[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4960 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4960

To provide health care quality safeguards for consumers of health care 
            insurance and health care products and services.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            August 12, 1994

  Mr. Wyden introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
To provide health care quality safeguards for consumers of health care 
            insurance and health care products and services.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Health Quality Protection 
Act of 1994''.

            TITLE I--DUTIES OF THE SECRETARY AND THE STATES

SEC. 101. RESPONSIBILITIES OF THE SECRETARY.

    The responsibilities of the Secretary of Health and Human Services 
(hereinafter referred to as ``the Secretary'') under this Act are the 
following:
            (1) State quality management program.--Determination of 
        initial and ongoing compliance of each State health quality 
        management program with the requirements of section 102.
            (2) National quality management program.--Establish a 
        national quality management program (in accordance with section 
        201).
            (3) Health quality improvement foundations.--Establishment 
        of health quality improvement foundations (in accordance with 
        section 202).
            (4) Consumer health care advocate.--Establishment of 
        consumer health care advocate in each State (in accordance with 
        section 203).
            (5) National consumer representative support center.--
        Establishment of a national consumer representative support 
        center (in accordance with section 204).
            (6) National measures of quality performance.--
        Establishment of national measures of quality performance for 
        health plans (in accordance with section 205).
            (7) Relative value scale for pharmacy counseling.--
        Establishment of a relative value scale for the purpose of 
        reimbursing pharmacists for the certain patient counseling 
        services (in accordance with section 206).

SEC. 102. RESPONSIBILITIES OF THE STATES.

    State Responsibilities.--As a condition of receipt of Federal 
medical assistance payments under title XIX of the Social Security Act, 
a State must comply with the following requirements of this section:
            (1) Health plans.--Certifying health plan compliance with 
        the quality standards of section 301.
            (2) Medical licensure board.--Assuring State medical 
        licensure board compliance with the requirements of section 
        302.

          TITLE II--NATIONAL HEALTH QUALITY MANAGEMENT PROGRAM

SEC. 201. ESTABLISHMENT OF NATIONAL QUALITY MANAGEMENT PROGRAM.

    (a) In General.--Not later than one year after the date of 
enactment of this Act, the Secretary shall establish and oversee a 
performance-based program of quality management and improvement 
designed to enhance the quality, appropriateness, and effectiveness of 
health care items and services, to be known as the national quality 
management program.
    (b) Funding.--
            (1) In general.--Beginning with the first quarter of the 
        first calendar year following enactment of this Act and 
        quarterly thereafter, the Secretary shall collect from each 
        health plan certified under section 301 a fee amounting to 0.25 
        percent of the premiums received by the plan.
            (2) Funded activities.--Funds collected under the authority 
        of paragraph (1) shall be utilized by the Secretary solely to 
        support the activities described under section 101.

SEC. 202. HEALTH QUALITY IMPROVEMENT FOUNDATIONS.

    (a) In General.--The Secretary shall, no later than two years after 
the date of enactment of this Act, establish a program of grants to 
eligible organizations to serve as health quality improvement 
foundations and perform the duties specified in subsection (d) for the 
population of each State, and shall oversee the operation of such 
foundations.
    (b) Eligibility.--To be eligible for a grant under this section, 
entities must demonstrate compliance with the criteria of subparagraphs 
(1) through (5).
            (1) Governing body.--Each entity shall be governed by a 
        board consisting of health professionals and public members, no 
        fewer than 51 percent of whom shall be public members.
            (2) Definition of public member.--For purposes of this 
        paragraph, the term ``public member'' means an individual who 
        resides in the State and is a person of integrity and good 
        reputation who has lived in the State for at least five years 
        immediately preceding appointment to the board, and has not in 
        the preceding five years been authorized to practice a healing 
        art or had a substantial personal, business, professional, or 
        pecuniary connection with a health plan, healing art or with a 
        medical education or health care facility, except as a patient 
        or a potential patient.
            (3) Staffing.--Each entity shall be staffed by individuals 
        expert in quality improvement, and experts in the fields of 
        epidemiology, measurement of risk adjusted health outcomes, use 
        of clinical practice guidelines, health services data analysis, 
        and provider education.
            (4) Contract with academic health center.--
                    (A) In general.--Each entity shall have a contract 
                with an academic health center to assist in fulfilling 
                the duties described under subsection (d).
                    (B) Definition.--For purposes of this paragraph, an 
                ``academic health center'' means an entity that--
                            (i) operates a school of medicine or 
                        osteopathic medicine accredited by the Liaison 
                        Committee on Medical Education of the 
                        Association of American Medical Colleges and 
                        the American Medical Association, or the 
                        American Osteopathic Association;
                            (ii) operates or is affiliated with one or 
                        more schools of nursing; and
                            (iii) operates or is affiliated with one or 
                        more teaching hospitals.
            (5) Conflict of interest.--
                    (A) In general.--An entity seeking to receive a 
                designation under this section shall be considered a 
                ``disclosing entity'' for purposes of section 1124 (42 
                U.S.C. 1320a-3) of the Social Security Act;
                    (B) Such entity may not--
                            (i) directly or indirectly (as determined 
                        by the regulations promulgated under section 
                        1124(a)(3) of the Social Security Act) possess 
                        an ownership interest of one (1) percent or 
                        more in a health care facility, a health plan, 
                        or association of such;
                            (ii) own a whole or part interest in any 
                        mortgage, deed of trust, note, or other 
                        obligation secured (in whole or in part) by a 
                        health care facility, health plan, association 
                        of such, or any of the property or assets 
                        thereof, which whole or part interest is equal 
                        to or exceeds (1) percent of the total property 
                        and assets of the facility, plan, or 
                        association; or
                            (iii) utilize officers or members of the 
                        governing body more than 10 percent of whom are 
                        the officers or members of the governing board 
                        of one or more health facilities, plans, or 
                        associations).
    (c) Grants to Entities.--
            (1) In general.--The Secretary shall select, through a 
        competitive grantmaking process, no more than one entity to 
        serve as a health quality improvement foundation in each State, 
        and may designate one entity to serve multiple contiguous 
        States.
            (2) Preferences.--In making its designation, the Secretary 
        shall give preference to an entity--
                    (A) which can demonstrate the capacity to fulfill 
                the duties described under subsection (d) for enrollees 
                of health plans certified under section 301, as well as 
                enrollees of title XVIII of the Social Security Act; 
                and
                    (B) for which the primary place of business is 
                located in the State within which the functions of the 
                foundation will be conducted, or, if one entity is to 
                be designated to serve multiple States, preference 
                shall be given to an entity for which the primary place 
                of business is located in one of the States.
            (3) Scope of work.--Each grant with an entity under this 
        section shall be pursuant to an agreement providing--
                    (A) the entity shall perform the duties described 
                in subsection (d) for the benefit of--
                            (i) enrollees in health plans certified 
                        under section 301,
                            (ii) individuals enrolled under title XVIII 
                        of the Social Security Act, and
                            (iii) recipients entitled to benefits under 
                        title XIX of the Social Security Act.
                    (B) the Secretary shall evaluate the performance of 
                the entity in carrying out the functions specified in 
                the grant;
                    (C) the grant shall be for a term of four years and 
                shall be renewable, based upon evidence of successful 
                quality improvement performance, without reopening the 
                competitive selection process, except that an entity 
                subject to subsection (e)(3) shall have term(s) limited 
                to two years and shall be subject to competition at the 
                end of each contract period;
                    (D) if the Secretary decides not to renew a grant 
                with a foundation, the foundation shall be notified of 
                the decision at least one hundred and eighty days prior 
                to the expiration of the grant term, and shall be 
                afforded an opportunity to present information for the 
                purposes of appeal of the decision not to renew the 
                grant;
                    (E) based on a finding by the Secretary that the 
                foundation has not met or no longer meets the 
                requirements of this section, the Secretary may 
                terminate the grant prior to its expiration upon one 
                hundred and eighty days notice, during which notice 
                period the Secretary shall provide the foundation an 
                opportunity to seek an nonbinding opinion on the 
                Secretary's finding before a panel of representatives 
                of foundations convened by the Secretary;
                    (F) the entity may terminate the grant upon one 
                hundred and eighty days notice to the Secretary; and
                    (G) the amount of the grant to be allocated under a 
                grant shall consist of a sum necessary to perform the 
                duties under paragraph (d), which may be augmented with 
                additional funds for the performance of research by a 
                foundation selected by the Secretary for exemplary 
                performance and the merit of research proposals 
                submitted.
    (d) Duties.--A health quality improvement foundation shall carry 
out the following duties in the State in which the foundation operates:
            (1) Quality improvement.--Collaboration with physicians and 
        other health care professionals in ongoing efforts to improve 
        the quality of health care provided to individuals in the 
        State, giving priority to health conditions and interventions 
        which are likely to produce the greatest impact in preventing 
        or reducing morbidity, mortality, and functional impairment.
            (2) Oversight.--Analyze data obtained under section 205 and 
        other information obtained by the foundation pertaining to 
        health care delivered in the State, for the purpose of--
                    (A) identifying opportunities for quality 
                improvement;
                    (B) documenting that such improvement is being 
                realized; and
                    (C) auditing samples of such information and its 
                source documents to assure the information is valid, 
                reliable, and comparable between plans, and to inform 
                recommendations for improving the validity, 
                reliability, and comparability of the information.
            (3) Technical assistance.--Provide technical assistance to 
        health plans and providers, including--
                    (A) feedback to providers of information on 
                patterns of health care delivery, health status, and 
                outcomes;
                    (B) assistance in fulfilling the data reporting 
                requirement of section 205;
                    (C) assistance in the development of patient 
                education systems that enhance patient involvement in 
                decisions relating to their health care;
                    (D) entering into agreements with selected health 
                plans to provide educational programs for health care 
                professionals.
            (4) Annual report.--Submit to the Secretary and make 
        publicly available an annual report concerning--
                    (A) recommendations for improving the utility of 
                clinical practice guidelines as a means of identifying 
                opportunities for improvement and bringing about 
                quality improvement;
                    (B) recommendations for improving the reliability 
                and validity of the national measures of quality 
                performance and consumer survey data described in 
                section 205;
                    (C) selected measures of the health care status of 
                the population of the State, including a description of 
                activities underway and progress achieved; and
                    (D) a description of activities undertaken during 
                the preceding year pursuant to subsection (b)(3) and 
                subsection (d)(3)(D).
            (5) Multiplan collaborations.--Sponsor of statewide and 
        other collaborations involving multiple plans or providers to 
        identify opportunities for quality improvement, and to bring 
        about improvements in health care.
            (6) Referrals.--
                    (A) In general.--If a health quality improvement 
                foundation finds, after affording reasonable 
                opportunities for improvement, that a provider or 
                plan--
                            (i) continues to furnish services 
                        characterized by underuse, overuse or poor 
                        technical quality, or
                            (ii) is unwilling or unable to successfully 
                        engage in quality improvement activities 
                        related to the services described in 
                        subparagraph (A),
        the foundation shall provide notice of such finding to the 
        officials and entities described in subparagraph (B), and shall 
        make available to such officials and entities upon request data 
        and information relied upon by the foundation in making the 
        referral.
                    (B) Notification.--A finding under clause (i) shall 
                be forwarded--
                            (i) if the finding pertains to a health 
                        plan, to the appropriate alliance(s), 
                        accreditation organization(s), State officials 
                        responsible for plan certification under 
                        section 301, the consumer health care advocate 
                        authorized under section 203, and the public;
                            (ii) if the finding pertains to a provider, 
                        to the appropriate State health facility or 
                        State professional licensure board(s), the 
                        consumer health care advocate authorized under 
                        section 203, and health plan(s) with which the 
                        provider is associated.
                            (iii) Imminent risk.--If a foundation 
                        identifies a provider who posses an imminent 
                        risk to the health of patients receiving or 
                        likely to receive health care from the 
                        provider, the foundation shall immediately 
                        notify the appropriate authorities listed under 
                        clause (ii).
    (e) Limitation on Liability.--No organization having a grant from 
the Secretary under this section, and no person who is employed by, or 
who has a fiduciary relationship with any such organization, or who 
furnishes professional services to such organization, shall be held by 
reason of the performance of any duty or activity authorized pursuant 
to this part to have violated any criminal law, or to be civilly liable 
under any law of the United States or of any State (or political 
subdivision thereof) provided that the performance of such duty or 
activity was not conducted in bad faith.

SEC. 203 CONSUMER HEALTH CARE ADVOCATE.

    (a) In General.--The Secretary shall, no later than two years after 
the date of enactment of this Act, make grants to an entity in each 
State which shall serve as the consumer health care advocate for the 
population of the State.
    (b) Selection of Grantees.--
            (1) Competition.--Grants shall be awarded under subsection 
        (a) on a competitive basis to applicants meeting the criteria 
        in paragraph (2).
            (2) Criteria.--In awarding grants under subsection (a)--
                    (A) preference shall be given to private 
                organizations which are exempt from taxation under 
                section 501(c)(3) or (4) of the Internal Revenue Act of 
                1986;
                    (B) preference shall be given to organizations with 
                a governing body which includes representation of 
                ethnic and low-income populations of the State;
                    (C) preference shall be given to an organization 
                which has previously received, and satisfactorily 
                performed under the terms of a grant from the Secretary 
                for the purpose of providing health insurance 
                counseling for enrollees under title XVIII of the 
                Social Security Act; and
                    (D) an applicant for a grant under subsection (a) 
                shall be ineligible if the applicant is, or is 
                affiliated with (through ownership, management, or 
                common control), a health plan, provider, State office 
                responsible for health facilities or health 
                professional licensing or certification, health 
                alliance, or association of such entities.
    (c) Grant Provisions.--Each grant with an organization under this 
section shall provide that--
            (1) the organization shall perform the duties set forth in 
        subsection (d);
            (2) the Secretary shall have access to documents and 
        personnel necessary to evaluate the effectiveness of the 
        organization in fulfilling the provisions of the grant;
            (3) the grant shall be for an initial term of four years 
        and shall be renewable thereafter based upon favorable 
        performance without reopening the competitive selection 
        process;
            (4) if the Secretary intends not to renew a grant to an 
        organization under this section, the organization shall be 
        notified of the decision at least one hundred and eighty days 
        prior to the expiration of the grant, and be afforded an 
        opportunity to present information for the purpose of appeal;
            (5) the Secretary may terminate a grant to an organization 
        under this section if it determines that the organization does 
        not meet the requirements of this section, and provides an 
        opportunity for the organization to appeal its determination;
            (6) an organization which has received a grant under this 
        section may terminate the grant upon one hundred and eighty 
        days notice to the Secretary;
    (d) Duties.--An organization which has received a grant under this 
section shall have the following duties--
            (1) investigate and resolve complaints made by or on behalf 
        of individuals;
            (2) provide information, referral and assistance to 
        individuals on the availability of health insurance coverage 
        and health care items and services;
            (3) identify, investigate and promote solutions to problems 
        arising from public or private practices and policies which 
        adversely affect individuals' access to quality health care, 
        including--
                    (A) marketing of health plans, and
                    (B) accessibility of services, subsidies or other 
                resources;
            (4) monitor, analyze, and comment on the development and 
        implementation of Federal, State, or local laws affecting 
        access to quality health care;
            (5) facilitate public comment on Federal, State, or local 
        laws affecting access to quality health care;
            (6) compile and report to the Secretary and national 
        consumer representative support center data regarding 
        complaints received and actions taken, in a form defined by the 
        Secretary;
            (7) protect the identity of any complainant, unless 
        released from this responsibility by the complainant;
            (8) coordinate activities and advocacy with other 
        organizations, including legal assistance providers, State and 
        local long-term care ombudsman programs, and protection and 
        advocacy programs established for persons with disabilities 
        under--
                    (A) part A of the Developmental Disabilities 
                Assistance and Bill of Rights Act (42 U.S.C. 6001 et 
                seq.),
                    (B) the Protection and Advocacy for Mentally Ill 
                Individuals Act of 1986 (42 U.S.C. 10801 et seq.), and
                    (C) the Americans with Disabilities Act;
            (9) perform such other duties the Secretary may specify.
    (e) Authority of Consumer Health Care Advocate.--The consumer 
health care advocate in each State shall be vested with the following 
powers and authorities:
            (1) The advocate may establish local programs with the same 
        powers and authorities, subject to the same restrictions 
        regarding eligibility and conflict of interest.
            (2) Representatives of the consumer health care advocate 
        shall have access to health care facilities for the purpose of 
        communicating with individuals receiving care on the premises.
            (3) Representatives of the consumer health care advocate 
        shall have access to the medical and social records of an 
        individual if the individual, or the legal representative of 
        the individual, has granted permission to do so.
            (4) The consumer health care advocate shall have access to, 
        and upon request copies of, all licensing and certification 
        reports and data pertaining to health care providers and 
        developed by a State.
    (f) Limited Liability.--No consumer health care advocate or its 
local programs or representatives shall be liable under State or 
Federal law for the good faith performance of official duties.
    (g) Funding.--The Secretary shall provide funding for the entities 
described under this section through the following mechanisms:
            (1) Base funding.--The Secretary shall provide grants to 
        the consumer health care advocate in each State and the Center 
        described under subsection (g) from the proceeds of the 
        assessment under section 201, up to a total of $50,000,000; and
            (2) Voluntary contributions.--The Secretary shall assist 
        States in ensuring that consumer health care advocate entities 
        are permitted to seek voluntary contributions through a 
        prominent solicitation in the enrollment materials distributed 
        by or on behalf of each health plan.

SEC. 204 NATIONAL CONSUMER REPRESENTATIVE SUPPORT CENTER

    The Secretary shall, no later than six months after the date of 
enactment of this Act, make one or more grants of a total amount not 
exceeding $5,000,000 per annum to establish national consumer 
representative support center(s) to assist consumer representatives 
serving on State medical boards, quality improvement foundation 
governing boards, and consumer health care advocates in performing 
their duties. Entities eligible for a grant under this section shall be 
nonprofit organizations with demonstrated expertise in training and 
representing diverse consumers of health care insurance, and health 
care items and services.

SEC. 205. NATIONAL MEASURES OF QUALITY PERFORMANCE.

    (a) In General.--The Secretary shall develop a set of national 
measures of quality performance, which shall be used to assess the 
provision if health care services and access to such services.
    (b) Subject of Measures.--National measures of quality performance 
shall be selected in a manner that provides information on the 
following subjects:
            (1) Access to health care services by consumers;
            (2) Appropriateness of health care services provided to 
        consumers;
            (3) Outcomes of health care services and procedures;
            (4) Health promotion;
            (5) Prevention of diseases, disorders, and other health 
        conditions;
            (6) Consumer satisfaction with care, including satisfaction 
        of consumers who disenroll from health plans and those who 
        utilize services from providers not included in their plan 
        network.
    (c) Selection of Measures.--
            (1) Consultation.--In developing and selecting the national 
        measures of quality performance, the Secretary shall consult 
        with appropriate interested parties, including--
                    (A) States;
                    (B) health plans;
                    (C) employers and individuals purchasing health 
                care through regional and corporate alliances;
                    (D) health care providers;
                    (E) health care consumers;
                    (F) the quality improvement foundations established 
                under section 202;
                    (G) the consumer health care advocate established 
                under section 203;
                    (H) nationally recognized accreditation 
                organizations.
            (2) Criteria.--The following criteria shall be used in 
        developing and selecting national measures of quality 
        performance:
                    (A) Significance.--When a measure relates to a 
                specific disease, disorder, or other health condition, 
                the disease, disorder, or condition shall be of 
                significance in terms of prevalence, morbidity, 
                mortality, or the costs associated with the prevention, 
                diagnosis, treatment, or clinical management of the 
                disease, disorder, or condition.
                    (B) Range of services.--The set of measures, taken 
                as a whole, shall be representative of the range of 
                items and services provided to consumers of health care 
                by health care providers and suppliers.
                    (C) Reliability and validity.--The measures shall 
                be reliable and valid.
                    (D) Undue burden.--The data needed to calculate the 
                measures shall be obtained without undue burden on the 
                entity or individual providing the data.
                    (E) Linkage to health outcome.--When a measure is a 
                rate of a process of care, the process shall, to the 
                extent practicable, be linked to a health outcome based 
                upon the best available scientific evidence.
                    (F) Control and risk adjustment.--When a measure of 
                a provider or plan is an outcome of the provision of 
                care, the outcome shall be within the control of the 
                provider or plan and shall be one with respect to which 
                an adequate risk adjustment can be made.
                    (G) Public health.--The measures shall incorporate 
                standards identified by the Secretary of Health and 
                Human Services for meeting public health objectives.
    (d) Updating.--The Secretary shall review and update the set of 
national measures of quality performance annually to reflect changing 
goals for quality improvement. The Secretary shall establish and 
maintain a priority list of performance measures that within a five-
year period it intends to consider for inclusion within the set through 
the updating process. The Secretary may select different performance 
measures for inclusion within the set from year to year.
    (e) Consumer Surveys.--
            (1) In general.--The Secretary shall conduct periodic 
        surveys of health care consumers to gather information 
        concerning access to care, use of health services, health 
        outcomes, and patient satisfaction. The surveys shall monitor 
        consumer reaction to the implementation of this Act and be 
        designed to assess the impact of this Act on the general 
        population of the United States and potentially vulnerable 
        populations.
            (2) Survey administration.--The Secretary shall develop and 
        approve a standard design for the surveys, which shall be 
        administered by the Administrator for Health Care Policy and 
        Research on a plan-by-plan and State-by-State basis. A State 
        may add survey questions on quality measures of local interest 
        to surveys conducted in the State.
            (3) Sampling strategies.--The Secretary shall develop 
        sampling strategies that ensure survey samples adequately 
        measure populations considered by the Secretary to be at risk 
        of receiving inadequate health care or who may be difficult to 
        reach through consumer sampling methods, including individuals 
        who--
                    (A) fail to enroll in a health plan;
                    (B) resign from a plan;
                    (C) are members of a vulnerable population, as 
                defined by the Secretary; or
                    (D) have received health care items or services 
                from providers or suppliers which were not members of 
                the network maintained by the plan in which the 
                individual was enrolled.
    (f) Effective Date.--The requirements of this section taken effect 
upon the date of enactment of this Act, with the first publication for 
comment of draft performance measures defined under subsection (a), and 
the surveys described under subsection (e), to take place no later than 
two years after the date of enactment of this Act. The Secretary shall 
publish, for use by the public in evaluating health plans and 
providers, the first set of performance measures no later than three 
years after the date of enactment of this Act.

SEC. 206 PAYMENT FOR PHARMACIST COUNSELING.

    (a) Relative Value Scale for Evaluation and Management Services by 
Pharmacists.--The Secretary shall develop and publish, no later than 
three years from the date of enactment of this Act, a relative value 
scale that defines and establishes a numerical relationship among 
various evaluation and management services performed by pharmacists, 
taking into account--
            (1) differences in skill levels and training required to 
        perform the services;
            (2) differences in level of risk associated with use of 
        individual drugs or groups of drugs; and
            (3) differences in the level of risk associated with drug 
        use by certain individuals.
    (b) Report to Congress.--No later than three years after the date 
of enactment of this subsection, the Secretary shall provide to 
Congress a report on the relative value scale developed under paragraph 
(1), together with recommendations regarding adoption of such scale by 
Federal health insurance programs and by health plans certified under 
section 301.

          TITLE III--STATE HEALTH QUALITY MANAGEMENT PROGRAMS

SEC. 301 CERTIFICATION OF HEALTH PLANS.

    (a) In General.--(1) To be certified by a State, a plan must be 
determined to be in substantial compliance with the standards described 
in this section.
    (2) Oversight.--The Secretary may conduct onsite inspections and 
inspect documents generated by or in the possession of a plan, 
accreditation organization, or State, to verify the compliance of a 
plan with the requirements of this section.
    (b) Accreditation.--A State may accept, in lieu of making its own 
determination of compliance with these standards, the determination of 
compliance by an accreditation organization designated by the Secretary 
as utilizing a process consistent with subsection (c).
    (c) Process.--A State or accreditation organization making a 
determination under subsection (a)--
            (1) shall verify compliance with each of the standards 
        under this section.
            (2) shall make available to the public its findings related 
        to a plan's compliance with each of the standards under this 
        section.
            (3) may charge plans fees sufficient to cover the cost of 
        assuring compliance with the standards under this section.
    (d) Quality Standards.--
            (1) Quality improvement.--
                    (A) In general.--Each health plan shall establish a 
                quality improvement program to systematically measure, 
                assess and improve enrollee health status, patient 
                outcomes, processes of care, and enrollee satisfaction 
                associated with health care provided under the plan.
                    (B) Functions.--Each quality improvement program 
                shall perform the following functions--
                            (i) measure performance of the plan and its 
                        member providers, using at least the quality 
                        measures developed under section 5003, and 
                        communicate findings of such monitoring to such 
                        providers and plan administrative personnel;
                            (ii) furnish the information required under 
                        subtitle B of this title and provide such other 
                        reports and information on the quality of care 
                        delivered by providers as may be required under 
                        this Act;
                            (iii) demonstrate measureable improvement 
                        in medical outcomes (including morbidity, 
                        mortality, functional impairment, and quality 
                        of life), as measured by the plan and as 
                        assessed by plan enrollees and patients;
                            (iv) establish procedures for--
                                    (I) educational intervention when 
                                services characterized by underuse, 
                                overuse, or poor technical quality are 
                                provided, and
                                    (II) referral to State licensure 
                                board or other appropriate regulatory 
                                authorities if the interventions 
                                described in subclause (I) are 
                                unsuccessful; and
                            (v) cooperate with the health quality 
                        improvement foundation established under 
                        section 5008, including providing access to 
                        appropriate medical records and quality 
                        performance data upon the request of such 
                        foundation, and undertaking investigation of 
                        quality problems and opportunities for quality 
                        improvement identified by the foundation.
            (2) community health improvement.--
                    (A) In general.--Each health plan shall establish a 
                community health improvement program that meets the 
                requirements of subparagraph (C) for the benefit of--
                            (i) plan enrollees; and
                            (ii) uninsured individuals residing in the 
                        geographic area served by the plan, or, with 
                        respect to self-insured plans, the geographic 
                        area served by insured plans in which the 
                        plan's principle place of business is located.
                    (B) Requirements.--A community health improvement 
                program shall consist of:
                            (i) identification of baseline health 
                        status problems in the population addressed by 
                        the program;
                            (ii) development of measures to address 
                        such problems in consultation with local public 
                        health officials, community organizations, and 
                        other health plans operating in the service 
                        area of the plan;
                            (iii) implementation of measures developed 
                        under clause (ii);
                            (iv) evaluation of the effectiveness of 
                        such measures in improvement of health status 
                        in the population; and
                            (v) an annual report of the results of the 
                        evaluation.
            (3) Utilization management.--
                    (A) In general.--The utilization management 
                activities of a plan are subject to the requirements of 
                this paragraph to the extent such activities involve 
                case by case review of care proposed for or provided to 
                individual patients. A plan may satisfy the 
                requirements of subparagraphs (C) through (G) by 
                conducting its utilization management efforts through 
                its quality improvement program.
                    (B) Disclosure of utilization management criteria 
                upon the request of practitioners or enrollees.
                    (C) Inclusion of utilization management criteria to 
                identify underutilization as well as overutilization.
                    (D) Systematic updating of utilization review 
                criteria to reflect current scientific and medical 
                findings.
                    (E) Supervision of utilization determinations by 
                qualified medical professionals.
                    (F) Consistency in the application of utilization 
                review criteria.
                    (G) Personnel responsible for utilization 
                management shall--
                            (i) monitor the outcome of utilization 
                        management decisions which are appealed by an 
                        enrollee or provider, and
                            (ii) revise utilization management criteria 
                        and procedures to eliminate future reversed 
                        decisions to the extent practicable, except 
                        where such reversals were not the result of 
                        deficiencies in such criteria or procedures.
            (4) Physician incentive plans.--
                    (A) In general.--A health plan may establish and 
                operate a physician incentive plan (as defined in 
                subparagraph (B)) if--
                            (i) the requirements specified in clauses 
                        (i) through (iii) of section 1876(i)(8)(A) of 
                        the Social Security Act are met (in the same 
                        manner as they apply to eligible organizations 
                        under section 1876 of such Act); and
                            (ii) the plan prominently discloses to the 
                        public, in its enrollment information, the 
                        nature of the incentives provided to providers 
                        under the plan.
                    (B) Definition.--For purposes of this paragraph, 
                the term ``physician incentive plan'' means any 
                compensation or other financial arrangement between a 
                health plan and a physician or physician group that may 
                directly or indirectly have the effect of reducing or 
                limiting services provided with respect to individuals 
                enrolled under the plan.
            (5) Enrollee rights and responsibilities.--
                    (A) In general.--A plan shall provide to all 
                enrollees written information, translated for the 
                benefit of any population representing 5 percent or 
                more of the plan's enrollees whose primary language is 
                other than English, describing--
                            (i) enrollee rights and responsibilities, 
                        including the grievance and appeals rights 
                        defined in subpart C of this title, the rights 
                        defined in subparagraphs (B) through (H), and
                            (ii) any limitations of coverage, 
                        exclusions, and out-of-pocket costs (including 
                        any copayment, coinsurance, deductible) and any 
                        limit(s) on out-of-pocket costs.
                    (B) Waiver of rights.--No health plan or provider 
                may require an individual or enrollee to waive the 
                rights set forth in this paragraph as a condition of 
                enrollment in a plan, admission to a health care 
                facility, or provision of treatment.
                    (C) Right to refuse treatment.--Each enrollee shall 
                have the right--
                            (i) to refuse any health care item or 
                        service;
                            (ii) to refuse to receive any health care 
                        item or service from a specified provider;
                            (iii) to leave the premises of any 
                        provider, except as otherwise provided under 
                        law;
                            (iv) to refuse participation in 
                        experimental research, and to have either a 
                        refusal or consent documented in the medical 
                        record, except the (HHS) Secretary may define 
                        in regulations circumstances under which 
                        obtaining consent directly from a patient is 
                        not possible; and
                            (v) to receive an explanation of any 
                        available alternative item, service, or 
                        provider, and any likely medical consequences 
                        of the exercise of the rights described in 
                        clauses (i)-(iv).
                    (D) Right to participate in planning treatment.--
                Enrollees shall have the right to participate in the 
                planning of their health care, including the 
                opportunity to discuss treatment alternatives with 
                providers and to be represented in such discussions by 
                a family member or other chosen representative.
                    (E) Right to choose primary care physician.--Each 
                plan shall permit enrollees to choose a primary care 
                physician from among providers who are members of the 
                plan, and permit enrollees to change physicians upon 
                request.
                    (F) Right to privacy.--Enrollees shall have the 
                right--
                            (i) to privacy in regard to their health 
                        care during discussion or consultation among 
                        providers regarding their care, physical 
                        examination, and treatment; and
                            (ii) while admitted to a health facility, 
                        to associate and communicate privately with 
                        persons of their choice, including being 
                        afforded opportunities to communicate privately 
                        with a representative of the consumer ombudsman 
                        or protection and advocacy organization, upon 
                        the request of such representative.
                    (G) Right to medical records.--Enrollees shall have 
                a right to review and, for a nominal charge, copy, 
                their own medical records during business hours.
                    (H) Right to confidentiality of records.--Enrollees 
                shall be assured confidential treatment of their 
                medical records, and shall be afforded the opportunity 
                to approve or refuse their release to any individual 
                other than providers involved in their care, except the 
                Secretary, entities authorized under section 5008 of 
                this Act, or others granted access to such records by 
                law.
            (6) Practitioner credentialing and competency.--Each health 
        plan shall--
                    (A) establish an ongoing credentialing and 
                recredentialing process for all physicians and other 
                licensed practitioners which are members of the plan;
                    (B) require practitioners applying for membership 
                to complete an application and statement attesting to 
                their professional standing and the accuracy of all 
                information provided;
                    (C) assure the demonstrated competence of member 
                practitioners to perform the duties under the plan's 
                membership agreement, and establish policies and 
                procedures for educational intervention or reduction, 
                suspension, or termination of privileges of 
                practitioners failing to demonstrate competence.
            (7) Information management.--Each health plan shall--
                    (A) protect the confidentiality and security of 
                information identifying any individual enrollee;
                    (B) standardize throughout the health plan and its 
                member providers, to the extent practicable and 
                consistent with the requirements of section 205, data 
                sets, codes, definitions, classifications, and 
                terminology.
            (8) Disclosures related to marketing information.--
                    (A) Each health plan which sponsors or distributes 
                any comparative information pertaining to plans 
                marketed in an area shall prominently disclose in such 
                information--
                            (i) the identity of the plan (or related 
                        organization) sponsoring or distributing the 
                        comparative information, and whether the 
                        performance of the plan (or organization) is 
                        included in the comparative information being 
                        sponsored or distributed by such plan; and
                            (ii) if clinical outcomes or other clinical 
                        performance data are included in such 
                        information, whether such data were adjusted to 
                        reflect the health status and severity of 
                        illness of enrollees or patients included in 
                        such comparisons, and the method by which any 
                        severity adjustment was accomplished.
                    (B) Enrollment materials provided to potential 
                enrollees by each health plan shall make a prominent 
                disclosure of the features, availability, cost sharing 
                and the additional premium cost (if any) associated 
                with purchase of the self-referral option described in 
                paragraph (11).
            (9) Counseling requirements for pharmacies.--Each health 
        plan shall ensure that no pharmacy may receive payment from the 
        plan for dispensing a covered outpatient drug unless the 
        pharmacy agrees that a pharmacist employed by the pharmacy will 
        ask individuals enrolled in the plan who receive a covered 
        outpatient drug from the pharmacy questions regarding--
                    (A) the appropriate use of the drug,
                    (B) major potential interactions between the drug 
                and other drugs used by the individual, and
                    (C) other questions necessary to determine, in the 
                professional judgment of the pharmacist--
                            (i) whether the individual understands and 
                        is likely to comply with instructions for the 
                        safe and effective use of such drugs, and
                            (ii) if any counseling or other action by 
                        the pharmacist is needed.
            (10) Voluntary contributions.--Each health plan shall, upon 
        the request of the consumer health care advocate described 
        under section 203--
                    (A) publish in a prominent location in its 
                enrollment document a solicitation for voluntary 
                contributions for the consumer health care advocate 
                designated by the Secretary to serve the State; and
                    (B) collect such contributions, through the same 
                mechanism as periodic premium payments of the enrollee 
                are collected, and forward them to the consumer health 
                care advocate no less frequently than monthly.
            (11) Point of service option.--
                    (A) In general.--Each health plan which utilizes a 
                network of providers or suppliers shall offer potential 
                enrollees a point of service option, permitting such 
                enrollees to receive all covered items and services 
                from suppliers and providers that are not members of 
                the plan's network, subject to the conditions described 
                in paragraphs (B) through (D).
                    (B) Cost sharing.--For items and services received 
                from out-of-network providers or suppliers, enrollees 
                who have purchased the point of service option shall be 
                subject to--
                            (i) a deductible not to exceed $200,
                            (ii) coinsurance at a rate no greater than 
                        150 percent of the coinsurance rate established 
                        for items and services purchased through the 
                        plan's network,
                except that for individuals with incomes below 150 
                percent of the applicable poverty level, the Secretary 
                shall establish a deductible and coinsurance level 
                which is higher than the amounts paid by such 
                individuals for items and services received from 
                network providers and suppliers, but which will not 
                pose an unreasonable barrier to exercise of the point 
                of service option.
                    (C) Self-referral.--With respect to an enrollee who 
                has purchased the point of service option, no plan may 
                require a referral from a network provider as a 
                precondition of coverage of out-of-network items and 
                services.
                    (D) Medical necessity.--A plan may deny payment for 
                items or services received from an out-of-network 
                provider or supplier if such items or services were not 
                medically necessary.

SEC. 302. STANDARDS FOR STATE MEDICAL BOARDS.

    (a) Requirements for State Board of Medical Examiners.--
            (1) Public accountability.--Each State Board of Medical 
        Examiners shall make available to the public upon request:
                    (A) a description of any final actions (including 
                those described in paragraph (4)(E)) taken by the Board 
                with respect to a physician;
                    (B) an annual performance report indicating the 
                number and type of investigations undertaken and 
                actions taken by the Board during the preceding year.
            (2) Composition of board of medical examiners and 
        committees.--Each State Board shall be structured so as to 
        include:
                    (A) public members in sufficient numbers that no 
                fewer than fifty percent of board members are public 
                members;
                    (B) in the membership of each committee or 
                subdivision of the board, at least one public member.
            (3) Funding.--
                    (A) Each State medical licensure board shall be 
                adequately funded to fulfill the requirements of this 
                section.
                    (B) All revenue generated by medical licensure fees 
                shall be used to fund the activities of the State 
                medical board, to the extent necessary to fulfill the 
                requirement of subparagraph (A).
            (4) Investigations.--A State medical licensure board 
        shall--
                    (A) investigate any credible evidence which alleges 
                that a physician--
                            (i) is incompetent to perform the duties 
                        reflected in the physician's license;
                            (ii) engages in unprofessional conduct that 
                        jeopardized patients;
                            (iii) is mentally or physically unable to 
                        safely and effectively perform the duties 
                        reflected in the physician's license;
                    (B) employ or arrange for the availability of 
                personnel with the appropriate medical training 
                necessary to investigate and document findings related 
                to allegations described in subparagraph (A);
                    (C) investigate allegations submitted to the board 
                by a health quality improvement foundation established 
                under section 202.
                    (D) possess the following investigative powers:
                            (i) the power to subpoena documents and 
                        individuals possessing information relevant to 
                        investigations;
                            (ii) the power to require professional 
                        competency examinations upon reasonable 
                        suspicion of incompetence;
                            (iii) the power to obtain the involuntary 
                        temporary summary suspension of a licensee from 
                        practice, based upon a reasonable belief that 
                        the licensee poses an imminent threat to 
                        patient health, followed as soon as practicable 
                        by a formal hearing;
                    (E) possess the following authorities related to 
                disciplinary action:
                            (i) revocation or suspension of a license;
                            (ii) restriction or limitation of the 
                        extent, scope, or type of practice, including 
                        the authority to order such limited practice to 
                        be conducted under the supervision of another 
                        licensee;
                            (iii) imposition of civil penalties;
                            (iv) issuance of a warning or reprimand;
                            (v) probation with or without conditions, 
                        such as submission to treatment, continuing 
                        education, or reexamination;
                            (vi) the authority to condition a 
                        reinstatement of a license or removal of 
                        license limitations upon the licensee obtaining 
                        minimum results on one or more forms of 
                        competency examination, and
                            (vii) assessment of the reasonable costs of 
                        investigation, hearings or reviews, and 
                        supervision of practice.
    (b) Eligibility for Grants.--
            (1) In general.--The Secretary may make a grant to a State 
        Board of Medical Examiners for any purpose related to its 
        duties under this section, or for demonstration projects, if 
        such Board demonstrates it is eligible under paragraph (2).
            (2) Eligibility.--A State Board of Medical Examiners is 
        eligible for a grant under paragraph (1) if the Secretary 
        determines that the Board is in substantial compliance with 
        this section and the current model standards established by the 
        Federation of State Medical Boards.
            (3) Construction.--If any of the model standards referred 
        to in paragraph (2) are inconsistent with the provisions of 
        this section, the Secretary's determination of eligibility 
        shall be based upon on compliance with the requirements of this 
        section.
    (c) Definitions.--
            (1) For purposes of this section, a ``Board of Medical 
        Examiners'' shall have the meaning given in section 431(14) of 
        the Health Care Quality Improvement Act of 1986.
            (2) For purposes of this section, a ``public member'' means 
        an individual who resides in the State and is a person of 
        integrity and good reputation who has lived in the State for at 
        least five years immediately preceding appointment to the 
        Board, and has never been authorized to practice a healing art, 
        and has never had a substantial personal, business, 
        professional, or pecuniary connection with a healing art or 
        with a medical education or health care facility, except as a 
        patient or a potential patient.
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