[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 701 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 701

To amend title XVIII of the Social Security Act to provide protections 
 for medicare beneficiaries who enroll in medicare managed care plans, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 6, 1997

Mr. Grassley (for himself, Mr. Conrad, Mr. Helms, Mr. D'Amato, and Mr. 
    Durbin) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to provide protections 
 for medicare beneficiaries who enroll in medicare managed care plans, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Patient Choice and Access 
Act of 1997''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) There should be no unreasonable barriers or impediments 
        to the ability of individuals enrolled in health care plans to 
        obtain appropriate specialized medical services.
            (2) The patient's first point of contact in a health care 
        plan must be encouraged to make all appropriate medical 
        referrals and should not be constrained financially from making 
        such referrals.
            (3) Some health care plans may impede timely access to 
        specialty care.
            (4) Some contracts between health care plans and providers 
        may contain provisions which impede the provider in informing 
        the patient of the full range of treatment options.
            (5) Patients cannot make appropriate health care decisions 
        without access to all relevant information relating to those 
        decisions.
            (6) Restrictions on the ability of health care providers to 
        provide full disclosure of all relevant information to patients 
        making health care decisions violate the principles of informed 
        consent and the ethical standards of the health care 
        professions. Contractual clauses and other policies that 
        interfere with communications between health care providers and 
        patients can impact the quality of care received by those 
        patients.
            (7) Patients should have the opportunity to access out-of-
        network items, treatment, and services at an additional cost to 
        the patient which is not so prohibitive that they are deterred 
        from seeing the health care provider of their own choice.
            (8) Specialty care must be available for the full duration 
        of the patient's medical needs when medically necessary and not 
        limited by time or number of visits.
            (9) Direct access to specialty care is essential for 
        patients in emergency and nonemergency situations and for 
        patients with chronic and temporary conditions.

SEC. 3. PROTECTION FOR MEDICARE HMO ENROLLEES.

    (a) In General.--Section 1876 of the Social Security Act (42 U.S.C. 
1395mm) is amended--
            (1) in subsection (c)(1), by striking ``subsection (e)'' 
        and inserting ``subsections (e) and (k)''; and
            (2) by adding at the end the following:
    ``(k) Beneficiary Protection.--
            ``(1) Assuring adequate in-network access.--
                    ``(A) Timely access.--An eligible organization that 
                restricts the providers from whom benefits may be 
                obtained must guarantee to enrollees under this section 
                timely access to primary and specialty health care 
                providers who are appropriate for the enrollee's 
                condition.
                    ``(B) Access to specialized care.--Enrollees must 
                have access to specialized treatment when medically 
                necessary. This access may be satisfied through 
                contractual arrangements with specialized health care 
                providers outside of the network.
                    ``(C) Continuity of care.--An eligible 
                organization's use of case management may not create an 
                undue burden for enrollees under this section. An 
                eligible organization must ensure direct access to 
                specialists for ongoing care as so determined by the 
                case manager in consultation with the specialty health 
                care provider. This continuity of care may be satisfied 
                for enrollees with chronic conditions through the use 
                of a specialist serving as case manager.
            ``(2) Out-of-network access.--If an eligible organization 
        offers to members enrolled under this section a plan which 
        provides for coverage of items and services covered under parts 
        A and B only if such items and services are furnished through 
        health care providers and other persons who are members of a 
network of health care providers and other persons who have entered 
into a contract with the organization to provide such services, the 
contract with the organization under this section shall provide that 
the organization shall also offer to members enrolled under this 
section (at the time of enrollment) a plan which provides for coverage 
of such items and services which are not furnished through health care 
providers and other persons who are members of such a network.
            ``(3) Grievance process.--
                    ``(A) In general.--An eligible organization must 
                provide a meaningful and expedited procedure, which 
                includes notice and hearing requirements, for resolving 
                grievances between the organization (including any 
                entity or individual through which the organization 
                provides health care services) and members enrolled 
                with the organization under this section. Under that 
                procedure, any member enrolled with the eligible 
                organization may, at any time, file a complaint to 
                resolve grievances between the member and the 
                organization before a board of appeals established 
                under subparagraph (C).
                    ``(B) Notice requirements.--
                            ``(i) In general.--The eligible 
                        organization must provide, in a timely manner, 
                        to an enrollee a notice of any denial of 
                        services in-network or denial of payment for 
                        out-of-network care.
                            ``(ii) Information required.--Such notice 
                        shall include the following:
                                    ``(I) A clear statement of the 
                                reason for the denial.
                                    ``(II) An explanation of the 
                                complaint process under subparagraph 
                                (A) which is available to the enrollee 
                                upon request.
                                    ``(III) An explanation of all other 
                                appeal rights available to all 
                                enrollees.
                                    ``(IV) A description of how to 
                                obtain supporting evidence for the 
                                hearing described in subparagraph (C), 
                                including the patient's medical records 
                                from the organization, as well as 
                                supporting affidavits from the 
                                attending health care providers.
                    ``(C) Hearing board.--
                            ``(i) In general.--Each eligible 
                        organization shall establish a board of appeals 
                        to hear and make determinations on complaints 
                        by enrollees concerning denials of coverage or 
                        payment for services (whether in-network or 
                        out-of-network) and the medical necessity and 
                        appropriateness of covered items and services.
                            ``(ii) Composition.--A board of appeals of 
                        an eligible organization shall consist of--
                                    ``(I) representatives of the 
                                organization, including physicians, 
                                nonphysicians, administrators, and 
                                enrollees;
                                    ``(II) consumers who are not 
                                enrolled with an eligible organization 
                                under this section; and
                                    ``(III) health care providers who 
                                are not under contract with the 
                                eligible organization and who are 
                                experts in the field of medicine which 
                                necessitates treatment.
                        Members of the board of appeals described in 
                        subclauses (II) and (III) shall have no 
                        interest in the eligible organization.
                            ``(iii) Deadline for decision.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), a board of 
                                appeals shall hear and resolve 
                                complaints within 30 days after the 
                                date the complaint is filed with the 
                                board.
                                    ``(II) Expedited procedure.--A 
                                board of appeals shall have an 
                                expedited procedure in order to hear 
                                and resolve complaints regarding urgent 
                                care (as determined by the Secretary in 
                                regulations).
                    ``(D) Other remedies.--Nothing in this paragraph 
                may be construed to replace or supersede any appeals 
                mechanism otherwise provided for an individual entitled 
                to benefits under this title.
            ``(4) Notice of enrollee rights and comparative report.--
                    ``(A) In general.--Each eligible organization shall 
                provide in any marketing materials distributed to 
                individuals eligible to enroll under this section and 
                to each enrollee at the time of enrollment and not less 
                frequently than annually thereafter, an explanation of 
                the individual's rights under this section and a copy 
                of the most recent comparative report (as established 
by the Secretary under subparagraph (C)) for that organization.
                    ``(B) Rights described.--The explanation of rights 
                under subparagraph (A) shall be in a standardized 
                format (as established by the Secretary in regulations) 
                and shall include an explanation of--
                            ``(i) the enrollee's rights to benefits 
                        from the organization;
                            ``(ii) the restrictions (if any) on 
                        payments under this title for services 
                        furnished other than by or through the 
                        organization;
                            ``(iii) out-of-area coverage provided by 
                        the organization;
                            ``(iv) the organization's coverage of 
                        emergency services and urgently needed care;
                            ``(v) the organization's coverage of out-
                        of-network services, including services that 
                        are additional to the items and services 
                        covered under parts A and B;
                            ``(vi) appeal rights of and grievance 
                        procedures available to enrollees; and
                            ``(vii) any other rights that the Secretary 
                        determines would be helpful to beneficiaries in 
                        understanding their rights under the plan.
                    ``(C) Comparative report.--
                            ``(i) In general.--The Secretary shall 
                        develop an understandable standardized 
                        comparative report on the plans offered by 
                        eligible organizations, that will assist 
                        beneficiaries under this title in their 
                        decisionmaking regarding medical care and 
                        treatment by allowing the beneficiaries to 
                        compare the organizations that the 
                        beneficiaries are eligible to enroll with. In 
                        developing such report the Secretary shall 
                        consult with outside organizations, including 
                        groups representing the elderly and health 
                        insurers, in order to assist the Secretary in 
                        developing the report.
                            ``(ii) Contents of report.--The report 
                        described in clause (i) shall include a 
                        comparison for each plan of--
                                    ``(I) the premium for the plan;
                                    ``(II) the benefits offered by the 
                                plan, including any benefits that are 
                                additional to the benefits offered 
                                under parts A and B;
                                    ``(III) the amount of any 
                                deductibles, coinsurance, or any 
                                monetary limits on benefits;
                                    ``(IV) the identity, location, 
                                qualifications, and availability of 
                                health care providers in any health 
                                care provider networks of the plan;
                                    ``(V) the number of individuals who 
                                disenrolled from the plan within 3 
                                months of enrollment and during the 
                                previous fiscal year, stated as 
                                percentages of the total number of 
                                individuals in the plan;
                                    ``(VI) the procedures used by the 
                                plan to control utilization of services 
                                and expenditures, including any 
                                financial incentives;
                                    ``(VII) the procedures used by the 
                                plan to ensure quality of care;
                                    ``(VIII) the rights and 
                                responsibilities of enrollees;
                                    ``(IX) the number of applications 
                                during the previous fiscal 
year requesting that the plan cover certain medical services that were 
denied by the plan (and the number of such denials that were 
subsequently reversed by the plan), stated as a percentage of the total 
number of applications during such period requesting that the plan 
cover such services;
                                    ``(X) the number of times during 
                                the previous fiscal year (after an 
                                appeal was filed with the Secretary) 
                                that the Secretary upheld or reversed a 
                                denial of a request that the plan cover 
                                certain medical services;
                                    ``(XI) the restrictions (if any) on 
                                payment for services provided outside 
                                the plan's health care provider 
                                network;
                                    ``(XII) the process by which 
                                services may be obtained through the 
                                plan's health care provider network;
                                    ``(XIII) coverage for out-of-area 
                                services;
                                    ``(XIV) any exclusions in the types 
                                of health care providers participating 
                                in the plan's health care provider 
                                network; and
                                    ``(XV) any additional information 
                                that the Secretary determines would be 
                                helpful for beneficiaries to compare 
                                the organizations that the 
                                beneficiaries are eligible to enroll 
                                with.
                            ``(iii) Ongoing development of report.--The 
                        Secretary shall, not less than annually, update 
                        each comparative report.
                    ``(D) Compliance.--Each eligible organization shall 
                disclose to the Secretary, as requested by the 
                Secretary, the information necessary to complete the 
                comparative report.
            ``(5) Restrictions on health care provider incentive 
        plans.--
                    ``(A) In general.--Each contract with an eligible 
                organization under this section shall provide that the 
                organization may not operate any health care provider 
                incentive plan (as defined in subparagraph (B)) unless 
                the following requirements are met:
                            ``(i) No specific payment is made directly 
                        or indirectly under the plan to a health care 
                        provider or health care provider group as an 
                        inducement to reduce or limit medically 
                        necessary services.
                            ``(ii) If the plan places a health care 
                        provider or health care provider group at 
                        substantial financial risk (as determined by 
                        the Secretary) for services not provided by the 
                        health care provider or health care provider 
                        group, the organization--
                                    ``(I) provides stop-loss protection 
                                for the health care provider or health 
                                care provider group that is adequate 
                                and appropriate, based on standards 
                                developed by the Secretary that take 
                                into account the number (and type) of 
                                health care providers placed at such 
                                substantial financial risk in the group 
                                or under the plan and the number of 
                                individuals enrolled with the 
                                organization that receive services from 
                                the health care provider or the health 
                                care provider group; and
                                    ``(II) conducts periodic surveys of 
                                both individuals enrolled and 
                                individuals previously enrolled with 
                                the organization to determine the 
                                degree of access of such individuals to 
                                services provided by the organization 
                                and satisfaction with the quality of 
                                such services.
                            ``(iii) The organization 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 
                        subparagraph.
                    ``(B) Health care provider incentive plan 
                defined.--In this paragraph, the term `health care 
                provider incentive plan' means any compensation 
                arrangement between an eligible organization and a 
                health care provider or health care provider group that 
                may directly or indirectly have the effect of reducing 
                or limiting medically necessary services provided with 
                respect to individuals enrolled with the organization.
            ``(6) Prohibition of interference with certain medical 
        communications.--
                    ``(A) In general.--
                            ``(i) Prohibition of certain provisions.--
                        Subject to subparagraph (C), an eligible 
organization may not include with respect to its plan under this 
section any provision that prohibits or restricts any medical 
communication (as defined in subparagraph (B)) as part of--
                                    ``(I) a written contract or 
                                agreement with a health care provider;
                                    ``(II) a written statement to such 
                                a provider; or
                                    ``(III) an oral communication to 
                                such a provider.
                            ``(ii) Nullification.--Any provision 
                        described in clause (i) is null and void.
                    ``(B) Medical communication defined.--In this 
                paragraph, the term `medical communication' means a 
                communication made by a health care provider with a 
                patient of the provider (or the guardian or legal 
                representative of such patient) with respect to any of 
                the following:
                            ``(i) How participating physicians and 
                        health care providers are paid.
                            ``(ii) Utilization review procedures.
                            ``(iii) The basis for specific utilization 
                        review decisions.
                            ``(iv) Whether a specific prescription drug 
                        or biological is included in the formulary.
                            ``(v) How the eligible organization decides 
                        whether a treatment or procedure is 
                        experimental.
                            ``(vi) The patient's physical or mental 
                        condition or treatment options.
                    ``(C) Construction.--Nothing in this paragraph 
                shall be construed as preventing an entity from--
                            ``(i) acting on information relating to the 
                        provision of (or failure to provide) treatment 
                        to a patient; or
                            ``(ii) restricting a medical communication 
                        that recommends 1 health plan over another if 
                        the sole purpose of the communication is to 
                        secure financial gain for the health care 
                        provider.
            ``(7) Additional definitions.--In this subsection:
                    ``(A) Health care provider.--The term `health care 
                provider' means anyone licensed under State law to 
                provide health care services under part A or B.
                    ``(B) In-network.--The term `in-network' means 
                services provided by health care providers who have 
                entered into a contract or agreement with the 
                organization under which such providers are obligated 
                to provide items, treatment, and services under this 
                section to individuals enrolled with the organization 
                under this section.
                    ``(C) Network.--The term `network' means, with 
                respect to an eligible organization, the health care 
                providers who have entered into a contract or agreement 
                with the organization under which such providers are 
                obligated to provide items, treatment, and services 
                under this section to individuals enrolled with the 
                organization under this section.
                    ``(D) Out-of-network.--The term `out-of-network' 
                means services provided by health care providers who 
                have not entered into a contract agreement with the 
                organization under which such providers are obligated 
                to provide items, treatment, and services under this 
                section to individuals enrolled with the organization 
                under this section.
            ``(8) Nonpreemption of state law.--A State may establish or 
        enforce requirements with respect to the subject matter of this 
        subsection, but only if such requirements are more stringent 
        than the requirements established under this subsection.''.
    (b) Conforming Amendments.--Section 1876 of such Act is amended--
            (1) in subsection (a)(1)(E)(ii)(II), by striking 
        ``subsection (c)(3)(E)'' and inserting ``subsection (k)(4)'';
            (2) in subsection (c)--
                    (A) in paragraph (3)--
                            (i) by striking subparagraph (E); and
                            (ii) in subparagraph (G)(ii)(II), by 
                        striking ``subparagraph (E)'' and inserting 
                        ``subsection (k)(4)'';
                    (B) by striking paragraph (4); and
                    (C) by striking ``(5)(A) The organization'' and all 
                that follows through ``(B) A member'' and inserting 
                ``(5) A member''; and
            (3) in subsection (i)--
                    (A) in paragraph (6)(A)(vi), by striking 
                ``paragraph (8)'' and inserting ``subsection (k)(5)''; 
                and
                    (B) by striking paragraph (8).
    (c) Effective Date.--The amendments made by this section shall 
apply to contracts entered into or renewed under section 1876 of the 
Social Security Act (42 U.S.C. 1395mm) after the expiration of the 1-
year period that begins on the date of enactment of this Act.

SEC. 4. APPLICATION OF PROTECTIONS TO MEDICARE SELECT POLICIES.

    (a) In General.--Section 1882(t) of the Social Security Act (42 
U.S.C. 1395ss(t)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``and'' at the end of subparagraph 
                (E);
                    (B) by striking the period at the end of 
                subparagraph (F) and inserting a semicolon; and
                    (C) by adding at the end the following:
                    ``(G) notwithstanding any other provision of this 
                section to the contrary, the issuer of the policy meets 
                the requirements of section 1876(k) (except for 
                subparagraphs (C) and (D) of paragraph (4) of that 
                section) with respect to individuals enrolled under the 
                policy, in the same manner such requirements apply with 
                respect to an eligible organization under such section 
                with respect to individuals enrolled with the 
                organization under such section; and
                    ``(H) the issuer of the policy discloses to the 
                Secretary, as requested by the Secretary, the 
                information necessary to complete the report described 
                in paragraph (4).''; and
            (2) by adding at the end the following:
    ``(4) The Secretary shall develop an understandable standardized 
comparative report on the policies offered by entities pursuant to this 
subsection. Such report shall contain information similar to the 
information contained in the report developed by the Secretary pursuant 
to section 1876(k)(4)(C).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to policies issued or renewed on or after the expiration of the 
1-year period that begins on the date of enactment of this Act.

SEC. 5. STUDY AND RECOMMENDATIONS TO CONGRESS.

    (a) Study.--The Secretary of Health and Human Services (in this Act 
referred to as the ``Secretary'') shall conduct a thorough study 
regarding the implementation of the amendments made by sections 3 and 4 
of this Act.
    (b) Report.--Not later than 2 years after the date of enactment of 
this Act and annually thereafter, the Secretary shall submit a report 
to Congress that shall contain a detailed statement of the findings and 
conclusions of the Secretary regarding the study conducted pursuant to 
subsection (a), together with the Secretary's recommendations for such 
legislation and administrative actions as the Secretary considers 
appropriate.
    (c) Funding.--The Secretary shall carry out the provisions of this 
section out of funds otherwise appropriated to the Secretary.

SEC. 6. NATIONAL INFORMATION CLEARINGHOUSE.

    Not later than 18 months after the date of enactment of this Act, 
the Secretary shall establish and operate, out of funds otherwise 
appropriated to the Secretary, a clearinghouse and (if the Secretary 
determines it to be appropriate) a 24-hour toll-free telephone hotline, 
to provide for the dissemination of the comparative reports created 
pursuant to section 1876(k)(4)(C) of the Social Security Act (42 U.S.C. 
1395mm(k)(4)(C)) (as added by section 3 of this Act) and section 
1882(t)(4) of the Social Security Act (42 U.S.C. 1395ss(t)(4)) (as 
added by section 4 of this Act). In order to assist in the 
dissemination of the comparative reports, the Secretary may also 
utilize medicare offices open to the general public, the beneficiary 
assistance program established under section 4359 of the Omnibus Budget 
Reconciliation Act of 1990 (42 U.S.C. 1395b-3), and the health 
insurance information counseling and assistance grants under section 
4359 of that Act (42 U.S.C. 1395b-4).
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