[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4519 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4519

     To increase access to health insurance for employees of small 
                  businesses, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 26, 1994

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

_______________________________________________________________________

                                 A BILL


 
     To increase access to health insurance for employees of small 
                  businesses, 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; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Health Insurance Choice Act''.
    (b) Findings Relating to Interstate Commerce.--Congress finds that 
health insurance is a critical part of the economy of the United States 
and interstate commerce, consumes a significant percentage of public 
and private spending, and affects all industries and individuals in the 
United States.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title; findings.
Sec. 2. Table of contents.
           TITLE I--IMPROVED ACCESS TO AFFORDABLE HEALTH CARE

 Subtitle A--Increased Availability and Continuity of Health Coverage 
                    for Employees and Their Families

PART 1--PREEXISTING CONDITIONS AND CONTINUITY OF COVERAGE; RENEWABILITY

Sec. 101. Limitation on pre-existing condition clauses.
Sec. 102. Assurance of continuity of coverage through previous 
                            satisfaction of pre-existing condition 
                            requirement.
Sec. 103. Requirements relating to renewability generally.
           PART 2--ENFORCEMENT; EFFECTIVE DATES; DEFINITIONS

Sec. 111. Enforcement.
Sec. 112. Effective dates.
Sec. 113. Definitions.
          Subtitle B--Preemption of Scope of State Regulation

Sec. 121. Prohibition of State benefit mandates for group health plans.
Sec. 122. Prohibition of provisions prohibiting employer groups from 
                            purchasing health insurance.
Sec. 123. Restrictions on managed care.
Sec. 124. Definitions.
                 Subtitle C--Health Deduction Fairness

Sec. 131. Permanent extension and increase in health insurance tax 
                            deduction for self-employed individuals.
Sec. 132. Deduction of health insurance premiums for certain previously 
                            uninsured individuals.
               TITLE II--REMOVING ANTI-TRUST IMPEDIMENTS

Sec. 201. Establishment of limited exemption program for health care 
                            joint ventures.
Sec. 202. Issuance of health care certificates of public advantage.
Sec. 203. Interagency Advisory Committee on Competition, Antitrust 
                            Policy, and Health Care.
Sec. 204. Definitions.

           TITLE I--IMPROVED ACCESS TO AFFORDABLE HEALTH CARE

 Subtitle A--Increased Availability and Continuity of Health Coverage 
                    for Employees and Their Families

PART 1--PREEXISTING CONDITIONS AND CONTINUITY OF COVERAGE; RENEWABILITY

SEC. 101. LIMITATION ON PRE-EXISTING CONDITION CLAUSES.

    A group health plan may not impose (and an insurer may not require 
an employer under a group health plan to impose through a waiting 
period for coverage under a plan or similar requirement) a limitation 
or exclusion of benefits relating to treatment of a condition based on 
the fact that the condition pre-existed the effective date of the plan 
with respect to an individual if--
            (1) the condition relates to a condition that was not 
        diagnosed or treated within 3 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
            (4) the limitation or exclusion relates to pregnancy.
In the case of an individual who is eligible for coverage under a plan 
but for a waiting period imposed by the employer, in applying 
paragraphs (1) and (2), the individual shall be treated as having been 
covered under the plan as of the earliest date of the beginning of the 
waiting period.

SEC. 102. ASSURANCE OF CONTINUITY OF COVERAGE THROUGH PREVIOUS 
              SATISFACTION OF PRE-EXISTING CONDITION REQUIREMENT.

    (a) In General.--Each group health plan shall waive any period 
applicable to a preexisting condition for similar benefits with respect 
to an individual to the extent that the individual, prior to the date 
of such individual's enrollment in such plan, was covered for the 
condition under any other health plan that was in effect before such 
date.
    (b) Continuous Coverage Required.--
            (1) In general.--Subsection (a) shall no longer apply if 
        there is a continuous period of more than 60 days (or, in the 
        case of an individual described in paragraph (3), 6 months) on 
        which the individual was not covered under a group health plan.
            (2) Treatment of waiting periods.--In applying paragraph 
        (1), any waiting period imposed by an employer before an 
        employee is eligible to be covered under a plan shall be 
        treated as a period in which the employee was covered under a 
        group health plan.
            (3) Job termination.--An individual is described in this 
        paragraph if the individual loses coverage under a group health 
        plan due to termination of employment.
            (4) Exclusion of cash-only and dread disease plans.--In 
        this subsection, the term ``group health plan'' does not 
        include any group health plan which is offered primarily to 
        provide--
                    (A) coverage for a specified disease or illness, or
                    (B) a hospital or fixed indemnity policy, unless 
                the Secretary determines that such a plan provides 
                sufficiently comprehensive coverage of a benefit so 
                that it should be treated as a group health plan under 
                this subsection.

SEC. 103. REQUIREMENTS RELATING TO RENEWABILITY GENERALLY.

    (a) Multiemployer Plans and Exempted Multiple Employer Health 
Plans.--A multiemployer plan and an exempted multiple employer health 
plan may not cancel coverage or deny renewal of coverage under such a 
plan with respect to an employer other than--
            (1) for nonpayment of contributions,
            (2) for fraud or other misrepresentation by the employer,
            (3) for noncompliance with plan provisions,
            (4) for misuse of a provider network provision, or
            (5) because the plan is ceasing to provide any coverage in 
        a geographic area.
    (b) Insurers.--
            (1) In general.--An insurer may not cancel a health 
        insurance plan or deny renewal of coverage under such a plan 
        other than--
                    (A) for nonpayment of premiums,
                    (B) for fraud or other misrepresentation by the 
                insured,
                    (C) for noncompliance with plan provisions,
                    (D) for misuse of a provider network provision, or
                    (E) because the insurer is ceasing to provide any 
                health insurance plan in a State, or, in the case of a 
                health maintenance organization, in a geographic area.
            (2) Limitation on market reentry.--If an insurer terminates 
        the offering of health insurance plans in an area, the insurer 
        may not offer such a health insurance plan to any employer in 
        the area until 5 years after the date of the termination.

           PART 2--ENFORCEMENT; EFFECTIVE DATES; DEFINITIONS

SEC. 111. ENFORCEMENT.

    (a) Enforcement by Department of Labor for Employers and Group 
Health Plans.--
            (1) In general.--For purposes of part 5 of subtitle B of 
        title I of the Employee Retirement Income Security Act of 1974, 
        the provisions of part 1 of this subtitle shall be deemed to be 
        provisions of title I of such Act irrespective of exclusions 
        under section 4(b) of such Act.
            (2) Regulatory authority.--With respect to the regulatory 
        authority of the Secretary of Labor under this subtitle 
        pursuant to subsection (a), section 505 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1135) shall 
        apply.
    (b) Enforcement by Excise Tax for Insurers.--
            (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 OF INSURER TO COMPLY WITH HEALTH INSURANCE 
              STANDARDS.

    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed a tax on the 
        failure of an insurer to comply with the requirements 
        applicable to the insurer under part 1 of subtitle A of title I 
        of the Small Business Health Insurance Choice Act.
            ``(2) Exception.--Paragraph (1) shall not apply to a 
        failure by an insurer in a State if the Secretary of Health and 
        Human Services determines that the State has in effect a 
        regulatory enforcement mechanism that provides adequate 
        sanctions with respect to such a failure by such an insurer.
    ``(b) Amount of Tax.--
            ``(1)  In general.--Subject to paragraph (2), the amount of 
        the tax imposed by subsection (a) shall be $100 for each day 
        during which such failure persists for each individual to which 
        such failure relates. A rule similar to the rule of section 
        4980B(b)(3) shall apply for purposes of this section.
            ``(2) Limitation.--The amount of the tax imposed by 
        subsection (a) for an insurer with respect to a health 
        insurance plan shall not exceed 25 percent of the amounts 
        received under the plan for coverage during the period such 
        failure persists.
    ``(c) Liability for Tax.--The tax imposed by this section shall be 
paid by the insurer.
    ``(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 insurer 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, the terms `health 
insurance plan' and `insurer' have the respective meanings given such 
terms in section 113 of the Small Business Health Insurance Choice 
Act.''
            (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 of insurer to 
                                        comply with health insurance 
                                        standards.''

SEC. 112. EFFECTIVE DATES.

    (a) Part 1.--The requirements of part 1 with respect to--
            (1) group health plans and employers shall apply to plans 
        years beginning after December 31, 1994, and
            (2) insurers shall take effect on January 1, 1995.

SEC. 113. DEFINITIONS.

    (a) In General.--For purposes of this subtitle:
            (1) Employer.--The term ``employer'' shall have the meaning 
        applicable under section 3(5) of the Employee Retirement Income 
        Security Act of 1974.
            (2) Exempted multiple employer health plan.--The term 
        ``exempted multiple employer health plan'' means a multiple 
        employer welfare arrangement treated as an employee welfare 
        benefit plan by reason of an exemption under part 7 of subtitle 
        B of title I of the Employee Retirement Income Security Act of 
        1974 (as added by part 2 of subtitle C of this title).
            (3) Group health plan; plan.--(A) The term ``group health 
        plan'' means an employee welfare benefit plan providing medical 
        care (as defined in section 213(d) of the Internal Revenue Code 
        of 1986) to participants or beneficiaries directly or through 
        insurance, reimbursement, or otherwise, but does not include 
        any type of coverage excluded from the definition of a health 
        insurance plan under section 1107(4)(B).
            (B) The term ``plan'' means, unless used with a modifying 
        term or the context specifically indicates otherwise, a group 
        health plan (including any such plan which is a multiemployer 
        plan), an exempted multiple employer health plan, or an insured 
        multiple employer health plan.
            (4) Health Insurance Plan.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``health insurance plan'' means any 
                hospital or medical service policy or certificate, 
                hospital or medical service plan contract, or health 
                maintenance organization group contract offered by an 
                insurer.
                    (B) Exception.--Such term does not include any of 
                the following--
                            (i) coverage only for accident, dental, 
                        vision, disability income, or long-term care 
                        insurance, or any combination thereof,
                            (ii) medicare supplemental health 
                        insurance,
                            (iii) coverage issued as a supplement to 
                        liability insurance,
                            (iv) worker's compensation or similar 
                        insurance, or
                            (v) automobile medical-payment insurance,
                or any combination thereof.
            (5) Insured multiple employer health plan.--The term 
        ``insured multiple employer health plan'' means a fully insured 
        multiple employer welfare arrangement under which benefits 
        consist solely of medical care described in section 607(1) of 
        the Employee Retirement Income Security Act of 1974 
        (disregarding such incidental benefits as the Secretary of 
        Health and Human Services shall specify by regulations).
            (6) Insurer.--The term ``insurer'' means a licensed 
        insurance company, a prepaid hospital or medical service plan, 
        and a health maintenance organization offering such a plan to 
        an employer, and includes a similar organization regulated 
        under State law for solvency.
            (7) State.--The term ``State'' means the 50 States, the 
        District of Columbia, Puerto Rico, the Virgin Islands, Guam, 
        and American Samoa.

          Subtitle B--Preemption of Scope of State Regulation

SEC. 121. PROHIBITION OF STATE BENEFIT MANDATES FOR GROUP HEALTH PLANS.

    In the case of a group health plan, no provision of State or local 
law shall apply that requires the coverage of one or more specific 
benefits, services, or categories of health care, or services of any 
class or type of provider of health care.

SEC. 122. PROHIBITION OF PROVISIONS PROHIBITING EMPLOYER GROUPS FROM 
              PURCHASING HEALTH INSURANCE.

    No provision of State or local law shall apply that prohibits 2 or 
more employers from obtaining coverage under an insured multiple 
employer health plan.

SEC. 123. 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 group 
        health plan 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 group health 
        plan may require a beneficiary to pay when a non-plan provider 
        is used on a non-emergency basis.
    (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.

SEC. 124. DEFINITIONS.

    For purposes of this subtitle, the terms ``employee'', 
``employer'', ``group health plan'', ``health insurance plan'', 
``insured multiple employer health plan'', and ``State'' have the 
meanings given such terms in section 113.

                 Subtitle C--Health Deduction Fairness

SEC. 131. PERMANENT EXTENSION AND INCREASE IN HEALTH INSURANCE TAX 
              DEDUCTION FOR SELF-EMPLOYED INDIVIDUALS.

    (a) Permanent Extension of Deduction.--
            (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) Effective date.--The amendment made by this subsection 
        shall apply to taxable years beginning after December 31, 1994.
    (b) Increase in Amount of Deduction.--
            (1) In general.--Paragraph (1) of section 162(l) of such 
        Code is amended by striking ``25 percent of'' and inserting 
        ``100 percent (50 percent in the case of taxable years 
        beginning in 1996 or 1997) of''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 1994.

SEC. 132. DEDUCTION OF HEALTH INSURANCE PREMIUMS FOR CERTAIN PREVIOUSLY 
              UNINSURED INDIVIDUALS.

    (a) In General.--Section 213 of the Internal Revenue Code of 1986 
(relating to medical, dental, etc., expenses) is amended by adding at 
the end thereof the following new subsection:
    ``(f) Deduction for Health Insurance Costs Determined Without 
Regard to Adjusted Gross Income Threshold.--
            ``(1) In general.--Subsection (a) shall be applied without 
        regard to the limitation based on adjusted gross income in the 
        case of the applicable percentage of the amounts paid for 
        insurance which constitutes medical care for the taxpayer, his 
        spouse, and dependents.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the term `applicable percentage' means--
                    ``(A) 25 percent for taxable years beginning in 
                1995 or 1996,
                    ``(B) 50 percent for taxable years beginning in 
                1997 or 1998, and
                    ``(C) 100 percent for taxable years beginning after 
                1999.
            ``(3) Deduction not allowed to individuals eligible for 
        employer-subsidized coverage.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any individual--
                            ``(i) who is eligible to participate in any 
                        subsidized health plan maintained by an 
                        employer of such individual or the spouse of 
                        such individual, or
                            ``(ii) who is (or whose spouse is) a member 
                        of a subsidized class of employees of an 
                        employer.
                    ``(B) Subsidized class.--For purposes of 
                subparagraph (A), an individual is a member of a 
                subsidized class of employees of an employer if, at any 
                time during the 3 calendar years ending with or within 
                the taxable year, any member of such class was eligible 
                to participate in any subsidized health plan maintained 
                by such employer.
                    ``(C) Special rules.--
                            ``(i) Controlled groups.--All persons 
                        treated as a single employer under subsection 
                        (a) or (b) of section 52 or subsection (m) or 
                        (o) of section 414 shall be treated as a single 
                        employer for purposes of subparagraph (B).
                            ``(ii) Classes.--Classes of employees shall 
                        be determined under regulations prescribed by 
                        the Secretary based on such factors as the 
                        Secretary determines appropriate to carry out 
                        the purposes of this subsection.
            ``(4) Coordination with deduction for other amounts.--
        Amounts allowable as a deduction under subsection (a) by reason 
        of this subsection shall not be taken into account in 
        determining the deduction under subsection (a) for other 
        amounts.
            ``(5) Subsection not to apply to individuals eligible for 
        medicare.--This subsection shall not apply to amount paid for 
        insurance covering an individual who is eligible for benefits 
        under title XVIII of the Social Security Act.''
    (b) Deduction Allowed Whether or Not Individual Itemizes Other 
Deductions.--Subsection (a) of section 62 of such Code is amended by 
inserting after paragraph (15) the following new paragraph:
            ``(16) Costs of certain health insurance.--The deduction 
        allowed by section 213 to the extent allowable by reason of 
        section 213(f).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1994.

               TITLE II--REMOVING ANTI-TRUST IMPEDIMENTS

SEC. 201. ESTABLISHMENT OF LIMITED EXEMPTION PROGRAM FOR HEALTH CARE 
              JOINT VENTURES.

    (a) Establishment.--
            (1) In general.--Not later than 6 months after the date of 
        the enactment of this Act, the Attorney General, after 
        consultation with the Secretary of Health and Human Services 
        and the Interagency Advisory Committee on Competition, 
        Antitrust Policy, and Health Care, shall promulgate specific 
        guidelines under which a health care joint venture may submit 
        an application requesting that the Attorney General provide the 
        entities participating in the joint venture with an exemption 
        under which (notwithstanding any other provision of law)--
                    (A) monetary recovery on a claim under the 
                antitrust laws shall be limited to actual damages if 
                the claim results from conduct within the scope of the 
                joint venture that occurs while the exemption is in 
                effect; and
                    (B) the conduct of the entity in making or 
                performing a contract to carry out the joint venture 
                shall not be deemed illegal per se under the antitrust 
                laws but shall be judged on the basis of its 
                reasonableness, taking into account all relevant 
                factors affecting competition, including (but not 
                limited to) effects on competition in properly defined, 
                relevant research, development, product, process, and 
                service markets (taking into consideration worldwide 
                capacity to the extent that it may be appropriate in 
                the circumstances).
            (2) Deadline for response.--The Attorney General, after 
        consultation with the Secretary and the Advisory Committee, 
        shall approve or disapprove the application of a health care 
        joint venture for an exemption under this subsection not later 
        than 30 days after the Attorney General receives the joint 
        venture's application.
            (3) Providing reasons for disapproval.--If the Attorney 
        General disapproves the application of a health care joint 
        venture for an exemption under this subsection, the Attorney 
        General shall provide the joint venture with a statement 
        explaining the reasons for the Attorney General's disapproval.
    (b) Requirements for Approval.--For purposes of subsection (a), the 
Attorney General shall approve the application of a health care joint 
venture for an exemption under subsection (a) if an entity 
participating in the joint venture submits to the Attorney General an 
application not later than 30 days after the entity has entered into a 
written agreement to participate in the joint venture (or not later 
than 30 days after the date of the enactment of this Act in the case of 
a joint venture in effect as of such date) that contains the following 
information and assurances:
            (1) The identities of the parties to the joint venture.
            (2) The nature, objectives, and planned activities of the 
        joint venture.
            (3) Assurances that the entities participating in the joint 
        venture shall notify the Attorney General of any changes in the 
        information described in paragraphs (1) and (2) during the 
        period for which the exemption is in effect.
    (c) Revocation of Exemption.--
            (1) In general.--The Attorney General, after consultation 
        with the Secretary, may revoke an exemption provided to a 
        health care joint venture under this section if, at any time 
        during which the exemption is in effect, the Attorney General 
        finds that the joint venture no longer meets the applicable 
        requirements for approval under subsection (b), except that the 
        Attorney General may not revoke such an exemption if the 
        failure of the health care joint venture to meet such 
        requirements is merely technical in nature.
            (2) Timing.--The revocation of an exemption under paragraph 
        (1) shall apply only to conduct of the health care joint 
        venture occurring after the exemption is no longer in effect.
    (d) Withdrawal of Application.--Any party that submits an 
application under this section may withdraw such application at any 
time before the Attorney General's response to the application.
    (e) Requirements Relating to Notice and Publication of Exemptions 
and Related Information.--
            (1) Publication of approved applications for exemptions in 
        federal register.--
                    (A) In general.--With respect to each exemption for 
                a health care joint venture provided under subsection 
                (a), the Attorney General (acting jointly with the 
                Secretary) shall--
                            (i) prepare a notice with respect to the 
                        joint venture that identifies the parties to 
                        the venture and that describes the planned 
                        activities of the venture;
                            (ii) submit the notice to the entities 
                        participating in the joint venture; and
                            (iii) after submitting the notice to such 
                        entities (but not later than 30 days after 
                        approving the application for the exemption for 
                        the joint venture), publish the notice in the 
                        Federal Register.
                    (B) Effect of publication.--An exemption provided 
                by the Attorney General under subsection (a) shall take 
                effect as of the date of the publication in the Federal 
                Register of the notice with respect to the exemption 
                pursuant to subparagraph (A).
            (2) Waiver of disclosure requirements for information 
        relating to applications for exemptions.--
                    (A) In general.--All information and documentary 
                material submitted as part of an application of a 
                health care joint venture for an exemption under 
                subsection (a), together with any other information 
                obtained by the Attorney General, the Secretary, or the 
                Advisory Committee in the course of any investigation, 
                administrative proceeding, or case with respect to a 
                potential violation of the antitrust laws by the joint 
                venture with respect to which the exemption applies, 
                shall be exempt from disclosure under section 552 of 
                title 5, United States Code, and shall not be made 
                publicly available by any agency of the United States 
                to which such section applies, except as relevant to a 
                law enforcement investigation or in a judicial or 
                administrative proceeding in which such information and 
                material is subject to any protective order.
                    (B) Exception for information included in federal 
                register notice.--Subparagraph (A) shall not apply with 
                respect to information contained in a notice published 
                in the Federal Register pursuant to paragraph (1).
            (3) Use of information to support or answer claims under 
        antitrust laws.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the fact of disclosure of conduct under an 
                application for an exemption under subsection (a) and 
                the fact of publication of a notice in the Federal 
                Register under paragraph (1) shall be admissible into 
                evidence in any judicial or administrative proceeding 
                for the sole purpose of establishing that a person is 
                entitled to the protections provided by an exemption 
                granted under subsection (a).
                    (B) Effect of rejected application.--If the 
                Attorney General denies, in whole or in part, an 
                application for an exemption under subsection (a), or 
                revokes an exemption under such section, neither the 
                negative determination nor the statement of reasons 
                therefore shall be admissible into evidence in any 
                administrative or judicial proceeding for the purpose 
                of supporting or answering any claim under the 
                antitrust laws.

SEC. 202. ISSUANCE OF HEALTH CARE CERTIFICATES OF PUBLIC ADVANTAGE.

    (a) Issuance and Effect of Certificate.--The Attorney General, 
after consultation with the Secretary and the Advisory Committee, shall 
issue in accordance with this section a certificate of public advantage 
to each eligible health care joint venture that complies with the 
requirements in effect under this section on or after the expiration of 
the 1-year period that begins on the date of the enactment of this Act 
(without regard to whether or not the Attorney General has promulgated 
regulations to carry out this section by such date). Such venture, and 
the parties to such venture, shall not be liable under any of the 
antitrust laws for conduct described in such certificate and engaged in 
by such venture if such conduct occurs while such certificate is in 
effect.
    (b) Requirements Applicable to Issuance of Certificates.--
            (1) Standards to be met.--The Attorney General shall issue 
        a certificate to an eligible health care joint venture if the 
        Attorney General finds that--
                    (A) the benefits that are likely to result from 
                carrying out the venture outweigh the reduction in 
                competition (if any) that is likely to result from the 
                venture, and
                    (B) such reduction in competition is reasonably 
                necessary to obtain such benefits.
            (2) Factors to be considered.--
                    (A) Weighing of benefits against reduction in 
                competition.--For purposes of making the finding 
                described in paragraph (1)(A), the Attorney General 
                shall consider whether the venture is likely --
                            (i) to maintain or to increase the quality 
                        of health care,
                            (ii) to increase access to health care,
                            (iii) to achieve cost efficiencies that 
                        will be passed on to health care consumers, 
                        such as economies of scale, reduced transaction 
                        costs, and reduced administrative costs,
                            (iv) to preserve the operation of health 
                        care facilities located in underserved 
                        geographical areas,
                            (v) to improve utilization of health care 
                        resources, and
                            (vi) to reduce inefficient health care 
                        resource duplication.
                    (B) Necessity of reduction in competition.--For 
                purposes of making the finding described in paragraph 
                (1)(B), the Attorney General shall consider--
                            (i) the ability of the providers of health 
                        care services that are (or likely to be) 
                        affected by the health care joint venture and 
                        the entities responsible for making payments to 
                        such providers to negotiate societally optimal 
                        payment and service arrangements,
                            (ii) the effects of the health care joint 
                        venture on premiums and other charges imposed 
                        by the entities described in clause (i), and
                            (iii) the availability of equally 
                        efficient, less restrictive alternatives to 
                        achieve the benefits that are intended to be 
                        achieved by carrying out the venture.
    (c) Establishment of Criteria and Procedures.--Subject to 
subsections (d) and (e), not later than 1 year after the date of the 
enactment of this Act, the Attorney General and the Secretary shall 
establish jointly by rule the criteria and procedures applicable to the 
issuance of certificates under subsection (a). The rules shall specify 
the form and content of the application to be submitted to the Attorney 
General to request a certificate, the information required to be 
submitted in support of such application, the procedures applicable to 
denying and to revoking a certificate, and the procedures applicable to 
the administrative appeal (if such appeal is authorized by rule) of the 
denial and the revocation of a certificate. Such information may 
include the terms of the health care joint venture (in the case of a 
venture in existence as of the time of the application) and 
implementation plan for the joint venture.
    (d) Eligible Health Care Joint Venture.--To be an eligible health 
care joint venture for purposes of this section, a health care joint 
venture shall submit to the Attorney General an application that 
complies with the rules in effect under subsection (c) and that 
includes--
            (1) an agreement by the parties to the venture that the 
        venture will not foreclose competition by entering into 
        contracts that prevent health care providers from providing 
        health care in competition with the venture,
            (2) an agreement that the venture will submit to the 
        Attorney General annually a report that describes the 
        operations of the venture and information regarding the impact 
        of the venture on health care and on competition in health 
        care, and
            (3) an agreement that the parties to the venture will 
        notify the Attorney General and the Secretary of the 
        termination of the venture not later than 30 days after such 
        termination occurs.
    (e) Review of Applications for Certificates.--Not later than 30 
days after an eligible health care joint venture submits to the 
Attorney General an application that complies with the rules in effect 
under subsection (c) and with subsection (d), the Attorney General 
shall issue or deny the issuance of such certificate. If, before the 
expiration of such 30-day period, the Attorney General fails to issue 
or deny the issuance of such certificate, the Attorney General shall be 
deemed to have issued such certificate.
    (f) Revocation of Certificate.--Whenever the Attorney General finds 
that a health care joint venture with respect to which a certificate is 
in effect does not meet the standards specified in subsection (b), the 
Attorney General shall revoke such certificate.
    (g) Written Reasons; Judicial Review.--
            (1) Denial and revocation of certificates.--If the Attorney 
        General denies an application for a certificate or revokes a 
        certificate, the Attorney General shall include in the notice 
        of denial or revocation a statement of the reasons relied upon 
        for the denial or revocation of such certificate.
            (2) Judicial review.--
                    (A) After administrative proceeding.--(i) If the 
                Attorney General denies an application submitted or 
                revokes a certificate issued under this section after 
                an opportunity for hearing on the record, then any 
                party to the health care joint venture involved may 
                commence a civil action, not later than 60 days after 
                receiving notice of the denial or revocation, in an 
                appropriate district court of the United States for 
                review of the record of such denial or revocation.
                    (ii) As part of the Attorney General's answer, the 
                Attorney General shall file in such court a certified 
                copy of the record on which such denial or revocation 
                is based. The findings of fact of the Attorney General 
                may be set aside only if found to be unsupported by 
                substantial evidence in such record taken as a whole.
                    (B) Denial or revocation without administrative 
                proceeding.--If the Attorney General denies an 
                application submitted or revokes a certificate issued 
                under this section without an opportunity for hearing 
                on the record, then any party to the health care joint 
                venture involved may commence a civil action, not later 
                than 60 days after receiving notice of the denial or 
                revocation, in an appropriate district court of the 
                United States for de novo review of such denial or 
                revocation.
    (h) Exemption.--A person shall not be liable under any of the 
antitrust laws for conduct necessary--
            (1) to prepare, agree to prepare, or attempt to agree to 
        prepare an application to request a certificate under this 
        section, or
            (2) to attempt to enter into any health care joint venture 
        with respect to which such a certificate is in effect.

SEC. 203. INTERAGENCY ADVISORY COMMITTEE ON COMPETITION, ANTITRUST 
              POLICY, AND HEALTH CARE.

    (a) Establishment.--There is hereby established the Interagency 
Advisory Committee on Competition, Antitrust Policy, and Health Care. 
The Advisory Committee shall be composed of--
            (1) the Secretary of Health and Human Services (or the 
        designee of the Secretary);
            (2) the Attorney General (or the designee of the Attorney 
        General);
            (3) the Director of the Office of Management and Budget (or 
        the designee of the Director); and
            (4) a representative of the Federal Trade Commission.
    (b) Duties.--The duties of the Advisory Committee are--
            (1) to discuss and evaluate competition and antitrust 
        policy, and their implications with respect to the performance 
        of health care markets;
            (2) to analyze the effectiveness of health care joint 
        ventures receiving exemptions under the program established 
        under section 201(a) or certificates under section 202 in 
        reducing the costs of and expanding access to the health care 
        services that are the subject of such ventures; and
            (3) to make such recommendations to Congress not later than 
        2 years after the date of the enactment of this Act (and at 
        such subsequent periods as the Advisory Committee considers 
        appropriate) regarding modifications to the program established 
        under section 201(a) or to section 202 as the Advisory 
        Committee considers appropriate, including modifications 
        relating to the costs to health care providers of obtaining an 
        exemption for a joint venture under such program.

SEC. 204. DEFINITIONS.

    For purposes of this title:
            (1) The term ``Advisory Committee'' means the Interagency 
        Advisory Committee on Competition, Antitrust Policy, and Health 
        Care established under section 203.
            (2) The term ``antitrust laws''--
                    (A) has the meaning given it in subsection (a) of 
                the first section of the Clayton Act (15 U.S.C. 12(a)), 
                except that such term includes section 5 of the Federal 
                Trade Commission Act (15 U.S.C. 45) to the extent such 
                section applies to unfair methods of competition; and
                    (B) includes any State law similar to the laws 
                referred to in subparagraph (A).
            (3) The term ``certificate'' means a certificate of public 
        advantage authorized to be issued under section 202(a).
            (4) The term ``health care joint venture'' means an 
        agreement (whether existing or proposed) between 2 or more 
        providers of health care services that is entered into solely 
        for the purpose of sharing in the provision of health care 
        services and that involves substantial integration or financial 
        risk-sharing between the parties, but does not include the 
        exchanging of information, the entering into of any agreement, 
        or the engagement in any other conduct that is not reasonably 
        required to carry out such agreement.
            (5) The term ``health care services'' includes services 
        related to the delivery or administration of health care 
        services.
            (6) The term ``liable'' means liable for any civil or 
        criminal violation of the antitrust laws.
            (7) The term ``provider of health care services'' means any 
        individual or entity that is engaged in the delivery of health 
        care services in a State and that is required by State law or 
        regulation to be licensed or certified by the State to engage 
        in the delivery of such services in the State.
            (8) The term ``Secretary'' means the Secretary of Health 
        and Human Services.

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