[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 644 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 644

  To amend the Public Health Service Act and the Employee Retirement 
 Income Security Act of 1974 to establish standards for relationships 
between group health plans and health insurance issuers with enrollees, 
                  health professionals, and providers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 24, 1997

  Mr. D'Amato introduced the following bill; which was read twice and 
         referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL


 
  To amend the Public Health Service Act and the Employee Retirement 
 Income Security Act of 1974 to establish standards for relationships 
between group health plans and health insurance issuers with enrollees, 
                  health professionals, and providers.

    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 ``Patient Access to 
Responsible Care Act of 1997''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Patient protection standards under the Public Health Service 
                            Act.
                 ``Part C--Patient Protection Standards

        ``Sec. 2770. Notice; additional definitions; construction.
        ``Sec. 2771. Enrollee access to care.
        ``Sec. 2772. Enrollee choice of health professionals and 
                            providers.
        ``Sec. 2773. Nondiscrimination against enrollees and in the 
                            selection of health professionals; 
                            equitable access to networks.
        ``Sec. 2774. Prohibition of interference with certain medical 
                            communications.
        ``Sec. 2775. Development of plan policies.
        ``Sec. 2776. Due process for enrollees.
        ``Sec. 2777. Due process for health professionals and 
                            providers.
        ``Sec. 2778. Information reporting and disclosure.
        ``Sec. 2779. Confidentiality; adequate reserves.
        ``Sec. 2780. Quality improvement program.
Sec. 3. Patient protection standards under the Employee Retirement 
                            Income Security Act of 1974.
Sec. 4. Non-preemption of State law respecting liability of group 
                            health plans.

SEC. 2. PATIENT PROTECTION STANDARDS UNDER THE PUBLIC HEALTH SERVICE 
              ACT.

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

                 ``Part C--Patient Protection Standards

``SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS; CONSTRUCTION.

    ``(a) Notice.--A health insurance issuer under this part shall 
comply with the notice requirement under section 711(d) of the Employee 
Retirement Income Security Act of 1974 with respect to the requirements 
of this part as if such section applied to such issuer and such issuer 
were a group health plan.
    ``(b) Additional Definitions.--For purposes of this part:
            ``(1) Enrollee.--The term `enrollee' means, with respect to 
        health insurance coverage offered by a health insurance issuer, 
        an individual enrolled with the issuer to receive such 
        coverage.
            ``(2) Health professional.--The term `health professional' 
        means a physician or other health care practitioner licensed, 
        accredited, or certified to perform specified health services 
        consistent with State law.
            ``(3) Network.--The term `network' means, with respect to a 
        health insurance issuer offering health insurance coverage, the 
        participating health professionals and providers through whom 
        the plan or issuer provides health care items and services to 
        enrollees.
            ``(4) Network coverage.--The term `network coverage' means 
        health insurance coverage offered by a health insurance issuer 
        that provides or arranges for the provision of health care 
        items and services to enrollees through participating health 
        professionals and providers.
            ``(5) Participating.--The term `participating' means, with 
        respect to a health professional or provider, a health 
        professional or provider that provides health care items and 
        services to enrollees under network coverage under an agreement 
        with the health insurance issuer offering the coverage.
            ``(6) Prior authorization.--The term `prior authorization' 
        means the process of obtaining prior approval from a health 
        insurance issuer as to the necessity or appropriateness of 
        receiving medical or clinical services for treatment of a 
        medical or clinical condition.
            ``(7) Provider.--The term `provider' means a health 
        organization, health facility, or health agency that is 
        licensed, accredited, or certified to provide health care items 
        and services under applicable State law.
            ``(8) Service area.--The term `service area' means, with 
        respect to a health insurance issuer with respect to health 
        insurance coverage, the geographic area served by the issuer 
        with respect to the coverage.
            ``(9) Utilization review.--The term `utilization review' 
        means prospective, concurrent, or retrospective review of 
        health care items and services for medical necessity, 
        appropriateness, or quality of care that includes prior 
authorization requirements for coverage of such items and services.
    ``(c) No Requirement for Any Willing Provider.--Nothing in this 
part shall be construed as requiring a health insurance issuer that 
offers network coverage to include for participation every willing 
provider or health professional who meets the terms and conditions of 
the plan or issuer.

``SEC. 2771. ENROLLEE ACCESS TO CARE.

    ``(a) General Access.--
            ``(1) In general.--Subject to paragraphs (2), and (3), a 
        health insurance issuer shall establish and maintain adequate 
        arrangements, as defined by the applicable State authority, 
        with a sufficient number, mix, and distribution of health 
        professionals and providers to assure that covered items and 
        services are available and accessible to each enrollee under 
        health insurance coverage--
                    ``(A) in the service area of the issuer;
                    ``(B) in a variety of sites of service;
                    ``(C) with reasonable promptness (including 
                reasonable hours of operation and after-hours 
                services);
                    ``(D) with reasonable proximity to the residences 
                and workplaces of enrollees; and
                    ``(E) in a manner that--
                            ``(i) takes into account the diverse needs 
                        of enrollees, and
                            ``(ii) reasonably assures continuity of 
                        care.
        For a health insurance issuer that serves a rural or medically 
        underserved area, the issuer shall be treated as meeting the 
        requirement of this subsection if the issuer has arrangements 
        with a sufficient number, mix, and distribution of health 
        professionals and providers having a history of serving such 
        areas. The use of telemedicine and other innovative means to 
        provide covered items and services by a health insurance issuer 
        that serves a rural or medically underserved area shall also be 
        considered in determining whether the requirement of this 
        subsection is met.
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed as requiring a health insurance issuer to 
        have arrangements that conflict with its responsibilities to 
        establish measures designed to maintain quality and control 
        costs.
            ``(3) Definitions.--For purposes of paragraph (1):
                    ``(A) Medically underserved area.--The term 
                `medically underserved area' means an area that is 
                designated as a health professional shortage area under 
                section 332 of the Public Health Service Act or as a 
                medically underserved area for purposes of section 330 
                or 1302(7) of such Act.
                    ``(B) Rural area.--The term `rural area' means an 
                area that is not within a Standard Metropolitan 
                Statistical Area or a New England County Metropolitan 
                Area (as defined by the Office of Management and 
                Budget).
    ``(b) Emergency and Urgent Care.--
            ``(1) In general.--A health insurance issuer shall--
                    ``(A) assure the availability and accessibility of 
                medically or clinically necessary emergency services 
                and urgent care services within the service area of the 
                issuer 24 hours a day, 7 days a week;
                    ``(B) require no prior authorization for items and 
                services furnished in a hospital emergency department 
                to an enrollee (without regard to whether the health 
                professional or hospital has a contractual or other 
                arrangement with the issuer) with symptoms that would 
                reasonably suggest to a prudent layperson an emergency 
                medical condition (including items and services 
                described in subparagraph (C)(iii));
                    ``(C) cover (and make reasonable payments for)--
                            ``(i) emergency services,
                            ``(ii) services that are not emergency 
                        services but are described in subparagraph (B),
                            ``(iii) medical screening examinations and 
                        other ancillary services necessary to diagnose, 
                        treat, and stabilize an emergency medical 
                        condition, and
                            ``(iv) urgent care services, without regard 
                        to whether the health professional or provider 
                        furnishing such services has a contractual (or 
                        other) arrangement with the issuer; and
                    ``(D) make prior authorization determinations for--
                            ``(i) services that are furnished in a 
                        hospital emergency department (other than 
                        services described in clauses (i) and (iii) of 
                        subparagraph (C)), and
                            ``(ii) urgent care services, within the 
                        time periods specified in (or pursuant to) 
                        section 2776(a)(8).
            ``(2) Definitions.--For purposes of this subsection:
                    ``(A) Emergency medical condition.--The term 
                `emergency medical condition' means a medical condition 
                (including emergency labor and delivery) manifesting 
                itself by acute symptoms of sufficient severity 
                (including severe pain) such that a prudent layperson, 
                who possesses an average knowledge of health and 
                medicine, could reasonably expect the absence of 
                immediate medical attention could reasonably be 
                expected to result in--
                    ``(i) placing the patient's health in serious 
                jeopardy,
                    ``(ii) serious impairment to bodily functions, or
                    ``(iii) serious dysfunction of any bodily organ or 
                part.
                    ``(B) Emergency services.--The term `emergency 
                services' means health care items and services that are 
                necessary for the diagnosis, treatment, and 
                stabilization of an emergency medical condition.
                    ``(C) Urgent care services.--The term `urgent care 
                services' means health care items and services that are 
                necessary for the treatment of a condition that--
                    ``(i) is not an emergency medical condition,
                    ``(ii) requires prompt medical or clinical 
                treatment, and
                    ``(iii) poses a danger to the patient if not 
                treated in a timely manner, as defined by the 
                applicable State authority in consultation with 
                relevant treating health professionals or providers.
    ``(c) Specialized Services.--
            ``(1) In general.--A health insurance issuer offering 
        network coverage shall demonstrate that enrollees have access 
        to specialized treatment expertise when such treatment is 
        medically or clinically indicated in the professional judgment 
        of the treating health professional, in consultation with the 
        enrollee.
            ``(2) Definition.--For purposes of paragraph (1), the term 
        `specialized treatment expertise' means expertise in diagnosing 
        or treating--
            ``(A) unusual diseases or conditions, or
            ``(B) diseases and conditions that are unusually difficult 
        to diagnose or treat.
    ``(d) Incentive Plans.--
            ``(1) In general.--In the case of a health insurance issuer 
        that offers network coverage, any health professional or 
        provider incentive plan operated by the issuer with respect to 
        such coverage shall meet the following requirements:
                    ``(A) No specific payment is made directly or 
                indirectly under the plan to a professional or provider 
                or group of professionals or providers as an inducement 
                to reduce or limit medically necessary services 
                provided with respect to a specific enrollee.
                    ``(B) If the plan places such a professional, 
                provider, or group at substantial financial risk (as 
                determined by the Secretary) for services not provided 
                by the professional, provider, or group, the issuer--
                            ``(i) provides stop-loss protection for the 
                        professional, provider, or group that is 
                        adequate and appropriate, based on standards 
                        developed by the Secretary that take into 
                        account the number of professionals or 
                        providers placed at such substantial financial 
                        risk in the group or under the coverage and the 
                        number of individuals enrolled with the issuer 
                        who receive services from the professional, 
                        provider, or group, and
                            ``(ii) conducts periodic surveys of both 
                        individuals enrolled and individuals previously 
                        enrolled with the issuer to determine the 
                        degree of access of such individuals to 
                        services provided by the issuer and 
                        satisfaction with the quality of such services.
                    ``(C) The issuer provides the Secretary with 
                descriptive information regarding the plan, sufficient 
                to permit the Secretary to determine whether the plan 
                is in compliance with the requirements of this 
                paragraph.
            ``(2) In this subsection, the term `health professional or 
        provider incentive plan' means any compensation arrangement 
        between a health insurance issuer and a health professional or 
        provider or professional or provide group that may directly or 
        indirectly have the effect of reducing or limiting services 
        provided with respect to individuals enrolled with the issuer.

``SEC. 2772. ENROLLEE CHOICE OF HEALTH PROFESSIONALS AND PROVIDERS.

    ``(a) Choice of Personal Health Professional.--A health insurance 
issuer shall permit each enrollee under network coverage to--
            ``(1) select a personal health professional from among the 
        participating health professionals of the issuer, and
            ``(2) change that selection as appropriate.
    ``(b) Point-of-Service Option.--
            ``(1) In general.--If a health insurance issuer offers to 
        enrollees health insurance coverage which provides for coverage 
        of services only if such services are furnished through health 
        professionals and providers who are members of a network of 
        health professionals and providers who have entered into a 
        contract with the issuer to provide such services, the issuer 
        shall also offer to such enrollees (at the time of enrollment) 
        the option of health insurance coverage which provides for 
        coverage of such services which are not furnished through 
        health professionals and providers who are members of such a 
        network.
            ``(2) Fair premiums.--The amount of any additional premium 
        required for the option described in paragraph (1) may not 
        exceed an amount that is fair and reasonable, as established by 
        the applicable State authority, in consultation with the 
        National Association of Insurance Commissioners, based on the 
        nature of the additional coverage provided.
            ``(3) Cost-sharing.--Under the option described in 
        paragraph (1), the health insurance coverage shall provide for 
        reimbursement rates for covered services offered by health 
        professionals and providers who are not participating health 
        professionals or providers that are not less than the 
        reimbursement rates for covered services offered by 
        participating health professionals and providers. Nothing in 
        this paragraph shall be construed as protecting an enrollee 
        against balance billing by a health professional or provider 
        that is not a participating health professional or provider.
    ``(c) Continuity of Care.--A health insurance issuer offering 
network coverage shall--
            ``(1) ensure that any process established by the issuer to 
        coordinate care and control costs does not create an undue 
        burden, as defined by the applicable State authority, for 
        enrollees with special health care needs or chronic conditions;
            ``(2) ensure direct access to relevant specialists for the 
        continued care of such enrollees when medically or clinically 
        indicated in the judgment of the treating health professional, 
        in consultation with the enrollee;
            ``(3) in the case of an enrollee with special health care 
        needs or a chronic condition, determine whether, based on the 
        judgment of the treating health professional, in consultation 
        with the enrollee, it is medically or clinically necessary to 
        use a specialist or a care coordinator from an 
        interdisciplinary team to ensure continuity of care; and
            ``(4) in circumstances under which a change of health 
        professional or provider might disrupt the continuity of care 
        for an enrollee, such as--
                    ``(A) hospitalization, or
                    ``(B) dependency on high-technology home medical 
                equipment,
        provide for continued coverage of items and services furnished 
        by the health professional or provider that was treating the 
        enrollee before such change for a reasonable period of time.
For purposes of paragraph (4), a change of health professional or 
provider may be due to changes in the membership of an issuer's health 
professional and provider network, changes in the health coverage made 
available by an employer, or other similar circumstances.

``SEC. 2773. NONDISCRIMINATION AGAINST ENROLLEES AND IN THE SELECTION 
              OF HEALTH PROFESSIONALS; EQUITABLE ACCESS TO NETWORKS.

    ``(a) Nondiscrimination Against Enrollees.--No health insurance 
issuer may discriminate (directly or through contractual arrangements) 
in any activity that has the effect of discriminating against an 
individual on the basis of race, national origin, gender, language, 
socioeconomic status, age, disability, health status, or anticipated 
need for health services.
    ``(b) Nondiscrimination in Selection of Network Health 
Professionals.--A health insurance issuer offering network coverage 
shall not discriminate in selecting the members of its health 
professional network (or in establishing the terms and conditions for 
membership in such network) on the basis of--
            ``(1) the race, national origin, gender, age, or disability 
        (other than a disability that impairs the ability of an 
        individual to provide health care services or that may threaten 
        the health of enrollees) of the health professional; or
            ``(2) the health professional's lack of affiliation with, 
        or admitting privileges at, a hospital (unless such lack of 
        affiliation is a result of infractions of quality standards and 
        is not due to a health professional's type of license).
    ``(c) Nondiscrimination in Access to Health Plans.--While nothing 
in this section shall be construed as an `any willing provider' 
requirement (as referred to in section 2770(c)), a health insurance 
issuer shall not discriminate in participation, reimbursement, or 
indemnification against a health professional, who is acting within the 
scope of the health professional's license or certification under 
applicable State law, solely on the basis of such license or 
certification.

``SEC. 2774. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    ``(a) In General.--The provisions of any contract or agreement, or 
the operation of any contract or agreement, between a health insurance 
issuer and a health professional shall not prohibit or restrict the 
health professional from engaging in medical communications with his or 
her patient.
    ``(b) Nullification.--Any contract provision or agreement described 
in subsection (a) shall be null and void.
    ``(c) Medical Communication Defined.--For purposes of this section, 
the term `medical communication' means a communication made by a health 
professional with a patient of the health professional (or the guardian 
or legal representative of the patient) with respect to--
            ``(1) the patient's health status, medical care, or legal 
        treatment options;
            ``(2) any utilization review requirements that may affect 
        treatment options for the patient; or
            ``(3) any financial incentives that may affect the 
        treatment of the patient.

``SEC. 2775. DEVELOPMENT OF PLAN POLICIES.

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

``SEC. 2776. DUE PROCESS FOR ENROLLEES.

    ``(a) Utilization Review.--The utilization review program of a 
health insurance issuer shall--
            ``(1) be developed (including any screening criteria used 
        by such program) with the involvement of participating health 
        professionals and providers;
            ``(2) to the extent consistent with the protection of 
        proprietary business information (as defined for purposes of 
        section 552 of title 5, United States Code) release, upon 
        request, to affected health professionals, providers, and 
        enrollees the screening criteria, weighting elements, and 
        computer algorithms used in reviews and a description of the 
        method by which they were developed;
            ``(3) uniformly apply review criteria that are based on 
        sound scientific principles and the most recent medical 
        evidence;
            ``(4) use licensed, accredited, or certified health 
        professionals to make review determinations (and for services 
        requiring specialized training for their delivery, use a health 
        professional who is qualified through equivalent specialized 
        training and experience);
            ``(5) subject to reasonable safeguards, disclose to health 
        professionals and providers, upon request, the names and 
        credentials of individuals conducting utilization review;
            ``(6) not compensate individuals conducting utilization 
        review for denials of payment or coverage of benefits;
            ``(7) comply with the requirement of section 2771 that 
        prior authorization not be required for emergency and related 
        services furnished in a hospital emergency department;
            ``(8) make prior authorization determinations--
                    ``(A) in the case of services that are urgent care 
                services described in section 2771(b)(2)(C), within 30 
                minutes of a request for such determination, and
                    ``(B) in the case of other services, within 24 
                hours after the time of a request for determination;
            ``(9) include in any notice of such determination an 
        explanation of the basis of the determination and the right to 
        an immediate appeal;
            ``(10) treat a favorable prior authorization review 
        determination as a final determination for purposes of making 
        payment for a claim submitted for the item or service involved 
        unless such determination was based on false information 
        knowingly supplied by the person requesting the determination;
            ``(11) provide timely access, as defined by the applicable 
        State authority, to utilization review personnel and, if such 
        personnel are not available, waives any prior authorization 
        that would otherwise be required; and
            ``(12) provide notice of an initial determination on 
        payment of a claim within 30 days after the date the claim is 
        submitted for such item or service, and include in such notice 
        an explanation of the reasons for such determination and of the 
        right to an immediate appeal.
    ``(b) Appeals Process.--A health insurance issuer shall establish 
and maintain an accessible appeals process that--
            ``(1) reviews an adverse prior authorization 
        determination--
                    ``(A) for urgent care services, described in 
                subsection (a)(8)(A), within 1 hour after the time of a 
                request for such review, and
                    ``(B) for other services, within 24 hours after the 
                time of a request for such review;
            ``(2) reviews an initial determination on payment of claims 
        described in subsection (a)(12) within 30 days after the date 
        of a request for such review;
            ``(3) provides for review of determinations described in 
        paragraphs (1) and (2) by an appropriate clinical peer 
        professional who is in the same or similar specialty as would 
        typically provide the item or service involved (or another 
        licensed, accredited, or certified health professional 
        acceptable to the plan and the person requesting such review); 
        and
            ``(4) provides for review of--
                    ``(A) the determinations described in paragraphs 
                (1), (2), and (3), and
                    ``(B) enrollee complaints about inadequate access 
                to any category or type of health professional or 
                provider in the network of the issuer or other matters 
                specified by this part,
        by an appropriate clinical peer professional who is in the same 
        or similar specialty as would typically provide the item or 
        service involved (or another licensed, accredited, or certified 
        health professional acceptable to the issuer and the person 
        requesting such review) that is not involved in the operation 
        of the plan or in making the determination or policy being 
        appealed.
The procedures specified in this subsection shall not be construed as 
preempting or superseding any other reviews or appeals an issuer is 
required by law to make available.

``SEC. 2777. DUE PROCESS FOR HEALTH PROFESSIONALS AND PROVIDERS.

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

``SEC. 2778. INFORMATION REPORTING AND DISCLOSURE.

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

``SEC. 2779. CONFIDENTIALITY; ADEQUATE RESERVES.

    ``(a) Confidentiality.--
            ``(1) In general.--A health insurance issuer shall 
        establish mechanisms and procedures to ensure compliance with 
        applicable Federal and State laws to protect the 
        confidentiality of individually identifiable information held 
        by the issuer with respect to an enrollee, health professional, 
        or provider.
            ``(2) Definition.--For purposes of paragraph (1), the term 
        `individually identifiable information' means, with respect to 
        an enrollee, a health professional, or a provider, any 
        information, whether oral or recorded in any medium or form, 
        that identifies or can readily be associated with the identity 
        of the enrollee, the health professional, or the provider.
    ``(b) Financial Reserves; Solvency.--A health insurance issuer 
shall--
            ``(1) meet such financial reserve or other solvency-related 
        requirements as the applicable State authority may establish to 
        assure the continued availability of (and appropriate payment 
        for) covered items and services for enrollees; and
            ``(2) establish mechanisms specified by the applicable 
        State authority to protect enrollees, health professionals, and 
        providers in the event of failure of the issuer.
Such requirements shall not unduly impede the establishment of health 
insurance issuers owned and operated by health care professionals or 
providers or by non-profit community-based organizations.

``SEC. 2780. QUALITY IMPROVEMENT PROGRAM.

    ``(a) In General.--A health insurance issuer shall establish a 
quality improvement program (consistent with subsection (b)) that 
systematically and continuously assesses and improves--
            ``(1) enrollee health status, patient outcomes, processes 
        of care, and enrollee satisfaction associated with health care 
        provided by the issuer; and
            ``(2) the administrative and funding capacity of the issuer 
        to support and emphasize preventive care, utilization, access 
        and availability, cost effectiveness, acceptable treatment 
        modalities, specialists referrals, the peer review process, and 
        the efficiency of the administrative process.
    ``(b) Functions.--A quality improvement program established 
pursuant to subsection (a) shall--
            ``(1) assess the performance of the issuer and its 
        participating health professionals and providers and report the 
        results of such assessment to purchasers, participating health 
        professionals and providers, and administrative personnel;
            ``(2) demonstrate measurable improvements in clinical 
        outcomes and plan performance measured by identified criteria, 
        including those specified in subsection (a)(1); and
            ``(3) analyze quality assessment data to determine specific 
        interactions in the delivery system (both the design and 
        funding of the health insurance coverage and the clinical 
        provision of care) that have an adverse impact on the quality 
        of care.''.
    (b) Application to Group Health Insurance Coverage.--
            (1) Subpart 2 of part A of title XXVII of the Public Health 
        Service Act is amended by adding at the end the following new 
        section:

``SEC. 2706. PATIENT PROTECTION STANDARDS.

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

``SEC. 2752. PATIENT PROTECTION STANDARDS.

    ``Each health insurance issuer shall comply with patient protection 
requirements under part C with respect to individual health insurance 
coverage it offers.''.
    (d) Modification of Preemption Standards.--
            (1) Group health insurance coverage.--Section 2723 of such 
        Act (42 U.S.C. 300gg-23) is amended--
                    (A) in subsection (a)(1), by striking ``subsection 
                (b)'' and inserting ``subsections (b) and (c)'';
                    (B) by redesignating subsections (c) and (d) as 
                subsections (d) and (e), respectively; and
                    (C) by inserting after subsection (b) the following 
                new subsection:
    ``(c) Special Rules in Case of Patient Protection Requirements.--
Subject to subsection (a)(2), the provisions of section 2706 and part 
C, and part D insofar as it applies to section 2706 or part C, shall 
not be construed to preempt any State law, or the enactment or 
implementation of such a State law, that provides protections for 
individuals that are equivalent to or stricter than the protections 
provided under such provisions.''.
            (2) Individual health insurance coverage.--Section 2762 of 
        such Act (42 U.S.C. 300gg-62), as added by section 605(b)(3)(B) 
        of Public Law 104-204, is amended--
                    (A) in subsection (a), by striking ``subsection 
                (b), nothing in this part'' and inserting ``subsections 
                (b) and (c)'', and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Special Rules in Case of Patient Protection Requirements.--
Subject to subsection (b), the provisions of section 2752 and part C, 
and part D insofar as it applies to section 2752 or part C, shall not 
be construed to preempt any State law, or the enactment or 
implementation of such a State law, that provides protections for 
individuals that are equivalent to or stricter than the protections 
provided under such provisions.''.
    (e) Additional Conforming Amendments.--
            (1) Section 2723(a)(1) of such Act (42 U.S.C. 300gg-
        23(a)(1)) is amended by striking ``part C'' and inserting 
        ``parts C and D''.
            (2) Section 2762(b)(1) of such Act (42 U.S.C. 300gg-
        62(b)(1)) is amended by striking ``part C'' and inserting 
        ``part D''.
    (f) Effective Dates.--(1)(A) Subject to subparagraph (B), the 
amendments made by subsections (a), (b), (d)(1), and (e) shall apply 
with respect to group health insurance coverage for group health plan 
years beginning on or after July 1, 1998 (in this subsection referred 
to as the ``general effective date'') and also shall apply to portions 
of plan years occurring on and after January 1, 1999.
    (B) In the case of group health insurance coverage provided 
pursuant to a group health plan maintained pursuant to 1 or more 
collective bargaining agreements between employee representatives and 1 
or more employers ratified before the date of enactment of this Act, 
the amendments made by subsections (a), (b), (d)(1), and (e) shall not 
apply to plan years beginning before the later of--
            (i) the date on which the last collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of 
        enactment of this Act), or
            (ii) the general effective date.
For purposes of clause (i), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by subsection (a) or 
(b) shall not be treated as a termination of such collective bargaining 
agreement.
    (2) The amendments made by subsections (a), (c), (d)(2), and (e) 
shall apply with respect to individual health insurance coverage 
offered, sold, issued, renewed, in effect, or operated in the 
individual market on or after the general effective date.

SEC. 3. PATIENT PROTECTION STANDARDS UNDER THE EMPLOYEE RETIREMENT 
              INCOME SECURITY ACT OF 1974.

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

``SEC. 713. PATIENT PROTECTION STANDARDS.

    ``(a) In General.--Subject to subsection (b), a group health plan 
(and a health insurance issuer offering group health insurance coverage 
in connection with such a plan) shall comply with the requirements of 
part C of title XXVII of the Public Health Service Act.
    ``(b) References in Application.--In applying subsection (a) under 
this part, any reference in such part C--
            ``(1) to a health insurance issuer and health insurance 
        coverage offered by such an issuer is deemed to include a 
        reference to a group health plan and coverage under such plan, 
        respectively;
            ``(2) to the Secretary is deemed a reference to the 
        Secretary of Labor;
            ``(3) to an applicable State authority is deemed a 
        reference to the Secretary of Labor; and
            ``(4) to an enrollee with respect to health insurance 
        coverage is deemed to include a reference to a participant or 
        beneficiary with respect to a group health plan.
    ``(c) Assuring Coordination.--The Secretary of Health and Human 
Services and the Secretary of Labor shall ensure, through the execution 
of an interagency memorandum of understanding between such Secretaries, 
that--
            ``(1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which such 
        Secretaries have responsibility under such part C (and section 
        2706 of the Public Health Service Act) and this section are 
        administered so as to have the same effect at all times; and
            ``(2) coordination of policies relating to enforcing the 
        same requirements through such Secretaries in order to have a 
        coordinated enforcement strategy that avoids duplication of 
        enforcement efforts and assigns priorities in enforcement.''.
    (b) Modification of Preemption Standards.--Section 731 of such Act 
(42 U.S.C. 1191) is amended--
            (1) in subsection (a)(1), by striking ``subsection (b)'' 
        and inserting ``subsections (b) and (c)'';
            (2) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (3) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Special Rules in Case of Patient Protection Requirements.--
Subject to subsection (a)(2), the provisions of section 713 and part C 
of title XXVII of the Public Health Service Act, and subpart C insofar 
as it applies to section 713 or such part, shall not be construed to 
preempt any State law, or the enactment or implementation of such a 
State law, that provides protections for individuals that are 
equivalent to or stricter than the protections provided under such 
provisions.''.
    (c) Conforming Amendments.--(1) Section 732(a) of such Act (29 
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting 
``sections 711 and 713''.
    (2) The table of contents in section 1 of such Act is amended by 
inserting after the item relating to section 712 the following new 
item:

``Sec. 713. Patient protection standards.''.
    (3) Section 734 of such Act (29 U.S.C. 1187) is amended by 
inserting ``and section 713(d)'' after ``of 1996''.
    (d) Effective Date.--(1) Subject to paragraph (2), the amendments 
made by this section shall apply with respect to group health plans for 
plan years beginning on or after July 1, 1998 (in this subsection 
referred to as the ``general effective date'') and also shall apply to 
portions of plan years occurring on and after January 1, 1999.
    (2) In the case of a group health plan maintained pursuant to 1 or 
more collective bargaining agreements between employee representatives 
and 1 or more employers ratified before the date of enactment of this 
Act, the amendments made by this section shall not apply to plan years 
beginning before the later of--
            (A) the date on which the last collective bargaining 
        agreements relating to the plan terminates (determined without 
        regard to any extension thereof agreed to after the date of 
        enactment of this Act), or
            (B) the general effective date.
For purposes of subparagraph (A), any plan amendment made pursuant to a 
collective bargaining agreement relating to the plan which amends the 
plan solely to conform to any requirement added by subsection (a) shall 
not be treated as a termination of such collective bargaining 
agreement.

SEC. 4. NON-PREEMPTION OF STATE LAW RESPECTING LIABILITY OF GROUP 
              HEALTH PLANS.

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