[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 475 Introduced in House (IH)]
105th CONGRESS
1st Session
H. R. 475
To amend title XVIII of the Social Security Act to provide for offering
the option of Medicare coverage through qualified provider-sponsored
organizations (PSOs), and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 21, 1997
Mr. Greenwood (for himself and Mr. Stenholm) introduced the following
bill; which was referred to the Committee on Commerce, and in addition
to the Committees on Ways and Means, and the Judiciary, 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 title XVIII of the Social Security Act to provide for offering
the option of Medicare coverage through qualified provider-sponsored
organizations (PSOs), and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare Provider-
Sponsored Organization Act of 1997''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Qualified provider-sponsored organizations as medicare health
plan option.
Sec. 3. Authorizing payment of all medicare health plans on a partial
risk basis.
Sec. 4. Elimination of enrollment composition requirement for eligible
organizations meeting enhanced quality
standards.
Sec. 5. Clarification of use of provider-sponsored organizations under
medicaid program.
Sec. 6. Demonstration of coordinated acute and long-term care benefits
under medicare and medicaid programs.
Sec. 7. Rules on coverage of emergency services by all medicare health
plans.
Sec. 8. Preemption of State law restrictions on managed care
arrangements.
Sec. 9. Publication of antitrust guidelines on activities of provider-
sponsored organizations.
SEC. 2. QUALIFIED PROVIDER-SPONSORED ORGANIZATIONS AS MEDICARE HEALTH
PLAN OPTION.
(a) Qualified Provider-Sponsored Organizations as Eligible
Organizations Under the Medicare Program.--Part C of title XVIII of the
Social Security Act is amended--
(1) in section 1876(b) (42 U.S.C. 1395mm(b))--
(A) in the matter before paragraph (1), by striking
``or a competitive medical plan'' and inserting ``, a
competitive medical plan, or a provider-sponsored
organization'', and
(B) in paragraph (1), by inserting ``or is a
qualified provider-sponsored organization (as defined
in section 1889(a))'' after ``Act)''; and
(2) by inserting after section 1888 the following new
section:
``requirements, standards, and certification of provider-sponsored
organizations
``Sec. 1889. (a) Definitions of Qualified Provider-Sponsored
Organization; Provider-Sponsored Organization.--For purposes of section
1876 and this section--
``(1) Qualified Provider-Sponsored Organization.--The term
`qualified provider-sponsored organization' means a provider-
sponsored organization that--
``(A) subject to subsection (b), is organized and
licensed under State law to offer prepaid health
services or health benefits coverage in each State in
which the entity seeks to enroll individuals under
section 1876 who are entitled to benefits under this
title;
``(B) provides a substantial proportion (as defined
by the Secretary in the standards established under
subsection (g) consistent with paragraph (3)) of the
health care items and services under the contract under
section 1876 directly through the provider or
affiliated group of providers comprising the
organization; and
``(C) is certified under subsection (h) as meeting
the standards established under subsection (g), which
except as provided in subsection (c), shall be based on
the requirements that apply to an entity described in
section 1876(b)(2) with a full risk contract under
section 1876(g).
``(2) Provider-sponsored organization.--The term `provider-
sponsored organization' means a public or private entity that
is a provider or group of affiliated providers organized to
deliver a spectrum of health care services (including basic
hospital and physicians services) under contract to purchasers
of such services.
``(3) Substantial proportion.--In defining what is a
`substantial proportion' for purposes of paragraph (1)(B), the
Secretary--
``(A) shall take into account the need for such an
organization to assume responsibility for providing--
``(i) significantly more than the majority
of the items and services under the contract
under section 1876 through its own affiliated
providers, and
``(ii) most of the remainder of items and
services under such contract through providers
with which the organization has an agreement to
provide such items and services,
in order to assure financial stability and to address
the practical considerations involved in integrating
the delivery of a wide range of service providers;
``(B) shall take into account the need for such an
organization to provide a limited proportion of the
items and services under such contract through
providers that are neither affiliated with nor have an
agreement with such organization; and
``(C) may vary such proportion based upon relevant
differences among organizations, such as their location
in an urban or rural area.
``(4) Affiliation.--
``(A) In general.--For purposes of this subsection,
a provider is `affiliated' with another provider if,
through contract, ownership, or otherwise--
``(i) one provider, directly or indirectly,
controls, is controlled by, or is under common
control with the other,
``(ii) each provider is a participant in a
lawful combination under which each provider
shares, directly or indirectly, substantial
financial risk in connection with their
operations,
``(iii) both providers are part of a
controlled group of corporations under section
1563 of the Internal Revenue Code of 1986, or
``(iv) both providers are part of an
affiliated service group under section 414 of
such Code.
``(B) Control.--For purposes of subparagraph (A),
control is presumed to exist if one party, directly or
indirectly, owns, controls, or holds the power to vote,
or proxies for, not less than 51 percent of the voting
rights or governance rights of another.
``(b) Application and Waiver of State Licensure Requirement.--
``(1) In general.--Subject to paragraph (2), subsection
(a)(1)(A) (relating to State licensure) shall not apply to a
provider-sponsored organization.
``(2) Delayed exception.--Effective on and after January 1,
2002, subsection (a)(1)(A) shall only apply (and paragraph (1)
of this subsection shall no longer apply) to a provider-
sponsored organization in a State if--
``(A) the financial solvency and capital adequacy
standards for licensure of the organization under the
laws of the State are identical to the standards
established under subsection (g), and
``(B) the standards for licensure of the
organization under the laws of the State (other than
the standards referred to in subparagraph (A)) are
substantially equivalent to the standards established
under subsection (g).
``(3) Application for waiver.--
``(A) In general.--A provider-sponsored
organization to which subsection (a)(1)(A) applies that
seeks to operate in a State under a full risk contract
under section 1876(g) or a partial risk contract under
section 1876(i) may apply for a waiver of the
requirement of subsection (a)(1)(A) for that
organization operating in that State.
``(B) Action on application.--The Secretary shall
act on such an application within 60 days after the
date it is filed and shall grant a waiver for an
organization with respect to a State if the Secretary
determines that--
``(i) the State did not act upon such a
licensure application within 90 days after the
date it was filed, or
``(ii)(I) the State denied such a licensure
application, and
``(II) the State's licensing standards or
review process impose unreasonable barriers to
market entry, including through the imposition
of any requirements, procedures, or other
standards on such organizations that are not
generally applicable to any other entities
engaged in substantially similar business.
``(C) Effective period of waiver.--In the case of a
waiver granted under this paragraph for an
organization--
``(i) the waiver shall be effective for a
24-month period, except that it may be renewed
based on a subsequent application filed during
the last 6 months of such period;
``(ii) if the State failed to meet the
requirement of subparagraph (B)(i)--
``(I) any application for a renewal
may be made on the basis described in
subparagraph (B)(i) only if the State
does not act on a pending licensure
application during the 24-month period
specified in clause (i),
``(II) any application for renewal
(other than one made on the basis
described in subparagraph (B)(i)) may
be made only on the basis described in
subparagraph (B)(ii), and
``(III) the waiver shall cease to
be effective upon approval of the
licensure application by the State
during such 24-month period; and
``(iii) any provisions of State law that
relate to the licensing of the organization and
prohibit the organization from providing
coverage pursuant to a contract under section
1876 shall be superseded during the period for
which such waiver is effective.
``(4) Construction.--Nothing in this subsection shall be
construed as--
``(A) limiting the number of times such a waiver
may be renewed under paragraph (3)(C)(i), or
``(B) affecting the operation of section 514 of the
Employee Retirement Income Security Act of 1974.
``(c) Application of Certain Requirements.--
``(1) Waiver of benefit package requirement.--For purposes
of carrying out subsection (a)(1)(C), the requirement of
subsection (b)(2)(A) (relating to benefit package for
commercial enrollees) of section 1876 shall not be applied.
``(2) Exception for method of delivering physicians
services.--For purposes of carrying out subsection (a)(1)(C),
the requirement of subsection (b)(2)(C) (relating to delivery
of physicians services) of section 1876 shall be applied,
except that the Secretary shall by regulation specify
alternative delivery models or arrangements that may be used by
such organizations in lieu of the models or arrangements
specified in such subsection.
``(3) Exception for risk assumption.--For purposes of
carrying out subsection (a)(1)(C), the requirement of
subsection (b)(2)(D) (relating to risk assumption) of section
1876 shall be applied, except that any provider-sponsored
organization with a full risk contract under section 1876(g)
may (with the concurrence of the Secretary) obtain insurance or
make other arrangements for covering costs in excess of those
permitted to be covered by such insurance and arrangements
under section 1876(b)(2)(D)(iii).
``(4) Treatment of meeting financial solvency
requirement.--
``(A) In general.--For purposes of carrying out
subsection (a)(1)(C), a provider-sponsored organization
shall be treated as meeting the requirement of
subsection (b)(2)(E) (relating to adequate provision
against risk of insolvency) of section 1876 if the
organization is fiscally sound.
``(B) Fiscal soundness.--A provider-sponsored
organization shall be treated as fiscally sound for
purposes of subparagraph (A) if the organization--
``(i) has a net worth that is not less than
the required net worth (as defined in clause
(i) or (ii) of subparagraph (C), as the case
may be), and
``(ii) has established adequate claims
reserves (as defined in subparagraph (D)).
``(C) Required net worth defined.--For purposes of
subparagraph (B)(i)--
``(i) Full risk contracts.--The term
`required net worth' means, in the case of an
organization with a full risk contract under
section 1876(g), a net worth (determined in
accordance with statutory accounting principles
for insurance companies and health maintenance
organizations) that is not less than the
greatest of the following:
``(I) $1,500,000 at the time of
application and $1,000,000 thereafter.
``(II) The sum of 8 percent of the
cost of health services that are not
provided directly by the organization
or its affiliated providers to
enrollees, plus 4 percent of the
estimated annual costs of health
services provided directly by the
organization or its affiliated
providers to enrollees.
``(III) 3 months of uncovered
expenditures.
``(ii) Partial risk contracts.--The term
`required net worth' means, in the case of an
organization with a partial risk contract under
section 1876(i), an amount determined in
accordance with clause (i), except that in
applying subclause (II) of such clause, the
Secretary shall substitute for the percentages
specified in such subclause such lower
percentages as are appropriate to reflect the
risk-sharing arrangements under the contract.
``(D) Adequate claims reserves.--For purposes of
subparagraph (B)(ii), the term `adequate claims
reserves' means, with respect to an organization,
reserves for claims that are--
``(i) incurred but not reported, or
``(ii) reported but unpaid,
that are determined in accordance with statutory
accounting principles for insurance companies and
health maintenance organizations and with professional
standards of actuarial practice and that are certified
by an independent actuary as adequate in light of the
operations and contracts of the organization.
``(E) Application of accounting principles.--In
applying statutory accounting principles for purposes
of determining the net worth of an organization under
subparagraph (B)(i), the Secretary shall--
``(i) treat as `admitted assets'--
``(I) land, buildings, and
equipment of the organization used for
the direct provision of health care
services,
``(II) any receivables from
governmental programs due for more than
90 days, and
``(III) any other assets designated
by the Secretary; and
``(ii) recognize, as a contribution to
surplus, amounts received under subordinated
debt (meeting such requirements as the
Secretary may specify).
``(F) Methods of demonstrating compliance.--The
Secretary shall recognize ways of complying with the
requirement of subparagraph (A) other than by means of
subparagraph (B), including (alone or in combination)--
``(i) letters of credit from a bank,
``(ii) financial guarantees from
financially strong parties including
affiliates,
``(iii) unrestricted fund balances,
``(iv) diversity of lines of business and
presence of non risk related revenue,
``(v) certification by an independent
actuary,
``(vi) reinsurance ceded to, or stop loss
insurance purchased through, a recognized
commercial insurance company, and
``(vii) other methods acceptable to the
Secretary.
``(d) Requirement for Ongoing Quality Assurance Program.--
``(1) In general.--A provider-sponsored organization shall
not be treated as meeting the requirements of subsection (c)(6)
(relating to an ongoing quality assurance program) of section
1876 unless the quality assurance program of the organization
meets the requirements of paragraphs (2) and (3).
``(2) Required elements of quality assurance program.--A
quality assurance program meets the requirements of this
paragraph if the program--
``(A) stresses health outcomes;
``(B) provides opportunities for input by
physicians and other health care professionals;
``(C) monitors and evaluates high volume and high
risk services and the care of acute and chronic
conditions;
``(D) evaluates the continuity and coordination of
care that enrollees receive;
``(E) establishes mechanisms to detect both
underutilization and overutilization of services;
``(F) after identifying areas for improvement,
establishes or alters practice parameters;
``(G) takes action to improve quality and assess
the effectiveness of such action through systematic
follow up;
``(H) makes available information on quality and
outcomes measures to facilitate beneficiary comparison
and choice of health coverage options (in such form and
on such quality and outcomes measures as the Secretary
determines to be appropriate); and
``(I) is evaluated on an ongoing basis as to its
effectiveness.
``(3) Treatment of case-by-case utilization review.--If a
provider-sponsored organization utilizes case-by-case
utilization review in its quality assurance program, the
organization shall--
``(A) base such review on written protocols
developed on the basis of current standards of medical
practice; and
``(B) implement a plan under which--
``(i) such review is coordinated with the
quality assurance program of the organization,
and
``(ii) a transition is made from relying
predominantly on case-by-case review to review
focusing on patterns of care.
``(4) Compliance through accreditation.--A provider-
sponsored organization shall be treated as meeting the
requirements of paragraphs (2) and (3) of this subsection and
the requirements of section 1876(c)(6) if the organization is
accredited (and periodically reaccredited) by a private
organization under a process that the Secretary has determined
assures that the organization meets standards for quality
assurance programs that are no less stringent than the
standards established for such programs under subsection (g) to
carry out this subsection and section 1876(c).
``(e) Requirement for Participation Procedures.--A provider-
sponsored organization shall not be treated as meeting the requirements
of this section unless--
``(1) the organization establishes reasonable procedures
relating to the participation (under an agreement between a
physician or group of physicians and the organization) of
physicians under contracts under section 1876 and such
procedures include--
``(A) providing notice of the rules regarding
participation,
``(B) providing written notice of participation
decisions that are adverse to physicians, and
``(C) providing a process within the organization
for appealing adverse decisions, including the
presentation of information and views of the physician
regarding such decision; and
``(2) the organization consults with physicians who have
entered into participation agreements with the organization
regarding the organization's medical policy, quality, and
medical management procedures.
Paragraph (1)(C) shall not be construed as requiring a live evidentiary
hearing, a verbatim record, or representation of the appealing party by
legal counsel.
``(f) Other Special Rules for Treatment of Provider-Sponsored
Organizations.--
``(1) Waiver of minimum enrollment rules.--In the case of a
provider-sponsored organization, paragraph (1) of section
1876(g)--
``(A) shall not apply for the first 3 contract
years of the organization under section 1876, and
``(B) shall be applied for contract years
thereafter--
``(i) by substituting `1500' for `5000',
and
``(ii) by substituting `at least 500' for
`fewer'.
``(2) Adjusted community rate.--In the case of a provider-
sponsored organization, the adjusted community rate under
subsections (e)(3) and (g)(2) of section 1876 may be computed
(in a manner specified by the Secretary) using data in the
general commercial marketplace or (during a transition period)
based on the costs incurred by the organization in providing
such a product.
``(g) Establishment of Standards for Qualified Provider-sponsored
Organizations.--
``(1) Interim standards.--
``(A) In general.--The Secretary shall issue
regulations regarding standards for qualified provider-
sponsored organizations within 180 days after the date
of the enactment of this section. Such regulations
shall be issued on an interim basis, but shall become
effective upon publication and shall be effective
through December 31, 2001.
``(B) Solicitation of views.--In developing
standards under this paragraph, the Secretary shall
solicit the views of the National Association of
Insurance Commissioners, the American Academy of
Actuaries, State health departments, associations
representing provider-sponsored organizations, quality
experts (including private accreditation
organizations), and medicare beneficiaries.
``(C) Contracts to monitor performance.--The
Secretary shall enter into contracts with appropriate
State agencies to monitor performance and beneficiary
access to services under this title during the period
in which interim standards are in effect under this
paragraph.
``(2) Permanent standards.--
``(A) In general.--Not later than July 1, 2001, the
Secretary shall issue permanent standards under this
paragraph.
``(B) Consultation.--In developing standards under
this paragraph, the Secretary shall consult with the
organizations and individuals referred to in paragraph
(1)(B).
``(C) Effective date.--The standards under this
paragraph shall be effective for periods after December
31, 2001.
``(3) Preemption.--The standards established under this
subsection shall supersede any State law or regulation with
respect to qualified provider-sponsored organizations insofar
as such law or regulation--
``(A) applies to individuals enrolled with such an
organization under a contract under section 1876, and
``(B) does not meet the requirements of subsection
(b)(2).
``(h) Certification.--
``(1) Establishment of process.--The Secretary shall
establish a process for the certification of provider-sponsored
organizations as qualified provider-sponsored organizations
under this section. Such process shall provide that an
application for certification shall be approved or denied not
later than 90 days after the date of receipt of the
application.
``(2) Application of accreditation.--
``(A) In general.--The process under this
subsection shall, to the maximum extent practical,
provide that provider-sponsored organizations that are
accredited by a qualified private accreditation process
that the Secretary finds applies standards that are no
less stringent than the standards established under
subsection (g) are deemed to meet the corresponding
standards of this title.
``(B) Period of validity of accreditation.--The use
of an accreditation under subparagraph (A) shall be
valid only for such period as the Secretary specifies.
``(3) Imposition of certification fee.--The Secretary may
impose user fees on entities seeking certification under this
subsection in such amounts as the Secretary deems sufficient to
finance the costs of such certification.
``(4) Decertification.--If a provider-sponsored
organization is decertified under this subsection, the
organization shall notify each enrollee with the organization
under section 1876 of such decertification.''.
(b) Effective Date; Use of Interim Regulations.--
(1) In general.--The amendments made by this section shall
become effective on the date of the enactment of this Act and
apply to contract years beginning on or after January 1, 1998.
(2) Use of interim final regulations.--In order to carry
out the amendments made by this section in a timely manner, the
Secretary of Health and Human Services may promulgate
regulations that take effect on an interim basis, after notice
and pending opportunity for public comment.
SEC. 3. AUTHORIZING PAYMENT OF ALL MEDICARE HEALTH PLANS ON A PARTIAL
RISK BASIS.
(a) In General.--Section 1876 of the Social Security Act (42 U.S.C.
1395mm) is amended--
(1) by redesignating subsections (i) and (j) as subsections
(k) and (l), respectively, and
(2) by inserting after subsection (h) the following:
``(i) The Secretary may enter into a partial risk contract with an
eligible organization under which--
``(1) notwithstanding subsection (b)(2)(D), the
organization and the program established under this title share
the financial risk associated with the services the
organization provides to individuals entitled to benefits under
part A and enrolled under part B or enrolled under part B only;
``(2) notwithstanding subsections (a)(1) and (h)(2),
payment is based on--
``(A) a blend of--
(i) the payments that would otherwise be
made to such organization under a risk-sharing
contract under subsection (g), and
``(ii) the payments that would be made to
such organization under a reasonable cost
reimbursement contract under subsection (h), or
``(B) any other methodology agreed upon by the
Secretary and the organization; and
``(3) adjustments, if appropriate, are made to the payments
under this section to the organization to reflect any risk
assumed by such program.''.
(b) Effective Date.--The amendments made by subsection (a) shall
become effective on the date of the enactment of this Act and apply to
contract years beginning on or after January 1, 1998.
SEC. 4. ELIMINATION OF ENROLLMENT COMPOSITION REQUIREMENT FOR ELIGIBLE
ORGANIZATIONS MEETING ENHANCED QUALITY STANDARDS.
(a) In General.--Section 1876 of the Social Security Act (42 U.S.C.
1395mm), as amended by section 3, is amended by inserting after
subsection (i) the following:
``(j)(1) An eligible organization shall be treated as meeting the
requirement of section 1876(f) (relating to enrollment composition) if
the organization demonstrates that it--
``(A) is capable of providing coordinated care in
accordance with the quality assurance standards established
under subsection (c)(6) and paragraph (2) of section 1889(d),
and
``(B) has experience, under a past or present arrangement,
providing coordinated care to individuals (other than
individuals who are entitled to benefits under this title) who
are enrollees, participants, or beneficiaries of a health plan
or a State plan approved under title XIX.
``(2) An eligible organization shall be treated as meeting the
standards referred to in paragraph (1)(A) if the organization is
accredited (and periodically reaccredited) by a private organization
under a process that the Secretary has determined assures that the
organization meets standards for quality assurance programs that are no
less stringent than the standards established for such programs under
subsection (c) and section 1889(g).
``(3) Definitions.--For purposes of this subsection:
``(A) Health plan.--The term `health plan' means--
``(i) any contract of insurance, including any
hospital or medical service policy or certificate,
hospital or medical service plan contract, or health
maintenance organization contract, that is provided by
a carrier (as defined in subparagraph (B)), and
``(ii) an employee welfare benefit plan insofar as
the plan provides health benefits and is funded in a
manner other than through the purchase of one or more
policies or contracts described in clause (i).
``(B) Carrier.--The term `carrier' means a licensed
insurance company, a hospital or medical service corporation
(including an existing Blue Cross or Blue Shield organization),
or other entity licensed or certified by a State to provide
health insurance or health benefits.
(b) Effective Date.--The amendments made by this subsection shall
become effective on the date of the enactment of this Act and apply to
contract years beginning on or after January 1, 1998.
SEC. 5. CLARIFICATION OF USE OF PROVIDER-SPONSORED ORGANIZATIONS UNDER
MEDICAID PROGRAM.
Section 1903(m)(1)(A) of the Social Security Act (42 U.S.C.
1396b(m)(1)(A)) is amended, in the matter before clause (i), by
inserting ``(which may be a provider-sponsored organization, as defined
in section 1889(a)(2))'' after ``public or private organization''.
SEC. 6. DEMONSTRATION OF COORDINATED ACUTE AND LONG-TERM CARE BENEFITS
UNDER MEDICARE AND MEDICAID PROGRAMS.
The Secretary of Health and Human Services shall provide, in at
least 10 States, for demonstration projects that permit Medicaid
programs under title XIX to be treated as eligible organizations under
section 1876 for individuals who are eligible to enroll with an
organization under such section and are eligible to receive medical
assistance under a State program approved under title XIX, for the
purpose of demonstrating the delivery of primary, acute, and long-term
care through an integrated delivery network that emphasizes
noninstitutional care.
SEC. 7. RULES ON COVERAGE OF EMERGENCY SERVICES BY ALL MEDICARE HEALTH
PLANS.
(a) In General.--Section 1876(c) of the Social Security Act (42
U.S.C. 1395mm(c)) is amended--
(1) in paragraph (4)--
(A) by striking ``and'' at the end of subparagraph
(A), and
(B) by striking subparagraph (B) and inserting in
lieu thereof the following:
``(B) provide for reimbursement with respect to services
which are covered under subparagraph (A) which are provided to
such an individual other than through the organization, if--
``(i) the services were medically necessary and
immediately required because of an unforeseen illness,
injury, or condition, and
``(ii) it was not reasonable given the
circumstances to obtain the services through the
organization;
``(C) provide coverage for emergency services (as defined
in paragraph (9))--
``(i) without regard to prior authorization, and
``(ii) subject to the requirement of subparagraph
(B)(ii), without regard to the emergency care
provider's contractual relationship with the
organization; and
``(D) make available 24 hours a day and 7 days a week a
person authorized to make any prior authorization determination
that is required by the organization as a condition of coverage
or payment for items and services included in the benefits
described in paragraph (2)(A) that are furnished with respect
to--
``(i) a medical condition that is--
``(I) identified pursuant to an appropriate
screening examination (as described in section
1867(a)), and
``(II) not an emergency medical condition
(as defined in section 1867(e)(1)), or
``(ii) an emergency medical condition (as so
defined) after that condition has been stabilized (as
defined in section 1867(e)(3)(B)),
and makes such determinations within a period of time that
meets standards established by the Secretary.''; and
(2) by adding at the end the following:
``(9) In this subsection, the term `emergency services' means--
``(A) an appropriate medical screening examination and
related ancillary services (as described in section 1867(a))
furnished in a hospital emergency department, and
``(B) necessary stabilizing examination and treatment
services (as described in section 1867(b)) for an emergency
medical condition (as defined in section 1867(e)(1)).''.
(b) Effective Date.--The amendments made by subsection (a) shall
become effective on the date of the enactment of this Act and shall
apply to contract years beginning on or after January 1, 1998.
SEC. 8. PREEMPTION OF STATE LAW RESTRICTIONS ON MANAGED CARE
ARRANGEMENTS.
(a) Limitation of State Law Restrictions on Managed Care
Arrangements.--Effective as of January 1, 1998--
(1) a State may not prohibit a carrier or group health plan
providing health coverage from including incentives for
enrollees to use the services of participating providers;
(2) a State may not prohibit such a carrier or plan from
limiting coverage of services to those provided by a
participating provider;
(3) a State may not prohibit the negotiation of rates and
forms of payments for providers by such a carrier or plan with
respect to health coverage;
(4) a State may not prohibit such a carrier or plan from
limiting the number of participating providers;
(5) a State may not prohibit such a carrier or plan from
requiring that services be provided (or authorized) by a
practitioner selected by the enrollee from a list of available
participating providers or, except for services of a physician
who specializes in obstetrics and gynecology, from requiring
enrollees to obtain referral in order to have coverage for
treatment by a specialist or health institution;
(6) a State may not prohibit or limit the corporate
practice of medicine; and
(7) a State may not prohibit the adoption and operation of
a utilization review program.
(b) Definitions.--In this section:
(1) Managed care coverage.--The term ``managed care
coverage'' means health coverage to the extent the coverage is
provided through a managed care arrangement (as defined in
paragraph (3)).
(2) Participating provider.--The term ``participating
provider'' means an entity or individual which provides, sells,
or leases health care services as part of a provider network
(as defined in paragraph (4)).
(3) Managed care arrangement.--The term ``managed care
arrangement'' means, with respect to a group health plan or
under health insurance coverage, an arrangement under such plan
or coverage under which providers agree to provide items and
services covered under the arrangement to individuals covered
under the plan or who have such coverage.
(4) Provider network.--The term ``provider network'' means,
with respect to a group health plan or health insurance
coverage, providers who have entered into an agreement
described in paragraph (3).
(5) Utilization review program.--The term ``utilization
review program'' means a system of reviewing the medical
necessity and appropriateness of patient services (which may
include inpatient and outpatient services) using specified
guidelines. Such a system may include pattern analysis,
preadmission certification, the application of practice
guidelines, continued stay review, discharge planning,
preauthorization of ambulatory procedures, and retrospective
review.
(6) State.--The term ``State'' includes the District of
Columbia, Puerto Rico, Guam, the Virgin Islands, the Northern
Mariana Islands, and American Samoa.
(c) Exemption of Laws Preventing Denial of Life Saving Medical
Treatment Pending Transfer to Another Health Care Provider.--Nothing in
this section shall be construed to invalidate any State law that has
the effect of preventing involuntary denial of life-preserving medical
treatment when such denial would cause the involuntary death of the
patient pending transfer of the patient to a health care provider
willing to provide such treatment.
(d) Purpose; Rule of Construction.--The purpose of this section is
to permit use of the mechanisms specified in paragraphs (1) through (7)
of subsection (a) in the States. Nothing in this section shall be
construed as prohibiting a State from regulating or limiting abusive
arrangements or practices that act inappropriately to withhold, limit,
or delay access to covered services.
SEC. 9. PUBLICATION OF ANTITRUST GUIDELINES ON ACTIVITIES OF PROVIDER-
SPONSORED ORGANIZATIONS.
(a) In General.--The Department of Justice and the Federal Trade
Commission shall jointly provide for the development and publication of
explicit guidelines on the application of antitrust laws to the
activities of provider-sponsored organizations (as defined in section
1889(a)(2) of the Social Security Act). The guidelines shall--
(1) address issues relating to the formation, development,
and operation of such organizations, and
(2) be designed to facilitate the development and operation
of such organizations.
(b) Effect of Guidelines.--The guidelines established under
subsection (a) shall--
(1) be binding on all enforcement activities undertaken
pursuant to the antitrust laws, and
(2) serve as guidance to the attorneys general and courts
of the States in interpreting and applying the antitrust laws
of the States to provider-sponsored organizations.
(c) Definition.--For purposes of this section, the term ``antitrust
laws'' has the meaning given to such term in the first section of the
Clayton Act (15 U.S.C. 12), except that such term includes section 5 of
the Federal Trade Commission Act (15 U.S.C. 45) to the extent such
section applies to unfair competition.
(d) Deadline; Annual Updates.--The guidelines required by
subsection (a) shall be published not later than 180 days after the
date of the enactment of this Act and shall be updated at least
annually thereafter based on consultations with interested parties.
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