[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2563 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
107th CONGRESS
  1st Session
                                H. R. 2563

_______________________________________________________________________

                                 AN ACT


 
To amend the Public Health Service Act, the Employee Retirement Income 
Security Act of 1974, 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 ``Bipartisan Patient 
Protection Act''.
    (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--Utilization Review; Claims; and Internal and External 
                                Appeals

Sec. 101. Utilization review activities.
Sec. 102. Procedures for initial claims for benefits and prior 
                            authorization determinations.
Sec. 103. Internal appeals of claims denials.
Sec. 104. Independent external appeals procedures.
Sec. 105. Health care consumer assistance fund.
                       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. Timely access to specialists.
Sec. 115. Patient access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical 
                            trials.
Sec. 120. Required coverage for minimum hospital stay for mastectomies 
                            and lymph node dissections for the 
                            treatment of breast cancer and coverage for 
                            secondary consultations.
                   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 claims.
Sec. 135. Protection for patient advocacy.
                        Subtitle E--Definitions

Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Treatment of excepted benefits.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
Sec. 157. Preservation of protections.
 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.
Sec. 202. Application to individual health insurance coverage.
Sec. 203. Cooperation between Federal and State authorities.
   TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL 
                       HEALTH INSURANCE PROGRAMS

Sec. 301. Application of patient protection standards to Federal health 
                            insurance programs.
TITLE IV--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

                     Subtitle A--General Provisions

Sec. 401. Application of patient protection standards to group health 
                            plans and group health insurance coverage 
                            under the Employee Retirement Income 
                            Security Act of 1974.
Sec. 402. Availability of civil remedies.
Sec. 403. Limitation on certain class action litigation.
Sec. 404. Limitations on actions.
Sec. 405. Cooperation between Federal and State authorities.
Sec. 406. Sense of the Senate concerning the importance of certain 
                            unpaid services.
                  Subtitle B--Association Health Plans

Sec. 421. Rules governing association health plans.
Sec. 422. Clarification of treatment of single employer arrangements.
Sec. 423. Clarification of treatment of certain collectively bargained 
                            arrangements.
Sec. 424. Enforcement provisions relating to association health plans.
Sec. 425. Cooperation between Federal and State authorities.
Sec. 426. Effective date and transitional and other rules.
        TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

        Subtitle A--Application of Patient Protection Provisions

Sec. 501. Application to group health plans under the Internal Revenue 
                            Code of 1986.
Sec. 502. Conforming enforcement for women's health and cancer rights.
         Subtitle B--Health Care Coverage Access Tax Incentives

Sec. 511. Expansion of availability of Archer medical savings accounts.
Sec. 512. Deduction for 100 percent of health insurance costs of self-
                            employed individuals.
Sec. 513. Credit for health insurance expenses of small businesses.
Sec. 514. Certain grants by private foundations to qualified health 
                            benefit purchasing coalitions.
Sec. 515. State grant program for market innovation.
       TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 601. Effective dates.
Sec. 602. Coordination in implementation.
Sec. 603. Severability.
                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 701. No impact on social security trust funds.
Sec. 702. Customs user fees.
Sec. 703. Fiscal year 2002 medicare payments.
Sec. 704. Sense of the Senate with respect to participation in clinical 
                            trials and access to specialty care.
Sec. 705. Sense of the Senate regarding fair review process.
Sec. 706. Annual review.
Sec. 707. Definition of born-alive infant.

                    TITLE I--IMPROVING MANAGED CARE

   Subtitle A--Utilization Review; Claims; and Internal and External 
                                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 and section 503A of the Employee 
        Retirement Income Security Act of 1974.
            (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 actively practicing health 
                care professionals, 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 a participant, 
                beneficiary, or 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 a periodic 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 qualified 
        health care professionals 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.
                    (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 and appropriate.

SEC. 102. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND PRIOR 
              AUTHORIZATION DETERMINATIONS.

    Part 5 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 is amended by inserting after section 503 (29 
U.S.C. 1133) the following:

``SEC. 503A. PROCEDURES FOR INITIAL CLAIMS FOR BENEFITS AND PRIOR 
              AUTHORIZATION DETERMINATIONS.

    ``(a) Procedures of Initial Claims for Benefits.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer offering health insurance coverage in 
        connection with the group health plan, shall--
                    ``(A) make a determination on an initial claim for 
                benefits by a participant or beneficiary (or authorized 
                representative) regarding payment or coverage for items 
                or services under the terms and conditions of the plan 
                or coverage involved, including any cost-sharing amount 
                that the participant or beneficiary is required to pay 
                with respect to such claim for benefits; and
                    ``(B) notify a participant or beneficiary (or 
                authorized representative) and the treating health care 
                professional involved regarding a determination on an 
                initial claim for benefits made under the terms and 
                conditions of the plan or coverage, including any cost-
                sharing amounts that the participant or beneficiary may 
                be required to make with respect to such claim for 
                benefits, and of the right of the participant or 
                beneficiary to an internal appeal under section 503B.
            ``(2) Access to information.--
                    ``(A) Timely provision of necessary information.--
                With respect to an initial claim for benefits, the 
                participant or beneficiary (or authorized 
                representative) and the treating health care 
                professional (if any) shall provide the plan or issuer 
                with access to information requested by the plan or 
                issuer that is necessary to make a determination 
                relating to the claim. Such access shall be provided 
                not later than 5 days after the date on which the 
                request for information is received, or, in a case 
                described in subparagraph (B) or (C) of subsection 
                (b)(1), by such earlier time as may be necessary to 
                comply with the applicable timeline under such 
                subparagraph.
                    ``(B) Limited effect of failure on plan or issuer's 
                obligations.--Failure of the participant or beneficiary 
                to comply with the requirements of subparagraph (A) 
                shall not remove the obligation of the plan or issuer 
                to make a decision in accordance with the medical 
                exigencies of the case and as soon as possible, based 
                on the available information, and failure to comply 
                with the time limit established by this paragraph shall 
                not remove the obligation of the plan or issuer to 
                comply with the requirements of this section.
            ``(3) Oral requests.--In the case of a claim for benefits 
        involving an expedited or concurrent determination, a 
        participant or beneficiary (or authorized representative) may 
        make an initial claim for benefits orally, but a group health 
        plan, or health insurance issuer offering health insurance 
        coverage in connection with the group health plan, may require 
        that the participant or beneficiary (or authorized 
        representative) provide written confirmation of such request in 
        a timely manner on a form provided by the plan or issuer. In 
        the case of such an oral request for benefits, the making of 
        the request (and the timing of such request) shall be treated 
        as the making at that time of a claim for such benefits without 
        regard to whether and when a written confirmation of such 
        request is made.
    ``(b) Timeline for Making Determinations.--
            ``(1) Prior authorization determination.--
                    ``(A) In general.--A group health plan, and a 
                health insurance issuer offering health insurance 
                coverage in connection with the group health plan, 
                shall make a prior authorization determination on a 
                claim for benefits (whether oral or written) in 
                accordance with the medical exigencies of the case and 
                as soon as possible, but in no case later than 14 days 
                from the date on which the plan or issuer receives 
                information that is reasonably necessary to enable the 
                plan or issuer to make a determination on the request 
                for prior authorization and in no case later than 28 
                days after the date of the claim for benefits is 
                received.
                    ``(B) Expedited determination.--Notwithstanding 
                subparagraph (A), a group health plan, and a health 
                insurance issuer offering health insurance coverage in 
                connection with the group health plan, shall expedite a 
                prior authorization determination on a claim for 
                benefits described in such subparagraph when a request 
                for such an expedited determination is made by a 
                participant or beneficiary (or authorized 
                representative) at any time during the process for 
                making a determination and a health care professional 
                certifies, with the request, that a determination under 
                the procedures described in subparagraph (A) would 
                seriously jeopardize the life or health of the 
                participant or beneficiary or the ability of the 
                participant or beneficiary to maintain or regain 
                maximum function. Such determination shall be made in 
                accordance with the medical exigencies of the case and 
                as soon as possible, but in no case later than 72 hours 
                after the time the request is received by the plan or 
                issuer under this subparagraph.
                    ``(C) Ongoing care.--
                            ``(i) Concurrent review.--
                                    ``(I) In general.--Subject to 
                                clause (ii), in the case of a 
                                concurrent review of ongoing care 
                                (including hospitalization), which 
                                results in a termination or reduction 
                                of such care, the plan or issuer 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 in 
                                accordance with the medical exigencies 
                                of the case and as soon as possible, 
                                with sufficient time prior to the 
                                termination or reduction to allow for 
                                an appeal under section 503B(b)(3) 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.
                            ``(ii) Rule of construction.--Clause (i) 
                        shall not be construed as requiring plans or 
                        issuers to provide coverage of care that would 
                        exceed the coverage limitations for such care.
            ``(2) Retrospective determination.--A group health plan, 
        and a health insurance issuer offering health insurance 
        coverage in connection with the group health plan, shall make a 
        retrospective determination on a claim for benefits in 
        accordance with the medical exigencies of the case and as soon 
        as possible, but not later than 30 days after the date on which 
        the plan or issuer receives information that is reasonably 
        necessary to enable the plan or issuer to make a determination 
        on the claim, or, if earlier, 60 days after the date of receipt 
        of the claim for benefits.
    ``(c) Notice of a Denial of a Claim for Benefits.--Written notice 
of a denial made under an initial claim for benefits shall be issued to 
the participant or beneficiary (or authorized representative) and the 
treating health care professional in accordance with the medical 
exigencies of the case and as soon as possible, but in no case later 
than 2 days after the date of the determination (or, in the case 
described in subparagraph (B) or (C) of subsection (b)(1), within the 
72-hour or applicable period referred to in such subparagraph).
    ``(d) Requirements of Notice of Determinations.--The written notice 
of a denial of a claim for benefits determination under subsection (c) 
shall be provided in printed form and written in a manner calculated to 
be understood by the participant or beneficiary and shall include--
            ``(1) the specific reasons for the determination (including 
        a summary of the clinical or scientific evidence used in making 
        the determination);
            ``(2) the procedures for obtaining additional information 
        concerning the determination; and
            ``(3) notification of the right to appeal the determination 
        and instructions on how to initiate an appeal in accordance 
        with section 503B.
    ``(e) Definitions.--For purposes of this section and sections 503B 
and 503C:
            ``(1) Authorized representative.--The term `authorized 
        representative' means, with respect to an individual who is a 
        participant or beneficiary, any health care professional or 
        other person acting on behalf of the individual with the 
        individual's consent or without such consent if the individual 
        is medically unable to provide such consent.
            ``(2) 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 in connection with the group health plan.
            ``(3) Denial of claim for benefits.--The term `denial' 
        means, with respect to a claim for benefits, a denial (in whole 
        or in part) of, or a failure to act in accordance with the 
        applicable deadlines established under this section and section 
        503B upon, the claim for benefits and includes a failure to 
        provide benefits (including items and services) required to be 
        provided under title I of the Bipartisan Patient Protection 
        Act.
            ``(4) Treating health care professional.--The term 
        `treating health care professional' means, with respect to 
        services to be provided to a participant or beneficiary, a 
        health care professional who is primarily responsible for 
        delivering those services to the participant or beneficiary.
            ``(5) Other definitions.--Section 151 of the Bipartisan 
        Patient Protection Act shall apply.''.

SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.

    Part 5 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 (as amended by section 503A) is amended further by 
inserting after section 503A (29 U.S.C. 1133A) the following:

``SEC. 503B. INTERNAL APPEALS OF CLAIMS DENIALS.

    ``(a) Right to Internal Appeal.--
            ``(1) In general.--A participant or beneficiary (or 
        authorized representative) may appeal any denial of a claim for 
        benefits under section 503A under the procedures described in 
        this section.
            ``(2) Time for appeal.--
                    ``(A) In general.--A group health plan, and a 
                health insurance issuer offering health insurance 
                coverage in connection with the group health plan, 
                shall ensure that a participant or beneficiary (or 
                authorized representative) has a period of not less 
                than 180 days beginning on the date of a denial of a 
                claim for benefits under section 503A in which to 
                appeal such denial under this section.
                    ``(B) Date of denial.--For purposes of subparagraph 
                (A), the date of the denial shall be deemed to be the 
                date as of which the participant or beneficiary knew of 
                the denial of the claim for benefits.
            ``(3) Failure to act.--The failure of a plan or issuer to 
        issue a determination on a claim for benefits under section 
        503A within the applicable timeline established for such a 
        determination under such section is a denial of a claim for 
        benefits for purposes this section and sections 503B and 503C 
        as of the date of the applicable deadline.
            ``(4) Plan waiver of internal review.--A group health plan, 
        or health insurance issuer offering health insurance coverage 
        in connection with the group health plan, may waive the 
        internal review process under this section. In such case the 
        plan or issuer shall provide notice to the participant or 
        beneficiary (or authorized representative) involved, the 
        participant or beneficiary (or authorized representative) 
        involved shall be relieved of any obligation to complete the 
        internal review involved, and may, at the option of such 
        participant, beneficiary, or representative proceed directly to 
        seek further appeal through external review under section 503C 
        or otherwise.
    ``(b) Timelines for Making Determinations.--
            ``(1) Oral requests.--In the case of an appeal of a denial 
        of a claim for benefits under this section that involves an 
        expedited or concurrent determination, a participant or 
        beneficiary (or authorized representative) may request such 
        appeal orally. A group health plan, or health insurance issuer 
        offering health insurance coverage in connection with the group 
        health plan, may require that the participant or beneficiary 
        (or authorized representative) provide written confirmation of 
        such request in a timely manner on a form provided by the plan 
        or issuer. In the case of such an oral request for an appeal of 
        a denial, the making of the request (and the timing of such 
        request) shall be treated as the making at that time of a 
        request for an appeal without regard to whether and when a 
        written confirmation of such request is made.
            ``(2) Access to information.--
                    ``(A) Timely provision of necessary information.--
                With respect to an appeal of a denial of a claim for 
                benefits, the participant or beneficiary (or authorized 
                representative) and the treating health care 
                professional (if any) shall provide the plan or issuer 
                with access to information requested by the plan or 
                issuer that is necessary to make a determination 
                relating to the appeal. Such access shall be provided 
                not later than 5 days after the date on which the 
                request for information is received, or, in a case 
                described in subparagraph (B) or (C) of paragraph (3), 
                by such earlier time as may be necessary to comply with 
                the applicable timeline under such subparagraph.
                    ``(B) Limited effect of failure on plan or issuer's 
                obligations.--Failure of the participant or beneficiary 
                to comply with the requirements of subparagraph (A) 
                shall not remove the obligation of the plan or issuer 
                to make a decision in accordance with the medical 
                exigencies of the case and as soon as possible, based 
                on the available information, and failure to comply 
                with the time limit established by this paragraph shall 
                not remove the obligation of the plan or issuer to 
                comply with the requirements of this section.
            ``(3) Prior authorization determinations.--
                    ``(A) In general.--Except as provided in this 
                paragraph or paragraph (4), a group health plan, and a 
                health insurance issuer offering health insurance 
                coverage in connection with the group health plan, 
                shall make a determination on an appeal of a denial of 
                a claim for benefits under this subsection in 
                accordance with the medical exigencies of the case and 
                as soon as possible, but in no case later than 14 days 
                from the date on which the plan or issuer receives 
                information that is reasonably necessary to enable the 
                plan or issuer to make a determination on the appeal 
                and in no case later than 28 days after the date the 
                request for the appeal is received.
                    ``(B) Expedited determination.--Notwithstanding 
                subparagraph (A), a group health plan, and a health 
                insurance issuer offering health insurance coverage in 
                connection with the group health plan, shall expedite a 
                prior authorization determination on an appeal of a 
                denial of a claim for benefits described in 
                subparagraph (A), when a request for such an expedited 
                determination is made by a participant or beneficiary 
                (or authorized representative) at any time during the 
                process for making a determination and a health care 
                professional certifies, with the request, that a 
                determination under the procedures described in 
                subparagraph (A) would seriously jeopardize the life or 
                health of the participant or beneficiary or the ability 
                of the participant or beneficiary to maintain or regain 
                maximum function. Such determination shall be made in 
                accordance with the medical exigencies of the case and 
                as soon as possible, but in no case later than 72 hours 
                after the time the request for such appeal is received 
                by the plan or issuer under this subparagraph.
                    ``(C) Ongoing care determinations.--
                            ``(i) In general.--Subject to clause (ii), 
                        in the case of a concurrent review 
                        determination described in section 
                        503A(b)(1)(C)(i)(I), which results in a 
                        termination or reduction of such care, the plan 
                        or issuer must provide notice of the 
                        determination on the appeal under this section 
                        by telephone and in printed form to the 
                        individual or the individual's designee and the 
                        individual's health care provider in accordance 
                        with the medical exigencies of the case and as 
                        soon as possible, with sufficient time prior to 
                        the termination or reduction to allow for an 
                        external appeal under section 503C to be 
                        completed before the termination or reduction 
                        takes effect.
                            ``(ii) Rule of construction.--Clause (i) 
                        shall not be construed as requiring plans or 
                        issuers to provide coverage of care that would 
                        exceed the coverage limitations for such care.
            ``(4) Retrospective determination.--A group health plan, 
        and a health insurance issuer offering health insurance 
        coverage in connection with the group health plan, shall make a 
        retrospective determination on an appeal of a denial of a claim 
        for benefits in no case later than 30 days after the date on 
        which the plan or issuer receives necessary information that is 
        reasonably necessary to enable the plan or issuer to make a 
        determination on the appeal and in no case later than 60 days 
        after the date the request for the appeal is received.
    ``(c) Conduct of Review.--
            ``(1) In general.--A review of a denial of a claim for 
        benefits under this section shall be conducted by an individual 
        with appropriate expertise who was not involved in the initial 
        determination.
            ``(2) Peer review of medical decisions by health care 
        professionals.--A review of an appeal of a denial of a claim 
        for benefits that is based on a lack of medical necessity and 
        appropriateness, or based on an experimental or investigational 
        treatment, or requires an evaluation of medical facts--
                    ``(A) shall be made by a physician (allopathic or 
                osteopathic); or
                    ``(B) in a claim for benefits provided by a non-
                physician health professional, shall be made by a 
                review panel including at least one practicing non-
                physician health professional of the same or similar 
                specialty,
        with appropriate expertise (including, in the case of a child, 
        appropriate pediatric expertise) and acting within the 
        appropriate scope of practice within the State in which the 
        service is provided or rendered, who was not involved in the 
        initial determination.
    ``(d) Notice of Determination.--
            ``(1) In general.--Written notice of a determination made 
        under an internal appeal of a denial of a claim for benefits 
        shall be issued to the participant or beneficiary (or 
        authorized representative) and the treating health care 
        professional in accordance with the medical exigencies of the 
        case and as soon as possible, but in no case later than 2 days 
        after the date of completion of the review (or, in the case 
        described in subparagraph (B) or (C) of subsection (b)(3), 
        within the 72-hour or applicable period referred to in such 
        subparagraph).
            ``(2) Final determination.--The decision by a plan or 
        issuer under this section shall be treated as the final 
        determination of the plan or issuer on a denial of a claim for 
        benefits. The failure of a plan or issuer to issue a 
        determination on an appeal of a denial of a claim for benefits 
        under this section within the applicable timeline established 
        for such a determination shall be treated as a final 
        determination on an appeal of a denial of a claim for benefits 
        for purposes of proceeding to external review under section 
        503C.
            ``(3) Requirements of notice.--With respect to a 
        determination made under this section, the notice described in 
        paragraph (1) shall be provided in printed form and written in 
        a manner calculated to be understood by the participant or 
        beneficiary and shall include--
                    ``(A) the specific reasons for the determination 
                (including a summary of the clinical or scientific 
                evidence used in making the determination);
                    ``(B) the procedures for obtaining additional 
                information concerning the determination; and
                    ``(C) notification of the right to an independent 
                external review under section 503C and instructions on 
                how to initiate such a review.''.

SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    (a) In General.--Part 5 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (as amended by sections 503A and 
503B) is amended further by inserting after section 503B (29 U.S.C. 
1133B) the following:

``SEC. 503C. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A group health plan, and a health 
insurance issuer offering health insurance coverage in connection with 
the group health plan, shall provide in accordance with this section 
participants and beneficiaries (or authorized representatives) with 
access to an independent external review for any denial of a claim for 
benefits.
    ``(b) Initiation of the Independent External Review Process.--
            ``(1) Time to file.--A request for an independent external 
        review under this section shall be filed with the plan or 
        issuer not later than 180 days after the date on which the 
        participant or beneficiary receives notice of the denial under 
        section 503B(d) or notice of waiver of internal review under 
        section 503B(a)(4) or the date on which the plan or issuer has 
        failed to make a timely decision under section 503B(d)(2) and 
        notifies the participant or beneficiary that it has failed to 
        make a timely decision and that the beneficiary must file an 
        appeal with an external review entity within 180 days if the 
        participant or beneficiary desires to file such an appeal.
            ``(2) Filing of request.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, a group health plan, or 
                health insurance issuer offering health insurance 
                coverage in connection with the group health plan, 
                may--
                            ``(i) except as provided in subparagraph 
                        (B)(i), require that a request for review be in 
                        writing;
                            ``(ii) limit the filing of such a request 
                        to the participant or beneficiary involved (or 
                        an authorized representative);
                            ``(iii) except if waived by the plan or 
                        issuer under section 503B(a)(4), condition 
                        access to an independent external review under 
                        this section upon a final determination of a 
                        denial of a claim for benefits under the 
                        internal review procedure under section 503B;
                            ``(iv) except as provided in subparagraph 
                        (B)(ii), require payment of a filing fee to the 
                        plan or issuer of a sum that does not exceed 
                        $25; and
                            ``(v) require that a request for review 
                        include the consent of the participant or 
                        beneficiary (or authorized representative) for 
                        the release of necessary medical information or 
                        records of the participant or beneficiary to 
                        the qualified external review entity only for 
                        purposes of conducting external review 
                        activities.
                    ``(B) Requirements and exception relating to 
                general rule.--
                            ``(i) Oral requests permitted in expedited 
                        or concurrent cases.--In the case of an 
                        expedited or concurrent external review as 
                        provided for under subsection (e), the request 
                        for such review may be made orally. A group 
                        health plan, or health insurance issuer 
                        offering health insurance coverage in 
                        connection with the group health plan, may 
                        require that the participant or beneficiary (or 
                        authorized representative) provide written 
                        confirmation of such request in a timely manner 
                        on a form provided by the plan or issuer. Such 
                        written confirmation shall be treated as a 
                        consent for purposes of subparagraph (A)(v). In 
                        the case of such an oral request for such a 
                        review, the making of the request (and the 
                        timing of such request) shall be treated as the 
                        making at that time of a request for such a 
                        review without regard to whether and when a 
                        written confirmation of such request is made.
                            ``(ii) Exception to filing fee 
                        requirement.--
                                    ``(I) Indigency.--Payment of a 
                                filing fee shall not be required under 
                                subparagraph (A)(iv) where there is a 
                                certification (in a form and manner 
                                specified in guidelines established by 
                                the appropriate Secretary) that the 
                                participant or beneficiary is indigent 
                                (as defined in such guidelines).
                                    ``(II) Fee not required.--Payment 
                                of a filing fee shall not be required 
                                under subparagraph (A)(iv) if the plan 
                                or issuer waives the internal appeals 
                                process under section 503B(a)(4).
                                    ``(III) Refunding of fee.--The 
                                filing fee paid under subparagraph 
                                (A)(iv) shall be refunded if the 
                                determination under the independent 
                                external review is to reverse the 
                                denial which is the subject of the 
                                review.
                                    ``(IV) Collection of filing fee.--
                                The failure to pay such a filing fee 
                                shall not prevent the consideration of 
                                a request for review but, subject to 
                                the preceding provisions of this 
                                clause, shall constitute a legal 
                                liability to pay.
    ``(c) Referral to Qualified External Review Entity Upon Request.--
            ``(1) In general.--Upon the filing of a request for 
        independent external review with the group health plan, or 
        health insurance issuer offering health insurance coverage in 
        connection with the group health plan, the plan or issuer shall 
        immediately refer such request, and forward the plan or 
        issuer's initial decision (including the information described 
        in section 503B(d)(3)(A)), to a qualified external review 
        entity selected in accordance with this section.
            ``(2) Access to plan or issuer and health professional 
        information.--With respect to an independent external review 
        conducted under this section, the participant or beneficiary 
        (or authorized representative), the plan or issuer, and the 
        treating health care professional (if any) shall provide the 
        external review entity with information that is necessary to 
        conduct a review under this section, as determined and 
        requested by the entity. Such information shall be provided not 
        later than 5 days after the date on which the request for 
        information is received, or, in a case described in clause (ii) 
        or (iii) of subsection (e)(1)(A), by such earlier time as may 
        be necessary to comply with the applicable timeline under such 
        clause.
            ``(3) Screening of requests by qualified external review 
        entities.--
                    ``(A) In general.--With respect to a request 
                referred to a qualified external review entity under 
                paragraph (1) relating to a denial of a claim for 
                benefits, the entity shall refer such request for the 
                conduct of an independent medical review unless the 
                entity determines that--
                            ``(i) any of the conditions described in 
                        clauses (ii) or (iii) of subsection (b)(2)(A) 
                        have not been met;
                            ``(ii) the denial of the claim for benefits 
                        does not involve a medically reviewable 
                        decision under subsection (d)(2);
                            ``(iii) the denial of the claim for 
                        benefits relates to a decision regarding 
                        whether an individual is a participant or 
                        beneficiary who is enrolled under the terms and 
                        conditions of the plan or coverage (including 
                        the applicability of any waiting period under 
                        the plan or coverage); or
                            ``(iv) the denial of the claim for benefits 
                        is a decision as to the application of cost-
                        sharing requirements or the application of a 
                        specific exclusion or express limitation on the 
                        amount, duration, or scope of coverage of items 
                        or services under the terms and conditions of 
                        the plan or coverage unless the decision is a 
                        denial described in subsection (d)(2).
                Upon making a determination that any of clauses (i) 
                through (iv) applies with respect to the request, the 
                entity shall determine that the denial of a claim for 
                benefits involved is not eligible for independent 
                medical review under subsection (d), and shall provide 
                notice in accordance with subparagraph (C).
                    ``(B) Process for making determinations.--
                            ``(i) No deference to prior 
                        determinations.--In making determinations under 
                        subparagraph (A), there shall be no deference 
                        given to determinations made by the plan or 
                        issuer or the recommendation of a treating 
                        health care professional (if any).
                            ``(ii) Use of appropriate personnel.--A 
                        qualified external review entity shall use 
                        appropriately qualified personnel to make 
                        determinations under this section.
                    ``(C) Notices and general timelines for 
                determination.--
                            ``(i) Notice in case of denial of 
                        referral.--If the entity under this paragraph 
                        does not make a referral to an independent 
                        medical review panel, the entity shall provide 
                        notice to the plan or issuer, the participant 
                        or beneficiary (or authorized representative) 
                        filing the request, and the treating health 
                        care professional (if any) that the denial is 
                        not subject to independent medical review. Such 
                        notice--
                                    ``(I) shall be written (and, in 
                                addition, may be provided orally) in a 
                                manner calculated to be understood by a 
                                participant;
                                    ``(II) shall include the reasons 
                                for the determination;
                                    ``(III) include any relevant terms 
                                and conditions of the plan or coverage; 
                                and
                                    ``(IV) include a description of any 
                                further recourse available to the 
                                individual.
                            ``(ii) General timeline for 
                        determinations.--Upon receipt of information 
                        under paragraph (2), the qualified external 
                        review entity, and if required the independent 
                        medical review panel, shall make a 
                        determination within the overall timeline that 
                        is applicable to the case under review as 
                        described in subsection (e), except that if the 
                        entity determines that a referral to an 
                        independent medical review panel is not 
                        required, the entity shall provide notice of 
                        such determination to the participant or 
                        beneficiary (or authorized representative) 
                        within such timeline and within 2 days of the 
                        date of such determination.
    ``(d) Independent Medical Review.--
            ``(1) In general.--If a qualified external review entity 
        determines under subsection (c) that a denial of a claim for 
        benefits is eligible for independent medical review, the entity 
        shall refer the denial involved to an independent medical 
        review panel composed of 3 independent medical reviewers for 
        the conduct of an independent medical review under this 
        subsection.
            ``(2) Medically reviewable decisions.--A denial of a claim 
        for benefits is eligible for independent medical review if the 
        benefit for the item or service for which the claim is made 
        would be a covered benefit under the terms and conditions of 
        the plan or coverage but for one (or more) of the following 
        determinations:
                    ``(A) Denials based on medical necessity and 
                appropriateness.--A determination that the item or 
                service is not covered because it is not medically 
                necessary and appropriate or based on the application 
                of substantially equivalent terms.
                    ``(B) Denials based on experimental or 
                investigational treatment.--A determination that the 
                item or service is not covered because it is 
                experimental or investigational or based on the 
                application of substantially equivalent terms.
                    ``(C) Denials otherwise based on an evaluation of 
                medical facts.--A determination that the item or 
                service or condition is not covered based on grounds 
                that require an evaluation of the medical facts by a 
                health care professional in the specific case involved 
                to determine the coverage and extent of coverage of the 
                item or service or condition.
            ``(3) Independent medical review determination.--
                    ``(A) In general.--An independent medical review 
                panel under this section shall make a new independent 
                determination with respect to whether or not the denial 
                of a claim for a benefit that is the subject of the 
                review should be upheld or reversed.
                    ``(B) Standard for determination.--The independent 
                medical review panel's determination relating to the 
                medical necessity and appropriateness, or the 
                experimental or investigational nature, or the 
                evaluation of the medical facts, of the item, service, 
                or condition involved shall be based on the medical 
                condition of the participant or beneficiary (including 
                the medical records of the participant or beneficiary) 
                and valid, relevant scientific evidence and clinical 
                evidence, including peer-reviewed medical literature or 
                findings and including expert opinion.
                    ``(C) No coverage for excluded benefits.--Nothing 
                in this subsection shall be construed to permit an 
                independent medical review panel to require that a 
                group health plan, or health insurance issuer offering 
                health insurance coverage in connection with the group 
                health plan, provide coverage for items or services for 
                which benefits are specifically excluded or expressly 
                limited under the plan or coverage in the plain 
                language of the plan document (and which are disclosed 
                under section 121(b)(1)(C) of the Bipartisan Patient 
                Protection Act). Notwithstanding any other provision of 
                this Act, any exclusion of an exact medical procedure, 
                any exact time limit on the duration or frequency of 
                coverage, and any exact dollar limit on the amount of 
                coverage that is specifically enumerated and defined 
                (in the plain language of the plan or coverage 
                documents) under the plan or coverage offered by a 
                group health plan or health insurance issuer offering 
                health insurance coverage in connection with the group 
                health plan and that is disclosed under section 
                121(b)(1) of the Bipartisan Patient Protection Act) 
                shall be considered to govern the scope of the benefits 
                that may be required: Provided, That the terms and 
                conditions of the plan or coverage relating to such an 
                exclusion or limit are in compliance with the 
                requirements of law.
                    ``(D) Evidence and information to be used in 
                medical reviews.--In making a determination under this 
                subsection, the independent medical review panel shall 
                also consider appropriate and available evidence and 
                information, including the following:
                            ``(i) The determination made by the plan or 
                        issuer with respect to the claim upon internal 
                        review and the evidence, guidelines, or 
                        rationale used by the plan or issuer in 
                        reaching such determination.
                            ``(ii) The recommendation of the treating 
                        health care professional and the evidence, 
                        guidelines, and rationale used by the treating 
                        health care professional in reaching such 
                        recommendation.
                            ``(iii) Additional relevant evidence or 
                        information obtained by the review panel or 
                        submitted by the plan, issuer, participant, or 
                        beneficiary (or an authorized representative), 
                        or treating health care professional.
                            ``(iv) The plan or coverage document.
                    ``(E) Independent determination.--In making 
                determinations under this section, a qualified external 
                review entity and an independent medical review panel 
                shall--
                            ``(i) consider the claim under review 
                        without deference to the determinations made by 
                        the plan or issuer or the recommendation of the 
                        treating health care professional (if any); and
                            ``(ii) consider, but not be bound by, the 
                        definition used by the plan or issuer of 
                        `medically necessary and appropriate', or 
                        `experimental or investigational', or other 
                        substantially equivalent terms that are used by 
                        the plan or issuer to describe medical 
                        necessity and appropriateness or experimental 
                        or investigational nature of the treatment.
                    ``(F) Determination of independent medical review 
                panel.--An independent medical review panel shall, in 
                accordance with the deadlines described in subsection 
                (e), prepare a written determination to uphold or 
                reverse the denial under review. Such written 
                determination shall include--
                            ``(i) the determination of the review 
                        panel;
                            ``(ii) the specific reasons of the review 
                        panel for such determination, including a 
                        summary of the clinical or scientific evidence 
                        used in making the determination; and
                            ``(iii) with respect to a determination to 
                        reverse the denial under review, a timeframe 
                        within which the plan or issuer must comply 
                        with such determination.
                    ``(G) Nonbinding nature of additional 
                recommendations.--In addition to the determination 
                under subparagraph (F), the review panel may provide 
                the plan or issuer and the treating health care 
                professional with additional recommendations in 
                connection with such a determination, but any such 
                recommendations shall not affect (or be treated as part 
                of) the determination and shall not be binding on the 
                plan or issuer.
    ``(e) Timelines and Notifications.--
            ``(1) Timelines for independent medical review.--
                    ``(A) Prior authorization determination.--
                            ``(i) In general.--The independent medical 
                        review panel shall make a determination on a 
                        denial of a claim for benefits that is referred 
                        to the review panel under subsection (c)(3) in 
                        accordance with the medical exigencies of the 
                        case and as soon as possible, but in no case 
                        later than 14 days after the date of receipt of 
                        information under subsection (c)(2) if the 
                        review involves a prior authorization of items 
                        or services and in no case later than 21 days 
                        after the date the request for external review 
                        is received.
                            ``(ii) Expedited determination.--
                        Notwithstanding clause (i) and subject to 
                        clause (iii), the independent medical review 
                        panel shall make an expedited determination on 
                        a denial of a claim for benefits described in 
                        clause (i), when a request for such an 
                        expedited determination is made by a 
                        participant or beneficiary (or authorized 
                        representative) at any time during the process 
                        for making a determination, and a health care 
                        professional certifies, with the request, that 
                        a determination under the timeline described in 
                        clause (i) would seriously jeopardize the life 
                        or health of the participant or beneficiary or 
                        the ability of the participant or beneficiary 
                        to maintain or regain maximum function. Such 
                        determination shall be made in accordance with 
                        the medical exigencies of the case and as soon 
                        as possible, but in no case later than 72 hours 
                        after the time the request for external review 
                        is received by the qualified external review 
                        entity.
                            ``(iii) Ongoing care determination.--
                        Notwithstanding clause (i), in the case of a 
                        review described in such clause that involves a 
                        termination or reduction of care, the notice of 
                        the determination shall be completed not later 
                        than 24 hours after the time the request for 
                        external review is received by the qualified 
                        external review entity and before the end of 
                        the approved period of care.
                    ``(B) Retrospective determination.--The independent 
                medical review panel shall complete a review in the 
                case of a retrospective determination on an appeal of a 
                denial of a claim for benefits that is referred to the 
                review panel under subsection (c)(3) in no case later 
                than 30 days after the date of receipt of information 
                under subsection (c)(2) and in no case later than 60 
                days after the date the request for external review is 
                received by the qualified external review entity.
            ``(2) Notification of determination.--The external review 
        entity shall ensure that the plan or issuer, the participant, 
        or beneficiary (or authorized representative) and the treating 
        health care professional (if any) receives a copy of the 
        written determination of the independent medical review panel 
        prepared under subsection (d)(3)(F). Nothing in this paragraph 
        shall be construed as preventing an entity or review panel from 
        providing an initial oral notice of the review panel's 
        determination.
            ``(3) Form of notices.--Determinations and notices under 
        this subsection shall be written in a manner calculated to be 
        understood by a participant.
    ``(f) Compliance.--
            ``(1) Application of determinations.--
                    ``(A) External review determinations binding on 
                plan.--The determinations of an external review entity 
                and an independent medical review panel under this 
                section shall be binding upon the plan or issuer 
                involved.
                    ``(B) Compliance with determination.--If the 
                determination of an independent medical review panel is 
                to reverse the denial, the plan or issuer, upon the 
                receipt of such determination, shall authorize coverage 
                to comply with the medical review panel's determination 
                in accordance with the timeframe established by the 
                medical review panel.
            ``(2) Failure to comply.--
                    ``(A) In general.--If a plan or issuer fails to 
                comply with the timeframe established under paragraph 
                (1)(B) with respect to a participant or beneficiary, 
                where such failure to comply is caused by the plan or 
                issuer, the participant, or beneficiary may obtain the 
                items or services involved (in a manner consistent with 
                the determination of the independent medical review 
                panel) from any provider regardless of whether such 
                provider is a participating provider under the plan or 
                coverage.
                    ``(B) Reimbursement.--
                            ``(i) In general.--Where a participant or 
                        beneficiary obtains items or services in 
                        accordance with subparagraph (A), the plan or 
                        issuer involved shall provide for reimbursement 
                        of the costs of such items or services. Such 
                        reimbursement shall be made to the treating 
                        health care professional or to the participant 
                        or beneficiary (in the case of a participant or 
                        beneficiary who pays for the costs of such 
                        items or services).
                            ``(ii) Amount.--The plan or issuer shall 
                        fully reimburse a professional, participant or 
                        beneficiary under clause (i) for the total 
                        costs of the items or services provided 
                        (regardless of any plan limitations that may 
                        apply to the coverage of such items or 
                        services) so long as the items or services were 
                        provided in a manner consistent with the 
                        determination of the independent medical review 
                        panel.
                    ``(C) Failure to reimburse.--Where a plan or issuer 
                fails to provide reimbursement to a professional, 
                participant, or beneficiary in accordance with this 
                paragraph, the professional, participant, or 
                beneficiary may commence a civil action (or utilize 
                other remedies available under law) to recover only the 
                amount of any such reimbursement that is owed by the 
                plan or issuer and any necessary legal costs or 
                expenses (including attorney's fees) incurred in 
                recovering such reimbursement.
                    ``(D) Available remedies.--The remedies provided 
                under this paragraph are in addition to any other 
                available remedies.
            ``(3) Penalties against authorized officials for refusing 
        to authorize the determination of an external review entity.--
                    ``(A) Monetary penalties.--
                            ``(i) In general.--In any case in which the 
                        determination of an external review entity is 
                        not followed by a group health plan, or by a 
                        health insurance issuer offering health 
                        insurance coverage in connection with the group 
                        health plan, any person who, acting in the 
                        capacity of authorizing the benefit, causes 
                        such refusal may, in the discretion of a court 
                        of competent jurisdiction, be liable to an 
                        aggrieved participant or beneficiary 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 review entity until the date the 
                        refusal to provide the benefit is corrected.
                            ``(ii) Additional penalty for failing to 
                        follow timeline.--In any case in which 
                        treatment was not commenced by the plan in 
                        accordance with the determination of an 
                        independent medical review panel, the Secretary 
                        shall assess a civil penalty of $10,000 against 
                        the plan and the plan shall pay such penalty to 
                        the participant or beneficiary involved.
                    ``(B) Cease and desist order and order of 
                attorney's fees.--In any action described in 
                subparagraph (A) brought by a participant or 
                beneficiary with respect to a group health plan, or a 
                health insurance issuer offering health insurance 
                coverage in connection with the group health plan, in 
                which a plaintiff alleges that a person referred to in 
                such subparagraph has taken an action resulting in a 
                refusal of a benefit determined by an external review 
                entity to be covered, or has failed to take an action 
                for which such person is responsible under the terms 
                and conditions of the plan or coverage 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--
                            ``(i) to cease and desist from the alleged 
                        action or failure to act; and
                            ``(ii) 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.
                    ``(C) Additional civil penalties.--
                            ``(i) In general.--In addition to any 
                        penalty imposed under subparagraph (A) or (B), 
                        the appropriate Secretary may assess a civil 
                        penalty against a person acting in the capacity 
                        of authorizing a benefit determined by an 
                        external review entity for one or more group 
                        health plans, or health insurance issuers 
                        offering health insurance coverage in 
                        connection with the group health plan, for--
                                    ``(I) any pattern or practice of 
                                repeated refusal to authorize a benefit 
                                determined by an external review entity 
                                to be covered; or
                                    ``(II) any pattern or practice of 
                                repeated violations of the requirements 
                                of this section with respect to such 
                                plan or coverage.
                            ``(ii) Standard of proof and amount of 
                        penalty.--Such penalty shall be payable only 
                        upon proof by clear and convincing evidence of 
                        such pattern or practice and shall be in an 
                        amount not to exceed the lesser of--
                                    ``(I) 25 percent of the aggregate 
                                value of benefits shown by the 
                                appropriate Secretary to have not been 
                                provided, or unlawfully delayed, in 
                                violation of this section under such 
                                pattern or practice; or
                                    ``(II) $500,000.
                    ``(D) Removal and disqualification.--Any person 
                acting in the capacity of authorizing benefits who has 
                engaged in any such pattern or practice described in 
                subparagraph (C)(i) with respect to a plan or coverage, 
                upon the petition of the appropriate Secretary, may be 
                removed by the court from such position, and from any 
                other involvement, with respect to such a plan or 
                coverage, and may be precluded from returning to any 
                such position or involvement for a period determined by 
                the court.
            ``(4) Protection of legal rights.--Nothing in this section 
        or section 503A or 503B shall be construed as altering or 
        eliminating any cause of action or legal rights or remedies of 
        participants or beneficiaries, and others under State or 
        Federal law (including sections 502 and 503 of the Employee 
        Retirement Income Security Act of 1974), including the right to 
        file judicial actions to enforce rights.
    ``(g) Qualifications of Independent Medical Reviewers.--
            ``(1) In general.--In referring a denial to an independent 
        medical review panel to conduct independent medical review 
        under subsection (c), the qualified external review entity 
        shall ensure that--
                    ``(A) each independent medical reviewer meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review, the review panel 
                meets the requirements of paragraph (4) and at least 1 
                reviewer on the panel meets the requirements described 
                in paragraph (5); and
                    ``(C) compensation provided by the entity to each 
                reviewer is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each independent medical 
        reviewer shall be a physician (allopathic or osteopathic) or 
        health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the plan or issuer, 
                        from serving as an independent medical reviewer 
                        if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the plan or 
                                issuer and the participant or 
                                beneficiary (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the plan or issuer 
                                and does not provide services 
                                exclusively or primarily to or on 
                                behalf of the plan or issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer merely on the 
                        basis of such affiliation if the affiliation is 
                        disclosed to the plan or issuer and the 
                        participant or beneficiary (or authorized 
                        representative), and neither party objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, each reviewer shall 
                        be a practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review; or
                            ``(ii) by a non-physician health care 
                        professional, the independent medical review 
                        panel shall include at least one practicing 
                        non-physician health care professional of the 
                        same or similar specialty as the non-physician 
                        health care professional who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have expertise 
        under paragraph (2) in pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by a qualified external review entity to an 
        independent medical reviewer in connection with a review under 
        this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a plan or coverage relating to a participant or 
        beneficiary, any of the following:
                    ``(A) The plan, plan sponsor, or issuer involved, 
                or any fiduciary, officer, director, or employee of 
                such plan, plan sponsor, or issuer.
                    ``(B) The participant or beneficiary (or authorized 
                representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
    ``(h) Qualified External Review Entities.--
            ``(1) Selection of qualified external review entities.--
                    ``(A) Limitation on plan or issuer selection.--The 
                appropriate Secretary shall implement procedures--
                            ``(i) to assure that the selection process 
                        among qualified external review entities will 
                        not create any incentives for external review 
                        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.
                No such selection process under the procedures 
                implemented by the appropriate Secretary may give 
                either the patient or the plan or issuer any ability to 
                determine or influence the selection of a qualified 
                external review entity to review the case of any 
                participant or beneficiary.
                    ``(B) State authority with respect to qualified 
                external review entities for health insurance 
                issuers.--With respect to health insurance issuers 
                offering health insurance coverage in connection with 
                the group health plan in a State, the State may provide 
                for external review activities to be conducted by a 
                qualified external review 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) Contract with qualified external review entity.--
        Except as provided in paragraph (1)(B), the external review 
        process of a plan or issuer under this section shall be 
        conducted under a contract between the plan or issuer and 1 or 
        more qualified external review entities (as defined in 
        paragraph (4)(A)).
            ``(3) Terms and conditions of contract.--The terms and 
        conditions of a contract under paragraph (2) shall--
                    ``(A) 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 review activities; and
                    ``(B) provide that the costs of the external review 
                process shall be borne by the plan or issuer.
        Subparagraph (B) shall not be construed as applying to the 
        imposition of a filing fee under subsection (b)(2)(A)(iv) or 
        costs incurred by the participant or beneficiary (or authorized 
        representative) or treating health care professional (if any) 
        in support of the review, including the provision of additional 
        evidence or information.
            ``(4) Qualifications.--
                    ``(A) In general.--In this section, the term 
                `qualified external review entity' means, in relation 
                to a plan or issuer, an entity that is initially 
                certified (and periodically recertified) under 
                subparagraph (C) as meeting the following requirements:
                            ``(i) The entity has (directly or through 
                        contracts or other arrangements) sufficient 
                        medical, legal, and other expertise and 
                        sufficient staffing to carry out duties of a 
                        qualified external review entity under this 
                        section on a timely basis, including making 
                        determinations under subsection (b)(2)(A) and 
                        providing for independent medical reviews under 
                        subsection (d).
                            ``(ii) The entity is not a plan or issuer 
                        or an affiliate or a subsidiary of a plan or 
                        issuer, and is not an affiliate or subsidiary 
                        of a professional or trade association of plans 
                        or issuers or of health care providers.
                            ``(iii) The entity has provided assurances 
                        that it will conduct external review activities 
                        consistent with the applicable requirements of 
                        this section and standards specified in 
                        subparagraph (C), including that it will not 
                        conduct any external review activities in a 
                        case unless the independence requirements of 
                        subparagraph (B) are met with respect to the 
                        case.
                            ``(iv) The entity has provided assurances 
                        that it will provide information in a timely 
                        manner under subparagraph (D).
                            ``(v) The entity meets such other 
                        requirements as the appropriate Secretary 
                        provides by regulation.
                    ``(B) Independence requirements.--
                            ``(i) In general.--Subject to clause (ii), 
                        an entity meets the independence requirements 
                        of this subparagraph with respect to any case 
                        if the entity--
                                    ``(I) is not a related party (as 
                                defined in subsection (g)(7));
                                    ``(II) does not have a material 
                                familial, financial, or professional 
                                relationship with such a party; and
                                    ``(III) does not otherwise have a 
                                conflict of interest with such a party 
                                (as determined under regulations).
                            ``(ii) Exception for reasonable 
                        compensation.--Nothing in clause (i) shall be 
                        construed to prohibit receipt by a qualified 
                        external review entity of compensation from a 
                        plan or issuer for the conduct of external 
                        review activities under this section if the 
                        compensation is provided consistent with clause 
                        (iii).
                            ``(iii) Limitations on entity 
                        compensation.--Compensation provided by a plan 
                        or issuer to a qualified external review entity 
                        in connection with reviews under this section 
                        shall--
                                    ``(I) not exceed a reasonable 
                                level; and
                                    ``(II) not be contingent on any 
                                decision rendered by the entity or by 
                                any independent medical review panel.
                    ``(C) Certification and recertification process.--
                            ``(i) In general.--The initial 
                        certification and recertification of a 
                        qualified external review entity shall be 
                        made--
                                    ``(I) under a process that is 
                                recognized or approved by the 
                                appropriate Secretary; or
                                    ``(II) by a qualified private 
                                standard-setting organization that is 
                                approved by the appropriate Secretary 
                                under clause (iii).
                        In taking action under subclause (I), the 
                        appropriate Secretary shall give deference to 
                        entities that are under contract with the 
                        Federal Government or with an applicable State 
                        authority to perform functions of the type 
                        performed by qualified external review 
                        entities.
                            ``(ii) Process.--The appropriate Secretary 
                        shall not recognize or approve a process under 
                        clause (i)(I) unless the process applies 
                        standards (as promulgated in regulations) that 
                        ensure that a qualified external review 
                        entity--
                                    ``(I) will carry out (and has 
                                carried out, in the case of 
                                recertification) the responsibilities 
                                of such an entity in accordance with 
                                this section, including meeting 
                                applicable deadlines;
                                    ``(II) will meet (and has met, in 
                                the case of recertification) 
                                appropriate indicators of fiscal 
                                integrity;
                                    ``(III) will maintain (and has 
                                maintained, in the case of 
                                recertification) appropriate 
                                confidentiality with respect to 
                                individually identifiable health 
                                information obtained in the course of 
                                conducting external review activities; 
                                and
                                    ``(IV) in the case of 
                                recertification, shall review the 
                                matters described in clause (iv).
                            ``(iii) Approval of qualified private 
                        standard-setting organizations.--For purposes 
                        of clause (i)(II), the appropriate Secretary 
                        may approve a qualified private standard-
                        setting organization if such Secretary finds 
                        that the organization only certifies (or 
                        recertifies) external review entities that meet 
                        at least the standards required for the 
                        certification (or recertification) of external 
                        review entities under clause (ii).
                            ``(iv) Considerations in 
                        recertifications.--In conducting 
                        recertifications of a qualified external review 
                        entity under this paragraph, the appropriate 
                        Secretary or organization conducting the 
                        recertification shall review compliance of the 
                        entity with the requirements for conducting 
                        external review activities under this section, 
                        including the following:
                                    ``(I) Provision of information 
                                under subparagraph (D).
                                    ``(II) Adherence to applicable 
                                deadlines (both by the entity and by 
                                independent medical review panels it 
                                refers cases to).
                                    ``(III) Compliance with limitations 
                                on compensation (with respect to both 
                                the entity and independent medical 
                                review panels it refers cases to).
                                    ``(IV) Compliance with applicable 
                                independence requirements.
                                    ``(V) Compliance with the 
                                requirement of subsection (d)(1) that 
                                only medically reviewable decisions 
                                shall be the subject of independent 
                                medical review and with the requirement 
                                of subsection (d)(3) that independent 
                                medical review panels may not require 
                                coverage for specifically excluded 
                                benefits.
                            ``(v) Period of certification or 
                        recertification.--A certification or 
                        recertification provided under this paragraph 
                        shall extend for a period not to exceed 2 
                        years.
                            ``(vi) Revocation.--A certification or 
                        recertification under this paragraph may be 
                        revoked by the appropriate Secretary or by the 
                        organization providing such certification upon 
                        a showing of cause. The Secretary, or 
                        organization, shall revoke a certification or 
                        deny a recertification with respect to an 
                        entity if there is a showing that the entity 
                        has a pattern or practice of ordering coverage 
                        for benefits that are specifically excluded 
                        under the plan or coverage.
                            ``(vii) Petition for denial or 
                        withdrawal.--An individual may petition the 
                        Secretary, or an organization providing the 
                        certification involves, for a denial of 
                        recertification or a withdrawal of a 
                        certification with respect to an entity under 
                        this subparagraph if there is a pattern or 
                        practice of such entity failing to meet a 
                        requirement of this section.
                            ``(viii) Sufficient number of entities.--
                        The appropriate Secretary shall certify and 
                        recertify a number of external review entities 
                        which is sufficient to ensure the timely and 
                        efficient provision of review services.
                    ``(D) Provision of information.--
                            ``(i) In general.--A qualified external 
                        review entity shall provide to the appropriate 
                        Secretary, in such manner and at such times as 
                        such Secretary may require, such information 
                        (relating to the denials which have been 
                        referred to the entity for the conduct of 
                        external review under this section) as such 
                        Secretary determines appropriate to assure 
                        compliance with the independence and other 
                        requirements of this section to monitor and 
                        assess the quality of its external review 
                        activities and lack of bias in making 
                        determinations. Such information shall include 
                        information described in clause (ii) but shall 
                        not include individually identifiable medical 
                        information.
                            ``(ii) Information to be included.--The 
                        information described in this subclause with 
                        respect to an entity is as follows:
                                    ``(I) The number and types of 
                                denials for which a request for review 
                                has been received by the entity.
                                    ``(II) The disposition by the 
                                entity of such denials, including the 
                                number referred to a independent 
                                medical review panel and the reasons 
                                for such dispositions (including the 
                                application of exclusions), on a plan 
                                or issuer-specific basis and on a 
                                health care specialty-specific basis.
                                    ``(III) The length of time in 
                                making determinations with respect to 
                                such denials.
                                    ``(IV) Updated information on the 
                                information required to be submitted as 
                                a condition of certification with 
                                respect to the entity's performance of 
                                external review activities.
                            ``(iii) Information to be provided to 
                        certifying organization.--
                                    ``(I) In general.--In the case of a 
                                qualified external review entity which 
                                is certified (or recertified) under 
                                this subsection by a qualifiedprivate 
                                standard-setting organization, at the 
                                request of the organization, the entity 
                                shall provide the organization with the 
                                information provided to the appropriate 
                                Secretary under clause (i).
                                    ``(II) Additional information.--
                                Nothing in this subparagraph shall be 
                                construed as preventing such an 
                                organization from requiring additional 
                                information as a condition of 
                                certification or recertification of an 
                                entity.
                            ``(iv) Use of information.--Information 
                        provided under this subparagraph may be used by 
                        the appropriate Secretary and qualified private 
                        standard-setting organizations to conduct 
                        oversight of qualified external review 
                        entities, including recertification of such 
                        entities, and shall be made available to the 
                        public in an appropriate manner.
                    ``(E) Limitation on liability.--No qualified 
                external review entity having a contract with a plan or 
                issuer, and no person who is employed by any such 
                entity or who furnishes professional services to such 
                entity (including as an independent medical review 
                panel), shall be held by reason of the performance of 
                any duty, function, or activity required or authorized 
                pursuant to this section, to be civilly liable under 
                any law of the United States or of any State (or 
                political subdivision thereof) if there was no actual 
                malice or gross misconduct in the performance of such 
                duty, function, or activity.
            ``(5) Report.--Not later than 12 months after the general 
        effective date referred to in section 601 of the Bipartisan 
        Patient Protection Act, the General Accounting Office shall 
        prepare and submit to the appropriate committees of Congress a 
        report concerning--
                    ``(A) the information that is provided under 
                paragraph (3)(D);
                    ``(B) the number of denials that have been upheld 
                by independent medical review panels and the number of 
                denials that have been reversed by such panels; and
                    ``(C) the extent to which independent medical 
                review panels are requiring coverage for benefits that 
                are specifically excluded under the plans or 
                coverage.''.

SEC. 105. HEALTH CARE CONSUMER ASSISTANCE FUND.

    (a) Grants.--
            (1) In general.--The Secretary of Health and Human Services 
        (referred to in this section as the ``Secretary'') shall 
        establish a fund, to be known as the ``Health Care Consumer 
        Assistance Fund'', to be used to award grants to eligible 
        States to carry out consumer assistance activities (including 
        programs established by States prior to the enactment of this 
        Act) designed to provide information, assistance, and referrals 
        to consumers of health insurance products.
            (2) State eligibility.--To be eligible to receive a grant 
        under this subsection a State shall prepare and submit to the 
        Secretary an application at such time, in such manner, and 
        containing such information as the Secretary may require, 
        including a State plan that describes--
                    (A) the manner in which the State will ensure that 
                the health care consumer assistance office (established 
                under paragraph (4)) will educate and assist health 
                care consumers in accessing needed care;
                    (B) the manner in which the State will coordinate 
                and distinguish the services provided by the health 
                care consumer assistance office with the services 
                provided by Federal, State and local health-related 
                ombudsman, information, protection and advocacy, 
                insurance, and fraud and abuse programs;
                    (C) the manner in which the State will provide 
                information, outreach, and services to underserved, 
                minority populations with limited English proficiency 
                and populations residing in rural areas;
                    (D) the manner in which the State will oversee the 
                health care consumer assistance office, its activities, 
                product materials and evaluate program effectiveness;
                    (E) the manner in which the State will ensure that 
                funds made available under this section will be used to 
                supplement, and not supplant, any other Federal, State, 
                or local funds expended to provide services for 
                programs described under this section and those 
                described in subparagraphs (C) and (D);
                    (F) the manner in which the State will ensure that 
                health care consumer office personnel have the 
                professional background and training to carry out the 
                activities of the office; and
                    (G) the manner in which the State will ensure that 
                consumers have direct access to consumer assistance 
                personnel during regular business hours.
            (3) Amount of grant.--
                    (A) In general.--From amounts appropriated under 
                subsection (b) for a fiscal year, the Secretary shall 
                award a grant to a State in an amount that bears the 
                same ratio to such amounts as the number of individuals 
                within the State covered under a group health plan or 
                under health insurance coverage in connection with the 
                group health plan offered by a health insurance issuer 
                bears to the total number of individuals so covered in 
                all States (as determined by the Secretary). Any 
                amounts provided to a State under this subsection that 
                are not used by the State shall be remitted to the 
                Secretary and reallocated in accordance with this 
                subparagraph.
                    (B) Minimum amount.--In no case shall the amount 
                provided to a State under a grant under this subsection 
                for a fiscal year be less than an amount equal to 0.5 
                percent of the amount appropriated for such fiscal year 
                to carry out this section.
                    (C) Non-federal contributions.--A State will 
                provide for the collection of non-Federal contributions 
                for the operation of the office in an amount that is 
                not less than 25 percent of the amount of Federal funds 
                provided to the State under this section.
            (4) Provision of funds for establishment of office.--
                    (A) In general.--From amounts provided under a 
                grant under this subsection, a State shall, directly or 
                through a contract with an independent, nonprofit 
                entity with demonstrated experience in serving the 
                needs of health care consumers, provide for the 
                establishment and operation of a State health care 
                consumer assistance office.
                    (B) Eligibility of entity.--To be eligible to enter 
                into a contract under subparagraph (A), an entity shall 
                demonstrate that it has the technical, organizational, 
                and professional capacity to deliver the services 
                described in subsection (b) to all public and private 
                health insurance participants or beneficiaries.
                    (C) Existing state entity.--Nothing in this section 
                shall prevent the funding of an existing health care 
                consumer assistance program that otherwise meets the 
                requirements of this section.
    (b) Use of Funds.--
            (1) By state.--A State shall use amounts provided under a 
        grant awarded under this section to carry out consumer 
        assistance activities directly or by contract with an 
        independent, non-profit organization. An eligible entity may 
        use some reasonable amount of such grant to ensure the adequate 
        training of personnel carrying out such activities. To receive 
        amounts under this subsection, an eligible entity shall provide 
        consumer assistance services, including--
                    (A) the operation of a toll-free telephone hotline 
                to respond to consumer requests;
                    (B) the dissemination of appropriate educational 
                materials on available health insurance products and on 
                how best to access health care and the rights and 
                responsibilities of health care consumers;
                    (C) the provision of education on effective methods 
                to promptly and efficiently resolve questions, 
                problems, and grievances;
                    (D) the coordination of educational and outreach 
                efforts with health plans, health care providers, 
                payers, and governmental agencies;
                    (E) referrals to appropriate private and public 
                entities to resolve questions, problems and grievances; 
                and
                    (F) the provision of information and assistance, 
                including acting as an authorized representative, 
                regarding internal, external, or administrative 
                grievances or appeals procedures in nonlitigative 
                settings to appeal the denial, termination, or 
                reduction of health care services, or the refusal to 
                pay for such services, under a group health plan or 
                health insurance coverage in connection with the group 
                health plan offered by a health insurance issuer.
            (2) Confidentiality and access to information.--
                    (A) State entity.--With respect to a State that 
                directly establishes a health care consumer assistance 
                office, such office shall establish and implement 
                procedures and protocols in accordance with applicable 
                Federal and State laws.
                    (B) Contract entity.--With respect to a State that, 
                through contract, establishes a health care consumer 
                assistance office, such office shall establish and 
                implement procedures and protocols, consistent with 
                applicable Federal and State laws, to ensure the 
                confidentiality of all information shared by a 
                participant, beneficiary, or their personal 
                representative and their health care providers, group 
                health plans, or health insurance insurers with the 
                office and to ensure that no such information is used 
                by the office, or released or disclosed to State 
                agencies or outside persons or entities without the 
                prior written authorization (in accordance with section 
                164.508 of title 45, Code of Federal Regulations) of 
                the individual or personal representative. The office 
                may, consistent with applicable Federal and State 
                confidentiality laws, collect, use or disclose 
                aggregate information that is not individually 
                identifiable (as defined in section 164.501 of title 
                45, Code of Federal Regulations). The office shall 
                provide a written description of the policies and 
                procedures of the office with respect to the manner in 
                which health information may be used or disclosed to 
                carry out consumer assistance activities. The office 
                shall provide health care providers, group health 
                plans, or health insurance issuers with a written 
                authorization (in accordance with section 164.508 of 
                title 45, Code of Federal Regulations) to allow the 
                office to obtain medical information relevant to the 
                matter before the office.
            (3) Availability of services.--The health care consumer 
        assistance office of a State shall not discriminate in the 
        provision of information, referrals, and services regardless of 
        the source of the individual's health insurance coverage in 
        connection with the group health plan or prospective coverage, 
        including individuals covered under a group health plan or 
        health insurance coverage in connection with the group health 
        plan offered by a health insurance issuer, the medicare or 
        medicaid programs under title XVIII or XIX of the Social 
        Security Act (42 U.S.C. 1395 and 1396 et seq.), or under any 
        other Federal or State health care program.
            (4) Designation of responsibilities.--
                    (A) Within existing state entity.--If the health 
                care consumer assistance office of a State is located 
                within an existing State regulatory agency or office of 
                an elected State official, the State shall ensure 
                that--
                            (i) there is a separate delineation of the 
                        funding, activities, and responsibilities of 
                        the office as compared to the other funding, 
                        activities, and responsibilities of the agency; 
                        and
                            (ii) the office establishes and implements 
                        procedures and protocols to ensure the 
                        confidentiality of all information shared by a 
                        participant, beneficiary, or their personal 
                        representative and their health care providers, 
                        group health plans, or health insurance issuers 
                        with the office and to ensure that no 
                        information is disclosed to the State agency or 
                        office without the written authorization of the 
                        individual or their personal representative in 
                        accordance with paragraph (2).
                    (B) Contract entity.--In the case of an entity that 
                enters into a contract with a State under subsection 
                (a)(3), the entity shall provide assurances that the 
                entity has no conflict of interest in carrying out the 
                activities of the office and that the entity is 
                independent of group health plans, health insurance 
                issuers, providers, payers, and regulators of health 
                care.
            (5) Subcontracts.--The health care consumer assistance 
        office of a State may carry out activities and provide services 
        through contracts entered into with 1 or more nonprofit 
        entities so long as the office can demonstrate that all of the 
        requirements of this section are complied with by the office.
            (6) Term.--A contract entered into under this subsection 
        shall be for a term of 3 years.
    (c) Report.--Not later than 1 year after the Secretary first awards 
grants under this section, and annually thereafter, the Secretary shall 
prepare and submit to the appropriate committees of Congress a report 
concerning the activities funded under this section and the 
effectiveness of such activities in resolving health care-related 
problems and grievances.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

                       Subtitle B--Access to Care

SEC. 111. CONSUMER CHOICE OPTION.

    (a) In General.--If--
            (1) a health insurance issuer providing health insurance 
        coverage in connection with a group health plan offers to 
        enrollees health insurance coverage which provides for coverage 
        of services (including physician pathology 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, or
            (2) a group health plan offers to participants or 
        beneficiaries health benefits which provide 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 plan to provide such services,
then the issuer or plan shall also offer or arrange to be offered to 
such enrollees, participants, or beneficiaries (at the time of 
enrollment and during an annual open season as provided under 
subsection (c)) the option of health insurance coverage or health 
benefits which provide for coverage of such services which are not 
furnished through health care professionals and providers who are 
members of such a network unless such enrollees, participants, or 
beneficiaries are offered such non-network coverage through another 
group health plan or through another health insurance issuer in the 
group market.
    (b) Additional Costs.--The amount of any additional premium charged 
by the health insurance issuer or group health plan 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, participant, or 
beneficiary unless it is paid by the health plan sponsor or group 
health plan through agreement with the health insurance issuer.
    (c) Open Season.--An enrollee, participant, or beneficiary, may 
change to the offering provided under this section only during a time 
period determined by the health insurance issuer or group health plan. 
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.--
            (1) In general.--Subject to paragraph (2), 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 and 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.
            (2) Limitation.--Paragraph (1) shall not apply to specialty 
        care if the plan or issuer clearly informs participants, 
        beneficiaries, and enrollees of the limitations on choice of 
        participating health care professionals with respect to such 
        care.
            (3) Construction.--Nothing in this subsection shall be 
        construed as affecting the application of section 114 (relating 
        to timely access to specialists).

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 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 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.
                    (B) Emergency services.--The term ``emergency 
                services'' means, with respect to an emergency medical 
                condition--
                            (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.
                    (C) Stabilize.--The term ``to stabilize'', with 
                respect to an emergency medical condition (as defined 
                in subparagraph (A)), has the meaning given in section 
                1867(e)(3) of the Social Security Act (42 U.S.C. 
                1395dd(e)(3)).
    (b) Reimbursement for Maintenance Care and Post-Stabilization 
Care.--A group health plan, and health insurance coverage offered by a 
health insurance issuer, must provide reimbursement for maintenance 
care and post-stabilization care in accordance with the requirements of 
section 1852(d)(2) of the Social Security Act (42 U.S.C. 1395w-
22(d)(2)). Such reimbursement shall be provided in a manner consistent 
with subsection (a)(1)(C).
    (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. TIMELY ACCESS TO SPECIALISTS.

    (a) Timely Access.--
            (1) In general.--A group health plan and a health insurance 
        issuer offering health insurance coverage shall ensure that 
        participants, beneficiaries, and enrollees receive timely 
        access to specialists who are appropriate to the condition of, 
        and accessible to, the participant, beneficiary, or enrollee, 
        when such specialty care is a covered benefit under the plan or 
        coverage.
            (2) Rule of construction.--Nothing in paragraph (1) shall 
        be construed--
                    (A) to require the coverage under a group health 
                plan or health insurance coverage of benefits or 
                services;
                    (B) to prohibit a plan or issuer from including 
                providers in the network only to the extent necessary 
                to meet the needs of the plan's or issuer's 
                participants, beneficiaries, or enrollees; or
                    (C) to override any State licensure or scope-of-
                practice law.
            (3) Access to certain providers.--
                    (A) In general.--With respect to specialty care 
                under this section, if a participating specialist is 
                not available and qualified to provide such care to the 
                participant, beneficiary, or enrollee, the plan or 
                issuer shall provide for coverage of such care by a 
                nonparticipating specialist.
                    (B) Treatment of nonparticipating providers.--If a 
                participant, beneficiary, or enrollee receives care 
                from a nonparticipating specialist pursuant to 
                subparagraph (A), such specialty care shall be provided 
                at no additional cost to the participant, beneficiary, 
                or enrollee beyond what the participant, beneficiary, 
                or enrollee would otherwise pay for such specialty care 
                if provided by a participating specialist.
    (b) Referrals.--
            (1) Authorization.--Subject to subsection (a)(1), a group 
        health plan or health insurance issuer may require an 
        authorization in order to obtain coverage for specialty 
        services under this section. Any such authorization--
                    (A) shall be for an appropriate duration of time or 
                number of referrals, including an authorization for a 
                standing referral where appropriate; and
                    (B) may not be refused solely because the 
                authorization involves services of a nonparticipating 
                specialist (described in subsection (a)(3)).
            (2) Referrals for ongoing special conditions.--
                    (A) In general.--Subject to subsection (a)(1), a 
                group health plan and a health insurance issuer shall 
                permit a participant, beneficiary, or enrollee who has 
                an ongoing special condition (as defined in 
                subparagraph (B)) to receive a referral to a specialist 
                for the treatment of such condition and such specialist 
                may authorize such referrals, procedures, tests, and 
                other medical services with respect to such condition, 
                or coordinate the care for such condition, subject to 
                the terms of a treatment plan (if any) referred to in 
                subsection (c) with respect to the condition.
                    (B) Ongoing special condition defined.--In this 
                subsection, the term ``ongoing special condition'' 
                means a condition or disease that--
                            (i) is life-threatening, degenerative, 
                        potentially disabling, or congenital; and
                            (ii) requires specialized medical care over 
                        a prolonged period of time.
    (c) Treatment Plans.--
            (1) In general.--A group health plan or health insurance 
        issuer may require that the specialty care be provided--
                    (A) pursuant to a treatment plan, but only if the 
                treatment plan--
                            (i) is developed by the specialist, in 
                        consultation with the case manager or primary 
                        care provider, and the participant, 
                        beneficiary, or enrollee, and
                            (ii) is approved by the plan or issuer in a 
                        timely manner, if the plan or issuer requires 
                        such approval; and
                    (B) in accordance with applicable quality assurance 
                and utilization review standards of the plan or issuer.
            (2) Notification.--Nothing in paragraph (1) shall be 
        construed as prohibiting a plan or issuer from requiring the 
        specialist to provide the plan or issuer with regular updates 
        on the specialty care provided, as well as all other reasonably 
        necessary medical information.
    (d) Specialist Defined.--For purposes of this section, the term 
``specialist'' means, with respect to the condition of the participant, 
beneficiary, or enrollee, a health care professional, facility, or 
center that has adequate expertise through appropriate training and 
experience (including, in the case of a child, appropriate pediatric 
expertise) to provide high quality care in treating the condition.

SEC. 115. PATIENT ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

    (a) General Rights.--
            (1) Direct access.--A group health plan, and a health 
        insurance issuer offering health insurance coverage, described 
        in subsection (b) may not require authorization or referral by 
        the plan, issuer, or any person (including a primary care 
        provider described in subsection (b)(2)) in the case of a 
        female participant, beneficiary, or enrollee who seeks coverage 
        for obstetrical or gynecological care provided by a 
        participating health care professional who specializes in 
        obstetrics or gynecology.
            (2) Obstetrical and gynecological care.--A group health 
        plan and a health insurance issuer described in subsection (b) 
        shall treat the provision of obstetrical and gynecological 
        care, and the ordering of related obstetrical and gynecological 
        items and services, pursuant to the direct access described 
        under paragraph (1), by a participating health care 
        professional who specializes in obstetrics or gynecology as the 
        authorization of the primary care provider.
    (b) Application of Section.--A group health plan, or health 
insurance issuer offering health insurance coverage, described in this 
subsection is a group health plan or coverage that--
            (1) provides coverage for obstetric or gynecologic care; 
        and
            (2) requires the designation by a participant, beneficiary, 
        or enrollee of a participating primary care provider.
    (c) Construction.--Nothing in subsection (a) shall be construed 
to--
            (1) waive any exclusions of coverage under the terms and 
        conditions of the plan or health insurance coverage 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 obstetrical or 
        gynecological provider notify the primary care health care 
        professional or the plan or issuer of treatment decisions.

SEC. 116. ACCESS TO PEDIATRIC CARE.

    (a) Pediatric Care.--In the case of a person who has a child who is 
a participant, beneficiary, or enrollee under a group health plan, or 
health insurance coverage offered by a health insurance issuer, if the 
plan or issuer requires or provides for the designation of a 
participating primary care provider for the child, the plan or issuer 
shall permit such person to designate a physician (allopathic or 
osteopathic) who specializes in pediatrics as the child's primary care 
provider if such provider participates in the network of the plan or 
issuer.
    (b) Construction.--Nothing in subsection (a) shall be construed to 
waive any exclusions of coverage under the terms and conditions of the 
plan or health insurance coverage with respect to coverage of pediatric 
care.

SEC. 117. CONTINUITY OF CARE.

    (a) Termination of Provider.--
            (1) In general.--If--
                    (A) a contract between a group health plan, or a 
                health insurance issuer offering health insurance 
                coverage, and a treating health care provider is 
                terminated (as defined in paragraph (e)(4)); or
                    (B) benefits or coverage provided by a health care 
                provider are terminated because of a change in the 
                terms of provider participation in such plan or 
                coverage,
        the plan or issuer shall meet the requirements of paragraph (3) 
        with respect to each continuing care patient.
            (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) Requirements.--The requirements of this paragraph are 
        that the plan or issuer--
                    (A) notify the continuing care patient involved, or 
                arrange to have the patient notified pursuant to 
                subsection (d)(2), on a timely basis of the termination 
                described in paragraph (1) (or paragraph (2), if 
                applicable) and the right to elect continued 
                transitional care from the provider under this section;
                    (B) provide the patient with an opportunity to 
                notify the plan or issuer of the patient's need for 
                transitional care; and
                    (C) subject to subsection (c), permit the patient 
                to elect to continue to be covered with respect to the 
                course of treatment by such provider with the 
                provider's consent during a transitional period (as 
                provided for under subsection (b)).
            (4) Continuing care patient.--For purposes of this section, 
        the term ``continuing care patient'' means a participant, 
        beneficiary, or enrollee who--
                    (A) is undergoing a course of treatment for a 
                serious and complex condition from the provider at the 
                time the plan or issuer receives or provides notice of 
                provider, benefit, or coverage termination described in 
                paragraph (1) (or paragraph (2), if applicable);
                    (B) is undergoing a course of institutional or 
                inpatient care from the provider at the time of such 
                notice;
                    (C) is scheduled to undergo non-elective surgery 
                from the provider at the time of such notice;
                    (D) is pregnant and undergoing a course of 
                treatment for the pregnancy from the provider at the 
                time of such notice; or
                    (E) is or was determined to be terminally ill (as 
                determined under section 1861(dd)(3)(A) of the Social 
                Security Act) at the time of such notice, but only with 
                respect to a provider that was treating the terminal 
                illness before the date of such notice.
    (b) Transitional Periods.--
            (1) Serious and complex conditions.--The transitional 
        period under this subsection with respect to a continuing care 
        patient described in subsection (a)(4)(A) shall extend for up 
        to 90 days (as determined by the treating health care 
        professional) from the date of the notice described in 
        subsection (a)(3)(A).
            (2) Institutional or inpatient care.--The transitional 
        period under this subsection for a continuing care patient 
        described in subsection (a)(4)(B) shall extend until the 
        earlier of--
                    (A) the expiration of the 90-day period beginning 
                on the date on which the notice under subsection 
                (a)(3)(A) is provided; or
                    (B) the date of discharge of the patient from such 
                care or the termination of the period of 
                institutionalization, or, if later, the date of 
                completion of reasonable follow-up care.
            (3) Scheduled non-elective surgery.--The transitional 
        period under this subsection for a continuing care patient 
        described in subsection (a)(4)(C) shall extend until the 
        completion of the surgery involved and post-surgical follow-up 
        care relating to the surgery and occurring within 90 days after 
        the date of the surgery.
            (4) Pregnancy.--The transitional period under this 
        subsection for a continuing care patient described in 
        subsection (a)(4)(D) shall extend through the provision of 
        post-partum care directly related to the delivery.
            (5) Terminal illness.--The transitional period under this 
        subsection for a continuing care patient described in 
        subsection (a)(4)(E) shall extend for the remainder of the 
        patient's life for care that is 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 this section upon the provider agreeing to the 
following terms and conditions:
            (1) The treating health care provider agrees to accept 
        reimbursement from the plan or issuer and continuing care 
        patient 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 
        coverage after the date of the termination of the contract with 
        the group health plan or health insurance issuer) and not to 
        impose cost-sharing with respect to the patient 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 treating health care 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 treating health care 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) Rules of Construction.--Nothing in this section shall be 
construed--
            (1) to require the coverage of benefits which would not 
        have been covered if the provider involved remained a 
        participating provider; or
            (2) with respect to the termination of a contract under 
        subsection (a) to prevent a group health plan or health 
        insurance issuer from requiring that the health care provider--
                    (A) notify participants, beneficiaries, or 
                enrollees of their rights under this section; or
                    (B) provide the plan or issuer with the name of 
                each participant, beneficiary, or enrollee who the 
                provider believes is a continuing care patient.
    (e) Definitions.--In this section:
            (1) Contract.--The term ``contract'' includes, with respect 
        to a plan or issuer and a treating health care provider, a 
        contract between such plan or issuer and an organized network 
        of providers that includes the treating health care provider, 
        and (in the case of such a contract) the contract between the 
        treating health care provider and the organized network.
            (2) Health care provider.--The term ``health care 
        provider'' or ``provider'' means--
                    (A) any individual who is engaged in the delivery 
                of health care services in a State and who is required 
                by State law or regulation to be licensed or certified 
                by the State to engage in the delivery of such services 
                in the State; and
                    (B) any entity that is engaged in the delivery of 
                health care services in a State and that, if it is 
                required by State law or regulation to be licensed or 
                certified by the State to engage in the delivery of 
                such services in the State, is so licensed.
            (3) Serious and complex condition.--The term ``serious and 
        complex condition'' means, with respect to a participant, 
        beneficiary, or enrollee under the plan or coverage--
                    (A) in the case of an acute illness, a condition 
                that is serious enough to require specialized medical 
                treatment to avoid the reasonable possibility of death 
                or permanent harm; or
                    (B) in the case of a chronic illness or condition, 
                is an ongoing special condition (as defined in section 
                114(b)(2)(B)).
            (4) Terminated.--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 
        for failure to meet applicable quality standards or for fraud.

SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

    (a) In General.--To the extent that a group health plan, or health 
insurance coverage offered by a health insurance issuer, provides 
coverage for benefits with respect to prescription drugs, and limits 
such coverage to drugs included in a formulary, the plan or issuer 
shall--
            (1) ensure the participation of physicians and pharmacists 
        in developing and reviewing such formulary;
            (2) provide for disclosure of the formulary to providers; 
        and
            (3) in accordance with the applicable quality assurance and 
        utilization review standards of the plan or issuer, provide for 
        exceptions from the formulary limitation when a non-formulary 
        alternative is medically necessary and appropriate and, in the 
        case of such an exception, apply the same cost-sharing 
        requirements that would have applied in the case of a drug 
        covered under the formulary.
    (b) Coverage of Approved Drugs and Medical Devices.--
            (1) In general.--A group health plan (and health insurance 
        coverage offered in connection with such a plan) that provides 
        any coverage of prescription drugs or medical devices shall not 
        deny coverage of such a drug or device on the basis that the 
        use is investigational, if the use--
                    (A) in the case of a prescription drug--
                            (i) is included in the labeling authorized 
                        by the application in effect for the drug 
                        pursuant to subsection (b) or (j) of section 
                        505 of the Federal Food, Drug, and Cosmetic 
                        Act, without regard to any postmarketing 
                        requirements that may apply under such Act; or
                            (ii) is included in the labeling authorized 
                        by the application in effect for the drug under 
                        section 351 of the Public Health Service Act, 
                        without regard to any postmarketing 
                        requirements that may apply pursuant to such 
                        section; or
                    (B) in the case of a medical device, is included in 
                the labeling authorized by a regulation under 
                subsection (d) or (e) of section 513 of the Federal 
                Food, Drug, and Cosmetic Act, an order under subsection 
                (f) of such section, or an application approved under 
                section 515 of such Act, without regard to any 
                postmarketing requirements that may apply under such 
                Act.
            (2) Construction.--Nothing in this subsection shall be 
        construed as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        coverage of prescription drugs or medical devices.

SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL 
              TRIALS.

    (a) Coverage.--
            (1) In general.--If a group health plan, or health 
        insurance issuer that is providing health insurance coverage, 
        provides coverage to a qualified individual (as defined in 
        subsection (b)), the plan or issuer--
                    (A) may not deny the individual participation in 
                the clinical trial referred to in subsection (b)(2);
                    (B) subject to subsection (c), may not deny (or 
                limit or impose additional conditions on) the coverage 
                of routine patient costs for items and services 
                furnished in connection with participation in the 
                trial; and
                    (C) may not discriminate against the individual on 
                the basis of the enrollee's participation in such 
                trial.
            (2) Exclusion of certain costs.--For purposes of paragraph 
        (1)(B), routine patient costs do not include the cost of the 
        tests or measurements conducted primarily for the purpose of 
        the clinical trial involved.
            (3) Use of in-network providers.--If one or more 
        participating providers is participating in a clinical trial, 
        nothing in paragraph (1) shall be construed as preventing a 
        plan or issuer from requiring that a qualified individual 
        participate in the trial through such a participating provider 
        if the provider will accept the individual as a participant in 
        the trial.
    (b) Qualified Individual Defined.--For purposes of subsection (a), 
the term ``qualified individual'' means an individual who is a 
participant or beneficiary in a group health plan, or who is an 
enrollee under health insurance coverage, and who meets the following 
conditions:
            (1)(A) The individual has a life-threatening or serious 
        illness for which no standard treatment is effective.
            (B) The individual is eligible to participate in an 
        approved clinical trial according to the trial protocol with 
        respect to treatment of such illness.
            (C) The individual's participation in the trial offers 
        meaningful potential for significant clinical benefit for the 
        individual.
            (2) Either--
                    (A) the referring physician is a participating 
                health care professional and has concluded that the 
                individual's participation in such trial would be 
                appropriate based upon the individual meeting the 
                conditions described in paragraph (1); or
                    (B) the participant, beneficiary, or enrollee 
                provides medical and scientific information 
                establishing that the individual's participation in 
                such trial would be appropriate based upon the 
                individual meeting the conditions described in 
                paragraph (1).
    (c) Payment.--
            (1) In general.--Under this section a group health plan and 
        a health insurance issuer shall provide for payment for routine 
        patient costs described in subsection (a)(2) but is not 
        required to pay for costs of items and services that are 
        reasonably expected (as determined by the appropriate 
        Secretary) to be paid for by the sponsors of an approved 
        clinical trial.
            (2) Payment rate.--In the case of covered items and 
        services provided by--
                    (A) a participating provider, the payment rate 
                shall be at the agreed upon rate; or
                    (B) a nonparticipating provider, the payment rate 
                shall be at the rate the plan or issuer would normally 
                pay for comparable services under subparagraph (A).
    (d) Approved Clinical Trial Defined.--
            (1) In general.--In this section, the term ``approved 
        clinical trial'' means a clinical research study or clinical 
        investigation--
                    (A) approved and funded (which may include funding 
                through in-kind contributions) by one or more of the 
                following:
                            (i) the National Institutes of Health;
                            (ii) a cooperative group or center of the 
                        National Institutes of Health, including a 
                        qualified nongovernmental research entity to 
                        which the National Cancer Institute has awarded 
                        a center support grant;
                            (iii) either of the following if the 
                        conditions described in paragraph (2) are met--
                                    (I) the Department of Veterans 
                                Affairs;
                                    (II) the Department of Defense; or
                    (B) approved by the Food and Drug Administration.
            (2) Conditions for departments.--The conditions described 
        in this paragraph, for a study or investigation conducted by a 
        Department, are that the study or investigation has been 
        reviewed and approved through a system of peer review that the 
        appropriate Secretary determines--
                    (A) to be comparable to the system of peer review 
                of studies and investigations used by the National 
                Institutes of Health; and
                    (B) assures unbiased review of the highest ethical 
                standards by qualified individuals who have no interest 
                in the outcome of the review.
    (e) Construction.--Nothing in this section shall be construed to 
limit a plan's or issuer's coverage with respect to clinical trials.

SEC. 120. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR MASTECTOMIES 
              AND LYMPH NODE DISSECTIONS FOR THE TREATMENT OF BREAST 
              CANCER AND COVERAGE FOR SECONDARY CONSULTATIONS.

    (a) Inpatient Care.--
            (1) In general.--A group health plan, and a health 
        insurance issuer providing health insurance coverage, that 
        provides medical and surgical benefits shall ensure that 
        inpatient coverage with respect to the treatment of breast 
        cancer is provided for a period of time as is determined by the 
        attending physician, in consultation with the patient, to be 
        medically necessary and appropriate following--
                    (A) a mastectomy;
                    (B) a lumpectomy; or
                    (C) a lymph node dissection for the treatment of 
                breast cancer.
            (2) Exception.--Nothing in this section shall be construed 
        as requiring the provision of inpatient coverage if the 
        attending physician and patient determine that a shorter period 
        of hospital stay is medically appropriate.
    (b) Prohibition on Certain Modifications.--In implementing the 
requirements of this section, a group health plan, and a health 
insurance issuer providing health insurance coverage, may not modify 
the terms and conditions of coverage based on the determination by a 
participant, beneficiary, or enrollee to request less than the minimum 
coverage required under subsection (a).
    (c) Secondary Consultations.--
            (1) In general.--A group health plan, and a health 
        insurance issuer providing health insurance coverage, that 
        provides coverage with respect to medical and surgical services 
        provided in relation to the diagnosis and treatment of cancer 
        shall ensure that full coverage is provided for secondary 
        consultations by specialists in the appropriate medical fields 
        (including pathology, radiology, and oncology) to confirm or 
        refute such diagnosis. Such plan or issuer shall ensure that 
        full coverage is provided for such secondary consultation 
        whether such consultation is based on a positive or negative 
        initial diagnosis. In any case in which the attending physician 
        certifies in writing that services necessary for such a 
        secondary consultation are not sufficiently available from 
        specialists operating under the plan or coverage with respect 
        to whose services coverage is otherwise provided under such 
        plan or by such issuer, such plan or issuer shall ensure that 
        coverage is provided with respect to the services necessary for 
        the secondary consultation with any other specialist selected 
        by the attending physician for such purpose at no additional 
        cost to the individual beyond that which the individual would 
        have paid if the specialist was participating in the network of 
        the plan or issuer.
            (2) Exception.--Nothing in paragraph (1) shall be construed 
        as requiring the provision of secondary consultations where the 
        patient determines not to seek such a consultation.
    (d) Prohibition on Penalties or Incentives.--A group health plan, 
and a health insurance issuer providing health insurance coverage, may 
not--
            (1) penalize or otherwise reduce or limit the reimbursement 
        of a provider or specialist because the provider or specialist 
        provided care to a participant, beneficiary, or enrollee in 
        accordance with this section;
            (2) provide financial or other incentives to a physician or 
        specialist to induce the physician or specialist to keep the 
        length of inpatient stays of patients following a mastectomy, 
        lumpectomy, or a lymph node dissection for the treatment of 
        breast cancer below certain limits or to limit referrals for 
        secondary consultations; or
            (3) provide financial or other incentives to a physician or 
        specialist to induce the physician or specialist to refrain 
        from referring a participant, beneficiary, or enrollee for a 
        secondary consultation that would otherwise be covered by the 
        plan or coverage involved under subsection (c).

                   Subtitle C--Access to Information

SEC. 121. PATIENT ACCESS TO INFORMATION.

    (a) Requirement.--
            (1) Disclosure.--
                    (A) In general.--A group health plan, and a health 
                insurance issuer that provides coverage in connection 
                with health insurance coverage, shall provide for the 
                disclosure to participants, beneficiaries, and 
                enrollees--
                            (i) of the information described in 
                        subsection (b) at the time of the initial 
                        enrollment of the participant, beneficiary, or 
                        enrollee under the plan or coverage;
                            (ii) of such information on an annual 
                        basis--
                                    (I) in conjunction with the 
                                election period of the plan or coverage 
                                if the plan or coverage has such an 
                                election period; or
                                    (II) in the case of a plan or 
                                coverage that does not have an election 
                                period, in conjunction with the 
                                beginning of the plan or coverage year; 
                                and
                            (iii) of information relating to any 
                        material reduction to the benefits or 
                        information described in such subsection or 
                        subsection (c), in the form of a notice 
                        provided not later than 30 days before the date 
                        on which the reduction takes effect.
                    (B) Participants, beneficiaries, and enrollees.--
                The disclosure required under subparagraph (A) shall be 
                provided--
                            (i) jointly to each participant, 
                        beneficiary, and enrollee who reside at the 
                        same address; or
                            (ii) in the case of a beneficiary or 
                        enrollee who does not reside at the same 
                        address as the participant or another enrollee, 
                        separately to the participant or other 
                        enrollees and such beneficiary or enrollee.
            (2) Provision of information.--Information shall be 
        provided to participants, beneficiaries, and enrollees under 
        this section at the last known address maintained by the plan 
        or issuer with respect to such participants, beneficiaries, or 
        enrollees, to the extent that such information is provided to 
        participants, beneficiaries, or enrollees via the United States 
        Postal Service or other private delivery service.
    (b) Required Information.--The informational materials to be 
distributed under this section shall include for each option available 
under the group health plan or health insurance coverage the following:
            (1) Benefits.--A description of the covered benefits, 
        including--
                    (A) any in- and out-of-network benefits;
                    (B) specific preventive services covered under the 
                plan or coverage if such services are covered;
                    (C) any specific exclusions or express limitations 
                of benefits described in section 503C(d)(3)(C) of the 
                Bipartisan Patient Protection Act;
                    (D) any other benefit limitations, including any 
                annual or lifetime benefit limits and any monetary 
                limits or limits on the number of visits, days, or 
                services, and any specific coverage exclusions; and
                    (E) any definition of medical necessity used in 
                making coverage determinations by the plan, issuer, or 
                claims administrator.
            (2) Cost sharing.--A description of any cost-sharing 
        requirements, including--
                    (A) any premiums, deductibles, coinsurance, 
                copayment amounts, and liability for balance billing, 
                for which the participant, beneficiary, or enrollee 
                will be responsible under each option available under 
                the plan;
                    (B) any maximum out-of-pocket expense for which the 
                participant, beneficiary, or enrollee may be liable;
                    (C) any cost-sharing requirements for out-of-
                network benefits or services received from 
                nonparticipating providers; and
                    (D) any additional cost-sharing or charges for 
                benefits and services that are furnished without 
                meeting applicable plan or coverage requirements, such 
                as prior authorization or precertification.
            (3) Disenrollment.--Information relating to the 
        disenrollment of a participant, beneficiary, or enrollee.
            (4) Service area.--A description of the plan or issuer's 
        service area, including the provision of any out-of-area 
        coverage.
            (5) Participating providers.--A directory of participating 
        providers (to the extent a plan or issuer provides coverage 
        through a network of providers) that includes, at a minimum, 
        the name, address, and telephone number of each participating 
        provider, and information about how to inquire whether a 
        participating provider is currently accepting new patients.
            (6) Choice of primary care provider.--A description of any 
        requirements and procedures to be used by participants, 
        beneficiaries, and enrollees in selecting, accessing, or 
        changing their primary care provider, including providers both 
        within and outside of the network (if the plan or issuer 
        permits out-of-network services), and the right to select a 
        pediatrician as a primary care provider under section 116 for a 
        participant, beneficiary, or enrollee who is a child if such 
        section applies.
            (7) Preauthorization requirements.--A description of the 
        requirements and procedures to be used to obtain 
        preauthorization for health services, if such preauthorization 
        is required.
            (8) Experimental and investigational treatments.--A 
        description of the process for determining whether a particular 
        item, service, or treatment is considered experimental or 
        investigational, and the circumstances under which such 
        treatments are covered by the plan or issuer.
            (9) Specialty care.--A description of the requirements and 
        procedures to be used by participants, beneficiaries, and 
        enrollees in accessing specialty care and obtaining referrals 
        to participating and nonparticipating specialists, including 
        any limitations on choice of health care professionals referred 
        to in section 112(b)(2) and the right to timely access to 
        specialists care under section 114 if such section applies.
            (10) Clinical trials.--A description of the circumstances 
        and conditions under which participation in clinical trials is 
        covered under the terms and conditions of the plan or coverage, 
        and the right to obtain coverage for approved clinical trials 
        under section 119 if such section applies.
            (11) Prescription drugs.--To the extent the plan or issuer 
        provides coverage for prescription drugs, a statement of 
        whether such coverage is limited to drugs included in a 
        formulary, a description of any provisions and cost-sharing 
        required for obtaining on- and off-formulary medications, and a 
        description of the rights of participants, beneficiaries, and 
        enrollees in obtaining access to access to prescription drugs 
        under section 118 if such section applies.
            (12) Emergency services.--A summary of the rules and 
        procedures for accessing emergency services, including the 
        right of a participant, beneficiary, or enrollee to obtain 
        emergency services under the prudent layperson standard under 
        section 113, if such section applies, and any educational 
        information that the plan or issuer may provide regarding the 
        appropriate use of emergency services.
            (13) Claims and appeals.--A description of the plan or 
        issuer's rules and procedures pertaining to claims and appeals, 
        a description of the rights (including deadlines for exercising 
        rights) of participants, beneficiaries, and enrollees under 
        subtitle A in obtaining covered benefits, filing a claim for 
        benefits, and appealing coverage decisions internally and 
        externally (including telephone numbers and mailing addresses 
        of the appropriate authority), and a description of any 
        additional legal rights and remedies available under section 
        502 of the Employee Retirement Income Security Act of 1974 and 
        applicable State law.
            (14) Advance directives and organ donation.--A description 
        of procedures for advance directives and organ donation 
        decisions if the plan or issuer maintains such procedures.
            (15) Information on plans and issuers.--The name, mailing 
        address, and telephone number or numbers of the plan 
        administrator and the issuer to be used by participants, 
        beneficiaries, and enrollees seeking information about plan or 
        coverage benefits and services, payment of a claim, or 
        authorization for services and treatment. Notice of whether the 
        benefits under the plan or coverage are provided under a 
        contract or policy of insurance issued by an issuer, or whether 
        benefits are provided directly by the plan sponsor who bears 
        the insurance risk.
            (16) Translation services.--A summary description of any 
        translation or interpretation services (including the 
        availability of printed information in languages other than 
        English, audio tapes, or information in Braille) that are 
        available for non-English speakers and participants, 
        beneficiaries, and enrollees with communication disabilities 
        and a description of how to access these items or services.
            (17) Accreditation information.--Any information that is 
        made public by accrediting organizations in the process of 
        accreditation if the plan or issuer is accredited, or any 
        additional quality indicators (such as the results of enrollee 
        satisfaction surveys) that the plan or issuer makes public or 
        makes available to participants, beneficiaries, and enrollees.
            (18) Notice of requirements.--A description of any rights 
        of participants, beneficiaries, and enrollees that are 
        established by the provisions of this Act (excluding those 
        described in paragraphs (1) through (17)) and of the amendments 
        made thereby if such provisions apply. The description required 
        under this paragraph may be combined with the notices of the 
        type described in sections 711(d), 713(b), or 606(a)(1) of the 
        Employee Retirement Income Security Act of 1974 and with any 
        other notice provision that the appropriate Secretary 
        determines may be combined, so long as such combination does 
        not result in any reduction in the information that would 
        otherwise be provided to the recipient.
            (19) Availability of additional information.--A statement 
        that the information described in subsection (c), and 
        instructions on obtaining such information (including telephone 
        numbers and, if available, Internet websites), shall be made 
        available upon request.
            (20) Designated decisionmakers.--The name and address of 
        the designated decisionmaker (or decisionmakers) appointed 
        under paragraph (2) of section 502(n) of the Employee 
        Retirement Income Security Act of 1974 for purposes of such 
        section and a description of the participants and beneficiaries 
        with respect to whom each designated decisionmaker under the 
        plan has assumed liability under section 502(n) of such Act.
    (c) Additional Information.--The informational materials to be 
provided upon the request of a participant, beneficiary, or enrollee 
shall include for each option available under a group health plan or 
health insurance coverage the following:
            (1) Status of providers.--The State licensure status of the 
        plan or issuer's participating health care professionals and 
        participating health care facilities, and, if available, the 
        education, training, specialty qualifications or certifications 
        of such professionals.
            (2) Compensation methods.--A summary description by 
        category of the applicable methods (such as capitation, fee-
        for-service, salary, bundled payments, per diem, or a 
        combination thereof) used for compensating prospective or 
        treating health care professionals (including primary care 
        providers and specialists) and facilities in connection with 
        the provision of health care under the plan or coverage.
            (3) Prescription drugs.--Information about whether a 
        specific prescription medication is included in the formulary 
        of the plan or issuer, if the plan or issuer uses a defined 
        formulary.
            (4) Utilization review activities.--A description of 
        procedures used and requirements (including circumstances, 
        timeframes, and appeals rights) under any utilization review 
        program under section 101 and section 503A of the Employee 
        Retirement Income Security Act of 1974, including any drug 
        formulary program under section 118.
            (5) External appeals information.--Aggregate information on 
        the number and outcomes of external medical reviews, relative 
        to the sample size (such as the number of covered lives) under 
        the plan or under the coverage of the issuer.
    (d) Manner of Disclosure.--The information described in this 
section shall be disclosed in an accessible medium and format that is 
calculated to be understood by a participant or enrollee.
    (e) Rules of Construction.--Nothing in this section shall be 
construed to prohibit a group health plan, or a health insurance issuer 
in connection with health insurance coverage, from--
            (1) distributing any other additional information 
        determined by the plan or issuer to be important or necessary 
        in assisting participants, beneficiaries, and enrollees in the 
        selection of a health plan or health insurance coverage; and
            (2) complying with the provisions of this section by 
        providing information in brochures, through the Internet or 
        other electronic media, or through other similar means, so long 
        as--
                    (A) the disclosure of such information in such form 
                is in accordance with requirements as the appropriate 
                Secretary may impose; and
                    (B) in connection with any such disclosure of 
                information through the Internet or other electronic 
                media--
                            (i) the recipient has affirmatively 
                        consented to the disclosure of such information 
                        in such form;
                            (ii) the recipient is capable of accessing 
                        the information so disclosed on the recipient's 
                        individual workstation or at the recipient's 
                        home;
                            (iii) the recipient retains an ongoing 
                        right to receive paper disclosure of such 
                        information and receives, in advance of any 
                        attempt at disclosure of such information to 
                        him or her through the Internet or other 
                        electronic media, notice in printed form of 
                        such ongoing right and of the proper software 
                        required to view information so disclosed; and
                            (iv) the plan administrator appropriately 
                        ensures that the intended recipient is 
                        receiving the information so disclosed and 
                        provides the information in printed form if the 
                        information is not received.

         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.

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

    (a) In General.--A group health plan, and a health insurance issuer 
with respect to 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 a particular benefit or service 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; or
            (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.

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 1852(j)(4) 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 1852(j)(4) of the Social Security Act to the 
Secretary, a Medicare+Choice 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 CLAIMS.

    A group health plan, and a health insurance issuer offering 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 that is no less protective than the 
provisions of section 1842(c)(2) of the Social Security Act (42 U.S.C. 
1395u(c)(2)).

SEC. 135. PROTECTION FOR PATIENT ADVOCACY.

    (a) Protection for Use of Utilization Review and Grievance 
Process.--A group health plan, and a health insurance issuer with 
respect to the provision of health insurance coverage, may not 
retaliate against a participant, beneficiary, enrollee, or health care 
provider based on the participant's, beneficiary's, enrollee's or 
provider's use of, or participation in, a utilization review process or 
a grievance process of the plan or issuer (including an internal or 
external review or appeal process) under this title or under sections 
503A, 503B, and 503C of the Employee Retirement Income Security Act of 
1974.
    (b) Protection for Quality Advocacy by Health Care Professionals.--
            (1) In general.--A group health plan and a health insurance 
        issuer may not retaliate or discriminate against a protected 
        health care professional because the professional in good 
        faith--
                    (A) discloses information relating to the care, 
                services, or conditions affecting one or more 
                participants, beneficiaries, or enrollees of the plan 
                or issuer to an appropriate public regulatory agency, 
                an appropriate private accreditation body, or 
                appropriate management personnel of the plan or issuer; 
                or
                    (B) initiates, cooperates, or otherwise 
                participates in an investigation or proceeding by such 
                an agency with respect to such care, services, or 
                conditions.
        If an institutional health care provider is a participating 
        provider with such a plan or issuer or otherwise receives 
        payments for benefits provided by such a plan or issuer, the 
        provisions of the previous sentence shall apply to the provider 
        in relation to care, services, or conditions affecting one or 
        more patients within an institutional health care provider in 
        the same manner as they apply to the plan or issuer in relation 
        to care, services, or conditions provided to one or more 
        participants, beneficiaries, or enrollees; and for purposes of 
        applying this sentence, any reference to a plan or issuer is 
        deemed a reference to the institutional health care provider.
            (2) Good faith action.--For purposes of paragraph (1), a 
        protected health care professional is considered to be acting 
        in good faith with respect to disclosure of information or 
        participation if, with respect to the information disclosed as 
        part of the action--
                    (A) the disclosure is made on the basis of personal 
                knowledge and is consistent with that degree of 
                learning and skill ordinarily possessed by health care 
                professionals with the same licensure or certification 
                and the same experience;
                    (B) the professional reasonably believes the 
                information to be true;
                    (C) the information evidences either a violation of 
                a law, rule, or regulation, of an applicable 
                accreditation standard, or of a generally recognized 
                professional or clinical standard or that a patient is 
                in imminent hazard of loss of life or serious injury; 
                and
                    (D) subject to subparagraphs (B) and (C) of 
                paragraph (3), the professional has followed reasonable 
                internal procedures of the plan, issuer, or 
                institutional health care provider established for the 
                purpose of addressing quality concerns before making 
                the disclosure.
            (3) Exception and special rule.--
                    (A) General exception.--Paragraph (1) does not 
                protect disclosures that would violate Federal or State 
                law or diminish or impair the rights of any person to 
                the continued protection of confidentiality of 
                communications provided by such law.
                    (B) Notice of internal procedures.--Subparagraph 
                (D) of paragraph (2) shall not apply unless the 
                internal procedures involved are reasonably expected to 
                be known to the health care professional involved. For 
                purposes of this subparagraph, a health care 
                professional is reasonably expected to know of internal 
                procedures if those procedures have been made available 
                to the professional through distribution or posting.
                    (C) Internal procedure exception.--Subparagraph (D) 
                of paragraph (2) also shall not apply if--
                            (i) the disclosure relates to an imminent 
                        hazard of loss of life or serious injury to a 
                        patient;
                            (ii) the disclosure is made to an 
                        appropriate private accreditation body pursuant 
                        to disclosure procedures established by the 
                        body; or
                            (iii) the disclosure is in response to an 
                        inquiry made in an investigation or proceeding 
                        of an appropriate public regulatory agency and 
                        the information disclosed is limited to the 
                        scope of the investigation or proceeding.
            (4) Additional considerations.--It shall not be a violation 
        of paragraph (1) to take an adverse action against a protected 
        health care professional if the plan, issuer, or provider 
        taking the adverse action involved demonstrates that it would 
        have taken the same adverse action even in the absence of the 
        activities protected under such paragraph.
            (5) Notice.--A group health plan, health insurance issuer, 
        and institutional health care provider shall post a notice, to 
        be provided or approved by the Secretary of Labor, setting 
        forth excerpts from, or summaries of, the pertinent provisions 
        of this subsection and information pertaining to enforcement of 
        such provisions.
            (6) Constructions.--
                    (A) Determinations of coverage.--Nothing in this 
                subsection shall be construed to prohibit a plan or 
                issuer from making a determination not to pay for a 
                particular medical treatment or service or the services 
                of a type of health care professional.
                    (B) Enforcement of peer review protocols and 
                internal procedures.--Nothing in this subsection shall 
                be construed to prohibit a plan, issuer, or provider 
                from establishing and enforcing reasonable peer review 
                or utilization review protocols or determining whether 
                a protected health care professional has complied with 
                those protocols or from establishing and enforcing 
                internal procedures for the purpose of addressing 
                quality concerns.
                    (C) Relation to other rights.--Nothing in this 
                subsection shall be construed to abridge rights of 
                participants, beneficiaries, enrollees, and protected 
                health care professionals under other applicable 
                Federal or State laws.
            (7) Protected health care professional defined.--For 
        purposes of this subsection, the term ``protected health care 
        professional'' means an individual who is a licensed or 
        certified health care professional and who--
                    (A) with respect to a group health plan or health 
                insurance issuer, is an employee of the plan or issuer 
                or has a contract with the plan or issuer for provision 
                of services for which benefits are available under the 
                plan or issuer; or
                    (B) with respect to an institutional health care 
                provider, is an employee of the provider or has a 
                contract or other arrangement with the provider 
                respecting the provision of health care services.

                        Subtitle E--Definitions

SEC. 151. DEFINITIONS.

    (a) Incorporation of General Definitions.--Except as otherwise 
provided, the provisions of section 2791 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 714 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) 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.
            (3) 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, except that such term 
        includes a employee welfare benefit plan treated as a group 
        health plan under section 732(d) of such Act or defined as such 
        a plan under section 607(1) of such Act.
            (4) 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.
            (5) 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.
            (6) 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.
            (7) 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.
            (8) 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.
            (9) 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.
            (10) Terms and conditions.--The term ``terms and 
        conditions'' includes, with respect to a group health plan or 
        health insurance coverage, requirements imposed under this 
        title and sections 503A, 503B, and 503C of the Employee 
        Retirement Income Security Act of 1974 with respect to the plan 
        or coverage.
            (11) References to provisions governing consideration of 
        claims and appeals of claims decisions.--Any reference in this 
        title to section 503A, 503B, or 503C of the Employee Retirement 
        Income Security Act of 1974 shall be deemed, for purposes of 
        the Public Health Service Act and the Internal Revenue Code of 
        1986, a reference to the provisions of such section as made 
        applicable under section 2707 or 2753 of the Public Health 
        Service Act or section 9813 of the Internal Revenue Code of 
        1986, as applicable.

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 (and 
        the amendments made thereby) 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 (or such 
        amendments).
            (2) Continued preemption with respect to group health 
        plans.--Nothing in this title (or the amendments made thereby) 
        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.
            (3) Construction.--In applying this section, a State law 
        that provides for equal access to, and availability of, all 
        categories of licensed health care providers and services shall 
        not be treated as preventing the application of any requirement 
        of this title (or the amendments made thereby).
    (b) Application of Substantially Compliant State Laws.--
            (1) In general.--In the case of a State law that imposes, 
        with respect to health insurance coverage offered by a health 
        insurance issuer and with respect to a group health plan that 
        is a non-Federal governmental plan, a requirement that 
        substantially complies (within the meaning of subsection (c)) 
        with a patient protection requirement (as defined in paragraph 
        (3)) and does not prevent the application of other requirements 
        under this Act or the amendments made thereby (except in the 
        case of other substantially compliant requirements), in 
        applying the requirements of this title under section 2707 and 
        2753 (as applicable) of the Public Health Service Act (as added 
        by title II), subject to subsection (a)(2)--
                    (A) the State law shall not be treated as being 
                superseded under subsection (a); and
                    (B) the State law shall apply instead of the 
                patient protection requirement otherwise applicable 
                with respect to health insurance coverage and non-
                Federal governmental plans.
            (2) Limitation.--In the case of a group health plan covered 
        under title I of the Employee Retirement Income Security Act of 
        1974, paragraph (1) shall be construed to apply only with 
        respect to the health insurance coverage (if any) offered in 
        connection with the plan and only with respect to patient 
        protection requirements under section 101 and subtitles B, C, 
        and D and this subtitle.
            (3) Definitions.--In this section:
                    (A) Patient protection requirement.--The term 
                ``patient protection requirement'' means a requirement 
                under this title (or the amendments made thereby), and 
                includes (as a single requirement) a group or related 
                set of requirements under a section or similar unit 
                under this title (or such amendments).
                    (B) Substantially compliant.--The terms 
                ``substantially compliant'', substantially complies'', 
                or ``substantial compliance'' with respect to a State 
                law, mean that the State law has the same or similar 
                features as the patient protection requirements and has 
                a similar effect.
    (c) Determinations of Substantial Compliance.--
            (1) Certification by states.--A State may submit to the 
        Secretary a certification that a State law provides for patient 
        protections that are at least substantially compliant with one 
        or more patient protection requirements. Such certification 
        shall be accompanied by such information as may be required to 
        permit the Secretary to make the determination described in 
        paragraph (2)(A).
            (2) Review.--
                    (A) In general.--The Secretary shall promptly 
                review a certification submitted under paragraph (1) 
                with respect to a State law to determine if the State 
                law substantially complies with the patient protection 
                requirement (or requirements) to which the law relates.
                    (B) Approval deadlines.--
                            (i) Initial review.--Such a certification 
                        is considered approved unless the Secretary 
                        notifies the State in writing, within 90 days 
                        after the date of receipt of the certification, 
                        that the certification is disapproved (and the 
                        reasons for disapproval) or that specified 
                        additional information is needed to make the 
                        determination described in subparagraph (A).
                            (ii) Additional information.--With respect 
                        to a State that has been notified by the 
                        Secretary under clause (i) that specified 
                        additional information is needed to make the 
                        determination described in subparagraph (A), 
                        the Secretary shall make the determination 
                        within 60 days after the date on which such 
                        specified additional information is received by 
                        the Secretary.
            (3) Approval.--
                    (A) In general.--The Secretary shall approve a 
                certification under paragraph (1) unless--
                            (i) the State fails to provide sufficient 
                        information to enable the Secretary to make a 
                        determination under paragraph (2)(A); or
                            (ii) the Secretary determines that the 
                        State law involved does not provide for patient 
                        protections that substantially comply with the 
                        patient protection requirement (or 
                        requirements) to which the law relates.
                    (B) State challenge.--A State that has a 
                certification disapproved by the Secretary under 
                subparagraph (A) may challenge such disapproval in the 
                appropriate United States district court.
                    (C) Deference to states.--With respect to a 
                certification submitted under paragraph (1), the 
                Secretary shall give deference to the State's 
                interpretation of the State law involved with respect 
                to the patient protection involved.
                    (D) Public notification.--The Secretary shall--
                            (i) provide a State with a notice of the 
                        determination to approve or disapprove a 
                        certification under this paragraph;
                            (ii) promptly publish in the Federal 
                        Register a notice that a State has submitted a 
                        certification under paragraph (1);
                            (iii) promptly publish in the Federal 
                        Register the notice described in clause (i) 
                        with respect to the State; and
                            (iv) annually publish the status of all 
                        States with respect to certifications.
            (4) Construction.--Nothing in this subsection shall be 
        construed as preventing the certification (and approval of 
        certification) of a State law under this subsection solely 
        because it provides for greater protections for patients than 
        those protections otherwise required to establish substantial 
        compliance.
            (5) Petitions.--
                    (A) Petition process.--Effective on the date on 
                which the provisions of this Act become effective, as 
                provided for in section 601, a group health plan, 
                health insurance issuer, participant, beneficiary, or 
                enrollee may submit a petition to the Secretary for an 
                advisory opinion as to whether or not a standard or 
                requirement under a State law applicable to the plan, 
                issuer, participant, beneficiary, or enrollee that is 
                not the subject of a certification under this 
                subsection, is superseded under subsection (a)(1) 
                because such standard or requirement prevents the 
                application of a requirement of this title (or the 
                amendments made thereby).
                    (B) Opinion.--The Secretary shall issue an advisory 
                opinion with respect to a petition submitted under 
                subparagraph (A) within the 60-day period beginning on 
                the date on which such petition is submitted.
    (d) 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, Puerto Rico, the Virgin Islands, Guam, 
        American Samoa, the Northern Mariana Islands, any political 
        subdivisions of such, or any agency or instrumentality of such.

SEC. 153. EXCLUSIONS.

    (a) No Benefit Requirements.--Nothing in this title or the 
amendments made thereby shall be construed to require a group health 
plan or a health insurance issuer offering health insurance coverage to 
include specific items and services under the terms of such a plan or 
coverage, other than those provided under the terms and conditions 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 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) allows access to any provider that is lawfully 
                authorized to provide the covered services and that 
                agrees 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 for any health 
                care services.

SEC. 154. TREATMENT OF EXCEPTED BENEFITS.

    (a) In General.--The requirements of this title and the amendments 
made thereby shall not apply to excepted benefits (as defined in 
section 733(c) of the Employee Retirement Income Security Act of 1974), 
other than benefits described in section 733(c)(2)(A) of such Act, in 
the same manner as the provisions of part 7 of subtitle B of title I of 
such Act do not apply to such benefits under subsections (b) and (c) of 
section 732 of such Act.
    (b) Coverage of Certain Limited Scope Plans.--Only for purposes of 
applying the requirements of this title and sections 503A, 503B, and 
503C of the Employee Retirement Income Security Act of 1974 under 
sections 2707 and 2753 of the Public Health Service Act, sections 
503(b) and 714 of the Employee Retirement Income Security Act of 1974, 
and section 9813 of the Internal Revenue Code of 1986, the following 
sections shall be deemed not to apply:
            (1) Section 2791(c)(2)(A) of the Public Health Service Act.
            (2) Section 733(c)(2)(A) of the Employee Retirement Income 
        Security Act of 1974.
            (3) Section 9832(c)(2)(A) of the Internal Revenue Code of 
        1986.

SEC. 155. REGULATIONS.

    The Secretaries of Health and Human Services, Labor, and the 
Treasury shall issue such regulations as may be necessary or 
appropriate to carry out this title and the amendments made thereby. 
Such regulations shall be issued consistent with section 104 of Health 
Insurance Portability and Accountability Act of 1996. Such Secretaries 
may promulgate any interim final rules as the Secretaries determine are 
appropriate to carry out this title and the amendments made thereby.

SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.

    The requirements of this title and the amendments made thereby with 
respect to a group health plan or health insurance coverage are, 
subject to section 154, deemed to be incorporated into, and made a part 
of, such plan or the policy, certificate, or contract providing such 
coverage and are enforceable under law as if directly included in the 
documentation of such plan or such policy, certificate, or contract.

SEC. 157. PRESERVATION OF PROTECTIONS.

    (a) In General.--The rights under this Act (including the right to 
maintain a civil action and any other rights under the amendments made 
by this Act) may not be waived, deferred, or lost pursuant to any 
agreement not authorized under this Act (or such amendments).
    (b) Exception.--Subsection (a) shall not apply to an agreement 
providing for arbitration or participation in any other nonjudicial 
procedure to resolve a dispute if the agreement is entered into 
knowingly and voluntarily by the parties involved after the dispute has 
arisen or is pursuant to the terms of a collective bargaining 
agreement. Nothing in this subsection shall be construed to permit the 
waiver of the requirements of sections 503B and 503C of the Employee 
Retirement Income Security Act of 1974 (relating to internal and 
external review).

 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.

    ``Each group health plan shall comply with the patient protection 
requirements under title I of the Bipartisan Patient Protection Act and 
sections 503A through 503C of the Employee Retirement Income Security 
Act of 1974, and each health insurance issuer shall comply with such 
patient protection requirements with respect to group health insurance 
coverage it offers, and such requirements shall be deemed to be 
incorporated into this subsection.''.
    (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.

    ``Each health insurance issuer shall comply with the patient 
protection requirements under title I of the Bipartisan Patient 
Protection Act and sections 503A through 503C of the Employee 
Retirement Income Security Act of 1974 (with respect to enrollees under 
individual health insurance coverage in the same manner as they apply 
to participants and beneficiaries under group health insurance 
coverage) with respect to individual health insurance coverage it 
offers, and such requirements shall be deemed to be incorporated into 
this subsection.''.

SEC. 203. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Part C of title XXVII of the Public Health Service Act (42 U.S.C. 
300gg-91 et seq.) is amended by adding at the end the following:

``SEC. 2793. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    ``(a) Agreement with States.--A State may enter into an agreement 
with the Secretary for the delegation to the State of some or all of 
the Secretary's authority under this title to enforce the requirements 
applicable under sections 2707 and 2753 with respect to health 
insurance coverage offered by a health insurance issuer and with 
respect to a group health plan that is a non-Federal governmental plan.
    ``(b) Delegations.--Any department, agency, or instrumentality of a 
State to which authority is delegated pursuant to an agreement entered 
into under this section may, if authorized under State law and to the 
extent consistent with such agreement, exercise the powers of the 
Secretary under this title which relate to such authority.''.

   TITLE III--APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL 
                       HEALTH INSURANCE PROGRAMS

SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO FEDERAL HEALTH 
              INSURANCE PROGRAMS.

    (a) Sense of Congress.--It is the sense of Congress that enrollees 
in Federal health insurance programs should have the same rights and 
privileges as those afforded under title I, under the amendments made 
by such title, and under the amendments made by subtitle A of title IV 
to participants and beneficiaries under group health plans.
    (b) Conforming Federal Health Insurance Programs.--It is the sense 
of Congress that the President should require, by executive order, the 
Federal official with authority over each Federal health insurance 
program, to the extent feasible, to take such steps as are necessary to 
implement the rights and privileges described in subsection (a) with 
respect to such program.
    (c) GAO Report on Additional Steps Required.--Not later than 1 year 
after the date of the enactment of this Act, the Comptroller General of 
the United States shall submit to Congress a report on statutory 
changes that are required to implement such rights and privileges in a 
manner that is consistent with the missions of the Federal health 
insurance programs and that avoids unnecessary duplication or 
disruption of such programs.
    (d) Federal Health Insurance Program.--In this section, the term 
``Federal health insurance program'' means a Federal program that 
provides creditable coverage (as defined in section 2701(c)(1) of the 
Public Health Service Act) and includes a health program of the 
Department of Veterans Affairs.

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

                     Subtitle A--General Provisions

SEC. 401. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH 
              PLANS AND GROUP HEALTH INSURANCE COVERAGE UNDER THE 
              EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

    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) In General.--Subject to subsection (b), a group health plan 
(and a health insurance issuer offering group health insurance coverage 
in connection with such a plan) shall comply with the requirements of 
section 101 and subtitles B, C, D, and E of title I of the Bipartisan 
Patient Protection Act (as in effect as of the date of the enactment of 
such Act), and such requirements shall be deemed to be incorporated 
into this subsection.
    ``(b) Plan Satisfaction of Certain Requirements.--
            ``(1) Satisfaction of certain requirements through 
        insurance.--For purposes of subsection (a), insofar as a group 
        health plan provides benefits in the form of health insurance 
        coverage through a health insurance issuer, the plan shall be 
        treated as meeting the following requirements of title I of the 
        Bipartisan Patient Protection Act with respect to such benefits 
        and not be considered as failing to meet such requirements 
        because of a failure of the issuer to meet such requirements so 
        long as the plan sponsor or its representatives did not cause 
        such failure by the issuer:
                    ``(A) Section 111 (relating to consumer choice 
                option).
                    ``(B) Section 112 (relating to choice of health 
                care professional).
                    ``(C) Section 113 (relating to access to emergency 
                care).
                    ``(D) Section 114 (relating to timely access to 
                specialists).
                    ``(E) Section 115 (relating to patient access to 
                obstetrical and gynecological care).
                    ``(F) Section 116 (relating to access to pediatric 
                care).
                    ``(G) Section 117 (relating to continuity of care), 
                but only insofar as a replacement issuer assumes the 
                obligation for continuity of care.
                    ``(H) Section 118 (relating to access to needed 
                prescription drugs).
                    ``(I) Section 119 (relating to coverage for 
                individuals participating in approved clinical trials).
                    ``(J) Section 120 (relating to required coverage 
                for minimum hospital stay for mastectomies and lymph 
                node dissections for the treatment of breast cancer and 
                coverage for secondary consultations).
                    ``(K) Section 134 (relating to payment of claims).
            ``(2) Information.--With respect to information required to 
        be provided or made available under section 121 of the 
        Bipartisan Patient Protection Act, in the case of a group 
        health plan that provides benefits in the form of health 
        insurance coverage through a health insurance issuer, the 
        Secretary shall determine the circumstances under which the 
        plan is not required to provide or make available the 
        information (and is not liable for the issuer's failure to 
        provide or make available the information), if the issuer is 
        obligated to provide and make available (or provides and makes 
        available) such information.
            ``(3) Application to prohibitions.--Pursuant to rules of 
        the Secretary, if a health insurance issuer offers health 
        insurance coverage in connection with a group health plan and 
        takes an action in violation of any of the following sections 
        of the Bipartisan Patient Protection Act, the group health plan 
        shall not be liable for such violation unless the plan caused 
        such violation:
                    ``(A) Section 131 (relating to prohibition of 
                interference with certain medical communications).
                    ``(B) Section 132 (relating to prohibition of 
                discrimination against providers based on licensure).
                    ``(C) Section 133 (relating to prohibition against 
                improper incentive arrangements).
                    ``(D) Section 135 (relating to protection for 
                patient advocacy).
            ``(4) Construction.--Nothing in this subsection shall be 
        construed to affect or modify the responsibilities of the 
        fiduciaries of a group health plan under part 4 of subtitle B.
            ``(5) Treatment of substantially compliant state laws.--For 
        purposes of applying this subsection in connection with health 
        insurance coverage, any reference in this subsection to a 
        requirement in a section or other provision in the Bipartisan 
        Patient Protection Act with respect to a health insurance 
        issuer is deemed to include a reference to a requirement under 
        a State law that substantially complies (as determined under 
        section 152(c) of such Act) with the requirement in such 
        section or other provisions.
            ``(6) Application to certain prohibitions against 
        retaliation.--With respect to compliance with the requirements 
        of section 135(b)(1) of the Bipartisan Patient Protection Act, 
        for purposes of this subtitle the term `group health plan' is 
        deemed to include a reference to an institutional health care 
        provider.
    ``(c) Enforcement of Certain Requirements.--
            ``(1) Complaints.--Any protected health care professional 
        who believes that the professional has been retaliated or 
        discriminated against in violation of section 135(b)(1) of the 
        Bipartisan Patient Protection Act may file with the Secretary a 
        complaint within 180 days of the date of the alleged 
        retaliation or discrimination.
            ``(2) Investigation.--The Secretary shall investigate such 
        complaints and shall determine if a violation of such section 
        has occurred and, if so, shall issue an order to ensure that 
        the protected health care professional does not suffer any loss 
        of position, pay, or benefits in relation to the plan, issuer, 
        or provider involved, as a result of the violation found by the 
        Secretary.
    ``(d) Conforming Regulations.--The Secretary shall issue 
regulations to coordinate the requirements on group health plans and 
health insurance issuers under this section with the requirements 
imposed under the other provisions of this title. In order to reduce 
duplication and clarify the rights of participants and beneficiaries 
with respect to information that is required to be provided, such 
regulations shall coordinate the information disclosure requirements 
under section 121 of the Bipartisan Patient Protection Act with the 
reporting and disclosure requirements imposed under part 1, so long as 
such coordination does not result in any reduction in the information 
that would otherwise be provided to participants and beneficiaries.''.
    (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)(1)(A) Subject to subparagraphs (B) and (C), 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 sections 503A, 503B, and 503C, and such requirements 
shall be deemed to be incorporated into this subsection.
    ``(B) With respect to the internal appeals process required to be 
established under section 503B, in the case of a group health plan that 
provides benefits in the form of health insurance coverage through a 
health insurance issuer, the Secretary shall determine the 
circumstances under which the plan is not required to provide for such 
process and system (and is not liable for the issuer's failure to 
provide for such process and system), if the issuer is obligated to 
provide for (and provides for) such process and system.
    ``(C) Pursuant to rules of the Secretary, insofar as a group health 
plan enters into a contract with a qualified external review entity for 
the conduct of external appeal activities in accordance with section 
503C, the plan shall be treated as meeting the requirement of such 
section and is not liable for the entity's failure to meet any 
requirements under such section.
    ``(2) In the case of a group health plan, compliance with the 
requirements of sections 503A, 503B, and 503C, and compliance with 
regulations promulgated by the Secretary, in connection with a denial 
of a claim under a group health plan shall be deemed compliance with 
subsection (a) with respect to such claim denial.
    ``(3) Terms used in this subsection which are defined in section 
733 shall have the meanings provided such terms in such section.''.
    (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.''.
    (3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is amended 
by inserting ``(other than section 135(b) of the Bipartisan Patient 
Protection Act, as enforcible under section 714(c))'' after ``part 7''.

SEC. 402. AVAILABILITY OF CIVIL 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:
    ``(n) Cause of Action Relating to Claims for Health Benefits.--
            ``(1) Cause of action.--
                    ``(A) In general.--With respect to an action 
                commenced by a participant or beneficiary (or the 
                estate of the participant or beneficiary) in connection 
                with a claim for benefits under a group health plan, 
                if--
                            ``(i) a designated decisionmaker described 
                        in paragraph (2) fails to exercise ordinary 
                        care--
                                    ``(I) in making a determination 
                                denying the claim for benefits under 
                                section 503A (relating to an initial 
                                claim for benefits),
                                    ``(II) in making a determination 
                                denying the claim for benefits under 
                                section 503B (relating to an internal 
                                appeal), or
                                    ``(III) in failing to authorize 
                                coverage in compliance with the written 
                                determination of an independent medical 
                                reviewer under section 503C(d)(3)(F) 
                                that reverses a determination denying 
                                the claim for benefits, and
                            ``(ii) the delay in receiving, or failure 
                        to receive, benefits attributable to the 
                        failure described in clause (i) is the 
                        proximate cause of personal injury to, or death 
                        of, the participant or beneficiary,
                such designated decisionmaker shall be liable to the 
                participant or beneficiary (or the estate) for economic 
                and noneconomic damages in connection with such failure 
                and such injury or death (subject to paragraph (4)).
                    ``(B) Rebuttable presumption.--In the case of a 
                cause of action under subparagraph (A)(i)(I) or 
                (A)(i)(II), if an independent medical reviewer under 
                section 503C(d) or 503C(e)(4)(B) upholds the 
                determination denying the claim for benefits involved, 
                there shall be a presumption (rebuttable by clear and 
                convincing evidence) that the designated decisionmaker 
                exercised ordinary care in making such determination.
            ``(2) Designated decisionmaker.--
                    ``(A) Appointment.--
                            ``(i) In general.--The plan sponsor or 
                        named fiduciary of a group health plan shall, 
                        in accordance with this paragraph with respect 
                        to a participant or beneficiary, designate a 
                        person that meets the requirements of 
                        subparagraph (B) to serve as a designated 
                        decisionmaker with respect to the cause of 
                        action described in paragraph (1), except 
                        that--
                                    ``(I) with respect to health 
                                insurance coverage offered in 
                                connection with a group health plan, 
                                the health insurance issuer shall be 
                                the designated decisionmaker unless the 
                                plan sponsor and the issuer 
                                specifically agree in writing (on a 
                                form to be prescribed by the Secretary) 
                                to substitute another person as the 
                                designated decisionmaker; or
                                    ``(II) with respect to the 
                                designation of a person other than a 
                                plan sponsor or health insurance 
                                issuer, such person shall satisfy the 
                                requirements of subparagraph (D).
                            ``(ii) Plan documents.--The designated 
                        decisionmaker shall be specifically designated 
                        as such in the written instruments of the plan 
                        (under section 402(a)) and be identified as 
                        required under section 121(b)(20) of the 
                        Bipartisan Patient Protection Act.
                    ``(B) Requirements.--For purposes of this 
                paragraph, a designated decisionmaker meets the 
                requirements of this subparagraph with respect to any 
                participant or beneficiary if--
                            ``(i) such designation is in such form as 
                        may be specified in regulations prescribed by 
                        the Secretary,
                            ``(ii) the designated decisionmaker--
                                    ``(I) meets the requirements of 
                                subparagraph (C),
                                    ``(II) assumes unconditionally all 
                                liability arising under this subsection 
                                in connection with actions and failures 
                                to act described in subparagraph (A) 
                                (whether undertaken by the designated 
                                decisionmaker or the employer, plan, 
                                plan sponsor, or employee or agent 
                                thereof) during the period in which the 
                                designation under this paragraph is in 
                                effect relating to such participant or 
                                beneficiary, and
                                    ``(III) where subparagraph (C)(ii) 
                                applies, assumes unconditionally the 
                                exclusive authority under the group 
                                health plan to make determinations on 
                                claims for benefits (irrespective of 
                                whether they constitute medically 
                                reviewable determinations) under the 
                                plan with respect to such participant 
                                or beneficiary, and
                            ``(iii) the designated decisionmaker and 
                        the participants and beneficiaries for whom the 
                        decisionmaker has assumed liability are 
                        identified in the written instrument required 
                        under section 402(a) and as required under 
                        section 121(b)(15) of the Bipartisan Patient 
                        Protection Act.
                Any liability assumed by a designated decisionmaker 
                pursuant to this paragraph shall be in addition to any 
                liability that it may otherwise have under applicable 
                law.
                    ``(C) Qualifications for designated 
                decisionmakers.--
                            ``(i) In general.--Subject to clause (ii), 
                        an entity is qualified under this subparagraph 
                        to serve as a designated decisionmaker with 
                        respect to a group health plan if the entity 
                        has the ability to assume the liability 
                        described in subparagraph (A) with respect to 
                        participants and beneficiaries under such plan, 
                        including requirements relating to the 
                        financial obligation for timely satisfying the 
                        assumed liability, and maintains with the plan 
                        sponsor certification of such ability. Such 
                        certification shall be provided to the plan 
                        sponsor or named fiduciary upon designation 
                        under this paragraph and not less frequently 
                        than annually thereafter, or if such 
                        designation constitutes a multiyear 
                        arrangement, in conjunction with the renewal of 
                        the arrangement.
                            ``(ii) Special qualification in the case of 
                        certain reviewable decisions.--In the case of a 
                        group health plan that provides benefits 
                        consisting of medical care to a participant or 
                        beneficiary only through health insurance 
                        coverage offered by a health insurance issuer, 
                        such issuer is the only entity that may be 
                        qualified under this subparagraph to serve as a 
                        designated decisionmaker with respect to such 
                        participant or beneficiary, and shall serve as 
                        the designated decisionmaker unless the 
                        employer or other plan sponsor acts 
                        affirmatively to prevent such service.
                    ``(D) Requirements relating to financial 
                obligations.--For purposes of subparagraphs (A)(i)(II) 
                and (C)(i), the requirements relating to the financial 
                obligation of an entity for liability shall include--
                            ``(i) coverage of such entity under an 
                        insurance policy or other arrangement, secured 
                        and maintained by such entity, to effectively 
                        insure such entity against losses arising from 
                        professional liability claims, including those 
                        arising from its service as a designated 
                        decisionmaker under this subsection; or
                            ``(ii) evidence of minimum capital and 
                        surplus levels that are maintained by such 
                        entity to cover any losses as a result of 
                        liability arising from its service as a 
                        designated decisionmaker under this subsection.
                The appropriate amounts of liability insurance and 
                minimum capital and surplus levels for purposes of 
                clauses (i) and (ii) shall be determined by an actuary 
                using sound actuarial principles and accounting 
                practices pursuant to established guidelines of the 
                American Academy of Actuaries and in accordance with 
                such regulations as the Secretary may prescribe and 
                shall be maintained throughout the term for which the 
                designation is in effect. The provisions of this 
                subparagraph shall not apply in the case of a 
                designated decisionmaker that is a group health plan, 
                plan sponsor, or health insurance issuer and that is 
                regulated under Federal law or a State financial 
                solvency law.
                    ``(E) Limitation on appointment of treating 
                physicians.--A treating physician who directly 
                delivered the care or treatment or provided services 
                which is the subject of a cause of action by a 
                participant or beneficiary under paragraph (1) may not 
                be appointed (or deemed to be appointed) as a 
                designated decisionmaker under this paragraph with 
                respect to such participant or beneficiary.
                    ``(F) Failure to appoint.--With respect to any 
                cause of action under paragraph (1) relating to a 
                denial of a claim for benefits where a designated 
                decisionmaker has not been appointed in accordance with 
                this paragraph, the plan sponsor or named fiduciary 
                responsible for determinations under section 503 shall 
                be deemed to be the designated decisionmaker.
                    ``(G) Effect of appointment.--The appointment of a 
                designated decisionmaker in accordance with this 
                paragraph shall not affect the liability of the 
                appointing plan sponsor or named fiduciary for the 
                failure of the plan sponsor or named fiduciary to 
                comply with any other requirement of this title.
                    ``(H) Treatment of certain trust funds.--For 
                purposes of this subsection, the terms `employer' and 
                `plan sponsor', in connection with the assumption by a 
                designated decisionmaker of the liability of employer 
                or other plan sponsor pursuant to this paragraph, shall 
                be construed to include a trust fund maintained 
                pursuant to section 302 of the Labor Management 
                Relations Act, 1947 (29 U.S.C. 186) or the Railway 
                Labor Act (45 U.S.C. 151 et seq.).
            ``(3) Requirement of exhaustion of independent medical 
        review.--
                    ``(A) In general.--Paragraph (1) shall apply only 
                if--
                            ``(i) a final determination denying a claim 
                        for benefits under section 503B has been 
                        referred for independent medical review under 
                        section 503C(d) and a written determination by 
                        an independent medical reviewer has been issued 
                        with respect to such review, or
                            ``(ii) the qualified external review entity 
                        has determined under section 503C(c)(3) that a 
                        referral to an independent medical reviewer is 
                        not required.
                    ``(B) Injunctive relief for irreparable harm.--A 
                participant or beneficiary may seek relief under 
                subsection (a)(1)(B) prior to the exhaustion of 
                administrative remedies under section 503B or 503C (as 
                required under subparagraph (A)) if it is demonstrated 
                to the court, by a preponderance of the evidence, that 
                the exhaustion of such remedies would cause irreparable 
                harm to the health of the participant or beneficiary. 
                Any determinations that already have been made under 
                section 503A, 503B, or 503C in such case, or that are 
                made in such case while an action under this 
                subparagraph is pending, shall be given due 
                consideration by the court in any action under 
                subsection (a)(1)(B) in such case. Notwithstanding the 
                awarding of such relief under subsection (a)(1)(B) 
                pursuant to this subparagraph, no relief shall be 
                available under paragraph (1), with respect to a 
                participant or beneficiary, unless the requirements of 
                subparagraph (A) are met.
                    ``(C) Receipt of benefits during appeals process.--
                Receipt by the participant or beneficiary of the 
                benefits involved in the claim for benefits during the 
                pendency of any administrative processes referred to in 
                subparagraph (A) or of any action commenced under this 
                subsection--
                            ``(i) shall not preclude continuation of 
                        all such administrative processes to their 
                        conclusion if so moved by any party, and
                            ``(ii) shall not preclude any liability 
                        under subsection (a)(1)(C) and this subsection 
                        in connection with such claim.
                The court in any action commenced under this subsection 
                shall take into account any receipt of benefits during 
                such administrative processes or such action in 
                determining the amount of the damages awarded.
            ``(4) Limitations on recovery of damages.--
                    ``(A) Maximum award of noneconomic damages.--The 
                aggregate amount of liability for noneconomic loss in 
                an action under paragraph (1) may not exceed 
                $1,500,000.
                    ``(B) Limitation on award of punitive damages.--In 
                the case of any action commenced pursuant to paragraph 
                (1), the court may not award any punitive, exemplary, 
                or similar damages against a defendant, except that the 
                court may award punitive, exemplary, or similar damages 
                (in addition to damages described in subparagraph (A)), 
                in an aggregate amount not to exceed $1,500,000, if--
                            ``(i) the denial of a claim for benefits 
                        involved in the case was reversed by a written 
                        determination by an independent medical 
                        reviewer under section 503C(d)(3)(F); and
                            ``(ii) there has been a failure to 
                        authorize coverage in compliance with such 
                        written determination.
                    ``(C) Permitting application of lower state damage 
                limits.--A State may limit damages for noneconomic loss 
                or punitive, exemplary, or similar damages in an action 
                under paragraph (1) to amounts less than the amounts 
                permitted under this paragraph.
            ``(5) Admissibility.--In an action described in subclause 
        (I) or (II) of paragraph (1)(A) relating to a denial of a claim 
        for benefits, any determination by an independent medical 
        reviewer under section 503C(d) or 503C(e)(4)(B) relating to 
        such denial is admissible.
            ``(6) Waiver of internal review.--In the case of any cause 
        of action under paragraph (1), the waiver or nonwaiver of 
        internal review under section 503B(a)(4) by the group health 
        plan, or health insurance issuer that offers health insurance 
        coverage in connection with a group health plan, shall not be 
        used in determining liability.
            ``(7) Limitations on actions.--Paragraph (1) shall not 
        apply in connection with any action that is commenced more than 
        5 years after the date on which the failure described in such 
        paragraph occurred or, if earlier, not later than 2 years after 
        the first date the participant or beneficiary became aware of 
        the personal injury or death referred to in such paragraph.
            ``(8) Exclusion of directed recordkeepers.--
                    ``(A) In general.--Paragraph (1) shall not apply 
                with respect to a directed record keeper in connection 
                with a group health plan.
                    ``(B) Directed recordkeeper.--For purposes of this 
                paragraph, the term `directed record keeper' means, in 
                connection with a group health plan, a person engaged 
                in directed recordkeeping activities pursuant to the 
                specific instructions of the plan, the employer, or 
                another plan sponsor, including the distribution of 
                enrollment information and distribution of disclosure 
                materials under this Act or title I of the Bipartisan 
                Patient Protection Act and whose duties do not include 
                making determinations on claims for benefits.
                    ``(C) Limitation.--Subparagraph (A) does not apply 
                in connection with any directed recordkeeper to the 
                extent that the directed recordkeeper fails to follow 
                the specific instruction of the plan or the employer or 
                other plan sponsor.
            ``(9) Protection of the regulation of quality of medical 
        care under state law.--Nothing in this subsection shall be 
        construed to preclude any action under State law against a 
        person or entity for liability or vicarious liability with 
        respect to the delivery of medical care. A cause of action that 
        is based on or otherwise relates to a group health plan's 
        determination on a claim for benefits shall not be deemed to be 
        the delivery of medical care under any State law for purposes 
        of this paragraph. Any such cause of action shall be maintained 
        exclusively under this section. Nothing in this paragraph shall 
        be construed to alter, amend, modify, invalidate, impair, or 
        supersede section 514.
            ``(10) 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 503C (relating to independent external appeals 
        procedures for group health plans) of a denial of claim for 
        benefits (within the meaning of section 503C(i)(2)).
            ``(11) Construction.--Nothing in this subsection shall be 
        construed as authorizing a cause of action under paragraph (1) 
        for the failure of a group health plan or health insurance 
        issuer to provide an item or service that is specifically 
        excluded under the plan or coverage.
            ``(12) Limitation on class action litigation.--A claim or 
        cause of action under this subsection may not be maintained as 
        a class action, as a derivative action, or as an action on 
        behalf of any group of 2 or more claimants.
            ``(13) Purchase of insurance to cover liability.--Nothing 
        in section 410 shall be construed to preclude the purchase by a 
        group health plan of insurance to cover any liability or losses 
        arising under a cause of action under subsection (a)(1)(C) and 
        this subsection.
            ``(14) Retrospective claims for benefits.--A cause of 
        action shall not arise under paragraph (1) where the claim for 
        benefits relates to an item or service that has already been 
        provided to the participant or beneficiary under the plan or 
        coverage and the claim relates solely to the subsequent denial 
        of payment for the provision of such item or service.
            ``(15) Exemption from personal liability for individual 
        members of boards of directors, joint boards of trustees, 
        etc.--Any individual who is--
                    ``(A) a member of a board of directors of an 
                employer or plan sponsor; or
                    ``(B) a member of an association, committee, 
                employee organization, joint board of trustees, or 
                other similar group of representatives of the entities 
                that are the plan sponsor of plan maintained by two or 
                more employers and one or more employee organizations;
        shall not be personally liable under this subsection for 
        conduct that is within the scope of employment or of plan-
        related duties of the individuals unless the individual acts in 
        a fraudulent manner for personal enrichment.
            ``(16) Definitions and related rules.--For purposes of this 
        subsection:
                    ``(A) Claim for benefits.--The term `claim for 
                benefits' shall have the meaning given such term in 
                section 503A(e).
                    ``(B) Group health plan.--The term `group health 
                plan' shall have the meaning given such term in section 
                733(a).
                    ``(C) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning given such term in 
                section 733(b)(1).
                    ``(D) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning given such term in 
                section 733(b)(2).
                    ``(E) Ordinary care.--The term `ordinary care' 
                means, with respect to a determination on a claim for 
                benefits, that degree of care, skill, and diligence 
                that a reasonable and prudent individual would exercise 
                in making a fair determination on a claim for benefits 
                of like kind to the claims involved.
                    ``(F) Personal injury.--The term `personal injury' 
                means a physical injury and includes an injury arising 
                out of the treatment (or failure to treat) a mental 
                illness or disease.
                    ``(G) Treatment of excepted benefits.--The 
                provisions of this subsection (and subsection 
                (a)(1)(C)) shall not apply to excepted benefits (as 
                defined in section 733(c)), other than benefits 
                described in section 733(c)(2)(A), in the same manner 
                as the provisions of part 7 do not apply to such 
                benefits under subsections (b) and (c) of section 732.
            (2) Conforming amendment.--Section 502(a)(1) of such Act 
        (29 U.S.C. 1132(a)(1)) is amended--
                    (A) by striking ``or'' at the end of subparagraph 
                (A);
                    (B) in subparagraph (B), by striking ``plan;'' and 
                inserting ``plan, or''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) for the relief provided for in subsection (n) 
                of this section.''.
    (b) Availability of Actions in State Court.--
            (1) Jurisdiction of state courts.--Section 502(e)(1) of 
        such Act (29 U.S.C. 1132(e)) is amended--
                    (A) in the first sentence, by striking ``subsection 
                (a)(1)(B)'' and inserting ``paragraphs (1)(B), (1)(C), 
                and (7) of subsection (a)'';
                    (B) in the second sentence, by striking 
                ``paragraphs (1)(B) and (7)'' and inserting 
                ``paragraphs (1)(B), (1)(C), and (7)''; and
                    (C) by adding at the end the following new 
                sentence: ``State courts of competent jurisdiction in 
                the State in which the plaintiff resides and district 
                courts of the United States shall have concurrent 
                jurisdiction over actions under subsections (a)(1)(C) 
                and (n).''.
            (2) Limitation on removability of certain actions in state 
        court.--Section 1445 of title 28, United States Code, is 
        amended by adding at the end the following new subsection:
    ``(e)(1) A civil action brought in any State court under 
subsections (a)(1)(C) and (n) of section 502 of the Employee Retirement 
Income Security Act of 1974 against any party (other than the employer, 
plan, plan sponsor, or other entity treated under section 502(n) of 
such Act as such) arising from a medically reviewable determination may 
not be removed to any district court of the United States.
    ``(2) For purposes of paragraph (1), the term `medically reviewable 
decision' means a denial of a claim for benefits under the plan which 
is described in section 503C(d)(2) of the Employee Retirement Income 
Security Act of 1974.''.
    (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 applicable effective date under section 601.

SEC. 403. LIMITATION ON CERTAIN CLASS ACTION LITIGATION.

    (a) In General.--Section 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132), as amended by section 402, is 
further amended by adding at the end the following:
    ``(o) Limitation on Class Action Litigation.--Any claim or cause of 
action that is maintained under this section (other than under 
subsection (n)) or under section 1962 or 1964(c) of title 18, United 
States Code, in connection with a group health plan, or health 
insurance coverage issued in connection with a group health plan, as a 
class action, derivative action, or as an action on behalf of any group 
of 2 or more claimants, may be maintained only if the class, the 
derivative claimant, or the group of claimants is limited to the 
participants or beneficiaries of a group health plan established by 
only 1 plan sponsor. No action maintained by such class, such 
derivative claimant, or such group of claimants may be joined in the 
same proceeding with any action maintained by another class, derivative 
claimant, or group of claimants or consolidated for any purpose with 
any other proceeding. In this paragraph, the terms `group health plan' 
and `health insurance coverage' have the meanings given such terms in 
section 733.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to actions commenced on or after August 2, 2001. 
Notwithstanding the preceding sentence, with respect to class actions, 
the amendment made by subsection (a) shall apply with respect to civil 
actions which are pending on such date in which a class action has not 
been certified as of such date.

SEC. 404. LIMITATIONS ON ACTIONS.

    Section 502 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1132) (as amended by sections 402 and 403) is amended 
further by adding at the end the following new subsection:
    ``(p) Limitations on Actions Relating to Group Health Plans.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        action may be brought under subsection (a)(1)(B), (a)(2), or 
        (a)(3) by a participant or beneficiary seeking relief based on 
        the application of any provision in section 101, subtitle B, or 
        subtitle D of title I of the Bipartisan Patient Protection Act 
        (as incorporated under section 714).
            ``(2) Certain actions allowable.--An action may be brought 
        under subsection (a)(1)(B), (a)(2), or (a)(3) by a participant 
        or beneficiary seeking relief based on the application of 
        section 101, 113, 114, 115, 116, 117, 118(a)(3), 119, or 120 of 
        the Bipartisan Patient Protection Act (as incorporated under 
        section 714) to the individual circumstances of that 
        participant or beneficiary, except that--
                    ``(A) such an action may not be brought or 
                maintained as a class action; and
                    ``(B) in such an action, relief may only provide 
                for the provision of (or payment of) benefits, items, 
                or services denied to the individual participant or 
                beneficiary involved (and for attorney's fees and the 
                costs of the action, at the discretion of the court) 
                and shall not provide for any other relief to the 
                participant or beneficiary or for any relief to any 
                other person.
            ``(3) Other provisions unaffected.--Nothing in this 
        subsection shall be construed as affecting subsections 
        (a)(1)(C) and (n).
            ``(4) Enforcement by secretary unaffected.--Nothing in this 
        subsection shall be construed as affecting any action brought 
        by the Secretary.''.

SEC. 405. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    (a) In General.--Subpart C of part 7 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1191 et 
seq.) is amended by adding at the end the following new section:

``SEC. 735. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    ``(a) Agreement with States.--A State may enter into an agreement 
with the Secretary for the delegation to the State of some or all of 
the Secretary's authority under this title to enforce the requirements 
applicable under sections 503A, 503B, 503C, and 714 with respect to 
health insurance coverage offered by a health insurance issuer and with 
respect to a group health plan that is a non-Federal governmental plan.
    ``(b) Delegations.--Any department, agency, or instrumentality of a 
State to which authority is delegated pursuant to an agreement entered 
into under this section may, if authorized under State law and to the 
extent consistent with such agreement, exercise the powers of the 
Secretary under this title which relate to such authority.''.
    (b) Clerical Amendments.--The table of contents in section 1 of 
such Act is amended--
            (1) by inserting after the item relating to section 503 the 
        following new items:

``Sec. 503A. Procedures for initial claims for benefits and prior 
                            authorization determinations.
``Sec. 503B. Internal appeals of claims denials.
``Sec. 503C. Independent external appeals procedures.'';
            (2) by inserting after the item relating to section 713 the 
        following new item:

``Sec. 714. Patient protection standards.''; and
            (3) by inserting after the item relating to section 734 the 
        following new item:

``Sec. 735. Cooperation between Federal and State authorities.''.

SEC. 406. SENSE OF THE SENATE CONCERNING THE IMPORTANCE OF CERTAIN 
              UNPAID SERVICES.

    It is the sense of the Senate that the court should consider the 
loss of a nonwage earning spouse or parent as an economic loss for the 
purposes of this section. Furthermore, the court should define the 
compensation for the loss not as minimum services, but, rather, in 
terms that fully compensate for the true and whole replacement cost to 
the family.

                  Subtitle B--Association Health Plans

SEC. 421. RULES GOVERNING ASSOCIATION HEALTH PLANS.

    (a) In General.--Subtitle B of title I of the Employee Retirement 
Income Security Act of 1974 is amended by adding after part 7 the 
following new part:

           ``Part 8--Rules Governing Association Health Plans

``SEC. 801. ASSOCIATION HEALTH PLANS.

    ``(a) In General.--For purposes of this part, the term `association 
health plan' means a group health plan whose sponsor is (or is deemed 
under this part to be) described in subsection (b).
    ``(b) Sponsorship.--The sponsor of a group health plan is described 
in this subsection if such sponsor--
            ``(1) is organized and maintained in good faith, with a 
        constitution and bylaws specifically stating its purpose and 
        providing for periodic meetings on at least an annual basis, as 
        a bona fide trade association, a bona fide industry association 
        (including a rural electric cooperative association or a rural 
        telephone cooperative association), a bona fide professional 
        association, or a bona fide chamber of commerce (or similar 
        bona fide business association, including a corporation or 
        similar organization that operates on a cooperative basis 
        (within the meaning of section 1381 of the Internal Revenue 
        Code of 1986)), for substantial purposes other than that of 
        obtaining or providing medical care;
            ``(2) is established as a permanent entity which receives 
        the active support of its members and requires for membership 
        payment on a periodic basis of dues or payments necessary to 
        maintain eligibility for membership in the sponsor; and
            ``(3) does not condition membership, such dues or payments, 
        or coverage under the plan on the basis of health status-
        related factors with respect to the employees of its members 
        (or affiliated members), or the dependents of such employees, 
        and does not condition such dues or payments on the basis of 
        group health plan participation.
Any sponsor consisting of an association of entities which meet the 
requirements of paragraphs (1), (2), and (3) shall be deemed to be a 
sponsor described in this subsection.

``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.

    ``(a) In General.--The applicable authority shall prescribe by 
regulation, through negotiated rulemaking, a procedure under which, 
subject to subsection (b), the applicable authority shall certify 
association health plans which apply for certification as meeting the 
requirements of this part.
    ``(b) Standards.--Under the procedure prescribed pursuant to 
subsection (a), in the case of an association health plan that provides 
at least one benefit option which does not consist of health insurance 
coverage, the applicable authority shall certify such plan as meeting 
the requirements of this part only if the applicable authority is 
satisfied that the applicable requirements of this part are met (or, 
upon the date on which the plan is to commence operations, will be met) 
with respect to the plan.
    ``(c) Requirements Applicable to Certified Plans.--An association 
health plan with respect to which certification under this part is in 
effect shall meet the applicable requirements of this part, effective 
on the date of certification (or, if later, on the date on which the 
plan is to commence operations).
    ``(d) Requirements for Continued Certification.--The applicable 
authority may provide by regulation, through negotiated rulemaking, for 
continued certification of association health plans under this part.
    ``(e) Class Certification for Fully Insured Plans.--The applicable 
authority shall establish a class certification procedure for 
association health plans under which all benefits consist of health 
insurance coverage. Under such procedure, the applicable authority 
shall provide for the granting of certification under this part to the 
plans in each class of such association health plans upon appropriate 
filing under such procedure in connection with plans in such class and 
payment of the prescribed fee under section 807(a).
    ``(f) Certification of Self-Insured Association Health Plans.--An 
association health plan which offers one or more benefit options which 
do not consist of health insurance coverage may be certified under this 
part only if such plan consists of any of the following:
            ``(1) a plan which offered such coverage on the date of the 
        enactment of the Bipartisan Patient Protection Act,
            ``(2) a plan under which the sponsor does not restrict 
        membership to one or more trades and businesses or industries 
        and whose eligible participating employers represent a broad 
        cross-section of trades and businesses or industries, or
            ``(3) a plan whose eligible participating employers 
        represent one or more trades or businesses, or one or more 
        industries, consisting of any of the following: agriculture; 
        equipment and automobile dealerships; barbering and 
        cosmetology; certified public accounting practices; child care; 
        construction; dance, theatrical and orchestra productions; 
        disinfecting and pest control; financial services; fishing; 
        foodservice establishments; hospitals; labor organizations; 
        logging; manufacturing (metals); mining; medical and dental 
        practices; medical laboratories; professional consulting 
        services; sanitary services; transportation (local and 
        freight); warehousing; wholesaling/distributing; or any other 
        trade or business or industry which has been indicated as 
        having average or above-average risk or health claims 
        experience by reason of State rate filings, denials of 
        coverage, proposed premium rate levels, or other means 
        demonstrated by such plan in accordance with regulations which 
        the Secretary shall prescribe through negotiated rulemaking.

``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF TRUSTEES.

    ``(a) Sponsor.--The requirements of this subsection are met with 
respect to an association health plan if the sponsor has met (or is 
deemed under this part to have met) the requirements of section 801(b) 
for a continuous period of not less than 3 years ending with the date 
of the application for certification under this part.
    ``(b) Board of Trustees.--The requirements of this subsection are 
met with respect to an association health plan if the following 
requirements are met:
            ``(1) Fiscal control.--The plan is operated, pursuant to a 
        trust agreement, by a board of trustees which has complete 
        fiscal control over the plan and which is responsible for all 
        operations of the plan.
            ``(2) Rules of operation and financial controls.--The board 
        of trustees has in effect rules of operation and financial 
        controls, based on a 3-year plan of operation, adequate to 
        carry out the terms of the plan and to meet all requirements of 
        this title applicable to the plan.
            ``(3) Rules governing relationship to participating 
        employers and to contractors.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the members of the board of 
                trustees are individuals selected from individuals who 
                are the owners, officers, directors, or employees of 
                the participating employers or who are partners in the 
                participating employers and actively participate in the 
                business.
                    ``(B) Limitation.--
                            ``(i) General rule.--Except as provided in 
                        clauses (ii) and (iii), no such member is an 
                        owner, officer, director, or employee of, or 
                        partner in, a contract administrator or other 
                        service provider to the plan.
                            ``(ii) Limited exception for providers of 
                        services solely on behalf of the sponsor.--
                        Officers or employees of a sponsor which is a 
                        service provider (other than a contract 
                        administrator) to the plan may be members of 
                        the board if they constitute not more than 25 
                        percent of the membership of the board and they 
                        do not provide services to the plan other than 
                        on behalf of the sponsor.
                            ``(iii) Treatment of providers of medical 
                        care.--In the case of a sponsor which is an 
                        association whose membership consists primarily 
                        of providers of medical care, clause (i) shall 
                        not apply in the case of any service provider 
                        described in subparagraph (A) who is a provider 
                        of medical care under the plan.
                    ``(C) Certain plans excluded.--Subparagraph (A) 
                shall not apply to an association health plan which is 
                in existence on the date of the enactment of the 
                Bipartisan Patient Protection Act.
                    ``(D) Sole authority.--The board has sole authority 
                under the plan to approve applications for 
                participation in the plan and to contract with a 
                service provider to administer the day-to-day affairs 
                of the plan.
    ``(c) Treatment of Franchise Networks.--In the case of a group 
health plan which is established and maintained by a franchiser for a 
franchise network consisting of its franchisees--
            ``(1) the requirements of subsection (a) and section 
        801(a)(1) shall be deemed met if such requirements would 
        otherwise be met if the franchiser were deemed to be the 
        sponsor referred to in section 801(b), such network were deemed 
        to be an association described in section 801(b), and each 
        franchisee were deemed to be a member (of the association and 
        the sponsor) referred to in section 801(b); and
            ``(2) the requirements of section 804(a)(1) shall be deemed 
        met.
The Secretary may by regulation, through negotiated rulemaking, define 
for purposes of this subsection the terms `franchiser', `franchise 
network', and `franchisee'.
    ``(d) Certain Collectively Bargained Plans.--
            ``(1) In general.--In the case of a group health plan 
        described in paragraph (2)--
                    ``(A) the requirements of subsection (a) and 
                section 801(a)(1) shall be deemed met;
                    ``(B) the joint board of trustees shall be deemed a 
                board of trustees with respect to which the 
                requirements of subsection (b) are met; and
                    ``(C) the requirements of section 804 shall be 
                deemed met.
            ``(2) Requirements.--A group health plan is described in 
        this paragraph if--
                    ``(A) the plan is a multiemployer plan; or
                    ``(B) the plan is in existence on April 1, 2001, 
                and would be described in section 3(40)(A)(i) but 
                solely for the failure to meet the requirements of 
                section 3(40)(C)(ii).
            ``(3) Construction.--A group health plan described in 
        paragraph (2) shall only be treated as an association health 
        plan under this part if the sponsor of the plan applies for, 
        and obtains, certification of the plan as an association health 
        plan under this part.

``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.

    ``(a) Covered Employers and Individuals.--The requirements of this 
subsection are met with respect to an association health plan if, under 
the terms of the plan--
            ``(1) each participating employer must be--
                    ``(A) a member of the sponsor,
                    ``(B) the sponsor, or
                    ``(C) an affiliated member of the sponsor with 
                respect to which the requirements of subsection (b) are 
                met,
        except that, in the case of a sponsor which is a professional 
        association or other individual-based association, if at least 
        one of the officers, directors, or employees of an employer, or 
        at least one of the individuals who are partners in an employer 
        and who actively participates in the business, is a member or 
        such an affiliated member of the sponsor, participating 
        employers may also include such employer; and
            ``(2) all individuals commencing coverage under the plan 
        after certification under this part must be--
                    ``(A) active or retired owners (including self-
                employed individuals), officers, directors, or 
                employees of, or partners in, participating employers; 
                or
                    ``(B) the beneficiaries of individuals described in 
                subparagraph (A).
    ``(b) Coverage of Previously Uninsured Employees.--In the case of 
an association health plan in existence on the date of the enactment of 
the Bipartisan Patient Protection Act, an affiliated member of the 
sponsor of the plan may be offered coverage under the plan as a 
participating employer only if--
            ``(1) the affiliated member was an affiliated member on the 
        date of certification under this part; or
            ``(2) during the 12-month period preceding the date of the 
        offering of such coverage, the affiliated member has not 
        maintained or contributed to a group health plan with respect 
        to any of its employees who would otherwise be eligible to 
        participate in such association health plan.
    ``(c) Individual Market Unaffected.--The requirements of this 
subsection are met with respect to an association health plan if, under 
the terms of the plan, no participating employer may provide health 
insurance coverage in the individual market for any employee not 
covered under the plan which is similar to the coverage 
contemporaneously provided to employees of the employer under the plan, 
if such exclusion of the employee from coverage under the plan is based 
on a health status-related factor with respect to the employee and such 
employee would, but for such exclusion on such basis, be eligible for 
coverage under the plan.
    ``(d) Prohibition of Discrimination Against Employers and Employees 
Eligible To Participate.--The requirements of this subsection are met 
with respect to an association health plan if--
            ``(1) under the terms of the plan, all employers meeting 
        the preceding requirements of this section are eligible to 
        qualify as participating employers for all geographically 
        available coverage options, unless, in the case of any such 
        employer, participation or contribution requirements of the 
        type referred to in section 2711 of the Public Health Service 
        Act are not met;
            ``(2) upon request, any employer eligible to participate is 
        furnished information regarding all coverage options available 
        under the plan; and
            ``(3) the applicable requirements of sections 701, 702, and 
        703 are met with respect to the plan.

``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS, CONTRIBUTION 
              RATES, AND BENEFIT OPTIONS.

    ``(a) In General.--The requirements of this section are met with 
respect to an association health plan if the following requirements are 
met:
            ``(1) Contents of governing instruments.--The instruments 
        governing the plan include a written instrument, meeting the 
        requirements of an instrument required under section 402(a)(1), 
        which--
                    ``(A) provides that the board of trustees serves as 
                the named fiduciary required for plans under section 
                402(a)(1) and serves in the capacity of a plan 
                administrator (referred to in section 3(16)(A));
                    ``(B) provides that the sponsor of the plan is to 
                serve as plan sponsor (referred to in section 
                3(16)(B)); and
                    ``(C) incorporates the requirements of section 806.
            ``(2) Contribution rates must be nondiscriminatory.--
                    ``(A) The contribution rates for any participating 
                small employer do not vary on the basis of the claims 
                experience of such employer and do not vary on the 
                basis of the type of business or industry in which such 
                employer is engaged.
                    ``(B) Nothing in this title or any other provision 
                of law shall be construed to preclude an association 
                health plan, or a health insurance issuer offering 
                health insurance coverage in connection with an 
                association health plan, from--
                            ``(i) setting contribution rates based on 
                        the claims experience of the plan; or
                            ``(ii) varying contribution rates for small 
                        employers in a State to the extent that such 
                        rates could vary using the same methodology 
                        employed in such State for regulating premium 
                        rates in the small group market with respect to 
                        health insurance coverage offered in connection 
                        with bona fide associations (within the meaning 
                        of section 2791(d)(3) of the Public Health 
                        Service Act),
                subject to the requirements of section 702(b) relating 
                to contribution rates.
            ``(3) Floor for number of covered individuals with respect 
        to certain plans.--If any benefit option under the plan does 
        not consist of health insurance coverage, the plan has as of 
        the beginning of the plan year not fewer than 1,000 
        participants and beneficiaries.
            ``(4) Marketing requirements.--
                    ``(A) In general.--If a benefit option which 
                consists of health insurance coverage is offered under 
                the plan, State-licensed insurance agents shall be used 
                to distribute to small employers coverage which does 
                not consist of health insurance coverage in a manner 
                comparable to the manner in which such agents are used 
                to distribute health insurance coverage.
                    ``(B) State-licensed insurance agents.--For 
                purposes of subparagraph (A), the term `State-licensed 
                insurance agents' means one or more agents who are 
                licensed in a State and are subject to the laws of such 
                State relating to licensure, qualification, testing, 
                examination, and continuing education of persons 
                authorized to offer, sell, or solicit health insurance 
                coverage in such State.
            ``(5) Regulatory requirements.--Such other requirements as 
        the applicable authority determines are necessary to carry out 
        the purposes of this part, which shall be prescribed by the 
        applicable authority by regulation through negotiated 
        rulemaking.
    ``(b) Ability of Association Health Plans To Design Benefit 
Options.--Subject to section 514(d), nothing in this part or any 
provision of State law (as defined in section 514(c)(1)) shall be 
construed to preclude an association health plan, or a health insurance 
issuer offering health insurance coverage in connection with an 
association health plan, from exercising its sole discretion in 
selecting the specific items and services consisting of medical care to 
be included as benefits under such plan or coverage, except (subject to 
section 514) in the case of any law to the extent that it (1) prohibits 
an exclusion of a specific disease from such coverage, or (2) is not 
preempted under section 731(a)(1) with respect to matters governed by 
section 711 or 712.

``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR SOLVENCY FOR 
              PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO HEALTH 
              INSURANCE COVERAGE.

    ``(a) In General.--The requirements of this section are met with 
respect to an association health plan if--
            ``(1) the benefits under the plan consist solely of health 
        insurance coverage; or
            ``(2) if the plan provides any additional benefit options 
        which do not consist of health insurance coverage, the plan--
                    ``(A) establishes and maintains reserves with 
                respect to such additional benefit options, in amounts 
                recommended by the qualified actuary, consisting of--
                            ``(i) a reserve sufficient for unearned 
                        contributions;
                            ``(ii) a reserve sufficient for benefit 
                        liabilities which have been incurred, which 
                        have not been satisfied, and for which risk of 
                        loss has not yet been transferred, and for 
                        expected administrative costs with respect to 
                        such benefit liabilities;
                            ``(iii) a reserve sufficient for any other 
                        obligations of the plan; and
                            ``(iv) a reserve sufficient for a margin of 
                        error and other fluctuations, taking into 
                        account the specific circumstances of the plan; 
                        and
                    ``(B) establishes and maintains aggregate and 
                specific excess/stop loss insurance and solvency 
                indemnification, with respect to such additional 
                benefit options for which risk of loss has not yet been 
                transferred, as follows:
                            ``(i) The plan shall secure aggregate 
                        excess/stop loss insurance for the plan with an 
                        attachment point which is not greater than 125 
                        percent of expected gross annual claims. The 
                        applicable authority may by regulation, through 
                        negotiated rulemaking, provide for upward 
                        adjustments in the amount of such percentage in 
                        specified circumstances in which the plan 
                        specifically provides for and maintains 
                        reserves in excess of the amounts required 
                        under subparagraph (A).
                            ``(ii) The plan shall secure specific 
                        excess/stop loss insurance for the plan with an 
                        attachment point which is at least equal to an 
                        amount recommended by the plan's qualified 
                        actuary. The applicable authority may by 
                        regulation, through negotiated rulemaking, 
                        provide for adjustments in the amount of such 
                        insurance in specified circumstances in which 
                        the plan specifically provides for and 
                        maintains reserves in excess of the amounts 
                        required under subparagraph (A).
                            ``(iii) The plan shall secure 
                        indemnification insurance for any claims which 
                        the plan is unable to satisfy by reason of a 
                        plan termination.
Any regulations prescribed by the applicable authority pursuant to 
clause (i) or (ii) of subparagraph (B) may allow for such adjustments 
in the required levels of excess/stop loss insurance as the qualified 
actuary may recommend, taking into account the specific circumstances 
of the plan.
    ``(b) Minimum Surplus in Addition to Claims Reserves.--In the case 
of any association health plan described in subsection (a)(2), the 
requirements of this subsection are met if the plan establishes and 
maintains surplus in an amount at least equal to--
            ``(1) $500,000, or
            ``(2) such greater amount (but not greater than $2,000,000) 
        as may be set forth in regulations prescribed by the applicable 
        authority through negotiated rulemaking, based on the level of 
        aggregate and specific excess/stop loss insurance provided with 
        respect to such plan.
    ``(c) Additional Requirements.--In the case of any association 
health plan described in subsection (a)(2), the applicable authority 
may provide such additional requirements relating to reserves and 
excess/stop loss insurance as the applicable authority considers 
appropriate. Such requirements may be provided by regulation, through 
negotiated rulemaking, with respect to any such plan or any class of 
such plans.
    ``(d) Adjustments for Excess/Stop Loss Insurance.--The applicable 
authority may provide for adjustments to the levels of reserves 
otherwise required under subsections (a) and (b) with respect to any 
plan or class of plans to take into account excess/stop loss insurance 
provided with respect to such plan or plans.
    ``(e) Alternative Means of Compliance.--The applicable authority 
may permit an association health plan described in subsection (a)(2) to 
substitute, for all or part of the requirements of this section (except 
subsection (a)(2)(B)(iii)), such security, guarantee, hold-harmless 
arrangement, or other financial arrangement as the applicable authority 
determines to be adequate to enable the plan to fully meet all its 
financial obligations on a timely basis and is otherwise no less 
protective of the interests of participants and beneficiaries than the 
requirements for which it is substituted. The applicable authority may 
take into account, for purposes of this subsection, evidence provided 
by the plan or sponsor which demonstrates an assumption of liability 
with respect to the plan. Such evidence may be in the form of a 
contract of indemnification, lien, bonding, insurance, letter of 
credit, recourse under applicable terms of the plan in the form of 
assessments of participating employers, security, or other financial 
arrangement.
    ``(f) Measures To Ensure Continued Payment of Benefits by Certain 
Plans in Distress.--
            ``(1) Payments by certain plans to association health plan 
        fund.--
                    ``(A) In general.--In the case of an association 
                health plan described in subsection (a)(2), the 
                requirements of this subsection are met if the plan 
                makes payments into the Association Health Plan Fund 
                under this subparagraph when they are due. Such 
                payments shall consist of annual payments in the amount 
                of $5,000, and, in addition to such annual payments, 
                such supplemental payments as the Secretary may 
                determine to be necessary under paragraph (2). Payments 
                under this paragraph are payable to the Fund at the 
                time determined by the Secretary. Initial payments are 
                due in advance of certification under this part. 
                Payments shall continue to accrue until a plan's assets 
                are distributed pursuant to a termination procedure.
                    ``(B) Penalties for failure to make payments.--If 
                any payment is not made by a plan when it is due, a 
                late payment charge of not more than 100 percent of the 
                payment which was not timely paid shall be payable by 
                the plan to the Fund.
                    ``(C) Continued duty of the secretary.--The 
                Secretary shall not cease to carry out the provisions 
                of paragraph (2) on account of the failure of a plan to 
                pay any payment when due.
            ``(2) Payments by secretary to continue excess/stop loss 
        insurance coverage and indemnification insurance coverage for 
        certain plans.--In any case in which the applicable authority 
        determines that there is, or that there is reason to believe 
        that there will be: (A) a failure to take necessary corrective 
        actions under section 809(a) with respect to an association 
        health plan described in subsection (a)(2); or (B) a 
        termination of such a plan under section 809(b) or 810(b)(8) 
        (and, if the applicable authority is not the Secretary, 
        certifies such determination to the Secretary), the Secretary 
        shall determine the amounts necessary to make payments to an 
        insurer (designated by the Secretary) to maintain in force 
        excess/stop loss insurance coverage or indemnification 
        insurance coverage for such plan, if the Secretary determines 
        that there is a reasonable expectation that, without such 
        payments, claims would not be satisfied by reason of 
        termination of such coverage. The Secretary shall, to the 
        extent provided in advance in appropriation Acts, pay such 
        amounts so determined to the insurer designated by the 
        Secretary.
            ``(3) Association health plan fund.--
                    ``(A) In general.--There is established on the 
                books of the Treasury a fund to be known as the 
                `Association Health Plan Fund'. The Fund shall be 
                available for making payments pursuant to paragraph 
                (2). The Fund shall be credited with payments received 
                pursuant to paragraph (1)(A), penalties received 
                pursuant to paragraph (1)(B); and earnings on 
                investments of amounts of the Fund under subparagraph 
                (B).
                    ``(B) Investment.--Whenever the Secretary 
                determines that the moneys of the fund are in excess of 
                current needs, the Secretary may request the investment 
                of such amounts as the Secretary determines advisable 
                by the Secretary of the Treasury in obligations issued 
                or guaranteed by the United States.
    ``(g) Excess/Stop Loss Insurance.--For purposes of this section--
            ``(1) Aggregate excess/stop loss insurance.--The term 
        `aggregate excess/stop loss insurance' means, in connection 
        with an association health plan, a contract--
                    ``(A) under which an insurer (meeting such minimum 
                standards as the applicable authority may prescribe by 
                regulation through negotiated rulemaking) provides for 
                payment to the plan with respect to aggregate claims 
                under the plan in excess of an amount or amounts 
                specified in such contract;
                    ``(B) which is guaranteed renewable; and
                    ``(C) which allows for payment of premiums by any 
                third party on behalf of the insured plan.
            ``(2) Specific excess/stop loss insurance.--The term 
        `specific excess/stop loss insurance' means, in connection with 
        an association health plan, a contract--
                    ``(A) under which an insurer (meeting such minimum 
                standards as the applicable authority may prescribe by 
                regulation through negotiated rulemaking) provides for 
                payment to the plan with respect to claims under the 
                plan in connection with a covered individual in excess 
                of an amount or amounts specified in such contract in 
                connection with such covered individual;
                    ``(B) which is guaranteed renewable; and
                    ``(C) which allows for payment of premiums by any 
                third party on behalf of the insured plan.
    ``(h) Indemnification Insurance.--For purposes of this section, the 
term `indemnification insurance' means, in connection with an 
association health plan, a contract--
            ``(1) under which an insurer (meeting such minimum 
        standards as the applicable authority may prescribe through 
        negotiated rulemaking) provides for payment to the plan with 
        respect to claims under the plan which the plan is unable to 
        satisfy by reason of a termination pursuant to section 809(b) 
        (relating to mandatory termination);
            ``(2) which is guaranteed renewable and noncancellable for 
        any reason (except as the applicable authority may prescribe by 
        regulation through negotiated rulemaking); and
            ``(3) which allows for payment of premiums by any third 
        party on behalf of the insured plan.
    ``(i) Reserves.--For purposes of this section, the term `reserves' 
means, in connection with an association health plan, plan assets which 
meet the fiduciary standards under part 4 and such additional 
requirements regarding liquidity as the applicable authority may 
prescribe through negotiated rulemaking.
    ``(j) Solvency Standards Working Group.--
            ``(1) In general.--Within 90 days after the date of the 
        enactment of the Bipartisan Patient Protection Act, the 
        applicable authority shall establish a Solvency Standards 
        Working Group. In prescribing the initial regulations under 
        this section, the applicable authority shall take into account 
        the recommendations of such Working Group.
            ``(2) Membership.--The Working Group shall consist of not 
        more than 15 members appointed by the applicable authority. The 
        applicable authority shall include among persons invited to 
        membership on the Working Group at least one of each of the 
        following:
                    ``(A) a representative of the National Association 
                of Insurance Commissioners;
                    ``(B) a representative of the American Academy of 
                Actuaries;
                    ``(C) a representative of the State governments, or 
                their interests;
                    ``(D) a representative of existing self-insured 
                arrangements, or their interests;
                    ``(E) a representative of associations of the type 
                referred to in section 801(b)(1), or their interests; 
                and
                    ``(F) a representative of multiemployer plans that 
                are group health plans, or their interests.

``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED REQUIREMENTS.

    ``(a) Filing Fee.--Under the procedure prescribed pursuant to 
section 802(a), an association health plan shall pay to the applicable 
authority at the time of filing an application for certification under 
this part a filing fee in the amount of $5,000, which shall be 
available in the case of the Secretary, to the extent provided in 
appropriation Acts, for the sole purpose of administering the 
certification procedures applicable with respect to association health 
plans.
    ``(b) Information To Be Included in Application for 
Certification.--An application for certification under this part meets 
the requirements of this section only if it includes, in a manner and 
form which shall be prescribed by the applicable authority through 
negotiated rulemaking, at least the following information:
            ``(1) Identifying information.--The names and addresses 
        of--
                    ``(A) the sponsor; and
                    ``(B) the members of the board of trustees of the 
                plan.
            ``(2) States in which plan intends to do business.--The 
        States in which participants and beneficiaries under the plan 
        are to be located and the number of them expected to be located 
        in each such State.
            ``(3) Bonding requirements.--Evidence provided by the board 
        of trustees that the bonding requirements of section 412 will 
        be met as of the date of the application or (if later) 
        commencement of operations.
            ``(4) Plan documents.--A copy of the documents governing 
        the plan (including any bylaws and trust agreements), the 
        summary plan description, and other material describing the 
        benefits that will be provided to participants and 
        beneficiaries under the plan.
            ``(5) Agreements with service providers.--A copy of any 
        agreements between the plan and contract administrators and 
        other service providers.
            ``(6) Funding report.--In the case of association health 
        plans providing benefits options in addition to health 
        insurance coverage, a report setting forth information with 
        respect to such additional benefit options determined as of a 
        date within the 120-day period ending with the date of the 
        application, including the following:
                    ``(A) Reserves.--A statement, certified by the 
                board of trustees of the plan, and a statement of 
                actuarial opinion, signed by a qualified actuary, that 
                all applicable requirements of section 806 are or will 
                be met in accordance with regulations which the 
                applicable authority shall prescribe through negotiated 
                rulemaking.
                    ``(B) Adequacy of contribution rates.--A statement 
                of actuarial opinion, signed by a qualified actuary, 
                which sets forth a description of the extent to which 
                contribution rates are adequate to provide for the 
                payment of all obligations and the maintenance of 
                required reserves under the plan for the 12-month 
                period beginning with such date within such 120-day 
                period, taking into account the expected coverage and 
                experience of the plan. If the contribution rates are 
                not fully adequate, the statement of actuarial opinion 
                shall indicate the extent to which the rates are 
                inadequate and the changes needed to ensure adequacy.
                    ``(C) Current and projected value of assets and 
                liabilities.--A statement of actuarial opinion signed 
                by a qualified actuary, which sets forth the current 
                value of the assets and liabilities accumulated under 
                the plan and a projection of the assets, liabilities, 
                income, and expenses of the plan for the 12-month 
                period referred to in subparagraph (B). The income 
                statement shall identify separately the plan's 
                administrative expenses and claims.
                    ``(D) Costs of coverage to be charged and other 
                expenses.--A statement of the costs of coverage to be 
                charged, including an itemization of amounts for 
                administration, reserves, and other expenses associated 
                with the operation of the plan.
                    ``(E) Other information.--Any other information as 
                may be determined by the applicable authority, by 
                regulation through negotiated rulemaking, as necessary 
                to carry out the purposes of this part.
    ``(c) Filing Notice of Certification With States.--A certification 
granted under this part to an association health plan shall not be 
effective unless written notice of such certification is filed with the 
applicable State authority of each State in which at least 25 percent 
of the participants and beneficiaries under the plan are located. For 
purposes of this subsection, an individual shall be considered to be 
located in the State in which a known address of such individual is 
located or in which such individual is employed.
    ``(d) Notice of Material Changes.--In the case of any association 
health plan certified under this part, descriptions of material changes 
in any information which was required to be submitted with the 
application for the certification under this part shall be filed in 
such form and manner as shall be prescribed by the applicable authority 
by regulation through negotiated rulemaking. The applicable authority 
may require by regulation, through negotiated rulemaking, prior notice 
of material changes with respect to specified matters which might serve 
as the basis for suspension or revocation of the certification.
    ``(e) Reporting Requirements for Certain Association Health 
Plans.--An association health plan certified under this part which 
provides benefit options in addition to health insurance coverage for 
such plan year shall meet the requirements of section 503B by filing an 
annual report under such section which shall include information 
described in subsection (b)(6) with respect to the plan year and, 
notwithstanding section 503C(a)(1)(A), shall be filed with the 
applicable authority not later than 90 days after the close of the plan 
year (or on such later date as may be prescribed by the applicable 
authority). The applicable authority may require by regulation through 
negotiated rulemaking such interim reports as it considers appropriate.
    ``(f) Engagement of Qualified Actuary.--The board of trustees of 
each association health plan which provides benefits options in 
addition to health insurance coverage and which is applying for 
certification under this part or is certified under this part shall 
engage, on behalf of all participants and beneficiaries, a qualified 
actuary who shall be responsible for the preparation of the materials 
comprising information necessary to be submitted by a qualified actuary 
under this part. The qualified actuary shall utilize such assumptions 
and techniques as are necessary to enable such actuary to form an 
opinion as to whether the contents of the matters reported under this 
part--
            ``(1) are in the aggregate reasonably related to the 
        experience of the plan and to reasonable expectations; and
            ``(2) represent such actuary's best estimate of anticipated 
        experience under the plan.
The opinion by the qualified actuary shall be made with respect to, and 
shall be made a part of, the annual report.

``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.

    ``Except as provided in section 809(b), an association health plan 
which is or has been certified under this part may terminate (upon or 
at any time after cessation of accruals in benefit liabilities) only if 
the board of trustees--
            ``(1) not less than 60 days before the proposed termination 
        date, provides to the participants and beneficiaries a written 
        notice of intent to terminate stating that such termination is 
        intended and the proposed termination date;
            ``(2) develops a plan for winding up the affairs of the 
        plan in connection with such termination in a manner which will 
        result in timely payment of all benefits for which the plan is 
        obligated; and
            ``(3) submits such plan in writing to the applicable 
        authority.
Actions required under this section shall be taken in such form and 
manner as may be prescribed by the applicable authority by regulation 
through negotiated rulemaking.

``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.

    ``(a) Actions To Avoid Depletion of Reserves.--An association 
health plan which is certified under this part and which provides 
benefits other than health insurance coverage shall continue to meet 
the requirements of section 806, irrespective of whether such 
certification continues in effect. The board of trustees of such plan 
shall determine quarterly whether the requirements of section 806 are 
met. In any case in which the board determines that there is reason to 
believe that there is or will be a failure to meet such requirements, 
or the applicable authority makes such a determination and so notifies 
the board, the board shall immediately notify the qualified actuary 
engaged by the plan, and such actuary shall, not later than the end of 
the next following month, make such recommendations to the board for 
corrective action as the actuary determines necessary to ensure 
compliance with section 806. Not later than 30 days after receiving 
from the actuary recommendations for corrective actions, the board 
shall notify the applicable authority (in such form and manner as the 
applicable authority may prescribe by regulation through negotiated 
rulemaking) of such recommendations of the actuary for corrective 
action, together with a description of the actions (if any) that the 
board has taken or plans to take in response to such recommendations. 
The board shall thereafter report to the applicable authority, in such 
form and frequency as the applicable authority may specify to the 
board, regarding corrective action taken by the board until the 
requirements of section 806 are met.
    ``(b) Mandatory Termination.--In any case in which--
            ``(1) the applicable authority has been notified under 
        subsection (a) of a failure of an association health plan which 
        is or has been certified under this part and is described in 
        section 806(a)(2) to meet the requirements of section 806 and 
        has not been notified by the board of trustees of the plan that 
        corrective action has restored compliance with such 
        requirements; and
            ``(2) the applicable authority determines that there is a 
        reasonable expectation that the plan will continue to fail to 
        meet the requirements of section 806,
the board of trustees of the plan shall, at the direction of the 
applicable authority, terminate the plan and, in the course of the 
termination, take such actions as the applicable authority may require, 
including satisfying any claims referred to in section 
806(a)(2)(B)(iii) and recovering for the plan any liability under 
subsection (a)(2)(B)(iii) or (e) of section 806, as necessary to ensure 
that the affairs of the plan will be, to the maximum extent possible, 
wound up in a manner which will result in timely provision of all 
benefits for which the plan is obligated.

``SEC. 810. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT ASSOCIATION 
              HEALTH PLANS PROVIDING HEALTH BENEFITS IN ADDITION TO 
              HEALTH INSURANCE COVERAGE.

    ``(a) Appointment of Secretary as Trustee for Insolvent Plans.--
Whenever the Secretary determines that an association health plan which 
is or has been certified under this part and which is described in 
section 806(a)(2) will be unable to provide benefits when due or is 
otherwise in a financially hazardous condition, as shall be defined by 
the Secretary by regulation through negotiated rulemaking, the 
Secretary shall, upon notice to the plan, apply to the appropriate 
United States district court for appointment of the Secretary as 
trustee to administer the plan for the duration of the insolvency. The 
plan may appear as a party and other interested persons may intervene 
in the proceedings at the discretion of the court. The court shall 
appoint such Secretary trustee if the court determines that the 
trusteeship is necessary to protect the interests of the participants 
and beneficiaries or providers of medical care or to avoid any 
unreasonable deterioration of the financial condition of the plan. The 
trusteeship of such Secretary shall continue until the conditions 
described in the first sentence of this subsection are remedied or the 
plan is terminated.
    ``(b) Powers as Trustee.--The Secretary, upon appointment as 
trustee under subsection (a), shall have the power--
            ``(1) to do any act authorized by the plan, this title, or 
        other applicable provisions of law to be done by the plan 
        administrator or any trustee of the plan;
            ``(2) to require the transfer of all (or any part) of the 
        assets and records of the plan to the Secretary as trustee;
            ``(3) to invest any assets of the plan which the Secretary 
        holds in accordance with the provisions of the plan, 
        regulations prescribed by the Secretary through negotiated 
        rulemaking, and applicable provisions of law;
            ``(4) to require the sponsor, the plan administrator, any 
        participating employer, and any employee organization 
        representing plan participants to furnish any information with 
        respect to the plan which the Secretary as trustee may 
        reasonably need in order to administer the plan;
            ``(5) to collect for the plan any amounts due the plan and 
        to recover reasonable expenses of the trusteeship;
            ``(6) to commence, prosecute, or defend on behalf of the 
        plan any suit or proceeding involving the plan;
            ``(7) to issue, publish, or file such notices, statements, 
        and reports as may be required by the Secretary by regulation 
        through negotiated rulemaking or required by any order of the 
        court;
            ``(8) to terminate the plan (or provide for its termination 
        in accordance with section 809(b)) and liquidate the plan 
        assets, to restore the plan to the responsibility of the 
        sponsor, or to continue the trusteeship;
            ``(9) to provide for the enrollment of plan participants 
        and beneficiaries under appropriate coverage options; and
            ``(10) to do such other acts as may be necessary to comply 
        with this title or any order of the court and to protect the 
        interests of plan participants and beneficiaries and providers 
        of medical care.
    ``(c) Notice of Appointment.--As soon as practicable after the 
Secretary's appointment as trustee, the Secretary shall give notice of 
such appointment to--
            ``(1) the sponsor and plan administrator;
            ``(2) each participant;
            ``(3) each participating employer; and
            ``(4) if applicable, each employee organization which, for 
        purposes of collective bargaining, represents plan 
        participants.
    ``(d) Additional Duties.--Except to the extent inconsistent with 
the provisions of this title, or as may be otherwise ordered by the 
court, the Secretary, upon appointment as trustee under this section, 
shall be subject to the same duties as those of a trustee under section 
704 of title 11, United States Code, and shall have the duties of a 
fiduciary for purposes of this title.
    ``(e) Other Proceedings.--An application by the Secretary under 
this subsection may be filed notwithstanding the pendency in the same 
or any other court of any bankruptcy, mortgage foreclosure, or equity 
receivership proceeding, or any proceeding to reorganize, conserve, or 
liquidate such plan or its property, or any proceeding to enforce a 
lien against property of the plan.
    ``(f) Jurisdiction of Court.--
            ``(1) In general.--Upon the filing of an application for 
        the appointment as trustee or the issuance of a decree under 
        this section, the court to which the application is made shall 
        have exclusive jurisdiction of the plan involved and its 
        property wherever located with the powers, to the extent 
        consistent with the purposes of this section, of a court of the 
        United States having jurisdiction over cases under chapter 11 
        of title 11, United States Code. Pending an adjudication under 
        this section such court shall stay, and upon appointment by it 
        of the Secretary as trustee, such court shall continue the stay 
        of, any pending mortgage foreclosure, equity receivership, or 
        other proceeding to reorganize, conserve, or liquidate the 
        plan, the sponsor, or property of such plan or sponsor, and any 
        other suit against any receiver, conservator, or trustee of the 
        plan, the sponsor, or property of the plan or sponsor. Pending 
        such adjudication and upon the appointment by it of the 
        Secretary as trustee, the court may stay any proceeding to 
        enforce a lien against property of the plan or the sponsor or 
        any other suit against the plan or the sponsor.
            ``(2) Venue.--An action under this section may be brought 
        in the judicial district where the sponsor or the plan 
        administrator resides or does business or where any asset of 
        the plan is situated. A district court in which such action is 
        brought may issue process with respect to such action in any 
        other judicial district.
    ``(g) Personnel.--In accordance with regulations which shall be 
prescribed by the Secretary through negotiated rulemaking, the 
Secretary shall appoint, retain, and compensate accountants, actuaries, 
and other professional service personnel as may be necessary in 
connection with the Secretary's service as trustee under this section.

``SEC. 811. STATE ASSESSMENT AUTHORITY.

    ``(a) In General.--Notwithstanding section 514, a State may impose 
by law a contribution tax on an association health plan described in 
section 806(a)(2), if the plan commenced operations in such State after 
the date of the enactment of the Bipartisan Patient Protection Act.
    ``(b) Contribution Tax.--For purposes of this section, the term 
`contribution tax' imposed by a State on an association health plan 
means any tax imposed by such State if--
            ``(1) such tax is computed by applying a rate to the amount 
        of premiums or contributions, with respect to individuals 
        covered under the plan who are residents of such State, which 
        are received by the plan from participating employers located 
        in such State or from such individuals;
            ``(2) the rate of such tax does not exceed the rate of any 
        tax imposed by such State on premiums or contributions received 
        by insurers or health maintenance organizations for health 
        insurance coverage offered in such State in connection with a 
        group health plan;
            ``(3) such tax is otherwise nondiscriminatory; and
            ``(4) the amount of any such tax assessed on the plan is 
        reduced by the amount of any tax or assessment otherwise 
        imposed by the State on premiums, contributions, or both 
        received by insurers or health maintenance organizations for 
        health insurance coverage, aggregate excess/stop loss insurance 
        (as defined in section 806(g)(1)), specific excess/stop loss 
        insurance (as defined in section 806(g)(2)), other insurance 
        related to the provision of medical care under the plan, or any 
        combination thereof provided by such insurers or health 
        maintenance organizations in such State in connection with such 
        plan.

``SEC. 812. DEFINITIONS AND RULES OF CONSTRUCTION.

    ``(a) Definitions.--For purposes of this part--
            ``(1) Group health plan.--The term `group health plan' has 
        the meaning provided in section 733(a)(1) (after applying 
        subsection (b) of this section).
            ``(2) Medical care.--The term `medical care' has the 
        meaning provided in section 733(a)(2).
            ``(3) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning provided in section 
        733(b)(1).
            ``(4) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning provided in section 733(b)(2).
            ``(5) Applicable authority.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `applicable authority' 
                means, in connection with an association health plan--
                            ``(i) the State recognized pursuant to 
                        subsection (c) of section 506 as the State to 
                        which authority has been delegated in 
                        connection with such plan; or
                            ``(ii) if there if no State referred to in 
                        clause (i), the Secretary.
                    ``(B) Exceptions.--
                            ``(i) Joint authorities.--Where such term 
                        appears in section 808(3), section 807(e) (in 
                        the first instance), section 809(a) (in the 
                        second instance), section 809(a) (in the fourth 
                        instance), and section 809(b)(1), such term 
                        means, in connection with an association health 
                        plan, the Secretary and the State referred to 
                        in subparagraph (A)(i) (if any) in connection 
                        with such plan.
                            ``(ii) Regulatory authorities.--Where such 
                        term appears in section 802(a) (in the first 
                        instance), section 802(d), section 802(e), 
                        section 803(d), section 805(a)(5), section 
                        806(a)(2), section 806(b), section 806(c), 
                        section 806(d), paragraphs (1)(A) and (2)(A) of 
                        section 806(g), section 806(h), section 806(i), 
                        section 806(j), section 807(a) (in the second 
                        instance), section 807(b), section 807(d), 
                        section 807(e) (in the second instance), 
                        section 808 (in the matter after paragraph 
                        (3)), and section 809(a) (in the third 
                        instance), such term means, in connection with 
                        an association health plan, the Secretary.
            ``(6) Health status-related factor.--The term `health 
        status-related factor' has the meaning provided in section 
        733(d)(2).
            ``(7) Individual market.--
                    ``(A) In general.--The term `individual market' 
                means the market for health insurance coverage offered 
                to individuals other than in connection with a group 
                health plan.
                    ``(B) Treatment of very small groups.--
                            ``(i) In general.--Subject to clause (ii), 
                        such term includes coverage offered in 
                        connection with a group health plan that has 
                        fewer than 2 participants as current employees 
                        or participants described in section 732(d)(3) 
                        on the first day of the plan year.
                            ``(ii) State exception.--Clause (i) shall 
                        not apply in the case of health insurance 
                        coverage offered in a State if such State 
                        regulates the coverage described in such clause 
                        in the same manner and to the same extent as 
                        coverage in the small group market (as defined 
                        in section 2791(e)(5) of the Public Health 
                        Service Act) is regulated by such State.
            ``(8) Participating employer.--The term `participating 
        employer' means, in connection with an association health plan, 
        any employer, if any individual who is an employee of such 
        employer, a partner in such employer, or a self-employed 
        individual who is such employer (or any dependent, as defined 
        under the terms of the plan, of such individual) is or was 
        covered under such plan in connection with the status of such 
        individual as such an employee, partner, or self-employed 
        individual in relation to the plan.
            ``(9) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of title XXVII of the Public Health Service Act 
        for the State involved with respect to such issuer.
            ``(10) Qualified actuary.--The term `qualified actuary' 
        means an individual who is a member of the American Academy of 
        Actuaries or meets such reasonable standards and qualifications 
        as the Secretary may provide by regulation through negotiated 
        rulemaking.
            ``(11) Affiliated member.--The term `affiliated member' 
        means, in connection with a sponsor--
                    ``(A) a person who is otherwise eligible to be a 
                member of the sponsor but who elects an affiliated 
                status with the sponsor,
                    ``(B) in the case of a sponsor with members which 
                consist of associations, a person who is a member of 
                any such association and elects an affiliated status 
                with the sponsor, or
                    ``(C) in the case of an association health plan in 
                existence on the date of the enactment of the 
                Bipartisan Patient Protection Act, a person eligible to 
                be a member of the sponsor or one of its member 
                associations.
            ``(12) Large employer.--The term `large employer' means, in 
        connection with a group health plan with respect to a plan 
        year, an employer who employed an average of at least 51 
        employees on business days during the preceding calendar year 
        and who employs at least 2 employees on the first day of the 
        plan year.
            ``(13) Small employer.--The term `small employer' means, in 
        connection with a group health plan with respect to a plan 
        year, an employer who is not a large employer.
    ``(b) Rules of Construction.--
            ``(1) Employers and employees.--For purposes of determining 
        whether a plan, fund, or program is an employee welfare benefit 
        plan which is an association health plan, and for purposes of 
        applying this title in connection with such plan, fund, or 
        program so determined to be such an employee welfare benefit 
        plan--
                    ``(A) in the case of a partnership, the term 
                `employer' (as defined in section 3(5)) includes the 
                partnership in relation to the partners, and the term 
                `employee' (as defined in section 3(6)) includes any 
                partner in relation to the partnership; and
                    ``(B) in the case of a self-employed individual, 
                the term `employer' (as defined in section 3(5)) and 
                the term `employee' (as defined in section 3(6)) shall 
                include such individual.
            ``(2) Plans, funds, and programs treated as employee 
        welfare benefit plans.--In the case of any plan, fund, or 
        program which was established or is maintained for the purpose 
        of providing medical care (through the purchase of insurance or 
        otherwise) for employees (or their dependents) covered 
        thereunder and which demonstrates to the Secretary that all 
        requirements for certification under this part would be met 
        with respect to such plan, fund, or program if such plan, fund, 
        or program were a group health plan, such plan, fund, or 
        program shall be treated for purposes of this title as an 
        employee welfare benefit plan on and after the date of such 
        demonstration.''.
    (b) Conforming Amendments to Preemption Rules.--
            (1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is 
        amended by adding at the end the following new subparagraph:
    ``(E) The preceding subparagraphs of this paragraph do not apply 
with respect to any State law in the case of an association health plan 
which is certified under part 8.''.
            (2) Section 514 of such Act (29 U.S.C. 1144) is amended--
                    (A) in subsection (b)(4), by striking ``Subsection 
                (a)'' and inserting ``Subsections (a) and (e)'';
                    (B) in subsection (b)(5), by striking ``subsection 
                (a)'' in subparagraph (A) and inserting ``subsection 
                (a) of this section and subsections (a)(2)(B) and (b) 
                of section 805'', and by striking ``subsection (a)'' in 
                subparagraph (B) and inserting ``subsection (a) of this 
                section or subsection (a)(2)(B) or (b) of section 
                805'';
                    (C) by redesignating subsection (d) as subsection 
                (e); and
                    (D) by inserting after subsection (c) the following 
                new subsection:
    ``(d)(1) Except as provided in subsection (b)(4), the provisions of 
this title shall supersede any and all State laws insofar as they may 
now or hereafter preclude, or have the effect of precluding, a health 
insurance issuer from offering health insurance coverage in connection 
with an association health plan which is certified under part 8.
    ``(2) Except as provided in paragraphs (4) and (5) of subsection 
(b) of this section--
            ``(A) In any case in which health insurance coverage of any 
        policy type is offered under an association health plan 
        certified under part 8 to a participating employer operating in 
        such State, the provisions of this title shall supersede any 
        and all laws of such State insofar as they may preclude a 
        health insurance issuer from offering health insurance coverage 
        of the same policy type to other employers operating in the 
        State which are eligible for coverage under such association 
        health plan, whether or not such other employers are 
        participating employers in such plan.
            ``(B) In any case in which health insurance coverage of any 
        policy type is offered under an association health plan in a 
        State and the filing, with the applicable State authority, of 
        the policy form in connection with such policy type is approved 
        by such State authority, the provisions of this title shall 
        supersede any and all laws of any other State in which health 
        insurance coverage of such type is offered, insofar as they may 
        preclude, upon the filing in the same form and manner of such 
        policy form with the applicable State authority in such other 
        State, the approval of the filing in such other State.
    ``(3) For additional provisions relating to association health 
plans, see subsections (a)(2)(B) and (b) of section 805.
    ``(4) For purposes of this subsection, the term `association health 
plan' has the meaning provided in section 801(a), and the terms `health 
insurance coverage', `participating employer', and `health insurance 
issuer' have the meanings provided such terms in section 811, 
respectively.''.
            (3) Section 514(b)(6)(A) of such Act (29 U.S.C. 
        1144(b)(6)(A)) is amended--
                    (A) in clause (i)(II), by striking ``and'' at the 
                end;
                    (B) in clause (ii), by inserting ``and which does 
                not provide medical care (within the meaning of section 
                733(a)(2)),'' after ``arrangement,'', and by striking 
                ``title.'' and inserting ``title, and''; and
                    (C) by adding at the end the following new clause:
            ``(iii) subject to subparagraph (E), in the case of any 
        other employee welfare benefit plan which is a multiple 
        employer welfare arrangement and which provides medical care 
        (within the meaning of section 733(a)(2)), any law of any State 
        which regulates insurance may apply.''.
            (4) Section 514(e) of such Act (as redesignated by 
        paragraph (2)(C)) is amended--
                    (A) by striking ``Nothing'' and inserting ``(1) 
                Except as provided in paragraph (2), nothing''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2) Nothing in any other provision of law enacted on or after the 
date of the enactment of the Bipartisan Patient Protection Act shall be 
construed to alter, amend, modify, invalidate, impair, or supersede any 
provision of this title, except by specific cross-reference to the 
affected section.''.
    (c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C. 
102(16)(B)) is amended by adding at the end the following new sentence: 
``Such term also includes a person serving as the sponsor of an 
association health plan under part 8.''.
    (d) Disclosure of Solvency Protections Related to Self-Insured and 
Fully Insured Options Under Association Health Plans.--Section 102(b) 
of such Act (29 U.S.C. 102(b)) is amended by adding at the end the 
following: ``An association health plan shall include in its summary 
plan description, in connection with each benefit option, a description 
of the form of solvency or guarantee fund protection secured pursuant 
to this Act or applicable State law, if any.''.
    (e) Savings Clause.--Section 731(c) of such Act is amended by 
inserting ``or part 8'' after ``this part''.
    (f) Report to the Congress Regarding Certification of Self-Insured 
Association Health Plans.--Not later than January 1, 2006, the 
Secretary of Labor shall report to the Committee on Education and the 
Workforce of the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate the effect association 
health plans have had, if any, on reducing the number of uninsured 
individuals.
    (g) Clerical Amendment.--The table of contents in section 1 of the 
Employee Retirement Income Security Act of 1974 is amended by inserting 
after the item relating to section 734 the following new items:

           ``Part 8--Rules Governing Association Health Plans

``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution 
                            rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for 
                            plans providing health benefits in addition 
                            to health insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Trusteeship by the Secretary of insolvent association 
                            health plans providing health benefits in 
                            addition to health insurance coverage.
``Sec. 811. State assessment authority.
``Sec. 812. Definitions and rules of construction.''.

SEC. 422. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER ARRANGEMENTS.

    Section 3(40)(B) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1002(40)(B)) is amended--
            (1) in clause (i), by inserting ``for any plan year of any 
        such plan, or any fiscal year of any such other arrangement;'' 
        after ``single employer'', and by inserting ``during such year 
        or at any time during the preceding 1-year period'' after 
        ``control group'';
            (2) in clause (iii)--
                    (A) by striking ``common control shall not be based 
                on an interest of less than 25 percent'' and inserting 
                ``an interest of greater than 25 percent may not be 
                required as the minimum interest necessary for common 
                control''; and
                    (B) by striking ``similar to'' and inserting 
                ``consistent and coextensive with'';
            (3) by redesignating clauses (iv) and (v) as clauses (v) 
        and (vi), respectively; and
            (4) by inserting after clause (iii) the following new 
        clause:
            ``(iv) in determining, after the application of clause (i), 
        whether benefits are provided to employees of two or more 
        employers, the arrangement shall be treated as having only one 
        participating employer if, after the application of clause (i), 
        the number of individuals who are employees and former 
        employees of any one participating employer and who are covered 
        under the arrangement is greater than 75 percent of the 
        aggregate number of all individuals who are employees or former 
        employees of participating employers and who are covered under 
        the arrangement;''.

SEC. 423. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY BARGAINED 
              ARRANGEMENTS.

    (a) In General.--Section 3(40)(A)(i) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1002(40)(A)(i)) is amended to 
read as follows:
            ``(i)(I) under or pursuant to one or more collective 
        bargaining agreements which are reached pursuant to collective 
        bargaining described in section 8(d) of the National Labor 
        Relations Act (29 U.S.C. 158(d)) or paragraph Fourth of section 
        2 of the Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or 
        which are reached pursuant to labor-management negotiations 
        under similar provisions of State public employee relations 
        laws, and (II) in accordance with subparagraphs (C), (D), and 
        (E);''.
    (b) Limitations.--Section 3(40) of such Act (29 U.S.C. 1002(40)) is 
amended by adding at the end the following new subparagraphs:
    ``(C) For purposes of subparagraph (A)(i)(II), a plan or other 
arrangement shall be treated as established or maintained in accordance 
with this subparagraph only if the following requirements are met:
            ``(i) The plan or other arrangement, and the employee 
        organization or any other entity sponsoring the plan or other 
        arrangement, do not--
                    ``(I) utilize the services of any licensed 
                insurance agent or broker for soliciting or enrolling 
                employers or individuals as participating employers or 
                covered individuals under the plan or other 
                arrangement; or
                    ``(II) pay any type of compensation to a person, 
                other than a full time employee of the employee 
                organization (or a member of the organization to the 
                extent provided in regulations prescribed by the 
                Secretary through negotiated rulemaking), that is 
                related either to the volume or number of employers or 
                individuals solicited or enrolled as participating 
                employers or covered individuals under the plan or 
                other arrangement, or to the dollar amount or size of 
                the contributions made by participating employers or 
                covered individuals to the plan or other arrangement;
        except to the extent that the services used by the plan, 
        arrangement, organization, or other entity consist solely of 
        preparation of documents necessary for compliance with the 
        reporting and disclosure requirements of part 1 or 
        administrative, investment, or consulting services unrelated to 
        solicitation or enrollment of covered individuals.
            ``(ii) As of the end of the preceding plan year, the number 
        of covered individuals under the plan or other arrangement who 
        are neither--
                    ``(I) employed within a bargaining unit covered by 
                any of the collective bargaining agreements with a 
                participating employer (nor covered on the basis of an 
                individual's employment in such a bargaining unit); nor
                    ``(II) present employees (or former employees who 
                were covered while employed) of the sponsoring employee 
                organization, of an employer who is or was a party to 
                any of the collective bargaining agreements, or of the 
                plan or other arrangement or a related plan or 
                arrangement (nor covered on the basis of such present 
                or former employment),
        does not exceed 15 percent of the total number of individuals 
        who are covered under the plan or arrangement and who are 
        present or former employees who are or were covered under the 
        plan or arrangement pursuant to a collective bargaining 
        agreement with a participating employer. The requirements of 
        the preceding provisions of this clause shall be treated as 
        satisfied if, as of the end of the preceding plan year, such 
        covered individuals are comprised solely of individuals who 
        were covered individuals under the plan or other arrangement as 
        of the date of the enactment of the Bipartisan Patient 
        Protection Act and, as of the end of the preceding plan year, 
        the number of such covered individuals does not exceed 25 
        percent of the total number of present and former employees 
        enrolled under the plan or other arrangement.
            ``(iii) The employee organization or other entity 
        sponsoring the plan or other arrangement certifies to the 
        Secretary each year, in a form and manner which shall be 
        prescribed by the Secretary through negotiated rulemaking that 
        the plan or other arrangement meets the requirements of clauses 
        (i) and (ii).
    ``(D) For purposes of subparagraph (A)(i)(II), a plan or 
arrangement shall be treated as established or maintained in accordance 
with this subparagraph only if--
            ``(i) all of the benefits provided under the plan or 
        arrangement consist of health insurance coverage; or
            ``(ii)(I) the plan or arrangement is a multiemployer plan; 
        and
            ``(II) the requirements of clause (B) of the proviso to 
        clause (5) of section 302(c) of the Labor Management Relations 
        Act, 1947 (29 U.S.C. 186(c)) are met with respect to such plan 
        or other arrangement.
    ``(E) For purposes of subparagraph (A)(i)(II), a plan or 
arrangement shall be treated as established or maintained in accordance 
with this subparagraph only if--
            ``(i) the plan or arrangement is in effect as of the date 
        of the enactment of the Bipartisan Patient Protection Act; or
            ``(ii) the employee organization or other entity sponsoring 
        the plan or arrangement--
                    ``(I) has been in existence for at least 3 years; 
                or
                    ``(II) demonstrates to the satisfaction of the 
                Secretary that the requirements of subparagraphs (C) 
                and (D) are met with respect to the plan or other 
                arrangement.''.
    (c) Conforming Amendments to Definitions of Participant and 
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is amended 
by adding at the end the following new sentence: ``Such term includes 
an individual who is a covered individual described in paragraph 
(40)(C)(ii).''.

SEC. 424. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION HEALTH PLANS.

    (a) Criminal Penalties for Certain Willful Misrepresentations.--
Section 501 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1131) is amended--
            (1) by inserting ``(a)'' after ``Sec. 501.''; and
            (2) by adding at the end the following new subsection:
    ``(b) Any person who willfully falsely represents, to any employee, 
any employee's beneficiary, any employer, the Secretary, or any State, 
a plan or other arrangement established or maintained for the purpose 
of offering or providing any benefit described in section 3(1) to 
employees or their beneficiaries as--
            ``(1) being an association health plan which has been 
        certified under part 8;
            ``(2) having been established or maintained under or 
        pursuant to one or more collective bargaining agreements which 
        are reached pursuant to collective bargaining described in 
        section 8(d) of the National Labor Relations Act (29 U.S.C. 
        158(d)) or paragraph Fourth of section 2 of the Railway Labor 
        Act (45 U.S.C. 152, paragraph Fourth) or which are reached 
        pursuant to labor-management negotiations under similar 
        provisions of State public employee relations laws; or
            ``(3) being a plan or arrangement with respect to which the 
        requirements of subparagraph (C), (D), or (E) of section 3(40) 
        are met,
shall, upon conviction, be imprisoned not more than 5 years, be fined 
under title 18, United States Code, or both.''.
    (b) Cease Activities Orders.--Section 502 of such Act (29 U.S.C. 
1132), as amended by sections 141 and 143, is further amended by adding 
at the end the following new subsection:
    ``(p) Association Health Plan Cease and Desist Orders.--
            ``(1) In general.--Subject to paragraph (2), upon 
        application by the Secretary showing the operation, promotion, 
        or marketing of an association health plan (or similar 
        arrangement providing benefits consisting of medical care (as 
        defined in section 733(a)(2))) that--
                    ``(A) is not certified under part 8, is subject 
                under section 514(b)(6) to the insurance laws of any 
                State in which the plan or arrangement offers or 
                provides benefits, and is not licensed, registered, or 
                otherwise approved under the insurance laws of such 
                State; or
                    ``(B) is an association health plan certified under 
                part 8 and is not operating in accordance with the 
                requirements under part 8 for such certification,
        a district court of the United States shall enter an order 
        requiring that the plan or arrangement cease activities.
            ``(2) Exception.--Paragraph (1) shall not apply in the case 
        of an association health plan or other arrangement if the plan 
        or arrangement shows that--
                    ``(A) all benefits under it referred to in 
                paragraph (1) consist of health insurance coverage; and
                    ``(B) with respect to each State in which the plan 
                or arrangement offers or provides benefits, the plan or 
                arrangement is operating in accordance with applicable 
                State laws that are not superseded under section 514.
            ``(3) Additional equitable relief.--The court may grant 
        such additional equitable relief, including any relief 
        available under this title, as it deems necessary to protect 
        the interests of the public and of persons having claims for 
        benefits against the plan.''.
    (c) Responsibility for Claims Procedure.--Section 503 of such Act 
(29 U.S.C. 1133), as amended by section 301(b), is amended by adding at 
the end the following new subsection:
    ``(c) Association Health Plans.--The terms of each association 
health plan which is or has been certified under part 8 shall require 
the board of trustees or the named fiduciary (as applicable) to ensure 
that the requirements of this section are met in connection with claims 
filed under the plan.''.

SEC. 425. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136) is amended by adding at the end the following new 
subsection:
    ``(c) Consultation With States With Respect to Association Health 
Plans.--
            ``(1) Agreements with states.--The Secretary shall consult 
        with the State recognized under paragraph (2) with respect to 
        an association health plan regarding the exercise of--
                    ``(A) the Secretary's authority under sections 502 
                and 504 to enforce the requirements for certification 
                under part 8; and
                    ``(B) the Secretary's authority to certify 
                association health plans under part 8 in accordance 
                with regulations of the Secretary applicable to 
                certification under part 8.
            ``(2) Recognition of primary domicile state.--In carrying 
        out paragraph (1), the Secretary shall ensure that only one 
        State will be recognized, with respect to any particular 
        association health plan, as the State to with which 
        consultation is required. In carrying out this paragraph, the 
        Secretary shall take into account the places of residence of 
        the participants and beneficiaries under the plan and the State 
        in which the trust is maintained.''.

SEC. 426. EFFECTIVE DATE AND TRANSITIONAL AND OTHER RULES.

    (a) Effective Date.--The amendments made by sections 421, 424, and 
425 shall take effect one year from the date of the enactment. The 
amendments made by sections 422 and 423 shall take effect on the date 
of the enactment of this Act. The Secretary of Labor shall first issue 
all regulations necessary to carry out the amendments made by this 
subtitle within one year from the date of the enactment. Such 
regulations shall be issued through negotiated rulemaking.
    (b) Exception.--Section 801(a)(2) of the Employee Retirement Income 
Security Act of 1974 (added by section 421) does not apply in 
connection with an association health plan (certified under part 8 of 
subtitle B of title I of such Act) existing on the date of the 
enactment of this Act, if no benefits provided thereunder as of the 
date of the enactment of this Act consist of health insurance coverage 
(as defined in section 733(b)(1) of such Act).
    (c) Treatment of Certain Existing Health Benefits Programs.--
            (1) In general.--In any case in which, as of the date of 
        the enactment of this Act, an arrangement is maintained in a 
        State for the purpose of providing benefits consisting of 
        medical care for the employees and beneficiaries of its 
        participating employers, at least 200 participating employers 
        make contributions to such arrangement, such arrangement has 
        been in existence for at least 10 years, and such arrangement 
        is licensed under the laws of one or more States to provide 
        such benefits to its participating employers, upon the filing 
        with the applicable authority (as defined in section 812(a)(5) 
        of the Employee Retirement Income Security Act of 1974 (as 
        amended by this subtitle)) by the arrangement of an application 
        for certification of the arrangement under part 8 of subtitle B 
        of title I of such Act--
                    (A) such arrangement shall be deemed to be a group 
                health plan for purposes of title I of such Act;
                    (B) the requirements of sections 801(a)(1) and 
                803(a)(1) of the Employee Retirement Income Security 
                Act of 1974 shall be deemed met with respect to such 
                arrangement;
                    (C) the requirements of section 803(b) of such Act 
                shall be deemed met, if the arrangement is operated by 
                a board of directors which--
                            (i) is elected by the participating 
                        employers, with each employer having one vote; 
                        and
                            (ii) has complete fiscal control over the 
                        arrangement and which is responsible for all 
                        operations of the arrangement;
                    (D) the requirements of section 804(a) of such Act 
                shall be deemed met with respect to such arrangement; 
                and
                    (E) the arrangement may be certified by any 
                applicable authority with respect to its operations in 
                any State only if it operates in such State on the date 
                of certification.
        The provisions of this subsection shall cease to apply with 
        respect to any such arrangement at such time after the date of 
        the enactment of this Act as the applicable requirements of 
        this subsection are not met with respect to such arrangement.
            (2) Definitions.--For purposes of this subsection, the 
        terms ``group health plan'', ``medical care'', and 
        ``participating employer'' shall have the meanings provided in 
        section 812 of the Employee Retirement Income Security Act of 
        1974, except that the reference in paragraph (7) of such 
        section to an ``association health plan'' shall be deemed a 
        reference to an arrangement referred to in this subsection.

        TITLE V--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

        Subtitle A--Application of Patient Protection Provisions

SEC. 501. APPLICATION TO GROUP HEALTH PLANS UNDER 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 
                                        patients' bill of rights.'';
        and
            (2) by inserting after section 9812 the following:

``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

    ``A group health plan shall comply with the requirements of title I 
of the Bipartisan Patient Protection Act and sections 503A through 503C 
of the Employee Retirement Income Security Act of 1974 (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.''.

SEC. 502. CONFORMING ENFORCEMENT FOR WOMEN'S HEALTH AND CANCER RIGHTS.

    Subchapter B of chapter 100 of the Internal Revenue Code of 1986, 
as amended by section 501, is further amended--
            (1) in the table of sections, by inserting after the item 
        relating to section 9813 the following new item:

                              ``Sec. 9814. Standard relating to women's 
                                        health and cancer rights.'';
        and
            (2) by inserting after section 9813 the following:

``SEC. 9814. STANDARD RELATING TO WOMEN'S HEALTH AND CANCER RIGHTS.

    ``The provisions of section 713 of the Employee Retirement Income 
Security Act of 1974 (as in effect as of the date of the enactment of 
this section) shall apply to group health plans as if included in this 
subchapter.''.

         Subtitle B--Health Care Coverage Access Tax Incentives

SEC. 511. EXPANSION OF AVAILABILITY OF ARCHER MEDICAL SAVINGS ACCOUNTS.

    (a) Repeal of Limitations on Number of Medical Savings Accounts.--
            (1) In general.--Subsections (i) and (j) of section 220 of 
        the Internal Revenue Code of 1986 are hereby repealed.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 220(c) of such Code is 
                amended by striking subparagraph (D).
                    (B) Section 138 of such Code is amended by striking 
                subsection (f).
    (b) Availability Not Limited to Accounts for Employees of Small 
Employers and Self-employed Individuals.--
            (1) In general.--Subparagraph (A) of section 220(c)(1) of 
        such Code (relating to eligible individual) is amended to read 
        as follows:
                    ``(A) In general.--The term `eligible individual' 
                means, with respect to any month, any individual if--
                            ``(i) such individual is covered under a 
                        high deductible health plan as of the 1st day 
                        of such month, and
                            ``(ii) such individual is not, while 
                        covered under a high deductible health plan, 
                        covered under any health plan--
                                    ``(I) which is not a high 
                                deductible health plan, and
                                    ``(II) which provides coverage for 
                                any benefit which is covered under the 
                                high deductible health plan.''.
            (2) Conforming amendments.--
                    (A) Section 220(c)(1) of such Code is amended by 
                striking subparagraph (C).
                    (B) Section 220(c) of such Code is amended by 
                striking paragraph (4) (defining small employer) and by 
                redesignating paragraph (5) as paragraph (4).
                    (C) Section 220(b) of such Code is amended by 
                striking paragraph (4) (relating to deduction limited 
                by compensation) and by redesignating paragraphs (5), 
                (6), and (7) as paragraphs (4), (5), and (6), 
                respectively.
    (c) Increase in Amount of Deduction Allowed for Contributions to 
Medical Savings Accounts.--
            (1) In general.--Paragraph (2) of section 220(b) of such 
        Code is amended to read as follows:
            ``(2) Monthly limitation.--The monthly limitation for any 
        month is the amount equal to \1/12\ of the annual deductible 
        (as of the first day of such month) of the individual's 
        coverage under the high deductible health plan.''.
            (2) Conforming amendment.--Clause (ii) of section 
        220(d)(1)(A) of such Code is amended by striking ``75 percent 
        of''.
    (d) Both Employers and Employees May Contribute to Medical Savings 
Accounts.--Paragraph (4) of section 220(b) of such Code (as 
redesignated by subsection (b)(2)(C)) is amended to read as follows:
            ``(4) Coordination with exclusion for employer 
        contributions.--The limitation which would (but for this 
        paragraph) apply under this subsection to the taxpayer for any 
        taxable year shall be reduced (but not below zero) by the 
        amount which would (but for section 106(b)) be includible in 
        the taxpayer's gross income for such taxable year.''.
    (e) Reduction of Permitted Deductibles Under High Deductible Health 
Plans.--
            (1) In general.--Subparagraph (A) of section 220(c)(2) of 
        such Code (defining high deductible health plan) is amended--
                    (A) by striking ``$1,500'' in clause (i) and 
                inserting ``$1,000''; and
                    (B) by striking ``$3,000'' in clause (ii) and 
                inserting ``$2,000''.
            (2) Conforming amendment.--Subsection (g) of section 220 of 
        such Code is amended to read as follows:
    ``(g) Cost-of-Living Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 1998, each dollar amount in 
        subsection (c)(2) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                such taxable year begins by substituting `calendar year 
                1997' for `calendar year 1992' in subparagraph (B) 
                thereof.
            ``(2) Special rules.--In the case of the $1,000 amount in 
        subsection (c)(2)(A)(i) and the $2,000 amount in subsection 
        (c)(2)(A)(ii), paragraph (1)(B) shall be applied by 
        substituting `calendar year 2000' for `calendar year 1997'.
            ``(3) Rounding.--If any increase under paragraph (1) or (2) 
        is not a multiple of $50, such increase shall be rounded to the 
        nearest multiple of $50.''.
    (f) Providing Incentives for Preferred Provider Organizations To 
Offer Medical Savings Accounts.--
            (1) Preventive care coverage permitted.--Clause (ii) of 
        section 220(c)(2)(B) of such Code is amended by striking 
        ``preventive care if'' and all that follows and inserting 
        ``preventive care''.
            (2) Treatment of network services.--Subparagraph (B) of 
        section 220(c)(2) of such Code is amended by adding at the end 
        the following new clause:
                            ``(iii) Treatment of network services.--In 
                        the case of a health plan which provides 
                        benefits for services provided by providers in 
                        a network (as defined in section 161 of the 
                        Patient's Bill of Rights Act of 2001) and which 
                        would (without regard to services provided by 
                        providers outside the network) be a high 
                        deductible health plan, such plan shall not 
                        fail to be a high deductible health plan 
                        because--
                                    ``(I) the annual deductible for 
                                services provided by providers outside 
                                the network exceeds the applicable 
                                maximum dollar amount in clause (i) or 
                                (ii), or
                                    ``(II) the annual out-of-pocket 
                                expenses required to be paid for 
                                services provided by providers outside 
                                the network exceeds the applicable 
                                dollar amount in clause (iii).
                        The annual deductible taken into account under 
                        subsection (b)(2) with respect to a plan to 
                        which the preceding sentence applies shall be 
                        the annual deductible for services provided by 
                        providers within the network.''.
    (g) Medical Savings Accounts May Be Offered Under Cafeteria 
Plans.--Subsection (f) of section 125 of such Code is amended by 
striking ``106(b),''.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 512. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS OF SELF-
              EMPLOYED INDIVIDUALS.

    (a) In General.--Paragraph (1) of section 162(l) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) Allowance of deduction.--In the case of an individual 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to 100 percent of the amount paid during the 
        taxable year for insurance which constitutes medical care for 
        the taxpayer and the taxpayer's spouse and dependents.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2001.

SEC. 513. CREDIT FOR HEALTH INSURANCE EXPENSES OF SMALL BUSINESSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by adding at the end the following:

``SEC. 45E. SMALL BUSINESS HEALTH INSURANCE EXPENSES.

    ``(a) General Rule.--For purposes of section 38, in the case of a 
small employer, the health insurance credit determined under this 
section for the taxable year is an amount equal to the applicable 
percentage of the expenses paid by the taxpayer during the taxable year 
for health insurance coverage for such year provided under a new health 
plan for employees of such employer.
    ``(b) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage is--
            ``(1) in the case of insurance purchased as a member of a 
        qualified health benefit purchasing coalition (as defined in 
        section 9841), 30 percent, and
            ``(2) in the case of insurance not described in paragraph 
        (1), 20 percent.
    ``(c) Limitations.--
            ``(1) Per employee dollar limitation.--The amount of 
        expenses taken into account under subsection (a) with respect 
        to any employee for any taxable year shall not exceed--
                    ``(A) $2,000 in the case of self-only coverage, and
                    ``(B) $5,000 in the case of family coverage.
        In the case of an employee who is covered by a new health plan 
        of the employer for only a portion of such taxable year, the 
        limitation under the preceding sentence shall be an amount 
        which bears the same ratio to such limitation (determined 
        without regard to this sentence) as such portion bears to the 
        entire taxable year.
            ``(2) Period of coverage.--Expenses may be taken into 
        account under subsection (a) only with respect to coverage for 
        the 4-year period beginning on the date the employer 
        establishes a new health plan.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning given such term by section 
        9832(b)(1).
            ``(2) New health plan.--
                    ``(A) In general.--The term `new health plan' means 
                any arrangement of the employer which provides health 
                insurance coverage to employees if--
                            ``(i) such employer (and any predecessor 
                        employer) did not establish or maintain such 
                        arrangement (or any similar arrangement) at any 
                        time during the 2 taxable years ending prior to 
                        the taxable year in which the credit under this 
                        section is first allowed, and
                            ``(ii) such arrangement provides health 
                        insurance coverage to at least 70 percent of 
                        the qualified employees of such employer.
                    ``(B) Qualified employee.--
                            ``(i) In general.--The term `qualified 
                        employee' means any employee of an employer if 
                        the annual rate of such employee's compensation 
                        (as defined in section 414(s)) exceeds $10,000.
                            ``(ii) Treatment of certain employees.--The 
                        term `employee' shall include a leased employee 
                        within the meaning of section 414(n).
            ``(3) Small employer.--The term `small employer' has the 
        meaning given to such term by section 4980D(d)(2); except that 
        only qualified employees shall be taken into account.
    ``(e) Special Rules.--
            ``(1) Certain rules made applicable.--For purposes of this 
        section, rules similar to the rules of section 52 shall apply.
            ``(2) Amounts paid under salary reduction arrangements.--No 
        amount paid or incurred pursuant to a salary reduction 
        arrangement shall be taken into account under subsection (a).
    ``(f) Termination.--This section shall not apply to expenses paid 
or incurred by an employer with respect to any arrangement established 
on or after January 1, 2010.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of 
such Code (relating to current year business credit) is amended by 
striking ``plus'' at the end of paragraph (12), by striking the period 
at the end of paragraph (13) and inserting ``, plus'', and by adding at 
the end the following:
            ``(14) in the case of a small employer (as defined in 
        section 45E(d)(3)), the health insurance credit determined 
        under section 45E(a).''.
    (c) No Carrybacks.--Subsection (d) of section 39 of such Code 
(relating to carryback and carryforward of unused credits) is amended 
by adding at the end the following:
            ``(10) No carryback of section 45e credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the employee health insurance 
        expenses credit determined under section 45E may be carried 
        back to a taxable year ending before the date of the enactment 
        of section 45E.''.
    (d) Denial of Double Benefit.--Section 280C of such Code is amended 
by adding at the end the following new subsection:
    ``(d) Credit for Small Business Health Insurance Expenses.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the expenses (otherwise allowable as a deduction) 
        taken into account in determining the credit under section 45E 
        for the taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 45E(a).
            ``(2) Controlled groups.--Persons treated as a single 
        employer under subsection (a) or (b) of section 52 shall be 
        treated as 1 person for purposes of this section.''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following:

                              ``Sec. 45E. Small business health 
                                        insurance expenses.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2001, for arrangements established after the date of the 
enactment of this Act.

SEC. 514. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO QUALIFIED HEALTH 
              BENEFIT PURCHASING COALITIONS.

    (a) In General.--Section 4942 of the Internal Revenue Code of 1986 
(relating to taxes on failure to distribute income) is amended by 
adding at the end the following:
    ``(k) Certain Qualified Health Benefit Purchasing Coalition 
Distributions.--
            ``(1) In general.--For purposes of subsection (g), sections 
        170, 501, 507, 509, and 2522, and this chapter, a qualified 
        health benefit purchasing coalition distribution by a private 
        foundation shall be considered to be a distribution for a 
        charitable purpose.
            ``(2) Qualified health benefit purchasing coalition 
        distribution.--For purposes of paragraph (1)--
                    ``(A) In general.--The term `qualified health 
                benefit purchasing coalition distribution' means any 
                amount paid or incurred by a private foundation to or 
                on behalf of a qualified health benefit purchasing 
                coalition (as defined in section 9841) for purposes of 
                payment or reimbursement of amounts paid or incurred in 
                connection with the establishment and maintenance of 
                such coalition.
                    ``(B) Exclusions.--Such term shall not include any 
                amount used by a qualified health benefit purchasing 
                coalition (as so defined)--
                            ``(i) for the purchase of real property,
                            ``(ii) as payment to, or for the benefit 
                        of, members (or employees or affiliates of such 
                        members) of such coalition, or
                            ``(iii) for any expense paid or incurred 
                        more than 48 months after the date of 
                        establishment of such coalition.
            ``(3) Termination.--This subsection shall not apply--
                    ``(A) to qualified health benefit purchasing 
                coalition distributions paid or incurred after December 
                31, 2009, and
                    ``(B) with respect to start-up costs of a coalition 
                which are paid or incurred after December 31, 2010.''.
    (b) Qualified Health Benefit Purchasing Coalition.--
            (1) In general.--Chapter 100 of such Code (relating to 
        group health plan requirements) is amended by adding at the end 
        the following new subchapter:

     ``Subchapter D--Qualified Health Benefit Purchasing Coalition

                              ``Sec.  9841.  Qualified health benefit 
                                        purchasing coalition.

``SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.

    ``(a) In General.--A qualified health benefit purchasing coalition 
is a private not-for-profit corporation which--
            ``(1) sells health insurance through State licensed health 
        insurance issuers in the State in which the employers to which 
        such coalition is providing insurance are located, and
            ``(2) establishes to the Secretary, under State 
        certification procedures or other procedures as the Secretary 
        may provide by regulation, that such coalition meets the 
        requirements of this section.
    ``(b) Board of Directors.--
            ``(1) In general.--Each purchasing coalition under this 
        section shall be governed by a Board of Directors.
            ``(2) Election.--The Secretary shall establish procedures 
        governing election of such Board.
            ``(3) Membership.--The Board of Directors shall--
                    ``(A) be composed of representatives of the members 
                of the coalition, in equal number, including small 
                employers and employee representatives of such 
                employers, but
                    ``(B) not include other interested parties, such as 
                service providers, health insurers, or insurance agents 
                or brokers which may have a conflict of interest with 
                the purposes of the coalition.
    ``(c) Membership of Coalition.--
            ``(1) In general.--A purchasing coalition shall accept all 
        small employers residing within the area served by the 
        coalition as members if such employers request such membership.
            ``(2) Other members.--The coalition, at the discretion of 
        its Board of Directors, may be open to individuals and large 
        employers.   
            ``(3) Voting.--Members of a purchasing coalition shall have 
        voting rights consistent with the rules established by the 
        State.
    ``(d) Duties of Purchasing Coalitions.--Each purchasing coalition 
shall--
            ``(1) enter into agreements with small employers (and, at 
        the discretion of its Board, with individuals and other 
        employers) to provide health insurance benefits to employees 
        and retirees of such employers,
            ``(2) where feasible, enter into agreements with 3 or more 
        unaffiliated, qualified licensed health plans, to offer 
        benefits to members,
            ``(3) offer to members at least 1 open enrollment period of 
        at least 30 days per calendar year,
            ``(4) serve a significant geographical area and market to 
        all eligible members in that area, and
            ``(5) carry out other functions provided for under this 
        section.
    ``(e) Limitation on Activities.--A purchasing coalition shall not--
            ``(1) perform any activity (including certification or 
        enforcement) relating to compliance or licensing of health 
        plans,
            ``(2) assume insurance or financial risk in relation to any 
        health plan, or
            ``(3) perform other activities identified by the State as 
        being inconsistent with the performance of its duties under 
        this section.
    ``(f) Additional Requirements for Purchasing Coalitions.--As 
provided by the Secretary in regulations, a purchasing coalition shall 
be subject to requirements similar to the requirements of a group 
health plan under this chapter.
    ``(g) Relation to Other Laws.--
            ``(1) Preemption of state fictitious group laws.--
        Requirements (commonly referred to as fictitious group laws) 
        relating to grouping and similar requirements for health 
        insurance coverage are preempted to the extent such 
        requirements impede the establishment and operation of 
        qualified health benefit purchasing coalitions.
            ``(2) Allowing savings to be passed through.--Any State law 
        that prohibits health insurance issuers from reducing premiums 
        on health insurance coverage sold through a qualified health 
        benefit purchasing coalition to reflect administrative savings 
        is preempted. This paragraph shall not be construed to preempt 
        State laws that impose restrictions on premiums based on health 
        status, claims history, industry, age, gender, or other 
        underwriting factors.
            ``(3) No waiver of hipaa requirements.--Nothing in this 
        section shall be construed to change the obligation of health 
        insurance issuers to comply with the requirements of title 
        XXVII of the Public Health Service Act with respect to health 
        insurance coverage offered to small employers in the small 
        group market through a qualified health benefit purchasing 
        coalition.
    ``(h) Definition of Small Employer.--For purposes of this section--
            ``(1) In general.--The term `small employer' means, with 
        respect to any calendar year, any employer if such employer 
        employed an average of at least 2 and not more than 50 
        qualified employees on business days during either of the 2 
        preceding calendar years. For purposes of the preceding 
        sentence, a preceding calendar year may be taken into account 
        only if the employer was in existence throughout such year.
            ``(2) Employers not in existence in preceding year.--In the 
        case of an employer which was not in existence throughout the 
        1st preceding calendar year, the determination under paragraph 
        (1) shall be based on the average number of qualified employees 
        that it is reasonably expected such employer will employ on 
        business days in the current calendar year.''.
            (2) Conforming amendment.--The table of subchapters for 
        chapter 100 of such Code is amended by adding at the end the 
        following item:

                              ``Subchapter D. Qualified health benefit 
                                        purchasing coalition.''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2001.

SEC. 515. STATE GRANT PROGRAM FOR MARKET INNOVATION.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall establish a 
program (in this section referred to as the ``program'') to award 
demonstration grants under this section to States to allow States to 
demonstrate the effectiveness of innovative ways to increase access to 
health insurance through market reforms and other innovative means. 
Such innovative means may include (and are not limited to) any of the 
following:
            (1) Alternative group purchasing or pooling arrangements, 
        such as purchasing cooperatives for small businesses, 
        reinsurance pools, or high risk pools.
            (2) Individual or small group market reforms.
            (3) Consumer education and outreach.
            (4) Subsidies to individuals, employers, or both, in 
        obtaining health insurance.
    (b) Scope; Duration.--The program shall be limited to not more than 
10 States and to a total period of 5 years, beginning on the date the 
first demonstration grant is made.
    (c) Conditions for Demonstration Grants.--
            (1) In general.--The Secretary may not provide for a 
        demonstration grant to a State under the program unless the 
        Secretary finds that under the proposed demonstration grant--
                    (A) the State will provide for demonstrated 
                increase of access for some portion of the existing 
                uninsured population through a market innovation (other 
                than merely through a financial expansion of a program 
                initiated before the date of the enactment of this 
                Act);
                    (B) the State will comply with applicable Federal 
                laws;
                    (C) the State will not discriminate among 
                participants on the basis of any health status-related 
                factor (as defined in section 2791(d)(9) of the Public 
                Health Service Act), except to the extent a State 
                wishes to focus on populations that otherwise would not 
                obtain health insurance because of such factors; and
                    (D) the State will provide for such evaluation, in 
                coordination with the evaluation required under 
                subsection (d), as the Secretary may specify.
            (2) Application.--The Secretary shall not provide a 
        demonstration grant under the program to a State unless--
                    (A) the State submits to the Secretary such an 
                application, in such a form and manner, as the 
                Secretary specifies;
                    (B) the application includes information regarding 
                how the demonstration grant will address issues such as 
                governance, targeted population, expected cost, and the 
                continuation after the completion of the demonstration 
                grant period; and
                    (C) the Secretary determines that the demonstration 
                grant will be used consistent with this section.
            (3) Focus.--A demonstration grant proposal under section 
        need not cover all uninsured individuals in a State or all 
        health care benefits with respect to such individuals.
    (d) Evaluation.--The Secretary shall enter into a contract with an 
appropriate entity outside the Department of Health and Human Services 
to conduct an overall evaluation of the program at the end of the 
program period. Such evaluation shall include an analysis of 
improvements in access, costs, quality of care, or choice of coverage, 
under different demonstration grants.
    (e) Option To Provide for Initial Planning Grants.--Notwithstanding 
the previous provisions of this section, under the program the 
Secretary may provide for a portion of the amounts appropriated under 
subsection (f) (not to exceed $5,000,000) to be made available to any 
State for initial planning grants to permit States to develop 
demonstration grant proposals under the previous provisions of this 
section.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated $100,000,000 for each fiscal year to carry out this 
section. Amounts appropriated under this subsection shall remain 
available until expended.
    (g) State Defined.--For purposes of this section, the term 
``State'' has the meaning given such term for purposes of title XIX of 
the Social Security Act.

       TITLE VI--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 601. EFFECTIVE DATES.

    (a) Group Health Coverage.--
            (1) In general.--Subject to paragraph (2) and subsection 
        (d), the amendments made by sections 201(a), 401, 403, 501, and 
        502 (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 October 1, 2002 (in this 
        section referred to as the ``general effective date'').
            (2) Treatment of collective bargaining agreements.--In the 
        case of a group health plan maintained pursuant to one or more 
        collective bargaining agreements between employee 
        representatives and one or more employers ratified before the 
        date of the enactment of this Act, the amendments made by 
        sections 201(a), 401, 403, 501, and 502 (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 
                (excluding any extension thereof agreed to after the 
                date of the enactment of this Act); or
                    (B) the general effective date,
        but shall apply not later than 1 year after 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.--Subject to subsection 
(d), 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.
    (c) Treatment of Religious Nonmedical Providers.--
            (1) In general.--Nothing in this Act (or the amendments 
        made thereby) shall be construed to--
                    (A) restrict or limit the right of group health 
                plans, and of health insurance issuers offering health 
                insurance coverage, to include as providers religious 
                nonmedical providers;
                    (B) require such plans or issuers to--
                            (i) utilize medically based eligibility 
                        standards or criteria in deciding provider 
                        status of religious nonmedical providers;
                            (ii) use medical professionals or criteria 
                        to decide patient access to religious 
                        nonmedical providers;
                            (iii) utilize medical professionals or 
                        criteria in making decisions in internal or 
                        external appeals regarding coverage for care by 
                        religious nonmedical providers; or
                            (iv) compel a participant or beneficiary to 
                        undergo a medical examination or test as a 
                        condition of receiving health insurance 
                        coverage for treatment by a religious 
                        nonmedical provider; or
                    (C) require such plans or issuers to exclude 
                religious nonmedical providers because they do not 
                provide medical or other required data, if such data is 
                inconsistent with the religious nonmedical treatment or 
                nursing care provided by the provider.
            (2) Religious nonmedical provider.--For purposes of this 
        subsection, the term ``religious nonmedical provider'' means a 
        provider who provides no medical care but who provides only 
        religious nonmedical treatment or religious nonmedical nursing 
        care.
    (d) Transition for Notice Requirement.--The disclosure of 
information required under section 121 of this Act shall first be 
provided pursuant to--
            (1) subsection (a) with respect to a group health plan that 
        is maintained as of the general effective date, not later than 
        30 days before the beginning of the first plan year to which 
        title I applies in connection with the plan under such 
        subsection; or
            (2) subsection (b) with respect to a individual health 
        insurance coverage that is in effect as of the general 
        effective date, not later than 30 days before the first date as 
        of which title I applies to the coverage under such subsection.

SEC. 602. COORDINATION IN IMPLEMENTATION.

    The Secretary of Labor and the Secretary of Health and Human 
Services 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 such 
        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.

SEC. 603. SEVERABILITY.

    (a) In General.--Except as provided in subsections (b) and (c), if 
any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such to any person or circumstance shall not be affected thereby.
    (b) Dependence of Remedies on Appeals.--If any provision of section 
503A, 503B, or 503C of the Employee Retirement Income Security Act of 
1974 (as inserted by section 131) or the application of either such 
section to any person or circumstance is held to be unconstitutional, 
section 502(n) of such Act (as inserted by section 402) shall be deemed 
to be null and void and shall be given no force or effect.
    (c) Remedies.--If any provision of section 502(n) of the Employee 
Retirement Income Security Act of 1974 (as inserted by section 402), or 
the application of such section to any person or circumstance, is held 
to be unconstitutional, the remainder of such section shall be deemed 
to be null and void and shall be given no force or effect.

                  TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 701. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.

    (a) In General.--Nothing in this Act (or an amendment made by this 
Act) shall be construed to alter or amend the Social Security Act (or 
any regulation promulgated under that Act).
    (b) Transfers.--
            (1) Estimate of secretary.--The Secretary of the Treasury 
        shall annually estimate the impact that the enactment of this 
        Act has on the income and balances of the trust funds 
        established under section 201 of the Social Security Act (42 
        U.S.C. 401).
            (2) Transfer of funds.--If, under paragraph (1), the 
        Secretary of the Treasury estimates that the enactment of this 
        Act has a negative impact on the income and balances of the 
        trust funds established under section 201 of the Social 
        Security Act (42 U.S.C. 401), the Secretary shall transfer, not 
        less frequently than quarterly, from the general revenues of 
        the Federal Government an amount sufficient so as to ensure 
        that the income and balances of such trust funds are not 
        reduced as a result of the enactment of such Act.

SEC. 702. CUSTOMS USER FEES.

    Section 13031(j)(3) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking 
``2003'' and inserting ``2011, except that fees may not be charged 
under paragraphs (9) and (10) of such subsection after March 31, 
2006''.

SEC. 703. FISCAL YEAR 2002 MEDICARE PAYMENTS.

    Notwithstanding any other provision of law, any letter of credit 
under part B of title XVIII of the Social Security Act (42 U.S.C. 1395j 
et seq.) that would otherwise be sent to the Treasury or the Federal 
Reserve Board on September 30, 2002, by a carrier with a contract under 
section 1842 of that Act (42 U.S.C. 1395u) shall be sent on October 1, 
2002.

SEC. 704. SENSE OF THE SENATE WITH RESPECT TO PARTICIPATION IN CLINICAL 
              TRIALS AND ACCESS TO SPECIALTY CARE.

    (a) Findings.--The Senate finds the following:
            (1) Breast cancer is the most common form of cancer among 
        women, excluding skin cancers.
            (2) During 2001, 182,800 new cases of female invasive 
        breast cancer will be diagnosed, and 40,800 women will die from 
        the disease.
            (3) In addition, 1,400 male breast cancer cases are 
        projected to be diagnosed, and 400 men will die from the 
        disease.
            (4) Breast cancer is the second leading cause of cancer 
        death among all women and the leading cause of cancer death 
        among women between ages 40 and 55.
            (5) This year 8,600 children are expected to be diagnosed 
        with cancer.
            (6) 1,500 children are expected to die from cancer this 
        year.
            (7) There are approximately 333,000 people diagnosed with 
        multiple sclerosis in the United States and 200 more cases are 
        diagnosed each week.
            (8) Parkinson's disease is a progressive disorder of the 
        central nervous system affecting 1,000,000 in the United 
        States.
            (9) An estimated 198,100 men will be diagnosed with 
        prostate cancer this year.
            (10) 31,500 men will die from prostate cancer this year. It 
        is the second leading cause of cancer in men.
            (11) While information obtained from clinical trials is 
        essential to finding cures for diseases, it is still research 
        which carries the risk of fatal results. Future efforts should 
        be taken to protect the health and safety of adults and 
        children who enroll in clinical trials.
            (12) While employers and health plans should be responsible 
        for covering the routine costs associated with federally 
        approved or funded clinical trials, such employers and health 
        plans should not be held legally responsible for the design, 
        implementation, or outcome of such clinical trials, consistent 
        with any applicable State or Federal liability statutes.
    (b) Sense of the Senate.--It is the sense of the Senate that--
            (1) men and women battling life-threatening, deadly 
        diseases, including advanced breast or ovarian cancer, should 
        have the opportunity to participate in a federally approved or 
        funded clinical trial recommended by their physician;
            (2) an individual should have the opportunity to 
        participate in a federally approved or funded clinical trial 
        recommended by their physician if--
                    (A) that individual--
                            (i) has a life-threatening or serious 
                        illness for which no standard treatment is 
                        effective;
                            (ii) is eligible to participate in a 
                        federally approved or funded clinical trial 
                        according to the trial protocol with respect to 
                        treatment of the illness;
                    (B) that individual's participation in the trial 
                offers meaningful potential for significant clinical 
                benefit for the individual; and
                    (C) either--
                            (i) the referring physician is a 
                        participating health care professional and has 
                        concluded that the individual's participation 
                        in the trial would be appropriate, based upon 
                        the individual meeting the conditions described 
                        in subparagraph (A); or
                            (ii) the participant, beneficiary, or 
                        enrollee provides medical and scientific 
                        information establishing that the individual's 
                        participation in the trial would be 
                        appropriate, based upon the individual meeting 
                        the conditions described in subparagraph (A);
            (3) a child with a life-threatening illness, including 
        cancer, should be allowed to participate in a federally 
        approved or funded clinical trial if that participation meets 
        the requirements of paragraph (2);
            (4) a child with a rare cancer should be allowed to go to a 
        cancer center capable of providing high quality care for that 
        disease; and
            (5) a health maintenance organization's decision that an 
        in-network physician without the necessary expertise can 
        provide care for a seriously ill patient, including a woman 
        battling cancer, should be appealable to an independent, 
        impartial body, and that this same right should be available to 
        all Americans in need of access to high quality specialty care.

SEC. 705. SENSE OF THE SENATE REGARDING FAIR REVIEW PROCESS.

    (a) Findings.--The Senate finds the following:
            (1) A fair, timely, impartial independent external appeals 
        process is essential to any meaningful program of patient 
        protection.
            (2) The independence and objectivity of the review 
        organization and review process must be ensured.
            (3) It is incompatible with a fair and independent appeals 
        process to allow a health maintenance organization to select 
        the review organization that is entrusted with providing a 
        neutral and unbiased medical review.
            (4) The American Arbitration Association and arbitration 
        standards adopted under chapter 44 of title 28, United States 
        Code (28 U.S.C. 651 et seq.) both prohibit, as inherently 
        unfair, the right of one party to a dispute to choose the judge 
        in that dispute.
    (b) Sense of the Senate.--It is the sense of the Senate that--
            (1) every patient who is denied care by a health 
        maintenance organization or other health insurance company 
        should be entitled to a fair, speedy, impartial appeal to a 
        review organization that has not been selected by the health 
        plan;
            (2) the States should be empowered to maintain and develop 
        the appropriate process for selection of the independent 
        external review entity;
            (3) a child battling a rare cancer whose health maintenance 
        organization has denied a covered treatment recommended by its 
        physician should be entitled to a fair and impartial external 
        appeal to a review organization that has not been chosen by the 
        organization or plan that has denied the care; and
            (4) patient protection legislation should not pre-empt 
        existing State laws in States where there already are strong 
        laws in place regarding the selection of independent review 
        organizations.

SEC. 706. ANNUAL REVIEW.

    (a) In General.--Not later than 24 months after the general 
effective date referred to in section 601(a)(1), and annually 
thereafter for each of the succeeding 4 calendar years (or until a 
repeal is effective under subsection (b)), the Secretary of Health and 
Human Services shall request that the Institute of Medicine of the 
National Academy of Sciences prepare and submit to the appropriate 
committees of Congress a report concerning the impact of this Act, and 
the amendments made by this Act, on the number of individuals in the 
United States with health insurance coverage.
    (b) Limitation With Respect to Certain Plans.--If the Secretary, in 
any report submitted under subsection (a), determines that more than 
1,000,000 individuals in the United States have lost their health 
insurance coverage as a result of the enactment of this Act, as 
compared to the number of individuals with health insurance coverage in 
the 12-month period preceding the date of the enactment of this Act, 
section 402 of this Act shall be repealed effective on the date that is 
12 month after the date on which the report is submitted, and the 
submission of any further reports under subsection (a) shall not be 
required.
    (c) Funding.--From funds appropriated to the Department of Health 
and Human Services for fiscal years 2003 and 2004, the Secretary of 
Health and Human Services shall provide for such funding as the 
Secretary determines necessary for the conduct of the study of the 
National Academy of Sciences under this section.

SEC. 707. DEFINITION OF BORN-ALIVE INFANT.

    (a) In General.--Chapter 1 of title 1, United States Code, is 
amended by adding at the end the following:
``Sec. 8. `Person', `human being', `child', and `individual' as 
              including born-alive infant
    ``(a) In determining the meaning of any Act of Congress, or of any 
ruling, regulation, or interpretation of the various administrative 
bureaus and agencies of the United States, the words `person', `human 
being', `child', and `individual', shall include every infant member of 
the species homo sapiens who is born alive at any stage of development.
    ``(b) As used in this section, the term `born alive', with respect 
to a member of the species homo sapiens, means the complete expulsion 
or extraction from his or her mother of that member, at any stage of 
development, who after such expulsion or extraction breathes or has a 
beating heart, pulsation of the umbilical cord, or definite movement of 
voluntary muscles, regardless of whether the umbilical cord has been 
cut, and regardless of whether the expulsion or extraction occurs as a 
result of natural or induced labor, caesarean section, or induced 
abortion.
    ``(c) Nothing in this section shall be construed to affirm, deny, 
expand, or contract any legal status or legal right applicable to any 
member of the species homo sapiens at any point prior to being born 
alive as defined in this section.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 1 of title 1, United States Code, is amended by adding at the 
end the following new item:

``8. `Person', `human being', `child', and `individual' as including 
                            born-alive infant.''.

            Passed the House of Representatives August 2, 2001.

            Attest:

                                                                 Clerk.
107th CONGRESS

  1st Session

                               H. R. 2563

_______________________________________________________________________

                                 AN ACT

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