[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 820 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 820

  To amend title XXVII of the Public Health Service Act to establish 
 standards for protection of consumers in managed care plans and other 
                       health insurance coverage.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 25, 1997

 Mr. Dingell introduced the following bill; which was referred to the 
                         Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
  To amend title XXVII of the Public Health Service Act to establish 
 standards for protection of consumers in managed care plans and other 
                       health insurance coverage.

    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 Insurance 
Bill of Rights 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. Amendments to the Public Health Service Act.
                 ``Part C--Patient Protection Standards

        ``Sec. 2770. Notice; additional definitions.
                      ``Subpart 1--Access to Care

        ``Sec. 2771. Access to emergency care.
        ``Sec. 2772. Access to specialty care.
        ``Sec. 2773. Continuity of care.
        ``Sec. 2774. Choice of provider.
        ``Sec. 2775. Coverage for individuals participating in approved 
                            clinical trials.
        ``Sec. 2776. Access to needed prescription drugs.
                     ``Subpart 2--Quality Assurance

        ``Sec. 2777. Internal quality assurance program.
        ``Sec. 2778. Collection of standardized data.
        ``Sec. 2779. Process for selection of providers.
        ``Sec. 2780. Drug utilization program.
        ``Sec. 2781. Standards for utilization review activities.
                    ``Subpart 3--Patient Information

        ``Sec. 2782. Patient information.
        ``Sec. 2783. Protection of patient confidentiality.
                   ``Subpart 4--Grievance Procedures

        ``Sec. 2784. Establishment of complaint and appeals process.
        ``Sec. 2785. Provisions relating to appeals of utilization 
                            review determinations and similar 
                            determinations.
        ``Sec. 2786. State health insurance ombudsmen.
``Subpart 5--Protection of Providers Against Interference with Medical 
           Communications and Improper Incentive Arrangements

        ``Sec. 2787. Prohibition of interference with certain medical 
                            communications.
        ``Sec. 2788. Prohibition against transfer of indemnification or 
                            improper incentive arrangements.
``Subpart 6--Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

        ``Sec. 2789. Promoting good medical practice.

SEC. 2. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Patient Protection Standards.--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--Patient Protection Standards

``SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS.

    ``(a) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 711(d) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this part as if such section applied to such issuer and such issuer 
were a group health plan.
    ``(b) Additional Definitions.--For purposes of this part:
            ``(1) Nonparticipating physician or provider.--The term 
        `nonparticipating physician or provider' means, with respect to 
        health care items and services furnished to an enrollee under 
        health insurance coverage, a physician or provider that is not 
        a participating physician or provider for such services.
            ``(2) Participating physician or provider.--The term 
        `participating physician or provider' means, with respect to 
        health care items and services furnished to an enrollee under 
        health insurance coverage, a physician or provider that 
        furnishes such items and services under a contract or other 
        arrangement with the health insurance issuer offering such 
        coverage.

                      ``Subpart 1--Access to Care

``SEC. 2771. ACCESS TO EMERGENCY CARE.

    ``(a) Prohibition of Certain Restrictions on Coverage of Emergency 
Services.
            ``(1) In general.--If health insurance coverage provides 
        any benefits with respect to emergency services (as defined in 
        paragraph (2)(B)), the health insurance issuer offering such 
        coverage shall cover emergency services furnished to an 
        enrollee--
                    ``(A) without the need for any prior authorization 
                determination,
                    ``(B) subject to paragraph (3), whether or not the 
                physician or provider furnishing such services is a 
                participating physician or provider with respect to 
                such services, and
                    ``(C) subject to paragraph (3), without regard to 
                any other term or condition of such coverage (other 
                than an exclusion of benefits, or an affiliation or 
                waiting period, permitted under section 2701).
            ``(2) Emergency services; emergency medical condition.--For 
        purposes of this section--
                    ``(A) Emergency medical condition based on prudent 
                layperson.--The term `emergency medical condition' 
                means a medical condition 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 to 
                result in--
                            ``(i) placing the health of the individual 
                        (or, with respect to a pregnant woman, the 
                        health of the woman or her unborn child) 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--
                            ``(i) a medical screening examination (as 
                        required under section 1867 of the Social 
                        Security Act) that is within the capability of 
                        the emergency department of a hospital, 
                        including ancillary services routinely 
                        available to the emergency department, to 
                        evaluate an emergency medical condition (as 
                        defined in subparagraph (A)), and
                            ``(ii) within the capabilities of the staff 
                        and facilities available at the hospital, such 
                        further medical examination and treatment as 
                        are required under section 1867 of the Social 
                        Security Act to stabilize the patient.
                    ``(C) Trauma and burn centers.--The provisions of 
                clause (ii) of subparagraph (B) apply to a trauma or 
                burn center, in a hospital, that--
                            ``(i) is designated by the State, a 
                        regional authority of the State, or by the 
                        designee of the State, or
                            ``(ii) is in a State that has not made such 
                        designations and meets medically recognized 
                        national standards.
            ``(3) Application of network restriction permitted in 
        certain cases.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if a health insurance issuer in 
                relation to health insurance coverage denies, limits, 
                or otherwise differentiates in coverage or payment for 
                benefits other than emergency services on the basis 
                that the physician or provider of such services is a 
                nonparticipating physician or provider, the issuer may 
                deny, limit, or differentiate in coverage or payment 
                for emergency services on such basis.
                    ``(B) Network restrictions not permitted in certain 
                exceptional cases.--The denial or limitation of, or 
                differentiation in, coverage or payment of benefits for 
                emergency services under subparagraph (A) shall not 
                apply in the following cases:
                            ``(i) Circumstances beyond control of 
                        enrollee.--The enrollee is unable to go to a 
                        participating hospital for such services due to 
                        circumstances beyond the control of the 
                        enrollee (as determined consistent with 
                        guidelines and subparagraph (C)).
                            ``(ii) Likelihood of an adverse health 
                        consequence based on layperson's judgment.--A 
                        prudent layperson possessing an average 
                        knowledge of health and medicine could 
                        reasonably believe that, under the 
                        circumstances and consistent with guidelines, 
the time required to go to a participating hospital for such services 
could result in any of the adverse health consequences described in a 
clause of subsection (a)(2)(A).
                            ``(iii) Physician referral.--A 
                        participating physician or other person 
                        authorized by the plan refers the enrollee to 
                        an emergency department of a hospital and does 
                        not specify an emergency department of a 
                        hospital that is a participating hospital with 
                        respect to such services.
                    ``(C) Application of `beyond control' standards.--
                For purposes of applying subparagraph (B)(i), receipt 
                of emergency services from a nonparticipating hospital 
                shall be treated under the guidelines as being `due to 
                circumstances beyond the control of the enrollee' if 
                any of the following conditions are met:
                            ``(i) Unconscious.--The enrollee was 
                        unconscious or in an otherwise altered mental 
                        state at the time of initiation of the 
                        services.
                            ``(ii) Ambulance delivery.--The enrollee 
                        was transported by an ambulance or other 
                        emergency vehicle directed by a person other 
                        than the enrollee to the nonparticipating 
                        hospital in which the services were provided.
                            ``(iii) Natural disaster.--A natural 
                        disaster or civil disturbance prevented the 
                        enrollee from presenting to a participating 
                        hospital for the provision of such services.
                            ``(iv) No good faith effort to inform of 
                        change in participation during a contract 
                        year.--The status of the hospital changed from 
                        a participating hospital to a nonparticipating 
                        hospital with respect to emergency services 
                        during a contract year and the plan or issuer 
                        failed to make a good faith effort to notify 
                        the enrollee involved of such change.
                            ``(v) Other conditions.--There were other 
                        factors (such as those identified in 
                        guidelines) that prevented the enrollee from 
                        controlling selection of the hospital in which 
                        the services were provided.
    ``(b) Assuring Coordinated Coverage of Maintenance Care and Post-
Stabilization Care.--
            ``(1) In general.--In the case of an enrollee who is 
        covered under health insurance coverage issued by a health 
        insurance issuer and who has received emergency services 
        pursuant to a screening evaluation conducted (or supervised) by 
        a treating physician at a hospital that is a nonparticipating 
        provider with respect to emergency services, if--
                    ``(A) pursuant to such evaluation, the physician 
                identifies post-stabilization care (as defined in 
                paragraph (3)(B)) that is required by the enrollee,
                    ``(B) the coverage provides benefits with respect 
                to the care so identified and the coverage requires 
                (but for this subsection) an affirmative prior 
                authorization determination as a condition of coverage 
                of such care, and
                    ``(C) the treating physician (or another individual 
                acting on behalf of such physician) initiates, not 
                later than 30 minutes after the time the treating 
                physician determines that the condition of the enrollee 
                is stabilized, a good faith effort to contact a 
                physician or other person authorized by the issuer (by 
                telephone or other means) to obtain an affirmative 
                prior authorization determination with respect to the 
                care,
        then, without regard to terms and conditions specified in 
        paragraph (2) the issuer shall cover maintenance care (as 
        defined in paragraph (3)(A)) furnished to the enrollee during 
        the period specified in paragraph (4) and shall cover post-
        stabilization care furnished to the enrollee during the period 
        beginning under paragraph (5) and ending under paragraph (6).
            ``(2) Terms and conditions waived.--The terms and 
        conditions (of coverage) described in this paragraph that are 
        waived under paragraph (1) are as follows:
                    ``(A) The need for any prior authorization 
                determination.
                    ``(B) Any limitation on coverage based on whether 
                or not the physician or provider furnishing the care is 
                a participating physician or provider with respect to 
                such care.
                    ``(C) Any other term or condition of the coverage 
                (other than an exclusion of benefits, or an affiliation 
                or waiting period, permitted under section 2701 and 
                other than a requirement relating to medical necessity 
                for coverage of benefits).
            ``(3) Maintenance care and post-stabilization care 
        defined.--In this subsection:
                    ``(A) Maintenance care.--The term `maintenance 
                care' means, with respect to an individual who is 
                stabilized after provision of emergency services, 
                medically necessary items and services (other than 
                emergency services) that are required by the individual 
                to ensure that the individual remains stabilized during 
                the period described in paragraph (4).
                    ``(B) Post-stabilization care.--The term `post-
                stabilization care' means, with respect to an 
                individual who is determined to be stable pursuant to a 
                medical screening examination or who is stabilized 
                after provision of emergency services, medically 
                necessary items and services (other than emergency 
                services and other than maintenance care) that are 
                required by the individual.
            ``(4) Period of required coverage of maintenance care.--The 
        period of required coverage of maintenance care of an 
        individual under this subsection begins at the time of the 
        request (or the initiation of the good faith effort to make the 
        request) under paragraph (1)(C) and ends when--
                    ``(A) the individual is discharged from the 
                hospital;
                    ``(B) a physician (designated by the issuer 
                involved) and with privileges at the hospital involved 
                arrives at the emergency department of the hospital and 
                assumes responsibility with respect to the treatment of 
                the individual; or
                    ``(C) the treating physician and the issuer agree 
                to another arrangement with respect to the care of the 
                individual.
            ``(5) When post-stabilization care required to be 
        covered.--
                    ``(A) When treating physician unable to communicate 
                request.--If the treating physician or other individual 
                makes the good faith effort to request authorization 
                under paragraph (1)(C) but is unable to communicate the 
                request directly with an authorized person referred to 
                in such paragraph within 30 minutes after the time of 
                initiating such effort, then post-stabilization care is 
                required to be covered under this subsection beginning 
                at the end of such 30-minute period.
                    ``(B) When able to communicate request, and no 
                timely response.--
                            ``(i) In general.--If the treating 
                        physician or other individual under paragraph 
                        (1)(C) is able to communicate the request 
                        within the 30-minute period described in 
                        subparagraph (A), the post-stabilization care 
                        requested is required to be covered under this 
                        subsection beginning 30 minutes after the time 
                        when the issuer receives the request unless a 
                        person authorized by the plan or issuer 
                        involved communicates (or makes a good faith 
                        effort to communicate) a denial of the request 
                        for the prior authorization determination 
                        within 30 minutes of the time when the issuer 
                        receives the request and the treating physician 
                        does not request under clause (ii) to 
                        communicate directly with an authorized 
                        physician concerning the denial.
                            ``(ii) Request for direct physician-to-
                        physician communication concerning denial.--If 
                        a denial of a request is communicated under 
                        clause (i), the treating physician may request 
                        to communicate respecting the denial directly 
                        with a physician who is authorized by the 
                        issuer to deny or affirm such a denial.
                    ``(C) When no timely response to request for 
                physician-to-physician communication.--If a request for 
                physician-to-physician communication is made under 
                subparagraph (B)(ii), the post-stabilization care 
                requested is required to be covered under this 
                subsection beginning 30 minutes after the time when the 
                issuer receives the request from a treating physician 
                unless a physician, who is authorized by the issuer to 
                reverse or affirm the initial denial of the care, 
                communicates (or makes a good faith effort to 
                communicate) directly with the treating physician 
                within such 30-minute period.
                    ``(D) Disagreements over post-stabilization care.--
                If, after a direct physician-to-physician communication 
                under subparagraph (C), the denial of the request for 
                the post-stabilization care is not reversed and the 
                treating physician communicates to the issuer involved 
                a disagreement with such decision, the post-
                stabilization care requested is required to be covered 
                under this subsection beginning as follows:
                            ``(i) Delay to allow for prompt arrival of 
                        physician assuming responsibility.--If the 
                        issuer communicates that a physician 
                        (designated by the plan or issuer) with 
                        privileges at the hospital involved will arrive 
                        promptly (as determined under guidelines) at 
                        the emergency department of the hospital in 
                        order to assume responsibility with respect to 
                        the treatment of the enrollee involved, the 
                        required coverage of the post-stabilization 
                        care begins after the passage of such time 
                        period as would allow the prompt arrival of 
                        such a physician.
                            ``(ii) Other cases.--If the issuer does not 
                        so communicate, the required coverage of the 
                        post-stabilization care begins immediately.
            ``(6) No requirement of coverage of post-stabilization care 
        if alternate plan of treatment.--
                    ``(A) In general.--Coverage of post-stabilization 
                care is not required under this subsection with respect 
                to an individual when--
                            ``(i) subject to subparagraph (B), a 
                        physician (designated by the plan or issuer 
                        involved) and with privileges at the hospital 
                        involved arrives at the emergency department of 
                        the hospital and assumes responsibility with 
                        respect to the treatment of the individual; or
                            ``(ii) the treating physician and the 
                        issuer agree to another arrangement with 
                        respect to the post-stabilization care (such as 
                        an appropriate transfer of the individual 
                        involved to another facility or an appointment 
                        for timely followup treatment for the 
                        individual).
                    ``(B) Special rule where once care initiated.--
                Required coverage of requested post-stabilization care 
                shall not end by reason of subparagraph (A)(i) during 
                an episode of care (as determined by guidelines) if the 
                treating physician initiated such care (consistent with 
                a previous paragraph) before the arrival of a physician 
                described in such subparagraph.
            ``(7) Construction.--Nothing in this subsection shall be 
        construed as--
                    ``(A) preventing an issuer from authorizing 
                coverage of maintenance care or post-stabilization care 
                in advance or at any time; or
                    ``(B) preventing a treating physician or other 
                individual described in paragraph (1)(C) and an issuer 
                from agreeing to modify any of the time periods 
                specified in paragraphs (5) as it relates to cases 
                involving such persons.
    ``(c) Limits on Cost-Sharing for Services Furnished in Emergency 
Departments.--If health insurance coverage provides any benefits with 
respect to emergency services, the health insurance issuer offering 
such coverage may impose cost sharing with respect to such services 
only if the following conditions are met:
            ``(1) Limitations on cost-sharing differential for 
        nonparticipating providers.--
                    ``(A) No differential for certain services.--In the 
                case of services furnished under the circumstances 
                described in clause (i), (ii), or (iii) of subsection 
                (a)(3)(B) (relating to circumstances beyond the control 
                of the enrollee, the likelihood of an adverse health 
                consequence based on layperson's judgment, and 
                physician referral), the cost-sharing for such services 
                provided by a nonparticipating provider or physician 
                does not exceed the cost-sharing for such services 
                provided by a participating provider or physician.
                    ``(B) Only reasonable differential for other 
                services.--In the case of other emergency services, any 
                differential by which the cost-sharing for such 
                services provided by a nonparticipating provider or 
                physician exceeds the cost-sharing for such services 
                provided by a participating provider or physician is 
                reasonable (as determined under guidelines).
            ``(2) Only reasonable differential between emergency 
        services and other services.--Any differential by which the 
        cost-sharing for services furnished in an emergency department 
        exceeds the cost-sharing for such services furnished in another 
        setting is reasonable (as determined under guidelines).
            ``(3) Construction.--Nothing in paragraph (1)(B) or (2) 
        shall be construed as authorizing guidelines other than 
        guidelines that establish maximum cost-sharing differentials.
    ``(d) Information on Access to Emergency Services.--A health 
insurance issuer, to the extent a health insurance issuer offers health 
insurance coverage, shall provide education to enrollees on--
            ``(1) coverage of emergency services (as defined in 
        subsection (a)(2)(B)) by the issuer in accordance with the 
        provisions of this section,
            ``(2) the appropriate use of emergency services, including 
        use of the 911 telephone system or its local equivalent,
            ``(3) any cost sharing applicable to emergency services,
            ``(4) the process and procedures of the plan for obtaining 
        emergency services, and
            ``(5) the locations of--
                    ``(A) emergency departments, and
                    ``(B) other settings,
        in which participating physicians and hospitals provide 
        emergency services and post-stabilization care.
    ``(e) General Definitions.--For purposes of this section:
            ``(1) Cost sharing.--The term `cost sharing' means any 
        deductible, coinsurance amount, copayment or other out-of-
        pocket payment (other than premiums or enrollment fees) that a 
        health insurance offering health insurance issuer imposes on 
        enrollees with respect to the coverage of benefits.
            ``(2) Good faith effort.--The term `good faith effort' has 
        the meaning given such term in guidelines and requires such 
        appropriate documentation as is specified under such 
        guidelines.
            ``(3) Guidelines.--The term `guidelines' means guidelines 
        established by the Secretary after consultation with an 
        advisory panel that includes individuals representing emergency 
        physicians, health insurance issuers, including at least one 
        health maintenance organization, hospitals, employers, the 
        States, and consumers.
            ``(4) Prior authorization determination.--The term `prior 
        authorization determination' means, with respect to items and 
        services for which coverage may be provided under health 
        insurance coverage, a determination (before the provision of 
        the items and services and as a condition of coverage of the 
        items and services under the coverage) of whether or not such 
        items and services will be covered under the coverage.
            ``(5) Stabilize.--The term `to stabilize' means, with 
        respect to an emergency medical condition, to provide (in 
        complying with section 1867 of the Social Security Act) such 
        medical treatment of the condition as may be necessary to 
        assure, within reasonable medical probability, that no material 
        deterioration of the condition is likely to result from or 
        occur during the transfer of the individual from the facility.
            ``(6) Stabilized.--The term `stabilized' means, with 
        respect to an emergency medical condition, that no material 
        deterioration of the condition is likely, within reasonable 
        medical probability, to result from or occur before an 
        individual can be transferred from the facility, in compliance 
        with the requirements of section 1867 of the Social Security 
        Act.
            ``(7) Treating physician.--The term `treating physician' 
        includes a treating health care professional who is licensed 
        under State law to provide emergency services other than under 
        the supervision of a physician.

``SEC. 2772. ACCESS TO SPECIALTY CARE.

    ``(a) 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.
    ``(b) Specialty Care.--
            ``(1) Referral to specialty care for enrollees requiring 
        treatment by specialists.--
                    ``(A) 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.
                    ``(B) 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.
                    ``(C) Care under referral.--Care provided pursuant 
                to such referral under subparagraph (A) shall be--
                            ``(i) 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
                            ``(ii) 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.
                    ``(D) Referrals to participating providers.--An 
                issuer is not required under subparagraph (A) 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.
                    ``(E) 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.
            ``(2) Specialists as primary care providers.--
                    ``(A) In general.--A health insurance issuer, in 
                connection with the provision of health insurance 
                coverage, shall have a procedure by which a new 
                enrollee upon enrollment, or an enrollee upon 
                diagnosis, with an ongoing special condition (as 
                defined in subparagraph (C)) may receive a referral to 
                a specialist for such condition who shall be 
                responsible for and capable of providing and 
                coordinating the enrollee's primary and specialty care. 
                If such an enrollee's care would most appropriately be 
                coordinated by such a specialist, the issuer shall 
                refer the enrollee to such specialist.
                    ``(B) Treatment as primary care provider.--Such 
                specialist shall be permitted to treat the enrollee 
                without a referral from the enrollee's primary care 
                provider and may authorize such referrals, procedures, 
                tests, and other medical services as the enrollee's 
                primary care provider would otherwise be permitted to 
                provide or authorize, subject to the terms of the 
                treatment plan (referred to in paragraph (1)(C)(i)).
                    ``(C) Ongoing special condition defined.--In this 
                paragraph, the term `special condition' means a 
                condition or disease that--
                            ``(i) is life-threatening, degenerative, or 
                        disabling, and
                            ``(ii) requires specialized medical care 
                        over a prolonged period of time.
                    ``(D) Terms of referral.--The provisions of 
                subparagraphs (C) through (E) of paragraph (1) shall 
                apply with respect to referrals under subparagraph (A) 
                of this paragraph in the same manner as they apply to 
                referrals under paragraph (1)(A).
            ``(3) Standing referrals.--
                    ``(A) In general.--A health insurance issuer, in 
                connection with the provision of health insurance 
                coverage, shall have a procedure by which an enrollee 
                who has a condition that requires ongoing care from a 
                specialist may receive a standing referral to such 
                specialist for treatment of such condition. If the 
                issuer, or the primary care provider in consultation 
                with the medical director of the issuer and the 
                specialist (if any), determines that such a standing 
                referral is appropriate, the issuer shall make such a 
                referral to such a specialist.
                    ``(C) Terms of referral.--The provisions of 
                subparagraphs (C) through (E) of paragraph (1) shall 
                apply with respect to referrals under subparagraph (A) 
                of this paragraph in the same manner as they apply to 
                referrals under paragraph (1)(A).

``SEC. 2773. CONTINUITY OF CARE.

    ``(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 undergoing a course of treatment from the provider at the 
time of such termination, the issuer shall--
            ``(1) notify the enrollee of such termination, and
            ``(2) subject to subsection (c), permit the enrollee to 
        continue the course of treatment with the provider during a 
        transitional period (provided under subsection (b)).
    ``(b) Transitional Period.--
            ``(1) In general.--Except as provided in paragraphs (2) 
        through (4), the transitional period under this subsection 
        shall extend for at least--
                    ``(A) 60 days from the date of the notice to the 
                enrollee of the provider's termination in the case of a 
                primary care provider, or
                    ``(B) 120 days from such date in the case of 
                another provider.
            ``(2) Institutional care.--The transitional period under 
        this subsection 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.
            ``(3) Pregnancy.--If--
                    ``(A) an enrollee has entered the second trimester 
                of pregnancy at the time of a provider's termination of 
                participation, and
                    ``(B) the provider was treating the pregnancy 
                before date of the termination,
        the transitional period under this subsection with respect to 
        provider's treatment of the pregnancy shall extend through the 
        provision of post-partum care directly related to the delivery.
            ``(4) Terminal illness.--
                    ``(A) In general.--If--
                            ``(i) an enrollee was determined to be 
                        terminally ill (as defined in subparagraph (B)) 
                        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 subsection shall 
                extend for the remainder of the enrollee's life for 
                care directly related to the treatment of the terminal 
                illness.
                    ``(B) Definition.--In subparagraph (A), 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 subsection (a)(2) 
upon the provider agreeing to the following terms and conditions:
            ``(1) 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.
            ``(2) 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.
            ``(3) 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.

``SEC. 2774. CHOICE OF PROVIDER.

    ``(a) Primary Care.--A health insurance issuer that offers health 
insurance coverage shall permit each enrollee to receive primary care 
from any participating primary care provider who is available to accept 
such enrollee.
    ``(b) Specialists.--
            ``(1) In general.--Subject to paragraph (2), a health 
        insurance issuer that offers health insurance coverage shall 
        permit each enrollee to receive medically necessary specialty 
        care, pursuant to appropriate referral procedures, from any 
        qualified participating health care provider who is available 
        to accept such enrollee for such care.
            ``(2) Limitation.--Paragraph (1) shall not apply to 
        speciality care if the issuer clearly informs enrollees of the 
        limitations on choice of participating providers with respect 
        to such care.
    ``(c) List of Participating Providers.--For disclosure of 
information about participating primary care and specialty care 
providers, see section 2782(b)(3).

``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. 2776. ACCESS TO NEEDED PRESCRIPTION DRUGS.

    ``If a health insurance issuer offers health insurance coverage 
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.

                     ``Subpart 2--Quality Assurance

``SEC. 2777. INTERNAL QUALITY ASSURANCE PROGRAM.

    ``(a) Requirement.--A health insurance issuer that offers health 
insurance coverage shall establish and maintain an ongoing, internal 
quality assurance and continuous quality improvement program that meets 
the requirements of subsection (b).
    ``(b) Program Requirements.--The requirements of this subsection 
for a quality improvement program of an issuer are as follows:
            ``(1) Administration.--The issuer has a separate 
        identifiable unit with responsibility for administration of the 
        program.
            ``(2) Written plan.--The issuer has a written plan for the 
        program that is updated annually and that specifies at least 
        the following:
                    ``(A) The activities to be conducted.
                    ``(B) The organizational structure.
                    ``(C) The duties of the medical director.
                    ``(D) Criteria and procedures for the assessment of 
                quality.
                    ``(E) Systems for ongoing and focussed evaluation 
                activities.
            ``(3) Systematic review.--The program provides for 
        systematic review of the type of health services provided, 
        consistency of services provided with good medical practice, 
        and patient outcomes.
            ``(4) Quality criteria.--The program--
                    ``(A) uses criteria that are based on performance 
                and clinical outcomes where feasible and appropriate, 
                and
                    ``(B) includes criteria that are directed 
                specifically at meeting the needs of at-risk 
                populations and enrollees with chronic or severe 
                illnesses.
            ``(5) System for reporting.--The program has procedures for 
        reporting of possible quality concerns by providers and 
        enrollees and for remedial actions to correct quality problems, 
        including written procedures for responding to concerns and 
        taking appropriate corrective action.
            ``(6) Data collection.--The program provides for the 
        collection of systematic, scientifically based data to be used 
        in the measure of quality.
    ``(c) Deeming.--For purposes of subsection (a), the requirements of 
subsection (b) are deemed to be met with respect to a health insurance 
issuer if the issuer--
            ``(1) is a qualified health maintenance organization (as 
        defined in section 1310(d)), or
            ``(2) is accredited by a national accreditation 
        organization that is certified by the Secretary.

``SEC. 2778. COLLECTION OF STANDARDIZED DATA.

    ``(a) In General.--A health insurance issuer that offers health 
insurance coverage shall collect uniform quality data that include--
            ``(1) a minimum uniform data set described in subsection 
        (b), and
            ``(2) additional data that are consistent with the 
        requirements of a nationally recognized body identified by the 
        Secretary.
    ``(b) Minimum Uniform Data Set.--The Secretary shall specify the 
data required to be included in the minimum uniform data set under 
subsection (a)(1) and the standard format for such data. Such data 
shall include at least--
            ``(1) aggregate utilization data;
            ``(2) data on the demographic characteristics of enrollees;
            ``(3) data on disease-specific and age-specific mortality 
        rates of enrollees;
            ``(4) data on enrollee satisfaction, including data on 
        enrollee disenrollment and grievances; and
            ``(5) data on quality indicators.
    ``(c) Availability.--A summary of the data collected under 
subsection (a) shall be disclosed under section 2782(b)(4).

``SEC. 2779. PROCESS FOR SELECTION OF PROVIDERS.

    ``(a) In General.--A health insurance issuer that offers health 
insurance coverage shall have a written process for the selection of 
participating health care professionals, including minimum professional 
requirements.
    ``(b) Verification of Background.--Such process shall include 
verification of a health care provider's license, a history of 
suspension or revocation, and liability claim history.
    ``(c) Restriction.--Such process shall not use a high-risk patient 
base or location of a provider in an area with residents with poorer 
health status as a basis for excluding providers from participation.

``SEC. 2780. 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.

``SEC. 2781. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES.

    ``(a) Compliance with Requirements.--
            ``(1) In general.--A health insurance issuer shall conduct 
        utilization review activities in connection with the provision 
        of health insurance coverage only in accordance with a 
        utilization review program that meets the requirements of this 
        section.
            ``(2) Use of outside agents.--Nothing in this section shall 
        be construed as preventing a health insurance issuer from 
        arranging through a contract or otherwise for persons or 
        entities to conduct utilization review activities on behalf of 
        the issuer, so long as such activities are conducted in 
        accordance with a utilization review program that meets the 
        requirements of this section.
            ``(3) Utilization review defined.--For purposes of this 
        section, the terms `utilization review' and `utilization review 
        activities' mean procedures used to monitor or evaluate the 
        clinical necessity, appropriateness, efficacy, or efficiency of 
        health care services, procedures or settings, and includes 
        ambulatory review, prospective review, concurrent review, 
        second opinions, case management, discharge planning, or 
        retrospective review.
    ``(b) Written Policies and Criteria.--
            ``(1) Written policies.--A utilization review program shall 
        be conducted consistent with written policies and procedures 
        that govern all aspects of the program.
            ``(2) Use of written criteria.--
                    ``(A) In general.--Such a program shall utilize 
                written clinical review criteria developed pursuant to 
                the program with the input of appropriate physicians.
                    ``(B) Continuing use of standards in retrospective 
                review.--If a health care service has been specifically 
                pre-authorized or approved for an enrollee under such a 
                program, the program shall not, pursuant to 
                retrospective review, revise or modify the specific 
                standards, criteria, or procedures used for the 
                utilization review for procedures, treatment, and 
                services delivered to the enrollee during the same 
                course of treatment.
                    ``(C) No adverse determination based on refusal to 
                observe service.--Such a program shall not base an 
                adverse determination on--
                            ``(i) a refusal to consent to observing any 
                        health care service, or
                            ``(ii) lack of reasonable access to a 
                        health care provider's medical or treatment 
                        records, unless the program has provided 
                        reasonable notice to the enrollee.
    ``(c) Conduct of Program Activities.--
            ``(1) Administration by health care professionals.--A 
        utilization review program shall be administered by qualified 
        health care professionals who shall oversee review decisions. 
        In this subsection, the term `health care professional' means a 
        physician or other health care practitioner licensed, 
        accredited, or certified to perform specified health services 
        consistent with State law.
            ``(2) Use of qualified, independent personnel.--
                    ``(A) In general.--A utilization review program 
                shall provide for the conduct of utilization review 
                activities only through personnel who are qualified 
                and, to the extent required, who have received 
                appropriate training in the conduct of such activities 
                under the program.
                    ``(B) Peer review of adverse clinical 
                determinations.--Such a program shall provide that 
                clinical peers shall evaluate the clinical 
                appropriateness of adverse clinical determinations. In 
                this subsection, 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.
                    ``(C) Prohibition of contingent compensation 
                arrangements.--Such a program shall not, with respect 
to utilization review activities, permit or provide compensation or 
anything of value to its employees, agents, or contractors in a manner 
that--
                            ``(i) provides incentives, direct or 
                        indirect, for such persons to make 
                        inappropriate review decisions, or
                            ``(ii) is based, directly or indirectly, on 
                        the quantity or type of adverse determinations 
                        rendered.
                    ``(D) Prohibition of conflicts.--Such a program 
                shall not permit a health care professional who 
                provides health care services to an enrollee to perform 
                utilization review activities in connection with the 
                health care services being provided to the enrollee.
            ``(3) Toll-free telephone number.--Such a program shall 
        provide that--
                    ``(A) appropriate personnel performing utilization 
                review activities under the program are reasonably 
                accessible by toll-free telephone not less than 40 
                hours per week during normal business hours to discuss 
                patient care and allow response to telephone requests, 
                and
                    ``(B) the program has a telephone system capable of 
                accepting, recording, or providing instruction to 
                incoming telephone calls during other than normal 
                business hours and to ensure response to accepted or 
                recorded messages not less than one business day after 
                the date on which the call was received.
            ``(4) Limits on frequency.--Such a program shall not 
        provide for the performance of utilization review activities 
        with respect to a class of services furnished to an enrollee 
        more frequently than is reasonably required to assess whether 
        the services under review are medically necessary.
            ``(5) Limitation on information requests.--Under such a 
        program, information shall be required to be provided by health 
        care providers only to the extent it is necessary to perform 
        the utilization review activity involved.
    ``(d) Deadline for Determinations.--
            ``(1) Prior authorization services.--Except as provided in 
        paragraph (2), in the case of a utilization review activity 
        involving the prior authorization of health care items and 
        services, the utilization review program shall make a 
        determination concerning such authorization, and provide notice 
        of the determination to the enrollee or the enrollee's designee 
        and the enrollee's health care provider by telephone and in 
        writing, as soon as possible in accordance with the medical 
        exigencies of the cases, and in no event later than 3 business 
        days after the date of receipt of the necessary information 
        respecting such determination.
            ``(2) Continued care.--In the case of a utilization review 
        activity involving authorization for continued or extended 
        health care services, or additional services for an enrollee 
        undergoing a course of continued treatment prescribed by a 
        health care provider, the utilization review program shall make 
        a determination concerning such authorization, and provide 
        notice of the determination to the enrollee or the enrollee's 
        designee and the enrollee's health care provider by telephone 
        and in writing, within 1 business day of the date of receipt of 
        the necessary information respecting such determination. Such 
        notice shall include, with respect to continued or extended 
        health care services, the number of extended services approved, 
        the new total of approved services, the date of onset of 
        services, and the next review date.
            ``(3) Previously provided services.--In the case of a 
        utilization review activity involving retrospective review of 
        health care services previously provided, the utilization 
        review program shall make a the determination concerning such 
        services, and provide notice of the determination to the 
        enrollee or the enrollee's designee and the enrollee's health 
        care provider by telephone and in writing, within 30 days of 
        the date of receipt of the necessary information respecting 
        such determination.
            ``(4) Reference to special rules for emergency services, 
        maintenance care, and post-stabilization care.--For waiver of 
        prior authorization requirements in certain cases involving 
        emergency services and maintenance care and post-stabilization 
        care, see sections 2771(a)(1)(A) and 2771(a)(2)(A), 
        respectively.
    ``(e) Notice of Adverse Determinations.--
            ``(1) In general.--Notice of an adverse determination under 
        a utilization review program (including as a result of a 
        reconsideration under subsection (f)) shall be in writing and 
        shall include--
                    ``(A) the reasons for the determination (including 
                the clinical rationale);
                    ``(B) instructions on how to initiate an appeal 
                under section 2785; and
                    ``(C) notice of the availability, upon request of 
                the enrollee (or the enrollee's designee) of the 
                clinical review criteria relied upon to make such 
                determination.
            ``(2) Specification of any additional information.--Such a 
        notice shall also specify what (if any) additional necessary 
        information must be provided to, or obtained by, person making 
        the determination in order to make a decision on such an 
        appeal.
    ``(f) Reconsideration.--
            ``(1) At request of provider.--In the event that a 
        utilization review program provides for an adverse 
        determination without attempting to discuss such matter with 
        the enrollee's health care provider who specifically 
        recommended the health care service, procedure, or treatment 
        under review, such health care provider shall have the 
        opportunity to request a reconsideration of the adverse 
        determination under this subsection.
            ``(2) Timing and conduct.--Except in cases of retrospective 
        reviews, such reconsideration shall occur as soon as possible 
        in accordance with the medical exigencies of the cases, and in 
        no event later than 1 business day after the date of receipt of 
        the request and shall be conducted by the enrollee's health 
        care provider and the health care professional making the 
        initial determination or a designated qualified health care 
        professional if the original professional cannot be available.
            ``(3) Notice.--In the event that the adverse determination 
        is upheld after reconsideration, the utilization review program 
        shall provide notice as required under subsection (e).
            ``(4) Construction.--Nothing in this subsection shall 
        preclude the enrollee from initiating an appeal from an adverse 
        determination under section 2785.

                    ``Subpart 3--Patient Information

``SEC. 2782. PATIENT INFORMATION.

    ``(a) Disclosure Requirement.--A health insurance issuer in 
connection with the provision of health insurance coverage shall submit 
to the applicable State authority, provide to enrollees (and 
prospective enrollees), and make available to the public, in writing 
the information described in subsection (b).
    ``(b) Information.--The information described in this subsection 
includes the following:
            ``(1) Description of coverage.--A description of coverage 
        provisions, including health care benefits, benefit limits, 
        coverage exclusions, coverage of emergency care, and the 
        definition of medical necessity used in determining whether 
        benefits will be covered.
            ``(2) Enrollee financial responsibility.-- An explanation 
        of an enrollee's financial responsibility for payment of 
        premiums, coinsurance, copayments, deductibles, and any other 
        charges, including limits on such responsibility and 
        responsibility for health care services that are provided by 
        nonparticipating providers or are furnished without meeting 
        applicable utilization review requirements.
            ``(3) Information on providers.--A description--
                    ``(A) of procedures for enrollees to select, 
                access, and change participating primary and specialty 
                providers,
                    ``(B) of the rights and procedures for obtaining 
                referrals (including standing referrals) to 
                participating and nonparticipating providers, and
                    ``(C) in the case of each participating provider, 
                of the name, address, and telephone number of the 
                provider, the credentials of the provider, and the 
                provider's availability to accept new patients.
            ``(4) Utilization review activities.--A description of 
        procedures used and requirements (including circumstances, time 
        frames, and rights to reconsideration and appeal) under any 
        utilization review program under section 2781 or any drug 
        utilization program under section 2780, as well as a summary of 
        the minimum uniform data collected under section 2778(a)(1).
            ``(5) Grievance procedures.--Information on the grievance 
        procedures under sections 2784 and 2785, including information 
        describing--
                    ``(A) the grievance procedures used by the issuer 
                to process and resolve disputes between the issuer and 
                an enrollee (including method for filing grievances and 
                the time frames and circumstances for acting on 
                grievances);
                    ``(B) written complaints and appeals, by type of 
                complaint or appeal, received by the issuer relating to 
                its coverage; and
                    ``(C) the disposition of such complaints and 
                appeals.
            ``(6) Payment methodology.--A description of the types of 
        methodologies the issuer uses to reimburse different classes of 
        providers and, as specified by the Secretary, the financial 
        arrangements or contractual provisions with providers.
            ``(7) Information on issuer.--Notice of appropriate mailing 
        addresses and telephone numbers to be used by enrollees in 
        seeking information or authorization for treatment.
            ``(8) Assuring communications with enrollees.--A 
        description of how the issuer addresses the needs of non-
        English-speaking enrollees and others with special 
        communications needs, including the provision of information 
        described in this subsection to such enrollees.
    ``(c) Form of Disclosure.--
            ``(1) Uniformity.--Information required to be disclosed 
        under this section shall be provided in accordance with 
        uniform, national reporting standards specified by the 
        Secretary, after consultation with applicable State 
        authorities, so that prospective enrollees may compare the 
        attributes of different issuers and coverage offered within an 
        area.
            ``(2) Information into handbook.--Nothing in this section 
        shall be construed as preventing an issuer from making the 
        information under subsection (b) available to enrollees through 
        an enrollee handbook or similar publication.
            ``(3) Updating.--The information on participating providers 
        described in subsection (a)(3)(C) shall be updated not less 
        frequently than monthly. Nothing in this section shall prevent 
        an issuer from changing or updating other information made 
        available under this section.
            ``(4) Construction.--Nothing in subsection (a)(6) shall be 
        construed as requiring disclosure of individual contracts or 
        financial arrangements between an issuer and any provider. 
        Nothing in this subsection shall be construed as preventing the 
        information described in subsection (a)(3)(C) from being 
        provided in a separate document.

``SEC. 2783. PROTECTION OF PATIENT CONFIDENTIALITY.

    ``A health insurance issuer that offers health insurance coverage 
shall establish appropriate policies and procedures to ensure that all 
applicable State and Federal laws to protect the confidentiality of 
individually identifiable medical information are followed.

                   ``Subpart 4--Grievance Procedures

``SEC. 2784. ESTABLISHMENT OF COMPLAINT AND APPEALS PROCESS.

    ``(a) Establishment of System.--A health insurance issuer in 
connection with the provision of health insurance coverage shall 
establish and maintain a system to provide for the presentation and 
resolution of complaints and appeals brought by enrollees, designees of 
enrollees, or by health care providers acting on behalf of an enrollee 
and with the enrollee's consent, regarding any aspect of the issuer's 
health care services, including complaints regarding quality of care, 
choice and accessibility of providers, network adequacy, and compliance 
with the requirements of this part.
    ``(b) Components of System.--Such system shall include the 
following components (which shall be consistent with applicable 
requirements of section 2785):
            ``(1) Written notification to all enrollees and providers 
        of the telephone numbers and business addresses of the issuer 
        employees responsible for resolution of complaints and appeals.
            ``(2) A system to record and document, over a period of at 
        least 3 years, all complaints and appeals made and their 
        status.
            ``(3) The availability of an enrollee services 
        representative to assist enrollees, as requested, with 
        complaint and appeal procedures.
            ``(4) Establishment of a specified deadline (not to exceed 
        30 days after the date of receipt of a complaint or appeal) for 
        the issuer to respond to complaints or appeals.
            ``(5) A process describing how complaints and appeals are 
        processed and resolved.
            ``(6) Procedures for follow-up action, including the 
        methods to inform the complainant or appellant of the 
        resolution of a complaint or appeal.
            ``(7) Notification to the continuous quality improvement 
        program under section 2777(a) of all complaints and appeals 
        relating to quality of care.
    ``(c) No Reprisal for Exercise of Rights.--A health insurance 
issuer shall not take any action with respect to an enrollee or a 
health care provider that is intended to penalize the enrollee, a 
designee of the enrollee, or the health care provider for discussing or 
exercising any rights provided under this part (including the filing of 
a complaint or appeal pursuant to this section).

``SEC. 2785. PROVISIONS RELATING TO APPEALS OF UTILIZATION REVIEW 
              DETERMINATIONS AND SIMILAR DETERMINATIONS.

    ``(a) 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 this section and (to the 
        extent applicable) section 2784. 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 
        and as provided in section 2782(a)(5)
            ``(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 section 2781.
                    ``(B) Denial of access to specialty and other care 
                under section 2772.
                    ``(C) Denial of continuation of care under section 
                2773.
                    ``(D) Denial of a choice of provider under section 
                2774.
                    ``(E) Denial of coverage of routine patient costs 
                in connection with an approval clinical trial under 
                section 2775.
                    ``(F) Denial of access to needed drugs under 
                section 2776(3).
                    ``(G) The imposition of a limitation that is 
                prohibited under section 2789.
                    ``(H) Denial of payment for a benefit,
    ``(b) 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 
        (c).
    ``(c) 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 (as 
        defined in section 2781(c)(2)(B)) 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.
            ``(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
    ``(d) 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 (b) or (c), 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.
    ``(e) 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.
    ``(f) 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 decision that does not 
        involve a decision described in subsection (e)(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.
    ``(g) 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.

``SEC. 2786. 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).

``Subpart 5--Protection of Providers Against Interference with Medical 
           Communications and Improper Incentive Arrangements

``SEC. 2787. 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 a health insurance issuer in relation to health 
        insurance coverage (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 the 
        provider's patient.
            ``(2) Nullification.--Any contract provision or agreement 
        described in paragraph (1) shall be null and void.
            ``(3) Prohibition on provisions.--A contract or agreement 
        described in paragraph (1) shall not include a provision that 
        violates paragraph (1).
    ``(b) Rules of Construction.--Nothing in this section 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 insurance issuer 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 health insurance coverage or to 
        otherwise require a health insurance issuer to reimburse 
        providers for benefits not covered under the coverage.
    ``(c) Protection of Religious or Moral Expression.--
            ``(1) In general.--An health insurance issuer may fully 
        advise--
                    ``(A) licensed or certified health care providers 
                at the time of their employment with the issuer or at 
                any time during such employment, or
                    ``(B) enrollees at the time of their enrollment for 
                health insurance coverage with the issuer or at any 
                time during which such enrollees have such coverage,
        of the coverage's limitations on providing particular medical 
        services (including limitations on referrals for care provided 
        outside of the coverage) based on the religious or moral 
        convictions of the issuer.
            ``(2) Health care providers.--Nothing in this section shall 
        be construed to alter the rights and duties of a health care 
        provider to determine what medical communications are 
        appropriate with respect to each patient, except as provided 
        for in subsection (a).
    ``(d) Medical Communication Defined.--
            ``(1) In general.--In this section, 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--
                    ``(A) the patient's health status, medical care, or 
                treatment options;
                    ``(B) any utilization review requirements that may 
                affect treatment options for the patient; or
                    ``(C) any financial incentives that may affect the 
                treatment of the patient.
            ``(2) 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.

``SEC. 2788. PROHIBITION AGAINST TRANSFER OF INDEMNIFICATION OR 
              IMPROPER INCENTIVE ARRANGEMENTS.

    ``(a) Prohibition of Transfer of Indemnification.--No contract or 
agreement between a health insurance issuer (or any agent acting on 
behalf of such an issuer) and a health care provider shall contain any 
clause purporting to transfer to the health care provider by 
indemnification or otherwise any liability relating to activities, 
actions, or omissions of the issuer or agent (as opposed to the 
provider).
    ``(b) Prohibition of Improper Physician Incentive Plans.--
            ``(1) In general.--A health insurance issuer offering 
        health insurance coverage may not operate any physician 
        incentive plan unless the following requirements are met:
                    ``(A) No specific payment is made directly or 
                indirectly by the issuer to a physician or physician 
                group as an inducement to reduce or limit medically 
                necessary services provided with respect to a specific 
                individual enrolled with the issuer.
                    ``(B) If the plan places a physician or physician 
                group at substantial financial risk (as determined by 
                the Secretary) for services not provided by the 
                physician or physician group, the issuer--
                            ``(i) provides stop-loss protection for the 
                        physician or group that is adequate and 
                        appropriate, based on standards developed by 
                        the Secretary that take into account the number 
                        of physicians placed at such substantial 
                        financial risk in the group or under the plan 
                        and the number of individuals enrolled with the 
                        issuer who receive services from the physician 
                        or the physician 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 applicable State 
                authority (or the Secretary if such authority is 
                implementing this section) with descriptive information 
                regarding the plan, sufficient to permit the authority 
                (or the Secretary in such case) to determine whether 
                the plan is in compliance with the requirements of this 
                paragraph.
            ``(2) Physician incentive plan defined.--In this section, 
        the term `physician incentive plan' means any compensation 
        arrangement between a health insurance issuer and a physician 
        or physician group that may directly or indirectly have the 
        effect of reducing or limiting services provided with respect 
        to individuals enrolled with the issuer.
            ``(3) Application of medicare rules.--The Secretary shall 
        provide for the application of rules under this subsection that 
        are substantially the same as the rules established to carry 
        out section 1876(i)(8) of the Social Security Act.

``Subpart 6--Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

``SEC. 2789. PROMOTING GOOD MEDICAL PRACTICE.

    ``(a) Prohibiting Arbitrary Limitations or Conditions for the 
Provision of Services.--A health insurance issuer, in connection with 
the provision of health insurance coverage, may not impose limits on 
the manner in which particular services are delivered if the services 
are medically necessary and appropriate for the treatment or diagnosis 
of an illness or injury to the extent that such treatment or diagnosis 
is otherwise a covered benefit.
    ``(b) Medical Necessity and Appropriateness Defined.--In subsection 
(a), the term `medically necessary and appropriate' means, with respect 
to a service or benefit, a service or benefit determined by the 
treating physician participating in the health insurance coverage after 
consultation with the enrollee, to be required, accordingly to 
generally accepted principles of good medical practice, for the 
diagnosis or direct care and treatment of an illness or injury of the 
enrollee.
    ``(c) Construction.--Subsection (a) shall not be construed as 
requiring coverage of particular services the coverage of which is 
otherwise not covered under the terms of the coverage.''.
    (b) Application to Group Health Insurance Coverage.--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. PATIENT PROTECTION STANDARDS.

    ``Each health insurance issuer shall comply with patient protection 
requirements under part C with respect to group health insurance 
coverage it offers.''.
    (c) 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. PATIENT PROTECTION STANDARDS.

    ``Each health insurance issuer shall comply with patient protection 
requirements under part C with respect to individual health insurance 
coverage it offers.''.
    (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 Patient Protection Requirements.--
Subject to subsection (a)(2), the provisions of section 2706 and part C 
(other than section 2771), and part D insofar as it applies to section 
2706 or part C, shall not prevent a State from establishing 
requirements relating to the subject matter of such provisions (other 
than section 2771) so long as such requirements are at least as 
stringent on health insurance issuers as the requirements imposed under 
such provisions. Subsection (a) shall apply to the provisions of 
section 2771 (and section 2706 insofar as it relates to such 
section).''.
            (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 Managed Care Requirements.--Subject 
to subsection (b), the provisions of section 2752 and part C (other 
than section 2771), and part D insofar as it applies to section 2752 or 
part C, shall not prevent a State from establishing requirements 
relating to the subject matter of such provisions so long as such 
requirements are at least as stringent on health insurance issuers as 
the requirements imposed under such section. Subsection (a) shall apply 
to the provisions of section 2771 (and section 2752 insofar as it 
relates to such section).''.
    (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 subsections (a), (b), (d)(1), and (e) 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 subsections (a), (b), (d)(1), and (e) 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 subsection (a) or 
(b) shall not be treated as a termination of such collective bargaining 
agreement.
    (2) The amendments made by subsections (a), (c), (d)(2), and (e) 
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.
                                 <all>