[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 526 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 526

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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 8, 2001

   Mr. Ganske (for himself, Mr. Dingell, Mr. Leach, Mr. Berry, Mrs. 
  Roukema, Mr. Brown of Ohio, Mrs. Morella, Mr. John, Mr. Gilman, Mr. 
  Andrews, Mr. LaTourette, Mr. Rangel, Mr. Stenholm, Mr. Sandlin, Mr. 
  Stupak, Mr. Pallone, Mr. Towns, Ms. Eshoo, Mrs. Capps, Mr. Green of 
Texas, Mr. Gordon, Ms. McCarthy of Missouri, Mr. Engel, Mr. Moore, Mr. 
   Stickland, Mr. Markey, Mr. Sawyer, Mrs. Davis of California, Mr. 
 Barrett, Mr. Wynn, Mr. Stark, Mr. Waxman, Mr. Rush, Mr. Boucher, Mr. 
 Hall of Texas, Mr. Bishop, Mr. Turner, Ms. Harman, Mr. Pascrell, Mrs. 
McCarthy of New York, Mr. Frank, Mr. Matsui, Mr. Coyne, Mr. McDermott, 
  Mr. Cardin, Mr. Levin, Mr. McNulty, Mr. Jefferson, Mr. Becerra, Mr. 
Lewis of Georgia, Mr. Kleczka, Mrs. Thurman, Mr. Boswell, Mr. Crowley, 
  Mr. Tierney, Mr. Hoeffel, and Mr. Meehan) introduced the following 
 bill; which was referred to the Committee on Energy and Commerce, and 
in addition to the Committees on Education and the Workforce, and Ways 
 and Means, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
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 of 2001''.
    (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.
                       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. Coverage of limited scope plans.
Sec. 155. Regulations.
Sec. 156. Incorporation into plan or coverage documents.
 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.
TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 301. Application of patient protection standards to group health 
                            plans and group health insurance coverage 
                            under the Employee Retirement Income 
                            Security Act of 1974.
Sec. 302. Availability of civil remedies.
Sec. 303. Limitations on actions.
       TITLE IV--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

        Subtitle A--Application of Patient Protection Provisions

Sec. 401. Application of requirements to group health plans under the 
                            Internal Revenue Code of 1986.
Sec. 402. Conforming enforcement for women's health and cancer rights.
         Subtitle B--Health Care Coverage Access Tax Incentives

Sec. 411. Expanded availability of Archer MSAs.
Sec. 412. Deduction for 100 percent of health insurance costs of self-
                            employed individuals.
Sec. 413. Credit for health insurance expenses of small businesses.
Sec. 414. Certain grants by private foundations to qualified health 
                            benefit purchasing coalitions.
Sec. 415. State grant program for market innovation.
        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.
Sec. 503. Severability.

                    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 102.
            (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 or appropriate.

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

    (a) Procedures of Initial Claims for Benefits.--
            (1) In general.--A group health plan, or health insurance 
        issuer offering health insurance coverage, shall--
                    (A) make a determination on an initial claim for 
                benefits by a participant, beneficiary, or enrollee (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, 
                beneficiary, or enrollee is required to pay with 
                respect to such claim for benefits; and
                    (B) notify a participant, beneficiary, or enrollee 
                (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, beneficiary, or 
                enrollee may be required to make with respect to such 
                claim for benefits, and of the right of the 
                participant, beneficiary, or enrollee to an internal 
                appeal under section 103.
            (2) Access to information.--
                    (A) Timely provision of necessary information.--
                With respect to an initial claim for benefits, the 
                participant, beneficiary, or enrollee (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, beneficiary, 
                or enrollee 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, beneficiary, or enrollee (or authorized 
        representative) may make an initial claim for benefits orally, 
        but a group health plan, or health insurance issuer offering 
        health insurance coverage, may require that the participant, 
        beneficiary, or enrollee (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 claims 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, or health 
                insurance issuer offering health insurance coverage, 
                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, or health 
                insurance issuer offering health insurance coverage, 
                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, beneficiary, or enrollee (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, beneficiary, or enrollee or 
                the ability of the participant, beneficiary, or 
                enrollee 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 
                                103(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, or 
        health insurance issuer offering health insurance coverage, 
        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, beneficiary, or enrollee (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 average participant, beneficiary, or enrollee 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 103.
    (e) Definitions.--For purposes of this part:
            (1) Authorized representative.--The term ``authorized 
        representative'' means, with respect to an individual who is a 
        participant, beneficiary, or enrollee, 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.
            (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 on a timely basis upon, the 
        claim for benefits and includes a failure to provide benefits 
        (including items and services) required to be provided under 
        this title.
            (4) Treating health care professional.--The term ``treating 
        health care professional'' means, with respect to services to 
        be provided to a participant, beneficiary, or enrollee, a 
        health care professional who is primarily responsible for 
        delivering those services to the participant, beneficiary, or 
        enrollee.

SEC. 103. INTERNAL APPEALS OF CLAIMS DENIALS.

    (a) Right to Internal Appeal.--
            (1) In general.--A participant, beneficiary, or enrollee 
        (or authorized representative) may appeal any denial of a claim 
        for benefits under section 102 under the procedures described 
        in this section.
            (2) Time for appeal.--
                    (A) In general.--A group health plan, or health 
                insurance issuer offering health insurance coverage, 
                shall ensure that a participant, beneficiary, or 
                enrollee (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 102 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, beneficiary, or 
                enrollee 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 102 
        within the applicable timeline established for such a 
        determination under such section is a denial of a claim for 
        benefits for purposes this subtitle 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, 
        may waive the internal review process under this section. In 
        such case the plan or issuer shall provide notice to the 
        participant, beneficiary, or enrollee (or authorized 
        representative) involved, the participant, beneficiary, or 
        enrollee (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, enrollee, or representative proceed directly to 
        seek further appeal through external review under section 104 
        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, 
        beneficiary, or enrollee (or authorized representative) may 
        request such appeal orally. A group health plan, or health 
        insurance issuer offering health insurance coverage, may 
        require that the participant, beneficiary, or enrollee (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, beneficiary, or enrollee (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, beneficiary, 
                or enrollee 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.--A group health plan, or health 
                insurance issuer offering health insurance coverage, 
                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, or health 
                insurance issuer offering health insurance coverage, 
                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, 
                beneficiary, or enrollee (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, beneficiary, or enrollee or the ability of 
                the participant, beneficiary, or enrollee 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 102(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 104 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, or 
        health insurance issuer offering health insurance coverage, 
        shall make a retrospective determination on an appeal 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) Review of medical decisions by physicians.--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, shall be made by a physician 
        (allopathic or osteopathic) with appropriate expertise 
        (including, in the case of a child, appropriate pediatric 
        expertise) 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, beneficiary, or enrollee 
        (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 104.
            (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 average 
        participant, beneficiary, or enrollee 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 104 and instructions on 
                how to initiate such a review.

SEC. 104. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    (a) Right to External Appeal.--A group health plan, and a health 
insurance issuer offering health insurance coverage, shall provide in 
accordance with this section participants, beneficiaries, and enrollees 
(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, beneficiary, or enrollee receives notice of the 
        denial under section 103(d) or notice of waiver of internal 
        review under section 103(a)(4) or the date on which the plan or 
        issuer has failed to make a timely decision under section 
        103(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, and 
                a health insurance issuer offering health insurance 
                coverage, 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, beneficiary, or enrollee 
                        involved (or an authorized representative);
                            (iii) except if waived by the plan or 
                        issuer under section 103(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 103;
                            (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, 
                        beneficiary, or enrollee (or authorized 
                        representative) for the release of necessary 
                        medical information or records of the 
                        participant, beneficiary, or enrollee 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 may be made 
                        orally. A group health plan, or health 
                        insurance issuer offering health insurance 
                        coverage, may require that the participant, 
                        beneficiary, or enrollee (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 an external 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, beneficiary, or enrollee 
                                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 103(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 or modify 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, the 
        plan or issuer shall immediately refer such request, and 
        forward the plan or issuer's initial decision (including the 
        information described in section 103(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, beneficiary, or 
        enrollee (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, beneficiary, or 
                        enrollee 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 
                        reviewer, the entity shall provide notice to 
                        the plan or issuer, the participant, 
                        beneficiary, or enrollee (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 
                                an average participant or enrollee;
                                    (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 reviewer, 
                        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 reviewer is not 
                        required, the entity shall provide notice of 
                        such determination to the participant, 
                        beneficiary, or enrollee (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 
        reviewer 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 reviewer 
                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, reversed, or modified.
                    (B) Standard for determination.--The independent 
                medical reviewer's determination relating to the 
                medical necessity and appropriateness, or the 
                experimental or investigation nature, or the evaluation 
                of the medical facts of the item, service, or condition 
                shall be based on the medical condition of the 
                participant, beneficiary, or enrollee (including the 
                medical records of the participant, beneficiary, or 
                enrollee) 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 reviewer to require that a group 
                health plan, or health insurance issuer offering health 
                insurance coverage, 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)) except to the 
                extent that the application or interpretation of the 
                exclusion or limitation involves a determination 
                described in paragraph (2).
                    (D) Evidence and information to be used in medical 
                reviews.--In making a determination under this 
                subsection, the independent medical reviewer 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 reviewer or 
                        submitted by the plan, issuer, participant, 
                        beneficiary, or enrollee (or an authorized 
                        representative), or treating health care 
                        professional.
                            (iv) The plan or coverage document.
                    (E) Independent determination.--In making 
                determinations under this subtitle, a qualified 
                external review entity and an independent medical 
                reviewer 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 
                reviewer.--An independent medical reviewer shall, in 
                accordance with the deadlines described in subsection 
                (e), prepare a written determination to uphold, 
                reverse, or modify the denial under review. Such 
                written determination shall include--
                            (i) the determination of the reviewer;
                            (ii) the specific reasons of the reviewer 
                        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 or modify 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 reviewer 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 
                        reviewer (or reviewers) shall make a 
                        determination on a denial of a claim for 
                        benefits that is referred to the reviewer 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 reviewer 
                        (or reviewers) 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, beneficiary, or enrollee 
                        (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, beneficiary, or enrollee or the 
                        ability of the participant, beneficiary, or 
                        enrollee to maintain or regain maximum 
                        function. Such determination shall be made as 
                        soon 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 subclause 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 reviewer (or reviewers) 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 reviewer 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, 
        beneficiary, or enrollee (or authorized representative) and the 
        treating health care professional (if any) receives a copy of 
        the written determination of the independent medical reviewer 
        prepared under subsection (d)(3)(F). Nothing in this paragraph 
        shall be construed as preventing an entity or reviewer from 
        providing an initial oral notice of the reviewer's 
        determination.
            (3) Form of notices.--Determinations and notices under this 
        subsection shall be written in a manner calculated to be 
        understood by an average 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 reviewer under this section 
                shall be binding upon the plan or issuer involved.
                    (B) Compliance with determination.--If the 
                determination of an independent medical reviewer is to 
                reverse or modify the denial, the plan or issuer, upon 
                the receipt of such determination, shall authorize 
                coverage to comply with the medical reviewer's 
                determination in accordance with the timeframe 
                established by the medical reviewer.
            (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, beneficiary, or 
                enrollee, where such failure to comply is caused by the 
                plan or issuer, the participant, beneficiary, or 
                enrollee may obtain the items or services involved (in 
                a manner consistent with the determination of the 
                independent external reviewer) 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, 
                        beneficiary, or enrollee 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, beneficiary, or enrollee (in the 
                        case of a participant, beneficiary, or enrollee 
                        who pays for the costs of such items or 
                        services).
                            (ii) Amount.--The plan or issuer shall 
                        fully reimburse a professional, participant, 
                        beneficiary, or enrollee 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 
                        reviewer.
                    (C) Failure to reimburse.--Where a plan or issuer 
                fails to provide reimbursement to a professional, 
                participant, beneficiary, or enrollee in accordance 
                with this paragraph, the professional, participant, 
                beneficiary, or enrollee 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, any person who, acting in 
                        the capacity of authorizing the benefit, causes 
                        such refusal may, in the discretion in a court 
                        of competent jurisdiction, be liable to an 
                        aggrieved participant, beneficiary, or enrollee 
                        for a civil penalty in an amount of up to 
                        $1,000 a day from the date on which the 
                        determination was transmitted to the plan or 
                        issuer by the external 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 external reviewer, the Secretary 
                        shall assess a civil penalty of $10,000 against 
                        the plan and the plan shall pay such penalty to 
                        the participant, beneficiary, or enrollee 
                        involved.
                    (B) Cease and desist order and order of attorney's 
                fees.--In any action described in subparagraph (A) 
                brought by a participant, beneficiary, or enrollee with 
                respect to a group health plan, or a health insurance 
                issuer offering health insurance coverage, in which a 
                plaintiff alleges that a person referred to in such 
                subparagraph has taken an action resulting in a refusal 
                of a benefit determined by an external appeal 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, for--
                                    (I) any pattern or practice of 
                                repeated refusal to authorize a benefit 
                                determined by an external appeal 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 subsection 
        or subtitle shall be construed as altering or eliminating any 
        cause of action or legal rights or remedies of participants, 
        beneficiaries, enrollees, 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 1 or more 
        individuals 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 at least 1 such 
                reviewer meets the requirements described in paragraphs 
                (4) and (5); and
                    (C) compensation provided by the entity to the 
                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, 
                                beneficiary, or enrollee (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, beneficiary, or enrollee (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, a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review; or
                            (ii) by a health care professional (other 
                        than a physician), a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) or, if determined appropriate by 
                        the qualified external review entity, a 
                        practicing health care professional (other than 
                        such a physician), of the same or similar 
                        specialty as the health care professional who 
                        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, 
        beneficiary, or enrollee, 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, beneficiary, or enrollee (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, beneficiary, or enrollee.
                    (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 a State, the 
                State may provide for external review activities to be 
                conducted by a qualified external appeal entity that is 
                designated by the State or that is selected by the 
                State in a manner determined by the State to assure an 
                unbiased determination.
            (2) 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, beneficiary, or enrollee (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 reviewer.
                    (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 reviewers it refers 
                                cases to).
                                    (III) Compliance with limitations 
                                on compensation (with respect to both 
                                the entity and independent medical 
                                reviewers it refers cases to).
                                    (IV) Compliance with applicable 
                                independence requirements.
                            (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.
                            (vii) 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 
                                reviewer 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 qualified private 
                                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 reviewer), 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.

                       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 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 or appropriate 
        specialty care, pursuant to appropriate referral procedures, 
        from any qualified participating health care professional who 
is available to accept such individual for such care.
            (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 access to specialty care).

SEC. 113. ACCESS TO EMERGENCY CARE.

    (a) Coverage of Emergency Services.--
            (1) In general.--If a group health plan, or health 
        insurance coverage offered by a health insurance issuer, 
        provides or covers any benefits with respect to services in an 
        emergency department of a hospital, the plan or issuer shall 
        cover emergency services (as defined in paragraph (2)(B))--
                    (A) without the need for any prior authorization 
                determination;
                    (B) whether 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 give 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 or 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.--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; 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.--A group health plan or 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 OBSTETRIC AND GYNECOLOGICAL CARE.

    (a) General Rights.--
            (1) Direct access.--A group health plan, or 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 or 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 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 (or 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 (3) 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 or 
        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 approved and funded (which may include funding 
        through in-kind contributions) by one or more of the following:
                    (A) The National Institutes of Health.
                    (B) A cooperative group or center of the National 
                Institutes of Health.
                    (C) The Food and Drug Administration.
                    (D) Either of the following if the conditions 
                described in paragraph (2) are met:
                            (i) The Department of Veterans Affairs.
                            (ii) The Department of Defense.
            (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 
                scientific 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 104(b)(3)(C);
                    (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) Service area.--A description of the plan or issuer's 
        service area, including the provision of any out-of-area 
        coverage.
            (4) 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.
            (5) 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.
            (6) Preauthorization requirements.--A description of the 
        requirements and procedures to be used to obtain 
        preauthorization for health services, if such preauthorization 
        is required.
            (7) 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.
            (8) 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.
            (9) Clinical trials.--A description 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.
            (10) 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.
            (11) 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.
            (12) 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.
            (13) Advance directives and organ donation.--A description 
        of procedures for advance directives and organ donation 
        decisions if the plan or issuer maintains such procedures.
            (14) 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.
            (15) 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.
            (16) 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.
            (17) Notice of requirements.--A description of any rights 
        of participants, beneficiaries, and enrollees that are 
        established by the Bipartisan Patient Protection Act of 2001 
        (excluding those described in paragraphs (1) through (16)) if 
        such sections 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.
            (18) 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.
    (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) 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 an average 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 1876(i)(8) of 
the Social Security Act) unless the requirements described in clauses 
(i), (ii)(I), and (iii) of subparagraph (A) of such section are met 
with respect to such a plan.
    (b) Application.--For purposes of carrying out paragraph (1), any 
reference in section 1876(i)(8) of the Social Security Act to the 
Secretary, an eligible organization, or an individual enrolled with the 
organization shall be treated as a reference to the applicable 
authority, a group health plan or health insurance issuer, 
respectively, and a participant, beneficiary, or enrollee with the plan 
or organization, respectively.
    (c) Construction.--Nothing in this section shall be construed as 
prohibiting all capitation and similar arrangements or all provider 
discount arrangements.

SEC. 134. PAYMENT OF CLAIMS.

    A group health plan, and a health insurance issuer offering group 
health insurance coverage, shall provide for prompt payment of claims 
submitted for health care services or supplies furnished to a 
participant, beneficiary, or enrollee with respect to benefits covered 
by the plan or issuer, in a manner consistent with the provisions of 
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.
    (b) Protection for Quality Advocacy by Health Care Professionals.--
            (1) In general.--A group health plan or 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 713 of the Employee Retirement 
Income Security Act of 1974.
    (c) Additional Definitions.--For purposes of this title:
            (1) Applicable authority.--The term ``applicable 
        authority'' means--
                    (A) in the case of a group health plan, the 
                Secretary of Health and Human Services and the 
                Secretary of Labor; and
                    (B) in the case of a health insurance issuer with 
                respect to a specific provision of this title, the 
                applicable State authority (as defined in section 
                2791(d) of the Public Health Service Act), or the 
                Secretary of Health and Human Services, if such 
                Secretary is enforcing such provision under section 
                2722(a)(2) or 2761(a)(2) of the Public Health Service 
                Act.
            (3) Enrollee.--The term ``enrollee'' means, with respect to 
        health insurance coverage offered by a health insurance issuer, 
        an individual enrolled with the issuer to receive such 
        coverage.
            (4) Group health plan.--The term ``group health plan'' has 
        the meaning given such term in section 733(a) of the Employee 
        Retirement Income Security Act of 1974, 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.
            (5) Health care professional.--The term ``health care 
        professional'' means an individual who is licensed, accredited, 
        or certified under State law to provide specified health care 
        services and who is operating within the scope of such 
        licensure, accreditation, or certification.
            (6) Health care provider.--The term ``health care 
        provider'' includes a physician or other health care 
        professional, as well as an institutional or other facility or 
        agency that provides health care services and that is licensed, 
        accredited, or certified to provide health care items and 
        services under applicable State law.
            (7) Network.--The term ``network'' means, with respect to a 
        group health plan or health insurance issuer offering health 
        insurance coverage, the participating health care professionals 
        and providers through whom the plan or issuer provides health 
        care items and services to participants, beneficiaries, or 
        enrollees.
            (8) Nonparticipating.--The term ``nonparticipating'' means, 
        with respect to a health care provider that provides health 
        care items and services to a participant, beneficiary, or 
        enrollee under group health plan or health insurance coverage, 
        a health care provider that is not a participating health care 
        provider with respect to such items and services.
            (9) Participating.--The term ``participating'' means, with 
        respect to a health care provider that provides health care 
        items and services to a participant, beneficiary, or enrollee 
        under group health plan or health insurance coverage offered by 
        a health insurance issuer, a health care provider that 
        furnishes such items and services under a contract or other 
        arrangement with the plan or issuer.
            (10) 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.
            (11) 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 with respect to the plan or coverage.

SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

    (a) Continued Applicability of State Law With Respect to Health 
Insurance Issuers.--
            (1) In general.--Subject to paragraph (2), this title shall 
        not be construed to supersede any provision of State law which 
        establishes, implements, or continues in effect any standard or 
        requirement solely relating to health insurance issuers (in 
        connection with group health insurance coverage or otherwise) 
        except to the extent that such standard or requirement prevents 
        the application of a requirement of this title.
            (2) Continued preemption with respect to group health 
        plans.--Nothing in this title shall be construed to affect or 
modify the provisions of section 514 of the Employee Retirement Income 
Security Act of 1974 with respect to group health plans.
            (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.
    (b) Application of Substantially Equivalent 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 is 
        substantially equivalent (within the meaning of subsection (c)) 
        to a patient protection requirement (as defined in paragraph 
        (3)) and does not prevent the application of other requirements 
        under this Act (except in the case of other substantially 
        equivalent 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.
            (3) Patient protection requirement defined.--For purposes 
        of this section, the term ``patient protection requirement'' 
        means a requirement under this title, and includes (as a single 
        requirement) a group or related set of requirements under a 
        section or similar unit under this title.
    (c) Determinations of Substantial Equivalence.--
            (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 equivalent to 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 provides for at least substantially equivalent and 
                effective patient protections to 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 are at least substantially 
                        equivalent to and as effective as 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.
            (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 
        equivalence.
    (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 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. COVERAGE OF LIMITED SCOPE PLANS.

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

SEC. 155. REGULATIONS.

    The Secretaries of Health and Human Services and Labor shall issue 
such regulations as may be necessary or appropriate to carry out this 
title. 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.

SEC. 156. INCORPORATION INTO PLAN OR COVERAGE DOCUMENTS.

    The requirements of this title with respect to a group health plan 
or health insurance coverage are 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.

 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 patient protection 
requirements under title I of the Bipartisan Patient Protection Act of 
2001, and each health insurance issuer shall comply with patient 
protection requirements under such title with respect to group health 
insurance coverage it offers, and such requirements shall be deemed to 
be incorporated into this subsection.''.
    (b) 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 patient protection 
requirements under title I of the Bipartisan Patient Protection Act of 
2001 with respect to individual health insurance coverage it offers, 
and such requirements shall be deemed to be incorporated into this 
subsection.''.

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

SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO GROUP HEALTH 
              PLANS AND GROUP HEALTH INSURANCE COVERAGE UNDER THE 
              EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.

    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 
title I of the Bipartisan Patient Protection Act of 2001 (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 of 2001 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 of 2001, 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) Internal appeals.--With respect to the internal 
        appeals process required to be established under section 103 of 
        such 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 
        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.
            ``(4) External appeals.--Pursuant to rules of the 
        Secretary, insofar as a group health plan enters into a 
        contract with a qualified external appeal entity for the 
        conduct of external appeal activities in accordance with 
        section 104 of such Act, 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.
            ``(5) 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 of 2001, 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).
            ``(6) 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.
            ``(7) Treatment of substantially equivalent state laws.--
        For purposes of applying this subsection, any reference in this 
        subsection to a requirement in a section or other provision in 
        the Bipartisan Patient Protection Act of 2001 with respect to a 
        health insurance issuer is deemed to include a reference to a 
        requirement under a State law that is substantially equivalent 
        (as determined under section 152(c) of such Act) to the 
        requirement in such section or other provisions.
            ``(8) Application to certain prohibitions against 
        retaliation.--With respect to compliance with the requirements 
        of section 135(b)(1) of the Bipartisan Patient Protection Act 
        of 2001, 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 of 2001 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 of 2001 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) In the case of a group health plan (as defined in section 
733) compliance with the requirements of subtitle A of title I of the 
Bipartisan Patient Protection Act of 2001, and compliance with 
regulations promulgated by the Secretary, in the case of a claims 
denial shall be deemed compliance with subsection (a) with respect to 
such claims denial.''.
    (c) Conforming Amendments.--(1) Section 732(a) of such Act (29 
U.S.C. 1185(a)) is amended by striking ``section 711'' and inserting 
``sections 711 and 714''.
    (2) The table of contents in section 1 of such Act is amended by 
inserting after the item relating to section 713 the following new 
item:

``Sec. 714. Patient protection standards.''.
    (3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is amended 
by inserting ``(other than section 135(b))'' after ``part 7''.

SEC. 302. AVAILABILITY OF CIVIL REMEDIES.

    (a) Availability of Federal Civil Remedies in Cases Not Involving 
Medically Reviewable Decisions.--
            (1) In general.--Section 502 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1132) is amended by 
        adding at the end the following new subsection:
    ``(n) Cause of Action Relating to Provision of Health Benefits.--
            ``(1) In general.--In any case in which--
                    ``(A) a person who is a fiduciary of a group health 
                plan, a health insurance issuer offering health 
                insurance coverage in connection with the plan, or an 
                agent of the plan, issuer, or plan sponsor--
                            ``(i) upon consideration of a claim for 
                        benefits of a participant or beneficiary under 
                        section 102 of the Bipartisan Patient 
                        Protection Act of 2001 (relating to procedures 
                        for initial claims for benefits and prior 
                        authorization determinations) or upon review of 
                        a denial of such a claim under section 103 of 
                        such Act (relating to internal appeal of a 
                        denial of a claim for benefits), fails to 
                        exercise ordinary care in making a decision--
                                    ``(I) regarding whether an item or 
                                service is covered under the terms and 
                                conditions of the plan or coverage,
                                    ``(II) 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
                                    ``(III) 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, or
                            ``(ii) otherwise fails to exercise ordinary 
                        care in the performance of a duty under the 
                        terms and conditions of the plan with respect 
                        to a participant or beneficiary, and
                    ``(B) such failure is a proximate cause of personal 
                injury to, or the death of, the participant or 
                beneficiary,
        such person shall be liable to the participant or beneficiary 
        (or the estate of such participant or beneficiary) for economic 
        and noneconomic damages (but not exemplary or punitive damages) 
        in connection with such personal injury or death.
            ``(2) Cause of action must not involve medically reviewable 
        decision.--
                    ``(A) In general.--A cause of action is established 
                under paragraph (1)(A) only if the decision referred to 
                in clause (i) or the failure described in clause (ii) 
                does not include a medically reviewable decision.
                    ``(B) Medically reviewable decision.--For purposes 
                of subparagraph (A), the term `medically reviewable 
                decision' means a denial of a claim for benefits under 
                the plan which is described in section 104(d)(2) of the 
                Bipartisan Patient Protection Act of 2001 (relating to 
                medically reviewable decisions).
            ``(3) Definitions.--For purposes of this subsection.--
                    ``(A) Ordinary care.--The term `ordinary care' 
                means--
                            ``(i) 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 claim involved; and
                            ``(ii) with respect to the performance of a 
                        duty, that degree of care, skill, and diligence 
                        that a reasonable and prudent individual would 
                        exercise in performing the duty or a duty of 
                        like character.
                    ``(B) 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.
                    ``(C) Claim for benefits; denial.--The terms `claim 
                for benefits' and `denial of a claim for benefits' have 
                the meanings provided such terms in section 102(e) of 
                the Bipartisan Patient Protection Act of 2001.
                    ``(D) Terms and conditions.--The term `terms and 
                conditions' includes, with respect to a group health 
                plan or health insurance coverage, requirements imposed 
                under title I of the Bipartisan Patient Protection Act 
                of 2001 or under part 6 or 7.
                    ``(E) Group health plan and other related terms.--
                The provisions of sections 732(d) and 733 apply for 
                purposes of this subsection in the same manner as they 
                apply for purposes of part 7, except that the term 
                `group health plan' includes a group health plan (as 
                defined in section 607(1)).
            ``(4) Exclusion of employers and other plan sponsors.--
                    ``(A) Causes of action against employers and plan 
                sponsors precluded.--Subject to subparagraph (B), 
                paragraph (1)(A) does not authorize a cause of action 
                against an employer or other plan sponsor maintaining 
                the plan (or against an employee of such an employer or 
                sponsor acting within the scope of employment).
                    ``(B) Certain causes of action permitted.--
                Notwithstanding subparagraph (A), a cause of action may 
                arise against an employer or other plan sponsor (or 
                against an employee of such an employer or sponsor 
                acting within the scope of employment)--
                            ``(i) under clause (i) of paragraph (1)(A), 
                        to the extent there was direct participation by 
                        the employer or other plan sponsor (or 
                        employee) in the decision of the plan under 
                        section 102 of the Bipartisan Patient 
                        Protection Act of 2001 upon consideration of a 
                        claim for benefits or under section 103 of such 
                        Act upon review of a denial of a claim for 
                        benefits, or
                            ``(ii) under clause (ii) of paragraph 
                        (1)(A), to the extent there was direct 
                        participation by the employer or other plan 
                        sponsor (or employee) in the failure described 
                        in such clause.
                    ``(C) Direct participation.--
                            ``(i) Direct participation in decisions.--
                        For purposes of subparagraph (B), the term 
                        `direct participation' means, in connection 
                        with a decision described in clause (i) of 
                        paragraph (1)(A) or a failure described in 
                        clause (ii) of such paragraph, the actual 
                        making of such decision or the actual exercise 
                        of control in making such decision or in the 
                        conduct constituting the failure.
                            ``(ii) Rules of construction.--For purposes 
                        of clause (i), the employer or plan sponsor (or 
                        employee) shall not be construed to be engaged 
                        in direct participation because of any form of 
                        decisionmaking or other conduct that is merely 
                        collateral or precedent to the decision 
                        described in clause (i) of paragraph (1)(A) on 
                        a particular claim for benefits of a 
                        participant or beneficiary or that is merely 
                        collateral or precedent to the conduct 
                        constituting a failure described in clause (ii) 
                        of paragraph (1)(A) with respect to a 
                        particular participant or beneficiary, 
                        including (but not limited to)--
                                    ``(I) any participation by the 
                                employer or other plan sponsor (or 
                                employee) in the selection of the group 
                                health plan or health insurance 
                                coverage involved or the third party 
                                administrator or other agent;
                                    ``(II) any engagement by the 
                                employer or other plan sponsor (or 
                                employee) in any cost-benefit analysis 
                                undertaken in connection with the 
                                selection of, or continued maintenance 
                                of, the plan or coverage involved;
                                    ``(III) any participation by the 
                                employer or other plan sponsor (or 
                                employee) in the process of creating, 
                                continuing, modifying, or terminating 
                                the plan or any benefit under the plan, 
                                if such process was not substantially 
                                focused solely on the particular 
                                situation of the participant or 
                                beneficiary referred to in paragraph 
                                (1)(A); and
                                    ``(IV) any participation by the 
                                employer or other plan sponsor (or 
                                employee) in the design of any benefit 
                                under the plan, including the amount of 
                                copayment and limits connected with 
                                such benefit.
                            ``(iv) Irrelevance of certain collateral 
                        efforts made by employer or plan sponsor.--For 
                        purposes of this subparagraph, an employer or 
                        plan sponsor shall not be treated as engaged in 
                        direct participation in a decision with respect 
                        to any claim for benefits or denial thereof in 
                        the case of any particular participant or 
                        beneficiary solely by reason of--
                                    ``(I) any efforts that may have 
                                been made by the employer or plan 
                                sponsor to advocate for authorization 
                                of coverage for that or any other 
                                participant or beneficiary (or any 
                                group of participants or 
                                beneficiaries), or
                                    ``(II) any provision that may have 
                                been made by the employer or plan 
                                sponsor for benefits which are not 
                                covered under the terms and conditions 
                                of the plan for that or any other 
                                participant or beneficiary (or any 
                                group of participants or 
                                beneficiaries).
            ``(5) Requirement of exhaustion.--
                    ``(A) In general.--Except as provided in this 
                paragraph, a cause of action may not be brought under 
                paragraph (1) in connection with any denial of a claim 
                for benefits of any individual until all administrative 
                processes under sections 102 and 103 of the Bipartisan 
                Patient Protection Act of 2001 (if applicable) have 
                been exhausted.
                    ``(B) Late manifestation of injury.--The 
                requirements under subparagraph (A) for a cause of 
                action in connection with any denial of a claim for 
                benefits shall be deemed satisfied, notwithstanding any 
                failure to timely commence review under section 103 
                with respect to the denial, if the personal injury is 
                first known (or first reasonably should have been 
                known) to the individual (or the death occurs) after 
                the latest date by which the applicable requirements of 
                subparagraph (A) can be met in connection with such 
                denial.
                    ``(C) Occurrence of immediate and irreparable harm 
                or death prior to completion of process.--
                            ``(i) In general.--The requirements of 
                        subparagraph (A) shall not apply if the action 
                        involves an allegation that immediate and 
                        irreparable harm or death was, or would be, 
                        caused by the denial of a claim for benefits 
                        prior to the completion of the administrative 
                        processes referred to in subparagraph (A) with 
                        respect to such denial.
                            ``(ii) Construction.--Nothing in clause (i) 
                        shall be construed to preclude--
                                    ``(I) continuation of such 
                                processes to their conclusion if so 
                                moved by any party, and
                                    ``(II) consideration in such action 
                                of the final decisions issued in such 
                                processes.
                            ``(iii) Definition.--In clause (i), the 
                        term `irreparable harm', with respect to an 
                        individual, means an injury or condition that, 
                        regardless of whether the individual receives 
                        the treatment that is the subject of the 
                        denial, cannot be repaired in a manner that 
                        would restore the individual to the 
                        individual's pre-injured condition.
                    ``(D) 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.
            ``(6) Statutory damages.--
                    ``(A) In general.--The remedies set forth in this 
                subsection (n) shall be the exclusive remedies for 
                causes of action brought under this subsection.
                    ``(B) Assessment of civil penalties.--In addition 
                to the remedies provided for in paragraph (1) (relating 
                to the failure to provide contract benefits in 
                accordance with the plan), a civil assessment, in an 
                amount not to exceed $5,000,000, payable to the 
                claimant may be awarded in any action under such 
                paragraph if the claimant establishes by clear and 
                convincing evidence that the alleged conduct carried 
                out by the defendant demonstrated bad faith and 
                flagrant disregard for the rights of the participant or 
                beneficiary under the plan and was a proximate cause of 
                the personal injury or death that is the subject of the 
                claim.
            ``(7) Limitation of action.--Paragraph (1) shall not apply 
        in connection with any action commenced after 3 years after the 
        later of--
                    ``(A) the date on which the plaintiff first knew, 
                or reasonably should have known, of the personal injury 
                or death resulting from the failure described in 
                paragraph (1), or
                    ``(B) the date as of which the requirements of 
                paragraph (5) are first met.
            ``(8) Tolling provision.--The statute of limitations for 
        any cause of action arising under State law relating to a 
        denial of a claim for benefits that is the subject of an action 
        brought in Federal court under this subsection shall be tolled 
        until such time as the Federal court makes a final disposition, 
        including all appeals, of whether such claim should properly be 
        within the jurisdiction of the Federal court. The tolling 
        period shall be determined by the applicable Federal or State 
        law, whichever period is greater.
            ``(9) 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.
            ``(10) Exclusion of directed recordkeepers.--
                    ``(A) In general.--Subject to subparagraph (C), 
                paragraph (1) shall not apply with respect to a 
                directed recordkeeper in connection with a group health 
                plan.
                    ``(B) Directed recordkeeper.--For purposes of this 
                paragraph, the term `directed recordkeeper' means, in 
                connection with a group health plan, a person engaged 
                in directed recordkeeping activities pursuant to the 
                specific instructions of the plan or the employer or 
                other 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 of 2001 and whose duties do not 
                include making decisions 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.
            ``(11) No effect on state law.--No provision of State law 
        (as defined in section 514(c)(1)) shall be treated as 
        superseded or otherwise altered, amended, modified, 
        invalidated, or impaired by reason of the provisions of 
        subsection (a)(1)(C) and this subsection.''.
            (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) Rules Relating to ERISA Preemption.--Section 514 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144) is 
amended--
            (1) by redesignating subsection (d) as subsection (f); and
            (2) by inserting after subsection (c) the following new 
        subsections:
    ``(d) Preemption Not To Apply to Causes of Action under State Law 
Involving Medically Reviewable Decision.--
            ``(1) Non-preemption of certain causes of action.--
                    ``(A) In general.--Except as provided in this 
                subsection, nothing in this title (including section 
                502) shall be construed to supersede or otherwise 
                alter, amend, modify, invalidate, or impair any cause 
                of action under State law of a participant or 
                beneficiary under a group health plan (or the estate of 
                such a participant or beneficiary) to recover damages 
                resulting from personal injury or for wrongful death 
                against any person if such cause of action arises by 
                reason of a medically reviewable decision.
                    ``(B) Medically reviewable decision.--For purposes 
                of subparagraph (A), the term `medically reviewable 
                decision' means a denial of a claim for benefits under 
                the plan which is described in section 104(d)(2) of the 
                Bipartisan Patient Protection Act of 2001 (relating to 
                medically reviewable decisions).
                    ``(C) Limitation on punitive damages.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), with respect to a cause 
                        of action described in subparagraph (A) brought 
                        with respect to a participant or beneficiary, 
                        State law is superseded insofar as it provides 
                        any punitive, exemplary, or similar damages if, 
                        as of the time of the personal injury or death, 
                        all the requirements of the following sections 
                        of the Bipartisan Patient Protection Act of 
                        2001 were satisfied with respect to the 
                        participant or beneficiary:
                                    ``(I) Section 102 (relating to 
                                procedures for initial claims for 
                                benefits and prior authorization 
                                determinations).
                                    ``(II) Section 103 of such Act 
                                (relating to internal appeals of claims 
                                denials).
                                    ``(III) Section 104 of such Act 
                                (relating to independent external 
                                appeals procedures).
                            ``(ii) Exception for certain actions for 
                        wrongful death.--Clause (i) shall not apply 
                        with respect to an action for wrongful death if 
                        the applicable State law provides (or has been 
                        construed to provide) for damages in such an 
                        action which are only punitive or exemplary in 
                        nature.
                            ``(iii) Exception for willful or wanton 
                        disregard for the rights or safety of others.--
                        Clause (i) shall not apply with respect to any 
                        cause of action described in subparagraph (A) 
                        if, in such action, the plaintiff establishes 
by clear and convincing evidence that conduct carried out by the 
defendant with willful or wanton disregard for the rights or safety of 
others was a proximate cause of the personal injury or wrongful death 
that is the subject of the action.
            ``(2) Definitions.--For purposes of this subsection and 
        subsection (e)--
                    ``(A) Group health plan and other related terms.--
                The provisions of sections 732(d) and 733 apply for 
                purposes of this subsection in the same manner as they 
                apply for purposes of part 7, except that the term 
                `group health plan' includes a group health plan (as 
                defined in section 607(1)).
                    ``(B) 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.
                    ``(C) Claim for benefit; denial.--The terms `claim 
                for benefits' and `denial of a claim for benefits' 
                shall have the meaning provided such terms under 
                section 102(e) of the Bipartisan Patient Protection Act 
                of 2001.
            ``(3) Exclusion of employers and other plan sponsors.--
                    ``(A) Causes of action against employers and plan 
                sponsors precluded.--Subject to subparagraph (B), 
                paragraph (1) does not apply with respect to--
                            ``(i) any cause of action against an 
                        employer or other plan sponsor maintaining the 
                        plan (or against an employee of such an 
                        employer or sponsor acting within the scope of 
                        employment), or
                            ``(ii) a right of recovery, indemnity, or 
                        contribution by a person against an employer or 
                        other plan sponsor (or such an employee) for 
                        damages assessed against the person pursuant to 
                        a cause of action to which paragraph (1) 
                        applies.
                    ``(B) Certain causes of action permitted.--
                Notwithstanding subparagraph (A), paragraph (1) applies 
                with respect to any cause of action described in 
                paragraph (1) maintained by a participant or 
                beneficiary against an employer or other plan sponsor 
                (or against an employee of such an employer or sponsor 
                acting within the scope of employment)--
                            ``(i) in the case of any cause of action 
                        based on a decision of the plan under section 
                        102 of the Bipartisan Patient Protection Act of 
                        2001 upon consideration of a claim for benefits 
                        or under section 103 of such Act upon review of 
                        a denial of a claim for benefits, to the extent 
                        there was direct participation by the employer 
                        or other plan sponsor (or employee) in the 
                        decision, or
                            ``(ii) in the case of any cause of action 
                        based on a failure to otherwise perform a duty 
                        under the terms and conditions of the plan with 
                        respect to a claim for benefits of a 
                        participant or beneficiary, to the extent there 
                        was direct participation by the employer or 
                        other plan sponsor (or employee) in the 
                        failure.
                    ``(C) Direct participation.--
                            ``(i) Direct participation in decisions.--
                        For purposes of subparagraph (B), the term 
                        `direct participation' means, in connection 
                        with a decision described in subparagraph 
                        (B)(i) or a failure described in subparagraph 
                        (B)(ii), the actual making of such decision or 
                        the actual exercise of control in making such 
                        decision or in the conduct constituting the 
                        failure.
                            ``(ii) Rules of construction.--For purposes 
                        of clause (i), the employer or plan sponsor (or 
                        employee) shall not be construed to be engaged 
                        in direct participation because of any form of 
                        decisionmaking or other conduct that is merely 
                        collateral or precedent to the decision 
                        described in subparagraph (B)(i) on a 
                        particular claim for benefits of a particular 
                        participant or beneficiary or that is merely 
                        collateral or precedent to the conduct 
                        constituting a failure described in 
                        subparagraph (B)(ii) with respect to a 
                        particular participant or beneficiary, 
                        including (but not limited to)--
                                    ``(I) any participation by the 
                                employer or other plan sponsor (or 
                                employee) in the selection of the group 
                                health plan or health insurance 
                                coverage involved or the third party 
                                administrator or other agent;
                                    ``(II) any engagement by the 
                                employer or other plan sponsor (or 
                                employee) in any cost-benefit analysis 
                                undertaken in connection with the 
                                selection of, or continued maintenance 
                                of, the plan or coverage involved;
                                    ``(III) any participation by the 
                                employer or other plan sponsor (or 
                                employee) in the process of creating, 
                                continuing, modifying, or terminating 
                                the plan or any benefit under the plan, 
                                if such process was not substantially 
                                focused solely on the particular 
                                situation of the participant or 
                                beneficiary referred to in paragraph 
                                (1)(A); and
                                    ``(IV) any participation by the 
                                employer or other plan sponsor (or 
                                employee) in the design of any benefit 
                                under the plan, including the amount of 
                                copayment and limits connected with 
                                such benefit.
                            ``(iv) Irrelevance of certain collateral 
                        efforts made by employer or plan sponsor.--For 
                        purposes of this subparagraph, an employer or 
                        plan sponsor shall not be treated as engaged in 
                        direct participation in a decision with respect 
                        to any claim for benefits or denial thereof in 
the case of any particular participant or beneficiary solely by reason 
of--
                                    ``(I) any efforts that may have 
                                been made by the employer or plan 
                                sponsor to advocate for authorization 
                                of coverage for that or any other 
                                participant or beneficiary (or any 
                                group of participants or 
                                beneficiaries), or
                                    ``(II) any provision that may have 
                                been made by the employer or plan 
                                sponsor for benefits which are not 
                                covered under the terms and conditions 
                                of the plan for that or any other 
                                participant or beneficiary (or any 
                                group of participants or 
                                beneficiaries).
            ``(4) Requirement of exhaustion.--
                    ``(A) In general.--Except as provided in this 
                paragraph, paragraph (1) shall not apply with respect 
                to a cause of action described in such paragraph in 
                connection with any denial of a claim for benefits of 
                any individual until all administrative processes under 
                sections 102, 103, and 104 of the Bipartisan Patient 
                Protection Act of 2001 (if applicable) have been 
                exhausted.
                    ``(B) Late manifestation of injury.--The 
                requirements under subparagraph (A) for a cause of 
                action in connection with any denial of a claim for 
                benefits shall be deemed satisfied, notwithstanding any 
                failure to timely commence review under section 103 or 
                104 with respect to the denial, if the personal injury 
                is first known (or first should have been known) to the 
                individual (or the death occurs) after the latest date 
                by which the applicable requirements of subparagraph 
                (A) can be met in connection with such denial.
                    ``(C) Occurrence of immediate an irreparable harm 
                or death prior to completion of process.--
                            ``(i) In general.--The requirements of 
                        subparagraph (A) shall not apply if the action 
                        involves an allegation that immediate and 
                        irreparable harm or death was, or would be, 
                        caused by the denial of a claim for benefits 
                        prior to the completion of the administrative 
                        processes referred to in subparagraph (A) with 
                        respect to such denial.
                            ``(ii) Construction.--Nothing in clause (i) 
                        shall be construed to preclude--
                                    ``(I) continuation of such 
                                processes to their conclusion if so 
                                moved by any party, and
                                    ``(II) consideration in such action 
                                of the final decisions issued in such 
                                processes.
                            ``(iii) Definition.--In clause (i), the 
                        term `irreparable harm', with respect to an 
                        individual, means an injury or condition that, 
                        regardless of whether the individual receives 
                        the treatment that is the subject of the 
                        denial, cannot be repaired in a manner that 
                        would restore the individual to the 
                        individual's pre-injured condition.
                    ``(D) 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.
            ``(5) Tolling provision.--The statute of limitations for 
        any cause of action arising under section 502(n) relating to a 
        denial of a claim for benefits that is the subject of an action 
        brought in State court shall be tolled until such time as the 
        State court makes a final disposition, including all appeals, 
        of whether such claim should properly be within the 
        jurisdiction of the State court. The tolling period shall be 
        determined by the applicable Federal or State law, whichever 
        period is greater.
            ``(6) Exclusion of directed recordkeepers.--
                    ``(A) In general.--Subject to subparagraph (C), 
                paragraph (1) shall not apply with respect to a 
                directed recordkeeper in connection with a group health 
                plan.
                    ``(B) Directed recordkeeper.--For purposes of this 
                paragraph, the term `directed recordkeeper' means, in 
                connection with a group health plan, a person engaged 
in directed recordkeeping activities pursuant to the specific 
instructions of the plan or the employer or other 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 of 2001 and whose duties do not include making 
decisions 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.
            ``(7) Construction.--Nothing in this subsection shall be 
        construed as--
                    ``(A) saving from preemption a cause of action 
                under State law for the failure to provide a benefit 
                for an item or service which is specifically excluded 
                under the group health plan involved, except to the 
                extent that--
                            ``(i) the application or interpretation of 
                        the exclusion involves a determination 
                        described in section 104(d)(2) of the 
                        Bipartisan Patient Protection Act of 2001, or
                            ``(ii) the provision of the benefit for the 
                        item or service is required under Federal law 
                        or under applicable State law consistent with 
                        subsection (b)(2)(B);
                    ``(B) preempting a State law which requires an 
                affidavit or certificate of merit in a civil action;
                    ``(C) affecting a cause of action or remedy under 
                State law in connection with the provision or 
                arrangement of excepted benefits (as defined in section 
                733(c)), other than those described in section 
                733(c)(2)(A); or
                    ``(D) affecting a cause of action under State law 
                other than a cause of action described in paragraph 
                (1)(A).
            ``(8) 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 described in paragraph (1)(A).
    ``(e) Rules of Construction Relating to Health Care.--Nothing in 
this title shall be construed as--
            ``(1) affecting any State law relating to the practice of 
        medicine or the provision of medical care, or affecting any 
        action based upon such a State law,
            ``(2) superseding any State law permitted under section 
        152(b)(1)(A) of the Bipartisan Patient Protection Act of 2001, 
        or
            ``(3) affecting any applicable State law with respect to 
        limitations on monetary damages.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to acts and omissions (from which a cause of action arises) 
occurring on or after the date of the enactment of this Act.

SEC. 303. LIMITATIONS ON ACTIONS.

    Section 502 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1132) (as amended by section 302(a)) is amended further by 
adding at the end the following new subsection:
    ``(o) 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 
        of 2001 (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 of 2001 (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) or section 514(d).
            ``(4) Enforcement by secretary unaffected.--Nothing in this 
        subsection shall be construed as affecting any action brought 
        by the Secretary.''.

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

        Subtitle A--Application of Patient Protection Provisions

SEC. 401. 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 of 2001 (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. 402. 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 401, 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. 411. EXPANDED AVAILABILITY OF ARCHER MSAS.

    (a) Extension of Program.--Paragraphs (2) and (3)(B) of section 
220(i) of the Internal Revenue Code of 1986 (defining cut-off year) are 
each amended by striking ``2002'' each place it appears and inserting 
``2004''.
    (b) Increase In Number of Permitted Account Participants.--
            (1) In general.--Subsection (j) of section 220 of such Code 
        is amended by redesignating paragraphs (3), (4), and (5) as 
        paragraphs (4), (5), and (6) and by inserting after paragraph 
        (2) the following new paragraph:
            ``(3) Determination of whether limit exceeded for years 
        after 2001.--
                    ``(A) In general.--The numerical limitation for any 
                year after 2001 is exceeded if the sum of--
                            ``(i) the number of Archer MSA returns 
                        filed on or before April 15 of such calendar 
                        year for taxable years ending with or within 
                        the preceding calendar year, plus
                            ``(ii) the Secretary's estimate (determined 
                        on the basis of the returns described in clause 
                        (i)) of the number of Archer MSA returns for 
                        such taxable years which will be filed after 
                        such date, exceeds 1,000,000. For purposes of 
                        the preceding sentence, the term `Archer MSA 
                        return' means any return on which any exclusion 
                        is claimed under section 106(b) or any 
                        deduction is claimed under this section.
                    ``(B) Alternative computation of limitation.--The 
                numerical limitation for any year after 2001 is also 
                exceeded if the sum of--
                            ``(i) 90 percent of the sum determined 
                        under subparagraph (A) for such calendar year, 
                        plus
                            ``(ii) the product of 2.5 and the number of 
                        medical savings accounts established during the 
                        portion of such year preceding July 1 (based on 
                        the reports required under paragraph (5)) for 
                        taxable years beginning in such year,
                exceeds 1,000,000''.
            (2) Conforming amendments.--
                    (A) Clause (ii) of section 220(j)(2)(B) of such 
                Code is amended by striking ``paragraph (4)'' and 
                inserting ``paragraph (5)''.
                    (B) Subparagraph (A) of section 220(j)(4) of such 
                Code is amended by striking ``and 2001'' and inserting 
                ``2001, 2002, and 2003''.
    (c) Increase in Size of Eligible Employers.--Subparagraph (A) of 
section 220(c)(4) of such Code is amended by striking ``50 or fewer 
employees'' and inserting ``100 or fewer employees''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
    (e) GAO Study.--Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall prepare and submit a report to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of the Senate 
on the impact of Archer MSAs on the cost of conventional insurance 
(especially in those areas where there are higher numbers of such 
accounts) and on adverse selection and health care costs.

SEC. 412. 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. 413. 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. 414. 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. 415. 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 a 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 V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

SEC. 501. EFFECTIVE DATES.

    (a) Group Health Coverage.--
            (1) In general.--Subject to paragraph (2) and subsection 
        (d), the amendments made by sections 201(a), 301, 303, and 401 
        and 402 (and title I insofar as it relates to such sections) 
        shall apply with respect to group health plans, and health 
        insurance coverage offered in connection with group health 
        plans, for plan years beginning on or after January 1, 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), 301, 303, and 401 and 402 (and title I insofar 
        as it relates to such sections) shall not apply to plan years 
        beginning before the later of--
                    (A) the date on which the last collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of the enactment of this Act); 
                or
                    (B) the general effective date.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by this division 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. 502. COORDINATION IN IMPLEMENTATION.

    The Secretary of Labor, the Secretary of Health and Human Services, 
and the Secretary of the Treasury shall ensure, through the execution 
of an interagency memorandum of understanding among such Secretaries, 
that--
            (1) regulations, rulings, and interpretations issued by 
        such Secretaries relating to the same matter over which such 
        Secretaries have responsibility under the provisions of this 
        division (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. 503. SEVERABILITY.

    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.
                                 <all>