[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2824 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2824

  To amend title I of the Employee Retirement Income Security Act of 
 1974, title XXVII of the Public Health Service Act, and the Internal 
  Revenue Code of 1986 to protect consumers in managed care plans and 
                         other health coverage.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 9, 1999

 Mr. Coburn (for himself, Mr. Shadegg, Mr. Cooksey, Mr. Hilleary, Mr. 
Vitter, Mrs. Emerson, Mr. Gillmor, Mr. Regula, Mrs. Cubin, Mr. Graham, 
  Mr. Cunningham, and Mr. Weldon of Florida) introduced the following 
bill; which was referred to the Committee on Commerce, and in addition 
 to the Committees on Education and the Workforce, and Ways and Means, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of sic provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend title I of the Employee Retirement Income Security Act of 
 1974, title XXVII of the Public Health Service Act, and the Internal 
  Revenue Code of 1986 to protect consumers in managed care plans and 
                         other health coverage.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Health Care 
Quality and Choice Act of 1999''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--IMPROVING MANAGED CARE

                   Subtitle A--Grievances and Appeals

Sec. 101. Utilization review activities.
Sec. 102. Internal appeals procedures.
Sec. 103. External appeals procedures.
Sec. 104. Establishment of a grievance process.
                       Subtitle B--Access to Care

Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Access to specialty care.
Sec. 115. Access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Network adequacy.
Sec. 119. Access to experimental or investigational prescription drugs.
                   Subtitle C--Access to Information

Sec. 121. Patient access to information.
         Subtitle D--Protecting the Doctor-Patient Relationship

Sec. 131. Prohibition of interference with certain medical 
                            communications.
Sec. 132. Prohibition of discrimination against providers based on 
                            licensure.
Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of clean claims.
                        Subtitle E--Definitions

Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Coverage of limited scope plans.
Sec. 155. Regulations; coordination; application under different laws.
 TITLE II--APPLICATION OF QUALITY STANDARDS TO GROUP HEALTH PLANS AND 
     HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to group health plans and group health insurance 
                            coverage.
Sec. 202. Application to individual health insurance coverage.
TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 301. Application of patient protection standards to group health 
                            plans and group health insurance coverage 
                            under the Employee Retirement Income 
                            Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving 
                            health insurance policyholders.
Sec. 303. Availability of binding arbitration.
TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

Sec. 401. Amendments to the Internal Revenue Code of 1986.
        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.
                       TITLE VI--OTHER PROVISIONS

Sec. 601. Health care paperwork simplification.
Sec. 602. Protection for certain information.
Sec. 603. Medicare competitive pricing demonstration project.

                    TITLE I--IMPROVING MANAGED CARE

                   Subtitle A--Grievance and Appeals

SEC. 101. UTILIZATION REVIEW ACTIVITIES.

    (a) Compliance With Requirements.--
            (1) In general.--A group health plan, and a health 
        insurance issuer that provides health insurance coverage, shall 
        conduct utilization review activities in connection with the 
        provision of benefits under such plan or coverage only in 
        accordance with a utilization review program that meets the 
        requirements of this section.
            (2) Use of outside agents.--Nothing in this section shall 
        be construed as preventing a group health plan or health 
        insurance issuer from arranging through a contract or otherwise 
        for persons or entities to conduct utilization review 
        activities on behalf of the plan or issuer, so long as such 
        activities are conducted in accordance with a utilization 
        review program that meets the requirements of this section.
            (3) Utilization review defined.--For purposes of this 
        section, the terms ``utilization review'' and ``utilization 
        review activities'' mean procedures used to monitor or evaluate 
        the use or coverage, clinical necessity, appropriateness, 
        efficacy, or efficiency of health care services, procedures or 
        settings, and includes prospective review, concurrent review, 
        second opinions, case management, discharge planning, or 
        retrospective review.
    (b) Written Policies and Criteria.--
            (1) Written policies.--A utilization review program shall 
        be conducted consistent with written policies and procedures 
        that govern all aspects of the program.
            (2) Use of written criteria.--
                    (A) In general.--Such a program shall utilize 
                written clinical review criteria developed with input 
                from a range of appropriate practicing physicians, as 
                determined by the plan, pursuant to the program. Such 
                criteria shall include written clinical review criteria 
                that are based on valid clinical evidence where 
                available and that are directed specifically at meeting 
                the needs of at-risk populations and covered 
                individuals with chronic conditions or severe 
                illnesses, including gender-specific criteria and 
                pediatric-specific criteria where available and 
                appropriate.
                    (B) Continuing use of standards in retrospective 
                review.--If a health care service has been specifically 
                pre-authorized or approved for an enrollee under such a 
                program, the program shall not, pursuant to 
                retrospective review, revise or modify the specific 
                standards, criteria, or procedures used for the 
                utilization review for procedures, treatment, and 
                services delivered to the enrollee during the same 
                course of treatment.
                    (C) Review of sample of claims denials.--Such a 
                program shall provide for an evaluation of the clinical 
                appropriateness of at least a sample of denials of 
                claims for benefits.
    (c) Conduct of Program Activities.--
            (1) Administration by health care professionals.--A 
        utilization review program shall be administered by appropriate 
        physician specialists who shall oversee review decisions.
            (2) Use of qualified, independent personnel.--
                    (A) In general.--A utilization review program shall 
                provide for the conduct of utilization review 
                activities only through personnel who are qualified and 
                have received appropriate training in the conduct of 
                such activities under the program.
                    (B) Prohibition of contingent compensation 
                arrangements.--Such a program shall not, with respect 
                to utilization review activities, permit or provide 
                compensation or anything of value to its employees, 
                agents, or contractors in a manner that encourages 
                denials of claims for benefits. This subparagraph shall 
                not preclude any capitation arrangements between plans 
                and providers.
                    (C) Prohibition of conflicts.--Such a program shall 
                not permit a health care professional who is providing 
                health care services to an individual to perform 
                utilization review activities in connection with the 
                health care services being provided to the individual.
            (3) Accessibility of review.--Such a program shall provide 
        that appropriate personnel performing utilization review 
        activities under the program, including the utilization review 
        administrator, are reasonably accessible by toll-free telephone 
        during normal business hours to discuss patient care and allow 
        response to telephone requests, and that appropriate provision 
        is made to receive and respond promptly to calls received 
        during other hours.
            (4) Limits on frequency.--Such a program shall not provide 
        for the performance of utilization review activities with 
        respect to a class of services furnished to an individual more 
        frequently than is reasonably required to assess whether the 
        services under review are medically necessary or appropriate.
    (d) Deadline for Determinations.--
            (1) Prior authorization services.--
                    (A) In general.--Except as provided in paragraph 
                (2), in the case of a utilization review activity 
                involving the prior authorization of health care items 
                and services for an individual, the utilization review 
                program shall make a determination concerning such 
                authorization, and provide notice of the determination 
                to the individual or the individual's designee and the 
                individual's health care provider by telephone and in 
                printed form, as soon as possible in accordance with 
                the medical exigencies of the case, and in no event 
                later than the deadline specified in subparagraph (B)
                    (B) Deadline.--
                            (i) In general.--Subject to clauses (ii) 
                        and (iii), the deadline specified in this 
                        subparagraph is 14 days after the date of 
                        receipt of the request for prior authorization, 
                        and all appropriate information shall be 
                        provided at the time of the request.
                            (ii) Extension permitted where notice of 
                        additional information required.--If a 
                        utilization review program--
                                    (I) receives a request for a prior 
                                authorization,
                                    (II) determines that additional 
                                information is necessary to complete 
                                the review and make the determination 
                                on the request,
                                    (III) notifies the requester, not 
                                later than 5 business days after the 
                                date of receiving the request, of the 
                                need for such specified additional 
                                information, and
                                    (IV) requires the requester to 
                                submit specified information not later 
                                than 2 business days after 
                                notification,
                        the deadline specified in this subparagraph is 
                        14 days after the date the program receives the 
                        specified additional information, but in no 
                        case later than 28 days after the date of 
                        receipt of the request for the prior 
                        authorization. This clause shall not apply if 
                        the deadline is specified in clause (iii).
                            (iii) Expedited cases.--In the case of a 
                        situation described in section 102(c)(1)(A), 
                        the deadline specified in this subparagraph is 
                        48 hours after the time of the request for 
                        prior authorization.
            (2) Ongoing care.--
                    (A) Concurrent review.--
                            (i) In general.--Subject to subparagraph 
                        (B), in the case of a concurrent review of 
                        ongoing care (including hospitalization), which 
                        results in a termination or reduction of such 
                        care, the plan must provide by telephone and in 
                        printed form notice of the concurrent review 
                        determination to the individual or the 
                        individual's designee and the individual's 
                        health care provider as soon as possible in 
                        accordance with the medical exigencies of the 
                        case, with sufficient time prior to the 
                        termination or reduction to allow for an appeal 
                        under section 102(c)(1)(A) to be completed 
                        before the termination or reduction takes 
                        effect.
                            (ii) Contents of notice.--Such notice shall 
                        include, with respect to ongoing health care 
                        items and services, the number of ongoing 
                        services approved, the new total of approved 
                        services, the date of onset of services, and 
                        the next review date, if any, as well as a 
                        statement of the individual's rights to further 
                        appeal.
                    (B) Exception.--Subparagraph (A) shall not be 
                interpreted as requiring plans or issuers to provide 
                coverage of care that would exceed the coverage 
                limitations for such care.
            (3) Previously provided services.--In the case of a 
        utilization review activity involving retrospective review of 
        health care services previously provided for an individual, the 
        utilization review program shall make a determination 
        concerning such services, and provide notice of the 
        determination to the individual or the individual's designee 
        and the individual's health care provider by telephone and in 
        printed form, within 30 days of the date of receipt of 
        information that is reasonably necessary to make such 
        determination, but in no case later than 60 days after the date 
        of receipt of the claim for benefits.
            (4) Failure to meet deadline.--In a case in which a group 
        health plan or health insurance issuer fails to make a 
        determination on a claim for benefit under paragraph (1), 
        (2)(A), or (3) by the applicable deadline established under the 
        respective paragraph, the failure shall be treated under this 
        subtitle as a denial of the claim as of the date of the 
        deadline.
            (5) Reference to special rules for emergency services, 
        maintenance care, post-stabilization care, and emergency 
        ambulance services.--For waiver of prior authorization 
        requirements in certain cases involving emergency services, 
        maintenance care and post-stabilization care, and emergency 
        ambulance services, see subsections (a)(1), (b), and (c)(1) of 
        section 113, respectively.
    (e) Notice of Denials of Claims for Benefits.--
            (1) In general.--Notice of a denial of claims for benefits 
        under a utilization review program shall be provided in printed 
        form and written in a manner calculated to be understood by the 
        participant, beneficiary, or enrollee and shall include--
                    (A) the reasons for the denial (including the 
                clinical rationale);
                    (B) instructions on how to initiate an appeal under 
                section 102; and
                    (C) notice of the availability, upon request of the 
                individual (or the individual's designee) of the 
                clinical review criteria relied upon to make such 
                denial.
            (2) Specification of any additional information.--Such a 
        notice shall also specify what (if any) additional necessary 
        information must be provided to, or obtained by, the person 
        making the denial in order to make a decision on such an 
        appeal.
    (f) Claim for Benefits and Denial of Claim for Benefits Defined.--
For purposes of this subtitle:
            (1) Claim for benefits.--The term ``claim for benefits'' 
        means any request for coverage (including authorization of 
        coverage), for eligibility, or for payment in whole or in part, 
        for an item or service under a group health plan or health 
        insurance coverage.
            (2) Denial of claim for benefits.--The term ``denial'' 
        means, with respect to a claim for benefits, means a denial, or 
        a failure to act on a timely basis upon, in whole or in part, 
        the claim for benefits and includes a failure to provide 
        benefits (including items and services) required to be provided 
        under this title.

SEC. 102. INTERNAL APPEALS PROCEDURES.

    (a) Right of Review.--
            (1) In general.--Each group health plan, and each health 
        insurance issuer offering health insurance coverage--
                    (A) shall provide adequate notice in writing to any 
                participant or beneficiary under such plan, or enrollee 
                under such coverage, whose claim for benefits under the 
                plan or coverage has been denied (within the meaning of 
                section 101(f)(2)), setting forth the specific reasons 
                for such denial of claim for benefits and rights to any 
                further review or appeal, written in layman's terms to 
                be understood by the participant, beneficiary, or 
                enrollee; and
                    (B) shall afford such a participant, beneficiary, 
                or enrollee (and any provider or other person acting on 
                behalf of such an individual with the individual's 
                consent or without such consent if the individual is 
                medically unable to provide such consent) who is 
                dissatisfied with such a denial of claim for benefits a 
                reasonable opportunity of not less than 180 days to 
                request and obtain a full and fair review by a named 
                fiduciary (with respect to such plan) or named 
                appropriate individual (with respect to such coverage) 
                of the decision denying the claim.
            (2) Treatment of oral requests.--The request for review 
        under paragraph (1)(B) may be made orally, but, in the case of 
        an oral request, shall be followed by a request in writing.
    (b) Internal Review Process.--
            (1) Conduct of review.--
                    (A) In general.--A review of a denial of claim 
                under this section shall be made by an individual (who 
                shall be a physician in a case involving medical 
                judgment) who has been selected by the plan or issuer 
                and who did not make the initial denial in the 
                internally appealable decision, except that in the case 
                of limited scope coverage (as defined in subparagraph 
                (B)) an appropriate specialist shall review the 
                decision.
                    (B) Limited scope coverage defined.--For purposes 
                of subparagraph (A), the term ``limited scope 
                coverage'' means a group health plan or health 
                insurance coverage the only benefits under which are 
                for benefits described in section 2791(c)(2)(A) of the 
                Public Health Service Act (42 U.S.C. 300gg-91(c)(2)).
            (2) Time limits for internal reviews.--
                    (A) In general.--Having received such a request for 
                review of a denial of claim, the plan or issuer shall, 
                in accordance with the medical exigencies of the case 
                but not later than the deadline specified in 
                subparagraph (B), complete the review on the denial and 
                transmit to the participant, beneficiary, enrollee, or 
                other person involved a decision that affirms, 
                reverses, or modifies the denial. If the decision does 
                not reverse the denial, the plan or issuer shall 
                transmit, in printed form, a notice that sets forth the 
                grounds for such decision and that includes a 
                description of rights to any further appeal. Such 
                decision shall be treated as the final decision of the 
                plan. Failure to issue such a decision by such deadline 
                shall be treated as a final decision affirming the 
                denial of claim.
                    (B) Deadline.--
                            (i) In general.--Subject to clauses (ii) 
                        and (iii), the deadline specified in this 
                        subparagraph is 14 days after the date of 
                        receipt of the request for internal review, and 
                        all information shall be provided at the time 
                        of the request.
                            (ii) Extension permitted where notice of 
                        additional information required.--If a group 
                        health plan or health insurance issuer--
                                    (I) receives a request for internal 
                                review,
                                    (II) determines that additional 
                                information is necessary to complete 
                                the review and make the determination 
                                on the request,
                                    (III) notifies the requester, not 
                                later than 5 business days after the 
                                date of receiving the request, of the 
                                need for such specified additional 
                                information, and
                                    (IV) requires the requester to 
                                submit specified information not later 
                                than 48 hours after notification,
                        the deadline specified in this subparagraph is 
                        14 days after the date the plan or issuer 
                        receives the specified additional information, 
                        but in no case later than 28 days after the 
                        date of receipt of the request for the internal 
                        review. This clause shall not apply if the 
                        deadline is specified in clause (iii).
                            (iii) Expedited cases.--In the case of a 
                        situation described in subsection (c)(1)(A), 
                        the deadline specified in this subparagraph is 
                        48 hours after the time of the request for 
                        review.
    (c) Expedited Review Process.--
            (1) In general.--A group health plan, and a health 
        insurance issuer, shall establish procedures in writing for the 
        expedited consideration of requests for review under subsection 
        (b) in situations--
                    (A) in which, as determined by the plan or issuer 
                or as certified in writing by a treating physician, the 
                application of the normal timeframe for making a 
                determination could seriously jeopardize the life or 
                health of the participant, beneficiary, or enrollee or 
                such an individual's ability to regain maximum 
                function; or
                    (B) described in section 101(d)(2) (relating to 
                requests for continuation of ongoing care which would 
                otherwise be reduced or terminated).
            (2) Process.--Under such procedures--
                    (A) the request for expedited review may be 
                submitted orally or in writing by an individual or 
                provider who is otherwise entitled to request the 
                review;
                    (B) all necessary information, including the plan's 
                or issuer's decision, shall be transmitted between the 
                plan or issuer and the requester by telephone, 
                facsimile, or other similarly expeditious available 
                method; and
                    (C) the plan or issuer shall expedite the review in 
                the case of any of the situations described in 
                subparagraph (A) or (B) of paragraph (1).
            (3) Deadline for decision.--The decision on the expedited 
        review must be made and communicated to the parties as soon as 
        possible in accordance with the medical exigencies of the case, 
        and in no event later than 48 hours after the time of receipt 
        of the request for expedited review, except that in a case 
        described in paragraph (1)(B), the decision must be made before 
        the end of the approved period of care.
    (d) Waiver of Process.--A plan or issuer may waive its rights for 
an internal review under subsection (b). In such case the participant, 
beneficiary, or enrollee involved (and any designee or provider 
involved) shall be relieved of any obligation to complete the review 
involved and may, at the option of such participant, beneficiary, 
enrollee, designee, or provider, proceed directly to seek further 
appeal through any applicable external appeals process.

SEC. 103. EXTERNAL APPEALS PROCEDURES.

    (a) Right to External Appeal.--
            (1) In general.--A group health plan, and a health 
        insurance issuer offering health insurance coverage, shall 
        provide for an external appeals process that meets the 
        requirements of this section in the case of an externally 
        appealable decision described in paragraph (2), for which 
a timely appeal is made either by the plan or issuer or by the 
participant, beneficiary, or enrollee (and any provider or other person 
acting on behalf of such an individual with the individual's consent or 
without such consent if such an individual is medically unable to 
provide such consent).
            (2) Externally appealable decision defined.--
                    (A) In general.--For purposes of this section, the 
                term ``externally appealable decision'' means a denial 
                of claim for benefits (as defined in section 
                101(f)(2)), if--
                            (i) the item or service involved is a 
                        covered benefit,
                            (ii) the amount involved exceeds $100, and
                            (iii) the requirements of subparagraph (B) 
                        are met with respect to such denial.
                Such term also includes a failure to meet an applicable 
                deadline for internal review under section 102 or such 
                standards as are established pursuant to section 118.
                    (B) Requirements.--For purposes of subparagraph 
                (A)(iii), the requirements of this subparagraph are met 
                with respect to a denial of a claim for benefits if--
                            (i) the denial is based in whole or in part 
                        on a decision that the item or service is not 
                        medically necessary or appropriate or is 
                        investigational or experimental, or
                            (ii) in such denial, the decision as to 
                        whether a benefit is covered involves a medical 
                        judgment.
                    (C) Exclusions.--Such term does not include--
                            (i) specific exclusions or express 
                        limitations on the amount, duration, or scope 
                        of coverage; or
                            (ii) a decision regarding eligibility for 
                        any benefits.
            (3) Exhaustion of internal review process.--Except as 
        provided under section 102(d), a plan or issuer may condition 
        the use of an external appeal process in the case of an 
        externally appealable decision upon a final decision in an 
        internal review under section 102, but only if the decision is 
        made in a timely basis consistent with the deadlines provided 
        under this subtitle.
            (4) Filing fee requirement.--
                    (A) In general.--A plan or issuer may condition the 
                use of an external appeal process upon payment in 
                advance to the plan or issuer of a $25 filing fee.
                    (B) Refunding fee in case of successful appeals.--
                The plan or issuer shall refund payment of the filing 
                fee under this paragraph if the recommendation of the 
                external appeal entity is to reverse the denial of a 
                claim for benefits which is the subject of the appeal.
    (b) General Elements of External Appeals Process.--
            (1) Use of qualified external appeal entity.--
                    (A) In general.--Except as provided in subparagraph 
                (D), the external appeal process under this section of 
                a plan or issuer shall be conducted between the plan or 
                issuer and one or more qualified external appeal 
                entities (as defined in subsection (c)).
                    (B) Limitation on plan or issuer selection.--The 
                applicable authority shall implement procedures--
                            (i) to assure that the selection process 
                        among qualified external appeal entities will 
                        not create any incentives for external appeal 
                        entities to make a decision in a biased manner, 
                        and
                            (ii) for auditing a sample of decisions by 
                        such entities to assure that no such decisions 
                        are made in a biased manner.
                    (C) Other terms and conditions.--The terms and 
                conditions of this paragraph shall be consistent with 
                the standards the appropriate Secretary shall establish 
                to assure there is no real or apparent conflict of 
                interest in the conduct of external appeal activities. 
                All costs of the process (except those incurred by the 
                participant, beneficiary, enrollee, or treating 
                professional in support of the appeal) shall be paid by 
                the plan or issuer, and not by the participant, 
                beneficiary, or enrollee. The previous sentence shall 
                not be construed as applying to the imposition of a 
                filing fee under subsection (a)(4).
                    (D) State authority with respect to qualified 
                external appeal entity for health insurance issuers.--
                With respect to health insurance issuers in a State, 
                the State may provide for external review activities to 
                be conducted by a qualified external appeal entity that 
                is designated by the State or that is selected by the 
                State in a manner determined by the State to assure an 
                unbiased determination.
            (2) Elements of process.--An external appeal process shall 
        be conducted consistent with standards established by the 
        appropriate Secretary that include at least the following:
                    (A) Fair and de novo determination.--The process 
                shall provide for a fair, de novo determination 
                described in subparagraph (B) based on evidence 
                described in subparagraphs (C) and (D). However, 
                nothing in this paragraph shall be construed as 
                providing for coverage of items and services for which 
                benefits are not covered under the plan or coverage.
                    (B) Standard of review.--An external appeal entity 
                shall determine whether the plan's or issuer's decision 
                is appropriate for the medical condition of the patient 
                involved (as determined by the entity) taking into 
                account as of the time of the entity's determination 
                the patient's medical condition and any relevant and 
                reliable evidence the entity obtains under 
                subparagraphs (C) and (D). If the entity determines the 
                decision is appropriate for such condition, the entity 
                shall affirm the decision and to the extent that the 
                entity determines the decision is not appropriate for 
                such condition, the entity shall reverse the decision. 
                Nothing in this subparagraph shall be construed as 
providing for coverage of items or services not provided or covered by 
the plan.
                    (C) Required consideration of certain matters.--In 
                making such determination, the external appeal entity 
                shall consider, but not be bound by--
                            (i) any language in the plan or coverage 
                        document relating to the definitions of the 
                        terms medical necessity, medically necessary or 
                        appropriate, or experimental, investigational, 
                        or related terms;
                            (ii) the decision made by the plan or 
                        issuer upon internal review under section 102 
                        and any guidelines or standards used by the 
                        plan or issuer in reaching such decision; and
                            (iii) the opinion of the individual's 
                        treating physician or health care professional.
                The entity also shall consider any personal health and 
                medical information supplied with respect to the 
                individual whose denial of claim for benefits has been 
                appealed.
                    (D) Additional evidence.--Such entity may also take 
                into consideration but not be limited to the following 
                evidence (to the extent available):
                            (i) The results of studies that meet 
                        professionally recognized standards of validity 
                        and replicability or that have been published 
                        in peer-reviewed journals.
                            (ii) The results of professional consensus 
                        conferences.
                            (iii) Practice and treatment policies.
                            (iv) Community standard of care and 
                        generally accepted principles of professional 
                        medical practice.
                            (v) To the extent that the entity 
                        determines it to be free of any conflict of 
                        interest, the opinions of individuals who are 
                        qualified as experts in one or more fields of 
                        health care which are directly related to the 
                        matters under appeal.
                            (vi) To the extent that the entity 
                        determines it to be free of any conflict of 
                        interest, the results of peer reviews conducted 
                        by the plan or issuer involved.
                    (E) Determination concerning externally appealable 
                decisions.--A qualified external appeal entity shall 
                determine--
                            (i) whether a denial of claim for benefits 
                        is an externally appealable decision (within 
                        the meaning of subsection (a)(2));
                            (ii) whether an externally appealable 
                        decision involves an expedited appeal;
                            (iii) for purposes of initiating an 
                        external review, whether the internal review 
                        process has been completed; and
                            (iv) whether the denial of claims is a 
                        covered benefit.
                    (F) Opportunity to submit evidence.--Each party to 
                an externally appealable decision may submit evidence 
                related to the issues in dispute.
                    (G) Provision of information.--The plan or issuer 
                involved shall provide timely access to the external 
                appeal entity to information and to provisions of the 
                plan or health insurance coverage relating to the 
                matter of the externally appealable decision, as 
                determined by the entity.
                    (H) Timely decisions.--A determination by the 
                external appeal entity on the decision shall--
                            (i) be made orally or in writing and, if it 
                        is made orally, shall be supplied to the 
                        parties in writing as soon as possible;
                            (ii) be made in accordance with the medical 
                        exigencies of the case involved, but in no 
                        event later than 21 days after the date (or, in 
                        the case of an expedited appeal, 48 hours after 
                        the time) of requesting an external appeal of 
                        the decision;
                            (iii) state, in layperson's language, the 
                        basis for the determination, including, if 
                        relevant, any basis in the terms or conditions 
                        of the plan or coverage; and
                            (iv) inform the participant, beneficiary, 
                        or enrollee of the individual's rights 
                        (including any limitation on such rights) to 
                        seek binding arbitration or further review by 
                        the courts (or other process) of the external 
                        appeal determination.
                    (I) Compliance with determination.--If the external 
                appeal entity determines that a denial of a claim for 
                benefits was not reasonable and reverses the denial, 
                the plan or issuer--
                            (i) shall (upon the receipt of the 
                        determination) authorize benefits in accordance 
                        with such determination;
                            (ii) shall take such actions as may be 
                        necessary to provide benefits (including items 
                        or services) in a timely manner consistent with 
                        such determination; and
                            (iii) shall submit information to the 
                        entity documenting compliance with the entity's 
                        determination and this subparagraph.
    (c) Qualifications of External Appeal Entities.--
            (1) In general.--For purposes of this section, the term 
        ``qualified external appeal entity'' means, in relation to a 
        plan or issuer, an entity that is certified under paragraph (2) 
        as meeting the following requirements:
                    (A) The entity meets the independence requirements 
                of paragraph (3).
                    (B) The entity conducts external appeal activities 
                through at least three clinical peers who are 
                practicing physicians.
                    (C) The entity has sufficient medical, legal, and 
                other expertise and sufficient staffing to conduct 
                external appeal activities for the plan or issuer on a 
                timely basis consistent with subsection (b)(2)(G).
            (2) Initial certification of external appeal entities.--
                    (A) In general.--In order to be treated as a 
                qualified external appeal entity with respect to--
                            (i) a group health plan, the entity must be 
                        certified (and, in accordance with subparagraph 
                        (B), periodically recertified) as meeting the 
                        requirements of paragraph (1)--
                                    (I) by the Secretary of Labor;
                                    (II) under a process recognized or 
                                approved by the Secretary of Labor; or
                                    (III) to the extent provided in 
                                subparagraph (C)(i), by a qualified 
                                private standard-setting organization 
                                (certified under such subparagraph), if 
                                elected by the entity; or
                            (ii) a health insurance issuer operating in 
                        a State, the entity must be certified (and, in 
                        accordance with subparagraph (B), periodically 
                        recertified) as meeting such requirements--
                                    (I) by the applicable State 
                                authority (or under a process 
                                recognized or approved by such 
                                authority); or
                                    (II) if the State has not 
                                established a certification and 
                                recertification process for such 
                                entities, by the Secretary of Health 
                                and Human Services, under a process 
                                recognized or approved by such 
                                Secretary, or to the extent provided in 
                                subparagraph (C)(ii), by a qualified 
                                private standard-setting organization 
                                (certified under such subparagraph), if 
                                elected by the entity.
                    (B) Recertification process.--The appropriate 
                Secretary shall develop standards for the 
                recertification of external appeal entities. Such 
                standards shall include a review of--
                            (i) the number of cases reviewed;
                            (ii) a summary of the disposition of those 
                        cases;
                            (iii) the length of time in making 
                        determinations on those cases;
                            (iv) updated information of what was 
                        required to be submitted as a condition of 
                        certification for the entity's performance of 
                        external appeal activities; and
                            (v) information necessary to assure that 
                        the entity meets the independence requirements 
                        (described in paragraph (3)) with respect to 
                        plans and issuers for which it conducts 
                        external review activities.
                    (C) Certification of qualified private standard-
                setting organizations.--
                            (i) For external reviews under group health 
                        plans.--For purposes of subparagraph 
                        (A)(i)(III), the Secretary of Labor may provide 
                        for a process for certification (and periodic 
                        recertification) of qualified private standard-
                        setting organizations which provide for 
                        certification of external appeal entities. Such 
                        an organization shall only be certified if the 
                        organization does not certify an external 
                        appeal entity unless it meets standards at 
                        least as stringent as the standards required 
                        for certification of such an entity by such 
                        Secretary under subparagraph (A)(i)(I).
                            (ii) For external reviews of health 
                        insurance issuers.--For purposes of 
                        subparagraph (A)(ii)(II), the Secretary of 
                        Health and Human Services may provide for a 
                        process for certification (and periodic 
                        recertification) of qualified private standard-
                        setting organizations which provide for 
                        certification of external appeal entities. Such 
                        an organization shall only be certified if the 
                        organization does not certify an external 
                        appeal entity unless it meets standards as 
                        least as stringent as the standards required 
                        for certification of such an entity by such 
                        Secretary under subparagraph (A)(ii)(II).
                    (D) Construction.--Nothing in subparagraph (A)(i) 
                shall be construed as permitting the Secretary of Labor 
                to delegate certification authority under subclause (I) 
                of such subparagraph to any person outside the 
                Department of Labor.
            (3) Independence requirements.--
                    (A) In general.--A clinical peer or other entity 
                meets the independence requirements of this paragraph 
                if--
                            (i) the peer or entity is not affiliated 
                        with any related party;
                            (ii) any compensation received by such peer 
                        or entity in connection with the external 
                        review is reasonable and not contingent on any 
                        decision rendered by the peer or entity;
                            (iii) the plan and the issuer (if any) have 
                        no recourse against the peer or entity in 
                        connection with the external review; and
                            (iv) the peer or entity does not otherwise 
                        have a conflict of interest with a related 
                        party.
                    (B) Related party.--For purposes of this paragraph, 
                the term ``related party'' means--
                            (i) with respect to--
                                    (I) a group health plan or health 
                                insurance coverage offered in 
                                connection with such a plan, the plan 
                                or the health insurance issuer offering 
                                such coverage, or
                                    (II) individual health insurance 
                                coverage, the health insurance issuer 
                                offering such coverage,
                        or any plan sponsor, fiduciary, officer, 
                        director, or management employee of such plan 
                        or issuer;
                            (ii) the health care professional that 
                        provided the health care involved in the 
                        coverage decision;
                            (iii) the institution at which the health 
                        care involved in the coverage decision is 
                        provided; or
                            (iv) the manufacturer of any drug or other 
                        item that was included in the health care 
                        involved in the coverage decision.
                    (C) Affiliated.--For purposes of this paragraph, 
                the term ``affiliated'' means, in connection with any 
                peer or entity, having a familial, financial, or 
                fidicuary relationship with such peer or entity.
            (4) Limitation on liability of reviewers.--No qualified 
        external appeal entity having a contract with a plan or issuer 
        under this part and no person who is employed by any such 
        entity or who furnishes professional services to such entity, 
        shall be held by reason of the performance of any duty, 
        function, or activity required or authorized pursuant to this 
        section, to have violated any criminal law, or to be civilly 
        liable under any law of the United States or of any State (or 
        political subdivision thereof) if due care was exercised in the 
        performance of such duty, function, or activity and there was 
        no actual malice or gross misconduct in the performance of such 
        duty, function, or activity.
    (d) External Appeal Determination Binding on Plan.--
            (1) In general.--The determination by an external appeal 
        entity under this section shall be binding on the plan (and 
        issuer, if any) involved in the determination.
            (2) Protection of legal rights.--Nothing in this subtitle 
        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.
    (e) Penalties Against Authorized Officials for Refusing to 
Authorize the Determination of an External Appeal Entity.--
            (1) Monetary penalties.--In any case in which the 
        determination of an external appeal entity is not followed in a 
        timely fashion by a group health plan, or by a health insurance 
        issuer offering health insurance coverage, any person who, 
        acting in the capacity of authorizing the benefit, causes such 
        refusal may, in the discretion in a court of competent 
        jurisdiction, be liable to an aggrieved participant, 
        beneficiary, or enrollee for a civil penalty in an amount of up 
        to $1,000 a day from the date on which the determination was 
        transmitted to the plan or issuer by the external appeal entity 
        until the date the refusal to provide the benefit is corrected.
            (2) Cease and desist order and order of attorney's fees.--
        In any action described in paragraph (1) brought by a 
        participant, beneficiary, or enrollee with respect to a group 
        health plan, or a health insurance issuer offering health 
        insurance coverage, in which a plaintiff alleges that a person 
        referred to in such paragraph has taken an action resulting in 
        a refusal of a benefit determined by an external appeal entity 
        in violation of such terms of the plan, coverage, or this 
        subtitle, or has failed to take an action for which such person 
        is responsible under the plan, coverage, or this title and 
        which is necessary under the plan or coverage for authorizing a 
        benefit, the court shall cause to be served on the defendant an 
        order requiring the defendant--
                    (A) to cease and desist from the alleged action or 
                failure to act; and
                    (B) to pay to the plaintiff a reasonable attorney's 
                fee and other reasonable costs relating to the 
                prosecution of the action on the charges on which the 
                plaintiff prevails.
    (f) Protection of Legal Rights.--Nothing in this subtitle shall be 
construed as removing or limiting any legal rights of participants, 
beneficiaries, enrollees, and others under State or Federal law 
(including section 502 of the Employee Retirement Income Security Act 
of 1974), including the right to file judicial actions to enforce 
rights.

SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.

    (a) Establishment of Grievance System.--
            (1) In general.--A group health plan, and a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, shall establish and maintain a system to 
        provide for the presentation and resolution of oral and written 
        grievances brought by individuals who are participants, 
        beneficiaries, or enrollees, or health care providers or other 
        individuals acting on behalf of an individual and with the 
        individual's consent or without such consent if the individual 
        is medically unable to provide such consent, regarding any 
        aspect of the plan's or issuer's services.
            (2) Grievance defined.--In this section, the term 
        ``grievance'' means any question, complaint, or concern brought 
        by a participant, beneficiary or enrollee that is not a claim 
        for benefits.
    (b) Grievance System.--Such system shall include the following 
components with respect to individuals who are participants, 
beneficiaries, or enrollees:
            (1) Written notification to all such individuals and 
        providers of the telephone numbers and business addresses of 
        the plan or issuer personnel responsible for resolution of 
        grievances and appeals.
            (2) A system to record and document, over a period of at 
        least 3 previous years beginning two months after the date of 
        the enactment of this Act, all grievances and appeals made and 
        their status.
            (3) A process providing processing and resolution of 
        grievances within 60 days.
            (4) Procedures for follow-up action, including the methods 
        to inform the person making the grievance of the resolution of 
        the grievance.
Grievances are not subject to appeal under the previous provisions of 
this subtitle.

                       Subtitle B--Access to Care

SEC. 111. CONSUMER CHOICE OPTION.

    (a) In General.--If a health insurance issuer offers to enrollees 
health insurance coverage in connection with a group health plan which 
provides for coverage of services only if such services are furnished 
through health care professionals and providers who are members of a 
network of health care 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 and 
during an annual open season as provided under subsection (c)) the 
option of health insurance coverage which provides for coverage of such 
services which are not furnished through health care professionals and 
providers who are members of such a network unless enrollees are 
offered such non-network coverage through another health insurance 
issuer.
    (b) Additional Costs.--The amount of any additional premium charged 
by the health insurance issuer for the additional cost of the creation 
and maintenance of the option described in subsection (a) and the 
amount of any additional cost sharing imposed under such option shall 
be borne by the enrollee unless it is paid by the health plan sponsor 
through agreement with the health insurance issuer.
    (c) Open Season.--An enrollee may change to the offering provided 
under this section only during a time period determined by the health 
insurance issuer. Such time period shall occur at least annually.

SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.

    (a) Primary Care.--If a group health plan, or a health insurance 
issuer that offers health insurance coverage, requires or provides for 
designation by a participant, beneficiary, or enrollee of a 
participating primary care provider, then the plan or issuer shall 
permit each participant, beneficiary, and enrollee to designate any 
participating primary care provider who is available to accept such 
individual.
    (b) Specialists.--A group health plan and a health insurance issuer 
that offers health insurance coverage shall permit each participant, 
beneficiary, or enrollee to receive medically necessary or appropriate 
specialty care, pursuant to appropriate referral procedures, from any 
qualified participating health care professional who is available to 
accept such individual for such care.

SEC. 113. ACCESS TO EMERGENCY CARE.

    (a) Coverage of Emergency Services.--
            (1) In general.--If a group health plan, or health 
        insurance coverage offered by a health insurance issuer, 
        provides or covers any benefits with respect to services in an 
        emergency department of a hospital, the plan or issuer shall 
        cover emergency services (as defined in paragraph (2)(B))--
                    (A) without the need for any prior authorization 
                determination;
                    (B) whether or not the health care provider 
                furnishing such services is a participating provider 
                with respect to such services;
                    (C) in a manner so that, if such services are 
                provided to a participant, beneficiary, or enrollee--
                            (i) by a nonparticipating health care 
                        provider with or without prior authorization, 
                        or
                            (ii) by a participating health care 
                        provider without prior authorization,
                the participant, beneficiary, or enrollee is not liable 
                for amounts that exceed the amounts of liability that 
                would be incurred if the services were provided by a 
                participating health care provider with prior 
                authorization; and
                    (D) without regard to any other term or condition 
                of such coverage (other than exclusion or coordination 
                of benefits, or an affiliation or waiting period, 
                permitted under section 2701 of the Public Health 
                Service Act, section 701 of the Employee Retirement 
                Income Security Act of 1974, or section 9801 of the 
                Internal Revenue Code of 1986, and other than 
                applicable cost-sharing).
            (2) Definitions.--In this section:
                    (A) Emergency medical condition.--The term 
                ``emergency medical condition'' means--
                            (i) 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 condition described in clause (i), 
                        (ii), or (iii) of section 1867(e)(1)(A) of the 
                        Social Security Act; and
                            (ii) a medical condition manifesting itself 
                        in a neonate by acute symptoms of sufficient 
                        severity (including severe pain) such that a 
                        prudent health care professional could 
                        reasonably expect the absence of immediate 
                        medical attention to result in a condition 
                        described in clause (i), (ii), or (iii) of 
                        section 1867(e)(1)(A) of the Social Security 
                        Act.
                    (B) Emergency services.--The term ``emergency 
                services'' means--
                            (i) with respect to an emergency medical 
                        condition described in subparagraph (A)(i)--
                                    (I) a medical screening examination 
                                (as required under section 1867 of the 
                                Social Security Act) that is within the 
                                capability of the emergency department 
                                of a hospital, including ancillary 
                                services routinely available to the 
                                emergency department to evaluate such 
                                emergency medical condition, and
                                    (II) within the capabilities of the 
                                staff and facilities available at the 
                                hospital, such further medical 
                                examination and treatment as are 
                                required under section 1867 of such Act 
                                to stabilize the patient; or
                            (ii) with respect to an emergency medical 
                        condition described in subparagraph (A)(ii), 
                        medical treatment for such condition rendered 
                        by a health care provider in a hospital to a 
                        neonate, including available hospital ancillary 
                        services in response to an urgent request of a 
                        health care professional and to the extent 
                        necessary to stabilize the neonate.
                    (C) Stabilize.--The term ``to stabilize'' means, 
                with respect to an emergency medical condition, to 
                provide such medical treatment of the condition as may 
                be necessary to assure, within reasonable medical 
                probability, that no material deterioration of the 
                condition is likely to result from or occur during the 
                transfer of the individual from a facility.
    (b) Reimbursement for Maintenance Care and Post-Stabilization 
Care.--If benefits are available under a group health plan, or under 
health insurance coverage offered by a health insurance issuer, with 
respect to maintenance care or post-stabilization care covered under 
the guidelines established under section 1852(d)(2) of the Social 
Security Act, the plan or issuer shall provide for reimbursement with 
respect to such services provided to a participant, beneficiary, or 
enrollee other than through a participating health care provider in a 
manner consistent with subsection (a)(1)(C) (and shall otherwise comply 
with such guidelines).
    (c) Coverage of Emergency Ambulance Services.--
            (1) In general.--If a group health plan, or health 
        insurance coverage provided by a health insurance issuer, 
        provides any benefits with respect to ambulance services and 
        emergency services, the plan or issuer shall cover emergency 
        ambulance services (as defined in paragraph (2))) furnished 
        under the plan or coverage under the same terms and conditions 
        under subparagraphs (A) through (D) of subsection (a)(1) under 
        which coverage is provided for emergency services.
            (2) Emergency ambulance services.--For purposes of this 
        subsection, the term ``emergency ambulance services'' means 
        ambulance services (as defined for purposes of section 
        1861(s)(7) of the Social Security Act) furnished to transport 
        an individual who has an emergency medical condition (as 
        defined in subsection (a)(2)(A)) to a hospital for the receipt 
        of emergency services (as defined in subsection (a)(2)(B)) in a 
        case in which the emergency services are covered under the plan 
        or coverage pursuant to subsection (a)(1) and a prudent 
        layperson, with an average knowledge of health and medicine, 
        could reasonably expect that the absence of such transport 
        would result in placing the health of the individual in serious 
        jeopardy, serious impairment of bodily function, or serious 
        dysfunction of any bodily organ or part.

SEC. 114. ACCESS TO SPECIALTY CARE.

    (a) Specialty Care for Covered Services.--
            (1) In general.--If--
                    (A) an individual is a participant or beneficiary 
                under a group health plan or an enrollee who is covered 
                under health insurance coverage offered by a health 
                insurance issuer,
                    (B) the individual has a condition or disease of 
                sufficient seriousness and complexity to require 
                treatment by a specialist or the individual requires 
                physician pathology services, and
                    (C) benefits for such treatment or services are 
                provided under the plan or coverage,
        the plan or issuer shall make or provide for a referral to a 
        specialist who is available and accessible (consistent with 
        standards developed under section 118) to provide the treatment 
        for such condition or disease or to provide such services.
            (2) Specialist defined.--For purposes of this subsection, 
        the term ``specialist'' means, with respect to a condition or 
        services, a health care practitioner, facility, or center or 
        physician pathologist that has adequate expertise through 
        appropriate training and experience (including, in the case of 
        a child, appropriate pediatric expertise and in the case of a 
        pregnant woman, appropriate obstetrical expertise) to provide 
        high quality care in treating the condition or to provide 
        physician pathology services.
            (3) Care under referral.--A group health plan or health 
        insurance issuer may require that the care provided to an 
        individual pursuant to such referral under paragraph (1) with 
        respect to treatment be--
                    (A) pursuant to a treatment plan, only if the 
                treatment plan is developed by the specialist and 
                approved by the plan or issuer, in consultation with 
                the designated primary care provider or specialist and 
                the individual (or the individual's designee), and
                    (B) in accordance with applicable quality assurance 
                and utilization review standards of the plan or issuer.
        Nothing in this subsection shall be construed as preventing 
        such a treatment plan for an individual from requiring a 
        specialist to provide the primary care provider with regular 
        updates on the specialty care provided, as well as all 
        necessary medical information.
            (4) Referrals to participating providers.--A group health 
        plan or health insurance issuer is not required under paragraph 
        (1) to provide for a referral to a specialist that is not a 
        participating provider, unless the plan or issuer does not have 
        a specialist that is available and accessible to treat the 
        individual's condition or provide physician pathology services 
        and that is a participating provider with respect to such 
        treatment or services.
            (5) Referrals to nonparticipating providers.--In a case in 
        which a referral of an individual to a nonparticipating 
        specialist is required under paragraph (1), the group health 
        plan or health insurance issuer shall provide the individual 
        the option of at least three nonparticipating specialists.
            (6) Treatment of nonparticipating providers.--If a plan or 
        issuer refers an individual to a nonparticipating specialist 
        pursuant to paragraph (1), services provided pursuant to the 
approved treatment plan (if any) shall be provided at no additional 
cost to the individual beyond what the individual would otherwise pay 
for services received by such a specialist that is a participating 
provider.
    (b) Specialists as Gatekeeper for Treatment of Ongoing Special 
Conditions.--
            (1) In general.--A group health plan, or a health insurance 
        issuer, in connection with the provision of health insurance 
        coverage, shall have a procedure by which an individual who is 
        a participant, beneficiary, or enrollee and who has an ongoing 
        special condition (as defined in paragraph (3)) may request and 
        receive a referral to a specialist for such condition who shall 
        be responsible for and capable of providing and coordinating 
        the individual's care with respect to the condition. Under such 
        procedures if such an individual's care would most 
        appropriately be coordinated by such a specialist, such plan or 
        issuer shall refer the individual to such specialist.
            (2) Treatment for related referrals.--Such specialists 
        shall be permitted to treat the individual without a referral 
        from the individual's primary care provider and may authorize 
        such referrals, procedures, tests, and other medical services 
        as the individual's primary care provider would otherwise be 
        permitted to provide or authorize, subject to the terms of the 
        treatment (referred to in subsection (a)(3)(A)) with respect to 
        the ongoing special condition.
            (3) Ongoing special condition defined.--In this subsection, 
        the term ``ongoing special condition'' means a condition or 
        disease that--
                    (A) is life-threatening, degenerative, or 
                disabling, and
                    (B) requires specialized medical care over a 
                prolonged period of time.
            (4) Terms of referral.--The provisions of paragraphs (3) 
        through (5) of subsection (a) apply with respect to referrals 
        under paragraph (1) of this subsection in the same manner as 
        they apply to referrals under subsection (a)(1).
            (5) Construction.--Nothing in this subsection shall be 
        construed as preventing an individual who is a participant, 
        beneficiary, or enrollee and who has an ongoing special 
        condition from having the individual's primary care physician 
        assume the responsibilities for providing and coordinating care 
        described in paragraph (1).
    (c) Standing Referrals.--
            (1) In general.--A group health plan, and a health 
        insurance issuer in connection with the provision of health 
        insurance coverage, shall have a procedure by which an 
        individual who is a participant, beneficiary, or enrollee and 
        who has a condition that requires ongoing care from a 
        specialist may receive a standing referral to such specialist 
        for treatment of such condition. If the plan or issuer, or if 
        the primary care provider in consultation with the medical 
        director of the plan or issuer and the specialist (if any), 
        determines that such a standing referral is appropriate, the 
        plan or issuer shall make such a referral to such a specialist 
        if the individual so desires.
            (2) Terms of referral.--The provisions of paragraphs (3) 
        through (5) of subsection (a) apply with respect to referrals 
        under paragraph (1) of this subsection in the same manner as 
        they apply to referrals under subsection (a)(1).

SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

    (a) In General.--If a group health plan, or a health insurance 
issuer in connection with the provision of health insurance coverage, 
requires or provides for a participant, beneficiary, or enrollee to 
designate a participating primary care health care professional, the 
plan or issuer--
            (1) may not require authorization or a referral by the 
        individual's primary care health care professional or otherwise 
        for coverage of routine gynecological care (including 
        preventive women's health examinations) and pregnancy-related 
        services provided by a participating physician (including a 
        family practice physician) who specializes or is trained and 
        experienced in obstetrics and gynecology to the extent such 
        care is otherwise covered, and
            (2) shall treat the ordering of other obstetrical or 
        gynecological care by such a participating physician as the 
        authorization of the primary care health care professional with 
        respect to such care under the plan or coverage.
    (b) Construction.--Nothing in subsection (a) shall be construed 
to--
            (1) waive any exclusions of coverage under the terms of the 
        plan with respect to coverage of obstetrical or gynecological 
        care; or
            (2) preclude the group health plan or health insurance 
        issuer involved from requiring that the obstetrician or 
        gynecologist notify the primary care health care professional 
        or the plan of treatment decisions.

SEC. 116. ACCESS TO PEDIATRIC CARE.

    (a) Pediatric Care.--If a group health plan, or a health insurance 
issuer in connection with the provision of health insurance coverage, 
requires or provides for an enrollee to designate a participating 
primary care provider for a child of such enrollee, the plan or issuer 
shall permit the enrollee to designate a physician (including a family 
practice physician) who specializes or is trained and experienced in 
pediatrics as the child's primary care provider.
    (b) Construction.--Nothing in subsection (a) shall be construed to 
waive any exclusions of coverage under the terms of the plan with 
respect to coverage of pediatric care.

SEC. 117. CONTINUITY OF CARE.

    (a) In General.--
            (1) Termination of provider.--If a contract between a group 
        health plan, or a health insurance issuer in connection with 
        the provision of health insurance coverage, and a health care 
        provider is terminated (as defined in paragraph (3)(B)), 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, beneficiary, or enrollee in the plan or coverage is 
undergoing treatment from the provider for an ongoing special condition 
(as defined in paragraph (3)(A)) at the time of such termination, the 
plan or issuer shall--
                    (A) notify the individual on a timely basis of such 
                termination and of the right to elect continuation of 
                coverage of treatment by the provider under this 
                section; and
                    (B) subject to subsection (c), permit the 
                individual to elect to continue to be covered with 
                respect treatment by the provider of such condition 
                during a transitional period (provided under subsection 
                (b)).
            (2) Treatment of termination of contract with health 
        insurance issuer.--If a contract for the provision of health 
        insurance coverage between a group health plan and a health 
        insurance issuer is terminated and, as a result of such 
        termination, coverage of services of a health care provider is 
        terminated with respect to an individual, the provisions of 
        paragraph (1) (and the succeeding provisions of this section) 
        shall apply under the plan in the same manner as if there had 
        been a contract between the plan and the provider that had been 
        terminated, but only with respect to benefits that are covered 
        under the plan after the contract termination.
            (3) Definitions.--For purposes of this section:
                    (A) Ongoing special condition.--The term ``ongoing 
                special condition'' has the meaning given such term in 
                section 114(b)(3), and also includes pregnancy.
                    (B) Termination.--The term ``terminated'' includes, 
                with respect to a contract, the expiration or 
                nonrenewal of the contract, but does not include a 
                termination of the contract by the plan or issuer for 
                failure to meet applicable quality standards or for 
                fraud.
    (b) Transitional Period.--
            (1) In general.--Except as provided in paragraphs (2) 
        through (4), the transitional period under this subsection 
        shall extend up to 90 days (as determined by the treating 
        health care professional) after the date of the notice 
        described in subsection (a)(1)(A) of the provider's 
        termination.
            (2) Scheduled surgery and organ transplantation.--If 
        surgery or organ transplantation was scheduled for an 
        individual 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 surgery or 
        transplantation, the transitional period under this subsection 
        with respect to the surgery or transplantation shall extend 
        beyond the period under paragraph (1) and until the date of 
        discharge of the individual after completion of the surgery or 
        transplantation.
            (3) Pregnancy.--If--
                    (A) a participant, beneficiary, or enrollee was 
                determined to be pregnant at the time of a provider's 
                termination of participation, and
                    (B) the provider was treating the pregnancy before 
                date of the termination,
        the transitional period under this subsection with respect to 
        provider's treatment of the pregnancy shall extend through the 
        provision of post-partum care directly related to the delivery.
            (4) Terminal illness.--If--
                    (A) a participant, beneficiary, or enrollee was 
                determined to be terminally ill (as determined under 
                section 1861(dd)(3)(A) of the Social Security Act) at 
                the time of 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 or its medical 
        manifestations.
    (c) Permissible Terms and Conditions.--A group health plan or 
health insurance issuer may condition coverage of continued treatment 
by a provider under subsection (a)(1)(B) upon the individual notifying 
the plan of the election of continued coverage and upon the provider 
agreeing to the following terms and conditions:
            (1) The provider agrees to accept reimbursement from the 
        plan or issuer 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 (a)(2), at the rates applicable under 
        the replacement plan or issuer after the date of the 
        termination of the contract with the health insurance issuer) 
        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 or issuer responsible for payment under 
        paragraph (1) and to provide to such plan or issuer necessary 
        medical information related to the care provided.
            (3) The provider agrees otherwise to adhere to such plan's 
        or issuer'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 or issuer.
    (d) 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.

SEC. 118. NETWORK ADEQUACY.

    (a) Requirement.--A group health plan, and a health insurance 
issuer providing health insurance coverage, shall meet such standards 
for network adequacy as are established by law pursuant to this 
section.
    (b) Development of Standards.--
            (1) Establishment of panel.--There is established a panel 
        to be known as the Health Care Panel to Establish Network 
        Adequacy Standards (in this section referred to as the 
        ``Panel'').
            (2) Duties of panel.--The Panel shall devise standards for 
        group health plans and health insurance issuers that offer 
        health insurance coverage to ensure that--
                    (A) participants, beneficiaries, and enrollees have 
                access to a sufficient number, mix, and distribution of 
                health care professionals and providers; and
                    (B) covered items and services are available and 
                accessible to each participant, beneficiary, and 
                enrollee--
                            (i) in the service area of the plan or 
                        issuer;
                            (ii) at a variety of sites of service;
                            (iii) with reasonable promptness (including 
                        reasonable hours of operation and after hours 
                        services);
                            (iv) with reasonable proximity to the 
                        residences or workplaces of enrollees; and
                            (v) in a manner that takes into account the 
                        diverse needs of enrollees and reasonably 
                        assures continuity of care.
    (c) Membership.--
            (1) Size and composition.--The Panel shall be composed of 
        15 members. The Secretary of Health and Human Services, the 
        Majority Leader of the Senate, and the Speaker of House of 
        Representatives shall each appoint 1 member from 
        representatives of private insurance organizations, consumer 
        groups, State insurance commissioners, State medical societies, 
        and State medical specialty societies.
            (2) Terms of appointment.--The members of the Panel shall 
        serve for the life of the Panel.
            (3) Vacancies.--A vacancy in the Panel shall not affect the 
        power of the remaining members to execute the duties of the 
        Panel, but any such vacancy shall be filled in the same manner 
        in which the original appointment was made.
    (d) Procedures.--
            (1) Meetings.--The Panel shall meet at the call of a 
        majority of its members.
            (2) First meeting.--The Panel shall convene not later than 
        60 days after the date of the enactment of the Health Care 
        Quality and Choice Act of 1999.
            (3) Quorum.--A quorum shall consist of a majority of the 
        members of the Panel.
            (4) Hearings.--For the purpose of carrying out its duties, 
        the Panel may hold such hearings and undertake such other 
        activities as the Panel determines to be necessary to carry out 
        its duties.
    (e) Administration.--
            (1) Compensation.--Except as provided in paragraph (1), 
        members of the Panel shall receive no additional pay, 
        allowances, or benefits by reason of their service on the 
        Panel.
            (2) Travel expenses and per diem.--Each member of the Panel 
        who is not an officer or employee of the Federal Government 
        shall receive travel expenses and per diem in lieu of 
        subsistence in accordance with sections 5702 and 5703 of title 
        5, United States Code.
            (3) Contract authority.--The Panel may contract with and 
        compensate government and private agencies or persons for items 
        and services, without regard to section 3709 of the Revised 
        Statutes (41 U.S.C. 5).
            (4) Use of mails.--The Panel may use the United States 
        mails in the same manner and under the same conditions as 
        Federal agencies and shall, for purposes of the frank, be 
        considered a commission of Congress as described in section 
        3215 of title 39, United States Code.
            (5) Administrative support services.--Upon the request of 
        the Panel, the Secretary of Health and Human Services shall 
        provide to the Panel on a reimbursable basis such 
        administrative support services as the Panel may request.
    (f) Report and Establishment of Standards.--Not later than 2 years 
after the first meeting, the Panel shall submit a report to Congress 
and the Secretary of Health and Human Services detailing the standards 
devised under subsection (b) and recommendations regarding the 
implementation of such standards. Such standards shall take effect to 
the extent provided by Federal law enacted after the date of the 
submission of such report.
    (g) Termination.--The Panel shall terminate on the day after 
submitting its report to the Secretary of Health and Human Services 
under subsection (f).

SEC. 119. ACCESS TO EXPERIMENTAL OR INVESTIGATIONAL PRESCRIPTION DRUGS.

    No use of a prescription drug or medical device shall be considered 
experimental or investigational under a group health plan or under 
health insurance coverage provided by a health insurance issuer if such 
use is included in the labeling authorized by the U.S. Food and Drug 
Administration under section 505, 513 or 515 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 355) or under section 351 of the Public 
Health Service Act (42 U.S.C. 262), unless such use is demonstrated to 
be unsafe or ineffective.

                   Subtitle C--Access to Information

SEC. 121. PATIENT ACCESS TO INFORMATION.

    (a) Disclosure Requirement.--
            (1) Group health plans.--A group health plan shall--
                    (A) provide to participants and beneficiaries at 
                the time of initial coverage under the plan (or the 
                effective date of this section, in the case of 
                individuals who are participants or beneficiaries as of 
                such date), and at least annually thereafter, the 
information described in subsection (b);
                    (B) provide to participants and beneficiaries, 
                within a reasonable period (as specified by the 
                appropriate Secretary) before or after the date of 
                significant changes in the information described in 
                subsection (b), information on such significant 
                changes; and
                    (C) upon request, make available to participants 
                and beneficiaries, the applicable authority, and 
                prospective participants and beneficiaries, the 
                information described in subsection (b) or (c).
        The plan may charge a reasonable fee for provision in printed 
        form of any of the information described in subsection (b) or 
        (c) more than once during any plan year.
            (2) Health insurance issuers.--A health insurance issuer in 
        connection with the provision of health insurance coverage 
        shall--
                    (A) provide to individuals enrolled under such 
                coverage at the time of enrollment, and at least 
                annually thereafter, the information described in 
                subsection (b) in printed form;
                    (B) provide to enrollees, within a reasonable 
                period (as specified by the appropriate Secretary) 
                before or after the date of significant changes in the 
                information described in subsection (b), information in 
                printed form on such significant changes; and
                    (C) upon request, make available to the applicable 
                authority, to individuals who are prospective 
                enrollees, and to the public the information described 
                in subsection (b) or (c) in printed form.
    (b) Information Provided.--The information described in this 
subsection with respect to a group health plan or health insurance 
coverage offered by a health insurance issuer shall be provided to a 
participant, beneficiary, or enrollee free of charge at least once a 
year and includes the following:
            (1) Service area.--The service area of the plan or issuer.
            (2) Benefits.--Benefits offered under the plan or coverage, 
        including--
                    (A) those that are covered benefits (by reference 
                to relevant CPT and DRG codes), limits and conditions 
                on such benefits, and those benefits that are 
                explicitly excluded from coverage (by reference to 
                relevant CPT and DRG codes);
                    (B) cost sharing, such as deductibles, coinsurance, 
                and copayment amounts, including any liability for 
                balance billing, any maximum limitations on out of 
                pocket expenses, and the maximum out of pocket costs 
                for services that are provided by nonparticipating 
                providers or that are furnished without meeting the 
                applicable utilization review requirements;
                    (C) the extent to which benefits may be obtained 
                from nonparticipating providers;
                    (D) the extent to which a participant, beneficiary, 
                or enrollee may select from among participating 
                providers and the types of providers participating in 
                the plan or issuer network;
                    (E) process for determining experimental coverage; 
                and
                    (F) use of a prescription drug formulary.
            (3) Access.--A description of the following:
                    (A) The number, mix, and distribution of providers 
                under the plan or coverage.
                    (B) Out-of-network coverage (if any) provided by 
                the plan or coverage.
                    (C) Any point-of-service option (including any 
                supplemental premium or cost-sharing for such option).
                    (D) The procedures for participants, beneficiaries, 
                and enrollees to select, access, and change 
                participating primary and specialty providers.
                    (E) The rights and procedures for obtaining 
                referrals (including standing referrals) to 
                participating and nonparticipating providers.
                    (F) The name, address, and telephone number of 
                participating health care providers and an indication 
                of whether each such provider is available to accept 
                new patients.
                    (G) Any limitations imposed on the selection of 
                qualifying participating health care providers, 
                including any limitations imposed under section 
                112(b)(2).
            (4) Out-of-area coverage.--Out-of-area coverage provided by 
        the plan or issuer.
            (5) Emergency coverage.--Coverage of emergency services, 
        including--
                    (A) the appropriate use of emergency services, 
                including use of the 911 telephone system or its local 
                equivalent in emergency situations and an explanation 
                of what constitutes an emergency situation;
                    (B) the process and procedures of the plan or 
                issuer for obtaining emergency services; and
                    (C) the locations of (i) emergency departments, and 
                (ii) other settings, in which plan physicians and 
                hospitals provide emergency services and post-
                stabilization care.
            (6) Prior authorization rules.--Rules regarding prior 
        authorization or other review requirements that could result in 
        noncoverage or nonpayment.
            (7) Grievance and appeals procedures.--All appeal or 
        grievance rights and procedures under the plan or coverage, 
        including the method for filing grievances and the time frames 
        and circumstances for acting on grievances and appeals, who is 
        the applicable authority with respect to the plan or issuer.
            (8) Accountability.--A description of the legal recourse 
        options available for participants and beneficiaries under the 
        plan including--
                    (A) the preemption that applies under section 514 
                of the Employee Retirement Income Security Act of 1974 
                (29 U.S.C. 1144) to certain actions arising out of the 
                provision of health benefits; and
                    (B) the extent to which coverage decisions made by 
                the plan are subject to internal review or any external 
                review and the proper time frames under.
            (9) Quality assurance.--Any information made public by an 
        accrediting organization in the process of accreditation of the 
        plan or issuer or any additional quality indicators the plan or 
        issuer makes available.
            (10) Information on issuer.--Notice of appropriate mailing 
        addresses and telephone numbers to be used by participants, 
        beneficiaries, and enrollees in seeking information or 
        authorization for treatment.
            (11) Availability of information on request.--Notice that 
        the information described in subsection (c) is available upon 
        request.
    (c) Information Made Available Upon Request.--The information 
described in this subsection is the following:
            (1) Utilization review activities.--A description of 
        procedures used and requirements (including circumstances, time 
        frames, and appeal rights) under any utilization review program 
        under section 101.
            (2) Grievance and appeals information.--Information on the 
        number of grievances and appeals and on the disposition in the 
        aggregate of such matters.
            (3) Formulary restrictions.--A description of the nature of 
        any drug formula restrictions.
            (4) Participating provider list.--A list of current 
        participating health care providers.
    (d) Construction.--Nothing in this section shall be construed as 
requiring public disclosure of individual contracts or financial 
arrangements between a group health plan or health insurance issuer and 
any provider.

         Subtitle D--Protecting the Doctor-Patient Relationship

SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
              COMMUNICATIONS.

    (a) General Rule.--The provisions of any contract or agreement, or 
the operation of any contract or agreement, between a group health plan 
or health insurance issuer in relation to health insurance coverage 
(including any partnership, association, or other organization that 
enters into or administers such a contract or agreement) and a health 
care provider (or group of health care providers) shall not prohibit or 
otherwise restrict a health care professional from advising such a 
participant, beneficiary, or enrollee who is a patient of the 
professional about the health status of the individual or medical care 
or treatment for the individual's condition or disease, regardless of 
whether benefits for such care or treatment are provided under the plan 
or coverage, if the professional is acting within the lawful scope of 
practice.
    (b) Nullification.--Any contract provision or agreement that 
restricts or prohibits medical communications in violation of 
subsection (a) shall be null and void.
    (c) Construction.--Nothing in this title shall be construed to 
require the sponsor of a group health plan, or a health insurance 
issuer offering health insurance coverage in connection with the group 
health plan, to provide, reimburse for, or provide coverage of, a 
counseling or referral service if the plan or issuer objects to the 
provision of such service on moral or religious grounds.

SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS BASED ON 
              LICENSURE.

    (a) In General.--A group health plan and a health insurance issuer 
offering health insurance coverage shall not discriminate with respect 
to participation or indemnification as to any provider who is acting 
within the scope of the provider's license or certification under 
applicable State law, solely on the basis of such license or 
certification.
    (b) Construction.--Subsection (a) shall not be construed--
            (1) as requiring the coverage under a group health plan or 
        health insurance coverage of particular benefits or services or 
        to prohibit a plan or issuer from including providers only to 
        the extent necessary to meet the needs of the plan's or 
        issuer's participants, beneficiaries, or enrollees or from 
        establishing any measure designed to maintain quality and 
        control costs consistent with the responsibilities of the plan 
        or issuer;
            (2) to override any State licensure or scope-of-practice 
        law;
            (3) as requiring a plan or issuer that offers network 
        coverage to include for participation every willing provider 
        who meets the terms and conditions of the plan or issuer; or
            (4) as prohibiting a family practice physician with 
        appropriate expertise from providing pediatric or obstetrical 
        or gynecological care.

SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE ARRANGEMENTS.

    (a) In General.--A group health plan and a health insurance issuer 
offering health insurance coverage may not operate any physician 
incentive plan (as defined in subparagraph (B) of section 1876(i)(8) of 
the Social Security Act) unless the requirements described in clauses 
(i), (ii)(I), and (iii) of subparagraph (A) of such section are met 
with respect to such a plan.
    (b) Application.--For purposes of carrying out paragraph (1), any 
reference in section 1876(i)(8) of the Social Security Act to the 
Secretary, an eligible organization, or an individual enrolled with the 
organization shall be treated as a reference to the applicable 
authority, a group health plan or health insurance issuer, 
respectively, and a participant, beneficiary, or enrollee with the plan 
or organization, respectively.
    (c) Construction.--Nothing in this section shall be construed as 
prohibiting all capitation and similar arrangements or all provider 
discount arrangements.

SEC. 134. PAYMENT OF CLEAN CLAIMS.

    A group health plan, and a health insurance issuer offering group 
health insurance coverage, shall provide for prompt payment of claims 
submitted for health care services or supplies furnished to a 
participant, beneficiary, or enrollee with respect to benefits covered 
by the plan or issuer, in a manner consistent with the provisions of 
sections 1816(c)(2) and 1842(c)(2) of the Social Security Act (42 
U.S.C. 1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for purposes 
of this section, subparagraph (C) of section 1816(c)(2) of the Social 
Security Act shall be treated as applying to claims received from a 
participant, beneficiary, or enrollee as well as claims referred to in 
such subparagraph.

                        Subtitle E--Definitions

SEC. 151. DEFINITIONS.

    (a) Incorporation of General Definitions.--Except as otherwise 
provided, the provisions of section 2971 of the Public Health Service 
Act shall apply for purposes of this title in the same manner as they 
apply for purposes of title XXVII of such Act.
    (b) Secretary.--Except as otherwise provided, the term 
``Secretary'' means the Secretary of Health and Human Services, in 
consultation with the Secretary of Labor and the term ``appropriate 
Secretary'' means the Secretary of Health and Human Services in 
relation to carrying out this title under sections 2706 and 2751 of the 
Public Health Service Act and the Secretary of Labor in relation to 
carrying out this title under section 713 of the Employee Retirement 
Income Security Act of 1974.
    (c) Additional Definitions.--For purposes of this title:
            (1) Applicable authority.--The term ``applicable 
        authority'' means--
                    (A) in the case of a group health plan, the 
                Secretary of Health and Human Services and the 
                Secretary of Labor; and
                    (B) in the case of a health insurance issuer with 
                respect to a specific provision of this title, the 
                applicable State authority (as defined in section 
                2791(d) of the Public Health Service Act), or the 
                Secretary of Health and Human Services, if such 
                Secretary is enforcing such provision under section 
                2722(a)(2) or 2761(a)(2) of the Public Health Service 
                Act.
            (2) Clinical peer.--The term ``clinical peer'' means, with 
        respect to a review or appeal, a practicing physician or other 
        health care professional who holds a nonrestricted license and 
        who is--
                    (A) appropriately certified by a nationally 
                recognized, peer reviewed accrediting body in the same 
                or similar specialty as typically manages the medical 
                condition, procedure, or treatment under review or 
                appeal, or
                    (B) is trained and experienced in managing such 
                condition, procedure, or treatment,
        and includes a pediatric specialist where appropriate; except 
        that only a physician may be a clinical peer with respect to 
        the review or appeal of treatment recommended or rendered by a 
        physician.
            (3) 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.
            (4) Group health plan.--The term ``group health plan'' has 
        the meaning given such term in section 733(a) of the Employee 
        Retirement Income Security Act of 1974.
            (5) Health care professional.--The term ``health care 
        professional'' means an individual who is licensed, accredited, 
        or certified under State law to provide specified health care 
        services and who is operating within the scope of such 
        licensure, accreditation, or certification.
            (6) Health care provider.--The term ``health care 
        provider'' includes a physician or other health care 
        professional, as well as an institutional or other facility or 
        agency that provides health care services and that is licensed, 
        accredited, or certified to provide health care items and 
        services under applicable State law.
            (7) Network.--The term ``network'' means, with respect to a 
        group health plan or health insurance issuer offering health 
        insurance coverage, the participating health care professionals 
        and providers through whom the plan or issuer provides health 
        care items and services to participants, beneficiaries, or 
        enrollees.
            (8) Nonparticipating.--The term ``nonparticipating'' means, 
        with respect to a health care provider that provides health 
        care items and services to a participant, beneficiary, or 
        enrollee under group health plan or health insurance coverage, 
        a health care provider that is not a participating health care 
        provider with respect to such items and services.
            (9) Participating.--The term ``participating'' means, with 
        respect to a health care provider that provides health care 
        items and services to a participant, beneficiary, or enrollee 
        under group health plan or health insurance coverage offered by 
        a health insurance issuer, a health care provider that 
        furnishes such items and services under a contract or other 
        arrangement with the plan or issuer.
            (10) Physician.--The term ``physician'' means an allopathic 
        or osteopathic physician.
            (11) Practicing physician.--The term ``practicing 
        physician'' means a physician who is licensed in the State in 
        which the physician furnishes professional services and who 
        provides professional services to individual patients on 
        average at least two full days per week.
            (12) Prior authorization.--The term ``prior authorization'' 
        means the process of obtaining prior approval from a health 
        insurance issuer or group health plan for the provision or 
        coverage of medical services.

SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

    (a) Continued Applicability of State Law With Respect to Health 
Insurance Issuers.--
            (1) In general.--Subject to paragraph (2), this title shall 
        not be construed to supersede any provision of State law which 
        establishes, implements, or continues in effect any standard or 
        requirement solely relating to health insurance issuers (in 
        connection with group health insurance coverage or otherwise) 
        except to the extent that such standard or requirement prevents 
        the application of a requirement of this title.
            (2) Continued preemption with respect to group health 
        plans.--Nothing in this title shall be construed to affect or 
        modify the provisions of section 514 of the Employee Retirement 
        Income Security Act of 1974 with respect to group health plans.
    (b) Definitions.--For purposes of this section:
            (1) State law.--The term ``State law'' includes all laws, 
        decisions, rules, regulations, or other State action having the 
        effect of law, of any State. A law of the United States 
        applicable only to the District of Columbia shall be treated as 
        a State law rather than a law of the United States.
            (2) State.--The term ``State'' includes a State, the 
        District of Columbia, the Northern Mariana Islands, any 
        political subdivisions of a State or such Islands, or any 
        agency or instrumentality of either.

SEC. 153. EXCLUSIONS.

    (a) No Benefit Requirements.--Nothing in this title shall be 
construed to require a group health plan or a health insurance issuer 
offering health insurance coverage to provide specific benefits under 
the terms of such plan or coverage, other than those provided under the 
terms of such plan or coverage.
    (b) Exclusion From Access to Care Managed Care Provisions for Fee-
for-Service Coverage.--
            (1) In general.--The provisions of sections 111 through 117 
        shall not apply to a group health plan or health insurance 
        coverage if the only coverage offered under the plan or 
        coverage is fee-for-service coverage (as defined in paragraph 
        (2)).
            (2) Fee-for-service coverage defined.--For purposes of this 
        subsection, the term ``fee-for-service coverage'' means 
        coverage under a group health plan or health insurance coverage 
        that--
                    (A) reimburses hospitals, health professionals, and 
                other providers on the basis of a rate determined by 
                the plan or issuer on a fee-for-service basis without 
                placing the provider at financial risk;
                    (B) does not vary reimbursement for such a provider 
                based on an agreement to contract terms and conditions 
                or the utilization of health care items or services 
                relating to such provider;
                    (C) does not restrict the selection of providers 
                among those who are lawfully authorized to provide the 
                covered services and agree to accept the terms and 
                conditions of payment established under the plan or by 
                the issuer; and
                    (D) for which the plan or issuer does not require 
                prior authorization before providing coverage for any 
                services.

SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

    Only for purposes of applying the requirements of this title under 
sections 2707 and 2753 of the Public Health Service Act and section 714 
of the Employee Retirement Income Security Act of 1974, section 
2791(c)(2)(A), and section 733(c)(2)(A) of the Employee Retirement 
Income Security Act of 1974 shall be deemed not to apply.

SEC. 155. REGULATIONS; COORDINATION; APPLICATION UNDER DIFFERENT LAWS.

    (a) Regulations.--The Secretaries of Health and Human Services, 
Labor, and the Treasury shall each issue such regulations as may be 
necessary or appropriate to carry out this title under sections 2707 
and 2753 of the Public Health Service Act, under section 714 of the 
Employee Retirement Income Security Act of 1974, and under section 9813 
of the Internal Revenue Code of 1986, respectively. Such Secretaries 
may promulgate such regulations in the form of interim final rules as 
may be necessary to carry out this Act in a timely manner.
    (b) Assuring Coordination.--Such Secretaries shall ensure, through 
the execution of an interagency memorandum of understanding among such 
Secretaries, that--
            (1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which two or 
        more such Secretaries have responsibility under this title (and 
        the amendments made by titles II, III, and IV) 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.
    (c) Application of Subtitle Under Different Laws.--The provisions 
of this subtitle shall be applied--
            (1) by the Secretary of Health and Human Services under 
        (and only under) title XXVII of the Public Health Service Act 
        (and not under Employee Retirement Income Security Act of 1974 
        or the Internal Revenue Code of 1986);
            (2) by the Secretary of Labor under (and only under) part 7 
        of subtitle B of title I of the Employee Retirement Income 
        Security Act of 1974 (and not under the Public Health Service 
        Act or the Internal Revenue Code of 1986); and
            (3) by the Secretary of the Treasury under (and only under) 
        chapter 100 of the Internal Revenue Code of 1986 (and not under 
        the Public Health Service Act or the Employee Retirement Income 
        Security Act of 1974).
    (d) Construction.--Nothing in this subtitle shall be construed as 
preventing the Congress from providing for different quality care 
policies for application under the different titles, parts, and 
chapters referenced in subsection (c).

 TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS 
   AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT

SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
              COVERAGE.

    (a) In General.--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. 2707. PATIENT PROTECTION STANDARDS.

    ``(a) In General.--Each group health plan shall comply with patient 
protection requirements under title I of the Health Care Quality and 
Choice Act of 1999 (as in effect on the date of the enactment of such 
Act), and each health insurance issuer shall comply with patient 
protection requirements under such title with respect to group health 
insurance coverage it offers, and such requirements shall be deemed to 
be incorporated into this subsection.
    ``(b) Notice.--A group health plan shall comply with the notice 
requirement under section 711(d) of the Employee Retirement Income 
Security Act of 1974 (as in effect on the date of the enactment of the 
Health Care Quality and Choice Act of 1999) with respect to the 
requirements referred to in subsection (a) and a health insurance 
issuer shall comply with such notice requirement as if such section 
applied to such issuer and such issuer were a group health plan.''.
    (b) Conforming Amendment.--Section 2721(b)(2)(A) of such Act (42 
U.S.C. 300gg-21(b)(2)(A)) is amended by inserting ``(other than section 
2707)'' after ``requirements of such subparts''.

SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE COVERAGE.

    Part B of title XXVII of the Public Health Service Act is amended 
by inserting after section 2752 the following new section:

``SEC. 2753. PATIENT PROTECTION STANDARDS.

    ``(a) In General.--Each health insurance issuer shall comply with 
patient protection requirements under title I of the Health Care 
Quality and Choice Act of 1999 (as in effect on the date of the 
enactment of such Act) with respect to individual health insurance 
coverage it offers, and such requirements shall be deemed to be 
incorporated into this subsection.
    ``(b) 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 such title as if such section applied to such issuer and such issuer 
were a group health plan.''.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH 
              PLANS AND GROUP HEALTH INSURANCE COVERAGE 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. 714. PATIENT PROTECTION STANDARDS.

    ``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 title I of the Health Care Quality and Choice 
Act of 1999 (as in effect as of the date of the enactment of such Act), 
and such requirements shall be deemed to be incorporated into this 
section.''.
    (b) Satisfaction of ERISA Claims Procedure Requirement.--Section 
503 of such Act (29 U.S.C. 1133) is amended by inserting ``(a)'' after 
``Sec. 503.'' and by adding at the end the following new subsection:
    ``(b) In the case of a group health plan (as defined in section 
733) compliance with the requirements of subtitle A of title I of the 
Health Care Quality and Choice Act of 1999 (as in effect on the date of 
the enactment of such Act) in the case of a claims denial shall be 
deemed compliance with subsection (a) with respect to such claims 
denial.''.
    (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 714''.
    (2) The table of contents in section 1 of such Act is amended by 
inserting after the item relating to section 713 the following new 
item:

``Sec. 714. Patient protection standards.''.

SEC. 302. AVAILABILITY OF COURT REMEDIES.

    (a) In General.--Section 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132) is amended by adding at the end 
the following new subsection:
    ``(n) Cause of Action Relating to Provision of Health Benefits.--
            ``(1) In general.--In any case in which--
                    ``(A) a person who is a fiduciary of a group health 
                plan, a health insurance issuer offering health 
                insurance coverage in connection with the plan, or an 
                agent of the plan or plan sponsor and who, under the 
                plan, has authority to make final decisions under 
                section 102 of the Health Care Quality and Choice Act 
                of 1999--
                            ``(i) fails to exercise ordinary care in 
                        making an incorrect determination in the case 
                        of a participant or beneficiary that an item or 
                        service is excluded from coverage under the 
                        terms of the plan based on the fact that the 
                        item or service--
                                    ``(I) does not meet the 
                                requirements for medical 
                                appropriateness or necessity,
                                    ``(II) would constitute 
                                experimental treatment or technology 
                                (as defined under the plan), or
                                    ``(III) is not a covered benefit, 
                                or
                            ``(ii) fails to exercise ordinary care to 
                        ensure that--
                                    ``(I) any denial of claim for 
                                benefits (within the meaning of section 
                                101(f) of the Health Care Quality and 
                                Choice Act of 1999), or
                                    ``(II) any decision by the plan on 
                                a request, made by a participant or 
                                beneficiary under section 102 or 103 of 
                                the Health Care Quality and Choice Act 
                                of 1999, for a reversal of an earlier 
                                decision of the plan,
                        is made and issued to the participant or 
                        beneficiary (in such form and manner as may be 
                        prescribed in regulations of the Secretary) 
                        before the end of the applicable period 
                        specified in section 101, 102, or 103 of the 
                        Health Care Quality and Choice Act of 1999, and
                    ``(B) such failure is the proximate cause of 
                personal injury to, or wrongful death of, the 
                participant or beneficiary,
        such person shall be liable to the participant or beneficiary 
        (or the estate of such participant or beneficiary) for economic 
        and noneconomic damages in connection with such failure and 
        such injury or death (subject to paragraph (10)).
        For purposes of this subsection, the term `final decision' 
        means, with respect to a group health plan, a final decision of 
        the plan under section 102 of the Health Care Quality and 
        Choice Act of 1999.
            ``(2) Ordinary care.--For purposes of this subsection, the 
        term `ordinary care' means the care, skill, prudence, and 
        diligence under the circumstances then prevailing that a 
        prudent individual acting in a like capacity and familiar with 
        such matters would use in the conduct of an enterprise of a 
        like character and with like aims.
            ``(3) Personal injury.--For purposes of this subsection, 
        the term `personal injury' means a physical injury and includes 
        a physical injury arising out of a failure to treat a mental 
        illness or disease.
            ``(4) Exception for employers and other plan sponsors.--
                    ``(A) In general.--Subject to subparagraph (B), 
                paragraph (1) does not authorize--
                            ``(i) any cause of action against an 
                        employer or other plan sponsor maintaining the 
                        group health plan (or against an employee of 
                        such an employer or sponsor acting within the 
                        scope of employment), or
                            ``(ii) a right of recovery or indemnity by 
                        a person against an employer or other plan 
                        sponsor (or such an employee) for damages 
                        assessed against the person pursuant to a cause 
                        of action under paragraph (1).
                    ``(B) Special rule.--Subparagraph (A) shall not 
                preclude any cause of action described in paragraph (1) 
                commenced against an employer or other plan sponsor (or 
                against an employee of such an employer or sponsor 
                acting within the scope of employment), but only if--
                            ``(i) such action is based on the direct 
                        participation of the employer or other plan 
                        sponsor (or employee of the employer or plan 
                        sponsor) in the final decision of the plan with 
                        respect to a specific participant or 
                        beneficiary on a claim for benefits covered 
                        under the plan or health insurance coverage in 
                        the case at issue; and
                            ``(ii) the decision on the claim resulted 
                        in personal injury to, or the wrongful death 
                        of, such participant or beneficiary.
                    ``(C) Direct participation.--For purposes of this 
                subsection, in determining whether an employer or other 
                plan sponsor (or employee of an employer or other plan 
                sponsor) is engaged in direct participation in the 
                final decision of the plan on a claim, the employer or 
                plan sponsor (or employee) shall not be construed to be 
                engaged in such direct participation (and to be liable 
                for any damages whatsoever) because of--
                            ``(i) any participation by the employer or 
                        other plan sponsor (or employee) in the 
                        selection of the group health plan or health 
                        insurance coverage involved or the third party 
                        administrator or other agent;
                            ``(ii) any engagement by the employer or 
                        other plan sponsor (or employee) in any cost-
                        benefit analysis undertaken in connection with 
                        the selection of, or continued maintenance of, 
                        the plan or coverage involved;
                            ``(iii) any decision to increase or 
                        decrease coverage or benefits affecting all 
                        plan participants or beneficiaries made in the 
                        initial purchase or regular renewal of coverage 
                        by the employer or plan sponsor (or employee);
                            ``(iv) any action by an agent of the 
                        employer or plan sponsor in making such a final 
                        decision on behalf of such employer or plan 
                        sponsor;
                            ``(v) any decision by an employer or plan 
                        sponsor (or employee) or agent acting on behalf 
                        of an employer or plan sponsor either to 
                        authorize coverage for, or to intercede or not 
                        to intercede as an advocate for or on behalf 
                        of, any specific participant or beneficiary (or 
                        group of participants or beneficiaries) under 
                        the plan; or
                            ``(vi) any other form of decisionmaking or 
                        other conduct performed by the employer or 
                        other plan sponsor (or employee) in connection 
                        with the plan or coverage involved unless it 
                        involves the making of a final decision of the 
                        plan consisting of a failure described in 
                        clause (i) or (ii) of paragraph (1)(A) as to 
                        specific participants or beneficiaries who 
                        suffer personal injury or wrongful death as a 
                        proximate cause of such decision.
            ``(5) Required demonstration of direct participation.--An 
        action against an employer or plan sponsor (or employee 
        thereof) under this subsection shall be immediately dismissed--
                    ``(A) in the absence of an allegation in the 
                complaint of direct participation by the employer or 
                plan sponsor in the final decision of the plan with 
                respect to a specific participant or beneficiary who 
                suffers personal injury or wrongful death, or
                    ``(B) upon a demonstration to the court that such 
                employer or plan sponsor (or employee) did not directly 
                participate in the final decision of the plan.
            ``(6) Treatment of third-party providers of 
        nondiscretionary administrative services.--Paragraph (1) does 
        not authorize any action against any person providing 
        nondiscretionary administrative services to employers or other 
        plan sponsors.
            ``(7) Requirement of exhaustion of administrative 
        remedies.--
                    ``(A) In general.--Paragraph (1) applies in the 
                case of any cause of action only if all remedies under 
                section 503 (including remedies under sections 102 and 
                103 of the Health Care Quality and Choice Act of 1999 
                made applicable under section 714) with respect to such 
                cause of action have been exhausted.
                    ``(B) External review required.--For purposes of 
                subparagraph (A), administrative remedies under section 
                503 shall not be deemed exhausted until available 
                remedies under section 103 of the Health Care Quality 
                and Choice Act of 1999 have been elected and are 
                exhausted.
                    ``(C) Consideration of administrative 
                determinations.--Any determinations made under section 
                102 or 103 of the Health Care Quality and Choice Act of 
                1999 made while an action under this paragraph is 
                pending shall be given due consideration by the court 
                in such action.
            ``(8) Use of external appeal entity in establishing absence 
        of personal injury or causation in litigation.--
                    ``(A) In general.--In any action under this 
                subsection by an individual in which damages are sought 
                on the basis of a personal injury to the individual, 
                the defendant may obtain (at its own expense), under 
                procedures similar to procedures applicable under 
                section 103 of the Health Care Quality and Choice Act 
                of 1999, a determination by a qualified external appeal 
                entity (as defined in section 103(c)(1) of the Health 
                Care Quality and Choice Act of 1999) that has not been 
                involved in any stage of the grievance or appeals 
                process which resulted in such action as to--
                            ``(i) whether or not such a personal injury 
                        has been sustained, or
                            ``(ii) whether or not the proximate cause 
                        of such injury was the result of the failure of 
                        the defendant to exercise ordinary care, as 
                        described in paragraph (1)(A).
                    ``(B) Effect of finding in favor of defendant.--If 
                the external appeal entity determines that such an 
                injury has not been sustained or was not proximately 
                caused by such a failure, such a finding shall be an 
                affirmative defense, the action shall be dismissed 
                forthwith, and all liability based upon the alleged 
                injury shall be precluded.
            ``(9) Rebuttable presumption.--In the case of any action 
        commenced pursuant to paragraph (1), there shall be a 
        rebuttable presumption in favor of the decision of the external 
        appeal entity rendered upon completion of any review elected 
under section 103 of the Health Care Quality and Choice Act of 1999 and 
such presumption may be overcome only upon a showing of clear and 
convincing evidence to the contrary.
            ``(10) Maximum noneconomic damages.--Total liability for 
        noneconomic loss under this subsection in connection with any 
        failure with respect to any participant or beneficiary may not 
        exceed the greater of--
                    ``(A) $250,000, or
                    ``(B) 2 times the amount of economic loss.
            ``(11) Prohibition of award of punitive damages.--
                    ``(A) General rule.--Except as provided in this 
                paragraph, nothing in this subsection shall be 
                construed as authorizing a cause of action for 
                punitive, exemplary, or similar damages.
                    ``(B) Exception.--Punitive damages are authorized 
                in any case described in paragraph (1)(A)(ii) in which 
                the plaintiff establishes by clear and convincing 
                evidence that conduct carried out by the defendant with 
                a conscious, flagrant indifference to the rights or 
                safety of others was the proximate cause of the harm 
                that is the subject of the action and that such conduct 
                was contrary to the recommendations of an external 
                appeal entity issued in any determination (if any) in 
                such case rendered pursuant to section 103 of the 
                Health Care Quality and Choice Act of 1999.
                    ``(C) Limitation on amount.--
                            ``(i) In general.--The amount of punitive 
                        damages that may be awarded in an action 
                        described in subparagraph (B) may not exceed 
                        the greater of--
                                    ``(I) 2 times the sum of the amount 
                                awarded to the claimant for economic 
                                loss; or
                                    ``(II) $250,000.
                            ``(ii) Special rule.--Notwithstanding 
                        clause (i), in any action described in 
                        subparagraph (B) against an individual whose 
                        net worth does not exceed $500,000 or against 
                        an owner of an unincorporated business, or any 
                        partnership, corporation, association, unit of 
                        local government, or organization which has 
                        fewer that 25 employees, the punitive damages 
                        shall not exceed the lesser of--
                                    ``(I) 2 times the amount awarded to 
                                the claimant for economic loss; or
                                    ``(II) $250,000.
                            ``(iii) Controlled groups.--
                                    ``(I) In general.--For the purpose 
                                of determining the applicability of 
                                clause (ii) to any employer, in 
                                determining the number of employees of 
                                an employer who is a member of a 
                                controlled group, the employees of any 
                                person in such group shall be deemed to 
                                be employees of the employer.
                                    ``(II) Controlled group.--For 
                                purposes of subclause (I), the term 
                                `controlled group' means any group 
                                treated as a single employer under 
                                subsection (b), (c), (m), or (o) of 
                                section 414 of the Internal Revenue 
                                Code of 1986.
                    ``(D) Exception for insufficient award in cases of 
                egregious conduct.--
                            ``(i) Determination by court.--If the court 
                        makes a determination, after considering each 
                        of the factors in subparagraph (E), that the 
                        application of subparagraph (B) would result in 
                        an award of punitive damages that is 
                        insufficient to punish the egregious conduct of 
                        the defendant against whom the punitive damages 
                        are to be awarded or to deter such conduct in 
                        the future, the court shall determine the 
                        additional amount of punitive damages (referred 
                        to in this subparagraph as the `additional 
                        amount') in excess of the amount determined in 
                        accordance with subparagraph (B) to be awarded 
                        against the defendant in a separate proceeding 
                        in accordance with this subparagraph.
                            ``(ii) Requirements for awarding additional 
                        amount.--If the court awards an additional 
                        amount pursuant to this subparagraph, the court 
                        shall state its reasons for setting the amount 
                        of the additional amount in findings of fact 
                        and conclusions of law.
                    ``(E) Factors for consideration in cases of 
                egregious conduct.--In any proceeding under 
                subparagraph (D), the matters to be considered by the 
                court shall include (but are not limited to)--
                            ``(i) the extent to which the defendant 
                        acted with actual malice;
                            ``(ii) the likelihood that serious harm 
                        would arise from the conduct of the defendant;
                            ``(iii) the degree of the awareness of the 
                        defendant of that likelihood;
                            ``(iv) the profitability of the misconduct 
                        to the defendant;
                            ``(v) the duration of the misconduct and 
                        any concurrent or subsequent concealment of the 
                        conduct by the defendant;
                            ``(vi) the attitude and conduct of the 
                        defendant upon the discovery of the misconduct 
                        and whether the misconduct has terminated;
                            ``(vii) the financial condition of the 
                        defendant; and
                            ``(viii) the cumulative deterrent effect of 
                        other losses, damages, and punishment suffered 
                        by the defendant as a result of the misconduct, 
                        reducing the amount of punitive damages on the 
                        basis of the economic impact and severity of 
                        all measures to which the defendant has been or 
                        may be subjected, including--
                                    ``(I) compensatory and punitive 
                                damage awards to similarly situated 
                                claimants;
                                    ``(II) the adverse economic effect 
                                of stigma or loss of reputation;
                                    ``(III) civil fines and criminal 
                                and administrative penalties; and
                                    ``(IV) stop sale, cease and desist, 
                                and other remedial or enforcement 
                                orders.
                    ``(F) Application by court.--This paragraph shall 
                be applied by the court and, in the case of a trial by 
                jury, application of this paragraph shall not be 
                disclosed to the jury. Nothing in this paragraph shall 
                authorize the court to enter an additional award of 
                punitive damages in excess of the amount of the jury's 
                initial award of punitive damages.
                    ``(G) Limitation on punitive damages.--No person 
                shall be liable for punitive, exemplary, or similar 
                damages in an action under this subsection based on any 
                failure described in paragraph (1) if such failure was 
                in compliance with the recommendations of an external 
                appeal entity issued in a determination under section 
                103 of the Health Care Quality and Choice Act of 1999.
                    ``(H) Bifurcation at request of any party.--
                            ``(i) In general.--At the request of any 
                        party the trier of fact in any action that is 
                        subject to this paragraph shall consider in a 
                        separate proceeding, held subsequent to the 
                        determination of the amount of compensatory 
                        damages, whether punitive damages are to be 
                        awarded for the harm that is the subject of the 
                        action and the amount of the award.
                            ``(ii) Inadmissibility of evidence relative 
                        only to a claim of punitive damages in a 
                        proceeding concerning compensatory damages.--If 
                        any party requests a separate proceeding under 
                        clause (i), in a proceeding to determine 
                        whether the claimant may be awarded 
                        compensatory damages, any evidence, argument, 
                        or contention that is relevant only to the 
                        claim of punitive damages, as determined by 
                        applicable State law, shall be inadmissible.
            ``(12) Limitation of action.--Paragraph (1) shall not apply 
        in connection with any action commenced after the later of--
                    ``(A) 1 year after (i) the date of the last action 
                which constituted a part of the failure, or (ii) in the 
                case of an omission, the latest date on which the 
                fiduciary could have cured the failure, or
                    ``(B) 1 year after the earliest date on which the 
                plaintiff first knew, or reasonably should have known, 
                of the bodily injury resulting from the failure.
            ``(13) Coordination with fiduciary requirements.--A 
        fiduciary shall not be treated as failing to meet any 
        requirement of part 4 solely by reason of any action taken by a 
        fiduciary which consists of full compliance with the reversal 
        under section 103 of the Health Care Quality and Choice Act of 
        1999 of a denial of claim for benefits (within the meaning of 
        section 101(f) of such Act).
            ``(14) Construction.--Nothing in this subsection shall be 
        construed as authorizing a cause of action for the failure to 
        provide an item or service which is not covered under the group 
        health plan involved.
            ``(15) Protection of medical malpractice and similar 
        actions under state law.--This subsection shall not be 
        construed to preclude any action under State law (as defined in 
        section 514(c)(1)) with respect to the duty (if any) under such 
        State law imposed on any person to exercise a specified 
        standard of care when making a health care treatment decision 
        where medical services are provided by such person and the 
        decision affects the quality of care or treatment provided or 
        received.
            ``(16) References to the health care quality and choice act 
        of 1999.--Any reference in this subsection to any provision of 
        the Health Care Quality and Choice Act of 1999 shall be deemed 
        a reference to such provision as in effect on the date of the 
        enactment of such Act.''.
    (b) Conforming Amendment.--Section 502(a)(1)(A) of such Act (29 
U.S.C. 1132(a)(1)(A)) is amended by inserting ``or (n)'' after 
``subsection (c)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to acts and omissions (from which a cause of action arises) 
occurring on or after the date of the enactment of this Act.

SEC. 303. AVAILABILITY OF BINDING ARBITRATION.

    (a) In General.--Section 503 of the Employee Retirement Income 
Security Act of 1974 (as amended by the preceding provisions of this 
Act) is amended further--
            (1) in subsection (a), by inserting ``In General.--'' after 
        ``(a)'';
            (2) in subsection (b), by striking ``(b) In the case'' and 
        inserting the following:
    ``(b) Group Health Plans.--
            ``(1) In general.--In the case''; and
            (3) by adding at the end of subsection (b) the following:
            ``(2) Binding arbitration permitted as alternative means of 
        dispute resolution.--
                    ``(A) In general.--A group health plan shall not be 
                treated as failing to meet the requirements of the 
                preceding provisions of this section relating to review 
                of any adverse coverage decision rendered by or under 
                the plan, if--
                            ``(i) in lieu of the procedures otherwise 
                        provided under the plan in accordance with such 
                        provisions and in lieu of any subsequent review 
                        of the matter by a court under section 502--
                                    ``(I) the aggrieved participant or 
                                beneficiary elects in the request for 
                                the review a procedure by which the 
                                dispute is resolved by binding 
                                arbitration which is available under 
                                the plan with respect to similarly 
situated participants and beneficiaries and which meets the 
requirements of subparagraph (B); or
                                    ``(II) in the case of any such plan 
                                or portion thereof which is established 
                                and maintained pursuant to a bona fide 
                                collective bargaining agreement, the 
                                plan provides for a procedure by which 
                                such disputes are resolved by means of 
                                binding arbitration which meets the 
                                requirements of subparagraph (B); and
                            ``(ii) the additional requirements of 
                        subparagraph (B) are met.
                    ``(B) Additional requirements.--The Secretary shall 
                prescribe by regulation requirements for arbitration 
                procedures under this paragraph, including at least the 
                following requirements:
                            ``(i) Arbitration panel.--The arbitration 
                        shall be conducted by an arbitration panel 
                        meeting the requirements of subparagraph (C).
                            ``(ii) Fair process; de novo 
                        determination.--The procedure shall provide for 
                        a fair, de novo determination.
                            ``(iii) Opportunity to submit evidence, 
                        have representation, and make oral 
                        presentation.--Each party to the arbitration 
                        procedure--
                                    ``(I) may submit and review 
                                evidence related to the issues in 
                                dispute;
                                    ``(II) may use the assistance or 
                                representation of one or more 
                                individuals (any of whom may be an 
                                attorney); and
                                    ``(III) may make an oral 
                                presentation.
                            ``(iv) Provision of information.--The plan 
                        shall provide timely access to all its records 
                        relating to the matters under arbitration and 
                        to all provisions of the plan relating to such 
                        matters.
                            ``(v) Timely decisions.--A determination by 
                        the arbitration panel on the decision shall--
                                    ``(I) be made in writing;
                                    ``(II) be binding on the parties; 
                                and
                                    ``(III) be made in accordance with 
                                the medical exigencies of the case 
                                involved.
                    ``(C) Arbitration panel.--
                            ``(i) In general.--Arbitrations commenced 
                        pursuant to this paragraph shall be conducted 
                        by a panel of arbitrators selected by the 
                        parties made up of 3 individuals, including at 
                        least one practicing physician and one 
                        practicing attorney.
                            ``(ii) Qualifications.--Any individual who 
                        is a member of an arbitration panel shall meet 
                        the following requirements:
                                    ``(I) There is no real or apparent 
                                conflict of interest that would impede 
                                the individual conducting arbitration 
                                independent of the plan and meets the 
                                independence requirements of clause 
                                (iii).
                                    ``(II) The individual has 
                                sufficient medical or legal expertise 
                                to conduct the arbitration for the plan 
                                on a timely basis.
                                    ``(III) The individual has 
                                appropriate credentials and has 
                                attained recognized expertise in the 
                                applicable medical or legal field.
                                    ``(IV) The individual was not 
                                involved in the initial adverse 
                                coverage decision or any other review 
                                thereof.
                            ``(iii) Independence requirements.--An 
                        individual described in clause (ii) meets the 
                        independence requirements of this clause if--
                                    ``(I) the individual is not 
                                affiliated with any related party,
                                    ``(II) any compensation received by 
                                such individual in connection with the 
                                binding arbitration procedure is 
                                reasonable and not contingent on any 
                                decision rendered by the individual,
                                    ``(III) under the terms of the 
                                plan, the plan has no recourse against 
                                the individual or entity in connection 
                                with the binding arbitration procedure, 
                                and
                                    ``(IV) the individual does not 
                                otherwise have a conflict of interest 
                                with a related party as determined 
                                under such regulations as the Secretary 
                                may prescribe.
                            ``(iv) Related party.--For purposes of 
                        clause (iii), the term `related party' means--
                                    ``(I) the plan or any health 
                                insurance issuer offering health 
                                insurance coverage in connection with 
                                the plan (or any officer, director, or 
                                management employee of such plan or 
                                issuer),
                                    ``(II) the physician or other 
                                medical care provider that provided the 
                                medical care involved in the coverage 
                                decision,
                                    ``(III) the institution at which 
                                the medical care involved in the 
                                coverage decision is provided,
                                    ``(IV) the manufacturer of any drug 
                                or other item that was included in the 
                                medical care involved in the coverage 
                                decision, or
                                    ``(V) any other party determined 
                                under such regulations as the Secretary 
                                may prescribe to have a substantial 
                                interest in the coverage decision .
                            ``(iv) Affiliated.--For purposes of clause 
                        (iii), the term `affiliated' means, in 
                        connection with any entity, having a familial, 
                        financial, or professional relationship with, 
                        or interest in, such entity.
                    ``(D) Decisions.--
                            ``(i) In general.--Decisions rendered by 
                        the arbitration panel shall be binding on all 
                        parties to the arbitration and shall be 
enforcible under section 502 as if the terms of the decision were the 
terms of the plan, except that the court may vacate any award made 
pursuant to the arbitration for any cause described in paragraph (1), 
(2), (3), (4), or (5) of section 10(a) of title 9, United States Code.
                            ``(ii) Allowable remedies.--The remedies 
                        which may be implemented by the arbitration 
                        panel shall consist of those remedies which 
                        would be available in an action timely 
                        commenced by a participant or beneficiary under 
                        section 502 after exhaustion of administrative 
                        remedies.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to adverse coverage decisions initially rendered by group health plans 
on or after the date of the enactment of this Act.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                             CODE OF 1986.

SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986 is 
amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9812 the following new item:

                              ``Sec. 9813. Standard relating to Health 
                                        Care Quality and Choice Act.''; 
                                        and
            (2) by inserting after section 9812 the following:

``SEC. 9813. STANDARD RELATING TO HEALTH CARE QUALITY AND CHOICE ACT.

    ``A group health plan shall comply with the requirements of title I 
of the Health Care Quality and Choice Act of 1999 (as in effect as of 
the date of the enactment of such Act), and such requirements shall be 
deemed to be incorporated into this section.''.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 501. EFFECTIVE DATES.

    (a) Group Health Coverage.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by sections 201(a), 301, and 401 (and title I insofar as 
        it relates to such sections) shall apply with respect to group 
        health plans, and health insurance coverage offered in 
        connection with group health plans, for plan years beginning on 
        or after January 1, 2000 (in this section referred to as the 
        ``general effective date'') and also shall apply to portions of 
        plan years occurring on and after such date.
            (2) Treatment of collective bargaining agreements.--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 sections 
        201(a), 301, and 401 (and title I insofar as it relates to such 
        sections) 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 this Act shall not be treated as a termination of such 
        collective bargaining agreement.
    (b) Individual Health Insurance Coverage.--The amendments made by 
section 202 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. 502. COORDINATION IN IMPLEMENTATION.

    The Secretary of Labor, the Secretary of Health and Human Services, 
and the Secretary of the Treasury shall ensure, through the execution 
of an interagency memorandum of understanding among such Secretaries, 
that--
            (1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which both 
        Secretaries have responsibility under the provisions of this 
        Act (and the amendments made thereby) 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.

                       TITLE VI--OTHER PROVISIONS

SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.

    (a) Establishment of Panel.--
            (1) Establishment.--There is established a panel to be 
        known as the Health Care Panel to Devise a Uniform Explanation 
        of Benefits (in this section referred to as the ``Panel'').
            (2) Duties of Panel.--
                    (A) In general.--The Panel shall devise a single 
                form for use by third-party health care payers for the 
                remittance of claims to providers.
                    (B) Definition.--For purposes of this section, the 
                term ``third-party health care payer'' means any entity 
                that contractually pays health care bills for an 
                individual.
            (3) Membership.--
                    (A) Size and composition.--The Secretary of Health 
                and Human Services, in consultation with the Majority 
                Leader of the Senate and the Speaker of the House of 
Representatives, shall determine the number of members and the 
composition of the Panel. Such Panel shall include equal numbers of 
representatives of private insurance organizations, consumer groups, 
State insurance commissioners, State medical societies, State hospital 
associations, and State medical specialty societies.
                    (B) Terms of appointment.--The members of the Panel 
                shall serve for the life of the Panel.
                    (C) Vacancies.--A vacancy in the Panel shall not 
                affect the power of the remaining members to execute 
                the duties of the Panel, but any such vacancy shall be 
                filled in the same manner in which the original 
                appointment was made.
            (4) Procedures.--
                    (A) Meetings.--The Panel shall meet at the call of 
                a majority of its members.
                    (B) First meeting.--The Panel shall convene not 
                later than 60 days after the date of the enactment of 
                the Health Care Quality and Choice Act of 1999.
                    (C) Quorum.--A quorum shall consist of a majority 
                of the members of the Panel.
                    (D) Hearings.--For the purpose of carrying out its 
                duties, the Panel may hold such hearings and undertake 
                such other activities as the Panel determines to be 
                necessary to carry out its duties.
            (5) Administration.--
                    (A) Compensation.--Except as provided in 
                subparagraph (B), members of the Panel shall receive no 
                additional pay, allowances, or benefits by reason of 
                their service on the Panel.
                    (B) Travel expenses and per diem.--Each member of 
                the Panel who is not an officer or employee of the 
                Federal Government shall receive travel expenses and 
                per diem in lieu of subsistence in accordance with 
                sections 5702 and 5703 of title 5, United States Code.
                    (C) Contract authority.--The Panel may contract 
                with and compensate government and private agencies or 
                persons for items and services, without regard to 
                section 3709 of the Revised Statutes (41 U.S.C. 5).
                    (D) Use of mails.--The Panel may use the United 
                States mails in the same manner and under the same 
                conditions as Federal agencies and shall, for purposes 
                of the frank, be considered a commission of Congress as 
                described in section 3215 of title 39, United States 
                Code.
                    (E) Administrative support services.--Upon the 
                request of the Panel, the Secretary of Health and Human 
                Services shall provide to the Panel on a reimbursable 
                basis such administrative support services as the Panel 
                may request.
            (6) Submission of form.--Not later than 2 years after the 
        first meeting, the Panel shall submit a form to the Secretary 
        of Health and Human Services for use by third-party health care 
        payers.
            (7) Termination.--The Panel shall terminate on the day 
        after submitting its the form under paragraph (6).
    (b) Requirement for Use of Form by Third-Party Care Payers.--A 
third-party health care payer shall be required to use the form devised 
under subsection (a) for plan years beginning on or after 5 years 
following the date of the enactment of this Act.

SEC. 602. PROTECTION FOR CERTAIN INFORMATION.

    (a) Protection of Certain Information.--Notwithstanding any other 
provision of Federal or State law, health care response information 
shall be exempt from any disclosure requirement (regardless of whether 
the requirement relates to subpoenas, discover, introduction of 
evidence, testimony, or any other form of disclosure), in connection 
with a civil or administrative proceeding under Federal or State law, 
to the same extent as information developed by a health care provider 
with respect to any of the following:
            (1) Peer review.
            (2) Utilization review.
            (3) Quality management or improvement.
            (4) Quality control.
            (5) Risk management.
            (6) Internal review for purposes of reducing mortality, 
        morbidity, or for improving patient care or safety.
    (b) No Waiver of Protection Through Interaction With Accrediting 
Body.--Notwithstanding any other provision of Federal or State law, the 
protection of health care response information from disclosure provided 
under subsection (a) shall not be deemed to be modified or in any way 
waived by--
            (1) the development of such information in connection with 
        a request or requirement of an accrediting body; or
            (2) the transfer of such information to an accrediting 
        body.
    (c) Definitions.--For purposes of this section:
            (1) Accrediting body.--The term ``accrediting body'' means 
        a national, not-for-profit organization that--
                    (A) accredits health care providers; and
                    (B) is recognized as an accrediting body by statute 
                or by a Federal or State agency that regulates health 
                care providers.
            (2) Health care response information.--The term ``health 
        care response information'' means information (including any 
        data, report, record, memorandum, analysis, statement, or other 
        communication) developed by, or on behalf of, a health care 
        provider in response to a serious, adverse, patient related 
        event--
                    (A) during the course of analyzing or studying the 
                event and its causes; and
                    (B) for the purposes of--
                            (i) reducing mortality or morbidity; or
                            (ii) improving patient care or safety 
                        (including the provider's notification to an 
                        accrediting body and the provider's plans of 
action in response to such event).
            (3) 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 or any 
                other privately-sponsored program that directly 
                provides items or services that constitute health care 
                to beneficiaries; or
                    (C) an officer or employee of a person described in 
                subparagraph (A) or (B).
            (4) State.--The term ``State'' includes a State, the 
        District of Columbia, the Northern Mariana Islands, any 
        political subdivisions of a State or such Islands, or any 
        agency or instrumentality of either.
    (d) Effective Date.--The provisions of this section are effective 
on the date of the enactment of this Act.

SEC. 603. MEDICARE COMPETITIVE PRICING DEMONSTRATION PROJECT.

    (a) Finding.--The Congress finds that implementing competitive 
pricing in the medicare program under title XVIII of the Social 
Security Act is an important goal.
    (b) Prohibition on Implementation of Project in Certain Areas.--
Notwithstanding subsection (b) of section 4011 of the Balanced Budget 
Act of 1997 (Public Law 105-33)), the Secretary of Health and Human 
Services may not implement the Medicare Competitive Pricing 
Demonstration Project (operated by the Secretary of Health and Human 
Services pursuant to such section) in Kansas City, Missouri or Kansas 
City, Kansas, or in any area in Arizona.
    (c) Moratorium on Implementation of Project in any Area until 
January, 1, 2001.--Notwithstanding any provision of section 4011 of the 
Balanced Budget Act of 1997 (Public Law 105-33)), the Secretary of 
Health and Human Services may not implement the Medicare Competitive 
Pricing Demonstration Project in any area before January 1, 2001.
    (d) Study and Report to Congress.--
            (1) Study.--The Secretary of Health and Human Services, in 
        conjunction with the Competitive Pricing Advisory Committee, 
        shall conduct a study on the different approaches of 
        implementing the Medicare Competitive Pricing Demonstration 
        Project on a voluntary basis.
            (2) Report.--Not later than June 30, 2000, the Secretary of 
        Health and Human Services shall submit a report to Congress 
        which shall contain a detailed description of the study 
        conducted under paragraph (1), together with the 
        recommendations of the Secretary and the Competitive Pricing 
        Advisory Committee regarding the implementation of the Medicare 
        Competitive Pricing Demonstration Project.
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