigns a 
                particular procedure to the parties;
            (6) provides for the transmittal to the State agency 
        responsible for monitoring or disciplining health care 
        professionals and health care providers of any findings made 
        under the system that such a professional or provider committed 
        malpractice, unless, during the 90-day period beginning on the 
        date the system resolves the claim against the professional or 
        provider, the professional or provider brings a medical 
        malpractice liability action contesting the decision made under 
        the system; and
            (7) provides for the regular transmittal to the 
        Administrator for Health Care Policy and Research of 
        information on disputes resolved under the system, in a manner 
        that assures that the identity of the parties to a dispute 
        shall not be revealed.
    (b) Application of Malpractice Liability Standards to Alternative 
Dispute Resolution.--The provisions of part 2 shall apply with respect 
to claims brought under a State's alternative dispute resolution system 
in the same manner as such provisions apply with respect to medical 
malpractice liability actions brought in the State.

SEC. 162. CERTIFICATION OF STATE SYSTEMS.

    (a) In General.--Not later than October 1 of each year (beginning 
with 1993), the Secretary, in consultation with the Attorney General, 
shall determine whether a State's alternative dispute resolution system 
meets the requirements of this part for the following calendar year.
    (b) Basis for Certification.--The Secretary shall certify a State's 
alternative dispute resolution system under this subsection if the 
Secretary determines under subsection (a) that the system meets the 
requirements of section 161.

SEC. 163. REPORTS ON IMPLEMENTATION AND EFFECTIVENESS OF ALTERNATIVE 
              DISPUTE RESOLUTION SYSTEMS.

    (a) In General.--Not later than 5 years after the date of the 
enactment of this Act, the Secretary shall prepare and submit to 
Congress a report describing and evaluating State alternative dispute 
resolution systems operated pursuant to this part.
    (b) Contents of Report.--The Secretary shall include in the report 
prepared and submitted under subsection (a)--
            (1) information on--
                    (A) the effect of such systems on the cost of 
                health care within the State,
                    (B) the impact of such systems on the access of 
                individuals to health care within the State, and
                    (C) the effect of such systems on the quality of 
                health care provided within such State; and
            (2) to the extent that such report does not provide 
        information on no-fault systems operated by States as 
        alternative dispute resolution systems pursuant to this part, 
        an analysis of the feasibility and desirability of establishing 
        a system under which medical malpractice liability claims shall 
        be resolved on a no-fault basis.

                Part 4--Other Requirements and Programs

SEC. 171. FACILITATING DEVELOPMENT AND USE OF MEDICAL PRACTICE 
              GUIDELINES.

    (a) Increase in Authorization of Appropriations.--Section 
1142(i)(1) of the Social Security Act (42 U.S.C. 1320b-12(i)(1)) is 
amended by striking subparagraphs (D) and (E) and inserting the 
following:
                    ``(D) $158,000,000 for fiscal year 1993 (of which 
                $10,000,000 shall be used for sanctioning practice 
                guidelines for purposes of an affirmative defense in 
                medical malpractice liability actions);
                    ``(E) $200,000,000 for fiscal year 1994 (of which 
                $20,000,000 shall be used for sanctioning practice 
                guidelines for purposes of an affirmative defense in 
                medical malpractice liability actions); and
                    ``(F) $20,000,000 for fiscal year 1995, to be used 
                for sanctioning practice guidelines for purposes of an 
                affirmative defense in medical malpractice liability 
                actions.''.
    (b) Consideration of Malpractice Liability Data in Developing and 
Updating Guidelines.--Section 1142(c)(5) of such Act (42 U.S.C. 1320b-
12(c)(5)) is amended by striking ``claims data'' and all that follows 
through ``patients'' and inserting the following: ``claims data, data 
on clinical and functional status of patients, and data on medical 
malpractice liability actions''.
    (c) Development of Reporting Forms for State ADR Systems.--The 
Secretary, in consultation with the Administrator for Health Care 
Policy and Research, shall develop a standard reporting form to be used 
by State alternative dispute resolution systems in transmitting 
information to the Administrator pursuant to section 161(a)(6) on 
disputes resolved under such systems.
    (d) Study of Effect of Guidelines on Medical Malpractice.--
            (1) Study.--The Secretary shall conduct a study of the 
        effect of the use of the medical practice guidelines developed 
        by the Administrator for Health Care Policy and Research on the 
        incidence of and the costs associated with medical malpractice.
            (2) Reports.--(A) Not later than 1 year after the date of 
        the enactment of this Act, the Secretary shall submit an 
        interim report to Congress describing the availability and use 
        of medical practice guidelines and the aggregate costs 
        associated with medical malpractice.
            (B) Not later than 5 years after the date of the enactment 
        of this Act, the Secretary shall submit a report to Congress on 
        the study conducted under paragraph (1), together with 
        recommendations regarding expanding the use of medical practice 
        guidelines for determining the liability of health care 
        professionals and health care providers for medical 
        malpractice.

SEC. 172. PERMITTING STATE PROFESSIONAL SOCIETIES TO PARTICIPATE IN 
              DISCIPLINARY ACTIVITIES.

    (a) Role of Professional Societies.--Notwithstanding any other 
provision of State or Federal law, a State agency responsible for the 
conduct of disciplinary actions for a type of health care practitioner 
may enter into agreements with State or county professional societies 
of such type of health care practitioner to permit such societies to 
participate in the licensing of such health care practitioner, and to 
review any health care malpractice action, health care malpractice 
claim or allegation, or other information concerning the practice 
patterns of any such health care practitioner. Any such agreement shall 
comply with subsection (b).
    (b) Requirements of Agreements.--Any agreement entered into under 
subsection (a) for licensing activities or the review of any health 
care malpractice action, health care malpractice claim or allegation, 
or other information concerning the practice patterns of a health care 
practitioner shall provide that--
            (1) the health care professional society conducts such 
        activities or review as expeditiously as possible;
            (2) after the completion of such review, such society shall 
        report its findings to the State agency with which it entered 
        into such agreement;
            (3) the conduct of such activities or review and the 
        reporting of such findings be conducted in a manner which 
        assures the preservation of confidentiality of health care 
        information and of the review process; and
            (4) no individual affiliated with such society is liable 
        for any damages or injury directly caused by the individual's 
        actions in conducting such activities or review.
    (c) Agreements Not Mandatory.--Nothing in this section may be 
construed to require a State to enter into agreements with societies 
described in subsection (a) to conduct the activities described in such 
subsection.
    (d) Effective Date.--This section shall take effect 2 years after 
the date of the enactment of this Act.

SEC. 173. REQUIREMENTS FOR RISK MANAGEMENT PROGRAMS.

    (a) Requirements for Providers.--Each State shall require each 
health care professional and health care provider providing services in 
the State to participate in a risk management program to prevent and 
provide early warning of practices which may result in injuries to 
patients or which otherwise may endanger patient safety.
    (b) Requirements for Insurers.--Each State shall require each 
entity which provides health care professional or provider liability 
insurance to health care professionals and health care providers in the 
State to--
            (1) establish risk management programs based on data 
        available to such entity or sanction programs of risk 
        management for health care professionals and health care 
        providers provided by other entities; and
            (2) require each such professional or provider, as a 
        condition of maintaining insurance, to participate in one 
        program described in paragraph (1) at least once in each 3-year 
        period.
    (c) Effective Date.--This section shall take effect 2 years after 
the date of the enactment of this Act.

SEC. 174. GRANTS FOR MEDICAL SAFETY PROMOTION.

    (a) Research on Medical Injury Prevention and Compensation.
            (1) In general.--The Secretary shall make grants for the 
        conduct of basic research in the prevention of and compensation 
        for injuries resulting from health care professional or health 
        care provider malpractice, and research of the outcomes of 
        health care procedures.
            (2) Preference for research on certain activities.--In 
        making grants under paragraph (1), the Secretary shall give 
        preference to applications for grants to conduct research on 
        the behavior of health care providers and health care 
        professionals in carrying out their professional duties and of 
        other participants in systems for compensating individuals 
        injured by medical malpractice, the effects of financial and 
        other incentives on such behavior, the determinants of 
        compensation system outcomes, and the costs and benefits of 
        alternative compensation policy options.
            (3) Application.--The Secretary may not make a grant under 
        paragraph (1) unless an applicant submits an application to the 
        Secretary at such time, in such form, in such manner, and 
        containing such information as the Secretary may require.
    (b) Grants for Licensing and Disciplinary Activities.--
            (1) In general.--The Secretary shall make grants to States 
        to assist States in improving the State's ability to license 
        and discipline health care professionals.
            (2) Uses for grants.--A State may use a grant awarded under 
        subsection (a) to develop and implement improved mechanisms for 
        monitoring the practices of health care professionals or for 
        conducting disciplinary activities.
            (3) Technical assistance.--The Secretary shall provide 
        technical assistance to States receiving grants under paragraph 
        (1) to assist them in evaluating their medical practice acts 
        and procedures and to encourage the use of efficient and 
        effective early warning systems and other mechanisms for 
        detecting practices which endanger patient safety and for 
        disciplining health care professionals.
            (4) Applications.--The Secretary may not make a grant under 
        paragraph (1) unless the applicant submits an application to 
        the Secretary at such time, in such form, in such manner, and 
        containing such information as the Secretary shall require.
    (c) Grants for Public Education Programs.--
            (1) In general.--The Secretary shall make grants to States 
        and to local governments, private nonprofit organizations, and 
        health professional schools (as defined in paragraph (3)) for--
                    (A) educating the general public about the 
                appropriate use of health care and realistic 
                expectations of medical intervention;
                    (B) educating the public about the resources and 
                role of health care professional licensing and 
                disciplinary boards in investigating claims of 
                incompetence or health care malpractice; and
                    (C) developing programs of faculty training and 
                curricula for educating health care professionals in 
                quality assurance, risk management, and medical injury 
                prevention.
            (2) Applications.--The Secretary may not make a grant under 
        paragraph (1) unless the applicant submits an application to 
        the Secretary at such time, in such form, in such manner, and 
        containing such information as the Secretary shall require.
            (3) Health professional school defined.--In paragraph (1), 
        the term ``health professional school'' means a school of 
        nursing (as defined in section 853(2) of the Public Health 
        Service Act) or a school or program described in section 799(1) 
        of such Act.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated not more than $15,000,000 for each of the first 5 fiscal 
years beginning on or after the date of the enactment of this Act for 
grants under this section.

SEC. 175. STUDY OF BARRIERS TO VOLUNTARY SERVICE BY PHYSICIANS.

    (a) Study.--The Secretary shall conduct a study to determine the 
factors preventing or discouraging physicians (whether practicing or 
retired) from volunteering to provide health care services in medically 
underserved areas.
    (b) Reports.--(1) Not later than 1 year after the date of the 
enactment of this Act, the Secretary shall submit an interim report to 
Congress on the study conducted under subsection (a), together with the 
Secretary's recommendations for actions to increase the number of 
physicians volunteering to provide health care services in medically 
underserved areas.
    (2) Not later than 5 years after the date of the enactment of this 
Act, the Secretary shall submit a final report to Congress on the study 
conducted under subsection (a) (taking into account the effects of this 
subtitle on the incidence and costs of medical malpractice), together 
with the Secretary's recommendations for actions to increase the number 
of physicians volunteering to provide health care services in medically 
underserved areas.

                  Subtitle E--Medical Education Reform

SEC. 181. LIMITATION ON MEDICARE HOSPITAL PAYMENT FOR DIRECT AND 
              INDIRECT GRADUATE MEDICAL EDUCATION SUPPORT AND FEDERAL 
              ASSISTANCE FOR INSURED MEDICAL STUDENT LOANS FOR NON-
              PRIMARY CARE PHYSICIANS.

    (a) Medicare Direct Graduate Medical Education Funding.--Section 
1886(h) of the Social Security Act (42 U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (1), by inserting ``subject to paragraph 
        (6),'' after ``1861(v),'', and
            (2) by adding at the end the following new paragraph:
            ``(6) Transition to equal assistance for primary care.--
                    ``(A) Plan.--The Secretary shall develop a plan for 
                adjusting payments made under this section in a manner 
                that--
                            ``(i) results, for each fiscal year 
                        beginning more than 10 years after the date of 
                        the enactment of this paragraph, in aggregate 
                        expenditures under this subsection for approved 
                        medical residency training programs in primary 
                        care fields equal to 50 percent of the 
                        aggregate expenditures under this subsection 
                        for all training programs, and
                            ``(ii) does not result in expenditures 
                        under this section exceeding the expenditures 
                        that would otherwise have been made under this 
                        subsection without regard to this paragraph.
                Within 1 year after the date of the enactment of this 
                paragraph, the Secretary shall submit a report to 
                Congress on the plan developed under this subparagraph.
                    ``(B) Implementation.--Unless the Congress 
                otherwise provides by law, the Secretary is authorized 
                to implement the plan developed under subparagraph 
                (A).''.
    (b) Medicare Indirect Medical Education Funding.--Section 
1886(d)(5)(B) of such Act is amended by adding at the end the following 
new clause:
            ``(v) Notwithstanding the previous provisions of this 
        subparagraph, the Secretary shall develop a plan for adjusting 
        additional payments made under this subparagraph in a manner 
        that--
                    ``(I) results, for each fiscal year beginning more 
                than 10 years after the date of the enactment of this 
                clause, in aggregate expenditures under this 
                subparagraph for indirect costs of medical education of 
                physicians in primary care fields equal to 50 percent 
                of the aggregate additional payments under this 
                subparagraph, and
                    ``(II) does not result in additional payments under 
                this subparagraph exceeding the payments that would 
                otherwise have been made under this subparagraph 
                without regard to this clause.
        Within 1 year after the date of the enactment of this clause, 
        the Secretary shall submit a report to Congress on the plan 
        developed under this clause. Unless the Congress otherwise 
        provides by law, the Secretary is authorized to implement the 
        plan developed under this clause.''.
    (c) Insured Student Loans.--Section 702 of the Public Health 
Service Act is amended by adding at the end the following new 
subsection:
    ``(d)(1) The Secretary shall develop and implement a plan for the 
insuring of loans under this subpart in a manner that results in 
aggregate new loans made for each fiscal year beginning more than 10 
years after the date of the enactment of this subsection and for 
installments with respect to such loans pursuant to lines of credit 
under this subpart for students at schools of medicine for students in 
primary care fields equal to 50 percent of the aggregate of such loans 
and installments for students in any medical field at such schools of 
medicine.
    ``(2) Within 1 year after the date of the enactment of this 
subsection, the Secretary shall submit a report to Congress on the plan 
developed under paragraph (1). Unless the Congress otherwise provides 
by law, the Secretary is authorized to implement the plan developed 
under paragraph (1).''.

SEC. 182. STATE COMPREHENSIVE HEALTH PROFESSIONS EDUCATION PLANS.

    Each State shall develop a comprehensive plan to identify the 
health personnel needs of the residents of the State, addressing 
shortages of and specialty requirements for health care providers.

                   Subtitle F--Public Delivery System

SEC. 183. IDENTIFICATION OF MEDICALLY UNDERSERVED POPULATIONS.

    The Secretary of Health and Human Services, through the Public 
Health Service, shall develop national standards to identify medically 
underserved populations and the areas in which such populations are.

SEC. 184. STATE COMPREHENSIVE PLANS FOR MEDICALLY UNDERSERVED 
              POPULATIONS.

    (a) In General.--Each State shall develop a comprehensive plan for 
addressing the health care needs of populations identified, under the 
standards established under section 183, as medically underserved.
    (b) Use of Resources.--Each such plan shall utilize, in the most 
efficient manner possible, the current resources of Federal, State, and 
local governments, including local public health clinics.

SEC. 185. PUBLICLY-FUNDED HEALTH CENTERS SERVING MEDICALLY UNDERSERVED 
              AREAS.

    (a) Objective.--It is the policy of the Congress to provide for at 
least one publicly-funded health center in each area identified, under 
section 186, as serving medically underserved populations.
    (b) Additional Authorization of Appropriations.--In addition to the 
amounts otherwise authorized, there are authorized to be appropriated 
such additional amounts to provide for such additional grants under 
sections 329, 330, and 340 of the Public Health Service Act (relating 
to migrant health, community health centers, and grant programs for 
certain health services for the homeless) as may be required to carry 
out the policy stated in subsection (a).

SEC. 186. OFFICE OF DISEASE PREVENTION AND HEALTH PROMOTION.

    (a) In General.--Section 1701(a)(11) of the Public Health Service 
Act (42 U.S.C. 300u(a)(11)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C),
            (2) by redesignating subparagraph (D) as subparagraph (E), 
        and
            (3) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) promote individual responsibility in personal 
                health care and in the use of valuable health care 
                resources; and''.
    (b) Funding.--It is the sense of the Congress that the amounts that 
are appropriated pursuant to section 1701(b) of the Public Health 
Service Act should be increased for fiscal year 1993 and each fiscal 
year thereafter in a manner sufficient to permit the Office of Disease 
Prevention and Health Promotion to carry out--
            (1) its duties under section 1701(a)(1)(D) of such Act (as 
        amended by subsection (a)), and
            (2) the activities for which additional funding was 
        requested in the President's request for appropriations for the 
        Office for fiscal year 1993, including implementation the 
        initiatives to ``Put Prevention into Practice'', for ``Healthy 
        Schools'', and for ``Health Communication Technology''.

SEC. 187. CONSOLIDATION OF FEDERAL ACTIVITIES RELATING TO NUTRITION.

    (a) In General.--The President shall provide for the coordination 
and, to the extent appropriate, consolidation of all Federal activities 
and programs relating to nutrition.
    (b) Purposes.--The coordination and consolidation required by 
subsection (a) shall--
            (1) eliminate confusing and contradictory Federal policies 
        with respect to nutritional issues,
            (2) place greater emphasis on the relevance of nutrition to 
        disease prevention and health promotion, and
            (3) promote public education on the effects of nutrition on 
        personal health.

SEC. 188. DEMONSTRATION PROJECTS ON HEALTH CARE DECISIONMAKING.

    (a) In General.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
establish under section 1701(a)(11) of the Public Health Service Act at 
least 4 demonstration projects to test alternative ways of promoting 
informed decisionmaking by providers and patients on the appropriate 
utilization of expensive life-sustaining technology.
    (b) Priorities.--The demonstration projects under subsection (a) 
shall include at least the following demonstrations projects:
            (1) A demonstration project, based on the ``Health 
        Decisions U.S.A.'' demonstration, to educate the public about 
        the implications of utilizing new medical technologies and to 
        measure the effects of such education on individual behavior.
            (2) A demonstration project to improve the validity and 
        reliability of computerized data systems designed to permit 
        patients and their families to assess the likely outcomes of 
        using particular medical technologies.
            (3) A demonstration project to test the efficacy of 
        educating individuals in various settings, including--
                    (A) the home,
                    (B) a physician's office, and
                    (C) upon admission to a health care facility,
        about their rights under State law to make decisions regarding 
        their medical treatment.
            (4) A demonstration project that provides for participation 
        by experts on medical ethics in the development of clinical 
        practice guidelines.
    (c) Reports and Evaluations.--The Secretary shall submit to 
Congress--
            (1) an annual report on the status of each demonstration 
        project conducted under this section, and
            (2) a final report to the Congress on each such project not 
        later than one year after the close of the project.
The reports required by paragraph (2) shall be accompanied by such 
recommendations for legislation as the Secretary determines to be 
appropriate to promote informed decisionmaking by physicians and 
patients on the utilization of medical technologies.
    (d) Funding.--There are authorized to be appropriated such sums as 
may be necessary to carry out this section.

SEC. 189. ACTION PLAN ON HEALTH PROMOTION AND DISEASE PREVENTION.

    (a) In General.--The Secretary of Health and Human Services shall 
develop an action plan for reducing the incidence in the United States 
of the following health risk factors which have been identified in the 
publication Healthy People, 2000:
            (1) Smoking.
            (2) High blood pressure.
            (3) High blood cholesterol.
            (4) Overweight.
            (5) Sedentary lifestyle.
            (6) High fat diet.
            (7) Inadequate childhood immunization.
            (8) Heavy use of alcohol.
            (9) Failure to use seat belts.
    (b) Review of Federal Policies.--In developing the action plan 
under subsection (a), the Secretary shall identify current Federal 
policies that may hinder attainment of the goals of the plan and shall 
consult with the agencies responsible for the implementation of these 
policies.
    (c) Reports.--The Secretary shall--
            (1) transmit the action plan required by subsection (a) to 
        the Congress not later than one year after the date of the 
        enactment of this Act, and
            (2) submit to the Congress at least every 2 years 
        thereafter a report that--
                    (A) describes progress made toward reducing the 
                incidence of the health risk factors specified in such 
                subsection, and
                    (B) includes recommendations for such regulatory 
                and legislative changes and other actions that should 
                be taken to reduce further the incidence of these 
                health risk factors.

                     Subtitle G--Public Disclosure

SEC. 191. DEVELOPMENT OF NATIONAL STANDARDS FOR DISCLOSURE OF HEALTH 
              CARE INFORMATION; IMPLEMENTATION BY STATES.

    (a) National Standards.--
            (1) In general.--The Secretary of Health and Human Services 
        shall establish standards for the collection and disclosure of 
        health care data pursuant to this subtitle.
            (2) Elements of standards.--In establishing such standards, 
        the Secretary shall develop--
                    (A) a computerized system for use in the 
                collection, analysis, and disclosure of data collected 
                pursuant to this subtitle;
                    (B) a uniform claims format for use by all data 
                sources and providers in billing for health care 
                services for which data are required to be submitted 
                pursuant to this subtitle;
                    (C) a mechanism--
                            (i) to avoid duplicative reporting of data 
                        for health care services furnished under titles 
                        XVIII and XIX of the Social Security Act, and
                            (ii) to coordinate and integrate the data 
                        collected for such services with the data 
                        collected for other health care services; and
                    (D) a methodology for use in measuring the quality 
                and effectiveness of health care services furnished by 
                providers.
    (b) State Implementation.--
            (1) Application.--Any State desiring to perform the data 
        collection and disclosure functions specified in this subtitle 
        for data sources and providers in the State may submit an 
        application to the Secretary. Such application shall be in a 
        form and manner specified by the Secretary.
            (2) Approval and financial assistance.--If the Secretary 
        determines that the State has demonstrated in its application 
        that it has the ability to carry out such functions and to 
        comply with the standards and other requirements of this 
        subtitle--
                    (A) the Secretary shall approve such application,
                    (B) the State shall become responsible for the 
                performance of the data collection and disclosure 
                functions specified in this subtitle for data sources 
                and providers in the State, and
                    (C) the Secretary shall provide the State with 
                financial assistance in such amount as is reasonably 
                sufficient to carry out such functions in the State.
            (3) Implementation in case of no qualifying state.--If, 
        with respect to a State, an application has not been approved 
        under paragraph (2), the Secretary shall become responsible for 
        the performance of the data collection and disclosure functions 
        specified in this subtitle for data sources and providers in 
        the State.
            (4) Responsible governmental entity defined.--In this 
        subtitle, the term ``responsible governmental entity'' means 
        for data sources and providers in a State--
                    (A) the State, if it has been granted such 
                responsibility under paragraph (2), or
                    (B) the Secretary, if the State has not been 
                granted such responsibility.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this subtitle 
(including providing financial assistance to qualifying States under 
subsection (b)(2)).

SEC. 192. DATA SUBMISSION AND COLLECTION.

    (a) Submission of Data.--The responsible governmental entity shall 
collect, and data sources shall submit to such entity, all data 
required in this section, according to uniform submission formats, 
coding systems and other technical specifications necessary to render 
the incoming data substantially valid, consistent, compatible and 
manageable using electronic data processing according to data 
submission schedules, such schedules to avoid, to the extent possible, 
submission of identical data from more than one data source, 
established and promulgated by the Secretary pursuant to section 
191(a)(2).
    (b) Uniform Claims Format.--The Secretary shall adopt, within 180 
days of the date of the enactment of this Act, a uniform claims format. 
The Secretary shall furnish such format to all data sources and the 
form shall be utilized and maintained by all data sources for all 
services covered under this subtitle. Such form shall have such fields 
as may be necessary to provide all of the data set forth in subsections 
(c) and (d).
    (c) Data Elements.--For each covered service, the responsible 
governmental entity shall collect the following data elements:
            (1) Uniform patient identifier, continuous across multiple 
        episodes and providers.
            (2) Patient date of birth.
            (3) Patient sex.
            (4) Patient ZIP Code number.
            (5) Date of admission.
            (6) Date of discharge.
            (7) Principal and up to four secondary diagnoses by 
        standard code.
            (8) Principal procedure by standard code and date.
            (9) Up to three secondary procedures by standard codes and 
        dates.
            (10) Uniform health care facility identifier, continuous 
        across episodes, patients, and providers.
            (11) Uniform identifier of admitting physician, by unique 
        physician identification number established by the Secretary, 
        continuous across episodes, patients, and providers.
            (12) Uniform identifier of consulting physicians, by unique 
        physician identification number established by the Secretary, 
        continuous across episodes, patients, and providers.
            (13) Total charges of health care facility, segregated into 
        major categories, including room and board, radiology, 
        laboratory, operating room, drugs, medical supplies and other 
        goods and services according to guidelines specified by the 
        Secretary.
            (14) Actual payments to health care facility, segregated, 
        if available, according to the categories specified in 
        paragraph (13).
            (15) Charges of each physician or professional rendering 
        service relating to an incident of hospitalization or treatment 
        in an ambulatory service facility.
            (16) actual payments to each physician or professional 
        rendering service pursuant to paragraph (15).
            (17) Uniform identifier of primary payor.
            (18) ZIP Code number of facility where health care service 
        is rendered.
            (19) Uniform identifier for payor group contract number.
            (20) Patient discharge status.
            (21) Provider service effectiveness and provider quality 
        pursuant to section 191(a)(2)(D) and subsection (d).
    (d) Provider Quality and Provider Service Effectiveness Data 
Elements.--In carrying out its duty to collect data on provider quality 
and provider service effectiveness under subsection (c)(21), the 
responsible governmental entity shall utilize the methodology developed 
under section 191(a)(2)(D).
    (e) Reserve Field Utilization and Addition or Deletion of Data 
Elements.--The Secretary shall include in the uniform claims format a 
reserve field. The Secretary may utilize the reserve field by adding 
other data elements beyond those specified in subsection (d) or the 
Secretary may delete data elements from the format pursuant to 
regulation after obtaining a cost-benefit analysis of the proposed 
addition or deletion which shall include the cost to data sources of 
any proposed additions.
    (f) Other Data Required to be Submitted.--Providers are hereby 
required to submit and the responsible governmental entity shall 
collect the following additional data, if such data is not available to 
the entity from public records:
            (1) Audited annual financial reports of all hospitals and 
        ambulatory service facilities providing covered services.
            (2) Additional data including data which can be used to 
        provide at least the following information:
                    (A) The incidence of medical and surgical 
                procedures in the population for individual providers.
                    (B) Physicians who provide covered services and 
                accept medical assistance patients.
                    (C) Physicians who provide covered services and 
                accept medicare assignment as full payment.
                    (D) Status of licensure and accreditation of 
                hospitals and ambulatory service facilities.
                    (E) Mortality rates for specified diagnoses and 
                treatments, grouped by severity, for individual 
                providers.
                    (F) Rates of infection for specified diagnoses and 
                treatments, grouped by severity, for individual 
                providers.
                    (G) Morbidity rates for specified diagnoses and 
                treatments, grouped by severity, for individual 
                providers.
                    (H) Readmission rates for specified diagnoses and 
                treatments, grouped by severity, for individual 
                providers.
                    (I) Rate of incidence of postdischarge professional 
                care for selected diagnoses and treatments, grouped by 
                severity, for individual providers.
    (g) Allowance for Clarification or Dissents.--The responsible 
governmental entity shall maintain a file of written statements 
submitted by data sources who wish to provide an explanation of data 
that they feel might be misleading or misinterpreted. The entity shall 
provide access to such file to any person and shall, where practical, 
in the entity's reports and data files indicate the availability of 
such statements. When the entity agrees with such statements, the 
entity shall correct the appropriate data and comments in its data 
files and subsequent reports.
    (h) Availability of Data.--Nothing in this subtitle shall prohibit 
a purchaser from obtaining from its health care insurer, nor relieve 
such a health care insurer from the obligation of providing such 
purchaser, on terms consistent with past practices, data previously 
provided or additional data not currently provided to such provider by 
such insurer pursuant to any existing or future arrangement, agreement, 
or understanding.

SEC. 193. DATA DISSEMINATION AND PUBLICATION.

    (a) Public Reports.--Subject to the restrictions on access to data 
in section 194 and utilizing the data collected under section 192 as 
well as other data, records, and matters of record available to it, the 
responsible governmental entity shall prepare and issue public reports 
according to the following provisions:
            (1) The responsible governmental entity shall, for every 
        provider and within appropriate geographic areas (approved by 
        the Secretary) and for those inpatient and outpatient services 
        which, when ranked by order of frequency, account for at least 
        65 percent of all covered services and which, when ranked by 
        order of total payments account for at least 65 percent of 
        total payments, prepare and issue quarterly reports that at 
        least provide information on the following:
                    (A) Comparisons among all providers of payments 
                received, charges, population-based admission or 
                incidence rates, and provider service effectiveness, 
                such comparisons to be grouped according to diagnosis 
                and severity, and to identify each provider by name and 
                type or specialty.
                    (B) Comparisons among all providers, except 
                physicians, of inpatient and outpatient charges and 
                payments for room and board, ancillary services, drugs, 
                equipment and supplies and total services, such 
                comparisons to be grouped according to provider quality 
                and provider service effectiveness and according to 
                diagnosis and severity, and to identify each health 
                care facility by name and type.
                    (C) Until the methodology to measure provider 
                quality and provider service effectiveness is developed 
                under section 191(a)(2)(D), comparisons among all 
                providers, grouped according to diagnosis, procedure, 
                and severity, which identify facilities by name and 
                type and physicians by name and specialty, of charges 
                and payment received, readmission rates, mortality 
                rates, morbidity rates, and infection rates.
                    (D) The incidence rate of selected medical or 
                surgical procedures, the provider service effectiveness 
                and the payments received for other providers, 
                identified by the name and type of specialty, for which 
                these elements vary significantly from the norms for 
                all providers.
            (2) In preparing reports under paragraph (1), the 
        responsible governmental entity shall ensure that factors which 
        have the effect of either reducing provider revenue or 
        increasing provider costs, and other factors beyond a 
        provider's control which reduce the provider competitiveness in 
        the market place, are explained in the reports. The entity 
        shall also ensure that any clarifications and dissents 
        submitted by individual providers under section 192(g) are 
        noted in any reports that include release of data on that 
        individual provider.
            (3) The responsible governmental entity shall, for all 
        providers and within appropriate geographic areas approved 
        under paragraph (1), prepare and issue quarterly reports that 
        at least provide information on the following:
                    (A) The number of physicians, by specialty, on the 
                staff of each hospital or ambulatory service facility 
                and those physicians on the staff that accept medicare 
                assignment as full payment and that accept medical 
                assistance patients.
                    (B) The status of hospitals respecting 
                accreditation and licensure.
        If such entity is not the Secretary, the entity shall transmit 
        a copy of each report under this paragraph to the Secretary.
            (4) The responsible governmental entity shall publish all 
        reports issued under paragraph (3) in the same periodical 
        publication in which regulations of the governmental entity are 
        published and shall publish, in at least one newspaper of 
        general circulation in each approved geographic area, reports 
        on the providers in that area and areas adjacent to it. In 
        addition, the responsible governmental entity shall advertise 
        the availability of these reports and the charge for 
        duplication in such periodical publication and in at least one 
        newspaper of general circulation in each such approved 
        geographic area at least once in each calendar quarter.
    (b) Raw Data Reports and Consumer Access to Data.--The responsible 
governmental entity shall provide special reports derived from raw data 
and a means for computer-to-computer access to raw data to any 
purchaser, pursuant to section 194(f). The responsible governmental 
entity shall provide such reports and computer-to-computer access, at 
the entity's discretion, to other parties, pursuant to section 194(g). 
The entity shall provide these special reports and computer-to-computer 
access in as timely a fashion as the entity's responsibilities to 
publish the public reports required in this section will allow. Any 
such provision of special reports or computer-to-computer access by the 
council shall be made only subject to the restrictions on access to raw 
data set forth in section 194(b) and only after payment for costs of 
preparation or duplication pursuant to section 194 (f) or (g).

SEC. 194. ACCESS TO DATA.

    (a) Public Access.--The information and data received by a 
responsible governmental entity under this subtitle shall be utilized 
by the entity for the benefit of the public. Subject to the specific 
limitations set forth in this section, the entity shall make 
determinations on requests for information in favor of access.
    (b) Limitations on Access.--Unless specifically provided in this 
subtitle, the responsible governmental entity shall not release--
            (1) any raw data that does not simultaneously disclose 
        payment, as well as provider quality and provider service 
        effectiveness information;
            (2) any raw data of the entity which could reasonably be 
        expected to reveal the identity of an individual patient;
            (3) any raw data which could reasonably be expected to 
        reveal the identity of any purchaser, other than a purchaser 
        requesting data on its own group or an entity entitled to such 
        purchaser's data pursuant to subsection (f);
            (4) any raw data relating to actual payments to any 
        identified provider made by any purchaser, except that this 
        paragraph shall not apply to access by a purchaser requesting 
        data on the group for which it purchases or otherwise provides 
        covered services or to access to that same data by an entity 
        entitled to the purchaser's data pursuant to subsection (f); 
        and
            (5) any raw data disclosing discounts or differentials 
        between payments accepted by providers for services and their 
        billed charges obtained by identified payors from identified 
        providers unless comparable data on all other payors is also 
        released and the entity determines that the release of such 
        information is not prejudicial or inequitable to any individual 
        payor or provider or group thereof.
In making determinations under paragraph (5), the entity shall consider 
that the purpose of this subtitle is primarily concerned with the 
analysis and dissemination of payments to providers, not with 
discounts.
    (c) Unauthorized Use of Data.--Any person who knowingly releases 
data violating the patient confidentiality, actual payments, discount 
data or raw data safeguards set forth in this section to an 
unauthorized person is subject to imprisonment of not more than 5 
years, or fine according to title 18, United States Code.
    (d) Unauthorized Access to Data.--Should any person inadvertently 
or by error of a responsible governmental entity gain access to data 
that violates the safeguards set forth in this section, the data must 
immediately be returned, without duplication, to the entity with proper 
notification.
    (e) Public Access to Records.--All public records prepared by the 
entity shall be available to the public for a reasonable fee, not to 
exceed the cost of duplication.
    (f) Access to Raw Data by Purchasers.--Subject to the limitations 
on access set forth in subsection (b), the responsible governmental 
entity shall provide access to its raw data to purchasers in accordance 
with the following procedure:
            (1) Special reports derived from raw data of the entity 
        shall be provided by the entity to any purchaser requiring such 
        reports.
            (2) A means to enable computer-to-computer access by any 
        purchaser to raw data shall be developed, adopted, and 
        implemented by the entity, and the entity shall provide such 
        access to raw data to any purchaser upon request.
            (3) In the event that any employer obtains from the entity, 
        pursuant to paragraph (1) or (2), data pertaining to the 
        employer's employees and their dependents for whom the employer 
        purchases or otherwise provides covered services and who are 
        represented by a certified collective bargaining 
        representative, such collective bargaining representative shall 
        be entitled to that same data, after payment of fees as 
        specified in paragraph (4). Likewise, should a certified 
        collective bargaining representative obtain from the entity, 
        pursuant to paragraph (1) or (2), data pertaining to members of 
        the collective bargaining unit and their dependents who are 
        employed by and for whom covered services are purchased or 
        otherwise provided by any employer, the employer shall be 
        entitled to that same data, after payment of fees as specified 
        in paragraph (4).
            (4) In providing for access to raw data, the responsible 
        governmental entity shall charge the purchasers which 
        originally obtained such access a fee sufficient to cover the 
        costs to prepare and provide special reports requested pursuant 
        to paragraph (1) or to provide computer-to-computer access to 
        its raw data requested pursuant to paragraph (2). Should a 
        second or subsequent party or parties request this same 
        information pursuant to paragraph (3), the entity shall charge 
        such party a fee sufficient to cover only the costs of 
        duplicating the original access.
    (g) Access to Raw Data by Other Parties.--Subject to the 
limitations on access to raw data set forth in subsection (b), the 
responsible governmental entity may provide special reports derived 
from raw data or computer-to-computer access to parties other than 
purchasers. The entity shall publish regulations that set forth the 
criteria and the procedure the entity shall use in making 
determinations on such access. In providing such access, the entity 
shall charge the party requesting the access a fee sufficient to cover 
the entity's costs of providing such access.

SEC. 195. DEFINITIONS.

    In this subtitle:
            (1) The term ``ambulatory service facility'' means a 
        licensed facility, not part of a hospital, which provides 
        medical, diagnostic, or surgical treatment to patients not 
        requiring hospitalization, including ambulatory surgical 
        facilities, ambulatory imaging or diagnostic centers, birthing 
        centers, freestanding emergency rooms, and any other facilities 
        providing ambulatory care which charge a separate facility 
        charge. Such term does not include the offices of private 
        physicians or dentists, whether for individual or group 
        practices.
            (2) The terms ``charge'' and ``rate'' means amounts billed 
        by a provider for specific goods or services provided to a 
        patient, prior to any adjustment for contractual allowances.
            (3) The term ``covered services'' means any health care 
        services or procedures connected with episodes of illness that 
        require either inpatient hospital care or major ambulatory 
        service such as surgical, medical, or major radiological 
        procedures, including any initial and followup outpatient 
        services associated with the episode of illness before, during, 
        or after inpatient hospital care or major ambulatory service. 
        The term does not include routine outpatient services connected 
        with episodes of illness that do not require hospitalization or 
        major ambulatory service.
            (4) The term ``data source'' means a hospital, ambulatory 
        service facility, physician, health maintenance organization, 
        hospital or medical service plan, commercial insurer, self-
        insured employer providing health or accident coverage, 
        administrator of a self-insured or partially self-insured 
        health or accident plan providing covered services, any health 
        and welfare fund that provides health or accident benefits or 
        insurance pertaining to covered services, and any other payor 
        for covered services in the United States other than an 
        individual.
            (5) The term ``health care facility'' means a general or 
        special hospital, including tuberculosis and psychiatric 
        hospitals, kidney disease treatment centers, including 
        freestanding hemodialysis units, and ambulatory service 
        facilities, and hospices (both profit and nonprofit).
            (6) The term ``health maintenance organization'' means an 
        organized system which combines the delivery and financing of 
        health care and which provides basic health care services to 
        voluntarily enrolled subscribers for a fixed prepaid fee.
            (7) The term ``hospital'' means any institution licensed in 
        a State as a hospital, including hospitals for tuberculosis, 
        mental disease or chronic illness.
            (8) The term ``major ambulatory service'' means surgical or 
        medical procedures, including diagnostic and therapeutic 
        radiological procedures, commonly performed in hospitals or 
        ambulatory service facilities, which are not of a type commonly 
        performed or which cannot be safely performed in physicians' 
        offices and which require special facilities such as operating 
        rooms or suites or special equipment such as fluoroscopic 
        equipment or computed tomographic scanners, or a postprocedure 
        recovery room or short-term convalescent room.
            (9) The term ``medical procedure incidence variation'' 
        means a variation in the incidence in the population of 
        specific medical, surgical, and radiological procedures in any 
        given year, expressed as a deviation from the norm, as these 
        terms are defined in the classical statistical definition of 
        ``variation,'' ``incidence,'' ``deviation'', and ``norm''.
            (10) The term ``payment'' means payments that providers 
        actually accept for their services, exclusive of charity care, 
        rather than the charges they bill.
            (11) The term ``payor'' means any person or entity, 
        including health care insurers and purchasers, that make direct 
        payments to providers for covered services.
            (12) The term ``physician'' means an individual licensed 
        under State law to practice medicine and surgery.
            (13) The term ``provider'' means a hospital, an ambulatory 
        service facility, or a physician.
            (14) The term ``provider quality'' means the extent to 
        which a provider renders care that, within the capabilities of 
        modern medicine, obtains for patients medically acceptable 
        outcomes and prognoses, adjusted for patient severity, and 
        treats patients compassionately and responsively.
            (15) The term ``provider service effectiveness'' means the 
        effectiveness of services rendered by a provider, determined by 
        measurement of the medical outcome of patients grouped by 
        severity receiving those services.
            (16) The term ``purchaser'' means any corporation, labor 
        organization or other entity that purchases benefits which 
        provide covered services for an employee or member, either 
        through a health care insurer or by means of a self-funded 
        program of benefits, and a certified bargaining representative 
        that represents a group or groups of employees for whom 
        employers purchase a program of benefits which provide covered 
        services, but excluding health care insurers.
            (17) The terms ``raw data'' and ``data'' mean data 
        collected by a responsible governmental entity under section 
        192 in the form initially received.
            (18) The term ``responsible governmental entity'' has the 
        meaning given such term in section 191(b)(4).
            (19) The term ``severity'' means, in any patient, the 
        measurable degree of the potential for failure of one or more 
        vital organs.
            (20) The term ``Secretary'' means the Secretary of Health 
        and Human Services.
            (21) The term ``State'' means the 50 States and the 
        District of Columbia.

      Subtitle H--Tax Incentives to Provide Only Minimum Benefits

SEC. 198. DENIAL OF EMPLOYER TAX DEDUCTION FOR PROVIDING HEALTH CARE 
              COVERAGE IN EXCESS OF MINIMUM BENEFITS AND DENIAL OF 
              EMPLOYEE EXCLUSION FOR SUCH EXCESS COVERAGE.

    (a) Denial of Deduction.--Section 162 of the Internal Revenue Code 
of 1986 (relating to trade or business expenses) is amended by 
redesignating subsection (m) as subsection (n) and by inserting after 
subsection (l) the following new subsection:
    ``(m) Expenses for Providing Health Care in Excess of Minimum 
Benefits.--No deduction shall be allowed under this chapter for 
expenses incurred to provide health care for any employee of the 
taxpayer (or any beneficiary of such employee) to the extent such 
expenses are attributable to benefits that are not within the minimum 
benefit package which has become effective under section 203(a)(2) of 
the American Consumers Health Care Reform Act of 1993.''
    (b) Denial of Exclusion.--The text of section 106 of such Code is 
amended to read as follows:
    ``(a) In General.--Gross income of an employee does not include 
employer-provided coverage under an accident or health plan.
    ``(b) No Exclusion for Health Care Coverage in Excess of Minimum 
Benefits.--Subsection (a) shall not apply to the extent coverage is 
provided for benefits that are not within the minimum benefit package 
which has become effective under section 203(a)(2) of the American 
Consumers Health Care Reform Act of 1993.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the first day of the 
second calendar year beginning after the date of the enactment of this 
Act, but shall not apply to taxable years beginning before the date the 
minimum benefit package has become effective under section 203(a)(2) of 
this Act.

SEC. 199. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED 
              INDIVIDUALS MADE PERMANENT AND INCREASED TO EXTENT OF 
              COSTS FOR MINIMUM BENEFITS.

    (a) Deduction Made Permanent.--
            (1) In general.--Subsection (l) of section 162 of the 
        Internal Revenue Code of 1986 (relating to special rules for 
        health insurance costs of self-employed individuals) is amended 
        by striking paragraph (6).
            (2) Technical amendment.--Paragraph (2) of section 110(a) 
        of the Tax Extension Act of 1991 is hereby repealed.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 1991.
    (b) Increase in Deduction for Minimum Benefits.--
            (1) In general.--Subsection (l) of section 162 of such Code 
        is amended by adding at the end thereof the following new 
        paragraph:
            ``(6) Full deduction for costs of minimum benefit 
        package.--Paragraph (1) shall be applied without regard to `25 
        percent of' with respect to costs attributable to benefits that 
        are within the minimum benefit package which has become 
        effective under section 203(a)(2) of the American Consumers 
        Health Care Reform Act of 1993.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning on or after the first 
        day of the second calendar year beginning after the date of the 
        enactment of this Act, but shall not apply to taxable years 
        beginning before the date the minimum benefit package has 
        become effective under section 203(a)(2) of this Act.

            TITLE II--NATIONAL HEALTH CARE REFORM PROPOSALS

           Subtitle A--National Health Care Reform Commission

SEC. 201. ESTABLISHMENT.

    (a) Establishment.--There is established an independent commission 
to be known as the National Health Care Reform Commission (in this 
title referred to as the ``Commission'').
    (b) Duties.--The Commission shall carry out the duties specified 
for it in this subtitle.
    (c) Appointment.--
            (1) Composition.--
                    (A) Size and manner of appointment.--The Commission 
                shall consist of--
                            (i) five members to be appointed by the 
                        President, by and with the advice and consent 
                        of the Senate, one of whom shall, at the time 
                        of appointment, be designated as Chairperson of 
                        the Commission;
                            (ii) two members to be appointed by the 
                        Speaker of the House of Representatives upon 
                        the recommendations of the Majority Leader and 
                        Minority Leader of the House of 
                        Representatives; and
                            (iii) two members to be appointed by the 
                        President pro tempore of the Senate upon the 
                        recommendations of the Majority Leader and 
                        Minority Leader of the Senate.
                    (B) Political affiliation.--At no time shall more 
                than three of the members appointed by the President, 
                one of the members appointed by the Speaker of the 
                House of Representatives, or one of the members 
                appointed by the President pro tempore of the Senate be 
                members of the same political party.
                    (C) Membership qualifications.--The membership of 
                the Commission shall consist of individuals who are of 
                recognized standing and distinction and who possess the 
                demonstrated capacity to discharge the duties imposed 
                on the Commission, and shall include persons possessing 
                substantial knowledge or expertise in health care 
                delivery, health care insurance, or health care 
                economics. No individual who is otherwise an officer or 
                full-time employee of the United States shall serve as 
                a member of the Commission. No member while serving on 
                the Commission may receive financial gain from direct 
                investments, employment or associations from any entity 
                with demonstrable financial interest in matters over 
                which the Commission has jurisdiction.
                    (D) Chairperson.--The Chairperson of the Commission 
                shall designate a member of the Commission to act as 
                Vice Chairperson of the Commission.
                    (E) Quorum.--A majority of the members of the 
                Commission shall constitute a quorum, but a lesser 
                number may conduct hearings.
                    (F) Term.--Members of the Commission shall be 
                appointed for a term of 5 years, except that with 
                respect to the members first appointed--
                            (i) the Chairperson and 2 members, 1 each 
                        appointed under clauses (ii) and (iii) of 
                        paragraph (1)(A), respectively, shall be 
                        appointed for a term of 5 years;
                            (ii) 3 members, 1 each appointed under 
                        clauses (i), (ii) and (iii) of paragraph 
                        (1)(A), respectively, shall be appointed for a 
                        term of 4 years; and
                            (iii) the remaining members shall be 
                        appointed for a term of 3 years.
                    (G) Vacancy.--A vacancy in the Commission shall not 
                affect its powers, but shall be filled in the same 
                manner as the original appointment, but the individual 
                appointed shall serve only for the unexpired portion of 
                the term for which the individual's predecessor was 
                appointed.
            (2) Effective date.--Appointments to the Commission shall 
        be made no later than 90 days after the date of enactment of 
        this Act.
    (d) Meetings.--The Commission shall meet at the call of the 
Chairperson, or at the call of a majority of the members of the 
Commission; but meetings shall not be held less frequently than once in 
each calendar month which begins after a majority of the membership of 
the Commission has been appointed.
    (e) Hearings.--In carrying out its duties under this section, the 
Commission, or any duly authorized committee thereof, is authorized to 
hold such hearings, sit and act at such times and places, and take such 
testimony, with respect to matters with respect to which it has a 
responsibility under this title, as the Commission or such committee 
may deem advisable. The Chairperson of the Commission or any member 
authorized by the Chairperson may administer oaths or affirmations to 
witnesses appearing before the Commission or before any committee 
thereof.
    (f) Pay and Travel Expenses.--
            (1) Pay.--
                    (A) Members.--Each member, other than the 
                Chairperson, shall be paid at a rate equal to the daily 
                equivalent of the minimum annual rate of basic pay 
                payable 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 vested in 
                the Commission.
                    (B) Chairperson.--The Chairperson shall be paid for 
                each day referred to in subparagraph (A) at a rate 
                equal to the daily equivalent of the minimum annual 
                rate of basic pay payable for level III of the 
                Executive Schedule under section 5314 of title 5, 
                United States Code.
            (2) Travel expenses.--Members shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
    (g) Staff.--
            (1) Appointment.--The Commission may employ and fix the 
        compensation of an Executive Director and such other personnel 
        (not to exceed 25) as may be necessary to carry out the duties 
        of the Commission. The employment and compensation of such 
        Director and personnel are not subject to the provisions of 
        title 5, United States Code, governing appointments in the 
        competitive service.
            (2) Detail of personnel from federal agencies.--Upon 
        request of the Commission, the head of any Federal department 
        or agency may detail any of the personnel of that department or 
        agency to the Commission to assist the Commission in carrying 
        out its duties under this title.
            (3) Federal agency assistance.--The Comptroller General of 
        the United States, the Secretary of Health and Human Services, 
        and the Administrator of General Services shall provide 
        assistance on a reimbursable basis, including the detailing of 
        employees, to the Commission in accordance with an agreement 
        entered into with the Commission.
    (h) Other Authority.--
            (1) Consultant services.--The Commission may procure by 
        contract, to the extent funds are available, the temporary or 
        intermittent services of experts or consultants pursuant to 
        section 3109 of title 5, United States Code.
            (2) Property matters.--The Commission may lease space and 
        acquire personal property to the extent funds are available.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the purposes of 
this section.

SEC. 202. ESTABLISHMENT OF NATIONAL GOALS; CONSULTATIONS; IMPROVED 
              COORDINATION; EVALUATION AND RECOMMENDATIONS ON 
              DEMONSTRATION PROJECTS.

    (a) In General.--The Commission shall develop national health care 
goals in order to--
            (1) improve access to necessary health care services;
            (2) safeguard and improve the quality of health care 
        services; and
            (3) control the cost of health care services.
    (b) Consultations.--In carrying out the responsibilities assigned 
to it under this Act, the Commission shall seek out and consider 
recommendations from a broad range of interested individuals and 
organizations, including organizations representing health care 
consumers, health care providers, health care carriers, representatives 
of State health programs, public health professionals, and the general 
public.
    (c) Improvement in Coordination.--The Commission shall examine 
steps that can be taken to better coordinate the activities of the 
Secretary of Health and Human Services and other Departments and 
agencies in promotion of the national health care goals developed under 
subsection (a) in order to meet the goals stated in the report 
``Healthy People, 2000''.
    (d) Evaluation and Recommendations Concerning Demonstration 
Projects.--The Commission shall--
            (1) advise the Secretary on the demonstration projects 
        established under subtitle B,
            (2) assist the Secretary in the evaluation of such 
        projects, and
            (3) make recommendations regarding changes that should be 
        made in laws or regulations as a result of such evaluations.

SEC. 203. ESTABLISHMENT OF MINIMUM BENEFIT PACKAGE.

    (a) Proposal.--
            (1) Submission.--Not later than 1 year after the date of 
        the enactment of this Act, the Commission shall develop and 
        submit to Congress a legislative proposal that specifies a 
        minimum benefit package consistent with this section to be used 
        for purposes of--
                    (A) the demonstration project established under 
                section 211(c)(1),
                    (B) implementing subtitle C of title I, and
                    (C) determining the tax treatment under the 
                Internal Revenue Code of 1986 (as amended by section 
                198) of amounts paid by an employer on behalf of an 
                employee for health insurance benefits in excess of the 
                minimum benefit package.
            (2) Implementation.--The minimum benefit package submitted 
        under this paragraph (1) shall not become effective for the 
        purposes specified in subparagraphs (B) and (C) of such 
        paragraph unless a joint resolution approving such package is 
        enacted in accordance with the procedures set forth in 
        subsection (d).
    (b) Benefits.--The services included in the benefit package shall 
include--
            (1) coverage for preventive, diagnostic, and therapeutic 
        services found to be medically appropriate and cost effective, 
        and
            (2) cost-sharing that provides an appropriate incentive to 
        avoid unnecessary care while avoiding excessive cost-sharing by 
        individuals with catastrophic illnesses.
    (c) Congressional Consideration of Commission Proposal.--
            (1) Rules of house of representatives and senate.--This 
        subsection is enacted by the Congress--
                    (A) as an exercise of the rulemaking power of the 
                House of Representatives and the Senate, respectively, 
                and as such is deemed a part of the rules of each 
                House, respectively, but applicable only with respect 
                to the procedure to be followed in that House in the 
                case of approval resolutions described in paragraph 
                (2), and supersedes other rules only to the extent that 
                such rules are inconsistent therewith; and
                    (B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                relating to the procedure of that House) at any time, 
                in the same manner and to the same extent as in the 
                case of any other rule of that House.
            (2) Terms of the resolution.--For purposes of subsection 
        (a), the term ``approval resolution'' means only a joint 
        resolution of the two Houses of the Congress, providing in--
                    (A) the matter after the resolving clause of which 
                is as follows: ``That the Congress approves the 
                recommendations of the National Commission on Health 
                Care Reform as submitted by the Commission on 
                ____________________________'', the blank space being 
                filled in with the appropriate date; and
                    (B) the title of which is as follows: ``Joint 
                Resolution approving the recommendation of the National 
                Commission on Health Care Reform''.
            (3) Introduction and referral.--On the day on which the 
        recommendation of the Commission is transmitted to the House of 
        Representatives and the Senate, an approval resolution with 
        respect to such recommendation shall be introduced (by request) 
        in the House of Representatives by the Majority Leader of the 
        House, for himself and the Minority Leader of the House, or by 
        Members of the House designated by the Majority Leader of the 
        House, for himself and the Minority Leader of the House, or by 
        Members of the House designated by the Majority Leader and 
        Minority Leader of the House; and shall be introduced (by 
        request) in the Senate by the Majority Leader of the Senate, 
        for himself and the Minority Leader of the Senate, or by 
        Members of the Senate designated by the Majority Leader and 
        Minority Leader of the Senate. If either House is not in 
        session on the day on which such recommendation is transmitted, 
        the approval resolution with respect to such recommendation 
        shall be introduced in the House, as provided in the preceding 
        sentence, on the first day thereafter on which the House is in 
        session. The approval resolution introduced in the House of 
        Representatives and the Senate shall be referred to the 
        appropriate committees of each House.
            (4) Amendments prohibited.--No amendment to an approval 
        resolution shall be in order in either the House of 
        Representatives or the Senate; and no motion to suspend the 
        application of this subsection shall be in order in either 
        House, nor shall it be in order in either House for the 
        Presiding Officer to entertain a request to suspend the 
        application of this subsection by unanimous consent.
            (5) Period for committee and floor consideration.--
                    (A) In general.--Except as provided in subparagraph 
                (B), if the committee or committees of either House to 
                which an approval resolution has been referred have not 
                reported it at the close of the 45th day after its 
                introduction, such committee or committees shall be 
                automatically discharged from further consideration of 
                the approval resolution and it shall be placed on the 
                appropriation calendar. A vote on final passage of the 
                approval resolution shall be taken in each House on or 
                before the close of the 45th day after the approval 
                resolution is reported by the committees or committee 
                of that House to which it was referred, or after such 
                committee or committees have been discharged from 
                further consideration of the approval resolution. If 
                prior to the passage by one House of an approval 
                resolution of that House, that House receives the same 
                approval resolution from the other House then--
                            (i) the procedure in that House shall be 
                        the same as if no approval resolution had been 
                        received from the other House; but
                            (ii) the vote on final passage shall be on 
                        the approval resolution of the other House.
                    (B) Computation of days.--For purposes of 
                subparagraph (A), in computing a number of days in 
                either House, there shall be excluded any day on which 
                the House is not in session.
            (6) Floor consideration in the house of representatives.--
                    (A) Motion to proceed.--A motion in the House of 
                Representatives to proceed to the consideration of an 
                approval resolution shall be highly privileged and not 
                debatable. An amendment to the motion shall not be in 
                order, nor shall it be in order to move to reconsider 
                the vote by which the motion is agreed to or disagreed 
                to.
                    (B) Debate.--Debate in the House of Representatives 
                on an approval resolution shall be limited to not more 
                than 20 hours, which shall be divided equally between 
                those favoring and those opposing the bill or 
                resolution. A motion further to limit debate shall not 
                be debatable. It shall not be in order to move to 
                recommit an approval resolution or to move to 
                reconsider the vote by which an approval resolution is 
                agreed to or disagreed to.
                    (C) Motion to postpone.--Motions to postpone, made 
                in the House of Representatives with respect to the 
                consideration of an approval resolution, and motions to 
                proceed to the consideration of other business, shall 
                be decided without debate.
                    (D) Appeals.--All appeals from the decisions of the 
                Chair relating to the application of the Rules of the 
                House of Representatives to the procedure relating to 
                an approval resolution shall be decided without debate.
                    (E) General rules apply.--Except to the extent 
                specifically provided in the preceding provisions of 
                this paragraph, consideration of an approval resolution 
                shall be governed by the Rules of the House of 
                Representatives applicable to other bills and 
                resolutions in similar circumstances.
            (7) Floor consideration in the senate.--
                    (A) Motion to proceed.--A motion in the Senate to 
                proceed to the consideration of an approval resolution 
                shall be privileged and not debatable. An amendment to 
                the motion shall not be in order, nor shall it be in 
                order to move to reconsider the vote by which the 
                motion is agreed to or disagreed to.
                    (B) General debate.--Debate in the Senate on an 
                approval resolution, and all debatable motions and 
                appeals in connection therewith, shall be limited to 
                not more than 20 hours. The time shall be equally 
                divided between, and controlled by, the Majority Leader 
                and the Minority Leader or their designees.
                    (C) Debate of motions and appeals.--Debate in the 
                Senate on any debatable motion or appeal in connection 
                with an approval resolution shall be limited to not 
                more than 1 hour, to be equally divided between, and 
                controlled by, the mover and the manager of the 
                approval resolution, except that in the event the 
                manager of the approval resolution is in favor of any 
                such motion or appeal, the time in opposition thereto, 
                shall be controlled by the Minority Leader or his 
                designee. Such leaders, or either of them, may, from 
                time under their control on the passage of an approval 
                resolution, allot additional time to any Senator during 
                the consideration of any debatable motion or appeal.
                    (D) Other motions.--A motion in the Senate to 
                further limit debate is not debatable. A motion to 
                recommit an approval resolution is not in order.
            (8) Point of order requiring supermajority for 
        modifications to recommendation once approved.--
                    (A) In general.--It shall not be in order in the 
                House of Representatives or the Senate to consider any 
                amendment to the provisions of this Act except as 
                provided in subparagraph (B).
                    (B) Waiver.--The point of order described in 
                subparagraph (A) may be waived or suspended in the 
                House of Representatives or the Senate only, by the 
                affirmative vote of three-fifths of the Members duly 
                chosen and sworn.

    Subtitle B--Demonstration Projects on Alternative Financing and 
                            Delivery Systems

SEC. 211. ESTABLISHMENT OF DEMONSTRATION PROJECTS.

    Not later than 1 year after the date of the enactment of this Act, 
the Secretary of Health and Human Services (in this subtitle referred 
to as the ``Secretary'') shall establish such demonstration projects as 
may be necessary to test alternative methods for organizing the 
structure of the health care financing and delivery system of the 
United States.

SEC. 212. PROCESS.

    (a) In General.--In carrying out section 211, the Secretary--
            (1) may initiate demonstration projects under this 
        subtitle, and
            (2) may seek applications from States desiring to test 
        alternative health care financing and delivery systems within 
        their jurisdictions.
    (b) State Applications.--
            (1) In general.--A State seeking approval of a 
        demonstration project under this subtitle shall file an 
        application in such form, in such manner, and at such time as 
        the Secretary may require.
            (2) Evaluation.--In evaluating an application submitted 
        under paragraph (1) for a project, the Secretary shall take 
        into account support for the project by the citizens of a State 
        as evidenced by the enactment of legislation providing for 
        implementation of an alternative health care financing and 
        delivery system in every political subdivision of the State.
    (c) Consultation.--Before making a final determination on approving 
a demonstration project under this subtitle, the Secretary shall--
            (1) consult with policy experts about any waivers necessary 
        under section 215(a),
            (2) consult with the Secretary of Labor and the Attorney 
        General about any waivers necessary under subsections (b) and 
        (c) of section 215, respectively,
            (3) provide an opportunity for all parties that would be 
        affected by the demonstration project to express their views, 
        and
            (4) in the case of a project initiated by the Secretary, 
        obtain the approval of the State regarding any changes in the 
        rules applicable to the State plan approved under title XIX of 
        the Social Security Act.
    (d) No Increase in Federal Expenditures.--The Secretary may not 
establish or approve a demonstration project under this subtitle unless 
the Secretary determines that the total amount expended by the Federal 
government under titles XVIII and XIX of the Social Security Act for 
such project (other than amounts expended for the evaluation of the 
projects under section 216(b)) will not exceed the total amount that 
would have been expended under such titles but for such project.

SEC. 213. PRIORITIES.

    In establishing and approving demonstration projects under this 
subtitle, the Secretary shall make it a priority to work cooperatively 
with States to secure locations to conduct the following:
            (1) BasiCare health access demonstration project.--A 
        demonstration project under which--
                    (A) the costs associated with the purchase of 
                coverage for the minimum benefit package established 
                under section 203 would be fully tax-deductible, and
                    (B) the costs associated with the purchase of 
                coverage not included in the minimum benefit package 
                would be deductible by the employer but not the 
                employee.
            (2) Managed competition demonstration project.--A 
        demonstration project that--
                    (A) provides for competition among community health 
                partnerships offered to individuals and employers 
                through health insurance purchasing cooperatives;
                    (B) provides for premiums that are community-rated 
                and for the adjustment of premiums paid to plans based 
                on the risk characteristics of individuals enrolled in 
                the plan;
                    (C) limits the tax benefits for employer 
                contributions to the lowest price of a community health 
                partnership offered in an area; and
                    (D) provides for the systematic reporting and 
                public dissemination of information on the performance 
                of plans in meeting the health care needs of enrollees.
            (3) Medical savings account demonstration project.--A 
        demonstration project that provides that--
                    (A) contributions made by an employer on behalf of 
                an employee to a medical savings account, in lieu of 
                payment for health insurance premiums, are treated as 
                excludable from income for purposes of determining the 
                income tax and employment tax liability of the 
                employee, and
                    (B) such account may be used for the purchase of 
                health care insurance or out-of-pocket health care 
                expenses.
            (4) Coordinated care networks demonstration project.--A 
        demonstration project that provides health care services 
        through a network of regional health care providers in a manner 
        that promotes the greatest efficiencies in the utilization of 
        expensive services and technology.

SEC. 214. SCOPE AND DURATION OF PROJECTS.

    The demonstration projects conducted under this subtitle shall be 
of such scope and duration as may be necessary to test and evaluate the 
approach tested under the project.

SEC. 215. WAIVERS OF CERTAIN LAWS.

    (a) Medicare and Medicaid Laws.--The Secretary may waive such 
provisions of titles XVIII (other than provisions relating to the 
eligibility for, and the scope of, benefits under such title) and XIX 
of the Social Security Act as may be necessary to implement a 
demonstration project under this subtitle.
    (b) ERISA.--The Secretary of Labor may waive section 514(a) of the 
Employee Retirement Income Security Act of 1974 (as that provision 
limits the application of State laws to employee benefit plans) to the 
extent necessary to permit a State to implement a demonstration project 
under this subtitle.
    (c) Antitrust Laws.--
            (1) In general.--Subject to paragraph (2), the Attorney 
        General may waive such provisions of--
                    (A) the Sherman Act,
                    (B) the Clayton Act, and
                    (C) the Federal Trade Commission Act,
        as may be necessary to permit a State to implement a 
        demonstration project under this subtitle.
            (2) Determination required.--A provision specified in 
        paragraph (1) may be waived only if the Attorney General 
        determines that the demonstration project would reduce health 
        care costs on a system-wide basis.

SEC. 216. REPORTS AND EVALUATIONS.

    (a) Congressional Reports.--The Secretary shall submit to the 
Congress--
            (1) annually a report on the status of each demonstration 
        project being conducted under this subtitle, and
            (2) a final report on each such project not later than 1 
        year after the close of the project.
    (b) Independent Evaluation.--
            (1) In general.--The Secretary shall arrange for an 
        independent evaluation of each demonstration project conducted 
        under this subtitle and for the submission of the evaluation to 
        the National Health Care Reform Commission (established under 
        section 201) not later than 1 year after the close of the 
        project.
            (2) Transfer of funds.--The Secretary shall provide for the 
        transfer from the Federal Hospital Insurance Trust Fund of such 
        sums as may be necessary to provide for the evaluation of 
        demonstration projects conducted under this subtitle (without 
        regard to amounts appropriated in advance in appropriation 
        Acts).

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