[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 889 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 889

    To protect consumers in managed care plans and in other health 
                               coverage.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 15, 2001

 Mr. Frist (for himself, Mr. Breaux, and Mr. Jeffords) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
    To protect consumers in managed care plans and in 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 
Patients' Bill of Rights 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--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

Sec. 101. Access to emergency medical care.
Sec. 102. Offering of choice of coverage options.
Sec. 103. Patient access to obstetric and gynecological care.
Sec. 104. Access to pediatric care.
Sec. 105. Timely access to specialists.
Sec. 106. Continuity of care.
Sec. 107. Protection of patient-provider communications.
Sec. 108. Patient's right to prescription drugs.
Sec. 109. Coverage for individuals participating in approved clinical 
                            trials.
Sec. 110. Required coverage for minimum hospital stay for mastectomies 
                            and lymph node dissections for the 
                            treatment of breast cancer and coverage for 
                            secondary consultations.
Sec. 111. Prohibition of discrimination against providers based on 
                            licensure.
Sec. 112. Generally applicable provision.
       Subtitle B--Right to Information About Plans and Providers

Sec. 121. Health plan information.
Sec. 122. Information about providers.
Sec. 123. Study on the effect of physician compensation methods.
           Subtitle C--Right to Hold Health Plans Accountable

Sec. 131. Amendments to Employee Retirement Income Security Act of 
                            1974.
Sec. 132. Enforcement.
                          Subtitle D--Remedies

Sec. 141. Availability of court remedies.
Sec. 142. Limitation on certain class action litigation.
Sec. 143. Authority to impose civil penalties for failure to provide a 
                            plan benefit not eligible for medical 
                            review.
                     Subtitle E--State Flexibility

Sec. 151. Preemption; State flexibility; construction.
Sec. 152. Coverage of limited scope dental plans.
                  Subtitle F--Miscellaneous Provisions

Sec. 161. Definitions.
         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to certain health insurance coverage.
Sec. 202. Application to individual health insurance coverage.
Sec. 203. Limitation on authority of the Secretary of Health and Human 
                            services with respect to non-Federal 
                            governmental plans.
Sec. 204. Cooperation between Federal and State authorities.
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. Cooperation between Federal and State authorities.
       TITLE IV--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 401. Application to group health plans under the Internal Revenue 
                            Code of 1986.
Sec. 402. Conforming enforcement for women's health and cancer rights.
                 TITLE V--EFFECTIVE DATE; SEVERABILITY

Sec. 501. Effective date and related rules.
Sec. 502. Severability.

                   TITLE I--PATIENTS' BILL OF RIGHTS

                  Subtitle A--Right to Advice and Care

SEC. 101. ACCESS TO EMERGENCY MEDICAL CARE.

    (a) Coverage of Emergency Services.--If a group health plan, and a 
health insurance issuer that offers health insurance coverage, provides 
coverage for any benefits consisting of emergency medical care, except 
for items or services specifically excluded from coverage, the plan or 
issuer shall, without regard to prior authorization or provider 
participation--
            (1) provide coverage for emergency medical screening 
        examinations to the extent that a prudent layperson, who 
        possesses an average knowledge of health and medicine, would 
        determine such examinations to be necessary; and
            (2) provide coverage for additional emergency medical care 
        to stabilize an emergency medical condition following an 
        emergency medical screening examination (if determined 
        necessary), pursuant to the definition of stabilize under 
        section 1867(e)(3) of the Social Security Act (42 U.S.C. 
        1395dd(e)(3)).
    (b) Coverage of Emergency Ambulance Services.--If a group health 
plan, and a health insurance issuer that offers health insurance 
coverage, provides coverage for any benefits consisting of emergency 
ambulance services, except for items or services specifically excluded 
from coverage, the plan or issuer shall, without regard to prior 
authorization or provider participation, provide coverage for emergency 
ambulance services to the extent that a prudent layperson, who 
possesses an average knowledge of health and medicine, would determine 
such emergency ambulance services to be necessary.
    (c) Care After Stabilization.--
            (1) In general.--In the case of medically necessary and 
        appropriate items or services related to the emergency medical 
        condition that may be provided to a participant, beneficiary, 
        or enrollee by a nonparticipating provider after the 
        participant, beneficiary, or enrollee is stabilized, the 
        nonparticipating provider shall contact the plan or issuer as 
        soon as practicable, but not later than 1 hour after 
        stabilization occurs, with respect to whether--
                    (A) the provision of items or services is approved;
                    (B) the participant, beneficiary, or enrollee will 
                be transferred; or
                    (C) other arrangements will be made concerning the 
                care and treatment of the participant, beneficiary, or 
                enrollee.
            (2) Failure to respond and make arrangements.--If a group 
        health plan, and a health insurance issuer that offers health 
        insurance coverage, fails to respond and make arrangements 
        within 1 hour of being contacted in accordance with paragraph 
        (1), then the plan or issuer shall be responsible for the cost 
        of any additional items or services provided by the 
        nonparticipating provider if--
                    (A) coverage for items or services of the type 
                furnished by the nonparticipating provider is available 
                under the plan or coverage;
                    (B) the items or services are medically necessary 
                and appropriate and related to the emergency medical 
                condition involved; and
                    (C) the timely provision of the items or services 
                is medically necessary and appropriate.
            (3) Rule of construction.--Nothing in this subsection shall 
        be construed to apply to a group health plan, and a health 
        insurance issuer that offers health insurance coverage, that 
        does not require prior authorization for items or services 
        provided to a participant, beneficiary, or enrollee after the 
        participant, beneficiary, or enrollee is stabilized.
    (d) Reimbursement to a Nonparticipating Provider.--The 
responsibility of a group health plan, and a health insurance issuer 
that offers health insurance coverage, to provide reimbursement to a 
nonparticipating provider under this section shall cease accruing upon 
the earlier of--
            (1) the transfer or discharge of the participant, 
        beneficiary, or enrollee; or
            (2) the completion of other arrangements made by the plan 
        or issuer and the nonparticipating provider.
    (e) Responsibility of Participant.--The coverage required under 
subsections (a), (b), and (c) shall be provided by a group health plan, 
and a health insurance issuer that offers health insurance coverage, in 
a manner so that, if the services referred to in such subsections are 
provided to a participant, beneficiary, or enrollee by a 
nonparticipating provider with or 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.
    (f) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a group health plan or health insurance issuer 
from negotiating reimbursement rates with a nonparticipating provider 
for items or services provided under this section.
    (g) Definitions.--In this section:
            (1) Emergency ambulance services.--The term ``emergency 
        ambulance services'' means, with respect to a participant, 
        beneficiary, or enrollee under a group health plan, or a health 
        insurance issuer that offers health insurance coverage, 
        ambulance services furnished to transport an individual who has 
        an emergency medical condition to a treating facility for 
        receipt of emergency medical care if--
                    (A) the emergency services are covered under the 
                group health plan or health insurance coverage 
                involved; and
                    (B) a prudent layperson who possesses an average 
                knowledge of health and medicine could reasonably 
                expect the absence of such emergency transport to 
                result in placing the health of the participant, 
                beneficiary, or enrollee (or, with respect to a 
                pregnant woman, the health of the woman or her unborn 
                child) in serious jeopardy, serious impairment to 
                bodily functions, or serious dysfunction of any bodily 
                organ or part.
            (2) Emergency medical care.--The term ``emergency medical 
        care'' means, with respect to a participant, beneficiary, or 
        enrollee under a group health plan, or a health insurance 
        issuer that offers health insurance coverage, covered inpatient 
        and outpatient items or services that--
                    (A) are furnished by any provider, including a 
                nonparticipating provider, that is qualified to furnish 
                such items or services; and
                    (B) are needed to evaluate or stabilize (as such 
                term is defined in section 1867(e)(3) of the Social 
                Security Act (42 U.S.C. 1395dd(e)(3)) an emergency 
                medical condition.
            (3) 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 
        placing the health of the participant, beneficiary, or enrollee 
        (or, with respect to a pregnant woman, the health of the woman 
        or her unborn child) in serious jeopardy, serious impairment to 
        bodily functions, or serious dysfunction of any bodily organ or 
        part.

SEC. 102. OFFERING OF CHOICE OF COVERAGE OPTIONS.

    (a) Requirement.--If a group health plan provides coverage for 
benefits only through a defined set of participating health care 
professionals, the plan shall offer the participant the option to 
purchase point-of-service coverage (as defined in subsection (b)) for 
all such benefits for which coverage is otherwise so limited. Such 
option shall be made available to the participant at the time of 
enrollment under the plan and at such other times as the plan offers 
the participant a choice of coverage options.
    (b) Point-of-Service Coverage Defined.--In this section, the term 
``point-of-service coverage'' means, with respect to benefits covered 
under a group health plan coverage of such benefits when provided by a 
nonparticipating health care professional.
    (c) Small Employer Exemption.--
            (1) In general.--This section shall not apply to any group 
        health plan with respect to a small employer.
            (2) Small employer.--For purposes of paragraph (1), the 
        term ``small employer'' means, in connection with a group 
        health plan with respect to a calendar year and a plan year, an 
        employer who employed an average of at least 2 but not more 
        than 25 employees on business days during the preceding 
        calendar year and who employs at least 2 employees on the first 
        day of the plan year. For purposes of this paragraph, the 
        provisions of subparagraph (C) of section 712(c)(1) shall apply 
        in determining employer size.
    (d) Rule of Construction.--Nothing in this section shall be 
construed--
            (1) as requiring coverage for benefits for a particular 
        type of health care professional;
            (2) as preventing a group health plan from imposing higher 
        premiums or cost-sharing on a participant for the exercise of a 
        point-of-service coverage option; or
            (3) to require that a group health plan include coverage of 
        health care professionals that the plan excludes because of 
        fraud, quality of care, or other similar reasons with respect 
        to such professionals.
    (e) Special Point of Service Protection for Individuals in Dental 
Plans.--For purposes of applying the requirements of this section 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) of the Public Health Service Act and section 733(c)(2)(A) 
of the Employee Retirement Income Security Act of 1974, only relating 
to limited scope dental benefits, shall be deemed not to apply.

SEC. 103. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL CARE.

    (a) General Rights.--
            (1) Direct access.--A group health plan, and a health 
        insurance issuer that offers health insurance coverage, 
        described in subsection (b) may not require authorization or 
        referral by the 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 physician who specializes in 
        obstetrics or gynecology.
            (2) Obstetrical and gynecological care.--A group health 
        plan, and a health insurance issuer that offers health 
        insurance coverage, 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, and a health 
insurance issuer that offers health insurance coverage, described in 
this subsection is a plan or issuer, 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 other than 
        a physician who specializes in obstetrics or gynecology.
    (c) Rules of Construction.--Nothing in this section shall be 
construed--
            (1) to require that a group health plan or a health 
        insurance issuer approve or provide coverage for--
                    (A) any items or services that are not covered 
                under the terms and conditions of the plan or coverage;
                    (B) any items or services that are not medically 
                necessary and appropriate; or
                    (C) any items or services that are provided, 
                ordered, or otherwise authorized under subsection 
                (a)(2) by a physician unless such items or services are 
                related to obstetric or gynecologic care;
            (2) to preclude a group health plan or health insurance 
        issuer from requiring that the physician described in 
        subsection (a) notify the designated primary care professional 
        or case manager of treatment decisions in accordance with a 
        process implemented by the plan or issuer, except that the plan 
        or issuer shall not impose such a notification requirement on 
        the participant, beneficiary, or enrollee involved in the 
        treatment decision;
            (3) to preclude a group health plan or health insurance 
        issuer from requiring authorization, including prior 
        authorization, for certain items and services from the 
        physician described in subsection (a) who specializes in 
        obstetrics and gynecology if the designated primary care 
        provider of the participant, beneficiary, or enrollee would 
        otherwise be required to obtain authorization for such items or 
        services;
            (4) to require that the participant, beneficiary, or 
        enrollee described in subsection (a)(1) obtain authorization or 
        a referral from a primary care provider in order to obtain 
        obstetrical or gynecological care from a health care 
        professional other than a physician if the provision of 
        obstetrical or gynecological care by such professional is 
        permitted by the group health plan or health insurance coverage 
        and consistent with State licensure, credentialing, and scope 
        of practice laws and regulations; or
            (5) to preclude the participant, beneficiary, or enrollee 
        described in subsection (a)(1) from designating a health care 
        professional other than a physician as a primary care provider 
        if such designation is permitted by the group health plan or 
        health insurance issuer and the treatment by such professional 
        is consistent with State licensure, credentialing, and scope of 
        practice laws and regulations.

SEC. 104. ACCESS TO PEDIATRIC CARE.

    (a) Pediatric Care.--If a group health plan, and a health insurance 
issuer that offers health insurance coverage, requires or provides for 
a participant, beneficiary, or enrollee to designate a participating 
primary care provider for a child of such participant, beneficiary, or 
enrollee, the plan or issuer shall permit the participant, beneficiary, 
or enrollee to designate a physician who specializes in pediatrics as 
the child's primary care provider if such provider participates in the 
network of the plan or issuer.
    (b) Rules of Construction.--With respect to the child of a 
participant, beneficiary, or enrollee, nothing in subsection (a) shall 
be construed to--
            (1) require that the participant, beneficiary, or enrollee 
        obtain prior authorization or a referral from a primary care 
        provider in order to obtain pediatric care from a health care 
        professional other than a physician if the provision of 
        pediatric care by such professional is permitted by the plan or 
        issuer and consistent with State licensure, credentialing, and 
        scope of practice laws and regulations; or
            (2) preclude the participant, beneficiary, or enrollee from 
        designating a health care professional other than a physician 
        as a primary care provider for the child if such designation is 
        permitted by the plan or issuer and the treatment by such 
        professional is consistent with State licensure, credentialing, 
        and scope of practice laws.

SEC. 105. TIMELY ACCESS TO SPECIALISTS.

    (a) Timely Access.--
            (1) Requirement of coverage.--
                    (A) In general.--A group health plan, and a health 
                insurance issuer that offers health insurance coverage, 
                shall ensure that participants, beneficiaries, and 
                enrollees receive timely coverage for access to 
                appropriate medical specialists when such specialty 
                care is a covered benefit under the plan or coverage.
                    (B) Appropriate medical specialist defined.--In 
                this subsection, the term ``appropriate medical 
                specialist'' means a physician (including an 
                alleopathic or osteopathic physician) or health care 
                professional who is appropriately credentialed or 
                licensed in 1 or more States and who typically treats 
                the diagnosis or condition of the participant, 
                beneficiary, or enrollee.
            (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 health insurance 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;
                    (C) to prohibit a plan or issuer from establishing 
                measures designed to maintain quality and control costs 
                consistent with the responsibilities of the plan or 
                issuer; or
                    (D) to override any State licensure or scope-of-
                practice law.
            (3) Access to certain providers.--
                    (A) Participating providers.--Nothing in this 
                section shall be construed to prohibit a group health 
                plan, or a health insurance issuer that offers health 
                insurance coverage, from requiring that a participant, 
                beneficiary, or enrollee obtain specialty care from a 
                participating specialist.
                    (B) Nonparticipating providers.--
                            (i) In general.--With respect to specialty 
                        care under this section, if a group health 
                        plan, or a health insurance issuer that offers 
                        health insurance coverage, determines that a 
                        participating specialist is not available 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.
                            (ii) Treatment of nonparticipating 
                        providers.--If a group health plan, or a health 
                        insurance issuer that offers health insurance 
                        coverage, refers a participant, beneficiary, or 
                        enrollee to a nonparticipating specialist 
                        pursuant to clause (i), 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.--Nothing in this section shall be 
        construed to prohibit a group health plan, or a health 
        insurance issuer that offers health insurance coverage, from 
        requiring an authorization in order to obtain coverage for 
        specialty services so long as such authorization is for an 
        appropriate duration or number of referrals.
            (2) Referrals for ongoing special conditions.--
                    (A) In general.--A group health plan, and a health 
                insurance issuer that offers health insurance coverage, 
                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 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, or 
                        disabling; and
                            (ii) requires specialized medical care over 
                        a prolonged period of time.
    (c) Treatment Plans.--
            (1) In general.--Nothing in this section shall be construed 
        to prohibit a group health plan, or a health insurance issuer 
        that offers health insurance coverage, from requiring that 
        specialty care be provided pursuant to a treatment plan so long 
        as the treatment plan is--
                    (A) developed by the specialist, in consultation 
                with the case manager or primary care provider, and the 
                participant, beneficiary, or enrollee; and
                    (B) if the plan or issuer requires such approval, 
                approved in a timely manner by the plan or issuer 
                consistent with the 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 necessary 
        medical information.
    (d) Specialist Defined.--For purposes of this section, the term 
``specialist'' means, with respect to the medical condition of the 
participant, beneficiary, or enrollee, a health care professional, 
facility, or center (such as a center of excellence) that has adequate 
expertise (including age-appropriate expertise) through appropriate 
training and experience.

SEC. 106. CONTINUITY OF CARE.

    (a) Termination of Provider.--If a contract between a group health 
plan, and a health insurance issuer that offers health insurance 
coverage, and a treating health care provider is terminated (as defined 
in paragraph (e)(4)), or 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, and an individual who is a 
participant, beneficiary or enrollee under such plan or coverage is 
undergoing an active course of treatment for a serious and complex 
condition, institutional care, pregnancy, or terminal illness from the 
provider at the time the plan or issuer receives or provides notice of 
such termination, the plan or issuer shall--
            (1) notify the individual, or arrange to have the 
        individual notified pursuant to subsection (d)(2), on a timely 
        basis of such termination;
            (2) provide the individual with an opportunity to notify 
        the plan or issuer of the individual's need for transitional 
        care; and
            (3) subject to subsection (c), permit the individual to 
        elect to continue to be covered with respect to the active 
        course of treatment with the provider's consent during a 
        transitional period (as provided for under subsection (b)).
    (b) Transitional Period.--
            (1) Serious and complex conditions.--The transitional 
        period under this section with respect to a serious and complex 
        condition shall extend for up to 90 days from the date of the 
        notice described in subsection (a)(1) of the provider's 
        termination.
            (2) Institutional or inpatient care.--
                    (A) In general.--The transitional period under this 
                section for institutional or non-elective inpatient 
                care from a provider shall extend until the earlier 
                of--
                            (i) the expiration of the 90-day period 
                        beginning on the date on which the notice 
                        described in subsection (a)(1) of the 
                        provider's termination is provided; or
                            (ii) the date of discharge of the 
                        individual from such care or the termination of 
                        the period of institutionalization.
                    (B) Scheduled care.--The 90 day limitation 
                described in subparagraph (A)(i) shall include post-
                surgical follow-up care relating to non-elective 
                surgery that has been scheduled before the date of the 
                notice of the termination of the provider under 
                subsection (a)(1).
            (3) Pregnancy.--If--
                    (A) a participant, beneficiary, or enrollee has 
                entered the second trimester of pregnancy at the time 
                of a provider's termination of participation; and
                    (B) the provider was treating the pregnancy before 
                the date of the termination;
        the transitional period under this subsection with respect to 
        provider's treatment of the pregnancy shall extend through the 
        provision of post-partum care directly related to the delivery.
            (4) Terminal illness.--If--
                    (A) a participant, beneficiary, or enrollee was 
                determined to be terminally ill (as determined under 
                section 1861(dd)(3)(A) of the Social Security Act) at 
                the time of a provider's termination of participation; 
                and
                    (B) the provider was treating the terminal illness 
                before the date of termination;
        the transitional period under this subsection shall extend for 
        the remainder of the individual's life for care that is 
        directly related to the treatment of the terminal illness.
    (c) Permissible Terms and Conditions.--A group health plan, and a 
health insurance issuer that offers health insurance coverage, 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 individual involved 
        (with respect to cost-sharing) at the rates applicable prior to 
        the start of the transitional period as payment in full (or at 
        the rates applicable under the replacement plan after the date 
        of the termination of the contract with the plan or issuer) and 
        not to impose cost-sharing with respect to the individual in an 
        amount that would exceed the cost-sharing that could have been 
        imposed if the contract referred to in this section 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 eligible for transitional care 
                under this section.
    (e) Definitions.--In this section:
            (1) Contract.--The term ``contract between a group health 
        plan, and a health insurance issuer that offers health 
        insurance coverage, and a treating health care provider'' shall 
        include a contract between such a plan or issuer and an 
        organized network of providers.
            (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 
        condition that is medically determinable and--
                    (A) in the case of an acute illness, is a condition 
                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 illness or condition that--
                            (i) is complex and difficult to manage;
                            (ii) is disabling or life- threatening; and
                            (iii) requires--
                                    (I) frequent monitoring over a 
                                prolonged period of time and requires 
                                substantial on-going specialized 
                                medical care; or
                                    (II) frequent ongoing specialized 
                                medical care across a variety of 
                                domains of care.
            (4) Terminated.--The term ``terminated'' includes, with 
        respect to a contract (as defined in paragraph (1)), the 
        expiration or nonrenewal of the contract by the group health 
        plan or health insurance issuer, but does not include a 
        termination of the contract by the plan or issuer for failure 
        to meet applicable quality standards or for fraud.

SEC. 107. PROTECTION OF PATIENT-PROVIDER COMMUNICATIONS.

    (a) In General.--Subject to subsection (b), a group health plan, 
and a health insurance issuer that offers health insurance coverage, 
(in relation to a participant, beneficiary, or enrollee) 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 participant, beneficiary, 
or enrollee or medical care or treatment for the condition or disease 
of the participant, beneficiary, or enrollee, regardless of whether 
coverage for such care or treatment are provided under the contract, if 
the professional is acting within the lawful scope of practice.
    (b) Rule of Construction.--Nothing in this section shall be 
construed as requiring a group health plan, or a health insurance 
issuer that offers health insurance coverage, to provide specific 
benefits under the terms of such plan or coverage.

SEC. 108. PATIENT'S RIGHT TO PRESCRIPTION DRUGS.

    (a) In General.--To the extent that a group health plan, and a 
health insurance issuer that offers health insurance coverage, 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; and
            (2) 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.
    (b) Rule of Construction.--Nothing in this section shall be 
construed to prohibit a group health plan, or a health insurance issuer 
that offers health insurance coverage, from excluding coverage for a 
specific drug or class of drugs if such drugs or class of drugs is 
expressly excluded under the terms and conditions of the plan or 
coverage.

SEC. 109. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED CLINICAL 
              TRIALS.

    (a) Coverage.--
            (1) In general.--If a group health plan, and a health 
        insurance issuer that offers 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 subsections (b), (c), and (d) 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 participant's, beneficiaries, or 
                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 an enrollee in 
health insurance coverage and who meets the following conditions:
            (1)(A) The individual has a life-threatening or serious 
        illness for which no standard treatment is effective.
            (B) The individual is eligible to participate in an 
        approved clinical trial according to the trial protocol with 
        respect to treatment of such illness.
            (C) The individual's participation in the trial offers 
        meaningful potential for significant clinical benefit for the 
        individual.
            (2) Either--
                    (A) the referring physician is a participating 
                health care professional and has concluded that the 
                individual's participation in such trial would be 
                appropriate based upon the individual meeting the 
                conditions described in paragraph (1); or
                    (B) the participant, beneficiary, or enrollee 
                provides medical and scientific information 
                establishing that the individual's participation in 
                such trial would be appropriate based upon the 
                individual meeting the conditions described in 
                paragraph (1).
    (c) Payment.--
            (1) In general.--Under this section a group health plan, 
        and a health insurance issuer that offers health insurance 
        coverage, 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 to be 
        paid for by the sponsors of an approved clinical trial.
            (2) Standards for determining routine patient costs 
        associated with clinical trial participation.--
                    (A) In general.--The Secretary shall, in accordance 
                with this paragraph, establish standards relating to 
                the coverage of routine patient costs for individuals 
                participating in clinical trials that group health 
                plans and health insurance issuers must meet under this 
                section.
                    (B) Factors.--In establishing routine patient cost 
                standards under subparagraph (A), the Secretary shall 
                consult with interested parties and take into account 
                --
                            (i) quality of patient care;
                            (ii) routine patient care costs versus 
                        costs associated with the conduct of clinical 
                        trials, including unanticipated patient care 
                        costs as a result of participation in clinical 
                        trials; and
                            (iii) previous and on-going studies 
                        relating to patient care costs associated with 
                        participation in clinical trials.
                    (C) Appointment and meetings of negotiated 
                rulemaking committee.--
                            (i) Publication of notice.--Not later than 
                        November 15, 2002, the Secretary shall publish 
                        notice of the establishment of a negotiated 
                        rulemaking committee, as provided for under 
                        section 564(a) of title 5, United States Code, 
                        to develop the standards described in 
                        subparagraph (A), which shall include--
                                    (I) the proposed scope of the 
                                committee;
                                    (II) the interests that may be 
                                impacted by the standards;
                                    (III) a list of the proposed 
                                membership of the committee;
                                    (IV) the proposed meeting schedule 
                                of the committee;
                                    (V) a solicitation for public 
                                comment on the committee; and
                                    (VI) the procedures under which an 
                                individual may apply for membership on 
                                the committee.
                            (ii) Comment period.--Notwithstanding 
                        section 564(c) of title 5, United States Code, 
                        the Secretary shall provide for a period, 
                        beginning on the date on which the notice is 
                        published under clause (i) and ending on 
                        November 30, 2002, for the submission of public 
                        comments on the committee under this 
                        subparagraph.
                            (iii) Appointment of committee.--Not later 
                        than December 30, 2001, the Secretary shall 
                        appoint the members of the negotiated 
                        rulemaking committee under this subparagraph.
                            (iv) Facilitator.--Not later than January 
                        10, 2003, the negotiated rulemaking committee 
                        shall nominate a facilitator under section 
                        566(c) of title 5, United States Code, to carry 
                        out the activities described in subsection (d) 
                        of such section.
                            (v) Meetings.--During the period beginning 
                        on the date on which the facilitator is 
                        nominated under clause (iv) and ending on March 
                        30, 2003, the negotiated rulemaking committee 
                        shall meet to develop the standards described 
                        in subparagraph (A).
                    (D) Preliminary committee report.--
                            (i) In general.--The negotiated rulemaking 
                        committee appointed under subparagraph (C) 
                        shall report to the Secretary, by not later 
                        than March 30, 2003, regarding the committee's 
                        progress on achieving a consensus with regard 
                        to the rulemaking proceedings and whether such 
                        consensus is likely to occur before the target 
                        date described in subsection (F).
                            (ii) Termination of process and publication 
                        of rule by secretary.--If the committee reports 
                        under clause (i) that the committee has failed 
                        to make significant progress towards such 
                        consensus or is unlikely to reach such 
                        consensus by the target date described in 
                        subsection (F), the Secretary shall terminate 
                        such process and provide for the publication in 
                        the Federal Register, by not later than June 
                        30, 2003, of a rule under this paragraph 
                        through such other methods as the Secretary may 
                        provide.
                    (E) Final committee report and publication of rule 
                by secretary.--
                            (i) In general.--If the rulemaking 
                        committee is not terminated under subparagraph 
                        (D)(ii), the committee shall submit to the 
                        Secretary, by not later than May 30, 2003, a 
                        report containing a proposed rule.
                            (ii) Publication of rule.--If the Secretary 
                        receives a report under clause (i), the 
                        Secretary shall provide for the publication in 
                        the Federal Register, by not later than June 
                        30, 2003, of the proposed rule.
                    (F) Target date for publication of rule.--As part 
                of the notice under subparagraph (C)(i), and for 
                purposes of this paragraph, the ``target date for 
                publication'' (referred to in section 564(a)(5) of 
                title 5, United States Code) shall be June 30, 2003.
                    (G) Effective date.--The provisions of this 
                paragraph shall apply to group health plans and health 
                insurance issuers that offer health insurance coverage 
                for plan or coverage years beginning on or after 
                January 1, 2004.
            (3) 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 or 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) 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 
        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 
preclude a plan or issuer from offering coverage that is broader than 
the coverage required under this section with respect to clinical 
trials.
    (f) Plan Satisfaction of Certain Requirements; Responsibilities of 
Fiduciaries.--
            (1) In general.--For purposes of this section, 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 requirements of this section 
        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.
            (2) Construction.--Nothing in this section shall be 
        construed to affect or modify the responsibilities of the 
        fiduciaries of a group health plan under part 4 of subtitle B.
    (g) Study and Report.--
            (1) Study.--The Secretary shall study the impact on group 
        health plans and health insurance issuers for covering routine 
        patient care costs for individuals who are entitled to benefits 
        under this section and who are enrolled in an approved clinical 
        trial program.
            (2) Report to congress.--Not later than January 1, 2006, 
        the Secretary shall submit a report to Congress that contains 
        an assessment of--
                    (A) any incremental cost to group health plans and 
                health insurance issuers resulting from the provisions 
                of this section;
                    (B) a projection of expenditures to such plans and 
                issuers resulting from this section; and
                    (C) any impact on premiums resulting from this 
                section.

SEC. 110. 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 that offers 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 that offers 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 that offers 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 that offers 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).

SEC. 111. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS BASED ON 
              LICENSURE.

    (a) In General.--A group health plan, and a health insurance issuer 
that offers 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 coverage.

SEC. 112. GENERALLY APPLICABLE PROVISION.

    Notwithstanding section 102, in the case of a group health plan, 
and a health insurance issuer that offers health insurance coverage, 
that provides benefits under 2 or more coverage options, the 
requirements of this subpart shall apply separately with respect to 
each coverage option.

       Subtitle B--Right to Information About Plans and Providers

SEC. 121. HEALTH PLAN INFORMATION.

    (a) Requirement.--
            (1) Disclosure.--
                    (A) In general.--A group health plan, and a health 
                insurance issuer that offers health insurance coverage, 
                shall provide for the disclosure of the information 
                described in subsection (b) to participants, 
                beneficiaries, and enrollees--
                            (i) at the time of the initial enrollment 
                        of the participant, beneficiary, or enrollee 
                        under the plan or coverage;
                            (ii) on an annual basis after enrollment--
                                    (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) in the case of any material reduction 
                        to the benefits or information described in 
                        paragraphs (1), (2) and (3) of subsection (b), 
                        in the form of a summary notice provided not 
                        later than the date on which the reduction 
                        takes effect.
                    (B) Participants, beneficiaries, or enrollees.--The 
                disclosure required under subparagraph (A) shall be 
                provided--
                            (i)(I) jointly to each participant and 
                        beneficiary who reside at the same address; or
                            (II) in the case of a beneficiary who does 
                        not reside at the same address as the 
                        participant, separately to the participant and 
                        such beneficiary; and
                            (ii) to each enrollee.
            (2) Rule of construction.--Nothing in this section shall be 
        construed to prevent a group health plan sponsor and health 
        insurance issuer from entering into an agreement under which 
        either the plan sponsor or the issuer agrees to assume 
        responsibility for compliance with the requirements of this 
        section, in whole or in part, and the party delegating such 
        responsibility is released from liability for compliance with 
        the requirements that are assumed by the other party, to the 
        extent the party delegating such responsibility did not cause 
        such noncompliance.
            (3) 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 preventative services covered under 
                the plan or coverage if such services are covered;
                    (C) any 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
                    (D) 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 
                above any reasonable and customary charges, 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 104 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 
        the right to timely coverage for access to specialists care 
        under section 105 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 cancer clinical 
        trials under section 109 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 107 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 101, 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 of participants, beneficiaries, or 
        enrollees under sections 503, 503A and 503B of the Employee 
        Retirement Income Security Act of 1974 (or sections 2707(b) and 
        2753(b) of the Public Health Service with respect to non-
        Federal governmental plans and individual health insurance 
        coverage) 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.
            (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. The name of the 
        designated decision-maker (or decision-makers) appointed under 
        section 502(n)(2) of the Employee Retirement Income Security 
        Act of 1974 for purposes of making final determinations under 
        section 503A of such Act and approving coverage pursuant to the 
        written determination of an independent medical reviewer under 
        section 503B of such Act. Notice of whether the benefits under 
        the plan 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 this Act (excluding those described in 
        paragraphs (1) through (16)) if such rights apply. The 
        description required under this paragraph may be combined with 
        the notices required under 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 Secretary 
        determines may be combined.
            (18) Compensation methods.--A summary description of the 
        methods (including capitation, fee-for-service, salary, 
        withholds, bonuses, bundled payments, per diem, or a 
        combination thereof) used for compensating participating health 
        care professionals (including primary care providers and 
        specialists) and facilities in connection with the provision of 
        health care under the plan or coverage. The requirement of this 
        paragraph shall not be construed as requiring plans or issuers 
        to provide information concerning proprietary payment 
        methodology.
            (19) Availability of additional information.--A statement 
        that the information described in subsection (c), and 
        instructions on obtaining such information (including telephone 
        numbers and, if available, Internet websites), shall be made 
        available upon request.
    (c) Additional Information.--The informational materials to be 
provided upon the request of a participant, beneficiary, or enrollees 
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) 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.
            (3) 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) 
        determined for the plan or issuer's book of business.
    (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 the average participant.
    (e) Rules of Construction.--Nothing in this section shall be 
construed to prohibit a group health plan, or a health insurance issuer 
that offers 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; 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 participants, beneficiaries, and enrollees are provided with 
        an opportunity to request that informational materials be 
        provided in printed form.
    (f) 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 part 1, to reduce duplication with respect to any information 
that is required to be provided under any such requirements.
    (g) Secretarial Enforcement Authority.--
            (1) In general.--The Secretary of Health and Human Services 
        or the Secretary of Labor (as appropriate) may assess a civil 
        monetary penalty against the administrator of a plan or issuer 
        in connection with the failure of the plan or issuer to comply 
        with the requirements of this section.
            (2) Amount of penalty.--
                    (A) In general.--The amount of the penalty to be 
                imposed under paragraph (1) shall not exceed $100 for 
                each day for each participant, beneficiary, or enrollee 
                with respect to which the failure to comply with the 
                requirements of this section occurs.
                    (B) Increase in amount.--The amount referred to in 
                subparagraph (A) shall be increased or decreased, for 
                each calendar year that ends after December 31, 2001, 
                by the same percentage as the percentage by which the 
                medical care expenditure category of the Consumer Price 
                Index for All Urban Consumers (United States city 
                average), published by the Bureau of Labor Statistics, 
                for September of the preceding calendar year has 
                increased or decreased from the such Index for 
                September of 2001.
            (3) Failure defined.--For purposes of this subsection, a 
        plan or issuer shall have failed to comply with the 
        requirements of this section with respect to a participant, 
        beneficiary, or enrollee if the plan or issuer failed or 
        refused to comply with the requirements of this section within 
        30 days--
                    (A) of the date described in subsection 
                (a)(1)(A)(i);
                    (B) of the date described in subsection 
                (a)(1)(A)(ii); or
                    (C) of the date on which additional information was 
                requested under subsection (c).
    (h) Conforming Amendments.--
            (1) Section 732(a) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by 
        striking ``section 711'' and inserting ``section 711 and 
        section 121 of the Bipartisan Patients' Bill of Rights Act of 
        2001''.
            (2) Section 502(b)(3) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended by 
        striking ``733(a)(1))'' and inserting ``733(a)(1)), except with 
        respect to the requirements of section 121 of the Bipartisan 
        Patients' Bill of Rights Act of 2001''.

SEC. 122. INFORMATION ABOUT PROVIDERS.

    (a) Study.--The Secretary of Health and Human Services shall enter 
into a contract with the Institute of Medicine for the conduct of a 
study, and the submission to the Secretary of a report, that includes--
            (1) an analysis of information concerning health care 
        professionals that is currently available to patients, 
        consumers, States, and professional societies, nationally and 
        on a State-by-State basis, including patient preferences with 
        respect to information about such professionals and their 
        competencies;
            (2) an evaluation of the legal and other barriers to the 
        sharing of information concerning health care professionals; 
        and
            (3) recommendations for the disclosure of information on 
        health care professionals, including the competencies and 
        professional qualifications of such practitioners, to better 
        facilitate patient choice, quality improvement, and market 
        competition.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, the Secretary of Health and Human Services shall forward 
to the appropriate committees of Congress a copy of the report and 
study conducted under subsection (a).

SEC. 123. STUDY ON THE EFFECT OF PHYSICIAN COMPENSATION METHODS.

    (a) Study and Report.--
            (1) In general.--The Secretary shall enter into a contract 
        with the Institute of Medicine for the conduct of a study in 
        accordance with this section, to be submitted to the Secretary 
        and the Secretary of Labor as provided for in paragraph (4).
            (2) Matters to be studied.--The study under paragraph (1) 
        shall include--
                    (A) a study, including a survey if necessary, of 
                physician compensation arrangements that are utilized 
                in employer-sponsored group health plans (including 
                group health plans sponsored by government and non-
                government employers) and commercial health insurance 
                products, including--
                            (i) all types of compensation arrangements, 
                        including financial incentive and risk sharing 
                        arrangements and arrangements that do not 
                        contain such incentives and risk sharing, that 
                        reflect the complexity of organizational 
                        relationships between health plans and 
                        physicians;
                            (ii) arrangements that are based on factors 
                        such as utilization management, cost control, 
                        quality improvement, and patient or enrollee 
                        satisfaction; and
                            (iii) arrangements between the plan or 
                        issuer and provider, as well as down-stream 
                        arrangements between providers and sub-
                        contracted providers;
                    (B) an analysis of the effect of such differing 
                arrangements on physician behavior with respect to the 
                provision of medical care to patients, including 
                whether and how such arrangements affect the quality of 
                patient care and the ability of physicians to provide 
                care that is medically necessary and appropriate.
            (3) Study design.--The Secretary shall consult with the 
        Director of the Agency for Healthcare Research and Quality in 
        preparing the scope of work and study design with respect to 
        the contract under paragraph (1).
                    (4) Report.--Not later than 24 months after the 
                date of enactment of this Act, the Secretary shall 
                forward to the appropriate committees of Congress a 
                copy of the report and study conducted under subsection 
                (a).
    (b) Research.--
            (1) In general.--The Secretary, acting through the Director 
        of the Agency for Healthcare Research and Quality, shall 
        conduct and support research to develop scientific evidence 
        regarding the effects of differing physician compensation 
        methods on physician behavior with respect to the provision of 
        medical care to patients, particularly issues relating to the 
        quality of patient care and whether patients receive medically 
        necessary and appropriate care.
            (2) Authorization of appropriations.--For purposes of 
        carrying out this section, there are authorized to be 
        appropriated such sums as may be necessary.

           Subtitle C--Right to Hold Health Plans Accountable

SEC. 131. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
              1974.

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

``SEC. 503A. CLAIMS AND INTERNAL APPEALS PROCEDURES FOR GROUP HEALTH 
              PLANS.

    ``(a) Initial Claim for Benefits Under Group Health Plans.--
            ``(1) Procedures.--
                    ``(A) In general.--A group health plan, or health 
                insurance issuer that offers health insurance coverage 
                in connection with a group health plan, shall ensure 
                that procedures are in place for--
                            ``(i) making a determination on an initial 
                        claim for benefits by a participant or 
                        beneficiary (or authorized representative) 
                        regarding payment or coverage for items or 
                        services under the terms and conditions of the 
                        plan or coverage involved, including any cost-
                        sharing amount that the participant or 
                        beneficiary is required to pay with respect to 
                        such claim for benefits; and
                            ``(ii) notifying a participant or 
                        beneficiary (or authorized representative) and 
                        the treating health care professional involved 
                        regarding a determination on an initial claim 
                        for benefits made under the terms and 
                        conditions of the plan or coverage, including 
                        any cost-sharing amounts that the participant 
                        or beneficiary may be required to make with 
                        respect to such claim for benefits, and of the 
                        right of the participant or beneficiary to an 
                        internal appeal under subsection (b).
                    ``(B) Access to information.--With respect to an 
                initial claim for benefits, the participant or 
                beneficiary (or authorized representative) and the 
                treating health care professional (if any) shall 
                provide the plan or issuer with access to information 
                requested by the plan or issuer that is necessary to 
                make a determination relating to the claim, not later 
                than 5 business days after the date on which the claim 
                is filed or to meet the applicable timelines under 
                clauses (ii) and (iii) of paragraph (2)(A).
                    ``(C) Oral requests.--In the case of a claim for 
                benefits involving an expedited or concurrent 
                determination, a participant or beneficiary (or 
                authorized representative) may make an initial claim 
                for benefits orally, but a group health plan, or health 
                insurance issuer that offers health insurance coverage 
                in connection with a group health plan, may require 
                that the participant or beneficiary (or authorized 
                representative) provide written confirmation of such 
                request in a timely manner.
            ``(2) Timeline for making determinations.--
                    ``(A) Prior authorization determination.--
                            ``(i) In general.--A group health plan, or 
                        health insurance issuer that offers health 
                        insurance coverage in connection with a group 
                        health plan, shall maintain procedures to 
                        ensure that a prior authorization determination 
                        on a claim for benefits is made within 14 
                        business 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, but in no case shall 
                        such determination be made later than 28 
                        business days after the receipt of the claim 
                        for benefits.
                            ``(ii) Expedited determination.--
                        Notwithstanding clause (i), a group health 
                        plan, or health insurance issuer that offers 
                        health insurance coverage in connection with a 
                        group health plan, shall maintain procedures 
                        for expediting a prior authorization 
                        determination on a claim for benefits described 
                        in such clause when a request for such an 
                        expedited determination is made by a 
                        participant or beneficiary (or authorized 
                        representative) at any time during the process 
                        for making a determination and the treating 
                        health care professional substantiates, with 
                        the request, that a determination under the 
                        procedures described in clause (i) would 
                        seriously jeopardize the life or health of the 
                        participant or beneficiary. Such determination 
                        shall be made within 72 hours after a request 
is received by the plan or issuer under this clause.
                            ``(iii) Concurrent determinations.--A group 
                        health plan, or health insurance issuer that 
                        offers health insurance coverage in connection 
                        with a group health plan, shall maintain 
                        procedures to ensure that a concurrent 
                        determination on a claim for benefits that 
                        results in a discontinuation of inpatient care 
                        is made within 24 hours after the receipt of 
                        the claim for benefits.
                    ``(B) Retrospective determination.--A group health 
                plan, or health insurance issuer that offers health 
                insurance coverage in connection with a group health 
                plan, shall maintain procedures to ensure that a 
                retrospective determination on a claim for benefits is 
                made within 30 business days of 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, but in no case shall such 
                determination be made later than 60 business days after 
                the receipt of the claim for benefits.
            ``(3) Notice of a denial of a claim for benefits.--Written 
        notice of a denial made under an initial claim for benefits 
        shall be issued to the participant or beneficiary (or 
        authorized representative) and the treating health care 
        professional not later than 2 business days after the 
        determination (or within the 72-hour or 24-hour period referred 
        to in clauses (ii) and (iii) of paragraph (2)(A) if 
        applicable).
            ``(4) Requirements of notice of determinations.--The 
        written notice of a denial of a claim for benefits 
        determination under paragraph (3) shall include--
                    ``(A) the reasons for the determination (including 
                a summary of the clinical or scientific-evidence based 
                rationale used in making the determination and 
                instruction on obtaining a more complete description 
                written in a manner calculated to be understood by the 
                average participant);
                    ``(B) the procedures for obtaining additional 
                information concerning the determination; and
                    ``(C) notification of the right to appeal the 
                determination and instructions on how to initiate an 
                appeal in accordance with subsection (b).
    ``(b) Internal Appeal of a Denial of a Claim for Benefits.--
            ``(1) Right to internal appeal.--
                    ``(A) In general.--A participant or beneficiary (or 
                authorized representative) may appeal any denial of a 
                claim for benefits under subsection (a) under the 
                procedures described in this subsection.
                    ``(B) Time for appeal.--A group health plan, or 
                health insurance issuer that offers health insurance 
                coverage in connection with a group health plan, shall 
                ensure that a participant or beneficiary (or authorized 
                representative) has a period of not less than 60 days 
                beginning on the date of a denial of a claim for 
                benefits under subsection (a) in which to appeal such 
                denial under this subsection.
                    ``(C) Failure to act.--The failure of a plan or 
                issuer to issue a determination on a claim for benefits 
                under subsection (a) within the applicable timeline 
                established for such a determination under such 
                subsection shall be treated as a denial of a claim for 
                benefits for purposes of proceeding to internal review 
                under this subsection.
                    ``(D) Plan waiver of internal review.--A group 
                health plan, or health insurance issuer that offers 
                health insurance coverage in connection with a group 
                health plan, may waive the internal review process 
                under this subsection and permit a participant or 
                beneficiary (or authorized representative) to proceed 
                directly to external review under section 503B.
            ``(2) Timelines for making determinations.--
                    ``(A) Oral requests.--In the case of an appeal of a 
                denial of a claim for benefits under this subsection 
                that involves an expedited or concurrent determination, 
                a participant or beneficiary (or authorized 
                representative) may request such appeal orally, but a 
                group health plan, or health insurance issuer that 
                offers health insurance coverage in connection with a 
                group health plan, may require that the participant or 
                beneficiary (or authorized representative) provide 
                written confirmation of such request in a timely 
                manner.
                    ``(B) Access to information.--With respect to an 
                appeal of a denial of a claim for benefits, the 
                participant or beneficiary (or authorized 
                representative) and the treating health care 
                professional (if any) shall provide the plan or issuer 
                with access to information requested by the plan or 
                issuer that is necessary to make a determination 
                relating to the appeal, not later than 5 business days 
                after the date on which the request for the appeal is 
                filed or to meet the applicable timelines under clauses 
                (ii) and (iii) of subparagraph (C).
                    ``(C) Prior authorization determinations.--
                            ``(i) In general.--A group health plan, or 
                        health insurance issuer that offers health 
                        insurance coverage in connection with a group 
                        health plan, shall maintain procedures to 
                        ensure that a determination on an appeal of a 
                        denial of a claim for benefits under this 
                        subsection is made within 14 business 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 appeal, but in no case 
shall such determination be made later than 28 business days after the 
receipt of the request for the appeal.
                            ``(ii) Expedited determination.--
                        Notwithstanding clause (i), a group health 
                        plan, or health insurance issuer that offers 
                        health insurance coverage in connection with a 
                        group health plan, shall maintain procedures 
                        for expediting a prior authorization 
                        determination on an appeal of a denial of a 
                        claim for benefits described in clause (i), 
                        when a request for such an expedited 
                        determination is made by a participant or 
                        beneficiary (or authorized representative) at 
                        any time during the process for making a 
                        determination and the treating health care 
                        professional substantiates, with the request, 
                        that a determination under the procedures 
                        described in clause (i) would seriously 
                        jeopardize the life or health of the 
                        participant or beneficiary. Such determination 
                        shall be made not later than 72 hours after the 
                        request for such appeal is received by the plan 
                        or issuer under this clause.
                            ``(iii) Concurrent determinations.--A group 
                        health plan, or health insurance issuer that 
                        offers health insurance coverage in connection 
                        with a group health plan, shall maintain 
                        procedures to ensure that a concurrent 
                        determination on an appeal of a denial of a 
                        claim for benefits that results in a 
                        discontinuation of inpatient care is made 
                        within 24 hours after the receipt of the 
                        request for appeal.
                    ``(B) Retrospective determination.--A group health 
                plan, or health insurance issuer that offers health 
                insurance coverage in connection with a group health 
                plan, shall maintain procedures to ensure that a 
                retrospective determination on an appeal of a claim for 
                benefits is made within 30 business days of the date on 
                which the plan or issuer receives necessary information 
                that is reasonably required by the plan or issuer to 
                make a determination on the appeal, but in no case 
                shall such determination be made later than 60 business 
                days after the receipt of the request for the appeal.
            ``(3) Conduct of review.--
                    ``(A) In general.--A review of a denial of a claim 
                for benefits under this subsection shall be conducted 
                by an individual with appropriate expertise who was not 
                directly involved in the initial determination.
                    ``(B) 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 with 
                appropriate expertise, including age-appropriate 
                expertise, who was not involved in the initial 
                determination.
            ``(4) Notice of determination.--
                    ``(A) In general.--Written notice of a 
                determination made under an internal appeal of a denial 
                of a claim for benefits shall be issued to the 
                participant or beneficiary (or authorized 
                representative) and the treating health care 
                professional not later than 2 business days after the 
                completion of the review (or within the 72-hour or 24-
                hour period referred to in paragraph (2) if 
                applicable).
                    ``(B) Final determination.--The decision by a plan 
                or issuer under this subsection 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 subsection 
                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 
                503B.
                    ``(C) Requirements of notice.--With respect to a 
                determination made under this subsection, the notice 
                described in subparagraph (A) shall include--
                            ``(i) the reasons for the determination 
                        (including a summary of the clinical or 
                        scientific-evidence based rationale used in 
                        making the determination and instruction on 
                        obtaining a more complete description written 
                        in a manner calculated to be understood by the 
                        average participant);
                            ``(ii) the procedures for obtaining 
                        additional information concerning the 
                        determination; and
                            ``(iii) notification of the right to an 
                        independent external review under section 503B 
                        and instructions on how to initiate such a 
                        review.
    ``(c) Definitions.--The definitions contained in section 503B(i) 
shall apply for purposes of this section.

``SEC. 503B. INDEPENDENT EXTERNAL APPEALS PROCEDURES FOR GROUP HEALTH 
              PLANS.

    ``(a) Right to External Appeal.--A group health plan, and a health 
insurance issuer that offers health insurance coverage in connection 
with a group health plan, shall provide in accordance with this section 
participants and beneficiaries (or authorized representatives) with 
access to an independent external review for any denial of a claim for 
benefits.
    ``(b) Initiation of the Independent External Review Process.--
            ``(1) Time to file.--A request for an independent external 
        review under this section shall be filed with the plan or 
        issuer not later than 60 business days after the date on which 
        the participant or beneficiary receives notice of the denial 
        under section 503A(b)(4) or the date on which the internal 
        review is waived by the plan or issuer under section 
        503A(b)(1)(D).
            ``(2) Filing of request.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this subsection, a group health plan, and 
                a health insurance issuer that offers health insurance 
                coverage in connection with a group health plan, may--
                            ``(i) except as provided in subparagraph 
                        (B)(i), require that a request for review be in 
                        writing;
                            ``(ii) limit the filing of such a request 
                        to the participant or beneficiary involved (or 
                        an authorized representative);
                            ``(iii) except if waived by the plan or 
                        issuer under section 503A(b)(1)(D), 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 503A;
                            ``(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 
                        $50; and
                            ``(v) require that a request for review 
                        include the consent of the participant or 
                        beneficiary (or authorized representative) for 
                        the release of medical information or records 
                        of the participant or beneficiary to the 
                        qualified external review entity 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. In such case a written 
                        confirmation of such request shall be made in a 
                        timely manner. Such written confirmation shall 
                        be treated as a consent for purposes of 
                        subparagraph (A)(v).
                            ``(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 Secretary) that the participant or 
                                beneficiary is indigent (as defined in 
                                such guidelines). In establishing 
                                guidelines under this subclause, the 
                                Secretary shall ensure that the 
                                guidelines relating to indigency are 
                                consistent with the poverty guidelines 
                                used by the Secretary of Health and 
                                Human Services under title XIX of the 
                                Social Security Act.
                                    ``(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 503A(b)(1)(D).
                                    ``(III) Refunding of fee.--The 
                                filing fee paid under subparagraph 
                                (A)(iv) shall be refunded if the 
                                determination under the independent 
                                external review is to reverse the 
                                denial which is the subject of the 
                                review.
                                    ``(IV) Increase in amount.--The 
                                amount referred to in subclause (I) 
                                shall be increased or decreased, for 
                                each calendar year that ends after 
                                December 31, 2002, by the same 
                                percentage as the percentage by which 
                                the Consumer Price Index for All Urban 
                                Consumers (United States city average), 
                                published by the Bureau of Labor 
                                Statistics, for September of the 
                                preceding calendar year has increased 
                                or decreased from the such Index for 
                                September of 2002.
    ``(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 that offers health insurance coverage 
        in connection with a group health plan, the plan or issuer 
        shall refer such request to a qualified external review entity 
        selected in accordance with this section.
            ``(2) Access to plan or issuer and health professional 
        information.--With respect to an independent external review 
        conducted under this section, the participant or beneficiary 
        (or authorized representative), the plan or issuer, and the 
        treating health care professional (if any) shall provide the 
        external review entity with access to information requested by 
        the external review entity that is necessary to conduct a 
        review under this section, as determined by the entity, not 
        later than 5 business days after the date on which a request is 
        referred to the qualified external review entity under 
        paragraph (1), or earlier as determined appropriate by the 
        entity to meet the applicable timelines under clauses (ii) and 
        (iii) of subsection (e)(1)(A).
            ``(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 
                        subsection (b)(2)(A) have not been met;
                            ``(ii) the thresholds described in 
                        subparagraph (B) have not been met;
                            ``(iii) the denial of the claim for 
                        benefits does not involve a medically 
                        reviewable decision under subsection (d)(2);
                            ``(iv) the denial of the claim for benefits 
                        relates to a decision regarding whether an 
                        individual is a participant or beneficiary who 
                        is enrolled under the terms of the plan or 
                        coverage (including the applicability of any 
                        waiting period under the plan or coverage); or
                            ``(v) 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 (v) 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 (D).
                    ``(B) Thresholds.--
                            ``(i) In general.--The thresholds described 
                        in this subparagraph are that--
                                    ``(I) the total amount payable 
                                under the plan or coverage for the item 
                                or service that was the subject of such 
                                denial exceeds $100; or
                                    ``(II) a physician has asserted in 
                                writing that there is a significant 
                                risk of placing the life, health, or 
                                development of the participant or 
                                beneficiary in jeopardy if the denial 
                                of the claim for benefits is sustained.
                            ``(ii) Thresholds not applied.--The 
                        thresholds described in this subparagraph shall 
                        not apply if the plan or issuer involved waives 
                        the internal appeals process with respect to 
                        the denial of a claim for benefits involved 
                        under section 503A(b)(1)(D).
                    ``(C) 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 under section 503A 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.
                    ``(D) 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 
                        or beneficiary (or authorized representative) 
                        filing the request, and the treating health 
                        care professional (if any) that the denial is 
                        not subject to independent medical review. Such 
                        notice--
                                    ``(I) shall be written (and, in 
                                addition, may be provided orally) in a 
                                manner calculated to be understood by 
                                an average participant;
                                    ``(II) shall include the reasons 
                                for the determination; and
                                    ``(III) include any relevant terms 
                                and conditions of the plan or coverage.
                            ``(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 or beneficiary (or authorized 
                        representative) within 2 business days 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 described 
        in this paragraph is one for which the item or service that is 
        the subject of the denial 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.--The basis of the determination is 
                that the item or service is not medically necessary and 
                appropriate.
                    ``(B) Denials based on experimental or 
                investigational treatment.--The basis of the 
                determination is that the item or service is 
                experimental or investigational.
                    ``(C) Denials otherwise based on an evaluation of 
                medical facts.--A determination that the item or 
                service or condition is not covered but an evaluation 
                of the medical facts by a health care professional in 
                the specific case involved is necessary to determine 
                whether the item or service or condition is required to 
                be provided under the terms and conditions of the plan 
                or coverage.
            ``(3) Independent medical review determination.--
                    ``(A) In general.--An independent medical reviewer 
                under this section shall make a new independent 
                determination with respect to--
                            ``(i) whether the item or service or 
                        condition that is the subject of the denial is 
                        covered under the terms and conditions of the 
                        plan or coverage; and
                            ``(ii) based upon an affirmative 
                        determination under clause (i), whether or not 
                        the denial of a claim for a benefit that is the 
                        subject of the review should be upheld or 
                        reversed.
                    ``(B) Standard for determination.--The independent 
                medical 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 or beneficiary (including the medical 
                records of the participant or beneficiary) and the 
                valid, relevant scientific evidence and clinical 
                evidence, including peer-reviewed medical literature or 
                findings and including expert consensus.
                    ``(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 that offers 
                health insurance coverage in connection with a group 
                health plan, provide coverage for items or services 
                that are specifically excluded or expressly limited 
                under the plan or coverage and that are not covered 
                regardless of any determination relating to medical 
                necessity and appropriateness, experimental or 
                investigational nature of the treatment, or an 
                evaluation of the medical facts in the case involved.
                    ``(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 or guidelines 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 evidence or information 
                        obtained by the reviewer or submitted by the 
                        plan, issuer, participant or beneficiary (or an 
                        authorized representative), or treating health 
                        care professional.
                            ``(iv) The plan or coverage document.
                    ``(E) Independent determination.--In making the 
                determination, the independent medical reviewer shall--
                            ``(i) consider the claim under review 
                        without deference to the determinations made by 
                        the plan or issuer under section 503A 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 
                        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 or 
                reverse the denial under review and, in the case of a 
                reversal, the timeframe within which the plan or issuer 
                shall authorize coverage to comply with the 
                determination. Such written determination shall include 
                the specific reasons of the reviewer for such 
                determination, including a summary of the clinical or 
                scientific-evidence based rationale used in making the 
                determination. 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 
                be treated as part of the determination.
    ``(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) not later than 14 business 
                        days after the receipt of information under 
                        subsection (c)(2) if the review involves a 
                        prior authorization of items or services.
                            ``(ii) Expedited determination.--
                        Notwithstanding clause (i), 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 or beneficiary (or 
                        authorized representative) at any time during 
                        the process for making a determination, and the 
                        treating health care professional 
                        substantiates, with the request, that a 
                        determination under the timeline described in 
                        clause (i) would seriously jeopardize the life 
                        or health of the participant or beneficiary. 
                        Such determination shall be made not later than 
                        72 hours after the receipt of information under 
                        subsection (c)(2).
                            ``(iii) Concurrent determination.--
                        Notwithstanding clause (i), a review described 
                        in such subclause shall be completed not later 
                        than 24 hours after the receipt of information 
                        under subsection (c)(2) if the review involves 
                        a discontinuation of inpatient 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) not 
                later than 30 business days after the receipt of 
                information under subsection (c)(2).
            ``(2) Notification of determination.--The external review 
        entity shall ensure that the plan or issuer, the participant or 
        beneficiary (or authorized representative) and the treating 
        health care professional (if any) receives a copy of the 
        written determination of the independent medical 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.
            ``(4) Termination of external review process if approval of 
        a claim for benefits during process.--
                    ``(A) In general.--If a plan or issuer--
                            ``(i) reverses a determination on a denial 
                        of a claim for benefits that is the subject of 
                        an external review under this section and 
                        authorizes coverage for the claim or provides 
                        payment of the claim; and
                            ``(ii) provides notice of such reversal to 
                        the participant or beneficiary (or authorized 
                        representative) and the treating health care 
                        professional (if any), and the external review 
                        entity responsible for such review,
                the external review process shall be terminated with 
                respect to such denial and any filing fee paid under 
                subsection (b)(2)(A)(iv) shall be refunded.
                    ``(B) Treatment of termination.--An authorization 
                of coverage under subparagraph (A) by the plan or 
                issuer shall be treated as a written determination to 
                reverse a denial under section (d)(3)(F) for purposes 
                of liability under section 502(n)(1)(B).
    ``(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 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 under subsection (d)(3)(F).
            ``(2) Failure to comply.--If a plan or issuer fails to 
        comply with the timeframe established under paragraph (1)(B) 
        with respect to a participant or beneficiary, where such 
        failure to comply is caused by the plan or issuer, the 
        participant or beneficiary may obtain the items or services 
        involved (in a manner consistent with the determination of the 
        independent external reviewer) from any provider regardless of 
        whether such provider is a participating provider under the 
        plan or coverage.
            ``(3) Reimbursement.--
                    ``(A) In general.--Where a participant or 
                beneficiary obtains items or services in accordance 
                with paragraph (2), the plan or issuer involved shall 
                provide for reimbursement of the costs of such items or 
                services. Such reimbursement shall be made to the 
                treating health care professional or to the participant 
                or beneficiary (in the case of a participant or 
                beneficiary who pays for the costs of such items or 
                services).
                    ``(B) Amount.--The plan or issuer shall fully 
                reimburse a professional, participant or beneficiary 
                under subparagraph (A) 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--
                            ``(i) the items or services would have been 
                        covered under the terms of the plan or coverage 
                        if provided by the plan or issuer; and
                            ``(ii) the items or services were provided 
                        in a manner consistent with the determination 
                        of the independent medical reviewer.
            ``(4) Failure to reimburse.--Where a plan or issuer fails 
        to provide reimbursement to a professional, participant or 
        beneficiary in accordance with this subsection, the 
        professional, participant or beneficiary may commence a civil 
        action (or utilize other remedies available under law) to 
        recover only the amount of any such reimbursement that is 
        unpaid and any necessary legal costs or expenses (including 
        attorneys' fees) incurred in recovering such reimbursement.
    ``(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.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer shall be a physician 
                (who may be an allopathic or osteopathic physician) or 
                health care professional who--
                            ``(i) is appropriately credentialed or 
                        licensed in 1 or more States to deliver health 
                        care services; and
                            ``(ii) typically treats the diagnosis or 
                        condition or provides the type of treatment 
                        under review.
                    ``(B) Physician review.--In referring a denial for 
                independent medical review under subsection (c), the 
                qualified external review entity shall ensure that, in 
                the case of the review of treatment that is recommended 
                or provided by a physician, such referral may be made 
                only to a physician for such independent medical 
                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 this subparagraph (A) 
                shall be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the plan or issuer, 
                        from serving as an independent medical reviewer 
                        if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the plan or 
                                issuer and the participant or 
                                beneficiary (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the plan or issuer 
                                and does not provide services 
                                exclusively or primarily to or on 
                                behalf of the plan or issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer if the 
                        affiliation is disclosed to the plan or issuer 
                        and the participant or beneficiary (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--The requirement of this 
                paragraph with respect to a reviewer in a case 
                involving treatment, or the provision of items or 
                services, by--
                            ``(i) a physician, is that the reviewer be 
                        a practicing physician of the same or similar 
                        specialty as a physician who typically treats 
                        the diagnosis or condition or provides such 
                        treatment in the case under review; or
                            ``(ii) a health care professional (other 
                        than a physician), is that the reviewer be a 
                        practicing physician or, if determined 
                        appropriate by the qualified external review 
                        entity, a health care professional (other than 
                        a physician), of the same or similar specialty 
                        as the health care professional who typically 
                        treats the diagnosis or condition or provides 
                        the treatment in the case 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 1 day per week.
            ``(5) Age-appropriate expertise.--The independent medical 
        reviewer shall have expertise under paragraph (2) that is age-
        appropriate to the participant or beneficiary involved.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by a qualified external review entity to an 
        independent medical reviewer in connection with a review under 
        this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a plan or coverage relating to a participant or 
        beneficiary, any of the following:
                    ``(A) The plan, plan sponsor, or issuer involved, 
                or any fiduciary, officer, director, or employee of 
                such plan, plan sponsor, or issuer.
                    ``(B) The participant or beneficiary (or authorized 
                representative).
                    ``(C) The health care professional that provides 
                the items of 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 
                Secretary shall implement procedures with respect to 
                the selection of qualified external review entities by 
a plan or issuer 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.
                    ``(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 the designation or selection of 
                qualified external review entities in a manner 
                determined by the State to assure an unbiased 
                determination in conducting external review activities. 
                In conducting reviews under this section, an entity 
                designated or selected under this subparagraph shall 
                comply with provisions of this section.
            ``(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 
                Secretary shall establish to assure there is no real or 
                apparent conflict of interest in the conduct of 
                external review activities; and
                    ``(B) provide that the costs of the external review 
                process shall be borne by the plan or issuer.
        Subparagraph (B) shall not be construed as applying to the 
        imposition of a filing fee under subsection (b)(2)(A)(iv) or 
        costs incurred by the participant or beneficiary (or authorized 
        representative) or treating health care professional (if any) 
        in support of the review, including the provision of additional 
        evidence or information.
            ``(4) Qualifications.--
                    ``(A) In general.--In this section, the term 
                `qualified external review entity' means, in relation 
                to a plan or issuer, an entity that is initially 
                certified (and periodically recertified) under 
                subparagraph (C) as meeting the following requirements:
                            ``(i) The entity has (directly or through 
                        contracts or other arrangements) sufficient 
                        medical, legal, and other expertise and 
                        sufficient staffing to carry out duties of a 
                        qualified external review entity under this 
                        section on a timely basis, including making 
                        determinations under subsection (b)(2)(A) and 
                        providing for independent medical reviews under 
                        subsection (d).
                            ``(ii) The entity is not a plan or issuer 
                        or an affiliate or a subsidiary of a plan or 
                        issuer, and is not an affiliate or subsidiary 
                        of a professional or trade association of plans 
                        or issuers or of health care providers.
                            ``(iii) The entity has provided assurances 
                        that it will conduct external review activities 
                        consistent with the applicable requirements of 
                        this section and standards specified in 
                        subparagraph (C), including that it will not 
                        conduct any external review activities in a 
                        case unless the independence requirements of 
                        subparagraph (B) are met with respect to the 
                        case.
                            ``(iv) The entity has provided assurances 
                        that it will provide information in a timely 
                        manner under subparagraph (D).
                            ``(v) The entity meets such other 
                        requirements as the 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 the 
                                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 
                                Secretary; or
                                    ``(II) by a qualified private 
                                standard-setting organization that is 
                                approved by the Secretary under clause 
                                (iii).
                            ``(ii) Process.--The 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 recertification, 
                                shall review the matters described in 
                                clause (iv).
                            ``(iii) Approval of qualified private 
                        standard-setting organizations.--For purposes 
                        of clause (i)(II), the Secretary may approve a 
                        qualified private standard-setting organization 
                        if the 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 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 5 
                        years.
                            ``(vi) Revocation.--A certification or 
                        recertification under this paragraph may be 
                        revoked by the Secretary or by the organization 
                        providing such certification upon a showing of 
                        cause.
                    ``(D) Provision of information.--
                            ``(i) In general.--A qualified external 
                        review entity shall provide to the Secretary, 
                        in such manner and at such times as the 
                        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 the 
                        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 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.--
                                    ``(I) In general.--Information 
                                provided under this subparagraph may be 
                                used by the 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.
                                    ``(II) Report to congress.--Not 
                                later than 2 years after the date on 
                                which the Bipartisan Patients' Bill of 
                                Rights Act of 2001 takes effect under 
                                section 501 of such Act, and every 2 
                                years thereafter, the Secretary, in 
                                consultation with the Secretary of 
                                Health and Human Services, shall 
                                prepare and submit to the appropriate 
                                committees of Congress, a report that 
                                contains--
                                            ``(aa) a summary of the 
                                        information provided to the 
                                        Secretary under clause (ii);
                                            ``(bb) a description of the 
                                        effect that the appeals process 
                                        established under this section 
                                        and section 503A had on the 
                                        access of individuals to health 
                                        insurance and health care;
                                            ``(cc) a description of the 
                                        effect on health care costs 
                                        associated with the 
                                        implementation of the appeals 
                                        process described in item (bb); 
                                        and
                                            ``(dd) a description of the 
                                        quality and consistency of 
                                        determinations by qualified 
                                        external review entities.
                                    ``(III) Recommendations.--The 
                                Secretary may from time to time submit 
                                recommendations to Congress with 
                                respect to proposed modifications to 
                                the appeals process based on the 
                                reports submitted under subclause (II).
                    ``(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.
    ``(i) Definitions.--In this section:
            ``(1) Authorized representative.--The term `authorized 
        representative' means, with respect to a participant or 
        beneficiary--
                    ``(A) a person to whom a participant or beneficiary 
                has given express written consent to represent the 
                participant or beneficiary in any proceeding under this 
                section;
                    ``(B) a person authorized by law to provide 
                substituted consent for the participant or beneficiary; 
                or
                    ``(C) a family member of the participant or 
                beneficiary (or the estate of the participant or 
                beneficiary) or the participant's or beneficiary's 
                treating health care professional when the participant 
                or beneficiary is unable to provide consent.
            ``(2) Claim for benefits.--The term `claim for benefits' 
        means any request by a participant or beneficiary (or 
        authorized representative) for benefits (including requests 
        that are subject to authorization of coverage or utilization 
        review), for eligibility, or for payment in whole or in part, 
        for an item or service under a group health plan or health 
        insurance coverage offered by a health insurance issuer in 
        connection with a group health plan.
            ``(3) Group health plan.--The term `group health plan' 
        shall have the meaning given such term in section 733(a). In 
        applying this paragraph, excepted benefits described in section 
        733(c) shall not be treated as benefits consisting of medical 
        care.
            ``(4) Health insurance coverage.--The term `health 
        insurance coverage' has the meaning given such term in section 
        733(b)(1). In applying this paragraph, excepted benefits 
        described in section 733(c) shall not be treated as benefits 
        consisting of medical care.
            ``(5) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 733(b)(2).
            ``(6) Prior authorization determination.--The term `prior 
        authorization determination' means a determination by the group 
        health plan or health insurance issuer offering health 
        insurance coverage in connection with a group health plan prior 
        to the provision of the items and services as a condition of 
        coverage of the items and services under the terms and 
        conditions of the plan or coverage.
            ``(7) Treating health care professional.--The term 
        `treating health care professional' with respect to a group 
        health plan, health insurance issuer or provider sponsored 
        organization means a physician (medical doctor or doctor of 
        osteopathy) or other health care practitioner who is acting 
        within the scope of his or her State licensure or certification 
        for the delivery of health care services and who is primarily 
        responsible for delivering those services to the participant or 
        beneficiary.
            ``(8) Utilization review.--The term `utilization review' 
        with respect to a group health plan or health insurance 
        coverage means procedures used in the determination of coverage 
        for a participant or beneficiary, such as procedures to 
        evaluate the medical necessity, appropriateness, efficacy, 
        quality, 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) Conforming Amendment.--The table of contents in section 1 of 
the Employee Retirement Income Security Act of 1974 is amended by 
inserting after the item relating to section 503 the following:

``Sec. 503A. Claims and internal appeals procedures for group health 
                            plans.
``Sec. 503B. Independent external appeals procedures for group health 
                            plans.''.

SEC. 132. ENFORCEMENT.

    Section 502(c) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1132(c)) is amended by adding at the end the following:
    ``(8) The Secretary may assess a civil penalty against any plan of 
up to $10,000 for the plan's failure or refusal to comply with any 
deadline applicable under section 503B or any determination under such 
section, except that in any case in which coverage was not approved 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 or beneficiary involved.''.

                          Subtitle D--Remedies

SEC. 141. AVAILABILITY OF COURT REMEDIES.

    (a) In General.--Section 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132) is amended by adding at the end 
the following:
    ``(n) Cause of Action Relating to Denial of a Claim for Health 
Benefits.--
            ``(1) In general.--
                    ``(A) Failure to comply with external medical 
                review.--With respect to an action commenced by a 
                participant or beneficiary (or the estate of the 
                participant or beneficiary) in connection with a claim 
                for benefits under a group health plan, if--
                            ``(i) a designated decision-maker described 
                        in paragraph (2) fails to exercise ordinary 
                        care in approving coverage pursuant to the 
                        written determination of an independent medical 
                        reviewer under section 503B(d)(3)(F) that 
                        reverses a denial of the claim for benefits; 
                        and
                            ``(ii) the failure described in clause (i) 
                        is the proximate cause of substantial harm (as 
                        defined in paragraph (10)(G)) to the 
                        participant or beneficiary;
                such designated decision-maker shall be liable to the 
                participant or beneficiary (or the estate) for economic 
                and noneconomic damages in connection with such failure 
                and such injury or death (subject to paragraph (4)).
                    ``(B) Wrongful determination resulting in delay in 
                providing benefits.--With respect to an action 
                commenced by a participant or beneficiary (or the 
                estate of the participant or beneficiary) in connection 
                with a claim for benefits under a group health plan, 
                if--
                            ``(i) a designated decision-maker described 
                        in paragraph (2)--
                                    ``(I) fails to exercise ordinary 
                                care in making a determination denying 
                                the claim for benefits under section 
                                503A(a) (relating to an initial claim 
                                for benefits); or
                                    ``(II) fails to exercise ordinary 
                                care in making a determination denying 
                                the claim for benefits under section 
                                503A(b) (relating to an internal 
                                appeal);
                            ``(ii) the denial described in clause (i) 
                        is reversed by an independent medical reviewer 
                        under section 503B(d) or 503B(e)(4)(B); and
                            ``(iii) the delay attributable to the 
                        failure described in clause (i) is the 
                        proximate cause of substantial harm to, or the 
                        wrongful death of, the participant or 
                        beneficiary;
                such designated decision-maker shall be liable to the 
                participant or beneficiary (or the estate) for economic 
                and noneconomic damages in connection with such failure 
                and such injury or death (subject to paragraph (4)).
                    ``(C) Limitation on liability based on appointment 
                of designated decision-maker.--If a plan sponsor or 
                named fiduciary appoints a designated decision-maker in 
                accordance with paragraph (2), the plan sponsor or 
                named fiduciary, or any other person or group health 
                plan (or their employees) associated with the plan 
                sponsor or named fiduciary, shall not be liable under 
                this paragraph. The appointment of a designated 
                decision-maker in accordance with paragraph (2) shall 
                not affect the liability of the appointing plan sponsor 
                or named fiduciary for the failure of the plan sponsor 
                or named fiduciary to comply with any other requirement 
                of this title.
            ``(2) Designated decision-maker.--
                    ``(A) Appointment.--
                            ``(i) In general.--The plan sponsor or 
                        named fiduciary of a group health plan shall, 
                        in accordance with this paragraph, designate 
                        one or more persons to serve as a designated 
                        decision-maker with respect to causes of action 
                        described in subparagraphs (A) and (B) of 
                        paragraph (1), except that--
                                    ``(I) with respect to health 
                                insurance coverage offered in 
                                connection with a group health plan, 
                                the health insurance issuer shall be 
                                the designated decision-maker unless 
                                the plan sponsor and the issuer 
                                specifically agree in writing (on a 
                                form to be prescribed by the Secretary) 
                                to substitute another person as the 
                                designated decision-maker; or
                                    ``(II) with respect to the 
                                designation of a person other than a 
                                plan sponsor or health insurance 
                                issuer, such person shall satisfy the 
                                requirements of subparagraph (D).
                            ``(ii) Plan documents.--The designated 
                        decision-maker shall be specifically designated 
                        as such in the written instruments of the plan 
                        (under section 402(a)) and be identified as 
                        required under section 121(b)(14) of the 
                        Bipartisan Patients' Bill of Rights Act of 
                        2001.
                    ``(B) Authority.--A designated decision-maker 
                appointed under subparagraph (A) shall have the 
                exclusive authority under the group health plan--
                            ``(i) to make determinations with respect 
                        to a claim for benefits under section 503A(a) 
                        (relating to an initial claim for benefits);
                            ``(ii) to make final determinations under 
                        section 503A(b) (relating to an internal 
                        appeal); or
                            ``(iii) to approve coverage pursuant to the 
                        written determination of independent medical 
                        reviewers under section 503B.
                    ``(C) Allocation of responsibility.--Responsibility 
                may be allocated among different designated decision-
                makers with respect to--
                            ``(i) for purposes of paragraph (1)(A), the 
                        approval of coverage under section 503B;
                            ``(ii) for purposes of paragraph (1)(B), 
                        making determinations on a claim for benefits 
                        under section 503A(a) (relating to an initial 
                        claim for benefits); and
                            ``(iii) for purposes of paragraph (1)(B), 
                        making final determinations on claims for 
                        benefits under section 503A(b) (relating to 
                        internal appeals).
                Where such an allocation is made, liability under a 
                cause of action under paragraph (1) shall be assessed 
                against the appropriate designated decision-maker.
                    ``(D) Qualifications.--
                            ``(i) Certification of ability.--To be 
                        appointed as a designated decision-maker under 
                        this paragraph, a person shall provide to the 
                        plan sponsor or named fiduciary a certification 
                        of such person's ability to meet the 
                        requirements of clause (ii) relating to 
                        financial obligation for liability under this 
                        subsection. Such certification shall be 
                        provided upon appointment and not less 
                        frequently than annually thereafter, or if the 
                        designation is pursuant to a multi-year 
                        contract, in conjunction with the renewal of 
                        the contract, but in no case less than once 
                        every 3 years.
                            ``(ii) Other requirements relating to 
                        financial obligations.--For purposes of clause 
                        (i), requirements relating to financial 
                        obligation for liability shall include evidence 
                        of--
                                    ``(I) coverage of the person under 
                                insurance policies or other 
                                arrangements, secured and maintained by 
                                the person, to insure the person 
                                against losses arising from 
                                professional liability claims, 
                                including those arising from being 
                                designated as a designated decision-
                                maker under this paragraph; or
                                    ``(II) minimum capital and surplus 
                                levels that are maintained by the 
                                person to cover any losses as a result 
                                of liability arising from being 
                                designated as a designated decision-
                                maker under this paragraph.
                        The appropriate amounts of liability insurance 
                        and minimum capital and surplus levels for 
                        purposes of subclauses (I) and (II) shall be 
                        determined by an actuary using sound actuarial 
                        principles and accounting practices pursuant to 
                        established guidelines of the American Academy 
                        of Actuaries and shall be maintained throughout 
                        the course of the contract in which such person 
                        is designated as a designated decision-maker.
                    ``(E) Flexibility in administration.--A group 
                health plan, or health insurance issuer offering health 
                insurance coverage in connection with a group health 
                plan, may provide--
                            ``(i) that any person or group of persons 
                        may serve in more than one capacity with 
                        respect to the plan or coverage (including 
                        service as a designated decision-maker, 
                        administrator, and named fiduciary); or
                            ``(ii) that a designated decision-maker may 
                        employ one or more persons to provide advice 
                        with respect to any responsibility of such 
                        decision-maker under the plan or coverage.
                    ``(F) Failure to appoint.--
                            ``(i) In general.--With respect to any 
                        cause of action under paragraph (1) relating to 
                        a denial of a claim for benefits where a 
                        designated decision-maker has not been 
                        appointed in accordance with this paragraph, 
                        the plan sponsor or named fiduciary responsible 
                        for determinations under section 503 shall be 
                        deemed to be the designated decision-maker.
                            ``(ii) Limitation on appointment.--A 
                        treating health care professional who directly 
                        delivered the care, treatment, or provided the 
                        patient service that is the subject of an 
                        action under this subsection may not be 
                        designated as a designated decision-maker under 
                        this paragraph unless the professional--
                                    ``(I) is a person or entity that 
                                may be appointed in accordance with 
                                subparagraph (A); and
                                    ``(II) specifically agrees to 
                                accept such appointment in accordance 
                                with the requirements under such 
                                subparagraph.
            ``(3) Requirement of exhaustion of independent medical 
        review.--
                    ``(A) In general.--Paragraph (1) shall apply only 
                if a final determination denying a claim for benefits 
                under section 503A(b) has been referred for independent 
                medical review under section 503B(d) and a written 
                determination by an independent medical reviewer to 
                reverse such final determination has been issued with 
                respect to such review.
                    ``(B) Injunctive relief for irreparable harm.--A 
                participant or beneficiary may seek relief under 
                subsection 502(a)(1)(B) prior to the exhaustion of 
                administrative remedies under section 503A(b) or 503B 
                (as required under subparagraph (A)) if it is 
                demonstrated to the court, by a preponderance of the 
                evidence, that the exhaustion of such remedies would 
                cause irreparable harm to the health of the participant 
                or beneficiary. Any determinations that already have 
                been made under section 503A or 503B in such case, or 
                that are made in such case while an action under this 
                subparagraph is pending, shall be given due 
                consideration by the court in any action under this 
                subsection in such case. Notwithstanding the awarding 
                of relief under subsection 502(a)(1)(B) pursuant to 
                this subparagraph, no relief shall be available under--
                            ``(i) paragraph (1), with respect to a 
                        participant or beneficiary, unless the 
                        requirements of subparagraph (A) are met; or
                            ``(ii) subsection (q) unless the 
                        requirements of such subsection are met.
            ``(4) Limitations on recovery of damages.--
                    ``(A) Maximum award of noneconomic damages.--The 
                aggregate amount of liability for noneconomic loss in 
                an action under paragraph (1) may not exceed $500,000.
                    ``(B) Increase in amount.--The amount referred to 
                in subparagraph (A) shall be increased or decreased, 
                for each calendar year that ends after December 31, 
                2002, by the same percentage as the percentage by which 
                the Consumer Price Index for All Urban Consumers 
                (United States city average), published by the Bureau 
                of Labor Statistics, for September of the preceding 
                calendar year has increased or decreased from the such 
                Index for September of 2002.
                    ``(C) Several liability.--In the case of any action 
                commenced pursuant to paragraph (1), the designated 
                decision-maker shall be liable only for the amount of 
                noneconomic damages attributable to such designated 
                decision-maker in direct proportion to such decision-
                maker's share of fault or responsibility for the injury 
                suffered by the participant or beneficiary. In all such 
                cases, the liability of a designated decision-maker for 
                noneconomic damages shall be several and not joint.
                    ``(D) Treatment of collateral source payments.--
                            ``(i) In general.--In the case of any 
                        action commenced pursuant to paragraph (1), the 
                        total amount of damages received by a 
                        participant or beneficiary under such action 
                        shall be reduced, in accordance with clause 
                        (ii), by any other payment that has been, or 
                        will be, made to such participant or 
                        beneficiary, pursuant to an order or judgment 
                        of another court, to compensate such 
                        participant or beneficiary for the injury that 
                        was the subject of such action.
                            ``(ii) Amount of reduction.--The amount by 
                        which an award of damages to a participant or 
                        beneficiary for an injury shall be reduced 
                        under clause (i) shall be--
                                    ``(I) the total amount of any 
                                payments (other than such award) that 
                                have been made or that will be made to 
                                such participant or beneficiary to pay 
                                costs of or compensate such participant 
                                or beneficiary for the injury that was 
                                the subject of the action; less
                                    ``(II) the amount paid by such 
                                participant or beneficiary (or by the 
                                spouse, parent, or legal guardian of 
                                such participant or beneficiary) to 
                                secure the payments described in 
                                subclause (I).
                            ``(iii) Determination of amounts from 
                        collateral sources.--The reduction required 
                        under clause (ii) shall be determined by the 
                        court in a pretrial proceeding. At the 
                        subsequent trial no evidence shall be admitted 
                        as to the amount of any charge, payments, or 
                        damage for which a participant or beneficiary--
                                    ``(I) has received payment from a 
                                collateral source or the obligation for 
                                which has been assured by a third 
                                party; or
                                    ``(II) is, or with reasonable 
                                certainty, will be eligible to receive 
                                from a collateral source which will, 
                                with reasonable certainty, be assumed 
                                by a third party.
                    ``(E) Prohibition of award of punitive damages.--
                Notwithstanding any other provision of law, in the case 
                of any action commenced pursuant to paragraph (1), the 
                court may not award any punitive, exemplary, or similar 
                damages against a defendant.
            ``(5) Affirmative defenses.--In the case of any cause of 
        action under paragraph (1), it shall be an affirmative defense 
        that--
                    ``(A) the designated decision-maker of a group 
                health plan, or health insurance issuer that offers 
                health insurance coverage in connection with a group 
                health plan, involved did not receive from the 
                participant or beneficiary (or authorized 
                representative) or the treating health care 
                professional (if any), the information requested by the 
                plan or issuer regarding the medical condition of the 
                participant or beneficiary that was necessary to make a 
                determination on a claim for benefits under section 
                503A(a) or a final determination on a claim for 
                benefits under section 503A(b);
                    ``(B) the participant or beneficiary (or authorized 
                representative)--
                            ``(i) was in possession of facts that were 
                        sufficient to enable the participant or 
                        beneficiary (or authorized representative) to 
                        know that an expedited review under section 
                        503A or 503B would have prevented the harm that 
                        is the subject of the action; and
                            ``(ii) failed to notify the plan or issuer 
                        of the need for such an expedited review; or
                    ``(C) the qualified external review entity or an 
                independent medical reviewer failed to meet the 
                timelines applicable under section 503B, or a period of 
                time elapsing after coverage has been authorized.
        Nothing in this paragraph shall be construed to limit the 
        application of any other affirmative defense that may be 
        applicable to the cause of action involved.
            ``(6) Waiver of internal review.--In the case of any cause 
        of action under paragraph (1), the waiver or nonwaiver of 
        internal review under section 503A(b)(1)(D) by the group health 
        plan, or health insurance issuer that offers health insurance 
        coverage in connection with a group health plan, shall not be 
        used in determining liability.
            ``(7) Limitations on actions.--Paragraph (1) shall not 
        apply in connection with any action that is commenced more than 
        3 years after the date on which the failure described in 
        paragraph (1) occurred.
            ``(8) Protection of the regulation of quality of medical 
        care under state law.--Nothing in this subsection shall be 
        construed to preclude any action under State law against a 
        person or entity for liability or vicarious liability with 
        respect to the delivery of medical care. A claim that is based 
        on or otherwise relates to a group health plan's administration 
        or determination of a claim for benefits (as such term is 
        defined in section 503B(i)(2) and notwithstanding the 
        definition contained in paragraph (10)(B)) shall not be deemed 
        to be the delivery of medical care under any State law for 
        purposes of this section. Any such claim shall be maintained 
        exclusively under section 502.
            ``(9) Construction.--Nothing in this subsection shall be 
        construed as authorizing a cause of action under paragraph (1) 
        for the failure of a group health plan or health insurance 
        issuer to provide an item or service that is specifically 
        excluded under the plan or coverage.
            ``(10) Definitions.--In this subsection:
                    ``(A) Authorized representative.--The term 
                `authorized representative' has the meaning given such 
                term in section 503B(i).
                    ``(B) Claim for benefits.--Except as provided for 
                in paragraph (8), the term `claim for benefits' shall 
                have the meaning given such term in section 503B(i), 
                except that such term shall only include claims for 
                prior authorization determinations (as such term is 
                defined in section 503B(i)).
                    ``(C) Group health plan.--The term `group health 
                plan' shall have the meaning given such term in section 
                733(a). In applying this paragraph, excepted benefits 
                described in section 733(c) shall not be treated as 
                benefits consisting of medical care.
                    ``(D) Health insurance coverage.--The term `health 
                insurance coverage' has the meaning given such term in 
                section 733(b)(1). In applying this paragraph, excepted 
                benefits described in section 733(c) shall not be 
                treated as benefits consisting of medical care.
                    ``(E) Health insurance issuer.--The term `health 
                insurance issuer' has the meaning given such term in 
                section 733(b)(2).
                    ``(F) Ordinary care.--The term `ordinary care' 
                means the care, skill, prudence, and diligence under 
                the circumstances then prevailing that a prudent 
                individual acting in a like capacity and familiar with 
                such matters would use in making a determination on a 
                claim for benefits of a similar character.
                    ``(G) Substantial harm.--The term `substantial 
                harm' means the loss of life, loss or significant 
                impairment of limb or bodily function, significant 
                mental illness or disease, significant disfigurement, 
                or severe and chronic physical pain.
            ``(11) Effective date.--The provisions of this subsection 
        shall apply to acts and omissions occurring on or after the 
        effective date of sections 503A and 503B (as contained in 
        section 501 of the Bipartisan Patients' Bill of Rights Act of 
        2001).''.
    (b) Conforming Amendment.--Section 502(a)(1)(A) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1132(a)(1)(A)) is 
amended by inserting ``or (n)'' after ``subsection (c)''.

SEC. 142. LIMITATION ON CERTAIN CLASS ACTION LITIGATION.

    (a) ERISA.--Section 502 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1132), as amended by section 131, is further 
amended by adding at the end the following:
    ``(p) Limitation on Class Action Litigation.--
            ``(1) In general.--Any claim or cause of action that is 
        maintained under this section in connection with a group health 
        plan, or health insurance coverage issued in connection with a 
        group health plan, as a class action, derivative action, or as 
        an action on behalf of any group of 2 or more claimants, may be 
        maintained only if the class, the derivative claimant, or the 
        group of claimants is limited to the participants or 
        beneficiaries of a group health plan established by only 1 plan 
        sponsor. No action maintained by such class, such derivative 
        claimant, or such group of claimants may be joined in the same 
        proceeding with any action maintained by another class, 
        derivative claimant, or group of claimants or consolidated for 
        any purpose with any other proceeding. In this paragraph, the 
        terms `group health plan' and `health insurance coverage' have 
        the meanings given such terms in section 733.''.
            ``(2) Effective date.--This subsection shall apply to all 
        civil actions that are filed on or after the date of enactment 
        of the Bipartisan Patients' Bill of Rights Act of 2001. This 
        subsection shall apply to civil actions that are pending and 
        have not been finally determined by judgment or settlement 
        prior to such date of enactment.''.
    (b) RICO.--Section 1964(c) of title 18, United States Code, is 
amended--
            (1) by inserting ``(1)'' after the subsection designation; 
        and
            (2) by adding at the end the following:
    ``(2)(A) No action may be brought under this subsection, or 
alleging any violation of section 1962, where the action seeks relief 
concerning the manner in which any person has marketed, provided 
information concerning, established, administered, or otherwise 
operated a group health plan, or health insurance coverage in 
connection with a group health plan. Any such action shall only be 
brought under the Employee Retirement Income Security Act of 1974. In 
this paragraph, the terms `group health plan' and `health insurance 
issuer' shall have the meanings given such terms in section 733 of the 
Employee Retirement Income Security Act of 1974.
    ``(B) Subparagraph (A) shall apply to civil actions that are 
pending and have not been finally determined by judgment or settlement 
prior to the date of enactment of the Bipartisan Patients' Bill of 
Rights Act of 2001 and all actions commenced on or after such date.''.

SEC. 143. AUTHORITY TO IMPOSE CIVIL PENALTIES FOR FAILURE TO PROVIDE A 
              PLAN BENEFIT NOT ELIGIBLE FOR MEDICAL REVIEW.

    Section 502 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1132), as amended by sections 131 and 141, is further 
amended by adding at the end the following:
    ``(q) In connection with any action maintained under subsection 
(a)(1)(B), the court, in its discretion, may assess a civil penalty 
against the designated decision-maker (as designated pursuant to 
section 502(n)(2)) of a group health plan or a health insurance issuer 
(that offers health insurance coverage in connection with a group 
health plan) of not to exceed $100,000 where--
            ``(1) in its final determination under section 
        503A(b)(4)(B), the designated decision-maker fails to provide, 
        or authorize coverage of, a benefit to which a participant or 
        beneficiary is entitled under the terms and conditions of the 
        plan;
            ``(2) the participant or beneficiary has appealed such 
        determination under section 503B and such determination is not 
        subject to independent medical review as determined by a 
        qualified external review entity under section 503B(c)(3)(A);
            ``(3) the plan has failed to exercise ordinary care in 
        making a final determination under section 503A(b)(4)(B) 
        denying a claim for benefits under the plan; and
            ``(4) that denial is the proximate cause of substantial 
        harm (as defined in subsection (n)(10)(G)) the participant or 
        beneficiary.''.

                     Subtitle E--State Flexibility

SEC. 151. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

    (a) Limitation on Preemption of State Law With Respect to Health 
Insurance Issuers.--
            (1) In general.--Subject to paragraph (2)--
                    (A) subtitles A and B of 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 plans or individual 
                health insurance coverage) and to non-Federal 
                governmental plans except to the extent that such 
                standard or requirement prevents the application of a 
                requirement of such subtitles; and
                    (B) the amendments made by subtitle C 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 individual health 
                insurance coverage and to non-Federal governmental 
                plans except to the extent that such standard or 
                requirement prevents the application of a requirement 
                of such amendments.
            (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 (29 U.S.C. 1144) with respect to 
        group health plans.
    (b) Continued Application of Certain State Laws.--
            (1) Requirements for continued application.--
                    (A) General rule.--With respect to a State law 
                described in subparagraph (B), in applying the 
                requirements of subtitles A and B to health insurance 
                issuers under sections 2707 and 2753 (as applicable) of 
                the Public Health Service Act (as added by title II), 
                or health insurance issuers in connection with group 
                health plans under section 714 of the Employee 
                Retirement Income Security Act of 1974 (as added by 
title III), subject to subsection (a)(2)--
                            (i) the State law shall not be treated as 
                        being superseded under subsection (a); and
                            (ii) the State law shall apply in lieu of 
                        the patient protection requirements otherwise 
                        applicable under such subtitles with respect to 
                        health insurance issuers (in connection with 
                        group health plans or individual health 
                        insurance coverage) and non-Federal 
                        governmental plans.
                    (B) State law described.--A State law described in 
                this subparagraph is a State law that imposes, with 
                respect to health insurance issuers (in connection with 
                group health plans or individual health insurance 
                coverage) and to non-Federal governmental plans, a 
                requirement that is approved by the Secretary (through 
                a certification under subsection (c)(4)) as being 
                consistent with a patient protection requirement (as 
                defined in paragraph (3)).
            (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 any one or more requirements under the following:
                    (A) Section 101 (relating to access to emergency 
                care).
                    (B) Section 102 (relating to consumer choice 
                option) with respect to non-Federal governmental plans 
                only.
                    (C) Section 103 (relating to patient access to 
                obstetrical and gynecological care).
                    (D) Section 104 (relating to access to pediatric 
                care).
                    (E) Section 105 (relating to timely access to 
                specialists).
                    (F) Section 106 (relating to continuity of care), 
                but only insofar as a replacement issuer assumes the 
                obligation for continuity of care.
                    (G) Section 108 (relating to access to needed 
                prescription drugs).
                    (H) Section 109 (relating to coverage for 
                individuals participating in approved clinical trials).
                    (I) Section 110 (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).
                    (J) A prohibition under--
                            (i) section 107 (relating to prohibition of 
                        interference with certain medical 
                        communications); and
                            (ii) section 111 (relating to prohibition 
                        of discrimination against providers based on 
                        licensure).
                    (K) An informational requirement under section 121.
    (c) Determinations With Respect to Certifications.--
            (1) In general.--For purposes of the continued application 
        of certain State laws under subsection (b)(1), a State may, on 
        or after May 1, 2002, submit to the Board established under 
        subsection (d) a certification that the State law involved is 
        consistent with those patient protections requirements (as 
        defined in subsection (b)(3)) that are covered under the law 
        for which the State is seeking a certification. Such 
        certification shall be accompanied by such information as may 
        be required to permit the Board to make the determination 
        described in paragraph (3), as applicable.
            (2) Action by board.--
                    (A) In general.--The Board shall promptly review a 
                certification submitted under paragraph (1) with 
                respect to a State law to make the determination 
                required under paragraph (3) with respect to the 
                certification.
                    (B) Approval deadlines.--
                            (i) Initial review.--Not later than 60 days 
                        after the date on which the Board receives a 
                        certification under paragraph (1), the Board 
                        shall--
                                    (I) notify the State involved that 
                                specified additional information is 
                                needed to make the determination 
                                described in paragraph (3); or
                                    (II) submit a recommendation to the 
                                Secretary concerning the approval or 
                                disapproval (and the reasons therefore) 
                                of the certification.
                            (ii) Additional information.--With respect 
                        to a State that has been notified by the Board 
                        under clause (i)(I) that specified additional 
                        information is needed to make the determination 
                        described in paragraph (3), the Board shall 
                        make the submission required under clause 
                        (i)(II) within 60 days after the date on which 
                        such specified additional information is 
                        requested by the Board.
            (3) Determination.--The Board shall recommend that the 
        Secretary approve or disapprove a certification submitted under 
        paragraph (1)(A). The Board shall recommend the approval of a 
        certification under this subparagraph unless the Board finds 
        that there is no reasonable basis or evidence for such 
        approval.
            (4) Review by secretary.--
                    (A) In general.--The recommendation by the Board to 
                approve or disapprove a certification submitted by a 
                State under paragraph (1) is considered to be approved 
                by the Secretary unless the Secretary notifies the 
                State in writing, within 30 days after the date on 
                which the Board submits its recommendation to 
the Secretary under paragraph (2) concerning such certification, that 
the certification is approved or disapproved (and the reasons for the 
approval or disapproval).
                    (B) Deference to states.--The recommendation of the 
                Board to approve a certification submitted under 
                paragraph (1) shall be approved by the Secretary unless 
                the Secretary finds that there is no reasonable basis 
                or there is insufficient evidence for approving the 
                certification.
                    (C) Notice.--
                            (i) State notification.--The Secretary 
                        shall provide a State with written notice of 
                        the determination of the Secretary to approve 
                        or disapprove the certification submitted by 
                        the State under paragraph (1) within 30 days 
                        after the date on which the Board submits its 
                        recommendation to the Secretary under paragraph 
                        (2) concerning such certification.
                            (ii) Public notification.--The Secretary 
                        shall publish each notice provided under clause 
                        (i) in the Federal Register and as otherwise 
                        determined appropriate by the Secretary 
                        (including the Internet) to inform the general 
                        public. The Secretary shall annually publish 
                        (in accordance with the preceding sentence) the 
                        status of all States with respect to 
                        certifications.
            (5) State challenge.--A State that has a certification 
        disapproved by the Secretary under paragraph (4) may challenge 
        such disapproval in the appropriate United States district 
        court. The court shall make a de novo determination with 
        respect to a challenge brought under this paragraph.
            (6) Termination of certification.--
                    (A) In general.--The Secretary, not more frequently 
                than once every 5 years, may request that a State with 
                respect to which a certification has been approved 
                under paragraph (4), submit an assurance to the 
                Secretary that with respect to a certification, the 
                State law involved has not been--
                            (i) repealed; or
                            (ii) modified to such an extent that such 
                        law is no longer consistent with a patient 
                        protection requirement under this title.
                    (B) Termination.--If a State fails to submit an 
                assurance to the Secretary under subparagraph (A) 
                within the 60-day period beginning on the date on which 
                the Secretary makes a request for such an assurance, 
                the certification applicable to the State under this 
                section shall terminate.
            (7) Rule of construction.--Nothing in this section shall be 
        construed to prohibit a State from submitting more than one 
        certification under paragraph (1).
            (8) Petitions by plans or issuers.--
                    (A) Petition process.--Effective on the date on 
                which the provisions of this Act become effective, as 
                provided for in section 501, a group health plan or 
                health insurance issuer may submit a petition to the 
                Secretary for a determination as to whether or not a 
                standard or requirement under a State law applicable to 
                the plan or issuer, that is not the subject of a 
                certification under subsection (c), is superseded under 
                subsection (a)(1) because such standard or requirement 
                prevents the application of a requirement of this 
                title.
                    (B) Approval.--The Secretary shall issue a 
                determination with respect to a petition submitted 
                under subparagraph (A) within the 60-day period 
                beginning on the date on which such petition is 
                submitted.
    (d) Patients' Protection Board.--
            (1) Establishment of board.--
                    (A) In general.--There is hereby established in the 
                Department of Health and Human Services a Patients' 
                Protection Board. Consistent with the requirements of 
                sections 5 and 10 of the Federal Advisory Committee 
                Act, the Board shall carry out the duties described in 
                paragraph (2).
                    (B) Composition.--The Board shall be composed of 13 
                members appointed by the Secretary with balanced 
                representation from among individuals who represent 
                consumers, employers, health professionals, health 
                insurance issuers, and officials of State government. 
                Members shall first be appointed to the Board not later 
                than May 1, 2002.
                    (C) Terms.--The terms of the members of the Board 
                shall be for 3 years except that for the members first 
                appointed the Secretary shall designate staggered terms 
                of 3 years for 2 members, 2 years for 2 members, and 1 
                year for 1 member. A vacancy on the Board shall be 
                filled in the same manner in which the original 
                appointment was made and a member appointed to fill a 
                vacancy occurring before the expiration of the term for 
                which the member's predecessor was appointed shall be 
                appointed only for the remainder of that term.
            (2) Duties.--
                    (A) Review of certifications submitted.--The Board 
                shall review certifications submitted under subsection 
                (c) and make recommendations to the Secretary of Health 
                and Human Services as provided for in such subsection.
                    (B) Annual congressional reports.--
                            (i) In general.--The Board shall submit to 
                        Congress an annual report on its activities. 
                        Each such report shall include the findings of 
                        the Board as to--
                                    (I) the States that have failed to 
                                obtain a certification under subsection 
                                (c); and
                                    (II) whether the enforcement role 
                                of the Federal Government with respect 
                                to health insurance has substantially 
                                expanded.
                            (ii) Initial report.--The first annual 
                        report under clause (i) shall focus 
                        specifically on the development by the Board of 
                        criteria for the evaluation of State laws and 
                        any other activities of the Board during its 
                        first year of operation.
    (e) Definitions.--For purposes of this section:
            (1) Board.--The term ``Board'' means the Patients' 
        Protection Board established under subsection (d).
            (2) State, state law.--The terms ``State'' and ``State 
        law'' shall have the meanings given such terms in section 
        2723(d) of the Public Health Service Act (42 U.S.C. 300gg-
        23(d)).

                  Subtitle F--Miscellaneous Provisions

SEC. 161. 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.
    (c) Additional Definitions.--For purposes of this title:
            (1) Enrollee.--The term ``enrollee'' means, with respect to 
        health insurance coverage offered by a health insurance issuer, 
        an individual enrolled with the issuer to receive such 
        coverage.
            (2) Health 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.
            (3) 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.
            (4) 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.
            (5) 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.
            (6) 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.
            (7) 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.
            (8) 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.

         TITLE II--AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT

SEC. 201. APPLICATION TO CERTAIN HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart 2 of part A of title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg-4 et seq.) is amended by adding at 
the end the following:

``SEC. 2707. PATIENT PROTECTION STANDARDS AND ACCOUNTABILITY.

    ``(a) In General.--Each health insurance issuer shall comply with 
the patient protection requirements under title I of the Bipartisan 
Patients' Bill of Rights Act of 2001 with respect to non-Federal 
governmental group health insurance coverage offered by such issuers, 
and such requirements shall be deemed to be incorporated into this 
section.
    ``(b) Accountability.--The provisions of sections 503 through 503B 
of the Employee Retirement Income Security Act of 1974 (as in effect as 
of the day after the date of enactment of the Bipartisan Patients' Bill 
of Rights Act of 2001) shall apply to non-Federal governmental group 
health insurance coverage offered by health insurance issuers with 
respect to an enrollee in the same manner as they apply to health 
insurance coverage offered by a health insurance issuer for a 
participant or beneficiary in connection with a group health plan and 
the requirements referred to in such sections shall be deemed to be 
incorporated into this section. For purposes of this subsection, 
references in such sections 503 through 503B to the Secretary shall be 
deemed to be references to the Secretary of Health and Human 
Services.''.
    (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 (42 U.S.C. 
300gg-41 et seq.) is amended--
            (1) by redesignating the first subpart 3 (relating to other 
        requirements) as subpart 2; and
            (2) by inserting after section 2752 the following:

``SEC. 2753. PATIENT PROTECTION STANDARDS AND ACCOUNTABILITY.

    ``(a) In General.--Each health insurance issuer shall comply with 
the patient protection requirements under subtitles A and B of title I 
of the Bipartisan Patients' Bill of Rights Act of 2001 with respect to 
individual health insurance coverage it offers, and such requirements 
shall be deemed to be incorporated into this section.''.
    ``(b) Accountability.--The provisions of sections 503 through 503B 
of the Employee Retirement Income Security Act of 1974 (as in effect as 
of the day after the date of enactment of the Bipartisan Patients' Bill 
of Rights Act of 2001) shall apply to health insurance coverage offered 
by a health insurance issuer in the individual market with respect to 
an enrollee in the same manner as they apply to health insurance 
coverage offered by a health insurance issuer for a participant or 
beneficiary in connection with a group health plan and the requirements 
referred to in such sections shall be deemed to be incorporated into 
this section. For purposes of this subsection, references in such 
sections 503 through 503B to the Secretary shall be deemed to be 
references to the Secretary of Health and Human Services.''.

SEC. 203. LIMITATION ON AUTHORITY OF THE SECRETARY OF HEALTH AND HUMAN 
              SERVICES WITH RESPECT TO NON-FEDERAL GOVERNMENTAL PLANS.

    Section 2722(b) of the Public Health Service Act (42 U.S.C. 300gg-
22(b)) is amended--
            (1) in paragraph (1), by striking ``only--'' and all that 
        follows through the period and inserting ``only as provided 
        under subsection (a)(2).''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``any non-
                Federal governmental plan that is a group health plan 
                and''; and
                    (B) in subparagraph (B), by striking ``by--'' and 
                all that follows through the period and inserting ``by 
                a health insurance issuer, the issuer is liable for 
                such penalty.''.

SEC. 204. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

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

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

    ``(a) Agreement with States.--A State may enter into an agreement 
with the Secretary for the delegation to the State of some or all of 
the Secretary's authority under this title to enforce the requirements 
applicable under title I of the Bipartisan Patients's Bill of Rights 
Act of 2001 to health insurance issuers in connection with non-Federal 
governmental plans and individual health insurance coverage.
    ``(b) Delegations.--Any department, agency, or instrumentality of a 
State to which authority is delegated pursuant to an agreement entered 
into under this section may, if authorized under State law and to the 
extent consistent with such agreement, exercise the powers of the 
Secretary under this title which relate to such authority.''.

TITLE III--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 (29 U.S.C. 1185 et seq.) is 
further 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 health insurance coverage in 
connection with a group health plan) shall comply with the requirements 
of title I of the Bipartisan Patients' Bill of Rights 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 Patients' Bill of Rights 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 101 (relating to access to emergency 
                care).
                    ``(B) Section 102 (relating to consumer choice 
                option).
                    ``(C) Section 103 (relating to patient access to 
                obstetrical and gynecological care).
                    ``(D) Section 104 (relating to access to pediatric 
                care).
                    ``(E) Section 105 (relating to timely access to 
                specialists).
                    ``(F) Section 106 (relating to continuity of care), 
                but only insofar as a replacement issuer assumes the 
                obligation for continuity of care.
                    ``(G) Section 108 (relating to access to needed 
                prescription drugs).
                    ``(H) Section 109 (relating to coverage for 
                individuals participating in approved clinical trials).
                    ``(I) Section 110 (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).
                    ``(J) Section 121 (relating to the provision of 
                information).
            ``(2) Application to prohibitions.--Pursuant to rules of 
        the Secretary, if a health insurance issuer offering health 
insurance coverage in connection with a group health plan takes an 
action in violation of any of the following sections of the Bipartisan 
Patients' Bill of Rights Act of 2001, the group health plan shall not 
be liable for such violation unless the plan caused such violation:
                    ``(A) Section 107 (relating to prohibition of 
                interference with certain medical communications).
                    ``(B) Section 111 (relating to prohibition of 
                discrimination against providers based on licensure).
            ``(3) 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.
            ``(4) Treatment of consistent state laws.--For purposes of 
        applying this subsection, a health insurance issuer offering 
        coverage in connection with a group health plan (and such group 
        health plan) shall be deemed to be in compliance with one or 
        more of the patient protection requirements of the Bipartisan 
        Patients' Bill of Rights Act of 2001 (as defined in section 
        151(b)(3) of such Act) that are otherwise applicable to such 
        issuer (or plan) under this section where--
                    ``(A) the issuer (or plan) is in compliance with a 
                State law, with respect to the patient protection 
                requirements involved, that has been certified in 
                accordance with section 151(c) of such Act; or
                    ``(B) the issuer (or plan) is in compliance with a 
                State law, with respect to the patient protection 
                requirements involved, that has been determined by the 
                Secretary as not preventing the application of the 
                patient protection requirements involved, in accordance 
                with section 151(c)(8)(B) of such Act.
    ``(c) 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.''.
    (b) Satisfaction of ERISA Claims Procedure Requirement.--Section 
503 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1133) is amended--
            (1) by inserting ``(a)'' after ``Sec. 503.''; and
            (2) by adding at the end the following:
    ``(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 Patients' Bill of Rights 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) Enforcement.--Section 502(b)(3) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended--
            (1) by striking ``The Secretary'' and inserting ``(A) The 
        Secretary''; and
            (2) by adding at the end the following:
    ``(B) A participant, beneficiary, plan fiduciary, or the Secretary 
may not bring an action to enforce the requirements of section 714 
against a health insurance issuer offering coverage in connection with 
a group health plan (or such group health plan) where the patient 
protection requirements of the Bipartisan Patients' Bill of Rights Act 
of 2001 (as defined in section 151(b)(3) of such Act) otherwise 
applicable to such issuer (or plan) under section 714 do not apply 
because the issuer (or plan) is in compliance with a State law, with 
respect to the patient protection requirements involved, that has been 
certified or a determination made in accordance with section 151 of 
such Act.''.
    (d) Conforming Amendments.--
            (1) Section 732(a) of the Employee Retirement Income 
        Security Act of 1974 (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 the Employee 
        Retirement Income Security Act of 1974 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 the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1132(b)(3)) is amended by 
        inserting ``(other than section 135(b))'' after ``part 7''.

SEC. 302. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136) is amended by adding at the end the following:
    ``(c) Responsibility of State with Respect to Health Insurance 
Issuers.--
            ``(1) Agreement with states.--A State may enter into an 
        agreement with the Secretary for the delegation to the State of 
        some or all of the Secretary's authority under sections 502, 
        503A, 503B, or 504 to enforce the requirements applicable under 
        title I of the Bipartisan Patients's Bill of Rights Act of 2001 
        to health insurance issuers in connection with a group health 
        plan.
            ``(2) Delegations.--Any department, agency, or 
        instrumentality of a State to which authority is delegated 
        pursuant to an agreement entered into under this subsection 
        may, if authorized under State law and to the extent consistent 
        with such agreement, exercise the powers of the Secretary under 
        this title which relate to such authority.''.

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

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 Patients' Bill of Rights 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.''.

                 TITLE V--EFFECTIVE DATE; SEVERABILITY

SEC. 501. EFFECTIVE DATE AND RELATED RULES.

    Except as otherwise provided in this Act, the provisions of this 
Act, including the amendments made by title I, shall apply on the later 
of--
            (1) plan years beginning on or after January 1, 2003; or
            (2) plan years beginning on or after 18 months after the 
        date on which the Secretary of Health and Human Services and 
        the Secretary of Labor issue final regulations, subject to the 
        notice and comment period required under subchapter 2 of 
        chapter 5 of title 5, United States Code, necessary to carry 
        out the amendments made by this Act.

SEC. 502. SEVERABILITY.

    (a) In General.--Except as provided in subsections (b) and (c), if 
any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of the provisions 
of such to any person or circumstance shall not be affected thereby.
    (b) Dependence of Remedies on Appeals.--If any provision of section 
131, or the amendments made by such section, or the application of such 
section or amendments to any person or circumstance is held to be 
unconstitutional, sections 141 and 143, and the amendments made by such 
sections, shall be deemed to be null and void and shall be given no 
force or effect.
    (c) Remedies.--If any provision of section 141, or the amendments 
made by such section, or the application of such section or amendments 
to any person or circumstance is held to be unconstitutional, the 
remainder of such section, and the amendments made by such section 
shall be deemed to be null and void and shall be given no force or 
effect.
                                 <all>