[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3009 Introduced in House (IH)]

  1st Session
                                H. R. 3009

  To amend the Public Health Service Act and the Employee Retirement 
  Income Security Act of 1974 to establish standards for managed care 
                                 plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 9, 1997

  Mr. Pallone (for himself, Mr. Gilman, Mr. Brown of Ohio, Mr. Fox of 
 Pennsylvania, Ms. Sanchez, Mr. Horn, Ms. Eshoo, Mr. Green, Mr. Frost, 
    Mr. Andrews, Mr. Filner, Mr. Ackerman, Mr. Wexler, Mr. Brown of 
  California, Mrs. Maloney of New York, Mr. Hastings of Florida, Mr. 
 Pascrell, Mr. Mascara, Mr. Davis of Illinois, Ms. Millender-McDonald, 
 Ms. Carson, Mrs. Clayton, Mr. Lampson, Mr. Nadler, Ms. Jackson-Lee of 
 Texas, Mr. Rothman, Mr. Engel, Mr. Payne, Mr. McCollum, Mr. Sherman, 
Mr. Cramer, and Mrs. Morella) introduced the following bill; which was 
     referred to the Committee on Commerce, and in addition to the 
 Committees on Ways and Means, and Education and the Workforce, 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 Public Health Service Act and the Employee Retirement 
  Income Security Act of 1974 to establish standards for managed care 
                                 plans.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Consumer Protection Act of 1997''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
            TITLE I--PATIENT CHOICE; ACCESS; QUALITY OF CARE

Sec. 101. Patient choice.
Sec. 102. Access to care.
Sec. 103. Quality of care.
Sec. 104. Patient confidentiality.
Sec. 105. Coverage under approved clinical trials.
Sec. 106. Access to needed prescription drugs; drug utilization 
                            program.
              TITLE II--CONTRACTING AND TERMINATION RIGHTS

Sec. 201. Nondiscrimination against providers.
Sec. 202. Development of plan policies.
Sec. 203. Due process.
Sec. 204. Non-preemption of State law respecting liability of group 
                            health plans.
                    TITLE III--INFORMATION REPORTING

Sec. 301. Information reporting.
Sec. 302. Automatic exclusion from medicare and medicaid for health 
                            plans that lie about quality data.
                TITLE IV--PATIENT-PROVIDER COMMUNICATION

Sec. 401. Short title; findings.
Sec. 402. Prohibition of interference with certain medical 
                            communications.
Sec. 403. Definitions.
Sec. 404. Effective date.
               TITLE V--UTILIZATION REVIEW AND MANAGEMENT

Sec. 501. Utilization review due process for enrollees.
           TITLE VI--ADDITIONAL AMENDMENTS; EFFECTIVE DATES.

Sec. 601. Application to group and individual health insurance 
                            coverage.
Sec. 602. Consumer protection standards under the Employee Retirement 
                            Income Security Act of 1974.

            TITLE I--PATIENT CHOICE; ACCESS; QUALITY OF CARE

SEC. 101. PATIENT CHOICE.

    (a) Under Health Insurance Coverage.--Title XXVII of the Public 
Health Service Act is amended--
            (1) by redesignating part C as part D, and
            (2) by inserting after part B the following new part:

           ``Part C--Consumer Protections Under Managed Care

``SEC. 2770. PATIENT CHOICE OF HEALTH PROFESSIONALS AND PROVIDERS.

    ``(a) Choice of Personal Health Professional.--A health insurance 
issuer shall permit each enrollee under network coverage to--
            ``(1) select a personal health professional from among the 
        participating health professionals of the issuer, and
            ``(2) change that selection as appropriate.
    ``(b) Point-of-Service Option.--
            ``(1) In general.--If a health insurance issuer offers to 
        enrollees health insurance coverage which provides for coverage 
        of services only if such services are furnished through health 
        professionals and providers who are members of a network of 
        health professionals and providers who have entered into a 
        contract with the issuer to provide such services, the issuer 
        shall also offer to such enrollees (at the time of enrollment) 
        the option of health insurance coverage which provides for 
        coverage of such services which are not furnished through 
        health professionals and providers who are members of such a 
        network.
            ``(2) Fair premiums.--The amount of any additional premium 
        required for the option described in paragraph (1) may not 
        exceed an amount that is fair and reasonable, as established by 
        the applicable State authority, in consultation with the 
        National Association of Insurance Commissioners, based on the 
        nature of the additional coverage provided.
            ``(3) Cost-sharing.--Under the option described in 
        paragraph (1)--
                    ``(A) the health insurance coverage shall provide 
                for reimbursement rates for covered services offered by 
                health professionals and providers who are not 
                participating health professionals or providers that 
                are not less than the reimbursement rates for covered 
                services offered by participating health professionals 
                and providers; and
                    ``(B) the issuer shall disclose to enrollees their 
                potential liability for cost-sharing and other out-of-
                pocket expenses.
    ``(c) Continuity of Care.--A health insurance issuer offering 
network coverage shall--
            ``(1) ensure that any process established by the issuer to 
        coordinate care and control costs does not create an undue 
        burden, as defined by the applicable State authority, for 
enrollees with special health care needs or chronic conditions;
            ``(2) ensure direct access to relevant specialists for the 
        continued care of such enrollees when medically or clinically 
        indicated in the judgment of the treating health professional, 
        in consultation with the enrollee;
            ``(3) in the case of an enrollee with special health care 
        needs or a chronic condition, determine whether, based on the 
        judgment of the treating health professional, in consultation 
        with the enrollee, it is medically or clinically necessary to 
        use a specialist or a care coordinator from an 
        interdisciplinary team to ensure continuity of care; and
            ``(4) in circumstances under which a change of health 
        professional or provider might disrupt the continuity of care 
        for an enrollee, such as--
                    ``(A) hospitalization, or
                    ``(B) dependency on high-technology home medical 
                equipment,
        provide for continued coverage of items and services furnished 
        by the health professional or provider that was treating the 
        enrollee before such change for a reasonable period of time.
For purposes of paragraph (4), a change of health professional or 
provider may be due to changes in the membership of an issuer's health 
professional and provider network, changes in the health coverage made 
available by an employer, or other similar circumstances.
    ``(d) No Requirement for Any Willing Provider.--Nothing in this 
part shall be construed as requiring a health insurance issuer that 
offers network coverage to include for participation every willing 
provider or health professional who meets the terms and conditions of 
the plan or issuer.
    ``(e) Definitions.--For purposes of this part:
            ``(1) Enrollee.--The term `enrollee' means, with respect to 
        health insurance coverage offered by a health insurance issuer, 
        an individual enrolled with the issuer to receive such 
        coverage.
            ``(2) Health professional.--The term `health professional' 
        means a physician or other health care practitioner licensed, 
        accredited, or certified to perform specified health services 
        consistent with State law.
            ``(3) Network.--The term `network' means, with respect to a 
        health insurance issuer offering health insurance coverage, the 
        participating health professionals and providers through whom 
        the plan or issuer provides health care items and services to 
        enrollees.
            ``(4) Network coverage.--The term `network coverage' means 
        health insurance coverage offered by a health insurance issuer 
        that provides or arranges for the provision of health care 
        items and services to enrollees through participating health 
        professionals and providers.
            ``(5) Participating.--The term `participating' means, with 
        respect to a health professional or provider, a health 
        professional or provider that provides health care items and 
        services to enrollees under network coverage under an agreement 
        with the health insurance issuer offering the coverage.
            ``(6) Prior authorization.--The term `prior authorization' 
        means the process of obtaining prior approval from a health 
        insurance issuer as to the necessity or appropriateness of 
        receiving medical or clinical services for treatment of a 
        medical or clinical condition.
            ``(7) Provider.--The term `provider' means a health 
        organization, health facility, or health agency that is 
        licensed, accredited, or certified to provide health care items 
        and services under applicable State law.
            ``(8) Service area.--The term `service area' means, with 
        respect to a health insurance issuer with respect to health 
        insurance coverage, the geographic area served by the issuer 
        with respect to the coverage.
            ``(9) Utilization review.--The term `utilization review' 
        means prospective, concurrent, or retrospective review of 
        health care items and services for medical necessity, 
        appropriateness, or quality of care that includes prior 
        authorization requirements for coverage of such items and 
        services.''.
    (b) Requiring Medicare+Choice Organizations to Offer Coverage for 
Out-of-Network Services.--
            (1) In general.--Section 1852(a)(3) of the Social Security 
        Act (42 U.S.C. 1395w-22(a)(3)), as added by section 4001 of the 
        Balanced Budget Act of 1997, is amended by redesignating 
        subparagraph (C) as subparagraph (D) and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) Requiring out-of-network service option.--If 
                a Medicare+Choice organization offers to members 
                enrolled under this part a plan which provides for 
                coverage of services covered under parts A and B of 
                this title only if such services are furnished through 
providers and other persons who are members of a network of providers 
and other persons who have entered into a contract with the 
organization to provide such services, the contract with the 
organization under section 1857 shall provide that the organization 
shall also offer to members enrolled under this part (at the time of 
enrollment) a plan which provides for coverage of such services which 
are not furnished through providers and other persons who are members 
of such a network.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to contracts for years beginning with 1999.

SEC. 102. ACCESS TO CARE.

    (a) In General.--Part C of title XVIII of the Public Health Service 
Act, as inserted by section 101, is amended by adding at the end the 
following:

``SEC. 2771. ACCESS TO CARE.

    ``(a) General Access.--
            ``(1) In general.--Subject to paragraphs (2), and (3), a 
        health insurance issuer shall establish and maintain adequate 
        arrangements, as defined by the applicable State authority, 
        with a sufficient number, mix, and distribution of health 
        professionals and providers to assure that covered items and 
        services are available and accessible to each enrollee under 
        health insurance coverage--
                    ``(A) in the service area of the issuer;
                    ``(B) in a variety of sites of service;
                    ``(C) with reasonable promptness (including 
                reasonable hours of operation and after-hours 
                services);
                    ``(D) with reasonable proximity to the residences 
                and workplaces of enrollees; and
                    ``(E) in a manner that--
                            ``(i) takes into account the diverse needs 
                        of enrollees, and
                            ``(ii) reasonably assures continuity of 
                        care.
        For a health insurance issuer that serves a rural or medically 
        underserved area, the issuer shall be treated as meeting the 
        requirement of this subsection if the issuer has arrangements 
        with a sufficient number, mix, and distribution of health 
        professionals and providers having a history of serving such 
        areas. The use of telemedicine and other innovative means to 
        provide covered items and services by a health insurance issuer 
        that serves a rural or medically underserved area shall also be 
        considered in determining whether the requirement of this 
        subsection is met.
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed as requiring a health insurance issuer to 
        have arrangements that conflict with its responsibilities to 
        establish measures designed to maintain quality and control 
        costs.
            ``(3) Definitions.--For purposes of paragraph (1):
                    ``(A) Medically underserved area.--The term 
                `medically underserved area' means an area that is 
                designated as a health professional shortage area under 
                section 332 of the Public Health Service Act or as a 
                medically underserved area for purposes of section 330 
                or 1302(7) of such Act.
                    ``(B) Rural area.--The term `rural area' means an 
                area that is not within a Standard Metropolitan 
                Statistical Area or a New England County Metropolitan 
                Area (as defined by the Office of Management and 
                Budget).
    ``(b) Emergency and Urgent Care.--
            ``(1) In general.--A health insurance issuer shall--
                    ``(A) assure the availability and accessibility of 
                medically or clinically necessary emergency services 
                and urgent care services within the service area of the 
                issuer 24 hours a day, 7 days a week;
                    ``(B) require no prior authorization for items and 
                services furnished in a hospital emergency department 
                to an enrollee (without regard to whether the health 
                professional or hospital has a contractual or other 
                arrangement with the issuer) with symptoms that would 
                reasonably suggest to a prudent layperson an emergency 
                medical condition (including items and services 
                described in subparagraph (C)(iii));
                    ``(C) cover (and make reasonable payments for)--
                            ``(i) emergency services,
                            ``(ii) services that are not emergency 
                        services but are described in subparagraph (B),
                            ``(iii) medical screening examinations and 
                        other ancillary services necessary to diagnose, 
                        treat, and stabilize an emergency medical 
                        condition, and
                            ``(iv) urgent care services, without regard 
                        to whether the health professional or provider 
                        furnishing such services has a contractual (or 
                        other) arrangement with the issuer; and
                    ``(D) make prior authorization determinations for--
                            ``(i) services that are furnished in a 
                        hospital emergency department (other than 
                        services described in clauses (i) and (iii) of 
                        subparagraph (C)), and
                            ``(ii) urgent care services, within the 
                        time periods specified in (or pursuant to) 
                        section 2781(a)(8).
            ``(2) Definitions.--For purposes of this subsection:
                    ``(A) Emergency medical condition.--The term 
                `emergency medical condition' means a medical condition 
                (including emergency labor and delivery) manifesting 
                itself by acute symptoms of sufficient severity 
                (including severe pain) such that a prudent layperson, 
                who possesses an average knowledge of health and 
                medicine, could reasonably expect the absence of 
                immediate medical attention could reasonably be 
                expected to result in--
                            ``(i) placing the patient's health in 
                        serious jeopardy,
                            ``(ii) serious impairment to bodily 
                        functions, or
                            ``(iii) serious dysfunction of any bodily 
                        organ or part.
                    ``(B) Emergency services.--The term `emergency 
                services' means health care items and services that are 
                necessary for the diagnosis, treatment, and 
                stabilization of an emergency medical condition.
                    ``(C) Urgent care services.--The term `urgent care 
                services' means health care items and services that are 
                necessary for the treatment of a condition that--
                            ``(i) is not an emergency medical 
                        condition,
                            ``(ii) requires prompt medical or clinical 
                        treatment, and
                            ``(iii) poses a danger to the patient if 
                        not treated in a timely manner, as defined by 
                        the applicable State authority in consultation 
                        with relevant treating health professionals or 
                        providers.
    ``(c) Obstetrical and Gynecological Care.--
            ``(1) In general.--If a health insurance issuer, in 
        connection with the provision of health insurance coverage, 
        requires or provides for an enrollee to designate a 
        participating primary care provider--
                    ``(A) the issuer shall permit a female enrollee to 
                designate a physician who specializes in obstetrics and 
                gynecology as the enrollee's primary care provider; and
                    ``(B) if such an enrollee has not designated such a 
                provider as a primary care provider, the issuer--
                            ``(i) may not require prior authorization 
                        by the enrollee's primary care provider or 
                        otherwise for coverage of routine gynecological 
                        care (such as preventive women's health 
                        examinations) and pregnancy-related services 
                        provided by a participating physician who 
                        specializes in obstetrics and gynecology to the 
                        extent such care is otherwise covered, and
                            ``(ii) may treat the ordering of other 
                        gynecological care by such a participating 
                        physician as the prior authorization of the 
                        primary care provider with respect to such care 
                        under the coverage.
            ``(2) Construction.--Nothing in paragraph (1)(B)(ii) shall 
        waive any requirements of coverage relating to medical 
        necessity or appropriateness with respect to coverage of 
        gynecological care so ordered.
    ``(d) Referral to Specialty Care for Enrollees Requiring Treatment 
by Specialists.--
            ``(1) In general.--In the case of an enrollee who is 
        covered under health insurance coverage offered by a health 
        insurance issuer and who has a condition or disease of 
        sufficient seriousness and complexity to require treatment by a 
        specialist, the issuer shall make or provide for a referral to 
        a specialist who is available and accessible to provide the 
        treatment for such condition or disease.
            ``(2) Specialist defined.--For purposes of this subsection, 
        the term `specialist' means, with respect to a condition, a 
        health care practitioner, facility, or center (such as a center 
        of excellence) that has adequate expertise through appropriate 
        training and experience (including, in the case of a child, 
        appropriate pediatric expertise) to provide high quality care 
        in treating the condition.
            ``(3) Care under referral.--Care provided pursuant to such 
        referral under paragraph (1) shall be--
                    ``(A) pursuant to a treatment plan (if any) 
                developed by the specialist and approved by the issuer, 
                in consultation with the designated primary care 
                provider or specialist and the enrollee (or the 
                enrollee's designee), and
                    ``(B) in accordance with applicable quality 
                assurance and utilization review standards of the 
                issuer.
        Nothing in this subsection shall be construed as preventing 
        such a treatment plan for an enrollee from requiring a 
        specialist to provide the primary care provider with regular 
        updates on the specialty care provided, as well as all 
        necessary medical information.
            ``(4) Referrals to participating providers.--An issuer is 
        not required under paragraph (1) to provide for a referral to a 
        specialist that is not a participating provider, unless the 
        issuer does not have an appropriate specialist that is 
        available and accessible to treat the enrollee's condition and 
        that is a participating provider with respect to such 
        treatment.
            ``(5) Treatment of nonparticipating providers.--If an 
        issuer refers an enrollee to a nonparticipating specialist, 
        services provided pursuant to the approved treatment plan shall 
        be provided at no additional cost to the enrollee beyond what 
        the enrollee would otherwise pay for services received by such 
        a specialist that is a participating provider.
    ``(e) Continuity of Care.--
            ``(1) In general.--A health insurance issuer offering 
        network coverage shall--
                    ``(A) ensure that any process established by the 
                issuer to coordinate care and control costs does not 
                create an undue burden, as defined by the applicable 
                State authority, for enrollees with special health care 
                needs or chronic conditions;
                    ``(B) ensure direct access to relevant specialists 
                for the continued care of such enrollees when medically 
                or clinically indicated in the judgment of the treating 
                health professional, in consultation with the enrollee;
                    ``(C) in the case of an enrollee with special 
                health care needs or a chronic condition, determine 
                whether, based on the judgment of the treating health 
                professional, in consultation with the enrollee, it is 
                medically or clinically necessary to use a specialist 
                or a care coordinator from an interdisciplinary team to 
                ensure continuity of care; and
                    ``(D) in circumstances under which a change of 
                health professional or provider might disrupt the 
                continuity of care for an enrollee, such as--
                            ``(i) hospitalization, or
                            ``(ii) dependency on high-technology home 
                        medical equipment,
                provide for continued coverage of items and services 
                furnished by the health professional or provider that 
                was treating the enrollee before such change for a 
                reasonable period of time.
        For purposes of subparagraph (D), a change of health 
        professional or provider may be due to changes in the 
        membership of an issuer's health professional and provider 
        network, changes in the health coverage made available by an 
        employer, or other similar circumstances.
            ``(2) Continued course of treatment.--
                    ``(A) In general.--If a contract between a health 
                insurance issuer, in connection with the provision of 
                health insurance coverage, and a health care provider 
                is terminated (other than by the issuer for failure to 
                meet applicable quality standards or for fraud) and an 
                enrollee is described in subparagraph (B)(i), (B)(ii), 
                or (B)(iii) and is undergoing a course of treatment 
                from the provider at the time of such termination, the 
                issuer shall--
                            ``(i) notify the enrollee of such 
                        termination, and
                            ``(ii) subject to subparagraph (C), permit 
                        the enrollee to continue the course of 
                        treatment with the provider during a 
                        transitional period (provided under 
                        subparagraph (B)).
                    ``(B) Transitional periods.--
                            ``(ii) Transitional period for 
                        institutional care.--The transitional period 
                        under this clause for institutional or 
                        inpatient care from a provider shall extend 
                        until the discharge or termination of the 
                        period of institutionalization and shall 
                        include reasonable follow-up care related to 
                        the institutionalization and shall also include 
                        institutional care scheduled prior to the date 
                        of termination of the provider status.
                            ``(iii) Pregnancy.--If--
                                    ``(I) an enrollee has entered the 
                                second trimester of pregnancy at the 
                                time of a provider's termination of 
                                participation, and
                                    ``(II) the provider was treating 
                                the pregnancy before date of the 
                                termination,
                        the transitional period under this clause with 
                        respect to provider's treatment of the 
                        pregnancy shall extend through the provision of 
                        post-partum care directly related to the 
                        delivery.
                            ``(iv) Terminal illness.--If--
                                    ``(I) an enrollee was determined to 
                                be terminally ill at the time of a 
                                provider's termination of 
                                participation, and
                                    ``(II) the provider was treating 
                                the terminal illness before the date of 
                                termination,
                        the transitional period under this clause shall 
                        extend for the remainder of the enrollee's life 
                        for care directly related to the treatment of 
                        the terminal illness. In subclause (I), an 
                        enrollee is considered to be `terminally ill' 
                        if the enrollee has a medical prognosis that 
                        the enrollee's life expectancy is 6 months or 
                        less.
                    ``(C) Permissible terms and conditions.--An issuer 
                may condition coverage of continued treatment by a 
                provider under subparagraph (A)(ii) upon the provider 
                agreeing to the following terms and conditions:
                            ``(i) The provider agrees to continue to 
                        accept reimbursement from the issuer at the 
                        rates applicable prior to the start of the 
                        transitional period as payment in full.
                            ``(ii) The provider agrees to adhere to the 
                        issuer's quality assurance standards and to 
                        provide to the issuer necessary medical 
                        information related to the care provided.
                            ``(iii) The provider agrees otherwise to 
                        adhere to the issuer's policies and procedures, 
                        including procedures regarding referrals and 
                        obtaining prior authorization and providing 
                        services pursuant to a treatment plan approved 
                        by the issuer.
    ``(e) Nondiscrimination Against Enrollees.--No health insurance 
issuer may discriminate (directly or through contractual arrangements) 
in any activity that has the effect of discriminating against an 
individual on the basis of race, national origin, genetic makeup, 
gender, language, socioeconomic status, sexual orientation, age, 
disability, health status, or anticipated need for health services.

SEC. 103. QUALITY OF CARE.

    (a) Quality Improvement Program.--Such part is further amended by 
adding at the end the following:

``SEC. 2772. QUALITY IMPROVEMENT PROGRAM.

    ``(a) In General.--A health insurance issuer shall establish a 
quality improvement program (consistent with subsection (b)) that 
systematically and continuously assesses and improves--
            ``(1) enrollee health status, patient outcomes, processes 
        of care, and enrollee satisfaction associated with health care 
        provided by the issuer; and
            ``(2) the administrative and funding capacity of the issuer 
        to support and emphasize preventive care, utilization, access 
        and availability, cost effectiveness, acceptable treatment 
modalities, specialists referrals, the peer review process, and the 
efficiency of the administrative process.
    ``(b) Functions.--A quality improvement program established 
pursuant to subsection (a) shall--
            ``(1) assess the performance of the issuer and its 
        participating health professionals and providers and report the 
        results of such assessment to purchasers, participating health 
        professionals and providers, and administrative personnel;
            ``(2) demonstrate measurable improvements in clinical 
        outcomes and plan performance measured by identified criteria, 
        including those specified in subsection (a)(1); and
            ``(3) analyze quality assessment data to determine specific 
        interactions in the delivery system (both the design and 
        funding of the health insurance coverage and the clinical 
        provision of care) that have an adverse impact on the quality 
        of care.''.
    ``(c) Incentive Plans.--
            ``(1) In general.--In the case of a health insurance issuer 
        that offers network coverage, any health professional or 
        provider incentive plan operated by the issuer with respect to 
        such coverage shall meet the following requirements:
                    ``(A) No specific payment is made directly or 
                indirectly under the plan to a professional or provider 
                or group of professionals or providers as an inducement 
                to reduce or limit medically necessary services 
                provided with respect to a specific enrollee.
                    ``(B) If the plan places such a professional, 
                provider, or group at substantial financial risk (as 
                determined by the Secretary) for services not provided 
                by the professional, provider, or group, the issuer--
                            ``(i) provides stop-loss protection for the 
                        professional, provider, or group that is 
                        adequate and appropriate, based on standards 
                        developed by the Secretary that take into 
                        account the number of professionals or 
                        providers placed at such substantial financial 
                        risk in the group or under the coverage and the 
                        number of individuals enrolled with the issuer 
                        who receive services from the professional, 
                        provider, or group, and
                            ``(ii) conducts periodic surveys of both 
                        individuals enrolled and individuals previously 
                        enrolled with the issuer to determine the 
                        degree of access of such individuals to 
                        services provided by the issuer and 
                        satisfaction with the quality of such services.
                    ``(C) The issuer provides the Secretary with 
                descriptive information regarding the plan, sufficient 
                to permit the Secretary to determine whether the plan 
                is in compliance with the requirements of this 
                paragraph.
            ``(2) In this subsection, the term `health professional or 
        provider incentive plan' means any compensation arrangement 
        between a health insurance issuer and a health professional or 
        provider or professional or provide group that may directly or 
        indirectly have the effect of reducing or limiting services 
        provided with respect to individuals enrolled with the 
        issuer.''.
    (b) Office of Medicare Advocacy.--Title XVIII of the Social 
Security Act is amended by inserting after section 1804 the following 
new section:

                     ``office of medicare advocacy

    ``Sec. 1805. (a) Establishment.--The Secretary shall establish, 
within the Health Care Financing Administration, an office of medicare 
advocacy (in this section referred to as the `office'), to be headed by 
a director appointed by the Secretary.
    ``(b) Purpose.--The office shall provide, in accordance with this 
section, independent review of problems and concerns of medicare 
beneficiaries in relation to the programs under this title, including, 
but not limited to, complaints concerning plans offered under part C or 
section 1876.
    ``(c) Access.--In order to carry out its functions, the office 
shall provide for a toll-free telephone number through which medicare 
beneficiaries can obtain assistance in the programs under this title, 
including providing comparative information on plans offered under part 
C or section 1876. The office also shall undertake such additional 
outreach activities, such as the use of town meetings and development 
of an appropriate Internet site, as most effectively and efficiently 
promotes dissemination of information to medicare beneficiaries.
    ``(d) Receipt and Disposition of Complaints.--The office shall 
provide for a record of the types of complaints and problems received 
and shall submit to the Secretary and publish an annual report on the 
nature of such complaints and problems, the disposition with respect to 
such complaints and problems, and such other additional information as 
the Secretary may specify.
    ``(e) Expedited Review Process for Complaints Under Emergency 
Circumstances.--
            ``(1) In general.--Under regulations of the Secretary, the 
        office shall have authority to provide for an expedited review 
        and resolution of complaints under emergency circumstances, 
        including those described in paragraph (2). Such reviews and 
        resolutions shall be conducted to the greatest extent 
        practicable through regional and local agencies.
            ``(2) Emergency circumstances described.--The emergency 
        circumstances described in this paragraph are cases in which--
                    ``(A) a delay in treatment resulting from 
                application of the usual hearing and appeals process 
                may endanger the life of the beneficiary, result in a 
                loss of function or a significant worsening of a 
                condition, or render treatment ineffective; or
                    ``(B) an advanced directive (as defined in section 
                1866(f)(3)) or other end-of-life preference is 
                involved.''.
    (c) State Health Insurance Ombudsmen.--Part C of title XVIII of the 
Public Health Service Act, as previously inserted and amended, is 
further amended by adding at the end the following:

``SEC. 2773. STATE HEALTH INSURANCE OMBUDSMEN.

    ``(a) In General.--Each State that obtains a grant under subsection 
(c) shall establish and maintain a Health Insurance Ombudsman. Such 
Ombudsman may be part of a independent, nonprofit entity, and shall be 
responsible for at least the following:
            ``(1) To assist consumers in the State in choosing among 
        health insurance coverage.
            ``(2) To provide counseling and assistance to enrollees 
        dissatisfied with their treatment by health insurance issuers 
        in regard to such coverage and in the filing of complaints and 
        appeals regarding determinations under such coverage.
            ``(3) To investigate instances of poor quality or improper 
        treatment of enrollees by health insurance issuers in regard to 
        such coverage and to bring such instances to the attention of 
        the applicable State authority.
    ``(b) Federal Role.--In the case of any State that does not 
establish and maintain such an Ombudsman under subsection (a), the 
Secretary shall provide for the establishment and maintenance of such 
an official as will carry out with respect to that State the functions 
otherwise provided under subsection (a) by a Health Insurance 
Ombudsman.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such amounts as may be necessary to 
provide for grants to States to establish and operate Health Insurance 
Ombudsmen under subsection (a) or for the operation of Ombudsmen under 
subsection (b).''.

SEC. 104. PATIENT CONFIDENTIALITY.

    Part C of title XVIII of the Public Health Service Act, as 
previously inserted and amended, is further amended by adding at the 
end the following:

``SEC. 2774. PROTECTION OF PATIENT CONFIDENTIALITY.

    ``(a) In General.--A health insurance issuer that offers health 
insurance coverage shall establish appropriate written policies and 
procedures to ensure that all applicable State and Federal laws to 
protect the confidentiality of individually identifiable medical 
information are followed.
    ``(b) Details.--Such policies and procedures shall provide that 
individually identifiable medical information should not be disclosed 
except under the following circumstances:
            ``(1) For purposes necessary to perform required quality 
        assurance functions, to meet requirements of purchasers and 
        providers (in order to determine entitlement to coverage and to 
        administer payments), and to conduct approved, bona fide 
        clinical or health services research. The disclosure of 
        information in such circumstances should not contain patient 
        identifiers which could lead to violation of individual privacy 
        and harm patients.
            ``(2) Upon the express consent of the covered person.
            ``(3) Pursuant to law or court order for the production of 
        evidence or the discovery thereof or other legally mandated 
        disclosure.
            ``(4) In the event of claim or litigation between the 
        covered person and the issuer.''.

SEC. 105. COVERAGE UNDER APPROVED CLINICAL TRIALS.

    Such part is further amended by adding at the end the following new 
section:

``SEC. 2775. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED 
              CLINICAL TRIALS.

    ``(a) In General.--If a health insurance issuer offers health 
insurance coverage to a qualified enrollee (as defined in subsection 
(b)), the issuer--
            ``(1) may not deny the enrollee participation in the 
        clinical trial referred to in subsection (b)(2);
            ``(2) subject to subsection (c), may not deny (or limit or 
        impose additional conditions on) the coverage of routine 
        patient costs for items and services furnished in connection 
with participation in the trial; and
            ``(3) may not discriminate against the enrollee on the 
        basis of the enrollee's participation in such trial.
    ``(b) Qualified Enrollee Defined.--For purposes of subsection (a), 
the term `qualified enrollee' means an enrollee under health insurance 
coverage who meets the following conditions:
            ``(1) The enrollee has a life-threatening or serious 
        illness for which no standard treatment is effective.
            ``(2) The enrollee is eligible to participate in an 
        approved clinical trial with respect to treatment of such 
        illness.
            ``(3) The enrollee and the referring physician conclude 
        that the enrollee's participation in such trial would be 
        appropriate.
            ``(4) The enrollee's participation in the trial offers 
        potential for significant clinical benefit for the enrollee.
    ``(c) Payment.--
            ``(1) In general.--Under this section an issuer shall 
        provide for payment for routine patient costs described in 
        subsection (a)(2) but is not required to pay for costs of items 
        and services that are reasonably expected (as determined by the 
        Secretary) to be paid for by the sponsors of an approved 
        clinical trial.
            ``(2) Payment rate.--In the case of covered items and 
        services provided by--
                    ``(A) a participating provider, the payment rate 
                shall be at the agreed upon rate, or
                    ``(B) a nonparticipating provider, the payment rate 
                shall be at the rate the issuer would normally pay for 
                comparable services under subparagraph (A).
    ``(d) Approved Clinical Trial Defined.--In this section, the term 
`approved clinical trial' means a clinical research study or clinical 
investigation approved and funded by one or more of the following:
            ``(1) The National Institutes of Health.
            ``(2) A cooperative group or center of the National 
        Institutes of Health.
            ``(3) The Department of Veterans Affairs.
            ``(4) The Department of Defense.''.

SEC. 106. ACCESS TO NEEDED PRESCRIPTION DRUGS; DRUG UTILIZATION 
              PROGRAM.

    Such part is further amended by adding at the end the following new 
section:

``SEC. 2776. ACCESS TO NEEDED PRESCRIPTION DRUGS; DRUG UTILIZATION 
              PROGRAM.

    ``(a) Access.--If a health insurance issuer offers health insurance 
coverage (whether directly or through any agent) that provides benefits 
with respect to prescription drugs but the coverage limits such 
benefits to drugs included in a formulary, the issuer shall--
            ``(1) ensure participation of participating physicians in 
        the development of the formulary;
            ``(2) disclose the nature of the formulary restrictions; 
        and
            ``(3) provide for exceptions from the formulary limitation 
        when medical necessity, as determined by the enrollee's 
        physician subject to reasonable review by the issuer, dictates 
        that a non-formulary alternative is indicated.
    ``(b) Drug Utilization Program.--A health insurance issuer that 
provides health insurance coverage that includes benefits for 
prescription drugs shall establish and maintain a drug utilization 
program which--
            ``(1) encourages appropriate use of prescription drugs by 
        enrollees and providers,
            ``(2) monitors illnesses arising from improper drug use or 
        from adverse drug reactions or interactions, and
            ``(3) takes appropriate action to reduce the incidence of 
        improper drug use and adverse drug reactions and 
        interactions.''.

              TITLE II--CONTRACTING AND TERMINATION RIGHTS

SEC. 201. NONDISCRIMINATION AGAINST PROVIDERS.

    Part C of title XXVII of the Public Health Service Act is amended 
by adding at the end the following:

``SEC. 2777. NONDISCRIMINATION IN THE SELECTION OF HEALTH 
              PROFESSIONALS; EQUITABLE ACCESS TO NETWORKS.

    ``(a) Nondiscrimination in Selection of Network Health 
Professionals.--A health insurance issuer offering network coverage 
shall not discriminate in selecting the members of its health 
professional network (or in establishing the terms and conditions for 
membership in such network) on the basis of the race, national origin, 
genetic makeup, gender, sexual orientation, age, place or institution 
in which received health professional education, or disability (other 
than a disability that impairs the ability of an individual to provide 
health care services or that may threaten the health of enrollees) of 
the health professional.
    ``(b) Nondiscrimination in Access to Health Plans.--While nothing 
in this section shall be construed as an `any willing provider' 
requirement (as referred to in section 2770(d)), a health insurance 
issuer shall not discriminate in participation, reimbursement, or 
indemnification against a health professional, who is acting within the 
scope of the health professional's license or certification under 
applicable State law, solely on the basis of such license or 
certification.''.

SEC. 202. DEVELOPMENT OF PLAN POLICIES.

    Such part is further amended by adding at the end the following:

``SEC. 2778. DEVELOPMENT OF PLAN POLICIES.

    ``A health insurance issuer that offers network coverage shall 
establish mechanisms to consider the recommendations, suggestions, and 
views of enrollees and participating health professionals and providers 
regarding--
            ``(1) the medical policies of the issuer (including 
        policies relating to coverage of new technologies, treatments, 
        and procedures);
            ``(2) the utilization review criteria and procedures of the 
        issuer;
            ``(3) the quality and credentialing criteria of the issuer; 
        and
            ``(4) the medical management procedures of the issuer.''.

SEC. 203. DUE PROCESS.

    Such part is further amended by adding at the end the following:

``SEC. 2779. DUE PROCESS FOR HEALTH PROFESSIONALS AND PROVIDERS.

    ``(a) In General.--A health insurance issuer with respect to its 
offering of network coverage shall--
            ``(1) allow all health professionals and providers in its 
        service area to apply to become a participating health 
        professional or provider during at least one period in each 
        calendar year;
            ``(2) provide reasonable notice to such health 
        professionals and providers of the opportunity to apply and of 
        the period during which applications are accepted;
            ``(3) provide for review of each application by a 
        credentialing committee with appropriate representation of the 
        category or type of health professional or provider;
            ``(4) select participating health professionals and 
        providers based on objective standards of quality developed 
        with the suggestions and advice of professional associations, 
        health professionals, and providers;
            ``(5) make such selection standards available to--
                    ``(A) those applying to become a participating 
                provider or health professional;
                    ``(B) health plan purchasers, and
                    ``(C) enrollees;
            ``(6) when economic considerations are taken into account 
        in selecting participating health professionals and providers, 
        use objective criteria that are available to those applying to 
        become a participating provider or health professional and 
        enrollees;
            ``(7) adjust any economic profiling to take into account 
        patient characteristics (such as severity of illness) that may 
        result in atypical utilization of services;
            ``(8) make the results of such profiling available to 
        insurance purchasers, enrollees, and the health professional or 
        provider involved;
            ``(9) notify any health professional or provider being 
        reviewed under the process referred to in paragraph (3) of any 
        information indicating that the health professional or provider 
        fails to meet the standards of the issuer;
            ``(10) offer a health professional or provider receiving 
        notice pursuant to the requirement of paragraph (9) with an 
        opportunity to--
                    ``(A) review the information referred to in such 
                paragraph, and
                    ``(B) submit supplemental or corrected information;
            ``(11) not include in its contracts with participating 
        health professionals and providers a provision permitting the 
        issuer to terminate the contract `without cause';
            ``(12) provide a due process appeal that conforms to the 
        process specified in section 412 of the Health Care Quality 
        Improvement Act of 1986 (42 U.S.C. 11112) for all 
        determinations that are adverse to a health professional or 
        provider; and
            ``(13) unless a health professional or provider poses an 
        imminent harm to enrollees or an adverse action by a 
        governmental agency effectively impairs the ability to provide 
        health care items and services, provide--
                    ``(A) reasonable notice of any decision to 
                terminate a health professional or provider `for cause' 
                (including an explanation of the reasons for the 
                determination),
                    ``(B) an opportunity to review and discuss all of 
                the information on which the determination is based, 
                and
                    ``(C) an opportunity to enter into a corrective 
                action plan, before the determination becomes subject 
                to appeal under the process referred to in paragraph 
                (12).
    ``(b) Rule of Construction.--The requirements of subsection (a) 
shall not be construed as preempting or superseding any other reviews 
and appeals a health insurance issuer is required by law to make 
available.''.

SEC. 204. NON-PREEMPTION OF STATE LAW RESPECTING LIABILITY OF GROUP 
              HEALTH PLANS.

    (a) In General.--Section 514(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144(b)) is amended by redesignating 
paragraph (9) as paragraph (10) and inserting the following new 
paragraph:
            ``(9) Subsection (a) of this section shall not be construed 
        to preclude any State cause of action to recover damages for 
        personal injury or wrongful death against any person that 
        provides insurance or administrative services to or for an 
        employee welfare benefit plan maintained to provide health care 
        benefits.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to causes of action arising on or after the date of the enactment 
of this Act.

                    TITLE III--INFORMATION REPORTING

SEC. 301. INFORMATION REPORTING.

    Part C of title XXVII of the Public Health Service Act is further 
amended by adding at the end the following:

``SEC. 2780. INFORMATION REPORTING AND DISCLOSURE.

    ``(a) In General.--A health insurance issuer offering health 
insurance coverage shall provide enrollees and prospective enrollees 
with information about--
            ``(1) coverage provisions, benefits, and any exclusions--
                    ``(A) by category of service,
                    ``(B) by category or type of health professional or 
                provider, and
                    ``(C) if applicable, by specific service, including 
                experimental treatments;
            ``(2) the percentage of the premium charged by the issuer 
        that is set aside for administration and marketing of the 
        issuer;
            ``(3) the percentage of the premium charged by the issuer 
        that is expended directly for patient care;
            ``(4) the number, mix, and distribution of participating 
        health professionals and providers;
            ``(5) the ratio of enrollees to participating health 
        professionals and providers by category and type of health 
        professional and provider;
            ``(6) the expenditures and utilization per enrollee by 
        category and type of health professional and provider;
            ``(7) the financial obligations of the enrollee and the 
        issuer, including premiums, copayments, deductibles, and 
        established aggregate maximums on out-of-pocket costs, for all 
        items and services, including--
                    ``(A) those furnished by health professionals and 
                providers that are not participating health 
                professionals and providers, and
                    ``(B) those furnished to an enrollee who is outside 
                the service area of the coverage;
            ``(8) utilization review requirements of the issuer 
        (including prior authorization review, concurrent review, post-
        service review, post-payment review, and any other procedures 
        that may lead to denial of coverage or payment for a service);
            ``(9) financial arrangements and incentives that may--
                    ``(A) limit the items and services furnished to an 
                enrollee,
                    ``(B) restrict referral or treatment options, or
                    ``(C) negatively affect the fiduciary 
                responsibility of a health professional or provider to 
                an enrollee;
            ``(10) other incentives for health professionals and 
        providers to deny or limit needed items or services;
            ``(11) quality indicators for the issuer and participating 
        health professionals and providers, including performance 
        measures such as appropriate referrals and prevention of 
        secondary complications following treatment;
            ``(12) grievance procedures and appeals rights under the 
        coverage, and summary information about the number and 
        disposition of grievances and appeals in the most recent period 
        for which complete and accurate information is available; and
            ``(13) the percentage of utilization review determinations 
        made by the issuer that disagree with the judgment of the 
        treating health professional or provider and the percentage of 
        such determinations that are reversed on appeal.
    ``(b) Regulations.--The Secretary, in collaboration with the 
Secretary of Labor, shall issue regulations to establish--
            ``(1) the styles and sizes of type to be used with respect 
        to the appearance of the publication of the information 
        required under subsection (a);
            ``(2) standards for the publication of information to 
        ensure that such publication is--
                    ``(A) readily accessible, and
                    ``(B) in common language easily understood,
        by individuals with little or no connection to or understanding 
        of the language employed by health professionals and providers, 
        health insurance issuers, or other entities involved in the 
        payment or delivery of health care services, and
            ``(3) the placement and positioning of information in 
        health plan marketing materials.''.

SEC. 302. AUTOMATIC EXCLUSION FROM MEDICARE AND MEDICAID FOR HEALTH 
              PLANS THAT LIE ABOUT QUALITY DATA.

    Notwithstanding any other provision of law, in the case of a 
Medicare+Choice organization, an eligible organization, health 
maintenance organizations, or other entity that is receiving payment on 
a prepaid basis for items and services provided under title XVIII or 
XIX of the Social Security Act and that submits information relating to 
the quality of such services provided that is material and false, the 
Secretary of Health and Human Services shall take such steps as may be 
necessary to assure the exclusion of the entity from continuing to 
qualify for such payments under such title and shall provide for the 
imposition of any intermediate sanctions in lieu of such exclusion.

                TITLE IV--PATIENT-PROVIDER COMMUNICATION

SEC. 401. SHORT TITLE; FINDINGS.

    (a) Short Title.--This title may be cited as the ``Patient Right to 
Know Act''.
    (b) Findings.--Congress finds the following:
            (1) Patients need access to all relevant information to 
        make appropriate decisions about their health care.
            (2) Open medical communications between health care 
        providers and their patients is a key to prevention and early 
        diagnosis and treatment, as well as to informed consent and 
        quality, cost-effective care.
            (3) Open medical communications are in the best interests 
        of patients.
            (4) Open medical communications must meet applicable legal 
        and ethical standards of care.
            (5) It is critical that health care providers continue to 
        exercise their best medical, ethical, and moral judgment in 
        advising patients without interference from health plans.
            (6) The offering and operation of health plans affect 
        commerce among the States.
    (c) Purpose.--It is the purpose of this title to establish a 
Federal standard that protects medical communications between health 
care providers and patients.

SEC. 402. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    (a) Prohibition.--
            (1) General rule.--The provisions of any contract or 
        agreement, or the operation of any contract or agreement, 
        between an entity operating a health plan (including any 
        partnership, association, or other organization that enters 
        into or administers such a contract or agreement) and a health 
        care provider (or group of health care providers) shall not 
        prohibit or restrict the provider from engaging in medical 
        communications with his or her patient.
            (2) Nullification.--Any contract provision or agreement 
        described in paragraph (1) shall be null and void.
            (3) Prohibition on provisions.--Effective on the date 
        described in section 404, a contract or agreement described in 
        paragraph (1) shall not include a provision that violates 
        paragraph (1).
    (b) Rules of Construction.--Nothing in this title shall be 
construed--
            (1) to prohibit the enforcement, as part of a contract or 
        agreement to which a health care provider is a party, of any 
        mutually agreed upon terms and conditions, including terms and 
        conditions requiring a health care provider to participate in, 
        and cooperate with, all programs, policies, and procedures 
        developed or operated by a health plan to assure, review, or 
        improve the quality and effective utilization of health care 
        services (if such utilization is according to guidelines or 
        protocols that are based on clinical or scientific evidence and 
        the professional judgment of the provider) but only if the 
        guidelines or protocols under such utilization do not prohibit 
        or restrict medical communications between providers and their 
        patients; or
            (2) to permit a health care provider to misrepresent the 
        scope of benefits covered under a health plan or to otherwise 
        require the plan to reimburse providers for benefits not 
        covered under the plan
    (c) Enforcement.--
            (1) State authority.--Except as otherwise provided in this 
        subsection, each State shall enforce the provisions of this 
        title with respect to health insurance issuers that issue, 
        sell, renew, or offer health plans in the State.
            (2) Enforcement by secretary.--
                    (A) In general.--Effective on January 1, 1998, if 
                the Secretary, after consultation with the chief 
                executive officer of a State and the insurance 
                commissioner or chief insurance regulatory official of 
                the State, determines that the State has failed to 
                substantially enforce the requirements of this title 
                with respect to health insurance issuers in the State, 
                the Secretary shall enforce the requirements of this 
title with respect to such State.
                    (B) Enforcement through imposition of civil money 
                penalty.--
                            (i) In general.--With respect to a State in 
                        which the Secretary is enforcing the 
                        requirements of this title, an entity operating 
                        a health plan in that State that violates 
                        subsection (a) shall be subject to a civil 
                        money penalty of up to $25,000 for each such 
                        violation.
                            (ii) Procedures.--For purposes of imposing 
                        a civil money penalty under clause (i), the 
                        provisions of subparagraphs (C) through (G) of 
                        section 2722(b)(2) of the Health Insurance 
                        Portability and Accountability Act of 1996 (42 
                        U.S.C. 300gg-22(b)(2)) shall apply except that 
                        the provisions of clause (i) of subparagraph 
                        (C) of such section shall not apply.
            (3) Self-insured plans.--Effective on January 1, 1998, the 
        Secretary of Labor shall enforce the requirements of this 
        section in the case of a health plan not subject to State 
        regulation by reason of section 514(b) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)).
            (4) Rule of construction.--Nothing in this title shall be 
        construed to affect or modify the provisions of section 514 of 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1144).
    (d) No Preemption of More Protective Laws.--A State may establish 
or enforce requirements with respect to the protection of medical 
communications, but only if such requirements are equal to or more 
protective of such communications than the requirements established 
under this section.

SEC. 403. DEFINITIONS.

    In this title:
            (1) Health care provider.--The term ``health care 
        provider'' means anyone licensed or certified under State law 
        to provide health care services who is operating within the 
        scope of such license.
            (2) Health insurance issuer.--The term ``health insurance 
        issuer'' has the meaning given such term in section 2791(b)(2) 
        of the Public Health Service Act (as added by the Health 
        Insurance Portability and Accountability Act of 1996).
            (3) Health plan.--The term ``health plan'' means a group 
        health plan (as defined in section 2791(a) of the Public Health 
        Service Act (as added by the Health Insurance Portability and 
        Accountability Act of 1996)) and any individual health 
        insurance (as defined in section 2791(b)(5)) operated by a 
        health insurance issuer and includes any other health care 
        coverage provided through a private or public entity. In the 
        case of a health plan that is an employee welfare benefit plan 
        (as defined in section 3(1) of the Employee Retirement Income 
        Security Act of 1974), any third party administrator or other 
        person with responsibility for contracts with health care 
        providers under the plan shall be considered, for purposes of 
        enforcement under this section, to be a health insurance issuer 
        operating such health plan.
            (4) Medical communication.--
                    (A) In general.--The term ``medical communication'' 
                means any communication made by a health care provider 
                with a patient of the health care provider (or the 
                guardian or legal representative of such patient) with 
                respect to--
                            (i) the patient's health status, medical 
                        care, or treatment options;
                            (ii) any utilization review requirements 
                        that may affect treatment options for the 
                        patient; or
                            (iii) any financial incentives that may 
                        affect the treatment of the patient.
                    (B) Misrepresentation.--The term ``medical 
                communication'' does not include a communication by a 
                health care provider with a patient of the health care 
                provider (or the guardian or legal representative of 
                such patient) if the communication involves a knowing 
                or willful misrepresentation by such provider.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 404. EFFECTIVE DATE.

    This title shall take effect on the date of enactment of this Act, 
except that section 402(a)(3) shall take effect 180 days after such 
date of enactment.

               TITLE V--UTILIZATION REVIEW AND MANAGEMENT

SEC. 501. UTILIZATION REVIEW DUE PROCESS FOR ENROLLEES.

    Part C of title XXVII of the Public Health Service Act, as 
previously inserted and amended, is further amended by adding at the 
end the following new section:

``SEC. 2781. DUE PROCESS FOR ENROLLEES.

    ``(a) Utilization Review.--The utilization review program of a 
health insurance issuer shall--
            ``(1) be developed (including any screening criteria used 
        by such program) with the involvement of participating health 
        professionals and providers;
            ``(2) to the extent consistent with the protection of 
        proprietary business information (as defined for purposes of 
        section 552 of title 5, United States Code) release, upon 
        request, to affected health professionals, providers, and 
        enrollees the screening criteria, weighting elements, and 
        computer algorithms used in reviews and a description of the 
        method by which they were developed;
            ``(3) uniformly apply review criteria that are based on 
        sound scientific principles and the most recent medical 
        evidence;
            ``(4) use licensed, accredited, or certified health 
        professionals to make review determinations (and for services 
        requiring specialized training for their delivery, use a health 
        professional who is qualified through equivalent specialized 
        training and experience);
            ``(5) subject to reasonable safeguards, disclose to health 
        professionals and providers, upon request, the names and 
        credentials of individuals conducting utilization review;
            ``(6) not compensate individuals conducting utilization 
        review for denials of payment or coverage of benefits;
            ``(7) comply with the requirement of section 2771 that 
        prior authorization not be required for emergency and related 
        services furnished in a hospital emergency department;
            ``(8) make prior authorization determinations--
                    ``(A) in the case of services that are urgent care 
                services described in section 2771(b)(2)(C), within 30 
                minutes of a request for such determination, and
                    ``(B) in the case of other services, within 24 
                hours after the time of a request for determination;
            ``(9) include in any notice of such determination an 
        explanation of the basis of the determination and the right to 
        an immediate appeal;
            ``(10) treat a favorable prior authorization review 
        determination as a final determination for purposes of making 
        payment for a claim submitted for the item or service involved 
        unless such determination was based on false information 
        knowingly supplied by the person requesting the determination;
            ``(11) provide timely access, as defined by the applicable 
        State authority, to utilization review personnel and, if such 
        personnel are not available, waives any prior authorization 
        that would otherwise be required;
            ``(12) provide notice of an initial determination on 
        payment of a claim within 30 days after the date the claim is 
        submitted for such item or service, and include in such notice 
        an explanation of the reasons for such determination and of the 
        right to an immediate appeal; and
            ``(13) take into consideration guidelines established by 
        the medical societies relating to necessary health care.
    ``(b) Right of Appeal.--
            ``(1) In general.--An enrollee in health insurance coverage 
        offered by a health insurance issuer, and any provider acting 
        on behalf of the enrollee with the enrollee's consent, may 
        appeal any appealable decision (as defined in paragraph (2)) 
        under the procedures described in the succeeding subsections in 
        this section and (to the extent applicable) subsection (a). 
        Such enrollees and providers shall be provided with a written 
        explanation of the appeal process upon the conclusion of each 
stage in the appeal process.
            ``(2) Appealable decision defined.--In this section, the 
        term `appealable decision' means any of the following:
                    ``(A) An adverse determination under a utilization 
                review program under subsection (a).
                    ``(B) A denial of patient choice of health care 
                professionals under section 2770.
                    ``(C) A denial of access to care under section 
                2771.
                    ``(D) Denial of coverage of routine patient costs 
                in connection with an approved clinical trial under 
                section 2775.
                    ``(E) Denial of access to needed drugs under 
                section 2776(a)(3).
                    ``(F) Denial of payment for a benefit,
    ``(c) Informal Internal Appeal Process (Stage 1).--
            ``(1) In general.--Each issuer shall establish and maintain 
        an informal internal appeal process (an appeal under such 
        process in this section referred to as a `stage 1 appeal') 
        under which any enrollee or any provider acting on behalf of an 
        enrollee with the enrollee's consent, who is dissatisfied with 
        any appealable decision has the opportunity to discuss and 
        appeal that decision with the medical director of the issuer or 
        the health care professional who made the decision.
            ``(2) Timing.--All appeals under this paragraph shall be 
        concluded as soon as possible in accordance with the medical 
        exigencies of the cases, and in no event later than 72 hours in 
        the case of appeals from decisions regarding urgent care and 5 
        days in the case of all other appeals.
            ``(3) Further review.--If the appeal is not resolved to the 
        satisfaction of the enrollee at this level by the deadline 
        under paragraph (2), the issuer shall provide the enrollee and 
        provider (if any) with a written explanation of the decision 
        and the right to proceed to a stage 2 appeal under subsection 
        (d).
    ``(d) Formal Internal Appeal Process (Stage 2).--
            ``(1) In general.--Each issuer shall establish and maintain 
        a formal internal appeal process (an appeal under such process 
        in this section referred to as a `stage 2 appeal') under which 
        any enrollee or provider acting on behalf of an enrollee with 
        the enrollee's consent, who is dissatisfied with the results of 
        a stage 1 appeal has the opportunity to appeal the results 
        before a panel that includes a physician or other health care 
        professional (or professionals) selected by the issuer who have 
        not been involved in the appealable decision at issue in the 
        appeal.
            ``(2) Availability of clinical peers.--The panel under 
        subparagraph (A) shall have available either clinical peers who 
        have not been involved in the appealable decision at issue in 
        the appeal or others who are mutually agreed upon by the 
        parties. If requested by the enrollee or enrollee's provider 
        with the enrollee's consent, such a peer shall participate in 
        the panel's review of the case. In this paragraph, the term 
        `clinical peer' means, with respect to a review, a physician or 
        other health care professional who holds a non-restricted 
        license in a State and in the same or similar specialty as 
        typically manages the medical condition, procedure, or 
        treatment under review.
            ``(3) Timely acknowledgment.--The issuer shall acknowledge 
        the enrollee or provider involved of the receipt of a stage 2 
        appeals upon receipt of the appeal.
            ``(4) Deadline.--
                    ``(A) In general.--The issuer shall conclude each 
                stage 2 appeal as soon as possible after the date of 
                the receipt of the appeal in accordance with medical 
                exigencies of the case involved, but in no event later 
                than 72 hours in the case of appeals from decisions 
                regarding urgent care and (except as provided in 
                subparagraph (B)) 20 business days in the case of all 
                other appeals.
                    ``(B) Extension.--An issuer may extend the deadline 
                for an appeal that does not relate to a decision 
                regarding urgent or emergency care up to an additional 
                20 business days where it can demonstrate to the 
                applicable State authority reasonable cause for the 
                delay beyond its control and where it provides, within 
                the original deadline under subparagraph (A), a written 
                progress report and explanation for the delay to such 
                authority and to the enrollee and provider involved.
            ``(5) Notice.--If an issuer denies a stage 2 appeal, the 
        issuer shall provide the enrollee and provider involved with 
        written notification of the denial and the reasons therefore, 
        together with a written notification of rights to any further 
        appeal.
    ``(e) Direct Use of Further Appeals.--In the event that the issuer 
fails to comply with any of the deadlines for completion of appeals 
under this section or in the event that the issuer for any reason 
expressly waives its rights to an internal review of an appeal under 
subsection (c) or (d), the enrollee and provider involved shall be 
relieved of any obligation to complete the appeal stage involved and 
may, at the enrollee's or provider's option, proceed directly to seek 
further appeal through any applicable external appeals process.
    ``(f) External Appeal Process in Case of Use of Experimental 
Treatment To Save Life of Patient.--
            ``(1) In general.--In the case of an enrollee described in 
        paragraph (2), the health insurance issuer shall provide for an 
        external independent review process respecting the issuer's 
        decision not to cover the experimental therapy (described in 
        paragraph (2)(B)(ii)).
            ``(2) Enrollee described.--An enrollee described in this 
        paragraph is an enrollee who meets the following requirements:
                    ``(A) The enrollee has a terminal condition that is 
                highly likely to cause death within 2 years.
                    ``(B) The enrollee's physician certifies that--
                            ``(i) there is no standard, medically 
                        appropriate therapy for successfully treating 
                        such terminal condition, but
                            ``(ii) based on medical and scientific 
                        evidence, there is a drug, device, procedure, 
                        or therapy (in this section referred to as the 
                        `experimental therapy') that is more beneficial 
                        than any available standard therapy.
                    ``(C) The issuer has denied coverage of the 
                experimental therapy on the basis that it is 
                experimental or investigational.
            ``(3) Description of process and decision.--The process 
        under this subsection shall provide for a determination on a 
        timely basis, by a panel of independent, impartial physicians 
        appointed by a State authority or by an independent review 
        organization certified by the State, of the medical 
        appropriateness of the experimental therapy. The decision of 
        the panel shall be in writing and shall be accompanied by an 
        explanation of the basis for the decision. A decision of the 
        panel that is favorable to the enrollee may not be appealed by 
        the issuer except in the case of misrepresentation of a 
        material fact by the enrollee or a provider. A decision of the 
        panel that is not favorable to the enrollee may be appealed by 
        the enrollee.
            ``(4) Issuer covering process costs.--Direct costs of the 
        process under this subsection shall be borne by the issuer, and 
        not by the enrollee.
    ``(g) Other Independent or External Review.--
            ``(1) In general.--In the case of appealable decision 
        described in paragraph (2), the health insurance issuer shall 
        provide for--
                    ``(A) an external review process for such decisions 
                consistent with the requirements of paragraph (3), or
                    ``(B) an internal independent review process for 
                such decisions consistent with the requirements of 
                paragraph (4).
            ``(2) Appealable decision described.--An appealable 
        decision described in this paragraph is a decision that does 
        not involve a decision a described in subsection (f)(1) but 
        involves--
                    ``(A) a claim for benefits involving costs over a 
                significant threshold, or
                    ``(B) assuring access to care for a serious 
                condition.
            ``(3) External review process.--The requirements of this 
        subsection for an external review process are as follows:
                    ``(A) The process is established under State law 
                and provides for review of decisions on stage 2 appeals 
                by an independent review organization certified by the 
                State.
                    ``(B) If the process provides that decisions in 
                such process are not binding on issuers, the process 
                must provide for public methods of disclosing frequency 
                of noncompliance with such decisions and for 
                sanctioning issuers that consistently refuse to take 
                appropriate actions in response to such decisions.
                    ``(C) Results of all such reviews under the process 
                are disclosed to the public, along with at least annual 
                disclosure of information on issuer compliance.
                    ``(D) All decisions under the process shall be in 
                writing and shall be accompanied by an explanation of 
                the basis for the decision.
                    ``(E) Direct costs of the process shall be borne by 
                the issuer, and not by the enrollee.
                    ``(F) The issuer shall provide for publication at 
                least annually of information on the numbers of appeals 
                and decisions considered under the process.
            ``(4) Internal, independent review process.--The 
        requirements of this subsection for an internal, independent 
        review process are as follows:
                    ``(A)(i) The process must provide for the 
                participation of persons who are independent of the 
                issuer in conducting reviews and (ii) the Secretary 
                must have found (through reviews conducted no less 
                often than biannually) the process to be fair and 
                impartial.
                    ``(B) If the process provides that decisions in 
                such process are not binding on issuers, the process 
                must provide for public methods of disclosing frequency 
                of noncompliance with such decisions and for 
                sanctioning issuers that consistently refuse to take 
                appropriate actions in response to such decisions.
                    ``(C) Results of all such reviews under the process 
                are disclosed to the public, along with at least annual 
                disclosure of information on issuer compliance.
                    ``(D) All decisions under the process shall be in 
                writing and shall be accompanied by an explanation of 
                the basis for the decision.
                    ``(E) Direct costs of the process shall be borne by 
                the issuer, and not by the enrollee.
                    ``(F) The issuer shall provide for publication at 
                least annually of information on the numbers of appeals 
                and decisions considered under the process.
        The Secretary may delegate the authority under subparagraph 
        (A)(ii) to applicable State authorities.
            ``(5) Oversight.--The Secretary (and applicable State 
        authorities in the case of delegation of Secretarial authority 
        under paragraph (4)) shall conduct reviews not less often than 
        biannually of the fairness and impartiality issuers who desired 
        to use an internal, independent review process described in 
        paragraph (4) to satisfy the requirement of paragraph (1).
            ``(6) Report.--The Secretary shall provide for periodic 
        reports on the effectiveness of this subsection in assuring 
        fair and impartial reviews of stage 2 appeals. Such reports 
        shall include information on the number of stage 2 appeals (and 
        decisions), for each of the types of review processes described 
        in paragraph (2), by health insurance coverage.
    ``(h) Construction.--Nothing in this part shall be construed as 
removing any legal rights of enrollees under State or Federal law, 
including the right to file judicial actions to enforce rights.''.

           TITLE VI--ADDITIONAL AMENDMENTS; EFFECTIVE DATES.

SEC. 601. APPLICATION TO GROUP AND INDIVIDUAL HEALTH INSURANCE 
              COVERAGE.

    (a) Group Health Insurance Coverage.--(1) Subpart 2 of part A of 
title XXVII of the Public Health Service Act is amended by adding at 
the end the following new section:

``SEC. 2706. CONSUMER PROTECTION STANDARDS.

    ``(a) In General.--Each health insurance issuer shall comply with 
consumer protection requirements under part C with respect to group 
health insurance coverage it offers.
    ``(b) Assuring Coordination.--The Secretary of Health and Human 
Services and the Secretary of Labor shall ensure, through the execution 
of an interagency memorandum of understanding between such Secretaries, 
that--
            ``(1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which such 
        Secretaries have responsibility under part C (and this section) 
        and section 713 of the Employee Retirement Income Security Act 
        of 1974 are administered so as to have the same effect at all 
        times; and
            ``(2) coordination of policies relating to enforcing the 
        same requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.''.
            (2) Section 2792 of such Act (42 U.S.C. 300gg-92) is 
        amended by inserting ``and section 2706(b)'' after ``of 1996''.
    (b) Application to Individual Health Insurance Coverage.--Part B of 
title XXVII of the Public Health Service Act is amended by inserting 
after section 2751 the following new section:

``SEC. 2752. CONSUMER PROTECTION STANDARDS.

    ``Each health insurance issuer shall comply with consumer 
protection requirements under part C with respect to individual health 
insurance coverage it offers.''.
    (c) Application under Medicare and Medicaid Programs.--
            (1) Medicare program.--Section 1852 of the Social Security 
        Act (42 U.S.C. 1395w-22), as inserted by section 4001 of the 
        Balanced Budget Act of 1997 (Public Law 105-33) is amended by 
        adding at the end the following new subsection:
    ``(l) Additional Beneficiary Protections.--
            ``(1) In general.--Each Medicare+Choice plan shall comply 
        with consumer protection requirements under part C of title 
        XXVII of the Public Health Service Act.
            ``(2) Construction.--Paragraph (1) shall not be construed 
        as superseding any requirements of this part to the extent such 
        requirements are more stringent than the requirements under 
        part C of title XXVII of the Public Health Service Act.'',
            (2) Medicaid program.--Section 1932(b) of the Social 
        Security Act (42 U.S.C. 1396u-2(b)), as added by section 
        4704(a) of the Balanced Budget Act of 1997 (Public Law 105-33) 
        is amended by adding at the end the following new paragraph:
            ``(9) Additional enrollee protections.--
                    ``(A) In general.--A medicaid managed care 
                organization shall comply with consumer protection 
                requirements under part C of title XXVII of the Public 
                Health Service Act with respect to individuals enrolled 
                with the organization under a contract under section 
                1903(m) or 1905(t)(3).
                    ``(B) Construction.--Paragraph (1) shall not be 
                construed as superseding any requirements of this title 
                to the extent such requirements are more stringent than 
                the requirements under part C of title XXVII of the 
                Public Health Service Act.'',
    (d) Modification of Preemption Standards.--
            (1) Group health insurance coverage.--Section 2723 of such 
        Act (42 U.S.C. 300gg-23) is amended--
                    (A) in subsection (a)(1), by striking ``subsection 
                (b)'' and inserting ``subsections (b) and (c)'';
                    (B) by redesignating subsections (c) and (d) as 
                subsections (d) and (e), respectively; and
                    (C) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Special Rules in Case of Consumer Protection Requirements.--
Subject to subsection (a)(2), the provisions of section 2706 and part 
C, and part D insofar as it applies to section 2706 or part C, shall 
not be construed to preempt any State law, or the enactment or 
implementation of such a State law, that provides protections for 
individuals that are equivalent to or stricter than the protections 
provided under such provisions.''.
            (2) Individual health insurance coverage.--Section 2762 of 
        such Act (42 U.S.C. 300gg-62), as added by section 605(b)(3)(B) 
        of Public Law 104-204, is amended--
                    (A) in subsection (a), by striking ``subsection 
                (b), nothing in this part'' and inserting ``subsections 
                (b) and (c)'', and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Special Rules in Case of Consumer Protection Requirements.--
Subject to subsection (b), the provisions of section 2752 and part C, 
and part D insofar as it applies to section 2752 or part C, shall not 
be construed to preempt any State law, or the enactment or 
implementation of such a State law, that provides protections for 
individuals that are equivalent to or stricter than the protections 
provided under such provisions.''.
    (e) Additional Conforming Amendments.--
            (1) Section 2723(a)(1) of such Act (42 U.S.C. 300gg-
        23(a)(1)) is amended by striking ``part C'' and inserting 
        ``parts C and D''.
            (2) Section 2762(b)(1) of such Act (42 U.S.C. 300gg-
        62(b)(1)) is amended by striking ``part C'' and inserting 
        ``part D''.
    (f) Effective Dates.--(1)(A) Subject to subparagraph (B), the 
amendments made by this Act shall apply with respect to group health 
insurance coverage for group health plan years beginning on or after 
July 1, 1998 (in this subsection referred to as the ``general effective 
date'') and also shall apply to portions of plan years occurring on and 
after January 1, 1999.
    (B) In the case of group health insurance coverage provided 
pursuant to 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 this Act shall not apply to plan years beginning 
before the later of--
            (i) 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
            (ii) the general effective date.
For purposes of clause (i), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by this Act shall not 
be treated as a termination of such collective bargaining agreement.
    (2) The amendments made by this Act shall apply with respect to 
individual health insurance coverage offered, sold, issued, renewed, in 
effect, or operated in the individual market on or after the general 
effective date.
    (3) The amendments made by this Act shall apply under the medicare 
and medicaid programs under titles XVIII and XIX of the Social Security 
Act on and after the general effective date.

SEC. 602. CONSUMER PROTECTION STANDARDS UNDER THE EMPLOYEE RETIREMENT 
              INCOME SECURITY ACT OF 1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 is amended by 
adding at the end the following new section:

``SEC. 713. CONSUMER PROTECTION STANDARDS.

    ``(a) In General.--Subject to subsection (b), a group health plan 
(and a health insurance issuer offering group health insurance coverage 
in connection with such a plan) shall comply with the requirements of 
part C of title XXVII of the Public Health Service Act.
    ``(b) References in Application.--In applying subsection (a) under 
this part, any reference in such part C--
            ``(1) to a health insurance issuer and health insurance 
        coverage offered by such an issuer is deemed to include a 
        reference to a group health plan and coverage under such plan, 
        respectively;
            ``(2) to the Secretary is deemed a reference to the 
        Secretary of Labor;
            ``(3) to an applicable State authority is deemed a 
        reference to the Secretary of Labor; and
            ``(4) to an enrollee with respect to health insurance 
        coverage is deemed to include a reference to a participant or 
        beneficiary with respect to a group health plan.
    ``(c) Assuring Coordination.--The Secretary of Health and Human 
Services and the Secretary of Labor shall ensure, through the execution 
of an interagency memorandum of understanding between such Secretaries, 
that--
            ``(1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which such 
        Secretaries have responsibility under such part C (and section 
        2706 of the Public Health Service Act) and this section are 
        administered so as to have the same effect at all times; and
            ``(2) coordination of policies relating to enforcing the 
        same requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.''.
    (b) Modification of Preemption Standards.--Section 731 of such Act 
(42 U.S.C. 1191) is amended--
            (1) in subsection (a)(1), by striking ``subsection (b)'' 
        and inserting ``subsections (b) and (c)'';
            (2) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Special Rules in Case of Consumer Protection Requirements.--
Subject to subsection (a)(2), the provisions of section 713 and part C 
of title XXVII of the Public Health Service Act, and subpart C insofar 
as it applies to section 713 or such part, shall not be construed to 
preempt any State law, or the enactment or implementation of such a 
State law, that provides protections for individuals that are 
equivalent to or stricter than the protections provided under such 
provisions.''.
    (c) Conforming Amendments.--(1) Section 732(a) of such Act (29 
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting 
``sections 711 and 713''.
    (2) 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. Consumer protection standards.''.
    (3) Section 734 of such Act (29 U.S.C. 1187) is amended by 
inserting ``and section 713(d)'' after ``of 1996''.
    (d) Effective Date.--(1) Subject to paragraph (2), the amendments 
made by this section shall apply with respect to group health plans for 
plan years beginning on or after July 1, 1998 (in this subsection 
referred to as the ``general effective date'') and also shall apply to 
portions of plan years occurring on and after January 1, 1999.
    (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 this section 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) the general effective date.
For purposes of subparagraph (A), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by subsection (a) shall 
not be treated as a termination of such collective bargaining 
agreement.
                                 <all>