[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1222 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1222

 To amend the Employee Retirement Income Security Act of 1974 and the 
 Public Health Service Act to require managed care group health plans 
  and managed care health insurance coverage to meet certain consumer 
                        protection requirements.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 21, 1997

 Mrs. Roukema introduced the following bill; which was referred to the 
   Committee on Education and the Workforce, and in addition to the 
 Committee on Commerce, for a period to be subsequently determined by 
the Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
 Public Health Service Act to require managed care group health plans 
  and managed care health insurance coverage to meet certain consumer 
                        protection requirements.

    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 ``Quality Health Care and Consumer 
Protection Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to ensure that enrollees in managed care 
group health plans and managed care health insurance coverage receive 
adequate health care services by ensuring that--
            (1) enrollees have full and timely access to clinically 
        appropriate health care personnel and facilities;
            (2) enrollees have adequate choice among health care 
        professionals who are accessible and qualified;
            (3) there is open communication between physicians and 
        enrollees;
            (4) enrollees have access to comprehensive pharmaceutical 
        services;
            (5) enrollees have access to information regarding limits 
        on coverage of experimental treatments;
            (6) there is high quality care provided within the plan or 
        coverage;
            (7) medical decisions are made by the appropriate medical 
        personnel;
            (8) participating health care professionals are 
        practitioners in good standing;
            (9) data on the plan or coverage are available as 
        appropriate;
            (10) there is full public access to information regarding 
        health care service delivery within the plan or coverage;
            (11) there is a fair vehicle for resolving enrollee 
        complaints under the plan or coverage; and
            (12) there is timely resolution of enrollee grievances and 
        appeals.

SEC. 3. QUALITY HEALTH CARE AND CONSUMER PROTECTION ACT UNDER GROUP 
              HEALTH PLANS AND GROUP HEALTH INSURANCE COVERAGE.

    (a) ERISA Amendments.--(1) Subpart B of part 7 of subtitle B of 
title I of the Employee Retirement Income Security Act of 1974, as 
amended by section 702(a) of Public Law 104-204, is amended by adding 
at the end the following new section:

``SEC. 713. QUALITY HEALTH CARE AND CONSUMER PROTECTION ACT.

    ``(a) Access to Personnel and Facilities.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall--
                    ``(A) include a sufficient number and type of 
                primary care practitioners and specialists, throughout 
                the service area, to meet the needs of enrollees and to 
                provide meaningful choice; and
                    ``(B) demonstrate that it offers the following:
                            ``(i) An adequate number of accessible 
                        acute care hospital services, within a 
                        reasonable distance and travel time for 
                        enrollees.
                            ``(ii) An adequate number of accessible 
                        primary care practitioners, within a reasonable 
                        distance and travel time for enrollees.
                            ``(iii) An adequate number of accessible 
                        specialists and subspecialists, within a 
                        reasonable distance and travel time for 
                        enrollees.
                            ``(iv) The availability of specialty 
                        medical services, including physical therapy, 
                        occupational therapy, and rehabilitation 
                        services.
                            ``(v) The availability of specialists who 
                        are not participating providers or 
                        professionals, when a patient's unique medical 
                        circumstances warrant it.
                Clause (iii) shall be construed as requiring access to 
                nonparticipating health care professionals who are 
                specialists for treatment of a specific condition if 
                and when there are not sufficient number of such 
                specialists who are participating health care 
                professionals.
            ``(2) Continuity of care.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall--
                    ``(A) provide for continuity of care with 
                established primary care practitioners, when the health 
                care professional's contract is terminated, and
                    ``(B) allow enrollees, at no additional out-of-
                pocket cost, to continue receiving services from a 
                primary care practitioner whose contract with the plan 
                or issuer is terminated without cause for a period of 
                at least 60 days if the enrollee requests such 
                continuation.
            ``(3) Telephone access.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall provide telephone access to the plan or 
        issuer for sufficient time during business and evening hours to 
        ensure enrollee access for routine care, and 24 hour telephone 
        access to either the plan, issuer, or a participating provider 
        or professional, for emergency care or authorization for such 
        care.
            ``(4) Standards for waiting times.--A managed care group 
        health plan (and a health insurance issuer offering managed 
        care group health insurance) shall establish reasonable 
        standards for waiting times for enrollees to obtain 
        appointments, subject to special rules for emergency services 
        under paragraph (5). Such standards shall include appointment 
        scheduling guidelines based on the type of health care service, 
        including prenatal care appointments, well-child visits and 
        immunizations, routine physicals, follow-up appointments for 
        chronic conditions, and urgent care.
            ``(5) Coverage of emergency services.--
                    ``(A) In general.--A managed care group health plan 
                (and a health insurance issuer offering managed care 
                group health insurance) shall cover and reimburse 
                expenses for treatment of an emergency medical 
                condition if the treatment is obtained, without prior 
                authorization.
                    ``(B) Emergency medical condition defined.--The 
                term `emergency medical condition' means a medical 
                condition, the onset of which is sudden and unexpected, 
                that manifests itself by symptoms of sufficient 
                severity, that a prudent layperson, who possesses an 
average knowledge of health and medicine, could reasonably assume that 
the condition requires immediate medical treatment, and could expect 
the absence of medical attention to result in serious impairment to 
bodily functions or place the person's health in serious jeopardy.
                    ``(C) Prudent layperson defined.--In this 
                paragraph, the term `prudent layperson' means a person 
                without specific medical training for the illness or 
                condition in question who acts as a reasonable person 
                would under similar circumstances.
    ``(b) Assuring Adequate Choice of Health Care Professionals.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall provide that each enrollee shall have adequate 
        choice among participating health care professionals who are 
        accessible and qualified.
            ``(2) Choice.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall permit enrollees to choose their own primary 
        care practitioner from a list of health care professionals 
        within the plan or coverage. Such list shall be updated as 
        health care professionals are added or removed and shall 
        include--
                    ``(A) a sufficient number of primary care 
                practitioners who are accepting new enrollees; and
                    ``(B) a sufficient mix of primary care 
                practitioners that reflects a diversity that is 
                adequate to meet the needs of the enrollees' varied 
                characteristics, including age, gender, race, and 
                health status.
            ``(3) Medical specialists.--A managed care group health 
        plan (and a health insurance issuer offering managed care group 
        health insurance) shall develop a system to permit enrollees to 
        use a medical specialist primary care practitioner, when the 
        enrollee's medical conditions (including suffering from a 
        chronic disease or medical condition) warrant it.
            ``(4) Continuity of care.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall provide--
                    ``(A) continuity of care and appropriate referral 
                to specialists within the plan or coverage, when 
                specialty care is warranted,
                    ``(B) enrollees with access to medical specialists 
                on a timely basis, and
                    ``(C) enrollees with a choice of specialists when a 
                referral is made.
            ``(5) Requirement for point of service option.--A managed 
        care group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall offer each enrollee 
        with an enrollment option under which the enrollee may receive 
        benefits for services provided by nonparticipating health care 
        professional or provider. The plan or issuer may require that 
        the enrollee pay a reasonable premium to reflect the cost of 
        such option.
            ``(6) Consultation for second opinions.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall provide enrollees 
        with access to a consultation for a second option.
    ``(c) Prohibition of Gag Rules.--A managed care group health plan 
(and a health insurance issuer offering managed care group health 
insurance)--
            ``(1) shall not have any contract provision with a health 
        care professional that limits the health care professional's 
        disclosure to an enrollee or on behalf of an enrollee of any 
        information relating to the enrollee's medical condition or 
        treatment options; and
            ``(2) shall not penalize (through contract termination or 
        otherwise) a health care professional--
                    ``(A) because the professional offers referrals, or 
                discusses any or all medically necessary or appropriate 
                care or treatment options (including disclosing any 
                information, determined by the health care professional 
                to be in the best interest of the enrollee) with, or on 
                behalf of, an enrollee; or
                    ``(B) for discussing financial incentives and 
                financial arrangements between the health care 
                professional and the plan or issuer.
    ``(d) Coverage of Drugs and Devices.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) that provides benefits with respect to drugs and 
        medical devices shall provide coverage for all drugs and 
        medical devices approved by the Food and Drug Administration, 
        whether or not that drug or device has been approved for the 
        specific treatment or condition, so long as the primary care 
        practitioner or other medical specialist treating the enrollee 
        determines the drug or device is medically necessary and 
        appropriate for the enrollee's condition.
            ``(2) Operation of drug utilization review program.--A 
        managed care group health plan (and a health insurance issuer 
        offering managed care group health insurance) that provides 
        benefits with respect to prescription drugs shall establish and 
        operate a drug utilization review program that includes the 
        following:
                    ``(A) Retrospective review of prescription drugs 
                furnished to enrollees.
                    ``(B) Education of physicians, enrollees, and 
                pharmacists regarding the appropriate use of 
                prescription drugs.
                    ``(C) An ongoing periodic examination of data on 
                outpatient prescription drugs to ensure quality 
                therapeutic outcomes for enrollees.
                    ``(D) A primary emphasis on enhancing quality of 
                care for enrollees by assuring appropriate drug 
                therapy.
                    ``(E) Clinically relevant criteria and standards 
                for drug therapy.
                    ``(F) Application of nonproprietary criteria and 
                standards, developed and revised through an open, 
                professional consensus process.
                    ``(G) Interventions which focus on improving 
                therapeutic outcomes.
                    ``(H) An educational outreach program that--
                            ``(i) is directed to enrollees, 
                        pharmacists, and other health care 
                        professionals, and
                            ``(ii) emphasizes the appropriate use of 
                        prescription drugs.
                    ``(I) Denial of services under prospective review 
                of drug therapy only in cases of enrollee 
                ineligibility, coverage limitations, or fraud.
                    ``(J) Determination of the appropriate drug therapy 
                for the enrollee by the prescribing health care 
                professional and prohibitions of substitutions without 
                the direct approval of such professional.
    ``(e) Coverage of Experimental Treatments.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) that limits coverage for services shall define the 
        limitation and disclose the limits in any agreement or 
        certificate of coverage. Such disclosure shall include--
                    ``(A) who is authorized to make such a 
                determination, and
                    ``(B) the criteria the plan or issuer uses to 
                determine whether a service is experimental.
            ``(2) Denials.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) that denies coverage for an experimental treatment, 
        procedure, drug, or device, for an enrollee who has a terminal 
        condition or illness shall provide the enrollee with a denial 
        letter within 20 working days of the submitted request. The 
        letter shall include--
                    ``(A) the name and title of the individual making 
                the decision;
                    ``(B) a statement setting forth the specific 
                medical and scientific reasons for denying coverage;
                    ``(C) a description of alternative treatment, 
                services, or supplies covered by the plan or under the 
                coverage, if any; and
                    ``(D) a copy of the plan's or issuer's grievance 
                and appeal procedure.
            ``(3) Experimental treatment defined.--In this subsection, 
        the term `experimental treatment' means treatment that, while 
        not commonly used for a particular condition or illness, 
        nevertheless is recognized for treatment of the particular 
        condition or illness, and there is no clearly superior, 
        nonexperimental treatment alternative available to the 
        enrollee.
    ``(f) Quality Assurance Program.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall develop comprehensive quality assurance 
        standards, adequate to identify, evaluate, and remedy problems 
        relating to access, continuity, and quality of care. The 
        standards shall include--
                    ``(A) an ongoing, written, internal quality 
                assurance program;
                    ``(B) specific written guidelines for quality of 
                care studies and monitoring, including attention to 
                vulnerable populations;
                    ``(C) performance and clinical outcomes-based 
                criteria;
                    ``(D) a procedure for remedial action to correct 
                quality problems, including written procedures for 
                taking appropriate corrective action;
                    ``(E) a plan for data gathering and assessment 
                under subsection (g); and
                    ``(F) a peer review process.
            ``(2) Process for selection of professionals.--A managed 
        care group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall have a process for 
        selection of health care professionals who will be 
        participating professionals, with written policies and 
        procedures for standards used by the plan or issuer. Such 
        process shall meet the following requirements:
                    ``(A) The plan or issuer shall establish minimum 
                professional requirements.
                    ``(B) The plan or issuer shall demonstrate that it 
                has consulted with appropriately qualified health care 
                professionals to establish the requirements.
                    ``(C) The process shall include verification of the 
                individual practitioner's license, history of 
                suspension or revocation, and liability claims history.
                    ``(D) The plan or issuer shall establish a formal, 
                written, ongoing, process for the reevaluation of all 
                participating health care professionals within a 
                specified number of years after the initial acceptance. 
                Such reevaluations shall include updates of the 
                previous review criteria and an assessment of the 
                performance pattern based on criteria including 
                enrollee clinical outcomes, number of complaints, and 
                malpractice actions.
            ``(3) Limitation on use of professionals.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall not use a health 
        care professional beyond, or outside of, the professional's 
        legally authorized scope of practice.
    ``(g) Data Systems and Confidentiality.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall provide information on the plan's or issuer's 
        structure, decision making process, health care benefits and 
        exclusions, cost and cost-sharing requirements, list of 
        participating providers and health care professionals as well 
        as grievance and appeal procedures, to all potential enrollees, 
        all enrollees covered by the plan or coverage, and, to the 
        Secretary of Labor and to the Secretary of Health and Human 
        Services (or, with respect to a health insurance issuer, to the 
        State oversight agency).
            ``(2) Reporting of data.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall collect and report annually to the 
        Secretary of Labor and to the Secretary of Health and Human 
        Services (or, in the case of a health insurance issuer, State 
        oversight agency) specified data including--
                    ``(A) gross outpatient and hospital utilization 
                data;
                    ``(B) enrollee clinical outcome data;
                    ``(C) the number and types of enrollee grievances 
                or complaints during the year, the status of decisions, 
                and the average time required to reach a decision; and
                    ``(D) the number, amount, and disposition of 
                malpractice claims resolved during the year by the plan 
                or issuer and any of its participating health care 
                providers and professionals.
            ``(3) Reporting.--All data specified in paragraphs (1) and 
        (2) shall be reported to the Secretary of Labor and to the 
        Secretary of Health and Human Services (or, in the case of a 
        health insurance issuer, the State oversight agency) and shall 
        be available to the public on a timely basis.
            ``(4) Medical records and confidentiality.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall--
                    ``(A) establish written policies and procedures for 
                the handling of medical records and enrollee 
                communications to ensure enrollee confidentiality;
                    ``(B) ensure the confidentiality of specified 
                enrollee information, including, prior medical history, 
                medical record information and claims information, 
                except where disclosure of this information is required 
                by law; and
                    ``(C) not release any individual patient record 
                information, unless such a release is authorized in 
                writing by the enrollee or otherwise required be law.
    ``(h) Clinical Decision Making.--
            ``(1) Appointment of medical director.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall appoint a medical 
        director who is a licensed physician in the State in which the 
        plan or issuer operates, who shall be responsible for treatment 
        policies protocols, quality assurance activities, and 
        utilization management decisions of the plan or issuer.
            ``(2) Disclosure about financial arrangements.--A managed 
        care group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall inform enrollees of 
        the financial arrangements between the plan or issuer and 
        participating providers and professionals (including 
        pharmacists), if those arrangements include incentives or 
        bonuses for restriction of services.
            ``(3) Quality assurance defined.--In this subsection, the 
        term `quality assurance' means the ongoing evaluation of the 
        quality of health care provided to enrollees.
            ``(4) Oversight.--The Secretary of Labor and the Secretary 
        of Health and Human Services are responsible for performance of 
        annual audits of managed care group health plans and, in the 
        case of a health insurance issuer, the State oversight agency 
        is responsible for performance of annual audits of managed care 
        health insurance coverage offered by such issuers, in order to 
        review enrollee clinical outcome data, enrollee service data, 
        and operational and other financial data.
    ``(i) Grievance Procedures, Reviews, and Appeals.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall provide written notification to enrollees, in 
        a language enrollees understand, regarding the right to file a 
        grievance concerning denials or limitations of coverage under 
        the plan or coverage. At a minimum, such notification shall be 
        given--
                    ``(A) prior to enrollment in the plan or under the 
                coverage; and
                    ``(B) at the time care is denied or limited under 
                the plan or coverage.
            ``(2) Notice of right to file grievance.--At the time of 
        such a denial, such a plan or issuer shall notify the enrollee 
        of the right to file a grievance. Such notice shall be in 
        writing and shall include the reason for denial, the name of 
        the individual responsible for the decision, the criteria for 
        determination, and the enrollee's right to file a grievance.
            ``(3) Grievance procedures.--The grievance procedures under 
        the plan or coverage shall include--
                    ``(A) identification of the reviewing body and an 
                explanation of the process of review;
                    ``(B) an initial investigation and review;
                    ``(C) notification within a reasonable amount of 
                time of the outcome of the grievance; and
                    ``(D) an appeal procedure.
            ``(4) Time limits.--
                    ``(A) In general.--Such a plan or issuer shall set 
                reasonable time limits for each part of the review 
                process, but in no case shall the review extend beyond 
                30 days.
                    ``(B) Expedited review.--Such a plan or issuer 
                shall provide for expedited review for cases involving 
                an imminent, emergent, or serious threat to the health 
                of an enrollee. In such case the plan or issuer shall--
                            ``(i) immediately inform the enrollee of 
                        this right, and
                            ``(ii) provide the enrollee with a written 
                        statement of the disposition or pending status 
                        of the grievance within 72 hours of the 
                        commencement of the review process.
            ``(5) Reporting.--Such a plan or issuer shall report to the 
        Secretary of Labor and to the Secretary of Health and Human 
        Services (or, in the case of a health insurance issuer, the 
        State oversight agency), the number of grievances and appeals 
        received by the plan or issuer within a specified time period, 
        including if applicable, the outcomes or current status of the 
        grievance and appeals as well as the average time taken to 
        resolve both grievances and appeals.
            ``(6) Definitions.--In this subsection:
                    ``(A) Appeal.--The term `appeal' means a formal 
                process whereby an enrollee whose care has been 
                reduced, denied, or terminated, or whereby the enrollee 
deems the care inappropriate, can contest an adverse grievance decision 
by the plan or issuer.
                    ``(B) The term `expedited review' means a review 
                process which takes no more than 72 hours after the 
                review is commenced.
                    ``(C) The term `grievance' means a written 
                complaint submitted by or on behalf of the enrollee.
    ``(j) Notice Under Group Health Plan.--The imposition of the 
requirements of this section shall be treated as a material 
modification in the terms of the plan described in section 102(a)(1), 
for purposes of assuring notice of such requirements under the plan; 
except that the summary description required to be provided under the 
last sentence of section 104(b)(1) with respect to such modification 
shall be provided by not later than 60 days after the first day of the 
first plan year in which such requirements apply.
    ``(k) General Definitions.--For purposes of this section:
            ``(1) The term `enrollee' means an individual who is 
        entitled to benefits under a managed care group health plan or 
        under managed care health insurance coverage offered in 
        connection with such a plan.
            ``(2) The term `health care provider' means a clinic, 
        hospital physician organization, preferred provider 
        organization, independent practice association, or other 
        appropriately licensed provider of health care services or 
        supplies.
            ``(3) The term `health care professional' means a physician 
        or other health care practitioner providing health care 
        services.
            ``(4) The term `managed care' means, with respect to a 
        group health plan or health insurance coverage, a plan or 
        coverage that provides financial incentives for enrollees to 
        obtain benefits through participating health care providers or 
        professionals.
            ``(5) The term `participating' means, with respect to a 
        health care provider or professional and a group health plan or 
        health insurance coverage offered by a health insurance issuer, 
        such a provider or professional that has entered into an 
        agreement with the plan or issuer with respect to the provision 
        of health care services to enrollees under the plan or 
        coverage.
            ``(6) The term `primary care practitioner' means, with 
        respect to a group health plan or health insurance coverage 
        offered by a health insurance issuer, a health care 
        professional (who may be a family practice physician, general 
        practice physician, internist, obstetrician/gynecologist, or 
        pediatrician) designated by the plan or issuer to coordinate, 
        supervise, or provide ongoing care to enrollees.
            ``(7) The term `State oversight agency' means, with respect 
        to a health insurance issuer, the State agency responsible for 
        the regulation of the issuer.''.
            (B) Section 731(c) of such Act (29 U.S.C. 1191(c)), as 
        amended by section 603(b)(1) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)), as 
        amended by section 603(b)(2) of Public Law 104-204, is amended 
        by striking ``section 711'' and inserting ``sections 711 and 
        713''.
            (D) The table of contents in section 1 of such Act is 
        amended by inserting after the item relating to section 712 the 
        following new item:

``Sec. 713. Managed care consumer protections.''.
    (b) PHSA Amendments.--(1) Subpart 2 of part A of title XXVII of the 
Public Health Service Act, as amended by section 703(a) of Public Law 
104-204, is amended by adding at the end the following new section:

``SEC. 2706. QUALITY HEALTH CARE AND CONSUMER PROTECTION ACT.

    ``(a) Access to Personnel and Facilities.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall--
                    ``(A) include a sufficient number and type of 
                primary care practitioners and specialists, throughout 
                the service area, to meet the needs of enrollees and to 
                provide meaningful choice; and
                    ``(B) demonstrate that it offers the following:
                            ``(i) An adequate number of accessible 
                        acute care hospital services, within a 
                        reasonable distance and travel time for 
                        enrollees.
                            ``(ii) An adequate number of accessible 
                        primary care practitioners, within a reasonable 
                        distance and travel time for enrollees.
                            ``(iii) An adequate number of accessible 
                        specialists and subspecialists, within a 
                        reasonable distance and travel time for 
                        enrollees.
                            ``(iv) The availability of specialty 
                        medical services, including physical therapy, 
                        occupational therapy, and rehabilitation 
                        services.
                            ``(v) The availability of specialists who 
                        are not participating providers or 
                        professionals, when a patient's unique medical 
                        circumstances warrant it.
                Clause (iii) shall be construed as requiring access to 
                nonparticipating health care professionals who are 
                specialists for treatment of a specific condition if 
                and when there are not sufficient number of such 
                specialists who are participating health care 
                professionals.
            ``(2) Continuity of care.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall--
                    ``(A) provide for continuity of care with 
                established primary care practitioners, when the health 
                care professional's contract is terminated, and
                    ``(B) allow enrollees, at no additional out-of-
                pocket cost, to continue receiving services from a 
                primary care practitioner whose contract with the plan 
                or issuer is terminated without cause for a period of 
                at least 60 days if the enrollee requests such 
                continuation.
            ``(3) Telephone access.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall provide telephone access to the plan or 
        issuer for sufficient time during business and evening hours to 
        ensure enrollee access for routine care, and 24 hour telephone 
        access to either the plan, issuer, or a participating provider 
        or professional, for emergency care or authorization for such 
        care.
            ``(4) Standards for waiting times.--A managed care group 
        health plan (and a health insurance issuer offering managed 
        care group health insurance) shall establish reasonable 
        standards for waiting times for enrollees to obtain 
        appointments, subject to special rules for emergency services 
        under paragraph (5). Such standards shall include appointment 
        scheduling guidelines based on the type of health care service, 
        including prenatal care appointments, well-child visits and 
        immunizations, routine physicals, follow-up appointments for 
        chronic conditions, and urgent care.
            ``(5) Coverage of emergency services.--
                    ``(A) In general.--A managed care group health plan 
                (and a health insurance issuer offering managed care 
                group health insurance) shall cover and reimburse 
                expenses for treatment of an emergency medical 
                condition if the treatment is obtained, without prior 
                authorization.
                    ``(B) Emergency medical condition defined.--The 
                term `emergency medical condition' means a medical 
                condition, the onset of which is sudden and unexpected, 
                that manifests itself by symptoms of sufficient 
                severity, that a prudent layperson, who possesses an 
                average knowledge of health and medicine, could 
                reasonably assume that the condition requires immediate 
                medical treatment, and could expect the absence of 
                medical attention to result in serious impairment to 
                bodily functions or place the person's health in 
                serious jeopardy.
                    ``(C) Prudent layperson defined.--In this 
                paragraph, the term `prudent layperson' means a person 
                without specific medical training for the illness or 
                condition in question who acts as a reasonable person 
                would under similar circumstances.
    ``(b) Assuring Adequate Choice of Health Care Professionals.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall provide that each enrollee shall have adequate 
        choice among participating health care professionals who are 
        accessible and qualified.
            ``(2) Choice.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall permit enrollees to choose their own primary 
        care practitioner from a list of health care professionals 
        within the plan or coverage. Such list shall be updated as 
        health care professionals are added or removed and shall 
        include--
                    ``(A) a sufficient number of primary care 
                practitioners who are accepting new enrollees; and
                    ``(B) a sufficient mix of primary care 
                practitioners that reflects a diversity that is 
                adequate to meet the needs of the enrollees' varied 
                characteristics, including age, gender, race, and 
                health status.
            ``(3) Medical specialists.--A managed care group health 
        plan (and a health insurance issuer offering managed care group 
        health insurance) shall develop a system to permit enrollees to 
        use a medical specialist primary care practitioner, when the 
        enrollee's medical conditions (including suffering from a 
        chronic disease or medical condition) warrant it.
            ``(4) Continuity of care.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall provide--
                    ``(A) continuity of care and appropriate referral 
                to specialists within the plan or coverage, when 
                specialty care is warranted,
                    ``(B) enrollees with access to medical specialists 
                on a timely basis, and
                    ``(C) enrollees with a choice of specialists when a 
                referral is made.
            ``(5) Requirement for point of service option.--A managed 
        care group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall offer each enrollee 
        with an enrollment option under which the enrollee may receive 
        benefits for services provided by nonparticipating health care 
        professional or provider. The plan or issuer may require that 
        the enrollee pay a reasonable premium to reflect the cost of 
        such option.
            ``(6) Consultation for second opinions.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall provide enrollees 
        with access to a consultation for a second option.
    ``(c) Prohibition of Gag Rules.--A managed care group health plan 
(and a health insurance issuer offering managed care group health 
insurance)--
            ``(1) shall not have any contract provision with a health 
        care professional that limits the health care professional's 
        disclosure to an enrollee or on behalf of an enrollee of any 
        information relating to the enrollee's medical condition or 
        treatment options; and
            ``(2) shall not penalize (through contract termination or 
        otherwise) a health care professional--
                    ``(A) because the professional offers referrals, or 
                discusses any or all medically necessary or appropriate 
                care or treatment options (including disclosing any 
                information, determined by the health care professional 
                to be in the best interest of the enrollee) with, or on 
                behalf of, an enrollee; or
                    ``(B) for discussing financial incentives and 
                financial arrangements between the health care 
                professional and the plan or issuer.
    ``(d) Coverage of Drugs and Devices.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) that provides benefits with respect to drugs and 
        medical devices shall provide coverage for all drugs and 
        medical devices approved by the Food and Drug Administration, 
        whether or not that drug or device has been approved for the 
        specific treatment or condition, so long as the primary care 
        practitioner or other medical specialist treating the enrollee 
        determines the drug or device is medically necessary and 
        appropriate for the enrollee's condition.
            ``(2) Operation of drug utilization review program.--A 
        managed care group health plan (and a health insurance issuer 
        offering managed care group health insurance) that provides 
        benefits with respect to prescription drugs shall establish and 
        operate a drug utilization review program that includes the 
        following:
                    ``(A) Retrospective review of prescription drugs 
                furnished to enrollees.
                    ``(B) Education of physicians, enrollees, and 
                pharmacists regarding the appropriate use of 
                prescription drugs.
                    ``(C) An ongoing periodic examination of data on 
                outpatient prescription drugs to ensure quality 
                therapeutic outcomes for enrollees.
                    ``(D) A primary emphasis on enhancing quality of 
                care for enrollees by assuring appropriate drug 
                therapy.
                    ``(E) Clinically relevant criteria and standards 
                for drug therapy.
                    ``(F) Application of nonproprietary criteria and 
                standards, developed and revised through an open, 
                professional consensus process.
                    ``(G) Interventions which focus on improving 
                therapeutic outcomes.
                    ``(H) An educational outreach program that--
                            ``(i) is directed to enrollees, 
                        pharmacists, and other health care 
                        professionals, and
                            ``(ii) emphasizes the appropriate use of 
                        prescription drugs.
                    ``(I) Denial of services under prospective review 
                of drug therapy only in cases of enrollee 
                ineligibility, coverage limitations, or fraud.
                    ``(J) Determination of the appropriate drug therapy 
                for the enrollee by the prescribing health care 
                professional and prohibitions of substitutions without 
                the direct approval of such professional.
    ``(e) Coverage of Experimental Treatments.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) that limits coverage for services shall define the 
        limitation and disclose the limits in any agreement or 
        certificate of coverage. Such disclosure shall include--
                    ``(A) who is authorized to make such a 
                determination, and
                    ``(B) the criteria the plan or issuer uses to 
                determine whether a service is experimental.
            ``(2) Denials.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) that denies coverage for an experimental treatment, 
        procedure, drug, or device, for an enrollee who has a terminal 
        condition or illness shall provide the enrollee with a denial 
        letter within 20 working days of the submitted request. The 
        letter shall include--
                    ``(A) the name and title of the individual making 
                the decision;
                    ``(B) a statement setting forth the specific 
                medical and scientific reasons for denying coverage;
                    ``(C) a description of alternative treatment, 
                services, or supplies covered by the plan or under the 
                coverage, if any; and
                    ``(D) a copy of the plan's or issuer's grievance 
                and appeal procedure.
            ``(3) Experimental treatment defined.--In this subsection, 
        the term `experimental treatment' means treatment that, while 
        not commonly used for a particular condition or illness, 
        nevertheless is recognized for treatment of the particular 
        condition or illness, and there is no clearly superior, 
        nonexperimental treatment alternative available to the 
        enrollee.
    ``(f) Quality Assurance Program.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall develop comprehensive quality assurance 
        standards, adequate to identify, evaluate, and remedy problems 
        relating to access, continuity, and quality of care. The 
        standards shall include--
                    ``(A) an ongoing, written, internal quality 
                assurance program;
                    ``(B) specific written guidelines for quality of 
                care studies and monitoring, including attention to 
                vulnerable populations;
                    ``(C) performance and clinical outcomes-based 
                criteria;
                    ``(D) a procedure for remedial action to correct 
                quality problems, including written procedures for 
                taking appropriate corrective action;
                    ``(E) a plan for data gathering and assessment 
                under subsection (g); and
                    ``(F) a peer review process.
            ``(2) Process for selection of professionals.--A managed 
        care group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall have a process for 
        selection of health care professionals who will be 
        participating professionals, with written policies and 
        procedures for standards used by the plan or issuer. Such 
        process shall meet the following requirements:
                    ``(A) The plan or issuer shall establish minimum 
                professional requirements.
                    ``(B) The plan or issuer shall demonstrate that it 
                has consulted with appropriately qualified health care 
                professionals to establish the requirements.
                    ``(C) The process shall include verification of the 
                individual practitioner's license, history of 
                suspension or revocation, and liability claims history.
                    ``(D) The plan or issuer shall establish a formal, 
                written, ongoing, process for the reevaluation of all 
                participating health care professionals within a 
                specified number of years after the initial acceptance. 
                Such reevaluations shall include updates of the 
                previous review criteria and an assessment of the 
                performance pattern based on criteria including 
                enrollee clinical outcomes, number of complaints, and 
                malpractice actions.
            ``(3) Limitation on use of professionals.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall not use a health 
        care professional beyond, or outside of, the professional's 
        legally authorized scope of practice.
    ``(g) Data Systems and Confidentiality.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall provide information on the plan's or issuer's 
        structure, decision making process, health care benefits and 
        exclusions, cost and cost-sharing requirements, list of 
        participating providers and health care professionals as well 
        as grievance and appeal procedures, to all potential enrollees, 
        all enrollees covered by the plan or coverage, and, to the 
        Secretary (or, with respect to a health insurance issuer, to 
        the State oversight agency).
            ``(2) Reporting of data.--A managed care group health plan 
        (and a health insurance issuer offering managed care group 
        health insurance) shall collect and report annually to the 
        Secretary (or, in the case of a health insurance issuer, State 
        oversight agency) specified data including--
                    ``(A) gross outpatient and hospital utilization 
                data;
                    ``(B) enrollee clinical outcome data;
                    ``(C) the number and types of enrollee grievances 
                or complaints during the year, the status of decisions, 
                and the average time required to reach a decision; and
                    ``(D) the number, amount, and disposition of 
                malpractice claims resolved during the year by the plan 
                or issuer and any of its participating health care 
                providers and professionals.
            ``(3) Reporting.--All data specified in paragraphs (1) and 
        (2) shall be reported to the Secretary or, in the case of a 
        health insurance issuer, the State oversight agency and shall 
        be available to the public on a timely basis.
            ``(4) Medical records and confidentiality.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall--
                    ``(A) establish written policies and procedures for 
                the handling of medical records and enrollee 
                communications to ensure enrollee confidentiality;
                    ``(B) ensure the confidentiality of specified 
                enrollee information, including, prior medical history, 
                medical record information and claims information, 
                except where disclosure of this information is required 
                by law; and
                    ``(C) not release any individual patient record 
                information, unless such a release is authorized in 
                writing by the enrollee or otherwise required be law.
    ``(h) Clinical Decision Making.--
            ``(1) Appointment of medical director.--A managed care 
        group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall appoint a medical 
        director who is a licensed physician in the State in which the 
        plan or issuer operates, who shall be responsible for treatment 
        policies protocols, quality assurance activities, and 
        utilization management decisions of the plan or issuer.
            ``(2) Disclosure about financial arrangements.--A managed 
        care group health plan (and a health insurance issuer offering 
        managed care group health insurance) shall inform enrollees of 
the financial arrangements between the plan or issuer and participating 
providers and professionals (including pharmacists), if those 
arrangements include incentives or bonuses for restriction of services.
            ``(3) Quality assurance defined.--In this subsection, the 
        term `quality assurance' means the ongoing evaluation of the 
        quality of health care provided to enrollees.
            ``(4) Oversight.--The Secretary is responsible for 
        performance of annual audits of managed care group health plans 
        and, in the case of a health insurance issuer, the State 
        oversight agency is responsible for performance of annual 
        audits of managed care health insurance coverage offered by 
        such issuers, in order to review enrollee clinical outcome 
        data, enrollee service data, and operational and other 
        financial data.
    ``(i) Grievance Procedures, Reviews, and Appeals.--
            ``(1) In general.--A managed care group health plan (and a 
        health insurance issuer offering managed care group health 
        insurance) shall provide written notification to enrollees, in 
        a language enrollees understand, regarding the right to file a 
        grievance concerning denials or limitations of coverage under 
        the plan or coverage. At a minimum, such notification shall be 
        given--
                    ``(A) prior to enrollment in the plan or under the 
                coverage; and
                    ``(B) at the time care is denied or limited under 
                the plan or coverage.
            ``(2) Notice of right to file grievance.--At the time of 
        such a denial, such a plan or issuer shall notify the enrollee 
        of the right to file a grievance. Such notice shall be in 
        writing and shall include the reason for denial, the name of 
        the individual responsible for the decision, the criteria for 
        determination, and the enrollee's right to file a grievance.
            ``(3) Grievance procedures.--The grievance procedures under 
        the plan or coverage shall include--
                    ``(A) identification of the reviewing body and an 
                explanation of the process of review;
                    ``(B) an initial investigation and review;
                    ``(C) notification within a reasonable amount of 
                time of the outcome of the grievance; and
                    ``(D) an appeal procedure.
            ``(4) Time limits.--
                    ``(A) In general.--Such a plan or issuer shall set 
                reasonable time limits for each part of the review 
                process, but in no case shall the review extend beyond 
                30 days.
                    ``(B) Expedited review.--Such a plan or issuer 
                shall provide for expedited review for cases involving 
                an imminent, emergent, or serious threat to the health 
                of an enrollee. In such case the plan or issuer shall--
                            ``(i) immediately inform the enrollee of 
                        this right, and
                            ``(ii) provide the enrollee with a written 
                        statement of the disposition or pending status 
                        of the grievance within 72 hours of the 
                        commencement of the review process.
            ``(5) Reporting.--Such a plan or issuer shall report to the 
        Secretary or, in the case of a health insurance issuer, the 
        State oversight agency, the number of grievances and appeals 
        received by the plan or issuer within a specified time period, 
        including if applicable, the outcomes or current status of the 
        grievance and appeals as well as the average time taken to 
        resolve both grievances and appeals.
            ``(6) Definitions.--In this subsection:
                    ``(A) Appeal.--The term `appeal' means a formal 
                process whereby an enrollee whose care has been 
                reduced, denied, or terminated, or whereby the enrollee 
                deems the care inappropriate, can contest an adverse 
                grievance decision by the plan or issuer.
                    ``(B) The term `expedited review' means a review 
                process which takes no more than 72 hours after the 
                review is commenced.
                    ``(C) The term `grievance' means a written 
                complaint submitted by or on behalf of the enrollee.
    ``(j) Notice.--A group health plan under this part shall comply 
with the notice requirement under section 713(j) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this section as if such section applied to such plan.
    ``(k) General Definitions.--For purposes of this section:
            ``(1) The term `enrollee' means an individual who is 
        entitled to benefits under a managed care group health plan or 
        under managed care health insurance coverage offered in 
        connection with such a plan.
            ``(2) The term `health care provider' means a clinic, 
        hospital physician organization, preferred provider 
        organization, independent practice association, or other 
        appropriately licensed provider of health care services or 
        supplies.
            ``(3) The term `health care professional' means a physician 
        or other health care practitioner providing health care 
        services.
            ``(4) The term `managed care' means, with respect to a 
        group health plan or health insurance coverage, a plan or 
        coverage that provides financial incentives for enrollees to 
        obtain benefits through participating health care providers or 
        professionals.
            ``(5) The term `participating' means, with respect to a 
        health care provider or professional and a group health plan or 
        health insurance coverage offered by a health insurance issuer, 
        such a provider or professional that has entered into an 
        agreement with the plan or issuer with respect to the provision 
        of health care services to enrollees under the plan or 
        coverage.
            ``(6) The term `primary care practitioner' means, with 
        respect to a group health plan or health insurance coverage 
        offered by a health insurance issuer, a health care 
        professional (who may be a family practice physician, general 
        practice physician, internist, obstetrician/gynecologist, or 
        pediatrician) designated by the plan or issuer to coordinate, 
        supervise, or provide ongoing care to enrollees.
            ``(7) The term `State oversight agency' means, with respect 
        to a health insurance issuer, the State agency responsible for 
        the regulation of the issuer.''.
    (2) Section 2723(c) of such Act (42 U.S.C. 300gg-23(c)), as amended 
by section 604(b)(2) of Public Law 104-204, is amended by striking 
``section 2704'' and inserting ``sections 2704 and 2706''.

SEC. 4. MANAGED CARE CONSUMER PROTECTIONS UNDER INDIVIDUAL HEALTH 
              INSURANCE COVERAGE.

    (a) In General.--Part B of title XXVII of the Public Health Service 
Act, as amended by section 605(a) of Public Law 104-204, is amended by 
inserting after section 2751 the following new section:

``SEC. 2752. MANAGED CARE CONSUMER PROTECTIONS.

    ``(a) In General.--The provisions of section 2706 (other than 
subsection (j)) shall apply to health insurance coverage offered by a 
health insurance issuer in the individual market in the same manner as 
it applies to health insurance coverage offered by a health insurance 
issuer in connection with a group health plan.
    ``(b) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 713(j) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
referred to in subsection (a) as if such section applied to such issuer 
and such issuer were a group health plan.''.
    (b) Conforming Amendment.--Section 2762(b)(2) of such Act (42 
U.S.C. 300gg-62(b)(2)), as added by section 605(b)(3)(B) of Public Law 
104-204, is amended by striking ``section 2751'' and inserting 
``sections 2751 and 2752''.

SEC. 5. EFFECTIVE DATES.

    (a) Group Health Plans and Group Health Insurance Coverage.--(1) 
Subject to paragraph (2), the amendments made by section 3 shall apply 
with respect to group health plans for plan years beginning on or after 
January 1, 1998.
    (2) In the case of a group health plan maintained pursuant to 1 or 
more collective bargaining agreements between employee representatives 
and 1 or more employers ratified before the date of enactment of this 
Act, the amendments made by section 3 shall not apply to plan years 
beginning before the later of--
            (A) the date on which the last collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of 
        enactment of this Act), or
            (B) January 1, 1998.
For purposes of subparagraph (A), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by section 3 shall not 
be treated as a termination of such collective bargaining agreement.
    (b) Individual Health Insurance Coverage.--The amendments made by 
section 4 shall apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated in the 
individual market on or after January 1, 1998.
                                 <all>