[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2330 Placed on Calendar Senate (PCS)]





                                                       Calendar No. 479

105th CONGRESS

  2d Session

                                S. 2330

_______________________________________________________________________

                                 A BILL

  To improve the access and choice of patients to quality, affordable 
                              health care.

_______________________________________________________________________

                             July 20, 1998

            Read the second time and placed on the calendar





                                                       Calendar No. 479
105th CONGRESS
  2d Session
                                S. 2330

  To improve the access and choice of patients to quality, affordable 
                              health care.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 17, 1998

 Mr. Lott (for Mr. Nickles) (for himself, Mr. Frist, Ms. Collins, Mr. 
Jeffords, Mr. Roth, Mr. Santorum, Mr. Hagel, Mr. Gramm, Mr. Coats, Mr. 
 Lott, Mr. Mack, Mr. Craig, Mr. Coverdell, Mr. McConnell, Mr. Abraham, 
  Mr. Allard, Mr. Ashcroft, Mr. Bennett, Mr. Bond, Mr. Brownback, Mr. 
Burns, Mr. Cochran, Mr. Domenici, Mr. Enzi, Mr. Faircloth, Mr. Gorton, 
  Mr. Grams, Mr. Grassley, Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. 
   Hutchison, Mr. Inhofe, Mr. Kempthorne, Mr. Lugar, Mr. McCain, Mr. 
  Murkowski, Mr. Roberts, Mr. Sessions, Mr. Shelby, Mr. Smith of New 
 Hampshire, Mr. Smith of Oregon, Ms. Snowe, Mr. Thomas, Mr. Thompson, 
Mr. Thurmond, and Mr. Warner) introduced the following bill; which was 
                          read the first time

                             July 20, 1998

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
  To improve the access and choice of patients to quality, affordable 
                              health care.

    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 ``Patients' Bill of 
Rights Act''.
    (b) Table Of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

Sec. 101.``subpart c--patient right to medical advice and care
        ``Sec. 721. Patient access to emergency medical care.
        ``Sec. 722. Offering of choice of coverage options.
        ``Sec. 723. Patient access to obstetric and gynecological care.
        ``Sec. 724. Patient access to pediatric care.
        ``Sec. 725. Continuity of care.
        ``Sec. 726. Protection of patient-provider communications.
        ``Sec. 727. Generally applicable provisions.
Sec. 102. Effective date and related rules.
       Subtitle B--Right to Information About Plans and Providers

Sec. 111. Information about plans.
Sec. 112. Information about providers.
           Subtitle C--Right to Hold Health Plans Accountable

Sec. 121. Amendment to Employee Retirement Income Security Act of 1974.
     TITLE II--INDIVIDUAL RIGHTS WITH RESPECT TO PERSONAL MEDICAL 
                              INFORMATION

Sec. 201. Short title.
                 Subtitle A--Access to Medical Records

Sec. 211. Inspection and copying of protected health information.
Sec. 212. Amendment of protected health information.
Sec. 213. Notice of confidentiality practices.
                Subtitle B--Establishment of Safeguards

Sec. 221. Establishment of safeguards.
                  Subtitle C--Enforcement; Definitions

Sec. 231. Civil penalty.
Sec. 232. Definitions.
              TITLE III--GENETIC INFORMATION AND SERVICES

Sec. 301. Short title.
Sec. 302. Amendments to Employee Retirement Income Security Act of 
                            1974.
Sec. 303. Amendments to the Public Health Service Act.
Sec. 304. Amendments to the Internal Revenue Code of 1986.
                 TITLE IV--HEALTHCARE QUALITY RESEARCH

Sec. 401. Short title.
Sec. 402. Amendment to the Public Health Service Act.
           ``TITLE IX--AGENCY FOR HEALTHCARE QUALITY RESEARCH

               ``Part A--Establishment and General Duties

        ``Sec. 901. Mission and duties.
        ``Sec. 902. General authorities.
               ``Part B--Healthcare Improvement Research

        ``Sec. 911. Healthcare outcome improvement research.
        ``Sec. 912. Private-public partnerships to improve organization 
                            and delivery.
        ``Sec. 913. Information on quality and cost of care.
        ``Sec. 914. Information systems for healthcare improvement.
        ``Sec. 915. Research supporting primary care delivery and 
                            access in underserved areas.
        ``Sec. 916. Clinical practice and technology innovation.
        ``Sec. 917. Coordination of Federal Government quality 
                            improvement efforts.
          ``Part C--Foundation for Healthcare Quality Research

        ``Sec. 921. Foundation for Healthcare Quality Research.
                      ``Part D--General Provisions

        ``Sec. 931. Advisory Council for Healthcare Quality Research.
        ``Sec. 932. Peer review with respect to grants and contracts.
        ``Sec. 933. Certain provisions with respect to development, 
                            collection, and dissemination of data.
        ``Sec. 934. Dissemination of information.
        ``Sec. 935. Additional provisions with respect to grants and 
                            contracts.
        ``Sec. 936. Certain administrative authorities.
        ``Sec. 937. Funding.
        ``Sec. 938. Definitions.
Sec. 403. References.
Sec. 404. Study.
            TITLE V--WOMEN'S HEALTH RESEARCH AND PREVENTION

Sec. 501. Short title.
   Subtitle A--Provisions Relating to Women's Health Research at the 
                     National Institutes of Health

Sec. 511. Extension of program for research and authorization of 
                            national program of education regarding the 
                            drug DES.
Sec. 512. Research on osteoporosis, Paget's disease, and related bone 
                            disorders.
Sec. 513. Research on cancer.
Sec. 514. Research on heart attack, stroke, and other cardiovascular 
                            diseases in women.
Sec. 515. Aging processes regarding women.
Sec. 516. Office of Research on Women's Health.
 Subtitle B--Provisions Relating to Women's Health at the Centers for 
                     Disease Control and Prevention

Sec. 521. National Center for Health Statistics.
Sec. 522. National program of cancer registries.
Sec. 523. National breast and cervical cancer early detection program.
Sec. 524. Centers for Research and Demonstration of Health Promotion.
Sec. 525. Community programs on domestic violence.
              Subtitle C--Women's Health and Cancer Rights

Sec. 531. Short title.
Sec. 532. Findings.
Sec. 533. Amendments to the Employee Retirement Income Security Act of 
                            1974.
Sec. 534. Amendments to the Public Health Service Act relating to the 
                            group market.
Sec. 535. Amendment to the Public Health Service Act relating to the 
                            individual market.
Sec. 536. Amendments to the Internal Revenue Code of 1986.
Sec. 537. Research study on the management of breast cancer.
         TITLE VI--ENHANCED ACCESS TO HEALTH INSURANCE COVERAGE

Sec. 601. Carryover of unused benefits from cafeteria plans, flexible 
                            spending arrangements, and health flexible 
                            spending accounts.
Sec. 602. Full deduction of health insurance costs for self-employed 
                            individuals.
Sec. 603. Full availability of medical savings accounts.
Sec. 604. Permitting contribution towards medical savings account 
                            through Federal employees health benefits 
                            program (FEHBP).

                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

SEC. 101. PATIENT RIGHT TO MEDICAL ADVICE AND CARE.

    (a) In General.--Part 7 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1185 et seq.) is 
amended--
            (1) by redesignating subpart C as subpart D; and
            (2) by inserting after subpart B the following:

         ``Subpart C--Patient Right to Medical Advice and Care

``SEC. 721. PATIENT ACCESS TO EMERGENCY MEDICAL CARE.

    ``(a) In General.--To the extent that the group health plan 
provides coverage for benefits consisting of emergency medical care (as 
defined in subsection (c)), except for items or services specifically 
excluded--
            ``(1) the plan shall provide coverage for benefits, without 
        requiring preauthorization, for appropriate emergency medical 
        screening examinations (within the capability of the emergency 
        facility) to the extent that a prudent layperson, who possesses 
        an average knowledge of health and medicine, would determine 
        such examinations to be necessary to determine whether 
        emergency medical care (as so defined) is necessary, and
            ``(2) the plan shall provide coverage for benefits for 
        additional emergency medical services following an emergency 
        medical screening examination (if determined necessary under 
        paragraph (1)) to the extent that a prudent emergency medical 
        professional would determine such additional emergency services 
        to be necessary to avoid the consequences described in 
        paragraph (2) of subsection (c).
    ``(b) Uniform Cost-Sharing Required.--Nothing in this section shall 
be construed as preventing a group health plan from imposing any form 
of cost-sharing applicable to any participant or beneficiary (including 
coinsurance, copayments, deductibles, and any other charges) in 
relation to coverage for benefits described in subsection (a), if such 
form of cost-sharing is uniformly applied under such plan, with respect 
to similarly situated participants and beneficiaries, to all benefits 
consisting of emergency medical care (as defined in subsection (c)) 
provided to such similarly situated participants and beneficiaries 
under the plan.
    ``(c) Definition of Emergency Medical Care.--In this section:
            ``(1) In general.--The term ``emergency medical care'' 
        means, with respect to a participant or beneficiary under a 
        group health plan, covered inpatient and outpatient services 
        that--
                    ``(A) are furnished by a provider that is qualified 
                to furnish such services; and
                    ``(B) are needed to evaluate or stabilize an 
                emergency medical condition (as defined in paragraph 
                (2)).
            ``(2) Emergency medical condition.--The term ``emergency 
        medical care'' 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--
                    ``(A) placing the health of the participant or 
                beneficiary (or, with respect to a pregnant woman, the 
                health of the woman or her unborn child) in serious 
                jeopardy,
                    ``(B) serious impairment to bodily functions, or
                    ``(C) serious dysfunction of any bodily organ or 
                part.

``SEC. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.

    ``(a) Requirement.--
            ``(1) Offering of point-of-service coverage option.--Except 
        as provided in paragraph (2), if a group health plan provides 
        coverage for benefits only through a defined set of 
        participating health care professionals, the plan shall offer 
        the participant the option to purchase point-of-service 
        coverage (as defined in subsection (b)) for all such benefits 
        for which coverage is otherwise so limited. Such option shall 
        be made available to the participant at the time of enrollment 
        under the plan and at such other times as the plan offers the 
        participant a choice of coverage options.
            ``(2) Exception in the case of multiple issuer or coverage 
        options.--Paragraph (1) shall not apply with respect to a 
        participant in a group health plan if the plan offers the 
        participant--
                    ``(A) a choice of health insurance coverage through 
                more than one health insurance issuer; or
                    ``(B) two or more coverage options that differ 
                significantly with respect to the use of participating 
                health care professionals or the networks of such 
                professionals that are used.
    ``(b) Point-of-Service Coverage Defined.--In this section, the term 
`point-of-service coverage' means, with respect to benefits covered 
under a group health plan, coverage of such benefits when provided by a 
nonparticipating health care professional.
    ``(c) Small Employer Exemption.--
            ``(1) In general.--This section shall not apply to any 
        group health plan of a small employer.
            ``(2) Small employer.--For purposes of paragraph (1), the 
        term `small employer' means, in connection with a group health 
        plan with respect to a calendar year and a plan year, an 
        employer who employed an average of at least 2 but not more 
        than 50 employees on business days during the preceding 
        calendar year and who employs at least 2 employees on the first 
        day of the plan year. For purposes of this paragraph, the 
provisions of subparagraph (C) of section 712(c)(1) shall apply in 
determining employer size.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed--
            ``(1) as requiring coverage for benefits for a particular 
        type of health care professional;
            ``(2) as requiring an employer to pay any costs as a result 
        of this section or to make equal contributions with respect to 
        different health coverage options;
            ``(3) as preventing a group health plan from imposing 
        higher premiums or cost-sharing on a participant for the 
        exercise of a point-of-service coverage option; or
            ``(4) to require that a group health plan include coverage 
        of health care professionals that the plan excludes because of 
        fraud, quality of care, or other similar reasons with respect 
        to such professionals.

``SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

    ``(a) In General.--In any case in which a group health plan--
            ``(1) provides coverage for benefits consisting of--
                    ``(A) gynecological care (such as preventive 
                women's health examinations); or
                    ``(B) obstetric care (such as pregnancy-related 
                services);
        provided by a participating physician who specializes in such 
        care; and
            ``(2) requires or provides for designation by a participant 
        or beneficiary of a participating primary care provider;
if the primary care provider designated by such a participant or 
beneficiary is not such a physician as described in paragraph (1), then 
the plan shall meet the requirements of subsection (b).
    ``(b) Requirements.--A group health plan meets the requirements of 
this subsection, in connection with the coverage of benefits described 
in subsection (a) consisting of care described in subparagraph (A) or 
(B) of subsection (a)(1), if the plan--
            ``(1) does not require authorization or a referral by the 
        primary care provider in order to obtain coverage for such 
        benefits, and
            ``(2) treats the ordering of other routine care of the same 
        type, by the participating physician providing the care 
        described in subparagraph (A) or (B) of subsection (a)(1), as 
        the authorization of the primary care provider with respect to 
        such care.
    ``(c) Rule of Construction.--Nothing in subsection (b)(2) shall 
waive any requirements of coverage relating to medical necessity or 
appropriateness with respect to coverage of gynecological or obstetric 
care so ordered.

``SEC. 724. PATIENT ACCESS TO PEDIATRIC CARE.

    ``(a) In General.--In any case in which a group health plan--
            ``(1) provides coverage for benefits consisting of 
        pediatric care by a participating pediatrician; and
            ``(2) requires or provides for designation by a participant 
        or beneficiary of a participating primary care provider;
if the primary care provider designated by such a participant or 
beneficiary is not a physician as described in paragraph (1), then the 
plan shall meet the requirements of subsection (b).
    ``(b) Requirements.--A group health plan meets the requirements of 
this subsection, in connection with the coverage of benefits described 
in subsection (a) consisting of care described in subsection (a)(1), if 
the plan--
            ``(1) does not require authorization or a referral by the 
        primary care provider in order to obtain coverage for such 
        benefits, and
            ``(2) treats the ordering of other routine care of the same 
        type, by the participating physician providing the care 
        described in subsection (a)(1), as the authorization of the 
        primary care provider with respect to such care.
    ``(c) Construction.--Nothing in subsection (b)(2) shall waive any 
requirements of coverage relating to medical necessity or 
appropriateness with respect to coverage of pediatric care so ordered.

``SEC. 725. CONTINUITY OF CARE.

    ``(a) In General.--
            ``(1) Termination of provider.--If a contract between a 
        group health plan and a health care provider is terminated (as 
        defined in paragraph (2)), or benefits or coverage provided by 
        a health care provider are terminated because of a change in 
        the terms of provider participation in a group health plan, and 
        an individual who is a participant or beneficiary in the plan 
        is undergoing a course of treatment from the provider at the 
        time of such termination, the plan shall--
                    ``(A) notify the individual on a timely basis of 
                such termination, and
                    ``(B) in the case of termination described in 
                paragraph (2), (3), or (4) of subsection (b), and 
subject to subsection (c), permit the individual to continue or be 
covered with respect to the course of treatment with the provider's 
consent during a transitional period (as provided under subsection 
(b)).
            ``(2) Termination.--In this section, the term `terminated' 
        includes, with respect to a contract, the expiration or 
        nonrenewal of the contract by the group health plan, but does 
        not include a termination of the contract by the plan for 
        failure to meet applicable quality standards or for fraud.
    ``(b) Transitional Period.--
            ``(1) General rule.--Except as provided in paragraph (3), 
        the transitional period under this subsection shall extend for 
        up to 90 days from the date of the notice described in 
        subsection (a)(1)(A) of the provider's termination.
            ``(2) Institutional care.--Subject to paragraph (1), 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 also 
        shall include institutional care provided within a reasonable 
        time of the date of termination of the provider status if the 
        care was scheduled before the date of the announcement of the 
        termination of the provider status under subsection (a)(1)(A) 
        or if the individual on such date was on an established waiting 
        list or otherwise scheduled to have such care.
            ``(3) Pregnancy.--Notwithstanding paragraph (1), if--
                    ``(A) a participant or beneficiary 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 the 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.--Subject to paragraph (1), if--
                    ``(A) a participant or beneficiary was determined 
                to be terminally ill (as determined under section 
                1861(dd)(3)(A) of the Social Security Act) prior to a 
                provider's termination of participation; and
                    ``(B) 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 individual's life for care directly 
        related to the treatment of the terminal illness.
    ``(c) Permissible Terms and Conditions.--A group health plan may 
condition coverage of continued treatment by a provider under 
subsection (a)(1)(B) upon the provider agreeing to the following terms 
and conditions:
            ``(1) The provider agrees to accept reimbursement from the 
        plan and individual involved (with respect to cost-sharing) at 
        the rates applicable prior to the start of the transitional 
        period as payment in full (or, in the case described in 
        subsection (b)(2), at the rates applicable under the 
        replacement plan after the date of the termination of the 
        contract with the group health plan) and not to impose cost-
        sharing with respect to the individual in an amount that would 
        exceed the cost-sharing that could have been imposed if the 
        contract referred to in subsection (a)(1) had not been 
        terminated.
            ``(2) The provider agrees to adhere to the quality 
        assurance standards of the plan responsible for payment under 
        paragraph (1) and to provide to such plan necessary medical 
        information related to the care provided.
            ``(3) The provider agrees otherwise to adhere to such 
        plan's policies and procedures, including procedures regarding 
        referrals and obtaining prior authorization and providing 
        services pursuant to a treatment plan (if any) approved by the 
        plan.
    ``(d) Rule of Construction.--Nothing in this section shall be 
construed to require the coverage of benefits which would not have been 
covered if the provider involved remained a participating provider.
    ``(e) Definition.--In this section, the term `health care provider' 
or `provider' means--
            ``(1) any individual who is engaged in the delivery of 
        health care services in a State and who is required by State 
        law or regulation to be licensed or certified by the State to 
        engage in the delivery of such services in the State; and
            ``(2) any entity that is engaged in the delivery of health 
        care services in a State and that, if it is required by State 
        law or regulation to be licensed or certified by the State to 
        engage in the delivery of such services in the State, is so 
        licensed.

``SEC. 726. PROTECTION OF PATIENT-PROVIDER COMMUNICATIONS.

    ``(a) In General.--Subject to subsection (b), a group health plan 
(in relation to a participant or beneficiary) shall not prohibit a 
health care professional from advising such a participant or 
beneficiary who is a patient of the professional about the health 
status of the participant or beneficiary or medical care or treatment 
for the condition or disease of the participant or beneficiary, 
regardless of whether coverage for such care or treatment are provided 
under the contract, if the professional is acting within the lawful 
scope of practice.
    ``(b) Rule of Construction.--Nothing in this section shall be 
construed as requiring a group health plan to provide specific benefits 
under the terms of such plan.

``SEC. 727. GENERALLY APPLICABLE PROVISIONS.

    ``(a) Applicability.--The provisions of this subpart shall apply to 
group health plans. Such provisions shall not apply to a health 
insurance issuer that is licensed by a State and subject to State laws 
that regulate insurance within the meaning of section 514(b)(2), while 
engaged in the business of insurance in such State.
    ``(b) Treatment of Multiple Coverage Options.--In the case of a 
group health plan that provides benefits under 2 or more coverage 
options, the requirements of sections 721, 723, 724, 725 and 726 shall 
apply separately with respect to each coverage option.''.
    (b) Rule With Respect to Certain Plans.--
            (1) In general.--Notwithstanding any other provision of 
        law, health insurance issuers may offer, and eligible 
        individuals may purchase, high deductible health plans 
        described in section 220(c)(2)(A) of the Internal Revenue Code 
        of 1986. Effective for the 4-year period beginning on the date 
        of the enactment of this Act, such health plans shall not be 
        required to provide payment for any health care items or 
        services that are exempt from the plan's deductible.
            (2) Existing state laws.--A State law relating to payment 
        for health care items and services in effect on the date of 
        enactment of this Act that is preempted under paragraph (1), 
        shall not apply to high deductible health plans after the 
        expiration of the 4-year period described in such paragraph 
        unless the State reenacts such law after such period.
    (c) Conforming Amendment.--The table of contents in section 1 of 
such Act is amended--
            (1) in the item relating to subpart C, by striking 
        ``Subpart C'' and inserting ``Subpart D''; and
            (2) by adding at the end of the items relating to subpart B 
        of part 7 of subtitle B of title I of such Act the following 
        new items:

         ``subpart c--patient right to medical advice and care
``Sec. 721. Patient access to emergency medical care.
``Sec. 722. Offering of choice of coverage options.
``Sec. 723. Patient access to obstetric and gynecological care.
``Sec. 724. Patient access to pediatric care.
``Sec. 725. Continuity of care.
``Sec. 726. Protection of patient-provider communications.
``Sec. 727. Generally applicable provisions.''.

SEC. 102. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--The amendments made by this subtitle shall apply 
with respect to plan years beginning on or after January 1 of the 
second calendar year following the date of the enactment of this Act. 
The Secretary shall issue all regulations necessary to carry out the 
amendments made by this section before the effective date thereof.
    (b) Limitation on Enforcement Actions.--No enforcement action shall 
be taken, pursuant to the amendments made by this subtitle, against a 
group health plan with respect to a violation of a requirement imposed 
by such amendments before the date of issuance of regulations issued in 
connection with such requirement, if the plan has sought to comply in 
good faith with such requirement.

       Subtitle B--Right to Information About Plans and Providers

SEC. 111. INFORMATION ABOUT PLANS.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et 
seq.) is amended by adding at the end the following:

``SEC. 713. HEALTH PLAN COMPARATIVE INFORMATION.

    ``(a) Requirement.--A group health plan, or health insurance issuer 
in connection with group health insurance coverage, shall, not later 
than 12 months after the date of enactment of this section, provide for 
the disclosure, in a clear and accurate form to each enrollee, or upon 
request to a potential enrollee eligible to receive benefits under the 
plan, or plan sponsor with which the plan or issuer has contracted, of 
the information described in subsection (b).
    ``(b) Required Information.--The informational materials to be 
distributed under this section shall include for each health benefit 
plan the following:
            ``(1) A description of the covered items and services under 
        each such plan and any in- and out-of-network features of each 
        such plan.
            ``(2) A description of any cost-sharing, including 
        premiums, deductibles, coinsurance, and copayment amounts, for 
        which the enrollee will be responsible, including any annual or 
        lifetime limits on benefits, for each such plan.
            ``(3) A description of any optional supplemental benefits 
        offered by each such plan and the terms and conditions 
        (including premiums or cost-sharing) for such supplemental 
        coverage.
            ``(4) A description of any restrictions on payments for 
        services furnished to an enrollee by a health care professional 
        that is not a participating professional and the liability of 
        the enrollee for additional payments for these services.
            ``(5) A description of the service area of each such plan, 
        including the provision of any out-of-area coverage.
            ``(6) A description of the extent to which enrollees may 
        select the primary care provider of their choice, including 
        providers both within the network and outside the network of 
        each such plan (if the plan permits out-of-network services).
            ``(7) A description of the procedures for advance 
        directives and organ donation decisions if the plan maintains 
        such procedures.
            ``(8) A description of the requirements and procedures to 
        be used to obtain preauthorization for health services 
(including telephone numbers and mailing addresses), including 
referrals for specialty care.
            ``(9) A summary of the rules and methods for appealing 
        coverage decisions and filing grievances (including telephone 
        numbers and mailing addresses), as well as other available 
        remedies.
            ``(10) A summary of the rules for access to emergency room 
        care. Also, any available educational material regarding proper 
        use of emergency services.
            ``(11) A description of whether or not coverage is provided 
        for experimental treatments, investigational treatments, or 
        clinical trials and the circumstances under which access to 
        such treatments or trials is made available.
            ``(12) A description of the specific preventative services 
        covered under the plan if such services are covered.
            ``(13) A statement that the following information, and 
        instructions on obtaining such information (including telephone 
        numbers and, if available, Internet websites), shall be made 
        available upon request:
                    ``(A) The names, addresses, telephone numbers, and 
                State licensure status of the plan's participating 
                health care professionals and participating health care 
                facilities, and, if available, the education, training, 
                speciality qualifications or certifications of such 
                professionals.
                    ``(B) A summary description of the methods used for 
                compensating participating health care professionals, 
                such as capitation, fee-for-service, salary, or a 
                combination thereof. The requirement of this 
                subparagraph shall not be construed as requiring plans 
                to provide information concerning proprietary payment 
                methodology.
                    ``(C) A summary description of the methods used for 
                compensating health care facilities, including per 
                diem, fee-for-service, capitation, bundled payments, or 
                a combination thereof. The requirement of this 
                subparagraph shall not be construed as requiring plans 
                to provide information concerning proprietary payment 
                methodology.
                    ``(D) A summary description of the procedures used 
                for utilization review.
                    ``(E) The list of the specific prescription 
                medications included in the formulary of the plan, if 
                the plan uses a defined formulary, and any provision 
                for obtaining off-formulary medications.
                    ``(F) A description of the specific exclusions from 
                coverage under the plan.
                    ``(G) Any available information related to the 
                availability of translation or interpretation services 
                for non-English speakers and people with communication 
                disabilities, including the availability of audio tapes 
                or information in Braille.
                    ``(H) Any information that is made public by 
                accrediting organizations in the process of 
                accreditation if the plan is accredited, or any 
                additional quality indicators that the plan makes 
                available.
    ``(c) Manner of Distribution.--
            ``(1) In general.--The information described in this 
        section shall be distributed in an accessible format that is 
        understandable to an average plan enrollee.
            ``(2) Rule of construction.--For purposes of this section, 
        a group health plan, or health insurance issuer in connection 
        with group health insurance coverage, in reliance on records 
        maintained by the plan or issuer, shall be deemed to have met 
        the requirements of this section if the plan or issuer provides 
        the information requested under this section--
                    ``(A) in the case of the plan, to participants and 
                beneficiaries at the address contained in such records 
                with respect to such participants and beneficiaries; or
                    ``(B) in the case of the issuer, to the employer of 
                a participant if the employer provides for the coverage 
                of such participant under the plan involved or to 
                participants and beneficiaries at the address contained 
                in such records with respect to such participants and 
                beneficiaries.
    ``(d) Rule of Construction.--Nothing in this section may be 
construed to prohibit a group health plan, or health insurance issuer 
in connection with group health insurance coverage, from distributing 
any other additional information determined by the plan or issuer to be 
important or necessary in assisting participants and beneficiaries 
enrollees or upon request potential participants in the selection of a 
health plan or from providing information under subsection (b)(13) as 
part of the required information.
    ``(e) Health Care Professional.--In this section, the term `health 
care professional' means a physician (as defined in section 1861(r) of 
the Social Security Act) or other health care professional if coverage 
for the professional's services is provided under the health plan 
involved for the services of the professional. Such term includes a 
podiatrist, optometrist, chiropractor, psychologist, dentist, physician 
assistant, physical or occupational therapist and therapy assistant, 
speech-language pathologist, audiologist, registered or licensed 
practical nurse (including nurse practitioner, clinical nurse 
specialist, certified registered nurse anesthetist, and certified 
nurse-midwife), licensed certified social worker, registered 
respiratory therapist, and certified respiratory therapy technician.''.
    (b) Conforming Amendments.--
            (1) Section 732(a) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1185(a)) is amended by striking 
        ``section 711, and inserting ``sections 711 and 713''.
            (2) The table of contents in section 1 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1001) is 
        amended by inserting after the item relating to section 712, 
        the following:
        ``Sec. 713. Health plan comparative information.''.

SEC. 112. INFORMATION ABOUT PROVIDERS.

    (a) Study.--The Secretary of Health and Human Services shall enter 
into a contract with the Institute of Medicine for the conduct of a 
study, and the submission to the Secretary of a report, that includes--
            (1) an analysis of information concerning health care 
        professionals that is currently available to patients, 
        consumers, States, and professional societies, nationally and 
        on a State-by-State basis, including patient preferences with 
        respect to information about such professionals and their 
        competencies;
            (2) an evaluation of the legal and other barriers to the 
        sharing of information concerning health care professionals; 
        and
            (3) recommendations for the disclosure of information on 
        health care professionals, including the competencies and 
        professional qualifications of such practitioners, to better 
        facilitate patient choice, quality improvement, and market 
        competition.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Secretary of Health and Human Services shall forward 
to the appropriate committees of Congress a copy of the report and 
study conducted under subsection (a).

           Subtitle C--Right to Hold Health Plans Accountable

SEC. 121. AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

    (a) In General.--Section 503 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1133) is amended to read as follows:

``SEC. 503. CLAIMS PROCEDURE, COVERAGE DETERMINATION, GRIEVANCES AND 
              APPEALS.

    ``(a) Claims Procedure.--In accordance with regulations of the 
Secretary, every employee benefit plan shall--
            ``(1) provide adequate notice in writing to any participant 
        or beneficiary whose claim for benefits under the plan has been 
        denied, setting forth the specific reasons for such denial, 
        written in a manner calculated to be understood by the 
        participant, and
            ``(2) afford a reasonable opportunity to any participant 
        whose claim for benefits has been denied for a full and fair 
        review by the appropriate named fiduciary of the decision 
        denying the claim.
    ``(b) Coverage Determinations Under Group Health Plans.--
            ``(1) Procedures.--
                    ``(A) In general.--A group health plan or health 
                insurance issuer conducting utilization review shall 
                ensure that procedures are in place for--
                            ``(i) making determinations regarding 
                        whether an enrollee is eligible to receive a 
                        payment or coverage for health services under 
                        the plan or coverage involved and any cost-
                        sharing amount that the enrollee is required to 
                        pay with respect to such service;
                            ``(ii) notifying covered enrollees (or the 
                        legal representative of such enrollees) and the 
                        treating health care professionals involved 
                        regarding determinations made under the plan or 
                        issuer and any additional payments that the 
                        enrollee may be required to make with respect 
                        to such service; and
                            ``(iii) responding to requests, either 
                        written or oral, for coverage determinations or 
                        for internal appeals from an enrollee (or the 
                        legal representative of such enrollee) or the 
                        treating health care professional.
                    ``(B) Oral requests.--With respect to an oral 
                request described in subparagraph (A)(iii), a group 
                health plan or health insurance issuer may require that 
                the requesting individual provide written evidence of 
                such request.
            ``(2) Timeline for making determinations.--
                    ``(A) Routine determination.--A group health plan 
                or a health insurance issuer shall maintain procedures 
                to ensure that prior authorization determinations 
                concerning the provision of non-emergency items or 
                services are made within 30 days from the date on which 
                the request for a determination is submitted, except 
                that such period may be extended where certain 
                circumstances exist that are determined by the 
                Secretary to be beyond control of the plan or issuer.
                    ``(B) Expedited determination.--
                            ``(i) In general.--A prior authorization 
                        determination under this subsection shall be 
                        made within 72 hours after a request is 
                        received by the plan or issuer under clause 
                        (ii) or (iii).
                            ``(ii) Request by enrollee.--A plan or 
                        issuer shall maintain procedures for expediting 
                        a prior authorization determination under this 
                        subsection upon the request of an enrollee if, 
                        based on such a request, the plan or issuer 
                        determines that the normal time for making such 
                        a determination could seriously jeopardize the 
                        life or health of the enrollee.
                            ``(iii) Documentation by health care 
                        professional.--A plan or issuer shall maintain 
                        procedures for expediting a prior authorization 
                        determination under this subsection if the 
                        request involved indicates that the treating 
                        health care professional has documented, based 
                        on the medical exigencies, that a determination 
                        under the procedures described in subparagraph 
                        (A) could seriously jeopardize the life or 
                        health of the enrollee.
                    ``(C) Concurrent determinations.--A plan or issuer 
                shall maintain procedures to certify or deny coverage 
                of an extended stay or additional services.
                    ``(D) Retrospective determination.--A plan or 
                issuer shall maintain procedures to ensure that, with 
                respect to the retrospective review of a determination 
                made under paragraph (1), the determination shall be 
                made within 30 working days of the date on which the 
                plan or issuer receives all necessary information.
            ``(3) Notice of determinations.--
                    ``(A) Routine determination.--With respect to a 
                coverage determination of a plan or issuer under 
                paragraph (2)(A), the plan or issuer shall issue notice 
                of such determination to the enrollee (or the legal 
                representative of the enrollee), and consistent with 
                the medical exigencies of the case, to the treating 
                health care professional involved not later than 2 
                working days after the date on which the determination 
                is made.
                    ``(B) Expedited determination.--With respect to a 
                coverage determination of a plan or issuer under 
                paragraph (2)(B), the plan or issuer shall issue notice 
                of such determination to the enrollee (or the legal 
                representative of the enrollee), and consistent with 
                the medical exigencies of the case, to the treating 
                health care professional involved within the 72 hour 
                period described in paragraph (2)(B).
                    ``(C) Concurrent reviews.--With respect to the 
                determination under a plan or issuer under paragraph 
                (1) to certify or deny coverage of an extended stay or 
                additional services, the plan or issuer shall issue 
                notice of such determination to the treating health 
                care professional and to the enrollee involved (or the 
                legal representative of the enrollee) within 1 working 
                day of the date on which the initial notice was issued.
                    ``(D) Retrospective reviews.--With respect to the 
                retrospective review under a plan or issuer of a 
                determination made under paragraph (1), a determination 
                shall be made within 30 working days of the date on 
                which the plan or issuer receives all necessary 
                information. The plan or issuer shall issue written 
                notice of an approval or disapproval of a determination 
                under this subparagraph to the enrollee (or the legal 
                representative of the enrollee) and health care 
                provider involved within 5 working days of the date on 
                which such determination is made.
                    ``(E) Requirements of notice of adverse coverage 
                determinations.--A written or electronic notice of an 
                adverse coverage determination under this subsection, 
                or of an expedited adverse coverage determination under 
                paragraph (2)(B), shall be provided to the enrollee (or 
                the legal representative of the enrollee) and treating 
                health care professional (if any) involved and shall 
                include--
                            ``(i) the reasons for the determination 
                        (including the clinical or scientific-evidence 
                        based rationale used in making the 
                        determination) written in a manner to be 
                        understandable to the average enrollee;
                            ``(ii) the procedures for obtaining 
                        additional information concerning the 
                        determination; and
                            ``(iii) notification of the right to appeal 
                        the determination and instructions on how to 
                        initiate an appeal in accordance with 
                        subsection (d).
    ``(c) Grievances.--A group health plan or a health insurance issuer 
shall have written procedures for addressing grievances between the 
plan and enrollees. Determinations under such procedures shall be non-
appealable.
    ``(d) Internal Appeal of Coverage Determinations.--
            ``(1) In general.--An enrollee (or the legal representative 
        of the enrollee) and the treating health care professional with 
        the consent of the enrollee (or the legal representative of the 
        enrollee), may appeal any adverse coverage determination under 
        subsection (b) under the procedures described in this 
        subsection.
            ``(2) Records.--A group health plan and a health insurance 
        issuer shall maintain written records, for at least 6 years, 
        with respect to any appeal under this subsection for purposes 
        of internal quality assurance and improvement.
            ``(3) Routine determinations.--A group health plan or a 
        health insurance issuer shall provide for the consideration of 
        an appeal of an adverse routine determination under this 
        subsection not later than 30 working days after the date on 
        which a request for such appeal is received.
            ``(4) Expedited determination.--
                    ``(A) In general.--An expedited determination with 
                respect to an appeal under this subsection shall be 
                made in accordance with the medical exigencies of the 
                case, but in no case more than 72 hours after the 
                request for such appeal is received by the plan or 
                issuer under subparagraph (B) or (C).
                    ``(B) Request by enrollee.--A plan or issuer shall 
                maintain procedures for expediting a prior 
                authorization determination under this subsection upon 
                the request of an enrollee if, based on such a request, 
                the plan or issuer determines that the normal time for 
                making such a determination could seriously jeopardize 
                the life or health of the enrollee.
                    ``(C) Documentation by health care professional.--A 
                plan or issuer shall maintain procedures for expediting 
                a prior authorization determination under this 
                subsection if the request involved indicates that the 
                treating health care professional has documented, based 
                on the medical exigencies that a determination under 
                the procedures described in paragraph (2) could 
                seriously jeopardize the life or health of the 
                enrollee.
            ``(5) Conduct of review.--A review of an adverse coverage 
        determination under this subsection shall be conducted by an 
        individual with appropriate expertise who was not involved in 
        the initial determination.
            ``(6) Lack of medical necessity.--An appeal under this 
        subsection relating to a determination to deny coverage based 
        on a lack of medical necessity or appropriateness, or based on 
        an experimental or investigational treatment, shall be made 
        only by a physician with appropriate expertise in the field of 
        medicine involved who was not involved in the initial 
        determination.
            ``(7) Notice.--
                    ``(A) In general.--Written notice of a 
                determination made under an internal review process 
                shall be issued to the enrollee (or the legal 
                representative of the enrollee) and the treating health 
                care professional not later than 2 working days after 
                the completion of the review (or within the 72-hour 
                period referred to in paragraph (4) if applicable).
                    ``(B) Adverse coverage determinations.--With 
                respect to an adverse coverage determination made under 
                this subsection, the notice described in subparagraph 
                (A) shall include--
                            ``(i) the reasons for the determination 
                        (including the clinical or scientific-evidence 
                        based rationale used in making the 
                        determination) written in a manner to be 
                        understandable to the average enrollee;
                            ``(ii) the procedures for obtaining 
                        additional information concerning the 
                        determination; and
                            ``(iii) notification of the right to an 
                        external review under subsection (e) and 
                        instructions on how to initiate such a review.
    ``(e) External Review.--
            ``(1) In general.--A group health plan or a health 
        insurance issuer shall have written procedures to permit an 
        enrollee (or the legal representative of the enrollee) access 
        to an external review with respect to a coverage determination 
        concerning a particular item or service where the plan, in 
        consultation with the plan's legal representative, has 
        determined that--
                    ``(A) the particular item or service involved, when 
                medically appropriate and necessary, is generally a 
                covered benefit under the terms and conditions of the 
contract between the plan or issuer and the enrollee;
                    ``(B) the coverage determination involved denied 
                coverage for such item or service because the provision 
                of such item or service--
                            ``(i) does not meet the plan's or issuer's 
                        requirements for medical appropriateness or 
                        necessity and the amount involved exceeds 
                        $1,000; or
                            ``(ii) would constitute experimental or 
                        investigational treatment and there is a 
                        significant risk of placing the life or health 
                        of the enrollee in jeopardy; and
                    ``(C) the enrollee has completed the internal 
                appeals process with respect to such determination.
            ``(2) Initiation of the external review process.--
                    ``(A) Filing of request.--An enrollee (or the legal 
                representative of the enrollee) who desires to have an 
                external review conducted under this subsection shall 
                file a written request for such a review with the plan 
                or issuer involved not later than 30 working days after 
                the receipt of a final denial of a claim under 
                subsection (d). Any such request shall include the 
                consent of the enrollee (or the legal representative of 
                the enrollee) for the release of medical information 
                and records to external reviewers regarding the 
                enrollee if such information is necessary for the 
                proper conduct of the external review.
                    ``(B) Information and notice.--Not later than 5 
                working days after the receipt of a request under 
                subparagraph (A), the plan or issuer involved shall 
                select an external appeals entity under paragraph 
                (3)(A) that shall be responsible for designating an 
                external reviewer under paragraph (3)(B).
                    ``(C) Provision of information.--The plan or issuer 
                involved shall forward all necessary information 
                (including medical records, any relevant review 
                criteria, the clinical rationale consistent with the 
                terms and conditions of the contract between the plan 
                or issuer and the enrollee for the coverage denial, and 
                evidence of the enrollee's coverage) to the external 
                reviewer selected under paragraph (3)(B).
                    ``(D) Notification.--The plan or issuer involved 
                shall send a written notification to the enrollee (or 
                the legal representative of the enrollee) and the plan 
                administrator, indicating that an external review has 
                been initiated.
            ``(3) Conduct of external review.--
                    ``(A) Designation of external appeals entity by 
                plan or issuer.--A plan or issuer that receives a 
                request for an external review under paragraph (2)(A) 
                shall designate one of the following entities to serve 
                as the external appeals entity:
                            ``(i) An external review entity licensed or 
                        credentialed by a State.
                            ``(ii) A State agency established for the 
                        purpose of conducting independent external 
                        reviews.
                            ``(iii) Any entity under contract with the 
                        Federal Government to provide external review 
                        services.
                            ``(iv) Any entity accredited as an external 
                        review entity by an accrediting body recognized 
                        by the Secretary for such purpose.
                            ``(v) Any fully accredited teaching 
                        hospital.
                            ``(vi) Any other entity meeting criteria 
                        established by the Secretary for purposes of 
                        this subparagraph.
                    ``(B) Designation of external reviewer by external 
                appeals entity.--The external appeals entity designated 
                under subparagraph (A) shall designate one or more 
                individuals to serve as external reviewers with respect 
                to a request receives under paragraph (2)(A). Such 
                reviewers shall be independent medical experts who 
                shall--
                            ``(i) be appropriately credentialed or 
                        licensed in any State to deliver health care 
                        services;
                            ``(ii) not have any material, professional, 
                        familial, or financial affiliation with the 
                        case under review, the enrollee involved, the 
                        treating health care professional, the 
                        institution where the treatment would take 
                        place, or the manufacturer or any drug, device, 
                        procedure, or other therapy proposed for the 
                        enrollee whose treatment is under review;
                            ``(iii) be experts in the treatment of the 
                        enrollee's medical condition and knowledgeable 
                        about the recommended therapy;
                            ``(iv) receive only reasonable and 
                        customary compensation from the group health 
                        plan or health insurance issuer in connection 
                        with the external review that is not contingent 
                        on the decision rendered by the reviewer; and
                            ``(v) not be held liable for decisions 
                        regarding medical determinations (but may be 
                        held liable for actions that are arbitrary and 
                        capricious).
            ``(4) Standard of review.--
                    ``(A) In general.--An external reviewer shall--
                            ``(i) make a determination based on the 
                        medical necessity, appropriateness, 
                        experimental or investigational nature of the 
                        coverage denial;
                            ``(ii) take into consideration any 
                        evidence-based decision making or clinical 
                        practice guidelines used by the group health 
                        plan or health insurance issuer in conducting 
                        utilization review; or
                            ``(iii) submit a report on the final 
                        determinations of the review involved to--
                                    ``(I) the plan or issuer involved;
                                    ``(II) the enrollee involved (or 
                                the legal representative of the 
                                enrollee); and
                                    ``(III) the health care 
                                professional involved.
                    ``(B) Notice.--The plan or issuer involved shall 
                ensure that the enrollee receives notice, within 30 
                days after the determination of the independent medical 
                expert, regarding the actions of the plan or issuer 
                with respect to the determination of such expert under 
                the external review.
            ``(5) Timeframe for review.--An external reviewer shall 
        complete a review of an adverse coverage determination in 
        accordance with the medical exigencies of the case, but in no 
        case later than 30 working days after the later of--
                    ``(A) the date on which such reviewer is 
                designated; or
                    ``(B) the date on which all information necessary 
                to completing such review is received.
            ``(6) Binding determination.--The determination of an 
        external reviewer under this subsection shall be binding upon 
        the plan or issuer if the provisions of this subsection or the 
        procedures implemented under such provisions were complied with 
        by the external reviewer.
            ``(7) Study.--Not later than 2 years after the date of 
        enactment of this section, the General Accounting Office shall 
        conduct a study of a statistically appropriate sample of 
        completed external reviews. Such study shall include an 
        assessment of the process involved during an external review 
        and the basis of decisionmaking by the external reviewer. The 
        results of such study shall be submitted to the appropriate 
        committees of Congress.
            ``(8) Continuing legal rights of enrollees.--Nothing in 
        this section shall be construed as removing any legal rights of 
        participants, beneficiaries, enrollees, and others under State 
        or Federal law, including the right to file judicial actions to 
        enforce rights.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a plan administrator or plan fiduciary or health 
plan medical director from requesting an external review by an external 
reviewer without first completing the internal review process.
    ``(g) Definitions.--In this section:
            ``(1) Adverse coverage determination.--The term `adverse 
        coverage determination' means a coverage determination under 
        the plan which results in a denial of coverage or 
        reimbursement.
            ``(2) Coverage determination.--The term `coverage 
        determination' means with respect to items and services for 
        which coverage may be provided under a health plan, a 
        determination of whether or not such items and services are 
        covered or reimbursable under the coverage and terms of the 
        contract.
            ``(3) Enrollee.--The term enrollee means a participant or 
        beneficiary.
            ``(4) Grievance.--The term `grievance' means any enrollee 
        complaint that does not involve a coverage determination.
            ``(5) Prior authorization determination.--The term `prior 
        authorization determination' means a coverage determination 
        prior to the provision of the items and services as a condition 
        of coverage of the items and services under the coverage.
            ``(6) Treating health care professional.--The term 
        `treating health care professional' with respect to a group 
        health plan, health insurance issuer or provider sponsored 
        organization means a practitioner who is acting within the 
        scope of their State licensure or certification for the 
        delivery of health care services and who is primarily 
        responsible for delivering those services to the enrollee.
            ``(7) Utilization review.--The term `utilization review' 
        with respect to a group health plan or health insurance 
        coverage means a set of formal techniques designed to monitor 
        the use of, or evaluate the clinical necessity, 
        appropriateness, efficacy, or efficiency of, health care 
        services, procedures, or settings. Techniques may include 
        ambulatory review, prospective review, second opinion, 
        certification, concurrent review, case management, discharge 
        planning or retrospective review.''.
    (b) Enforcement.--Section 502(c)(1) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1132(c)(1)) is amended by 
inserting after ``or section 101(e)(1)'' the following: ``, or fails to 
comply with a coverage determination as required under section 
503(e)(6),''.
    (c) Conforming Amendment.--The table of contents in section 1 of 
the Employee Retirement Income Security Act of 1974 is amended by 
striking the item relating to section 503 and inserting the following 
new item:

``Sec. 503. Claims procedures, coverage determination, grievances and 
                            appeals.''.

     TITLE II--INDIVIDUAL RIGHTS WITH RESPECT TO PERSONAL MEDICAL 
                              INFORMATION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Personal Medical Information 
Access Act''.

                 Subtitle A--Access to Medical Records

SEC. 211. INSPECTION AND COPYING OF PROTECTED HEALTH INFORMATION.

    (a) In General.--At the request of an individual and except as 
provided in subsection (b), a health care provider, health plan, 
employer, health or life insurer, school, or university shall permit an 
individual who is the subject of protected health information or the 
individual's designee, to inspect and copy protected health information 
concerning the individual, including records created under section 212 
that such entity maintains. Such entity may set forth appropriate 
procedures to be followed for such inspection or copying and may 
require an individual to pay reasonable costs associated with such 
inspection or copying.
    (b) Exceptions.--Unless ordered by a court of competent 
jurisdiction, an entity described in subsection (a) is not required to 
permit the inspection or copying of protected health information if any 
of the following conditions are met:
            (1) Endangerment to life or safety.--The entity determines 
        that the disclosure of the information could reasonably be 
        expected to endanger the life or physical safety of an 
        individual.
            (2) Confidential source.--The information identifies, or 
        could reasonably lead to the identification of, a person who 
        provided information under a promise of confidentiality 
        concerning the individual who is the subject of the 
        information.
            (3) Information compiled in anticipation of litigation.--
        The information is compiled principally--
                    (A) in the reasonable anticipation of a civil, 
                criminal, or administrative action or proceeding; or
                    (B) for use in such an action or proceeding.
            (4) Research purposes.--The information was collected for a 
        research project monitored by an institutional review board, 
        such project is not complete, and the researcher involved 
        reasonably believes that access to such information would harm 
        the conduct of the research or invalidate or undermine the 
        validity of the research.
    (c) Denial of a Request for Inspection or Copying.--If an entity 
described in subsection (a) denies a request for inspection or copying 
pursuant to subsection (b), the entity shall inform the individual in 
writing of--
            (1) the reasons for the denial of the request for 
        inspection or copying;
            (2) any procedures for further review of the denial; and
            (3) the individual's right to file with the entity a 
        concise statement setting forth the request for inspection or 
        copying.
    (d) Statement Regarding Request.--If an individual has filed a 
statement under subsection (c)(3), the entity in any subsequent 
disclosure of the portion of the information requested under subsection 
(a) shall include--
            (1) a copy of the individual's statement; and
            (2) a concise statement of the reasons for denying the 
        request for inspection or copying.
    (e) Inspection and Copying of Segregable Portion.--An entity 
described in subsection (a) shall permit the inspection and copying 
under subsection (a) of any reasonably segregable portion of protected 
health information after deletion of any portion that is exempt under 
subsection (b).
    (f) Deadline.--An entity described in subsection (a) shall comply 
with or deny, in accordance with subsection (c), a request for 
inspection or copying of protected health information under this 
section not later than 45 days after the date on which the entity 
receives the request.
    (g) Rules Governing Agents.--An agent of an entity described in 
subsection (a) shall not be required to provide for the inspection and 
copying of protected health information, except where--
            (1) the protected health information is retained by the 
        agent; and
            (2) the agent has received in writing a request from the 
        entity involved to fulfill the requirements of this section;
at which time such information shall be provided to the requesting 
entity. Such requesting entity shall comply with subsection (f) with 
respect to any such information.
    (h) Rule of Construction.--This section shall not be construed to 
require an entity described in subsection (a) to conduct a formal, 
informal, or other hearing or proceeding concerning a request for 
inspection or copying of protected health information.

SEC. 212. AMENDMENT OF PROTECTED HEALTH INFORMATION.

    (a) Requirement.--
            (1) In general.--Except as provided in subsection (b) and 
        subject to paragraph (2), a health care provider, health plan, 
        employer, health or life insurer, school, or university that 
        receives from an individual a request in writing to amend 
        protected health information shall--
                    (A) amend such information as requested;
                    (B) inform the individual of the amendment that has 
                been made; and
                    (C) make reasonable efforts to inform any person to 
                whom the unamended portion of the information was 
                previously disclosed, of any nontechnical amendment 
                that has been made.
            (2) Compliance.--An entity described in paragraph (1) shall 
        comply with the requirements of such paragraph within 45 days 
        of the date on which the request involved is received if the 
        entity--
                    (A) created the protected health information 
                involved; and
                    (B) determines that such information is in fact 
                inaccurate.
    (b) Refusal To Amend.--If an entity described in subsection (a) 
refuses to make the amendment requested under such subsection, the 
entity shall inform the individual in writing of--
            (1) the reasons for the refusal to make the amendment;
            (2) any procedures for further review of the refusal; and
            (3) the individual's right to file with the entity a 
        concise statement setting forth the requested amendment and the 
        individual's reasons for disagreeing with the refusal.
    (c) Statement of Disagreement.--If an individual has filed a 
statement of disagreement under subsection (b)(3), the entity involved, 
in any subsequent disclosure of the disputed portion of the 
information--
            (1) shall include a copy of the individual's statement; and
            (2) may include a concise statement of the reasons for not 
        making the requested amendment.
    (d) Rules Governing Agents.--The agent of an entity described in 
subsection (a) shall not be required to make amendments to protected 
health information, except where--
            (1) the protected health information is retained by the 
        agent; and
            (2) the agent has been asked by such entity to fulfill the 
        requirements of this section.
If the agent is required to comply with this section as provided for in 
paragraph (2), such agent shall be subject to the 45-day deadline 
described in subsection (a).
    (e) Repeated Requests for Amendments.--If an entity described in 
subsection (a) receives a request for an amendment of information as 
provided for in such subsection and a statement of disagreement has 
been filed pursuant to subsection (c), the entity shall inform the 
individual of such filing and shall not be required to carry out the 
procedures required under this section.
    (f) Rules of Construction.--This section shall not be construed 
to--
            (1) require that an entity described in subsection (a) 
        conduct a formal, informal, or other hearing or proceeding 
        concerning a request for an amendment to protected health 
        information;
            (2) require a provider to amend an individual's protected 
        health information as to the type, duration, or quality of 
        treatment the individual believes he or she should have been 
        provided; or
            (3) permit any deletions or alterations of the original 
        information.

SEC. 213. NOTICE OF CONFIDENTIALITY PRACTICES.

    (a) Preparation of Written Notice.--A health care provider, health 
plan, health oversight agency, public health authority, employer, 
health or life insurer, health researcher, school or university shall 
post or provide, in writing and in a clear and conspicuous manner, 
notice of the entity's confidentiality practices, that shall include--
            (1) a description of an individual's rights with respect to 
        protected health information;
            (2) the procedures established by the entity for the 
        exercise of the individual's rights; and
            (3) the right to obtain a copy of the notice of the 
        confidentiality practices required under this subtitle.
    (b) Model Notice.--The Secretary, in consultation with the National 
Committee on Vital and Health Statistics and the National Association 
of Insurance Commissioners, and after notice and opportunity for public 
comment, shall develop and disseminate model notices of confidentiality 
practices. Use of the model notice shall serve as an absolute defense 
against claims of receiving inappropriate notice.

                Subtitle B--Establishment of Safeguards

SEC. 221. ESTABLISHMENT OF SAFEGUARDS.

    A health care provider, health plan, health oversight agency, 
public health authority, employer, health or life insurer, health 
researcher, law enforcement official, school or university shall 
establish and maintain appropriate administrative, technical, and 
physical safeguards to protect the confidentiality, security, accuracy, 
and integrity of protected health information created, received, 
obtained, maintained, used, transmitted, or disposed of by such entity.

                  Subtitle C--Enforcement; Definitions

SEC. 231. CIVIL PENALTY.

    (a) Violation.--A health care provider, health researcher, health 
plan, health oversight agency, public health agency, law enforcement 
agency, employer, health or life insurer, school, or university, or the 
agent of any such individual or entity, who the Secretary, in 
consultation with the Attorney General, determines has substantially 
and materially failed to comply with this Act shall, for a violation of 
this title, be subject, in addition to any other penalties that may be 
prescribed by law, to a civil penalty of not more than $500 for each 
such violation, but not to exceed $5,000 in the aggregate for multiple 
violations.
    (b) Procedures for Imposition of Penalties.--Section 1128A of the 
Social Security Act, other than subsections (a) and (b) and the second 
sentence of subsection (f) of that section, shall apply to the 
imposition of a civil, monetary, or exclusionary penalty under this 
section in the same manner as such provisions apply with respect to the 
imposition of a penalty under section 1128A of such Act.

SEC. 232. DEFINITIONS.

    In this title:
            (1) Agent.--The term ``agent'' means a person who 
        represents and acts for another under the contract or relation 
        of agency, or whose function is to bring about, modify, affect, 
        accept performance of, or terminate contractual obligations 
        between the principal and a third person, including a 
        contractor.
            (2) Disclose.--The term ``disclose'' means to release, 
        transfer, provide access to, or otherwise divulge protected 
        health information to any person other than the individual who 
        is the subject of such information. Such term includes the 
        initial disclosure and any subsequent redisclosures of 
        protected health information.
            (3) Employer.--The term ``employer'' has the meaning given 
        such term under section 3(5) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1002(5)), except that such term 
        shall include only employers of 2 or more employees.
            (4) Health care provider.--The term ``health care 
        provider'' means a person who, with respect to a specific item 
        of protected health information, receives, creates, uses, 
        maintains, or discloses the information while acting in whole 
        or in part in the capacity of--
                    (A) a person who is licensed, certified, 
                registered, or otherwise authorized by Federal or State 
                law to provide an item or service that constitutes 
                health care in the ordinary course of business, or 
                practice of a profession;
                    (B) a Federal, State, or employer-sponsored program 
                that directly provides items or services that 
                constitute health care to beneficiaries; or
                    (C) an officer, employee, or agent of a person 
                described in subparagraph (A) or (B).
            (5) Health or life insurer.--The term ``health or life 
        insurer'' means a health insurance issuer as defined in section 
        2791 of the Public Health Service Act (42 U.S.C. 300gg-91) or a 
        life insurance company as defined in section 816 of the 
        Internal Revenue Code of 1986.
            (6) Health plan.--The term ``health plan'' means any health 
        insurance plan, including any hospital or medical service plan, 
        dental or other health service plan or health maintenance 
        organization plan, provider sponsored organization, or other 
        program providing or arranging for the provision of health 
        benefits, whether or not funded through the purchase of 
        insurance.
            (7) Person.--The term ``person'' means a government, 
        governmental subdivision, agency or authority; corporation; 
        company; association; firm; partnership; society; estate; 
        trust; joint venture; individual; individual representative; 
        tribal government; and any other legal entity.
            (8) Protected health information.--The term ``protected 
        health information'' means any information (including 
        demographic information) whether or not recorded in any form or 
        medium--
                    (A) that relates to the past, present or future--
                            (i) physical or mental health or condition 
                        of an individual (including the condition or 
                        other attributes of individual cells or their 
                        components);
                            (ii) provision of health care to an 
                        individual; or
                            (iii) payment for the provision of health 
                        care to an individual;
                    (B) that is created by a health care provider, 
                health plan, health researcher, health oversight 
                agency, public health authority, employer, law 
                enforcement official, health or life insurer, school or 
                university; and
                    (C) that is not nonidentifiable health information.
            (9) School or university.--The term ``school or 
        university'' means an institution or place for instruction or 
        education, including an elementary school, secondary school, or 
        institution of higher learning, a college, or an assemblage of 
        colleges united under one corporate organization or government.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (11) Writing.--The term ``writing'' means writing in either 
        a paper-based or computer-based form, including electronic 
        signatures.

              TITLE III--GENETIC INFORMATION AND SERVICES

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Genetic Information 
Nondiscrimination in Health Insurance Act of 1998''.

SEC. 302. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) Prohibition of Health Discrimination on the Basis of Genetic 
Information or Genetic Services.--
            (1) No enrollment restriction for genetic services.--
        Section 702(a)(1)(F) of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1182(a)(1)(F)) is amended by inserting 
        before the period the following: ``(including information about 
        a request for or receipt of genetic services)''.
            (2) No discrimination in group premiums based on predictive 
        genetic information.--Subpart B of part 7 of subtitle B of 
        title I of the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1185 et seq.) (as amended by section 111) is further 
        amended by adding at the end the following:

``SEC. 714. PROHIBITING PREMIUM DISCRIMINATION AGAINST GROUPS ON THE 
              BASIS OF PREDICTIVE GENETIC INFORMATION.

    ``A group health plan, or a health insurance issuer offering group 
health insurance coverage in connection with a group health plan, shall 
not adjust premium or contribution amounts for a group on the basis of 
predictive genetic information concerning an individual in the group or 
a family member of the individual (including information about a 
request for or receipt of genetic services).''.
            (3) Conforming amendment.--Section 702(b) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1182(b)) is 
        amended by adding at the end the following:
            ``(3) Reference to related provision.--For a provision 
        prohibiting the adjustment of premium or contribution amounts 
        for a group under a group health plan on the basis of 
        predictive genetic information (including information about a 
        request for or receipt of genetic services), see section 
        714.''.
    (b) Limitation on Collection of Predictive Genetic Information.--
Section 702 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1182) is amended by adding at the end the following:
    ``(c) Collection of Predictive Genetic Information.--
            ``(1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph (2), a 
        group health plan, or a health insurance issuer offering health 
        insurance coverage in connection with a group health plan, 
        shall not request or require predictive genetic information 
        concerning an individual or a family member of the individual 
        (including information about a request for or receipt of 
        genetic services).
            ``(2) Information needed for diagnosis, treatment, or 
        payment.--
                    ``(A) In general.--Notwithstanding paragraph (1), a 
                group health plan or health insurance issuer that 
                provides health care items and services to an 
                individual or dependent may request (but may not 
                require) that such individual or dependent disclose, or 
                authorize the collection or disclosure of, predictive 
                genetic information for purposes of diagnosis, 
                treatment, or payment relating to the provision of 
                health care items and services to such individual or 
                dependent.
                    ``(B) Notice of confidentiality practices and 
                description of safeguards.--As a part of a request 
                under subparagraph (A), the group health plan or health 
                insurance issuer shall provide to the individual or 
                dependent a description of the procedures in place to 
                safeguard the confidentiality, as described in sections 
                213 and 221 of the Patients' Bill of Rights Act, of 
                such individually identifiable information.''.
    (c) Definitions.--Section 733(d) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1191b(d)) is amended by adding at the 
end the following:
            ``(5) Family member.--The term `family member' means with 
        respect to an individual--
                    ``(A) the spouse of the individual;
                    ``(B) a dependent child of the individual, 
                including a child who is born to or placed for adoption 
                with the individual; and
                    ``(C) all other individuals related by blood to the 
                individual or the spouse or child described in 
                subparagraph (A) or (B).
            ``(6) Genetic information.--The term `genetic information' 
        means information about genes, gene products, or inherited 
        characteristics that may derive from an individual or a family 
        member (including information about a request for or receipt of 
        genetic services).
            ``(7) Genetic services.--The term `genetic services' means 
        health services provided to obtain, assess, or interpret 
        genetic information for diagnostic and therapeutic purposes, 
        and for genetic education and counseling.
            ``(8) Predictive genetic information.--
                    ``(A) In general.--The term `predictive genetic 
                information' means--
                            ``(i) information about an individual's 
                        genetic tests which are associated with a 
                        statistically significant increased risk of 
                        developing a disease or disorder;
                            ``(ii) information about genetic tests of 
                        family members of the individual; or
                            ``(iii) information about the occurrence of 
                        a disease or disorder in family members that 
                        predicts a statistically significant increased 
                        risk of a disease or disorder in the 
                        individual.
                    ``(B) Exceptions.--The term `predictive genetic 
                information' shall not include--
                            ``(i) information about the sex or age of 
                        the individual;
                            ``(ii) information derived from routine 
                        physical tests, such as the chemical, blood, or 
                        urine analyses of the individual, unless such 
                        analyses are genetic tests; and
                            ``(iii) information about physical exams of 
                        the individual and other information relevant 
                        to determining the current health status of the 
                        individual so long as such information does not 
                        include information described in clauses (i), 
                        (ii), or (iii) of subparagraph (A).
            ``(9) Genetic test.--The term `genetic test' means the 
        analysis of human DNA, RNA, chromosomes, proteins, and certain 
        metabolites, in order to detect disease-related genotypes, 
        mutations, phenotypes, or karyotypes.''.
    (d) Effective Date.--Except as provided in this section, this 
section and the amendments made by this section shall apply with 
respect to group health plans for plan years beginning 1 year after the 
date of the enactment of this Act.

SEC. 303. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

    (a) Amendments Relating to the Group Market.--
            (1) Prohibition of health discrimination on the basis of 
        genetic information in the group market.--
                    (A) In general.--Subpart 2 of part A of title XXVII 
                of the Public Health Service Act (42 U.S.C. 300gg-4 et 
                seq.) is amended by adding at the end the following:

``SEC. 2706. PROHIBITING PREMIUM DISCRIMINATION AGAINST GROUPS ON THE 
              BASIS OF PREDICTIVE GENETIC INFORMATION IN THE GROUP 
              MARKET.

    ``A group health plan, or a health insurance issuer offering group 
health insurance coverage in connection with a group health plan shall 
not adjust premium or contribution amounts for a group on the basis of 
predictive genetic information concerning an individual in the group or 
a family member of the individual (including information about a 
request for or receipt of genetic services).''.
                    (B) Conforming amendment.--Section 2702(b) of the 
                Public Health Service Act (42 U.S.C. 300gg-1(b)) is 
                amended by adding at the end the following:
            ``(3) Reference to related provision.--For a provision 
        prohibiting the adjustment of premium or contribution amounts 
        for a group under a group health plan on the basis of 
        predictive genetic information (including information about a 
        request for or receipt of genetic services), see section 
        2706.''.
                    (C) Limitation on collection and disclosure of 
                predictive genetic information.--Section 2702 of the 
                Public Health Service Act (42 U.S.C. 300gg-1) is 
                amended by adding at the end the following:
    ``(c) Collection of Predictive Genetic Information.--
            ``(1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph (2), a 
        group health plan, or a health insurance issuer offering health 
        insurance coverage in connection with a group health plan, 
        shall not request or require predictive genetic information 
        concerning an individual or a family member of the individual 
        (including information about a request for or receipt of 
        genetic services).
            ``(2) Information needed for diagnosis, treatment, or 
        payment.--
                    ``(A) In general.--Notwithstanding paragraph (1), a 
                group health plan or health insurance issuer that 
                provides health care items and services to an 
                individual or dependent may request (but may not 
                require) that such individual or dependent disclose, or 
                authorize the collection or disclosure of, predictive 
                genetic information for purposes of diagnosis, 
                treatment, or payment relating to the provision of 
                health care items and services to such individual or 
                dependent.
                    ``(B) Notice of confidentiality practices and 
                description of safeguards.--As a part of a request 
                under subparagraph (A), the group health plan or health 
                insurance issuer shall provide to the individual or 
                dependent a description of the procedures in place to 
                safeguard the confidentiality, as described in sections 
                213 and 221 of the Patients' Bill of Rights Act, of 
                such individually identifiable information.''.
            (2) Definitions.--Section 2791(d) of the Public Health 
        Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at the 
        end the following:
            ``(15) Family member.--The term `family member' means, with 
        respect to an individual--
                    ``(A) the spouse of the individual;
                    ``(B) a dependent child of the individual, 
                including a child who is born to or placed for adoption 
                with the individual; and
                    ``(C) all other individuals related by blood to the 
                individual or the spouse or child described in 
                subparagraph (A) or (B).
            ``(16) Genetic information.--The term `genetic information' 
        means information about genes, gene products, or inherited 
        characteristics that may derive from an individual or a family 
        member.
            ``(17) Genetic services.--The term `genetic services' means 
        health services provided to obtain, assess, or interpret 
        genetic information for diagnostic and therapeutic purposes, 
        and for genetic education and counseling.
            ``(18) Predictive genetic information.--
                    ``(A) In general.--The term `predictive genetic 
                information' means--
                            ``(i) information about an individual's 
                        genetic tests which is associated with a 
                        statistically significant increased risk of 
                        developing a disease or disorder;
                            ``(ii) information about genetic tests of 
                        family members of the individual; or
                            ``(iii) information about the occurrence of 
                        a disease or disorder in family members that 
                        predicts a statistically significant increased 
                        risk of a disease or disorder in the 
                        individual.
                    ``(B) Exceptions.--The term `predictive genetic 
                information' shall not include--
                            ``(i) information about the sex or age of 
                        the individual;
                            ``(ii) information derived from routine 
                        physical tests, such as the chemical, blood, or 
                        urine analyses of the individual, unless such 
                        analyses are genetic tests; and
                            ``(iii) information about physical exams of 
                        the individual and other information relevant 
                        to determining the current health status of the 
                        individual so long as such information does not 
                        include information described in clauses (i), 
                        (ii), or (iii) of subparagraph (A).
            ``(19) Genetic test.--The term `genetic test' means the 
        analysis of human DNA, RNA, chromosomes, proteins, and certain 
        metabolites, in order to detect disease-related genotypes, 
        mutations, phenotypes, or karyotypes.''.
    (b) Amendment Relating to the Individual Market.--The first subpart 
3 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-11 et seq.) (relating to other requirements) is amended--
            (1) by redesignating such subpart as subpart II; and
            (2) by adding at the end the following:

``SEC. 2752. PROHIBITION OF HEALTH DISCRIMINATION ON THE BASIS OF 
              PREDICTIVE GENETIC INFORMATION.

    ``(a) Prohibition on Predictive Genetic Information as a Condition 
of Eligibility.--A health insurance issuer offering health insurance 
coverage in the individual market may not use predictive genetic 
information as a condition of eligibility of an individual to enroll in 
individual health insurance coverage (including information about a 
request for or receipt of genetic services).
    ``(b) Prohibition on Predictive Genetic Information in Setting 
Premium Rates.--A health insurance issuer offering health insurance 
coverage in the individual market shall not adjust premium rates for 
individuals on the basis of predictive genetic information concerning 
such an enrollee or a family member of the enrollee (including 
information about a request for or receipt of genetic services).
    ``(c) Collection of Predictive Genetic Information.--
            ``(1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph (2), a 
        health insurance issuer offering health insurance coverage in 
        the individual market shall not request or require predictive 
        genetic information concerning an individual or a family member 
        of the individual (including information about a request for or 
        receipt of genetic services).
            ``(2) Information needed for diagnosis, treatment, or 
        payment.--
                    ``(A) in general.--Notwithstanding paragraph (1), a 
                health insurance issuer that provides health care items 
                and services to an individual or dependent may request 
                (but may not require) that such individual or dependent 
                disclose, or authorize the collection or disclosure of, 
                predictive genetic information for purposes of 
                diagnosis, treatment, or payment relating to the 
                provision of health care items and services to such 
                individual or dependent.
                    ``(B) Notice of confidentiality practices and 
                description of safeguards.--As a part of a request 
under subparagraph (A), the health insurance issuer shall provide to 
the individual or dependent a description of the procedures in place to 
safeguard the confidentiality, as described in sections 213 and 221 of 
the Patients' Bill of Rights Act, of such individually identifiable 
information.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to--
            (1) group health plans, and health insurance coverage 
        offered in connection with group health plans, for plan years 
        beginning after 1 year after the date of enactment of this Act; 
        and
            (2) health insurance coverage offered, sold, issued, 
        renewed, in effect, or operated in the individual market after 
        1 year after the date of enactment of this Act.

SEC. 304. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    (a) Prohibition of Health Discrimination on the Basis of Predictive 
Genetic Information.--
            (1) In general.--Subchapter B of chapter 100 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following:

``SEC. 9813. PROHIBITING HEALTH DISCRIMINATION AGAINST GROUPS ON THE 
              BASIS OF PREDICTIVE GENETIC INFORMATION.

    ``A group health plan, or a health insurance issuer offering group 
health insurance coverage in connection with a group health plan, shall 
not adjust premium or contribution amounts for a group on the basis of 
predictive genetic information concerning an individual in the group or 
a family member of the individual (including information about a 
request for or receipt of genetic services).''.
            (2) Conforming amendment.--Section 9802(b) of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following:
            ``(3) Reference to related provision.--For a provision 
        prohibiting the adjustment of premium or contribution amounts 
        for a group under a group health plan on the basis of 
        predictive genetic information (including information about a 
        request for or the receipt of genetic services), see section 
        9813.''.
            (3) Amendment to table of sections.--The table of sections 
        for subchapter B of chapter 100 of the Internal Revenue Code of 
        1986 is amended by adding at the end the following:

``Sec. 9813. Prohibiting premium discrimination against groups on the 
                            basis of predictive genetic information.''.
    (b) Limitation on Collection of Predictive Genetic Information.--
Section 9802 of the Internal Revenue Code of 1986 is amended by adding 
at the end the following:
    ``(c) Collection of Predictive Genetic Information.--
            ``(1) Limitation on requesting or requiring predictive 
        genetic information.--Except as provided in paragraph (2), a 
        group health plan, or a health insurance issuer offering health 
        insurance coverage in connection with a group health plan, 
        shall not request or require predictive genetic information 
        concerning an individual or a family member of the individual 
        (including information about a request for or receipt of 
        genetic services).
            ``(2) Information needed for diagnosis, treatment, or 
        payment.--
                    ``(A) In general.--Notwithstanding paragraph (1), a 
                group health plan or health insurance issuer that 
                provides health care items and services to an 
                individual or dependent may request (but may not 
                require) that such individual or dependent disclose, or 
                authorize the collection or disclosure of, predictive 
                genetic information for purposes of diagnosis, 
                treatment, or payment relating to the provision of 
                health care items and services to such individual or 
                dependent.
                    ``(B) Notice of confidentiality practices; 
                description of safeguards.--As a part of a request 
                under subparagraph (A), the group health plan or health 
                insurance issuer shall provide to the individual or 
                dependent a description of the procedures in place to 
                safeguard the confidentiality, as described in sections 
                213 and 221 of the Patients' Bill of Rights Act, of 
                such individually identifiable information.''.
    (c) Definitions.--Section 9832(d) of the Internal Revenue Code of 
1986 is amended by adding at the end the following:
            ``(6) Family member.--The term `family member' means, with 
        respect to an individual--
                    ``(A) the spouse of the individual;
                    ``(B) a dependent child of the individual, 
                including a child who is born to or placed for adoption 
                with the individual; and
                    ``(C) all other individuals related by blood to the 
                individual or the spouse or child described in 
                subparagraph (A) or (B).
            ``(7) Genetic information.--The term `genetic information' 
        means information about genes, gene products, or inherited 
        characteristics that may derive from an individual or a family 
        member.
            ``(8) Genetic services.--The term `genetic services' means 
        health services provided to obtain, assess, or interpret 
        genetic information for diagnostic and therapeutic purposes, 
        and for genetic education and counseling.
            ``(9) Predictive genetic information.--
                    ``(A) In general.--The term `predictive genetic 
                information' means--
                            ``(i) information about an individual's 
                        genetic tests which is associated with a 
                        statistically significant increased risk of 
                        developing a disease or disorder;
                            ``(ii) information about genetic tests of 
                        family members of the individual; or
                            ``(iii) information about the occurrence of 
                        a disease or disorder in family members that 
                        predicts a statistically significant increased 
                        risk of a disease or disorder in the 
                        individual.
                    ``(B) Exceptions.--The term `predictive genetic 
                information' shall not include--
                            ``(i) information about the sex or age of 
                        the individual;
                            ``(ii) information derived from routine 
                        physical tests, such as the chemical, blood, or 
                        urine analyses of the individual, unless such 
                        analyses are genetic tests; and
                            ``(iii) information about physical exams of 
                        the individual and other information relevant 
                        to determining the current health status of the 
                        individual so long as such information does not 
                        include information described in clauses (i), 
                        (ii), or (iii) of subparagraph (A).
            ``(10) Genetic test.--The term `genetic test' means the 
        analysis of human DNA, RNA, chromosomes, proteins, and certain 
        metabolites, in order to detect disease-related genotypes, 
        mutations, phenotypes, or karyotypes.''.
    (d) Effective Date.--Except as provided in this section, this 
section and the amendments made by this section shall apply with 
respect to group health plans for plan years beginning after 1 year 
after the date of the enactment of this Act.

                 TITLE IV--HEALTHCARE QUALITY RESEARCH

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Healthcare Quality Research Act of 
1998''.

SEC. 402. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

    Title IX of the Public Health Service Act (42 U.S.C. 299 et seq.) 
is amended to read as follows:

           ``TITLE IX--AGENCY FOR HEALTHCARE QUALITY RESEARCH

               ``PART A--ESTABLISHMENT AND GENERAL DUTIES

``SEC. 901. MISSION AND DUTIES.

    ``(a) In General.--There is established within the Public Health 
Service an agency to be known as the Agency for Healthcare Quality 
Research. In carrying out this subsection, the Secretary shall 
redesignate the Agency for Health Care Policy and Research as the 
Agency for Healthcare Quality Research.
    ``(b) Mission.--The purpose of the Agency is to enhance the 
quality, appropriateness, and effectiveness of healthcare services, and 
access to such services, through the establishment of a broad base of 
scientific research and through the promotion of improvements in 
clinical practice, including the prevention of diseases and other 
health conditions. The Agency shall promote healthcare quality 
improvement by--
            ``(1) conducting and supporting research that develops and 
        presents scientific evidence regarding all aspects of 
        healthcare, including--
                    ``(A) the development and assessment of methods for 
                the purposes of enhancing patient participation in 
                their own care and for facilitating shared patient-
                physician decision-making;
                    ``(B) the outcomes, effectiveness, and cost-
                effectiveness of healthcare practices, including 
                preventive measures and primary care;
                    ``(C) existing and innovative technologies;
                    ``(D) the costs and utilization of, and access to 
                healthcare;
                    ``(E) the ways in which healthcare services are 
                organized, delivered, and financed and the interaction 
                and impact of these factors on the quality of patient 
                care;
                    ``(F) methods for measuring quality and strategies 
                for improving quality; and
                    ``(G) ways in which patients, consumers, and 
                practitioners acquire new information about best 
practices and health benefits, and the determinants of their use of 
this information;
            ``(2) synthesizing and disseminating available scientific 
        evidence for use by patients, consumers, practitioners, 
        providers, purchasers, policy makers, and educators; and
            ``(3) advancing private and public efforts to improve 
        healthcare quality.
    ``(c) Requirements With Respect to Rural Areas and Priority 
Populations.--In carrying out subsection (b), the Director shall 
undertake and support research, demonstration projects, and evaluations 
with respect to--
            ``(1) the delivery of health services in rural areas 
        (including frontier areas);
            ``(2) health services for low-income groups, and minority 
        groups;
            ``(3) the health of children;
            ``(4) the elderly; and
            ``(5) people with special healthcare needs, including 
        chronic care and end-of-life healthcare.
    ``(d) Appointment of Director.--There shall be at the head of the 
Agency an official to be known as the Director for Healthcare Quality 
Research. The Director shall be appointed by the Secretary. The 
Secretary, acting through the Director, shall carry out the authorities 
and duties established in this title.

``SEC. 902. GENERAL AUTHORITIES.

    ``(a) In General.--In carrying out section 901(b), the Director 
shall support demonstration projects, conduct and support research, 
evaluations, training, research networks, multi-disciplinary centers, 
technical assistance, and the dissemination of information, on 
healthcare, and on systems for the delivery of such care, including 
activities with respect to--
            ``(1) the quality, effectiveness, efficiency, 
        appropriateness and value of healthcare services;
            ``(2) quality measurement and improvement;
            ``(3) the outcomes, cost, cost-effectiveness, and use of 
        healthcare services and access to such services;
            ``(4) clinical practice, including primary care and 
        practice-oriented research;
            ``(5) healthcare technologies, facilities, and equipment;
            ``(6) healthcare costs, productivity, and market forces;
            ``(7) health promotion and disease prevention, including 
        clinical preventive services;
            ``(8) health statistics, surveys, database development, and 
        epidemiology; and
            ``(9) medical liability.
    ``(b) Health Services Training Grants.--The Director may provide 
training grants in the field of health services research related to 
activities authorized under subsection (a), to include pre- and post-
doctoral fellowships and training programs, young investigator awards, 
and other programs and activities as appropriate. In carrying out this 
subsection, the Director shall make use of funds made available under 
section 478.
    ``(c) Multidisciplinary Centers.--The Director may provide 
financial assistance to assist in meeting the costs of planning and 
establishing new centers, and operating existing and new centers, for 
multidisciplinary health services research, demonstration projects, 
evaluations, training, and policy analysis with respect to the matters 
referred to in subsection (a).
    ``(d) Relation to Certain Authorities Regarding Social Security.--
Activities authorized in this section may include, and shall be 
appropriately coordinated with experiments, demonstration projects, and 
other related activities authorized by the Social Security Act and the 
Social Security Amendments of 1967. Activities under subsection (a)(2) 
of this section that affect the programs under titles XVIII and XIX of 
the Social Security Act shall be carried out consistent with section 
1142 of such Act.
    ``(e) Disclaimer.--Nothing in this title shall be construed to 
imply that the Agency's role is to mandate national standards of 
clinical practice or quality healthcare standards. Recommendations 
resulting from projects funded and published by the Agency shall 
include a corresponding disclaimer.
    ``(f) Rule of Construction.--Nothing in this section shall be 
construed to imply that quality measurement is a science of uniform 
national standards. In research and quality improvement activities, the 
Agency shall consider a wide range of choices, providers, healthcare 
delivery systems, and individual preferences.

               ``PART B--HEALTHCARE IMPROVEMENT RESEARCH

``SEC. 911. HEALTHCARE OUTCOME IMPROVEMENT RESEARCH.

    ``(a) Evidence Rating Systems.--In collaboration with experts from 
the public and private sector, the Agency shall identify and 
disseminate methods or systems used to assess healthcare research 
results, particularly to rate the strength of the scientific evidence 
behind healthcare practice and technology recommendations in the 
research literature. The Agency shall make methods or systems for 
evidence rating widely available. Agency publications containing 
healthcare recommendations shall indicate the level of substantiating 
evidence using such methods or systems.
    ``(b) Healthcare Improvement Research Centers and Provider-Based 
Research Networks.--
            ``(1) In general.--In order to address the full continuum 
        of care and outcomes research, to link research to practice 
        improvement, and to speed the dissemination of research 
        findings to community practice settings, the Agency shall 
        employ research strategies and mechanisms that will link 
        research directly with clinical practice in geographically 
        diverse locations throughout the United States, including--
                    ``(A) Healthcare Improvement Research Centers that 
                combine demonstrated multidisciplinary expertise in 
                outcomes or quality improvement research with linkages 
                to relevant sites of care;
                    ``(B) Practice-based Research Networks, including 
                plan, facility, or delivery system sites of care 
                (especially primary care), that can evaluate and 
                promote quality improvement; and
                    ``(C) other innovative mechanisms or strategies.
            ``(2) Requirements.--The Director is authorized to 
        establish the requirements for entities applying for grants 
        under this subsection.
    ``(c) Expansion of the Health Services Research Workforce.--
            ``(1) Grants.--The Agency shall, through the awarding of 
        grants, support eligible entities at geographically diverse 
        locations throughout the United States to enable such entities 
        to carry out research training programs that are dedicated to 
        health services research training at the doctoral, post-
        doctoral, and junior faculty levels.
            ``(2) Requirements.--In developing priorities for the 
        allocation of training funds under this subsection, the 
        Director shall take into consideration shortages in the number 
        of trained researchers addressing the priority populations.

``SEC. 912. PRIVATE-PUBLIC PARTNERSHIPS TO IMPROVE ORGANIZATION AND 
              DELIVERY.

    ``(a) Support for Efforts To Develop Information on Quality.--
            ``(1) Scientific and technical support.--In its role as the 
        principal agency for healthcare quality research, the Agency 
        shall provide scientific and technical support for private and 
        public efforts to improve healthcare quality, including 
        accrediting organizations.
            ``(2) Role of the agency.--With respect to paragraph (1), 
        the role of the Agency shall include--
                    ``(A) the identification and assessment of methods 
                for the evaluation of the health of enrollees in health 
                plans by type of plan, provider, and provider 
                arrangements;
                    ``(B) the ongoing development, testing, and 
                dissemination of quality measures, including measures 
                of health and functional outcomes, that take into 
                account appropriate variations in individual 
                preferences;
                    ``(C) the compilation and dissemination of 
                healthcare quality measures developed in the private 
                and public sector;
                    ``(D) assistance in the development of improved 
                healthcare information systems;
                    ``(E) the development of survey tools for the 
                purpose of measuring participant and beneficiary 
                assessments of their healthcare; and
                    ``(F) the integration of information on quality 
                into purchaser and consumer decision-making processes.
    ``(b) Demonstration Program Regarding Centers for Education and 
Research on Therapeutics.--
            ``(1) In general.--The Secretary, acting through the 
        Director and in consultation with the Commissioner of Food and 
        Drugs, shall establish a demonstration program for the purpose 
        of making one or more grants for the establishment and 
        operation of one or more centers to carry out the activities 
        specified in paragraph (2).
            ``(2) Required activities.--The activities referred to in 
        this paragraph are the following:
                    ``(A) The conduct of state-of-the-art clinical 
                research for the following purposes:
                            ``(i) To increase awareness of--
                                    ``(I) new uses of drugs, biological 
                                products, and devices;
                                    ``(II) ways to improve the 
                                effective use of drugs, biological 
                                products, and devices; and
                                    ``(III) risks of new uses and risks 
                                of combinations of drugs and biological 
                                products.
                            ``(ii) To provide objective clinical 
                        information to the following individuals and 
                        entities:
                                    ``(I) Healthcare practitioners and 
                                other providers of Healthcare goods or 
                                services.
                                    ``(II) Pharmacy benefit managers 
                                and purchasers.
                                    ``(III) Health maintenance 
                                organizations and other managed 
                                healthcare organizations.
                                    ``(IV) Healthcare insurers and 
                                governmental agencies.
                                    ``(V) Patients and consumers.
                            ``(iii) To improve the quality of 
                        healthcare while reducing the cost of 
                        Healthcare through--
                                    ``(I) the appropriate use of drugs, 
                                biological products, or devices; and
                                    ``(II) the prevention of adverse 
                                effects of drugs, biological products, 
                                and devices and the consequences of 
                                such effects, such as unnecessary 
                                hospitalizations.
                    ``(B) The conduct of research on the comparative 
                effectiveness, cost-effectiveness, and safety of drugs, 
                biological products, and devices.
                    ``(C) Such other activities as the Secretary 
                determines to be appropriate, except that a grant may 
                not be expended to assist the Secretary in the review 
                of new drugs.
            ``(3) Application for grant.--A grant under paragraph (1) 
        may be made only if an application for the grant is submitted 
        to the Secretary and the application is in such form, is made 
        in such manner, and contains such agreements, assurances, and 
        information as the Secretary determines to be necessary to 
        carry out this section.
            ``(4) Peer review.--A grant under paragraph (1) may be made 
        only if the application for the grant has undergone appropriate 
        technical and scientific peer review.
    ``(c) Reducing Errors in Medicine.--The Director shall conduct and 
support research and build private-public partnerships to--
            ``(1) identify the causes of preventable healthcare errors 
        and patient injury in healthcare delivery systems;
            ``(2) develop, demonstrate, and evaluate strategies for 
        reducing errors and improving patient safety; and
            ``(3) promote the implementation of effective strategies 
        throughout the healthcare industry.

``SEC. 913. INFORMATION ON QUALITY AND COST OF CARE.

    ``(a) In General.--In carrying out 902(a), the Director shall--
            ``(1) collect data from a nationally representative sample 
        of the population on the cost and use of healthcare, including 
        the types of healthcare services Americans use, their access to 
        healthcare services, frequency of use, how much is paid for the 
        services used, the source of those payments, the types and 
        costs of private health insurance, access, satisfaction, and 
        quality of care for the general population and also for 
        children, uninsured persons, poor and near-poor individuals, 
        and persons with special healthcare needs, including end-of-
        life healthcare;
            ``(2) develop databases and tools that enable States to 
        track the quality, access, and use of healthcare services 
        provided to their residents; and
            ``(3) enter into agreements with public or private entities 
        to use, link, or acquire databases for research authorized 
        under this title.
    ``(b) Quality and Outcomes Information.--
            ``(1) In general.--To enhance the understanding of the 
        quality of care, the determinants of health outcomes and 
        functional status, the needs of special populations as well as 
        an understanding of these changes over time, their relationship 
        to healthcare access and use, and to monitor the overall 
        national impact of Federal and State policy changes on 
        healthcare, the Director, beginning in fiscal year 2000, shall 
        ensure that the survey conducted under subsection (a)(1) will--
                    ``(A) provide information on the quality of care 
                and patient outcomes for frequently occurring clinical 
                conditions for a nationally representative sample of 
                the population; and
                    ``(B) provide reliable national estimates for 
                children and persons with special healthcare needs 
                through the use of supplements or periodic expansions 
                of the survey.
            ``(2) Annual report.--Beginning in fiscal year 2002, the 
        Secretary, acting through the Director, shall submit to 
        Congress an annual report on national trends in the quality of 
healthcare provided to the American people.

``SEC. 914. INFORMATION SYSTEMS FOR HEALTHCARE IMPROVEMENT.

    ``In order to foster a range of innovative approaches to the 
management and communication of health information, the Agency shall 
support research to evaluate and initiatives to advance--
            ``(1) the use of information systems for the study of 
        healthcare quality, including the generation of both individual 
        provider and plan-level comparative performance measures;
            ``(2) training for healthcare practitioners and researchers 
        in the use of information systems;
            ``(3) the creation of effective linkages between various 
        sources of health information, including the development of 
        information networks;
            ``(4) the delivery and coordination of evidence-based 
        healthcare services, using real-time decision-support programs;
            ``(5) the structure, content, definition, and coding of 
        health information data and medical vocabularies and shall 
        consult with other Federal entities;
            ``(6) the evaluation and use of computer-based health 
        records in outpatient and inpatient settings as a personal 
        health record for individual health assessment and maintenance, 
        and for monitoring public health and outcomes of care within 
        populations; and
            ``(7) the protection of individually identifiable 
        information in health services research and healthcare quality 
        improvement.

``SEC. 915. RESEARCH SUPPORTING PRIMARY CARE DELIVERY AND ACCESS IN 
              UNDERSERVED AREAS.

    ``(a) Preventive Services Task Force.--
            ``(1) Purpose.--The Agency shall provide ongoing 
        administrative, research, and technical support for the 
        operation of the Preventive Services Task Force. The Agency 
        shall coordinate and support the dissemination of the 
        Preventive Services Task Force recommendations.
            ``(2) Operation.--The Preventive Services Task Force shall 
        review the scientific evidence related to the effectiveness, 
        appropriateness, and cost-effectiveness of clinical preventive 
        services for the purpose of developing recommendations, and 
        updating previous recommendations, regarding their usefulness 
        in daily clinical practice. In carrying out its 
        responsibilities under paragraph (1), the Task Force shall not 
        be subject to the provisions of Appendix 2 of title 5, United 
        States Code.
    ``(b) Primary Care Delivery Research.--
            ``(1) In general.--There is established within the Agency a 
        Center for Primary Care Delivery Research (referred to in this 
        subsection as the `Center') that shall serve as the principal 
        source of funding for primary care delivery research in the 
        Department of Health and Human Services. For purposes of this 
        paragraph, primary care delivery research focuses on the first 
        contact when illness or health concerns arise, the diagnosis, 
        treatment or referral to specialty care, preventive care, and 
        the relationship between the clinician and the patient in the 
        context of the family and community.
            ``(2) Research.--In carrying out this section, the Center 
        shall conduct and support research on--
                    ``(A) the nature and characteristics of primary 
                care delivery practice;
                    ``(B) producing evidence for the management of 
                commonly occurring clinical problems;
                    ``(C) the management of undifferentiated clinical 
                problems;
                    ``(D) the continuity and coordination of health 
                services; and
                    ``(E) the application and impact of telemedicine 
                and other distance technologies.
            ``(3) Demonstration.--The Agency shall support 
        demonstrations into the use of new information tools aimed at 
        improving shared decision-making between patients and their 
        care-givers.

``SEC. 916. CLINICAL PRACTICE AND TECHNOLOGY INNOVATION.

    ``(a) In General.--The Director shall promote innovation in 
evidence-based clinical practice and healthcare technologies by--
            ``(1) conducting and supporting research on the 
        development, diffusion, and use of healthcare technology;
            ``(2) developing, evaluating, and disseminating 
        methodologies for healthcare practice and technology 
        assessment;
            ``(3) conducting intramural and supporting extramural 
        assessments of existing and new healthcare practices and 
        technologies;
            ``(4) promoting education, training, and providing 
        technical assistance in the use of healthcare practice and 
        healthcare technology assessment methodologies and results; and
            ``(5) working with the National Library of Medicine and the 
        public and private sector to develop an electronic 
        clearinghouse of currently available assessments and those in 
        progress.
    ``(b) Specification of Process.--
            ``(1) In general.--Not later than June 1, 1999, the 
        Director shall develop and publish a description of the methods 
        used by the Agency and its contractors for practice and 
        technology assessment.
            ``(2) Consultations.--In carrying out this subsection, the 
        Director shall cooperate and consult with the Administrator of 
        the Health Care Financing Administration, the Director of the 
        National Institutes of Health, the Commissioner of Food and 
        Drugs, and the heads of any other interested Federal department 
        or agency, professional societies, and other private and public 
        entities.
            ``(3) Methodology.--The methods employed in practice and 
        technology assessments under paragraph (1) shall consider--
                    ``(A) safety, efficacy, and effectiveness;
                    ``(B) legal, social, and ethical implications;
                    ``(C) costs, benefits, and cost-effectiveness;
                    ``(D) comparisons to alternative technologies and 
                practices; and
                    ``(E) requirements of Food and Drug Administration 
                approval to avoid duplication.
    ``(c) Specific Assessments.--
            ``(1) In general.--The Director shall conduct and support 
        specific assessments of healthcare technologies and practices.
            ``(2) Grants and contracts.--The Director may make grants 
        to, or enter into cooperative agreements or contracts with, 
        entities described in paragraph (3) for the establishment of 
        collaborative arrangements for the purpose of conducting 
        assessments of experimental, emerging, existing, or potentially 
        outmoded healthcare technologies, and for related activities.
            ``(3) Eligible entities.--An entity described in this 
        paragraph is an entity that is determined to be appropriate by 
        the Director, including academic medical centers, research 
        institutions, professional organizations, third party payers, 
        other governmental agencies, and consortia of appropriate 
        research entities established for the purpose of conducting 
        technology assessments.

``SEC. 917. COORDINATION OF FEDERAL GOVERNMENT QUALITY IMPROVEMENT 
              EFFORTS.

    ``(a) Requirement.--
            ``(1) In general.--The Secretary, acting through the 
        Director, shall coordinate all research, evaluations, and 
        demonstrations related to health services research and quality 
        measurement and improvement activities undertaken and supported 
        by the Federal Government.
            ``(2) Specific activities.--The Director, in collaboration 
        with the appropriate Federal officials representing all 
        concerned executive agencies and departments, shall develop and 
        manage a process to--
                    ``(A) improve interagency coordination, priority 
                setting, and the use and sharing of research findings 
                and data pertaining to Federal quality improvement 
                programs and health services research;
                    ``(B) strengthen the research information 
                infrastructure, including databases, pertaining to 
                Federal health services research and healthcare quality 
                improvement initiatives;
                    ``(C) set specific goals for participating agencies 
                and departments to further health services research and 
                healthcare quality improvement; and
                    ``(D) strengthen the management of Federal 
                healthcare quality improvement programs.
    ``(b) Study by the Institute of Medicine.--
            ``(1) In general.--To provide the Department of Health and 
        Human Services with independent, expert advice in redesigning 
        its quality oversight functions, and pertinent research 
        programs, the Secretary shall enter into a contract with the 
        Institute of Medicine--
                    ``(A) to describe and evaluate current quality 
                improvement research and monitoring processes through--
                            ``(i) an overview of pertinent health 
                        services research activities and quality 
                        improvement efforts with particular attention 
                        paid to those performed by the peer review 
                        organizations;
                            ``(ii) an analysis of the various 
                        partnership activities that the Department of 
                        Health and Human Services has pursued with 
                        private sector accreditation and other quality 
                        measurement organizations;
                            ``(iii) the exploration of programmatic 
                        areas where partnership activities could be 
                        pursued to improve quality oversight of the 
                        medicare and medicaid programs under titles 
                        XVIII and XIX of the Social Security Act; and
                            ``(iv) an identification of opportunities 
                        for enhancing health system efficiency through 
                        simplification and reduction in redundancy of 
                        public and private sector quality improvement 
                        efforts; and
                    ``(B) to identify options and make recommendations 
                to improve the efficiency and effectiveness of such 
                quality improvement programs and to optimize public/
                private sector accreditation bodies through--
                            ``(i) the improved coordination of 
                        activities across the medicare and medicaid 
                        programs under titles XVIII and XIX of the 
                        Social Security Act and various health services 
                        research programs;
                            ``(ii) greater consistency and 
                        standardization of oversight activities across 
                        traditional fee-for-service and managed care 
                        components of these programs;
                            ``(iii) the strengthening of patient choice 
                        and participation by incorporating state-of-
                        the-art quality monitoring tools and making 
information on quality available; and
                            ``(iv) the enhancement of the most 
                        effective programs, consolidation as 
                        appropriate, and elimination of duplicative 
                        activities within various federal agencies.
            ``(2) Requirements.--
                    ``(A) In general.--The Secretary shall enter into a 
                contract with the Institute of Medicine for the 
                preparation--
                            ``(i) not later than 12 months after the 
                        date of enactment of this title, of a report 
                        providing an overview of the quality 
                        improvement programs of the Department of 
                        Health and Human Services for the medicare, 
                        medicaid, and CHIP programs under titles XVIII, 
                        XIX, and XXI of the Social Security Act; and
                            ``(ii) not later than 24 months after the 
                        date of enactment of this title, of a final 
                        report containing recommendations for a 
                        comprehensive system and public-private 
                        partnerships for healthcare quality 
                        improvement.
                    ``(B) Reports.--The Secretary shall submit the 
                reports described in subparagraph (A) to the Committee 
                on Finance and the Committee on Labor and Human 
                Resources of the Senate and the Committee on Ways and 
                Means and the Committee on Commerce of the House of 
                Representatives.

          ``PART C--FOUNDATION FOR HEALTHCARE QUALITY RESEARCH

``SEC. 921. FOUNDATION FOR HEALTHCARE QUALITY RESEARCH.

    ``(a) In General.--The Secretary shall, acting through the Director 
of the Agency for Healthcare Quality Research, establish a nonprofit 
corporation to be known as the Foundation for Healthcare Research 
(hereafter in this section referred to as the `Foundation'). The 
Foundation shall not be an agency or instrumentality of the United 
States Government.
    ``(b) Purpose of Foundation.--The purpose of the Foundation shall 
be to--
            ``(1) support the Agency for Healthcare Quality Research in 
        its mission;
            ``(2) foster public-private partnerships to support the 
        programs and activities of the Agency;
            ``(3) advance collaboration with healthcare researchers 
        from universities, industry, and nonprofit organizations; and
            ``(4) develop linkages with users of healthcare and quality 
        research, including patients, consumers, practitioners and 
        other healthcare providers, health plans and insurers, large 
        private or public sector purchasers of healthcare, healthcare 
        policy makers, and healthcare educators.
    ``(c) Certain Activities of Foundation.--In carrying out subsection 
(b), the Foundation may solicit and accept gifts, grants, and other 
donations, establish accounts, and invest and expend funds in support 
of a broad range of research, training, dissemination, and other 
activities with respect to the purpose described in such subsection. In 
addition, the Foundation is authorized to support the following:
            ``(1) A program to provide and administer endowed positions 
        that are associated with the research program of the Agency for 
        Healthcare Quality Research. Such endowments may be expended 
        for the compensation of individuals holding the positions, for 
        staff, equipment, quarters, travel, and other expenditures that 
        are appropriate in supporting the endowed positions.
            ``(2) A program to provide and administer fellowships and 
        grants to research personnel in order to work and study in 
        association with the Agency for Healthcare Quality Research. 
        Such fellowships and grants may include stipends, travel, 
        health insurance benefits, and other appropriate expenses. The 
        recipients of fellowships shall be selected by the donors and 
        the Foundation upon the recommendation of the Agency for 
        Healthcare Quality Research, and shall be subject to the 
        agreement of the Director of the Agency for Healthcare Quality 
        Research and the Executive Director of the Foundation.
    ``(d) General Structure of Foundation; Nonprofit Status.--
            ``(1) Board of directors.--The Foundation shall have a 
        Board of Directors (in this section referred to as the Board), 
        which shall be established and conducted in accordance with 
        subsection (e). The Board shall establish the general policies 
        of the Foundation for carrying out subsection (b), including 
        the establishment of the bylaws of the Foundation.
            ``(2) Executive director.--The Foundation shall have an 
        executive director (in this section referred to as the 
        `Director'), who shall be appointed by the Board, who shall 
serve at the pleasure of the Board, and for whom the Board shall 
establish the rate of compensation. Subject to compliance with the 
policies and bylaws established by the Board pursuant to paragraph (1), 
the Director shall be responsible for the daily operations of the 
Foundation in carrying out subsection (b).
            ``(3) Nonprofit status.--In carrying out subsection (b), 
        the Board shall establish such policies and bylaws under 
        paragraph (1), and the Director shall carry out such activities 
        under paragraph (2), as may be necessary to ensure that the 
        Foundation maintains status as an organization that--
                    ``(A) is described in subsection (c)(3) of section 
                501 of the Internal Revenue Code of 1986; and
                    ``(B) is, under subsection (a) of such section, 
                exempt from taxation.
    ``(e) Board of Directors.--
            ``(1) Certain bylaws.--
                    ``(A) In general.--The Board shall ensure that 
                bylaws established under subsection (a)(1) include 
                bylaws for the following:
                            ``(i) Policies for the selection of the 
                        officers, employees, agents, and contractors of 
                        the Foundation.
                            ``(ii) Policies, including ethical 
                        standards, for the acceptance and disposition 
                        of donations to the Foundation and for the 
                        disposition of the assets of the Foundation.
                            ``(iii) Policies for the conduct of the 
                        general operations of the Foundation.
                            ``(iv) Policies for writing, editing, 
                        printing, and publishing of books and other 
                        materials, and the acquisition of patents and 
                        licenses for devices and procedures developed 
                        by the Foundation.
                    ``(B) Requirements.--The Board shall ensure that 
                the bylaws established under subsection (d)(1) (and 
                activities carried out under such bylaws) do not--
                            ``(i) reflect unfavorably upon the ability 
                        of the Foundation, or the Agency for Healthcare 
                        Quality Research, to carry out its 
                        responsibilities or official duties in a fair 
                        and objective manner; or
                            ``(ii) compromise, or appear to compromise, 
                        the integrity of any governmental program or 
                        any officer or employee involved in such 
                        program.
            ``(2) Composition.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Board shall be composed of 7 individuals, appointed in 
                accordance with paragraph (4), who collectively possess 
                education or experience appropriate for representing 
                the constituencies described in subsection (b). Each 
                such individual shall be a voting member of the Board.
                    ``(B) Additional members.--The Board may, through 
                amendments to the bylaws of the Foundation, provide 
                that the number of members of the Board shall be a 
                greater number than the number specified in 
                subparagraph (A).
            ``(3) Chair.--The Board shall, from among the members of 
        the Board, designate an individual to serve as the chair of the 
        Board (in this subsection referred to as the `Chair').
            ``(4) Appointments, vacancies, and terms.--The following 
        shall apply to the Board:
                    ``(A) Any vacancy in the membership of the Board 
                shall be filled by appointment by the Board, after 
                consideration of suggestions made by the Chair and the 
                Director regarding the appointments. Any such vacancy 
                shall be filled not later than the expiration of the 
                180-day period beginning on the date on which the 
                vacancy occurs.
                    ``(B) The term of office of each member of the 
                Board appointed under subparagraph (A) shall be 5 
                years. A member of the Board may continue to serve 
                after the expiration of the term of the member until 
                the expiration of the 180-day period beginning on the 
                date on which the term of the member expires.
                    ``(C) A vacancy in the membership of the Board 
                shall not affect the power of the Board to carry out 
                the duties of the Board. If a member of the Board does 
                not serve the full term applicable under subparagraph 
                (B), the individual appointed to fill the resulting 
                vacancy shall be appointed for the remainder of the 
                term of the predecessor of the individual.
            ``(5) Compensation.--Members of the Board may not receive 
        compensation for service on the Board. The members may be 
        reimbursed for travel, subsistence, and other necessary 
        expenses incurred in carrying out the duties of the Board.
    ``(f) Certain Responsibilities of Executive Director.--In carrying 
out subsection (d)(2), the Director shall carry out the following 
functions:
            ``(1) Hire, promote, compensate, and discharge officers and 
        employees of the Foundation, and define the duties of the 
        officers and employees.
            ``(2) Accept and administer donations to the Foundation, 
        and administer the assets of the Foundation.
            ``(3) Establish a process for the selection of candidates 
        for holding endowed positions under subsection (c).
            ``(4) Enter into such financial agreements as are 
        appropriate in carrying out the activities of the Foundation.
            ``(5) Take such action as may be necessary to acquire 
        patents and licenses for devices and procedures developed by 
        the Foundation and the employees of the Foundation.
            ``(6) Adopt, alter, and use a corporate seal, which shall 
        be judicially noticed.
            ``(7) Commence and respond to judicial proceedings in the 
        name of the Foundation.
            ``(8) Other functions that are appropriate in the 
        determination of the Director.
    ``(g) General Provisions.--
            ``(1) Authority for accepting funds.--The Director of the 
        Agency for Healthcare Quality Research may accept and utilize, 
        on behalf of the Federal Government, any gift, donation, 
        bequest, or devise of real or personal property from the 
        Foundation for the purpose of aiding or facilitating the work 
        of such Agency. Funds may be accepted and utilized by such 
        Director under the preceding sentence without regard to whether 
        the funds are designated as general-purpose funds or special-
        purpose funds. Any funds transferred under this paragraph shall 
        be subject to all Federal limitations relating to federally 
        funded research.
            ``(2) Authority for acceptance of voluntary services.--
                    ``(A) In general.--The Director of the Agency for 
                Healthcare Quality Research may accept, on behalf of 
                the Federal Government, any voluntary services provided 
                to such Agency by the Foundation for the purpose of 
                aiding or facilitating the work of such Agency. In the 
                case of an individual, such Director may accept the 
                services provided under the preceding sentence by the 
                individual for not more than 2 years.
                    ``(B) Limitation.--The limitation established in 
                subparagraph (A) regarding the period of time in which 
                services may be accepted applies to each individual who 
                is not an employee of the Federal Government and who 
                serves in association with the Agency for Healthcare 
                Quality Research pursuant to financial support from the 
                Foundation.
            ``(3) Administrative control.--No officer, employee, or 
        member of the Board of the Foundation may exercise any 
        administrative or managerial control over any Federal employee.
            ``(4) Applicability of certain standards to non-federal 
        employees.--In the case of any individual who is not an 
        employee of the Federal Government and who serves in 
        association with the Agency for Healthcare Quality Research 
        pursuant to financial support from the Foundation, the 
        Foundation shall negotiate a memorandum of understanding with 
        the individual and the Director of the Agency for Healthcare 
        Quality Research specifying that the individual--
                    ``(A) shall be subject to the ethical and 
                procedural standards regulating Federal employment, 
                scientific investigation, and research findings 
                (including publications and patents) that are required 
                of individuals employed by the Agency for Healthcare 
                Quality Research, including standards under this Act, 
                the Ethics in Government Act, and the Technology 
                Transfer Act; and
                    ``(B) shall be subject to such ethical and 
                procedural standards under chapter 11 of title 18, 
                United States Code (relating to conflicts of interest), 
                as the Director of such Agency determines is 
                appropriate, except such memorandum may not provide 
                that the individual shall be subject to the standards 
                of section 209 of such chapter.
            ``(5) Financial conflicts of interest.--Any individual who 
        is an officer, employee, or member of the Board of the 
        Foundation may not directly or indirectly participate in the 
        consideration or determination by the Foundation of any 
        question affecting--
                    ``(A) any direct or indirect financial interest of 
                the individual; or
                    ``(B) any direct or indirect financial interest of 
                any business organization or other entity of which the 
                individual is an officer or employee or in which the 
                individual has a direct or indirect financial interest.
            ``(6) Audits; availability of records.--The Foundation 
        shall--
                    ``(A) provide for biennial audits of the financial 
                condition of the Foundation; and
                    ``(B) make such audits, and all other records, 
                documents, and other papers of the Foundation, 
                available to the Secretary and the Comptroller General 
                of the United States for examination or audit.
            ``(7) Reports.--
                    ``(A) In general.--Not later than February 1 of 
                each fiscal year, the Foundation shall publish a report 
                describing the activities of the Foundation during the 
                preceding fiscal year. Each such report shall include 
                for the fiscal year involved a comprehensive statement 
                of the operations, activities, financial condition, and 
                accomplishments of the Foundation.
                    ``(B) Financial requirement.--With respect to the 
                financial condition of the Foundation, each report 
                under subparagraph (A) shall include the source, and a 
                description of, all gifts to the Foundation of real or 
                personal property, and the source and amount of all 
                gifts to the Foundation of money. Each such report 
                shall include a specification of any restrictions on 
                the purposes for which gifts to the Foundation may be 
                used.
                    ``(C) Public inspection.--The Foundation shall make 
                copies of each report submitted under subparagraph (A) 
                available for public inspection, and shall upon request 
                provide a copy of the report to any individual for a 
                charge not exceeding the cost of providing the copy.
            ``(8) Liaison from the agency for healthcare quality 
        research.--The Director of the Agency for Healthcare Quality 
        Research shall serve as the liaison representative of such 
        Agency and the Foundation.
    ``(h) Federal Funding.--
            ``(1) Authority for financial support.--
                    ``(A) In general.--The Secretary, acting through 
                the Director of the Agency for Healthcare Quality 
                Research, shall--
                            ``(i) for fiscal year 1999, support the 
                        work of the Committee, established pursuant to 
                        subsection (i); and
                            ``(ii) for fiscal year 2000 and each 
                        subsequent fiscal year, make a grant to the 
                        Foundation.
                    ``(B) Limitations.--Financial support under 
                subparagraph (A) may be expended--
                            ``(i) in the case of the Committee, only 
                        for the purpose of carrying out the duties 
                        established in subsection (i); and
                            ``(ii) in the case of the Foundation, only 
                        for the purpose of the administrative expenses 
                        of the Foundation.
                    ``(C) Remaining funds.--For the purposes described 
                in subparagraph (B), any portion of the financial 
                support provided to the Committee under subparagraph 
                (A)(i) for fiscal year 1999 that remains unobligated 
                after the Committee completes the duties established in 
                subsection (i) shall be available to the Foundation.
            ``(2) Funds.--
                    ``(A) Authorization of appropriations.--For the 
                purpose of providing financial support under paragraph 
                (1), there is authorized to be appropriated for the 
                Foundation $500,000 for each fiscal year.
                    ``(B) Grants.--For the purpose of grants under 
                paragraph (1), the Secretary may for each fiscal year 
                make available not more than $500,000 from the amounts 
                appropriated for the fiscal year for the programs of 
                the Department of Health and Human Services. Such 
                amounts may be made available without regard to whether 
                amounts have been appropriated under subparagraph (A).
            ``(3) Certain restriction.--If the Foundation receives 
        Federal funds for the purpose of serving as a fiscal 
        intermediary between Federal agencies, the Foundation may not 
        receive such funds for the indirect costs of carrying out such 
        purpose in an amount exceeding 10 percent of the direct costs 
        of carrying out such purpose. The preceding sentence may not be 
        construed as authorizing the expenditure of any grant under 
        paragraph (1) for such purpose.
    ``(i) Establishment of Committee.--
            ``(1) In general.--The Secretary shall establish in 
        accordance with this subsection a committee (referred to in 
this subsection as the `Committee') to carry out the functions 
described in paragraph (2).
            ``(2) Functions.--The functions referred to in paragraph 
        (1) for the Committee are as follows:
                    ``(A) To carry out such activities as may be 
                necessary to incorporate the Foundation under the laws 
                of the State involved, including serving as 
                incorporators for the Foundation. Such activities shall 
                include ensuring that the articles of incorporation for 
                the Foundation require that the Foundation be 
                established and operated in accordance with the 
                applicable provisions of this part (or any successor to 
                this part), including such provisions as may be in 
                effect pursuant to amendments enacted after the date of 
                the enactment of the Healthcare Quality Research Act of 
                1998.
                    ``(B) To ensure that the Foundation qualifies for 
                and maintains the status described in subsection (d)(3) 
                (regarding taxation).
                    ``(C) To establish the general policies and initial 
                bylaws of the Foundation, which bylaws shall include 
                the bylaws described in subsections (d)(3) and (e)(1).
                    ``(D) To provide for the initial operation of the 
                Foundation, including providing for quarters, 
                equipment, and staff.
                    ``(E) To appoint the initial members of the Board 
                in accordance with the requirements established in 
                subsection (e)(2)(A) for the composition of the Board 
                and establish their respective terms, and other such 
                qualifications as the Committee may determine to be 
                appropriate.
            ``(3) Completion of functions of committee; initial meeting 
        of board.--
                    ``(A) In general.--The Committee shall complete the 
                functions required in paragraph (1) not later than 1 
                year following the appointment of the last member of 
                the Committee. The Committee shall terminate upon the 
                expiration of the 30-day period beginning on the date 
                on which the Secretary determines that the functions 
                have been completed.
                    ``(B) Initial meeting.--The initial meeting of the 
                Board shall be held not later than 90 days after the 
                Committee has completed its functions.
            ``(4) Composition.--The Committee shall be composed of 7 
        members, each of whom shall be a voting member. Of the members 
        of the Committee--
                    ``(A) not fewer than 2 members shall have broad, 
                general experience in healthcare; and
                    ``(B) not fewer than 2 members shall have broad, 
                general experience in the creation of a nonprofit 
                private organization, one of whom shall have expertise 
                in the legal structuring of nonprofit organizations 
                (without regard to whether the individuals have 
                experience in healthcare).
            ``(5) Chair.--The Committee shall, from among the members 
        of the Committee, designate an individual to serve as the chair 
        of the Committee.
            ``(6) Terms; vacancies.--The term of members of the 
        Committee shall be for the duration of the Committee. A vacancy 
        in the membership of the Committee shall not affect the power 
        of the Committee to carry out the duties of the Committee. If a 
        member of the Committee does not serve the full term, the 
        individual appointed to fill the resulting vacancy shall be 
        appointed for the remainder of the term of the predecessor of 
        the individual.
            ``(7) Compensation.--Members of the Committee may not 
        receive compensation for service on the Committee. Members of 
        the Committee may be reimbursed for travel, subsistence, and 
        other necessary expenses incurred in carrying out the duties of 
        the Committee.
            ``(8) Committee support.--The Director of the Agency for 
        Healthcare Quality Research may, from amounts available to the 
        Director for the general administration of such Agency, provide 
        staff and financial support to assist the Committee with 
        carrying out the functions described in paragraph (2). In 
        providing such staff and support, the Director may both detail 
        employees and contract for assistance.

                      ``PART D--GENERAL PROVISIONS

``SEC. 931. ADVISORY COUNCIL FOR HEALTHCARE QUALITY RESEARCH.

    ``(a) Establishment.--There is established an advisory council to 
be known as the Advisory Council for Healthcare Quality Research.
    ``(b) Duties.--
            ``(1) In general.--The Advisory Council shall advise the 
        Secretary and the Director with respect to activities to carry 
out the purpose of the Agency under section 901(b).
            ``(2) Certain recommendations.--Activities of the Advisory 
        Council under paragraph (1) shall include making 
        recommendations to the Director regarding--
                    ``(A) priorities regarding healthcare research, 
                especially studies related to quality, outcomes, cost 
                and the utilization of, and access to, healthcare 
                services;
                    ``(B) the field of healthcare research and related 
                disciplines, especially issues related to training 
                needs, and dissemination of information on quality; and
                    ``(C) the appropriate role of the Agency in each of 
                these areas in light of private sector activity and 
                identification of opportunities for public-private 
                sector partnerships.
    ``(c) Membership.--
            ``(1) In general.--The Advisory Council shall, in 
        accordance with this subsection, be composed of appointed 
        members and ex officio members. All members of the Advisory 
        Council shall be voting members other than the individuals 
        designated under paragraph (3)(B) who shall be ex officio 
        members of the Advisory Council.
            ``(2) Appointed members.--The Secretary shall appoint to 
        the Advisory Council 21 appropriately qualified individuals. At 
        least 17 members of the Advisory Council shall be 
        representatives of the public who are not officers or employees 
        of the United States. The Secretary shall ensure that the 
        appointed members of the Council, as a group, are 
        representative of professions and entities concerned with, or 
        affected by, activities under this title and under section 1142 
        of the Social Security Act. Of such members--
                    ``(A) 4 shall be individuals distinguished in the 
                conduct of research, demonstration projects, and 
                evaluations with respect to healthcare;
                    ``(B) 4 shall be individuals distinguished in the 
                practice of medicine of which at least 1 shall be a 
                primary care practitioner;
                    ``(C) 3 shall be individuals distinguished in the 
                health professions;
                    ``(D) 4 shall be individuals either representing 
                the private healthcare sector, including health plans, 
                providers, and purchasers or individuals distinguished 
                as administrators of healthcare delivery systems;
                    ``(E) 4 shall be individuals distinguished in the 
                fields of healthcare quality improvement, economics, 
                information systems, law, ethics, business, or public 
                policy; and
                    ``(F) 2 shall be individuals representing the 
                interests of patients and consumers of healthcare.
            ``(3) Ex officio members.--The Secretary shall designate as 
        ex officio members of the Advisory Council--
                    ``(A) the Director of the National Institutes of 
                Health, the Director of the Centers for Disease Control 
                and Prevention, the Administrator of the Health Care 
                Financing Administration, the Assistant Secretary of 
                Defense (Health Affairs), and the Chief Medical Officer 
                of the Department of Veterans Affairs; and
                    ``(B) such other Federal officials as the Secretary 
                may consider appropriate.
    ``(d) Terms.--Members of the Advisory Council appointed under 
subsection (c)(2) shall serve for a term of 3 years. A member of the 
Council appointed under such subsection may continue to serve after the 
expiration of the term of the members until a successor is appointed.
    ``(e) Vacancies.--If a member of the Advisory Council appointed 
under subsection (c)(2) does not serve the full term applicable under 
subsection (d), the individual appointed to fill the resulting vacancy 
shall be appointed for the remainder of the term of the predecessor of 
the individual.
    ``(f) Chair.--The Director shall, from among the members of the 
Advisory Council appointed under subsection (c)(2), designate an 
individual to serve as the chair of the Advisory Council.
    ``(g) Meetings.--The Advisory Council shall meet not less than once 
during each discrete 4-month period and shall otherwise meet at the 
call of the Director or the chair.
    ``(h) Compensation and Reimbursement of Expenses.--
            ``(1) Appointed members.--Members of the Advisory Council 
        appointed under subsection (c)(2) shall receive compensation 
        for each day (including travel time) engaged in carrying out 
        the duties of the Advisory Council unless declined by the 
        member. Such compensation may not be in an amount in excess of 
        the maximum rate of basic pay payable for GS-18 of the General 
        Schedule.
            ``(2) Ex officio members.--Officials designated under 
        subsection (c)(3) as ex officio members of the Advisory Council 
        may not receive compensation for service on the Advisory 
        Council in addition to the compensation otherwise received for 
        duties carried out as officers of the United States.
    ``(i) Staff.--The Director shall provide to the Advisory Council 
such staff, information, and other assistance as may be necessary to 
carry out the duties of the Council.

``SEC. 932. PEER REVIEW WITH RESPECT TO GRANTS AND CONTRACTS.

    ``(a) Requirement of Review.--
            ``(1) In general.--Appropriate technical and scientific 
        peer review shall be conducted with respect to each application 
        for a grant, cooperative agreement, or contract under this 
        title.
            ``(2) Reports to director.--Each peer review group to which 
        an application is submitted pursuant to paragraph (1) shall 
        report its finding and recommendations respecting the 
        application to the Director in such form and in such manner as 
        the Director shall require.
    ``(b) Approval as Precondition of Awards.--The Director may not 
approve an application described in subsection (a)(1) unless the 
application is recommended for approval by a peer review group 
established under subsection (c).
    ``(c) Establishment of Peer Review Groups.--
            ``(1) In general.--The Director shall establish such 
        technical and scientific peer review groups as may be necessary 
        to carry out this section. Such groups shall be established 
        without regard to the provisions of title 5, United States 
        Code, that govern appointments in the competitive service, and 
        without regard to the provisions of chapter 51, and subchapter 
        III of chapter 53, of such title that relate to classification 
        and pay rates under the General Schedule.
            ``(2) Membership.--The members of any peer review group 
        established under this section shall be appointed from among 
        individuals who by virtue of their training or experience are 
        eminently qualified to carry out the duties of such peer review 
        group. Officers and employees of the United States may not 
        constitute more than 25 percent of the membership of any such 
        group. Such officers and employees may not receive compensation 
        for service on such groups in addition to the compensation 
        otherwise received for duties carried out as such officers and 
        employees.
            ``(3) Duration.--Notwithstanding section 14(a) of the 
        Federal Advisory Committee Act, peer review groups established 
        under this section shall continue in existence until otherwise 
        provided by law.
            ``(4) Qualifications.--Members of any peer-review group 
        shall, at a minimum, meet the following requirements:
                    ``(A) Such members shall agree in writing to treat 
                information received, records, reports, and 
                recommendations as confidential information.
                    ``(B) Such members shall agree in writing to recuse 
                themselves from participation in the peer-review of 
                specific applications which present a potential 
                personal conflict of interest or appearance of such 
                conflict, including employment in the applicant 
                organization, stock ownership, or any financial or 
                other arrangement that might introduce bias in the 
                process of peer-review.
    ``(d) Authority for Procedural Adjustments in Certain Cases.--In 
the case of applications described in subsection (a)(1) for financial 
assistance whose direct costs will not exceed $100,000, the Director 
may make appropriate adjustments in the procedures otherwise 
established by the Director for the conduct of peer review under this 
section. Such adjustments may be made for the purpose of encouraging 
the entry of individuals into the field of research, for the purpose of 
encouraging clinical practice-oriented research, and for such other 
purposes as the Director may determine to be appropriate.
    ``(e) Regulations.--The Secretary shall issue regulations for the 
conduct of peer review under this section.

``SEC. 933. CERTAIN PROVISIONS WITH RESPECT TO DEVELOPMENT, COLLECTION, 
              AND DISSEMINATION OF DATA.

    ``(a) Standards With Respect to Utility of Data.--
            ``(1) In general.--With respect to data developed or 
        collected by any entity for the purpose described in section 
        901(b), the Director shall, in order to assure that utility, 
        accuracy, and sufficiency of such data for all interested 
        entities, establish recommendations for methods of developing 
        and collecting such data. Such recommendations shall include 
        recommendations for the development and collection of data on 
        the outcomes of healthcare services and procedures. Such 
        recommendations shall recognize the differences between types 
        of healthcare plans, delivery systems, healthcare providers, 
        and provider arrangements.
            ``(2) Relationship with medicare program.--In any case 
        where recommendations under paragraph (1) may affect the 
        administration of the program under title XVIII of the Social 
        Security Act, they shall be in the form of recommendations to 
        the Secretary for such program.
    ``(b) Statistics.--The Director shall--
            ``(1) take such action as may be necessary to assure that 
        statistics developed under this title are of high quality, 
        timely, and comprehensive, as well as specific, standardized, 
        and adequately analyzed and indexed; and
            ``(2) publish, make available, and disseminate such 
        statistics on as wide a basis as is practicable.
    ``(c) Authority Regarding Certain Requests.--Upon request of a 
public or private entity, the Director may undertake research or 
analyses otherwise authorized by this title pursuant to arrangements 
under which such entity will pay the cost of the services provided. 
Amounts received by the Director under such arrangements shall be 
available to the Director for obligation until expended.

``SEC. 934. DISSEMINATION OF INFORMATION.

    ``(a) In General.--The Administrator shall--
            ``(1) without regard to section 501 of title 44, United 
        States Code, promptly publish, make available, and otherwise 
        disseminate, in a form understandable and on as broad a basis 
        as practicable so as to maximize its use, the results of 
        research, demonstration projects, and evaluations conducted or 
        supported under this title;
            ``(2) promptly make available to the public data developed 
        in such research, demonstration projects, and evaluations;
            ``(3) building upon, but without duplicating, information 
        services provided by the National Library of Medicine and 
        considering applicable interagency agreements, provide 
        indexing, abstracting, translating, publishing, and other 
        services leading to a more effective and timely dissemination 
        of information on research, demonstration projects, and 
        evaluations with respect to healthcare to public and private 
        entities and individuals engaged in the improvement of 
        healthcare delivery and the general public, and undertake 
        programs to develop new or improved methods for making such 
        information available; and
            ``(4) as appropriate, provide technical assistance to State 
        and local government and health agencies and conduct liaison 
        activities to such agencies to foster dissemination.
    ``(b) Prohibition Against Restrictions.--Except as provided in 
subsection (c), the Director may not restrict the publication or 
dissemination of data from, or the results of, projects conducted or 
supported under this title.
    ``(c) Limitation on Use of Certain Information.--No information, if 
an establishment or person supplying the information or described in it 
is identifiable, obtained in the course of activities undertaken or 
supported under this title may be used for any purpose other than the 
purpose for which it was supplied unless such establishment or person 
has consented (as determined under regulations of the Director) to its 
use for such other purpose. Such information may not be published or 
released in other form if the person who supplied the information or 
who is described in it is identifiable unless such person has consented 
(as determined regulations of the Director) to its publication or 
release in other form.
    ``(d) Penalty.--Any person who violates subsection (c) shall be 
subject to a civil monetary penalty of not more than $10,000 for each 
such violation involved. Such penalty shall be imposed and collected in 
the same manner as civil money penalties under subsection (a) of 
section 1128A of the Social Security Act are imposed and collected 
under that section.

``SEC. 935. ADDITIONAL PROVISIONS WITH RESPECT TO GRANTS AND CONTRACTS.

    ``(a) Priorities.--In establishing priorities to carry out this 
title, subject to the availability of funds, the Director shall 
consider--
            ``(1) the needs and priorities of healthcare programs that 
        are operated by or supported, in whole or in part, by Federal 
        agencies;
            ``(2) the healthcare needs of low-income groups, minority 
        groups, children, the elderly, and persons with special 
        healthcare needs and issues related to the delivery of 
        healthcare services in rural areas (including frontier areas).
    ``(b) Financial Conflicts of Interest.--With respect to projects 
for which awards of grants, cooperative agreements, or contracts are 
authorized to be made under this title, the Director shall by 
regulation define--
            ``(1) the specific circumstances that constitute financial 
        interests in such projects that will, or may be reasonably 
        expected to, create a bias in favor of obtaining results in the 
        projects that are consistent with such interests; and
            ``(2) the actions that will be taken by the Director in 
        response to any such interests identified by the Director.
    ``(c) Requirement of Application.--The Director may not, with 
respect to any program under this title authorizing the provision of 
grants, cooperative agreements, or contracts, provide any such 
financial assistance unless an application for the assistance is 
submitted to the Secretary and the application is in such form, is made 
in such manner, and contains such agreements, assurances, and 
information as the Director determines to be necessary to carry out the 
program in involved.
    ``(d) Provision of Supplies and Services in Lieu of Funds.--
            ``(1) In general.--Upon the request of an entity receiving 
        a grant, cooperative agreement, or contract under this title, 
        the Secretary may, subject to paragraph (2), provide supplies, 
        equipment, and services for the purpose of aiding the entity in 
        carrying out the project involved and, for such purpose, may 
        detail to the entity any officer or employee of the Department 
        of Health and Human Services.
            ``(2) Corresponding reduction in funds.--With respect to a 
        request described in paragraph (1), the Secretary shall reduce 
        the amount of the financial assistance involved by an amount 
        equal to the costs of detailing personnel and the fair market 
        value of any supplies, equipment, or services provided by the 
        Director. The Secretary shall, for the payment of expenses 
        incurred in complying with such request, expend the amounts 
        withheld.
    ``(e) Applicability of Certain Provisions With Respect to 
Contracts.--Contracts may be entered into under this part without 
regard to sections 3648 and 3709 of the Revised Statutes (31 U.S.C. 
529; 41 U.S.C. 5).

``SEC. 936. CERTAIN ADMINISTRATIVE AUTHORITIES.

    ``(a) Deputy Director and Other Officers and Employees.--
            ``(1) Deputy director.--The Director may appoint a deputy 
        director for the Agency.
            ``(2) Other officers and employees.--The Director may 
        appoint and fix the compensation of such officers and employees 
        as may be necessary to carry out this title. Except as 
        otherwise provided by law, such officers and employees shall be 
        appointed in accordance with the civil service laws and their 
        compensation fixed in accordance with title 5, United States 
        Code.
    ``(b) Facilities.--The Secretary, in carrying out this title--
            ``(1) may acquire, without regard to the Act of March 3, 
        1877 (40 U.S.C. 34), by lease or otherwise through the Director 
        of General Services, buildings or portions of buildings in the 
        District of Columbia or communities located adjacent to the 
        District of Columbia for use for a period not to exceed 10 
        years; and
            ``(2) may acquire, construct, improve, repair, operate, and 
        maintain laboratory, research, and other necessary facilities 
        and equipment, and such other real or personal property 
        (including patents) as the Secretary deems necessary.
    ``(c) Provision of Financial Assistance.--The Director, in carrying 
out this title, may make grants to public and nonprofit entities and 
individuals, and may enter into cooperative agreements or contracts 
with public and private entities and individuals.
    ``(d) Utilization of Certain Personnel and Resources.--
            ``(1) Department of health and human services.--The 
        Director, in carrying out this title, may utilize personnel and 
        equipment, facilities, and other physical resources of the 
        Department of Health and Human Services, permit appropriate (as 
        determined by the Secretary) entities and individuals to 
        utilize the physical resources of such Department, and provide 
        technical assistance and advice.
            ``(2) Other agencies.--The Director, in carrying out this 
        title, may use, with their consent, the services, equipment, 
        personnel, information, and facilities of other Federal, State, 
        or local public agencies, or of any foreign government, with or 
        without reimbursement of such agencies.
    ``(e) Consultants.--The Secretary, in carrying out this title, may 
secure, from time to time and for such periods as the Director deems 
advisable but in accordance with section 3109 of title 5, United States 
Code, the assistance and advice of consultants from the United States 
or abroad.
    ``(f) Experts.--
            ``(1) In general.--The Secretary may, in carrying out this 
        title, obtain the services of not more than 50 experts or 
        consultants who have appropriate scientific or professional 
        qualifications. Such experts or consultants shall be obtained 
        in accordance with section 3109 of title 5, United States Code, 
        except that the limitation in such section on the duration of 
        service shall not apply.
            ``(2) Travel expenses.--
                    ``(A) In general.--Experts and consultants whose 
                services are obtained under paragraph (1) shall be paid 
                or reimbursed for their expenses associated with 
                traveling to and from their assignment location in 
                accordance with sections 5724, 5724a(a), 5724a(c), and 
                5726(C) of title 5, United States Code.
                    ``(B) Limitation.--Expenses specified in 
                subparagraph (A) may not be allowed in connection with 
                the assignment of an expert or consultant whose 
                services are obtained under paragraph (1) unless and 
                until the expert agrees in writing to complete the 
                entire period of assignment, or 1 year, whichever is 
                shorter, unless separated or reassigned for reasons 
                that are beyond the control of the expert or consultant 
                and that are acceptable to the Secretary. If the expert 
                or consultant violates the agreement, the money spent 
                by the United States for the expenses specified in 
                subparagraph (A) is recoverable from the expert or 
                consultant as a debt of the United States. The 
                Secretary may waive in whole or in part a right of 
recovery under this subparagraph.
    ``(g) Voluntary and Uncompensated Services.--The Director, in 
carrying out this title, may accept voluntary and uncompensated 
services.

``SEC. 937. FUNDING.

    ``(a) Intent.--To ensure that the United States's investment in 
biomedical research is rapidly translated into improvements in the 
quality of patient care, there must be a corresponding investment in 
research on the most effective clinical and organizational strategies 
for use of these findings in daily practice. The authorization levels 
in subsections (b) and (c) provide for a proportionate increase in 
healthcare research as the United State's investment in biomedical 
research increases.
    ``(b) Authorization of Appropriations.--For the purpose of carrying 
out this title, there are authorized to be appropriated $180,000,000 
for fiscal year 1999, and such sums as may be necessary for each of the 
fiscal years 2000 through 2003.
    ``(c) Evaluations.--In addition to amounts available pursuant to 
subsection (b) for carrying out this title, there shall be made 
available for such purpose, from the amounts made available pursuant to 
section 241 (relating to evaluations), an amount equal to 40 percent of 
the maximum amount authorized in such section 241 to be made available 
for a fiscal year.
    ``(d) Centers for Education and Research on Therapeutics.--For the 
purpose of carrying out the demonstration program regarding centers for 
education and research on therapeutics under section 912(b), there are 
authorized to be appropriated $2,000,000 for fiscal year 1998, and 
$3,000,000 for fiscal year 1999, and such sums as may be necessary for 
each of the fiscal years 2000 through 2003.

``SEC. 938. DEFINITIONS.

    ``In this title:
            ``(1) Advisory council.--The term `Advisory Council' means 
        the Advisory Council on Healthcare Quality Research established 
        under section 931.
            ``(2) Agency.--The term `Agency' means the Agency for 
        Healthcare Quality.
            ``(3) Director.--The term `Director' means the Director for 
        the Agency for Healthcare Quality Research.''.

SEC. 403. REFERENCES.

    Effective upon the date of enactment of this Act, any reference in 
law to the ``Agency for Health Care Policy and Research'' shall be 
deemed to be a reference to the ``Agency for Healthcare Quality 
Research''.

SEC. 404. STUDY.

    (a) Study.--Not later than 30 days after the date of enactment of 
any Act providing for a qualifying health care benefit (as defined in 
subsection (b), the Secretary of Health and Human Services, in 
consultation with the Agency for Healthcare Quality Research, the 
National Institutes of Health, and the Institute of Medicine, shall 
conduct a study concerning such benefit that scientifically evaluates--
            (1) the safety and efficacy of the benefit, particularly 
        the effect of the benefit on outcomes of care;
            (2) the cost, benefits and value of such benefit;
            (3) the benefit in comparison to alternative approaches in 
        improving care; and
            (4) the overall impact that such benefit will have on 
        health care as measured through research.
    (b) Qualifying Health Care Benefit.--In this section, the term 
``qualifying health care benefit'' means a health care benefit that--
            (1) is disease- or health condition-specific;
            (2) requires the provision of or coverage for health care 
        items or services;
            (3) applies to group health plan, individual health plans, 
        or health insurance issuers under part 7 of subtitle B of title 
        I of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1181 et seq.) or under title XXVII of the Public Health 
        Service Act (42 U.S.C. 300gg et seq.); and
            (4) was provided under an Act (or amendment) enacted on or 
        after January 1, 1998.
    (c) Reports.--Not later than 3 years after the date of enactment of 
any Act described in subsection (a), the Secretary of Health and Human 
Services shall prepare and submit to the appropriate committees of 
Congress a report based on the study conducted under such subsection 
with respect to the qualifying health care benefit involved.

            TITLE V--WOMEN'S HEALTH RESEARCH AND PREVENTION

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Women's Health Research and 
Prevention Amendments of 1998''.

   Subtitle A--Provisions Relating to Women's Health Research at the 
                     National Institutes of Health

SEC. 511. EXTENSION OF PROGRAM FOR RESEARCH AND AUTHORIZATION OF 
              NATIONAL PROGRAM OF EDUCATION REGARDING THE DRUG DES.

    (a) In General.--Section 403A(e) of the Public Health Service Act 
(42 U.S.C. 283a(e)) is amended by striking ``1996'' and inserting 
``2001''.
    (b) National Program for Education of Health Professionals and 
Public.--From amounts appropriated for carrying out section 403A of the 
Public Health Service Act (42 U.S.C. 283a), the Secretary of Health and 
Human Services, acting through the heads of the appropriate agencies of 
the Public Health Service, shall carry out a national program for the 
education of health professionals and the public with respect to the 
drug diethylstilbestrol (commonly known as DES). To the extent 
appropriate, such national program shall use methodologies developed 
through the education demonstration program carried out under such 
section 403A. In developing and carrying out the national program, the 
Secretary shall consult closely with representatives of nonprofit 
private entities that represent individuals who have been exposed to 
DES and that have expertise in community-based information campaigns 
for the public and for health care providers. The implementation of the 
national program shall begin during fiscal year 1999.

SEC. 512. RESEARCH ON OSTEOPOROSIS, PAGET'S DISEASE, AND RELATED BONE 
              DISORDERS.

    Section 409A(d) of the Public Health Service Act (42 U.S.C. 
284e(d)) is amended by striking ``and 1996'' and inserting ``through 
2001''.

SEC. 513. RESEARCH ON CANCER.

    (a) In General.--Section 417B(a) of the Public Health Service Act 
(42 U.S.C. 286a-8(a)) is amended by striking ``and 1996'' and inserting 
``through 2001''.
    (b) Research on Breast Cancer.--Section 417B(b)(1) of the Public 
Health Service Act (42 U.S.C. 286a-8(b)(1)) is amended--
            (1) in subparagraph (A), by striking ``and 1996'' and 
        inserting ``through 2001''; and
            (2) in subparagraph (B), by striking ``and 1996'' and 
        inserting ``through 2001''.
    (c) Research on Ovarian and Related Cancer Research.--Section 
417B(b)(2) of the Public Health Service Act (42 U.S.C. 286a-8(b)(2)) is 
amended by striking ``and 1996'' and inserting ``through 2001''.

SEC. 514. RESEARCH ON HEART ATTACK, STROKE, AND OTHER CARDIOVASCULAR 
              DISEASES IN WOMEN.

    Subpart 2 of part C of title IV of the Public Health Service Act 
(42 U.S.C. 285b et seq.) is amended by inserting after section 424 the 
following:

   ``heart attack, stroke, and other cardiovascular diseases in women

    ``Sec. 424A. (a) In General.--The Director of the Institute shall 
expand, intensify, and coordinate research and related activities of 
the Institute with respect to heart attack, stroke, and other 
cardiovascular diseases in women.
    ``(b) Coordination With Other Institutes.--The Director of the 
Institute shall coordinate activities under subsection (a) with similar 
activities conducted by the other national research institutes and 
agencies of the National Institutes of Health to the extent that such 
Institutes and agencies have responsibilities that are related to heart 
attack, stroke, and other cardiovascular diseases in women.
    ``(c) Certain Programs.--In carrying out subsection (a), the 
Director of the Institute shall conduct or support research to expand 
the understanding of the causes of, and to develop methods for 
preventing, cardiovascular diseases in women. Activities under such 
subsection shall include conducting and supporting the following:
            ``(1) Research to determine the reasons underlying the 
        prevalence of heart attack, stroke, and other cardiovascular 
        diseases in women, including African-American women and other 
        women who are members of racial or ethnic minority groups.
            ``(2) Basic research concerning the etiology and causes of 
        cardiovascular diseases in women.
            ``(3) Epidemiological studies to address the frequency and 
        natural history of such diseases and the differences among men 
        and women, and among racial and ethnic groups, with respect to 
        such diseases.
            ``(4) The development of safe, efficient, and cost-
        effective diagnostic approaches to evaluating women with 
        suspected ischemic heart disease.
            ``(5) Clinical research for the development and evaluation 
        of new treatments for women, including rehabilitation.
            ``(6) Studies to gain a better understanding of methods of 
        preventing cardiovascular diseases in women, including 
        applications of effective methods for the control of blood 
        pressure, lipids, and obesity.
            ``(7) Information and education programs for patients and 
        health care providers on risk factors associated with heart 
        attack, stroke, and other cardiovascular diseases in women, and 
        on the importance of the prevention or control of such risk 
        factors and timely referral with appropriate diagnosis and 
        treatment. Such programs shall include information and 
        education on health-related behaviors that can improve such 
        important risk factors as smoking, obesity, high blood 
        cholesterol, and lack of exercise.
    ``(d) Authorization of Appropriations.--For the purpose of carrying 
out this section, there is authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 1999 through 2001. The 
authorization of appropriations established in the preceding sentence 
is in addition to any other authorization of appropriation that is 
available for such purpose.''.

SEC. 515. AGING PROCESSES REGARDING WOMEN.

    Section 445I of the Public Health Service Act (42 U.S.C. 285e-11) 
is amended by striking ``and 1996'' and inserting ``through 2001''.

SEC. 516. OFFICE OF RESEARCH ON WOMEN'S HEALTH.

    Section 486(d)(2) of the Public Health Service Act (42 U.S.C. 
287d(d)(2)) is amended by striking ``Director of the Office'' and 
inserting ``Director of the National Institutes of Health''.

 Subtitle B--Provisions Relating to Women's Health at the Centers for 
                     Disease Control and Prevention

SEC. 521. NATIONAL CENTER FOR HEALTH STATISTICS.

    Section 306(n) of the Public Health Service Act (42 U.S.C. 242k(n)) 
is amended--
            (1) in paragraph (1), by striking ``through 1998'' and 
        inserting ``through 2002''; and
            (2) in paragraph (2), by striking ``through 1998'' and 
        inserting ``through 2002''.

SEC. 522. NATIONAL PROGRAM OF CANCER REGISTRIES.

    Section 399L(a) of the Public Health Service Act (42 U.S.C. 280e-
4(a)) is amended by striking ``through 1998'' and inserting ``through 
2002''.

SEC. 523. NATIONAL BREAST AND CERVICAL CANCER EARLY DETECTION PROGRAM.

    (a) Grants.--Section 1501(b) of the Public Health Service Act (42 
U.S.C. 300k(b)) is amended--
            (1) in paragraph (1), by striking ``nonprofit''; and
            (2) in paragraph (2), by striking ``that are not nonprofit 
        entities''.
    (b) Preventive Health.--Section 1509(d) of the Public Health 
Service Act (42 U.S.C. 300n-4a(d)(1)) is amended by striking ``through 
1998'' and inserting ``through 2002''.
    (c) General Program.--Section 1510(a) of the Public Health Service 
Act (42 U.S.C. 300n-5(a)) is amended by striking ``through 1998'' and 
inserting ``through 2002''.

SEC. 524. CENTERS FOR RESEARCH AND DEMONSTRATION OF HEALTH PROMOTION.

    Section 1706(e) of the Public Health Service Act (42 U.S.C. 300u-
5(e)) is amended by striking ``through 1998'' and inserting ``through 
2002''.

SEC. 525. COMMUNITY PROGRAMS ON DOMESTIC VIOLENCE.

    Section 318(h)(2) of the Family Violence Prevention and Services 
Act (42 U.S.C. 10418(h)(2)) is amended by striking ``fiscal year 1997'' 
and inserting ``for each of the fiscal years 1997 through 2002''.

              Subtitle C--Women's Health and Cancer Rights

SEC. 531. SHORT TITLE.

    This subtitle may be cited as the ``Women's Health and Cancer 
Rights Act of 1998''.

SEC. 532. FINDINGS.

    Congress finds that--
            (1) the offering and operation of health plans affect 
        commerce among the States;
            (2) health care providers located in a State serve patients 
        who reside in the State and patients who reside in other 
        States; and
            (3) in order to provide for uniform treatment of health 
        care providers and patients among the States, it is necessary 
        to cover health plans operating in 1 State as well as health 
        plans operating among the several States.

SEC. 533. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

    (a) In General.--Subpart B of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1185 et 
seq.), as amended by sections 111 and 302, is further amended by adding 
at the end the following new section:

``SEC. 715. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR 
              MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE TREATMENT 
              OF BREAST CANCER AND COVERAGE FOR RECONSTRUCTIVE SURGERY 
              FOLLOWING MASTECTOMIES.

    ``(a) Inpatient Care.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer providing health insurance coverage in 
        connection with a group health plan, that provides medical and 
        surgical benefits shall ensure that inpatient coverage with 
        respect to the surgical treatment of breast cancer (including a 
        mastectomy, lumpectomy, or lymph node dissection for the 
        treatment of breast cancer) is provided for a period of time as 
        is determined by the attending physician, in his or her 
        professional judgment consistent with scientific evidence-based 
        practices or guidelines, in consultation with the patient, to 
        be medically appropriate.
            ``(2) Exception.--Nothing in this section shall be 
        construed as requiring the provision of inpatient coverage if 
        the attending physician in consultation with the patient 
        determine that a shorter period of hospital stay is medically 
        appropriate.
    ``(b) Reconstructive Surgery.--A group health plan, and a health 
insurance issuer providing health insurance coverage in connection with 
a group health plan, that provides medical and surgical benefits with 
respect to a mastectomy shall ensure that, in a case in which a 
mastectomy patient elects breast reconstruction, coverage is provided 
for--
            ``(1) all stages of reconstruction of the breast on which 
        the mastectomy has been performed;
            ``(2) surgery and reconstruction of the other breast to 
        produce a symmetrical appearance; and
            ``(3) the costs of prostheses and complications of 
        mastectomy including lymphedemas;
in the manner determined by the attending physician and the patient to 
be appropriate. Such coverage may be subject to annual deductibles and 
coinsurance provisions as may be deemed appropriate and as are 
consistent with those established for other benefits under the plan or 
coverage. Written notice of the availability of such coverage shall be 
delivered to the participant upon enrollment and annually thereafter.
    ``(c) Notice.--A group health plan, and a health insurance issuer 
providing health insurance coverage in connection with a group health 
plan shall provide notice to each participant and beneficiary under 
such plan regarding the coverage required by this section in accordance 
with regulations promulgated by the Secretary. Such notice shall be in 
writing and prominently positioned in any literature or correspondence 
made available or distributed by the plan or issuer and shall be 
transmitted--
            ``(1) in the next mailing made by the plan or issuer to the 
        participant or beneficiary;
            ``(2) as part of any yearly informational packet sent to 
        the participant or beneficiary; or
            ``(3) not later than January 1, 1999;
whichever is earlier.
    ``(d) No Authorization Required.--
            ``(1) In general.--An attending physician shall not be 
        required to obtain authorization from the plan or issuer for 
        prescribing any length of stay in connection with a mastectomy, 
        a lumpectomy, or a lymph node dissection for the treatment of 
        breast cancer.
            ``(2) Prenotification.--Nothing in this section shall be 
        construed as preventing a group health plan from requiring 
        prenotification of an inpatient stay referred to in this 
        section if such requirement is consistent with terms and 
        conditions applicable to other inpatient benefits under the 
        plan, except that the provision of such inpatient stay benefits 
        shall not be contingent upon such notification.
    ``(e) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            ``(1) deny to a patient eligibility, or continued 
        eligibility, to enroll or to renew coverage under the terms of 
        the plan, solely for the purpose of avoiding the requirements 
        of this section;
            ``(2) provide monetary payments or rebates to individuals 
        to encourage such individuals to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such provider 
        provided care to an individual participant or beneficiary in 
        accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to 
        an individual participant or beneficiary in a manner 
        inconsistent with this section; and
            ``(5) subject to subsection (f)(2), restrict benefits for 
        any portion of a period within a hospital length of stay 
        required under subsection (a) in a manner which is less 
        favorable than the benefits provided for any preceding portion 
        of such stay.
    ``(f) Rules of Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to require a patient who is a participant or 
        beneficiary--
                    ``(A) to undergo a mastectomy or lymph node 
                dissection in a hospital; or
                    ``(B) to stay in the hospital for a fixed period of 
                time following a mastectomy or lymph node dissection.
            ``(2) Cost sharing.--Nothing in this section shall be 
        construed as preventing a group health plan or issuer from 
        imposing deductibles, coinsurance, or other cost-sharing in 
        relation to benefits for hospital lengths of stay in connection 
        with a mastectomy or lymph node dissection for the treatment of 
        breast cancer under the plan (or under health insurance 
        coverage offered in connection with a group health plan), 
        except that such coinsurance or other cost-sharing for any 
        portion of a period within a hospital length of stay required 
        under subsection (a) may not be greater than such coinsurance 
        or cost-sharing for any preceding portion of such stay.
            ``(3) Level and type of reimbursements.--Nothing in this 
        section shall be construed to prevent a group health plan or a 
        health insurance issuer offering group health insurance 
        coverage from negotiating the level and type of reimbursement 
        with a provider for care provided in accordance with this 
        section.
    ``(g) Preemption, Relation to State Laws.--
            ``(1) In general.--Nothing in this section shall be 
        construed to preempt any State law with respect to health 
        insurance coverage that--
                    ``(A) relates to hospital length of stays after a 
                mastectomy, lumpectomy, or lymph node dissection;
                    ``(B) relates to coverage of reconstructive breast 
                surgery after a mastectomy, lumpectomy, of lymph node 
                dissection; or
                    ``(C) requires coverage for breast cancer 
                treatments (including breast reconstruction) in 
                accordance with scientific evidence-based practices or 
                guidelines recommended by established medical 
                associations.
            ``(2) Application of section.--With respect to a State 
        law--
                    ``(A) described in paragraph (1)(A), the provisions 
                of this section relating to breast reconstruction shall 
                apply in such State; and
                    ``(B) described in paragraph (1)(B), the provisions 
                of this section relating to length of stays for 
                surgical breast treatment shall apply in such State.
            ``(3) ERISA.--Nothing in this section shall be construed to 
        affect or modify the provisions of section 514 with respect to 
        group health plans.''.
    (b) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 note) 
is amended by inserting after the item relating to section 714 the 
following new item:

``Sec. 715. Required coverage for minimum hospital stay for 
                            mastectomies and lymph node dissections for 
                            the treatment of breast cancer and coverage 
                            for reconstructive surgery following 
                            mastectomies.''.
    (c) Effective Dates.--The amendments made by this section shall 
apply with respect to plan years beginning on or after the date of 
enactment of this Act.

SEC. 534. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE 
              GROUP MARKET.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-4 et seq.), as amended by section 
303(a), is further amended by adding at the end the following new 
section:

``SEC. 2707. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR 
              MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE TREATMENT 
              OF BREAST CANCER AND COVERAGE FOR RECONSTRUCTIVE SURGERY 
              FOLLOWING MASTECTOMIES.

    ``(a) Inpatient Care.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer providing health insurance coverage in 
        connection with a group health plan, that provides medical and 
        surgical benefits shall ensure that inpatient coverage with 
        respect to the surgical treatment of breast cancer (including a 
        mastectomy, lumpectomy, or lymph node dissection for the 
        treatment of breast cancer) is provided for a period of time as 
        is determined by the attending physician, in his or her 
        professional judgment consistent with scientific evidence-based 
        practices or guidelines, in consultation with the patient, to 
        be medically appropriate.
            ``(2) Exception.--Nothing in this section shall be 
        construed as requiring the provision of inpatient coverage if 
        the attending physician in consultation with the patient 
        determine that a shorter period of hospital stay is medically 
        appropriate.
    ``(b) Reconstructive Surgery.--A group health plan, and a health 
insurance issuer providing health insurance coverage in connection with 
a group health plan, that provides medical and surgical benefits with 
respect to a mastectomy shall ensure that, in a case in which a 
mastectomy patient elects breast reconstruction, coverage is provided 
for--
            ``(1) all stages of reconstruction of the breast on which 
        the mastectomy has been performed;
            ``(2) surgery and reconstruction of the other breast to 
        produce a symmetrical appearance; and
            ``(3) the costs of prostheses and complications of 
        mastectomy including lymphedemas;
in the manner determined by the attending physician and the patient to 
be appropriate. Such coverage may be subject to annual deductibles and 
coinsurance provisions as may be deemed appropriate and as are 
consistent with those established for other benefits under the plan or 
coverage. Written notice of the availability of such coverage shall be 
delivered to the enrollee upon enrollment and annually thereafter.
    ``(c) Notice.--A group health plan, and a health insurance issuer 
providing health insurance coverage in connection with a group health 
plan shall provide notice to each participant and beneficiary under 
such plan regarding the coverage required by this section in accordance 
with regulations promulgated by the Secretary. Such notice shall be in 
writing and prominently positioned in any literature or correspondence 
made available or distributed by the plan or issuer and shall be 
transmitted--
            ``(1) in the next mailing made by the plan or issuer to the 
        participant or beneficiary;
            ``(2) as part of any yearly informational packet sent to 
        the participant or beneficiary; or
            ``(3) not later than January 1, 1999;
whichever is earlier.
    ``(d) No Authorization Required.--
            ``(1) In general.--An attending physician shall not be 
        required to obtain authorization from the plan or issuer for 
        prescribing any length of stay in connection with a mastectomy, 
        a lumpectomy, or a lymph node dissection for the treatment of 
        breast cancer.
            ``(2) Prenotification.--Nothing in this section shall be 
        construed as preventing a plan or issuer from requiring 
        prenotification of an inpatient stay referred to in this 
        section if such requirement is consistent with terms and 
        conditions applicable to other inpatient benefits under the 
        plan, except that the provision of such inpatient stay benefits 
        shall not be contingent upon such notification.
    ``(e) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            ``(1) deny to a patient eligibility, or continued 
        eligibility, to enroll or to renew coverage under the terms of 
        the plan, solely for the purpose of avoiding the requirements 
        of this section;
            ``(2) provide monetary payments or rebates to individuals 
        to encourage such individuals to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such provider 
        provided care to an individual participant or beneficiary in 
        accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to 
        an individual participant or beneficiary in a manner 
        inconsistent with this section; and
            ``(5) subject to subsection (f)(2), restrict benefits for 
        any portion of a period within a hospital length of stay 
        required under subsection (a) in a manner which is less 
        favorable than the benefits provided for any preceding portion 
        of such stay.
    ``(f) Rules of Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to require a patient who is a participant or 
        beneficiary--
                    ``(A) to undergo a mastectomy or lymph node 
                dissection in a hospital; or
                    ``(B) to stay in the hospital for a fixed period of 
                time following a mastectomy or lymph node dissection.
            ``(2) Cost sharing.--Nothing in this section shall be 
        construed as preventing a group health plan or issuer from 
        imposing deductibles, coinsurance, or other cost-sharing in 
        relation to benefits for hospital lengths of stay in connection 
        with a mastectomy or lymph node dissection for the treatment of 
        breast cancer under the plan (or under health insurance 
        coverage offered in connection with a group health plan), 
        except that such coinsurance or other cost-sharing for any 
        portion of a period within a hospital length of stay required 
        under subsection (a) may not be greater than such coinsurance 
        or cost-sharing for any preceding portion of such stay.
            ``(3) Level and type of reimbursements.--Nothing in this 
        section shall be construed to prevent a group health plan or a 
        health insurance issuer offering group health insurance 
        coverage from negotiating the level and type of reimbursement 
        with a provider for care provided in accordance with this 
        section.
    ``(g) Preemption, Relation to State Laws.--
            ``(1) In general.--Nothing in this section shall be 
        construed to preempt any State law with respect to health 
        insurance coverage that--
                    ``(A) relates to a hospital length of stay after a 
                mastectomy, lumpectomy, or lymph node dissection;
                    ``(B) relates to coverage of reconstructive breast 
                surgery after a mastectomy, lumpectomy, or lymph node 
                dissection; or
                    ``(C) requires coverage for breast cancer 
                treatments (including breast reconstruction) in 
                accordance with scientific evidence-based practices or 
                guidelines recommended by established medical 
                associations.
            ``(2) Application of section.--With respect to a State 
        law--
                    ``(A) described in paragraph (1)(A), the provisions 
                of this section relating to breast reconstruction shall 
                apply in such State; and
                    ``(B) described in paragraph (1)(B), the provisions 
                of this section relating to length of stays for 
                surgical breast treatment shall apply in such State.
            ``(3) ERISA.--Nothing in this section shall be construed to 
        affect or modify the provisions of section 514 with respect to 
        group health plans.''.
    (b) Effective Dates.--The amendments made by this section shall 
apply to group health plans for plan years beginning on or after the 
date of enactment of this Act.

SEC. 535. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE 
              INDIVIDUAL MARKET.

    (a) In General.--Subpart 3 of part B of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-51 et seq.), as amended by section 
303(b), is further amended by adding at the end the following new 
section:

``SEC. 2753. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR 
              MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE TREATMENT 
              OF BREAST CANCER.

    ``The provisions of section 2707 shall apply to health insurance 
coverage offered by a health insurance issuer in the individual market 
in the same manner as they apply to health insurance coverage offered 
by a health insurance issuer in connection with a group health plan in 
the small or large group market.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to health insurance coverage offered, sold, issued, 
renewed, in effect, or operated in the individual market on or after 
the date of enactment of this Act.

SEC. 536. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    (a) In General.--Subchapter A of chapter 100 of the Internal 
Revenue Code of 1986 (relating to group health plan portability, 
access, and renewability requirements) is amended by inserting after 
section 9803 the following new section:

``SEC. 9804. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR 
              MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE TREATMENT 
              OF BREAST CANCER AND COVERAGE FOR RECONSTRUCTIVE SURGERY 
              FOLLOWING MASTECTOMIES.

    ``(a) Inpatient Care.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer providing health insurance coverage in 
        connection with a group health plan, that provides medical and 
        surgical benefits shall ensure that inpatient coverage with 
        respect to the surgical treatment of breast cancer (including a 
        mastectomy, lumpectomy, or lymph node dissection for the 
        treatment of breast cancer) is provided for a period of time as 
        is determined by the attending physician, in his or her 
        professional judgment consistent with scientific evidence-based 
        practices or guidelines, in consultation with the patient, to 
        be medically appropriate.
            ``(2) Exception.--Nothing in this section shall be 
        construed as requiring the provision of inpatient coverage if 
        the attending physician in consultation with the patient 
        determine that a shorter period of hospital stay is medically 
        appropriate.
    ``(b) Reconstructive Surgery.--A group health plan, and a health 
insurance issuer providing health insurance coverage in connection with 
a group health plan, that provides medical and surgical benefits with 
respect to a mastectomy shall ensure that, in a case in which a 
mastectomy patient elects breast reconstruction, coverage is provided 
for--
            ``(1) all stages of reconstruction of the breast on which 
        the mastectomy has been performed;
            ``(2) surgery and reconstruction of the other breast to 
        produce a symmetrical appearance; and
            ``(3) the costs of prostheses and complications of 
        mastectomy including lymphedemas;
in the manner determined by the attending physician and the patient to 
be appropriate. Such coverage may be subject to annual deductibles and 
coinsurance provisions as may be deemed appropriate and as are 
consistent with those established for other benefits under the plan or 
coverage. Written notice of the availability of such coverage shall be 
delivered to the participant upon enrollment and annually thereafter.
    ``(c) Notice.--A group health plan, and a health insurance issuer 
providing health insurance coverage in connection with a group health 
plan shall provide notice to each participant and beneficiary under 
such plan regarding the coverage required by this section in accordance 
with regulations promulgated by the Secretary. Such notice shall be in 
writing and prominently positioned in any literature or correspondence 
made available or distributed by the plan or issuer and shall be 
transmitted--
            ``(1) in the next mailing made by the plan or issuer to the 
        participant or beneficiary;
            ``(2) as part of any yearly informational packet sent to 
        the participant or beneficiary; or
            ``(3) not later than January 1, 1999;
whichever is earlier.
    ``(d) No Authorization Required.--
            ``(1) In general.--A, attending physician shall not be 
        required to obtain authorization from the plan or issuer for 
        prescribing any length of stay in connection with a mastectomy, 
        a lumpectomy, or a lymph node dissection for the treatment of 
        breast cancer.
            ``(2) Prenotification.--Nothing in this section shall be 
        construed as preventing a plan or issuer from requiring 
        prenotification of an inpatient stay referred to in this 
        section if such requirement is consistent with terms and 
        conditions applicable to other inpatient benefits under the 
        plan, except that the provision of such inpatient stay benefits 
        shall not be contingent upon such notification.
    ``(e) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            ``(1) deny to a patient eligibility, or continued 
        eligibility, to enroll or to renew coverage under the terms of 
        the plan, solely for the purpose of avoiding the requirements 
        of this section;
            ``(2) provide monetary payments or rebates to individuals 
        to encourage such individuals to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such provider 
        provided care to an individual participant or beneficiary in 
        accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to 
        an individual participant or beneficiary in a manner 
        inconsistent with this section; and
            ``(5) subject to subsection (f)(2), restrict benefits for 
        any portion of a period within a hospital length of stay 
        required under subsection (a) in a manner which is less 
        favorable than the benefits provided for any preceding portion 
        of such stay.
    ``(f) Rules of Construction.--
            ``(1) In general.--Nothing in this section shall be 
        construed to require a patient who is a participant or 
        beneficiary--
                    ``(A) to undergo a mastectomy or lymph node 
                dissection in a hospital; or
                    ``(B) to stay in the hospital for a fixed period of 
                time following a mastectomy or lymph node dissection.
            ``(2) Cost sharing.--Nothing in this section shall be 
        construed as preventing a group health plan or issuer from 
        imposing deductibles, coinsurance, or other cost-sharing in 
        relation to benefits for hospital lengths of stay in connection 
        with a mastectomy or lymph node dissection for the treatment of 
        breast cancer under the plan (or under health insurance 
        coverage offered in connection with a group health plan), 
        except that such coinsurance or other cost-sharing for any 
        portion of a period within a hospital length of stay required 
        under subsection (a) may not be greater than such coinsurance 
        or cost-sharing for any preceding portion of such stay.
            ``(3) Level and type of reimbursements.--Nothing in this 
        section shall be construed to prevent a group health plan or a 
        health insurance issuer offering group health insurance 
        coverage from negotiating the level and type of reimbursement 
        with a provider for care provided in accordance with this 
        section.
    ``(g) Preemption, Relation to State Laws.--
            ``(1) In general.--Nothing in this section shall be 
        construed to preempt any State law with respect to health 
        insurance coverage that--
                    ``(A) relates to a hospital length of stay after a 
                mastectomy, lumpectomy, or lymph node dissection;
                    ``(B) relates to coverage of reconstructive breast 
                surgery after a mastectomy, lumpectomy, or lymph node 
                dissection; or
                    ``(C) requires coverage for breast cancer 
                treatments (including breast reconstruction) in 
                accordance with scientific evidence-based practices or 
                guidelines recommended by established medical 
                associations.
            ``(2) Application of section.--With respect to a State 
        law--
                    ``(A) described in paragraph (1)(A), the provisions 
                of this section relating to breast reconstruction shall 
                apply in such State; and
                    ``(B) described in paragraph (1)(B), the provisions 
                of this section relating to length of stays for 
                surgical breast treatment shall apply in such State.
            ``(3) ERISA.--Nothing in this section shall be construed to 
        affect or modify the provisions of section 514 with respect to 
        group health plans.''.
    (b) Conforming Amendments.--
            (1) The heading for subtitle K of such Code is amended to 
        read as follows:

``Subtitle K--Group Health Plan Portability, Access, Renewability, and 
                         Other Requirements''.

            (2) The heading for chapter 100 of such Code is amended to 
        read as follows:

``CHAPTER 100--GROUP HEALTH PLAN PORTABILITY, ACCESS, RENEWABILITY, AND 
                         OTHER REQUIREMENTS''.

            (3) Section 4980D(a) of such Code is amended by striking 
        ``and renewability'' and inserting ``renewability, and other''.
    (c) Clerical Amendments.--
            (1) The table of contents for chapter 100 of such Code is 
        amended inserting after the item relating to section 9803 the 
        following new item:

``Sec. 9804. Required coverage for minimum hospital stay for 
                            mastectomies and lymph node dissections for 
                            the treatment of breast cancer and coverage 
                            for reconstructive surgery following 
                            mastectomies.''.
            (2) The item relating to subtitle K in the table of 
        subtitles for such Code is amended by striking ``and 
        renewability'' and inserting ``renewability, and other''.
            (3) The item relating to chapter 100 in the table of 
        chapters for subtitle K of such Code is amended by striking 
        ``and renewability'' and inserting ``renewability, and other''.
    (d) Effective Dates.--The amendments made by this section shall 
apply with respect to plan years beginning on or after the date of 
enactment of this Act.

SEC. 537. RESEARCH STUDY ON THE MANAGEMENT OF BREAST CANCER.

    (a) Study.--To improve survival, quality of life and patient 
satisfaction in the care of patients with breast cancer, the Agency for 
Health Care Policy and Research shall conduct a study of the scientific 
issues relating to--
            (1) disease management strategies for breast cancer that 
        can achieve better patient outcomes;
            (2) controlled clinical evidence that links specific 
        clinical procedures to improved health outcomes;
            (3) the definition of quality measures to evaluate plan and 
        provider performance in the management of breast cancer;
            (4) the identification of quality improvement interventions 
        that can change the process of care to achieve better outcomes 
        for individuals with breast cancer;
            (5) preventive strategies utilized by health plans for the 
        treatment of breast cancer; and
            (6) the extent of clinical practice variation including its 
        impact on cost, quality and outcomes.
    (b) Report.--Not later than January 1, 2000, the Agency for Health 
Care Policy and Research shall prepare and submit to the appropriate 
committees of Congress a report concerning the results of the study 
conducted under subsection (a).

         TITLE VI--ENHANCED ACCESS TO HEALTH INSURANCE COVERAGE

SEC. 601. CARRYOVER OF UNUSED BENEFITS FROM CAFETERIA PLANS, FLEXIBLE 
              SPENDING ARRANGEMENTS, AND HEALTH FLEXIBLE SPENDING 
              ACCOUNTS.

    (a) In General.--Section 125 of the Internal Revenue Code of 1986 
(relating to cafeteria plans) is amended by redesignating subsections 
(h) and (i) as subsections (i) and (j) and by inserting after 
subsection (g) the following new subsection:
    ``(h) Allowance of Carryovers of Unused Benefits to Later Taxable 
Years.--
            ``(1) In general.--For purposes of this title--
                    ``(A) a plan or other arrangement shall not fail to 
                be treated as a cafeteria plan or flexible spending or 
                similar arrangement, and
                    ``(B) no amount shall be required to be included in 
                gross income by reason of this section or any other 
                provision of this chapter,
        solely because under such plan or other arrangement any 
        nontaxable benefit which is unused as of the close of a taxable 
        year may be carried forward to 1 or more succeeding taxable 
        years.
            ``(2) Limitation.--Paragraph (1) shall not apply to amounts 
        carried from a plan to the extent such amounts exceed $500 
        (applied on an annual basis). For purposes of this paragraph, 
        all plans and arrangements maintained by an employer or any 
        related person shall be treated as 1 plan.
            ``(3) Allowance of rollover.--
                    ``(A) In general.--In the case of any unused 
                benefit described in paragraph (1) which consists of 
                amounts in a health flexible spending account or 
                dependent care flexible spending account, the plan or 
                arrangement shall provide that a participant may elect, 
                in lieu of such carryover, to have such amounts 
                distributed to the participant.
                    ``(B) Amounts not included in income.--Any 
                distribution under subparagraph (A) shall not be 
                included in gross income to the extent that such amount 
is transferred in a trustee-to-trustee transfer, or is contributed 
within 60 days of the date of the distribution, to--
                            ``(i) an individual retirement plan other 
                        than a Roth IRA (as defined in section 
                        408A(b)),
                            ``(ii) a qualified cash or deferred 
                        arrangement described in section 401(k),
                            ``(iii) a plan under which amounts are 
                        contributed by an individual's employer for an 
                        annuity contract described in section 403(b),
                            ``(iv) an eligible deferred compensation 
                        plan described in section 457, or
                            ``(v) a medical savings account (within the 
                        meaning of section 220).
                Any amount rolled over under this subparagraph shall be 
                treated as a rollover contribution for the taxable year 
                from which the unused amount would otherwise be 
                carried.
                    ``(C) Treatment of rollover.--Any amount rolled 
                over under subparagraph (B) shall be treated as an 
                eligible rollover under section 219, 220, 401(k), 
                403(b), or 457, whichever is applicable, and shall not 
                be taken into account in applying any limitation (or 
                participation requirement) on employer or employee 
                contributions under such section or any other provision 
                of this chapter for the taxable year of the rollover.
            ``(4) Cost-of-living adjustment.--In the case of any 
        taxable year beginning in a calendar year after 1998, the $500 
        amount under paragraph (2) shall be adjusted at the same time 
        and in the same manner as under section 415(d)(2), except that 
        the base period taken into account shall be the calendar 
        quarter beginning October 1, 1997, and any increase which is 
        not a multiple of $50 shall be rounded to the next lowest 
        multiple of $50.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 602. FULL DEDUCTION OF HEALTH INSURANCE COSTS FOR SELF-EMPLOYED 
              INDIVIDUALS.

    (a) In General.--Section 162(l)(1) of the Internal Revenue Code of 
1986 (relating to allowance of deductions) is amended to read as 
follows:
            ``(1) Allowance of deduction.--In the case of an individual 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to the amount paid during the taxable year for 
        insurance which constitutes medical care for the taxpayer, his 
        spouse, and his dependents.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 603. FULL AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

    (a) Availability Not Limited To Accounts for Employees of Small 
Employers and Self-Employed Individuals.--
            (1) In general.--Section 220(c)(1)(A) of the Internal 
        Revenue Code of 1986 (relating to eligible individual) is 
        amended to read as follows:
                    ``(A) In general.--The term `eligible individual' 
                means, with respect to any month, any individual if--
                            ``(i) such individual is covered under a 
                        high deductible health plan as of the 1st day 
                        of such month, and
                            ``(ii) such individual is not, while 
                        covered under a high deductible health plan, 
                        covered under any health plan--
                                    ``(I) which is not a high 
                                deductible health plan, and
                                    ``(II) which provides coverage for 
                                any benefit which is covered under the 
                                high deductible health plan.''.
            (2) Conforming amendments.--
                    (A) Section 220(c)(1) of such Code is amended by 
                striking subparagraphs (C) and (D).
                    (B) Section 220(c) of such Code is amended by 
                striking paragraph (4) (defining small employer) and by 
                redesignating paragraph (5) as paragraph (4).
                    (C) Section 220(b) of such Code is amended by 
                striking paragraph (4) (relating to deduction limited 
                by compensation) and by redesignating paragraphs (5), 
                (6), and (7) as paragraphs (4), (5), and (6), 
                respectively.
    (b) Removal of Limitation on Number of Taxpayers Having Medical 
Savings Accounts.--
            (1) In general.--Section 220 of the Internal Revenue Code 
        of 1986 (relating to medical savings accounts) is amended by 
        striking subsections (i) and (j).
            (2) Medicare+choice.--Section 138 of such Code (relating to 
        Medicare+Choice MSA) is amended by striking subsection (f).
    (c) Reduction in High Deductible Plan Minimum Annual Deductible.--
Section 220(c)(2)(A) of the Internal Revenue Code of 1986 (relating to 
high deductible health plan) is amended--
            (1) by striking ``$1,500'' in clause (i) and inserting 
        ``$1,000'', and
            (2) by striking ``$3,000'' in clause (ii) and inserting 
        ``$2,000''.
    (d) Increase in Contribution Limit to 100 Percent of Annual 
Deductible.--
            (1) In general.--Section 220(b)(2) of the Internal Revenue 
        Code of 1986 (relating to monthly limitation) is amended to 
        read as follows:
            ``(2) Monthly limitation.--The monthly limitation for any 
        month is the amount equal to \1/12\ of the annual deductible of 
        the high deductible health plan of the individual.''
            (2) Conforming amendment.--Section 220(d)(1)(A) of such 
        Code is amended by striking ``75 percent of''.
    (e) Limitation on Additional Tax on Distributions Not Used for 
Qualified Medical Expenses.--Section 220(f)(4) of the Internal Revenue 
Code of 1986 (relating to additional tax on distributions not used for 
qualified medical expenses) is amended by adding at the end the 
following:
                    ``(D) Exception in case of sufficient account 
                balance.--Subparagraph (A) shall not apply to any 
                payment or distribution in any taxable year, but only 
                to the extent such payment or distribution does not 
                reduce the fair market value of the assets of the 
                medical savings account to an amount less than the 
                annual deductible for the high deductible health plan 
                of the account holder (determined as of January 1 of 
                the calendar year in which the taxable year begins).''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 604. PERMITTING CONTRIBUTION TOWARDS MEDICAL SAVINGS ACCOUNT 
              THROUGH FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM 
              (FEHBP).

    (a) Government Contribution to Medical Savings Account.--
            (1) In general.--Section 8906 of title 5, United States 
        Code, is amended by adding at the end the following:
    ``(j)(1) In the case of an employee or annuitant who is enrolled in 
a catastrophic plan described by section 8903(5), there shall be a 
Government contribution under this subsection to a medical savings 
account established or maintained for the benefit of the individual. 
The contribution under this subsection shall be in addition to the 
Government contribution under subsection (b).
    ``(2) The amount of the Government contribution under this 
subsection with respect to an individual is equal to the amount by 
which--
            ``(A) the maximum contribution allowed under subsection 
        (b)(1) with respect to any employee or annuitant, exceeds
            ``(B) the amount of the Government contribution actually 
        made with respect to the individual under subsection (b) for 
        coverage under the catastrophic plan.
    ``(3) The Government contributions under this subsection shall be 
paid into a medical savings account (designated by the individual 
involved) in a manner that is specified by the Office and consistent 
with the timing of contributions under subsection (b).
    ``(4) Subsections (f) and (g) shall apply to contributions under 
this section in the same manner as they apply to contributions under 
subsection (b).
    ``(5) For the purpose of this subsection, the term `medical savings 
account' has the meaning given such term by section 220(d) of the 
Internal Revenue Code of 1986.''.
            (2) Allowing payment of full amount of charge for 
        catastrophic plan.--Section 8906(b)(2) of such title is amended 
        by inserting ``(or 100 percent of the subscription charge in 
        the case of a catastrophic plan)'' after ``75 percent of the 
        subscription charge''.
    (b) Offering of Catastrophic Plans.--
            (1) In general.--Section 8903 of title 5, United States 
        Code, is amended by adding at the end the following:
            ``(5) Catastrophic plans.--One or more plans described in 
        paragraph (1), (2), or (3), but which provide benefits of the 
        types referred to by paragraph (5) of section 8904(a), instead 
        of the types referred to in paragraphs (1), (2), and (3) of 
        such section.''.
            (2) Types of benefits.--Section 8904(a) of such title is 
        amended by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Catastrophic plans.--Benefits of the types named 
        under paragraph (1) or (2) of this subsection or both, to the 
        extent expenses covered by the plan exceed $500.''.
            (3) Disregarding catastrophic plans in determining level of 
        government contributions.--Section 8906(a)(3) of such title is 
        amended by inserting ``described by section 8903(3)'' after 
        ``plans''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contract terms beginning on or after January 1, 1999.