[Congressional Record Volume 143, Number 20 (Monday, February 24, 1997)]
[Senate]
[Pages S1472-S1477]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WELLSTONE:
  S. 346. A bill to assure fairness and assistance to patients and 
health care providers, and for other purposes; to the Committee on 
Labor and Human Resources.


                   THE PATIENT PROTECTION ACT OF 1997

 Mr. WELLSTONE. Mr. President, I introduce the Patient 
Protection Act of 1997. This bill addresses the issue of fairness in 
health care today.
  Mr. President, the last few years have seen an enormous growth in 
managed care health plans. Now, more than 50 percent of Americans are 
enrolled in some kind of managed care arrangement. We have learned a 
lot in the past several years about what works and what doesn't in 
managed care, in all kinds of health insurance for that matter.
  And, let me be clear that I recognize that there are things that are 
working well in managed care and other types of plans. We have seen a 
decrease in the rate of increase in healthcare costs. Health plans are 
emphasizing prevention and early intervention. Health plans are largely 
moving from managing costs to managing care to managing health.
  All of this is good, but enough time has gone by that we have found 
the problems, the glitches, the occasions and circumstances where 
patient and providers are not equal stakeholders in the systems and 
where they are treated unfairly, where their voices are either silent 
or disregarded. I am deeply concerned about the lack of availability of 
protections for patients and providers participating in all forms of 
health plans. This includes not only managed care plans in their 
various forms, but also point-of-service and traditional--fee-for-
service--plans as well. The inclusion of self-insured plans, MEWA's 
multiple employer welfare agreements--and association plans is an 
important component of this act because it extends provisions to some 
of those consumers who most need the protections.
  Many States are currently developing and moving similar bills through 
their legislatures and assemblies. There is a clear cry for these 
corrections and protections. However, even if all 50 States were to 
pass patient protection acts, not all Americans would benefit from  
these protections. I believe that now more than ever, Federal standards 
are needed to ensure that consumers are protected in our rapidly 
changing health care delivery environment. Almost 50 percent of 
Americans, those who belong to health plans regulated by the Federal 
Government, are excluded from State based protections. According to a 
report released by the GAO in July 1995, 44 million Americans are 
covered under exempt plans. There are an additional 70 million who are 
covered by other employer plans that may also be outside of the realm 
of State authority. In addition, self-funded plans are becoming more 
common, especially in smaller businesses. The standards that I am 
proposing should assure fairness for consumers and providers, while 
still encouraging health plans to pursue innovative approaches to 
providing high quality, cost-effective care. I am sure, Mr. President, 
that each of us is committed to fairness and understands the need for 
the Federal Government to work cooperatively with the States on this 
issue.

  My Patient Protection Act of 1997 will do several things that will 
ease the confusion so often present for consumers and providers in the 
health care system. It will assist them with their rights as 
participants in health plans.
  The act will award a grant to each State to establish an office of 
consumer education counseling, and assistance with health care. This 
will help consumers choose among the many plans available to them, 
understand their rights for appeals if care that their provider advises 
is denied, and receive support if they undertake a grievance procedure. 
These offices will be modeled after the successful ones in the Medicare 
Program, staffed largely by volunteers, that have helped seniors find 
their way through what might be for many an overwhelming situation.
  The act will require that health plans disclose certain information 
so that consumers and providers are better informed. Information that 
must be disclosed ranges from the financial health of the plan to its 
internal review process and criteria used in making decisions about 
treatment. No longer will there be a black hole in health plans into 
which very personal information about a patient goes, something unknown 
happens and out comes a decision to treat or not treat the problem. 
That simply is not the way to provide health care in a democracy.
  The act will require that plans ensure timely access to services and 
specialized treatment expertise, when clinically indicated.
  The act will require the development of health plan standards, 
including utilization review activities and handling of grievances of 
consumers or providers. Providers and consumers will be involved in the 
development of these processes.
  The act will protect providers by requiring mechanisms for due 
process

[[Page S1473]]

and disallowing dismissal of providers from the panel of a health plan 
without cause. It adds antigag clause and whistle-blower protection in 
order to ensure that consumers receive information that they need about 
health care options and quality of health care.
  In a country where many are either uninsured or underinsured, it is 
especially important that attempts to control costs be accompanied by 
clear legal rights for consumers and providers. With a competitive 
insurance market lacking adequate consumer protections and a health 
care system that says it's OK to leave some people out, what's to 
prevent plans from discriminating against patients who are likely to 
need expensive clinical services?
  Mr. President, these are not anti-managed care provisions. As a 
matter of fact, they are not anti anything. They are positive steps 
that will restore a better balance between health plans, consumers, and 
providers. Responsible health plans already comply with the standards 
that the Patient Protection Act would establish. But the Patient 
Protection Act would ensure that all patients and providers are 
guaranteed at least a baseline of protection.
  We are currently seeing attempts to regulate health care on a 
disease-by-disease basis. This is not the best way to protect consumers 
and providers. We need to focus on maintaining the unique relationship 
between health care providers and their patients, so that optimal care 
is available. Congress should not be in the business of deciding how 
long a patient needs to stay in the hospital for treatment of a 
specific condition, or whether a specific technology should be offered 
to a specific patient. We should instead make certain that health care 
providers can take into account the uniqueness of each of their 
patients in developing a rational and appropriate plan of care that can 
be followed. We can do this by ensuring that consumers and providers 
are included in the utilization review and decisionmaking process. The 
framework provided by the Patient Protection Act of 1997 will allow 
this to occur.
  These issues will become increasingly important as managed care 
arrangements proliferate, competition increases, more and more 
Americans and children lose their health insurance coverage, and costs 
continue to escalate. Until we are willing to make the hard choices and 
deal with the underlying problems in our current system, the very least 
we should do is enact some sensible protections that safeguard 
patients' and providers' rights.
  Mr. President, many people are fond of saying that health care reform 
is happening now--employers are managing their costs by enrolling 
increasing numbers of employees in managed care plans and new provider 
networks are emerging daily. But with so much attention being paid to 
the cost and business of health care, the providers and patients are 
losing substantial control over decisions affecting patients' health. 
It is therefore all the more important that we provide patient and 
provider protections. The Patient Protection Act of 1997 will go a long 
way toward doing that.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 346

       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 ``Patient 
     Protection Act of 1997''.
       (b) Table of Contents.--The table of contents for this Act 
     are as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

  TITLE I--OFFICE FOR CONSUMER INFORMATION, COUNSELING AND ASSISTANCE 
                            WITH HEALTH CARE

Sec. 101. Establishment.

                    TITLE II--UTILIZATION MANAGEMENT

Sec. 201. Definitions.
Sec. 202. Requirement for utilization review program.
Sec. 203. Standards for utilization review.

                    TITLE III--HEALTH PLAN STANDARDS

Sec. 301. Health plan standards.
Sec. 302. Minimum solvency requirements.
Sec. 303. Information on terms of plan.
Sec. 304. Access.
Sec. 305. Credentialing for health providers.
Sec. 306. Grievance procedures.
Sec. 307. Confidentiality standards.
Sec. 308. Discrimination.
Sec. 309. Prohibition on selective marketing.

                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Enforcement.
Sec. 402. Effective date.
Sec. 403. Preemption.

     SEC. 2. DEFINITIONS.

       Unless specifically provided otherwise, as used in this 
     Act:
       (1) Carrier.--The term ``carrier'' means a licensed 
     insurance company, a hospital or medical service corporation 
     (including an existing Blue Cross or Blue Shield 
     organization, within the meaning of section 833(c)(2) of 
     Internal Revenue Code of 1986 as in effect before the date of 
     the enactment of this Act), a health maintenance 
     organization, or other entity licensed or certified by the 
     State to provide health insurance or health benefits.
       (2) Covered individual.--The term ``covered individual'' 
     means a member, enrollee, subscriber, covered life, patient 
     or other individual eligible to receive benefits under a 
     health plan.
       (3) Emergency services.--The term ``emergency services'' 
     means those health care services that are provided to a 
     patient after the sudden onset of a health condition that 
     manifests itself by symptoms of sufficient severity, 
     including severe pain, and the absence of such immediate 
     health care attention could reasonably be expected, to result 
     in--
       (A) placing the patient's health in serious jeopardy;
       (B) serious impairment to bodily function; or
       (C) serious dysfunction of any bodily organ or part.
       (4) Health plan.--The term ``health plan'' includes any 
     organization that seeks to arrange for, or provide for the 
     financing and coordinated delivery of, health care services 
     directly or through a contracted health provider panel, and 
     shall include health maintenance organizations, preferred 
     provider organizations, single service health maintenance 
     organizations, single service preferred provider 
     organizations, other entities such as provider-hospital or 
     hospital-provider organizations, employee welfare benefit 
     plans (as defined in section 3(1) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1002(1)), and multiple 
     employer welfare plans or other association plans, as well as 
     carriers.
       (5) Health provider.--The term ``health provider'' means an 
     individual who is licensed or certified under State law to 
     provide health care services and who is operating within the 
     scope of such licensure or certification.
       (6) Managed care plan.--
       (A) In general.--The term ``managed care plan'' means a 
     plan operated by a managed care entity (as defined in 
     subparagraph (B)), that provides for the financing and 
     delivery of health care services to persons enrolled in such 
     plan through--
       (i) arrangements with selected providers to furnish health 
     care services;
       (ii) explicit standards for the selection of participating 
     providers;
       (iii) organizational arrangements for ongoing quality 
     assurance, utilization review programs, and dispute 
     resolution; and
       (iv) financial incentives for persons enrolled in the plan 
     to use the participating providers and procedures provided 
     for by the plan.
       (B) Managed care entity.--The term ``managed care entity'' 
     includes a licensed insurance company, hospital or medical 
     service plan (including provider and provider-hospital 
     networks), health maintenance organization, an employer or 
     employee organization, or a managed care contractor (as 
     defined in subparagraph (C)), that operates a managed care 
     plan.
       (C) Managed care contractor.--The term ``managed care 
     contractor'' means a person that--
       (i) establishes, operates, or maintains a network of 
     participating providers;
       (ii) conducts or arranges for utilization review 
     activities; and
       (iii) contracts with an insurance company, a hospital or 
     health service plan, an employer, an employee organization, 
     or any other entity providing coverage for health care 
     services to operate a managed care plan.
       (7) Provider network.--The term ``provider network'' means, 
     with respect to a health plan that restricts access, those 
     providers who have entered into a contract or agreement with 
     the plan under which such providers are obligated to provide 
     items and services under the plan to eligible individuals 
     enrolled in the plan, or have an agreement to provide 
     services on a fee-for-service basis.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services unless specifically provided 
     otherwise .
       (9) Specialized treatment expertise.--The term 
     ``specialized treatment expertise'' means expertise in 
     diagnosing and treating unusual diseases and conditions, 
     diagnosing and treating diseases and conditions that are 
     usually difficult to diagnose or treat, and providing other 
     specialized health care.
       (10) Sponsor.--The term ``sponsor'' means a carrier or 
     employer that provides a health plan.
       (11) Utilization review.--The term ``utilization review'' 
     means a set of formal techniques designed to monitor and 
     evaluate the

[[Page S1474]]

     clinical necessity, appropriateness and efficiency of health 
     care services, procedures, providers and facilities. 
     Techniques may include ambulatory review, prospective review, 
     second opinion, certification, concurrent review, case 
     management, discharge planning and retrospective review.
  TITLE I--OFFICE FOR CONSUMER INFORMATION, COUNSELING AND ASSISTANCE 
                            WITH HEALTH CARE

     SEC. 101. ESTABLISHMENT.

       (a) In General.--The Secretary shall award a grant to each 
     State and each State shall use amounts received under the 
     grant to establish an Office for Consumer Information, 
     Counseling and Assistance with Health Care (referred to in 
     this section as the ``Office''). Each such Office shall 
     perform public outreach and provide education and assistance 
     concerning consumer rights with respect to health insurance 
     and benefits as provided for in subsection (d).
       (b) Use of Grant.--
       (1) In general.--A State shall use a grant under this 
     section--
       (A) to administer the Office and carry out the duties 
     described in subsection (d);
       (B) to solicit and award contracts to private, nonprofit 
     organizations applying to the State to administer the Office 
     and carry out the duties described in subsection (d); or
       (C) in the case of a State operating a consumer information 
     counseling and assistance program on the date of enactment of 
     this Act, to expand and improve such program.
       (2) Contracts.--With respect to the contract described in 
     paragraph (1)(B), the contract period shall be not less than 
     2 years and not more than 4 years.
       (c) Staff.--A State shall ensure that the Office has 
     sufficient staff (including volunteers) and local offices 
     throughout the State to carry out its duties under this 
     section and a demonstrated ability to represent and work with 
     a broad spectrum of consumers, including vulnerable and 
     underserved populations.
       (d) Duties.--An Office established under this section 
     shall--
       (1) establish a State-wide toll-free hotline to enable 
     consumers to contact the Office;
       (2) have the ability to provide culturally appropriate 
     assistance that as far as practicable takes into 
     consideration under this subsection language needs;
       (3) develop outreach programs to provide health insurance 
     and health benefits information, counseling, and assistance;
       (4) provide outreach and education relating to consumer 
     rights and responsibilities under this Act, including the 
     rights and services available through the Office;
       (5) provide individuals with assistance in enrolling in 
     health plans (including providing plan comparisons), or in 
     obtaining services or reimbursements from health plans;
       (6) provide individuals with assistance in filing 
     applications for appropriate State health plan premium 
     assistance programs;
       (7) provide individuals with information and advocacy 
     concerning existing grievance procedures and institute 
     systems of referral to appropriate Federal or State 
     departments or agencies for assistance with problems related 
     to insurance coverage (including legal problems);
       (8) ensure that regular and timely access is provided to 
     the services available through the Office;
       (9) implement training programs for staff members 
     (including volunteer staff members) and collect and 
     disseminate timely and accurate health care information to 
     staff members;
       (10) not less than once each year, conduct public hearings 
     to identify and address community health care needs;
       (11) coordinate its activities with the staff of the 
     appropriate departments and agencies of the State government 
     and other appropriate entities within the State; and
       (12) carry out any other activities determined appropriate 
     by the Secretary.
       (e) State Duties.--
       (1) Access to information.--The State shall ensure that, 
     for purposes of carrying out the duties of the Office, the 
     Office has appropriate access to relevant information, 
     subject to the application of procedures to ensure 
     confidentiality of enrollee and proprietary health plan 
     information.
       (2) Reporting and evaluation requirements.--
       (A) Report.--The Office shall annually prepare and submit 
     to the State a report on the nature and patterns of consumer 
     complaints received by the Office during the year for which 
     the report is prepared. Such report shall contain any policy, 
     regulatory, and legislative recommendations for improvements 
     in the activities of the Office together with a record of the 
     activities of the Office.
       (B) Evaluation.--The State shall annually evaluate the 
     quality and effectiveness of the Office in carrying out the 
     activities described in subsection (d).
       (3) Conflicts of interest.--The State shall ensure that no 
     individual involved in selecting the entity with which to 
     enter into a contract under subsection (b)(1)(B), or involved 
     in the operation of the Office, or any delegate of the 
     Office, is subject to a conflict of interest.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.
                    TITLE II--UTILIZATION MANAGEMENT

     SEC. 201. DEFINITIONS.

       As used in this title:
       (1) Adverse determination.--The term ``adverse 
     determination'' means a determination that an admission to or 
     continued stay at a hospital or that another health care 
     service that is required has been reviewed and, based upon 
     the information provided, does not meet the requirements for 
     clinical necessity, appropriateness, level of care, or 
     effectiveness.
       (2) Ambulatory review.--The term ``ambulatory review'' 
     means utilization review of health care services performed or 
     provided in an outpatient setting.
       (3) Appeals procedure.--The term ``appeals procedure'' 
     means a formal process under which a covered individual (or 
     an individual acting on behalf of a covered individual), 
     attending provider or facility may appeal an adverse 
     utilization review decision rendered by the health plan or 
     its designee utilization review organization.
       (4) Care coordinator.--The term ``care coordinator'' means 
     a health provider who performs case management functions in 
     consultation with the interdisciplinary health care team, the 
     patient, family, and community.
       (5) Case management.--The term ``case management'' means a 
     coordinated set of activities conducted for the individual 
     patient management of serious, complicated, protracted or 
     chronic health conditions that provides cost-effective and 
     benefit-maximizing treatments for extremely resource-
     intensive conditions.
       (6) Clinical review criteria.--The term ``clinical review 
     criteria'' means the recorded (written or otherwise) 
     screening procedures, decision abstracts, clinical protocols 
     and practice guidelines used by the health plan to determine 
     necessity and appropriateness of health care services.
       (7) Comparable.--The term ``comparable'' means a health 
     provider who is licensed or certified in a manner that 
     permits the provider to authorize the equipment, services, or 
     procedures that are the subject of a review.
       (8) Concurrent review.--The term ``concurrent review'' 
     means utilization review conducted during a patient's 
     hospital stay or course of treatment.
       (9) Discharge planning.--The term ``discharge planning'' 
     means the formal process for determining, coordinating and 
     managing the care a patient receives following the discharge 
     of the patient from a facility.
       (10) Facility.--The term ``facility'' means an institution 
     or health care setting providing the prescribed health care 
     services under review. Such term includes hospitals and other 
     licensed inpatient facilities, ambulatory surgical or 
     treatment centers, skilled nursing facilities, residential 
     treatment centers, diagnostic, laboratory and imaging centers 
     and rehabilitation and other therapeutic health care 
     settings.
       (11) Prospective review.--The term ``prospective review'' 
     means utilization review conducted prior to an admission or a 
     course of treatment.
       (12) Retrospective review.--The term ``retrospective 
     review'' means utilization review conducted after health care 
     services have been provided to a patient. Such term does not 
     include the retrospective review of a claim that is limited 
     to an evaluation of reimbursement levels, veracity of 
     documentation, accuracy of coding and adjudication for 
     payment.
       (13) Second opinion.--The term ``second opinion'' means an 
     opportunity or requirement to obtain a clinical evaluation by 
     a provider other than the provider originally making a 
     recommendation for a proposed health service to assess the 
     clinical necessity and appropriateness of the initial 
     proposed health service.
       (14) Utilization review organization.--The term 
     ``utilization review organization'' means an entity that 
     conducts utilization review.

     SEC. 202. REQUIREMENT FOR UTILIZATION REVIEW PROGRAM.

       A health plan shall have in place a utilization review 
     program that meets the requirements of this title and that is 
     certified by the State.

     SEC. 203. STANDARDS FOR UTILIZATION REVIEW.

       (a) Establishment.--The Secretary of Health and Human 
     Services, in consultation with the Secretary of Labor 
     (referred to in this title as the ``Secretaries''), shall 
     establish standards for the establishment, operation, and 
     certification and periodic recertification of health plan 
     utilization review programs.
       (b) Alternative Standards.--
       (1) In general.--A State may certify a health plan as 
     meeting the standards established under subsection (a) if the 
     State determines that the health plan has met the utilization 
     standards required for accreditation as applied by a 
     nationally recognized, independent, nonprofit accreditation 
     entity.
       (2) Review by state.--A State that makes a determination 
     under paragraph (1) shall periodically review the standards 
     used by the private accreditation entity to ensure that such 
     standards meet or exceed the standards established by the 
     Secretaries under this title.
       (c) Utilization Review Program Requirements.--The standards 
     developed by the Secretaries under subsection (a) shall 
     require that utilization review programs comply with the 
     following:
       (1) Documentation.--A health plan shall provide a written 
     description of the utilization review program of the plan, 
     including a description of--

[[Page S1475]]

       (A) any activities assigned from the health plan to other 
     entities;
       (B) the policies and procedures used under the program to 
     evaluate clinical necessity; and
       (C) the clinical review criteria, information sources, and 
     the process used to review and approve the provision of 
     health care services under the program.
       (2) Prohibition.--With respect to the administration of the 
     utilization review program, a health plan may not employ 
     utilization reviewers or contract with a utilization 
     management organization if the conditions of employment or 
     the contract terms include financial incentives to reduce or 
     limit the provision of clinically necessary or appropriate 
     services to covered individuals.
       (3) Review and modification.--A health plan shall develop 
     procedures for periodically reviewing and modifying the 
     utilization review of the plan. Such procedures shall provide 
     for the participation of providers and consumers in the 
     health plan in the development and review of utilization 
     review policies and procedures.
       (4) Decision protocols.--
       (A) In general.--A utilization review program shall develop 
     and apply recorded (written or otherwise) utilization review 
     decision protocols. Such protocols shall be based on sound 
     health care evidence.
       (B) Protocol criteria.--The clinical review criteria used 
     under the utilization review decision protocols to assess the 
     appropriateness of health care services shall be clearly 
     documented and available to participating health providers 
     upon request. Such protocols shall include a mechanism for 
     assessing the consistency of the application of the criteria 
     used under the protocols across reviewers, and a mechanism 
     for periodically updating such criteria.
       (5) Review and decisions.--
       (A) Review.--The procedures applied under a utilization 
     review program with respect to the preauthorization and 
     concurrent review of the necessity and appropriateness of 
     health care devices, services or procedures, shall require 
     that qualified, comparable health care providers supervise 
     review decisions. With respect to a decision to deny the 
     provision of health care devices, services or procedures, a 
     comparable provider shall conduct a subsequent review to 
     determine the clinical appropriateness of such a denial. 
     Comparable health providers from the appropriate specialty 
     area shall be utilized in the review process.
       (B) Decisions.--All utilization review decisions shall be 
     made in a timely manner, as determined appropriate when 
     considering the urgency of the situation.
       (C) Adverse determinations.--With respect to utilization 
     review, an adverse determination or noncertification of an 
     admission, continued stay, or service shall be clearly 
     documented, including the specific clinical or other reason 
     for the adverse determination or noncertification, and be 
     available to the covered individual and the affected provider 
     or facility. A health plan may not deny or limit coverage 
     with respect to a service that the enrollee has already 
     received solely on the basis of lack of prior authorization 
     or second opinion, to the extent that the service would have 
     otherwise been covered by the plan had such prior 
     authorization or a second opinion been obtained.
       (D) Notification of denial.--A health plan shall provide a 
     covered individual with timely notice of an adverse 
     determination or noncertification of an admission, continued 
     stay, or service. Such a notification shall include 
     information concerning the utilization review program appeals 
     procedure as well as the telephone number for the Office.
       (6) Requests for authorization.--A health plan utilization 
     review program shall ensure that requests by covered 
     individuals or providers for prior authorization of a 
     nonemergency service shall be answered in a timely manner 
     after such request is received. If utilization review 
     personnel are not available in a timely fashion, any health 
     care services provided shall be considered approved.
       (7) New technologies.--A utilization review program shall 
     implement policies and procedures to evaluate the appropriate 
     use of new health care technologies or new applications of 
     established technologies, including health care procedures, 
     drugs, and devices. The program shall ensure that appropriate 
     providers participate in the development of technology 
     evaluation criteria.
       (8) Special rule.--Where prior authorization for a service 
     or other covered item is obtained under a program under this 
     section, the service shall be considered to be covered unless 
     there was intentional fraud or intentionally incorrect 
     information provided at the time such prior authorization was 
     obtained. If a provider intentionally supplied the incorrect 
     information that led to the authorization of clinically 
     unnecessary care, the provider shall be prohibited from 
     collecting payment directly from the enrollee, and shall 
     reimburse the plan and subscriber for any payments or 
     copayments the provider may have received.
       (d) Health Plan Requirements.--
       (1) Disclosure of information.--
       (A) Prospective covered individuals.--A health plan shall, 
     with respect to any materials distributed to prospective 
     covered individuals, include a summary of the utilization 
     review procedures of the plan.
       (B) Covered individuals.--A health plan shall, with respect 
     to any materials distributed to newly covered individuals, 
     include a clear and comprehensive description of utilization 
     review procedures of the plan and a statement of patient 
     rights and responsibilities with respect to such procedures.
       (C) State officials.--
       (i) In general.--A health plan shall disclose to the State 
     insurance commissioner, or other designated State official, 
     the health plan utilization review program policies, 
     procedures, and reports required by the State for 
     certification.
       (ii) Streamlining of procedures.--To the extent 
     practicable, a State shall implement procedures to streamline 
     the process by which a health plan documents compliance with 
     the requirements of this Act, including procedures to 
     condense the number of documents filed with the State 
     concerning such compliance.
       (2) Toll-free number.--A health plan shall have a 
     membership card which shall have printed on the card the 
     toll-free telephone number that a covered individual should 
     call to receive precertification utilization review 
     decisions.
       (3) Evaluation.--A health plan shall establish mechanisms 
     to evaluate the effects of the utilization review program of 
     the plan through the use of member satisfaction data or 
     through other appropriate means.
       (e) Emergency Care.--
       (1) Emergency medical condition.--For purposes of this 
     section 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 (including the parent of a minor child or 
     the guardian of a disabled individual), who possesses an 
     average knowledge of health and medicine, could reasonably 
     expect the absence of immediate medical attention to result 
     in--
       (A) placing the health of the individual (or, with respect 
     to a pregnant woman, the health of the woman or her unborn 
     child) in serious jeopardy,
       (B) serious impairment to bodily functions, or
       (C) serious dysfunction of any bodily organ or part.
       (2) Preauthorization.--With respect to emergency services 
     furnished in a hospital emergency department, a health plan 
     shall not require prior authorization for the provision of 
     such services if the enrollee arrived at the emergency 
     department with symptoms that reasonably suggested an 
     emergency medical condition based on the judgment of a 
     prudent layperson, regardless of whether the hospital was 
     affiliated with the health plan. All procedures performed 
     during the evaluation and treatment of an emergency medical 
     condition shall be covered under the health plan.
                    TITLE III--HEALTH PLAN STANDARDS

     SEC. 301. HEALTH PLAN STANDARDS.

       (a) Establishment.--The Secretary of Health and Human 
     Services, in conjunction with the Secretary of Labor 
     (referred to in this title as the ``Secretaries''), shall 
     establish standards for the certification and periodic 
     recertification of health plans, including standards which 
     require plans to meet the requirements of this title.
       (b) State Certification.--
       (1) In general.--A State shall provide for the 
     certification of health plans if the certifying authority 
     designated by the State determines that the plan meets the 
     applicable requirements of this Act.
       (2) Requirement.--Effective on January 1, 1999, a health 
     plan sponsor may only offer a health plan in a State if such 
     plan is certified by the State under paragraph (1).
       (c) Construction.--Whenever in this title a requirement or 
     standard is imposed on a health plan, the requirement or 
     standard is deemed to have been imposed on the sponsor of the 
     plan in relation to that plan.

     SEC. 302. MINIMUM SOLVENCY REQUIREMENTS.

       (a) In General.--Except as provided in subsection (b), each 
     State shall apply minimum solvency requirements to all health 
     plans offered or operating within the State to ensure the 
     fiscal integrity of such plans. A health plan shall meet the 
     financial reserve requirements that are established by the 
     State to assure proper payment for health care services 
     provided under the plan. Such requirements may include plan 
     participation in a mechanism to provide for indemnification 
     of plan failures even if a plan has met the reserve 
     requirements.
       (b) Federal Standards.--The Secretaries shall establish 
     minimum solvency standards that shall apply to all self-
     insured health plans. Such standards shall at least meet the 
     solvency requirements established by the National Association 
     of Insurance Commissioners.

     SEC. 303. INFORMATION ON TERMS OF PLAN.

       (a) In General.--A health plan shall provide prospective 
     covered individuals with written information concerning the 
     terms and conditions of the health plan to enable such 
     individuals to make informed decisions with respect to a 
     certain system of health care delivery. Such information 
     shall be standardized so that prospective covered individuals 
     may compare the attributes of all such plans offered within 
     the coverage area.
       (b) Understandability.--Information provided under this 
     section, whether written or oral shall be easily 
     understandable, truthful, linguistically appropriate and 
     objective with respect to the terms used. Descriptions 
     provided in such information shall be consistent with 
     standards developed for supplemental insurance coverage under 
     title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq.).

[[Page S1476]]

       (c) Required Information.--Information required under this 
     section shall include information concerning--
       (1) coverage provisions, benefits, and any exclusions by 
     category of service or product;
       (2) plan loss ratios with an explanation that such ratios 
     reflect the percentage of the premiums expended for health 
     services;
       (3) prior authorization or other review requirements 
     including preauthorization review, concurrent review, post-
     service review, post-payment review and procedures that may 
     lead the patient to be denied coverage for, or not be 
     provided, a particular service or product;
       (4) an explanation of how plan design impacts enrollees, 
     including information on the financial responsibility of 
     covered individuals for payment for coinsurance or other out-
     of-plan services;
       (5) covered individual satisfaction statistics, including 
     disenrollment statistics and satisfaction statistics from 
     those who disenroll;
       (6) advance directives and organ donation;
       (7) the characteristics and availability of health care 
     providers and institutions participating in the plan, 
     including descriptions of the financial arrangements or 
     contractual provisions with hospitals, utilization review 
     organizations, physicians, or any other provider of health 
     care services that would affect the services offered, 
     referral or treatment options, or provider's fiduciary 
     responsibility to patients, including financial incentives 
     regarding the provision of services; and
       (8) quality indicators for the plan and for participating 
     health providers under the plan, including population-based 
     statistics such as immunization rates and performance 
     measures such as survival after surgery, adjusted for case 
     mix.

     SEC. 304. ACCESS.

       (a) In General.--A health plan shall demonstrate that the 
     plan has a sufficient number, distribution, and variety of 
     qualified health care providers to ensure that all covered 
     health care services will be available and accessible in a 
     timely manner to adults, infants, children, and individuals 
     with disabilities enrolled in the plan. Plans shall make 
     reasonable efforts to address issues of cultural competence 
     and appropriateness with respect to providers.
       (b) Availability of Services.--A health plan shall ensure 
     that services covered under the plan are available in a 
     timely manner that ensures a continuity of care, are 
     accessible within a reasonable proximity to the residences of 
     the enrollees, are available within reasonable hours of 
     operation, and include emergency and urgent care services 
     when clinically necessary and available which shall be 
     accessible within the service area 24-hours a day, seven days 
     a week.
       (c) Specialized Treatment.--A health plan shall demonstrate 
     that plan enrollees have meaningful access, when clinically 
     indicated in the judgment of the treating health provider, to 
     specialized treatment expertise.
       (d) Chronic Conditions.--
       (1) In general.--Any process established by a health plan 
     to coordinate care and control costs may not impose an undue 
     burden on enrollees with chronic health conditions. The plan 
     shall ensure a continuity of care and shall, when clinically 
     indicated in the judgment of the treating health provider, 
     ensure ongoing direct access to relevant specialists for 
     continued care.
       (2) Care coordinator.--In the case of an enrollee who has a 
     severe, complex, or chronic condition, the health plan shall 
     determine, based on the judgment of the treating health 
     provider, whether it is clinically necessary or appropriate 
     to use a care coordinator from an interdisciplinary team.
       (e) Requirement.--
       (1) In general.--The requirements of this section may not 
     be waived and shall be met in all areas where the health plan 
     has enrollees, including rural areas. With respect to 
     children, such services shall include pediatric and pediatric 
     specialty services.
       (2) Out-of-network services.--If a health plan fails to 
     meet the requirements of this section, the plan shall arrange 
     for the provision of out-of-network services to enrollees in 
     a manner that provides enrollees with access to services in 
     accordance with the principles and parameters set forth in 
     this section.

     SEC. 305. CREDENTIALING FOR HEALTH PROVIDERS.

       (a) In General.--A health plan shall credential health 
     providers furnishing health care services under the plan.
       (b) Credentialing Process.--
       (1) In general.--A health plan shall establish a 
     credentialing process. Such process shall ensure that a 
     health provider is credentialed prior to that provider being 
     listed as a health provider in the health plan's marketing 
     materials, in accordance with recorded (written or otherwise) 
     policies and procedures.
       (2) Responsibility chief health care officer.--The chief 
     health care officer of the health plan, or another designated 
     health provider, shall have responsibility for the 
     credentialing of health providers under the plan.
       (3) Uniform applications.--A State shall develop a basic 
     uniform application that shall be used by all health plans in 
     the State for credentialing purposes.
       (4) Standards.--
       (A) In general.--Credentialing decisions under a health 
     plan shall be based on objective standards with input from 
     health providers credentialed under the plan. Information 
     concerning all application and credentialing policies and 
     procedures shall be made available for review by the health 
     providers involved upon written request.
       (B) Right to review information.--A health provider who 
     undergoes the credentialing process shall have the right to 
     review the basis information, including the sources of that 
     information, that was used to meet the designated 
     credentialing criteria.

     SEC. 306. GRIEVANCE PROCEDURES.

       (a) In General.--A health plan shall adopt a timely and 
     organized system for resolving complaints and formal 
     grievances filed by covered individuals. Such system shall 
     include--
       (1) recorded (written or otherwise) procedures for 
     registering and responding to complaints and grievances in a 
     timely manner;
       (2) documentation concerning the substance of complaints, 
     grievances, and actions taken concerning such complaints and 
     grievances, which shall be in writing, and be available upon 
     request to the Office for Consumer Information, Counseling 
     and Assistance with Health Care;
       (3) procedures to ensure a resolution of a complaint or 
     grievance;
       (4) the compilation and analysis of complaint and grievance 
     data;
       (5) procedures to expedite the complaint process if the 
     complaint involves a dispute about the coverage of an 
     immediately and urgently needed service; and
       (6) procedures to ensure that if an enrollee orally 
     notifies a health plan about a complaint, the plan (if 
     requested) must send the enrollee a complaint form that 
     includes the telephone numbers and addresses of member 
     services, a description of the plan's grievance procedure, 
     and the telephone number of the Officer for Consumer 
     Information, Counseling and Assistance with Health Care where 
     enrollees may register complaints.
       (b) Appeal Process.--A health plan shall adopt an appeals 
     process to enable covered individuals and providers to appeal 
     decisions that are adverse to the covered individuals. Such a 
     process shall include--
       (1) the right to a review by a grievance panel;
       (2) the right to a second review with a different panel, 
     independent from the health plan; and
       (3) an expedited process for review in emergency cases.

     The Secretaries shall develop guidelines for the structure 
     and requirements applicable to the independent review panel.
       (c) Notification.--With respect to the complaint, 
     grievance, and appeals processes required under this section, 
     a health plan shall, upon the request of a covered 
     individual, provide the individual a written decision 
     concerning a complaint, grievance, or appeal in a timely 
     fashion.
       (d) Non-Impediment to Benefits.--The complaint, grievance, 
     and appeals processes established in accordance with this 
     section may not be used in any fashion to discourage, 
     prevent, or deny a covered individual from receiving 
     clinically necessary care in a timely manner.
       (e) Due Process With Respect to Credentialing.--
       (1) Receipt of information.--A health provider who is 
     subject to credentialing under section 305 shall, upon 
     written request, receive from the health plan any information 
     obtained by the plan during the credentialing process that, 
     as determined by the credentialing committee, does not meet 
     the credentialing standards of the plan, or that varies 
     substantially from the information provided to the health 
     plan by the health provider.
       (2) Submission of corrections.--A health plan shall have a 
     formal, recorded (written or otherwise) process by which a 
     health provider may submit supplemental information to the 
     credentialing committee if the health provider determines 
     that erroneous or misleading information has been previously 
     submitted. The health provider may request that such 
     information be reconsidered in the evaluation for 
     credentialing purposes.
       (3) No entitlement.--
       (A) In general.--A health provider is not entitled to be 
     selected or retained by a health plan as a participating or 
     contracting provider whether or not such provider meets the 
     credentialing standards established under section 305.
       (B) Economic considerations.--If economic considerations, 
     including the health care provider's patterns of expenditure 
     per patient, are part of a selection decision, objective 
     criteria shall be used in examining such considerations and a 
     written description of such criteria shall be provided to 
     applicants, participating health providers, and enrollees. 
     Any economic profiling of health providers must be adjusted 
     to recognize case mix, severity of illness, and the age and 
     gender of patients of a health provider's practice that may 
     account for higher or lower than expected costs, to the 
     extent appropriate data in this regard is available to the 
     health plan.
       (4) Termination, reduction or withdrawal.--
       (A) Procedures.--A health plan shall develop and implement 
     procedures for the reporting, to appropriate authorities, of 
     serious quality deficiencies that result in the suspension or 
     termination of a contract with a health provider.
       (B) Review.--A health plan shall develop and implement 
     policies and procedures under which the plan reviews the 
     contract privileges of health providers who--

[[Page S1477]]

       (i) have seriously violated policies and procedures of the 
     health plan;
       (ii) have lost their privilege to practice with a 
     contracting institutional provider; or
       (iii) otherwise pose a threat to the quality of service and 
     care provided to the enrollees of the health plan.

     At a minimum, the policies and procedures implemented under 
     this subparagraph shall meet the requirements of the Health 
     Care Quality Improvement Act of 1986.
       (C) Communication.--Health plans shall not restrict nor 
     inhibit communication between providers and patients or 
     penalize a provider making public the failure of the health 
     plan to comply with the provisions of this Act.
       (D) Liability.--A health plan shall not require a provider 
     to sign any type of hold-harmless agreement as a requirement 
     for participation in the health plan.
       (E) Due process.--The policies and procedures implemented 
     under subparagraph (B) shall include requirements for the 
     timely notification of the affected health provider of the 
     reasons for the reduction, withdrawal, or termination of 
     privileges, and shall provide the health provider with the 
     right to appeal initially to the health plan and 
     subsequently, upon failure to resolve a dispute, to an 
     independent entity, the determination of reduction, 
     withdrawal, or termination. No reduction, withdrawal or 
     termination of privileges shall be made without cause.
       (F) Availability.--A written copy of the policies and 
     procedures implemented under this paragraph shall be made 
     available to a health provider on request prior to the time 
     at which the health provider contracts to provide services 
     under the plan.

     SEC. 307. CONFIDENTIALITY STANDARDS.

       (a) In General.--A health plan shall ensure that the 
     confidentiality of specified enrollee patient information and 
     records is protected.
       (b) Policies and Procedures.--A health plan shall have 
     written confidentiality policies and procedures. Such 
     policies and procedures shall, at a minimum--
       (1) protect the confidentiality of enrollee patient 
     information within the administrative structure of the health 
     plan with special attention to sensitive health conditions 
     and history;
       (2) protect health care record information;
       (3) protect claim information;
       (4) establish requirements for the release of information; 
     and
       (5) inform health plan employees of the confidentiality 
     policies and procedures and enforce compliance with such 
     policies and procedures.
       (c) Patient Care Providers and Facilities.--A health plan 
     shall ensure that providers, offices and facilities 
     responsible for providing covered items or services to plan 
     enrollees have implemented policies and procedures to prevent 
     the unauthorized or inadvertent disclosure of confidential 
     patient information to individuals who should not have access 
     to such information.
       (d) Release of Information.--An enrollee in a health plan 
     shall have the opportunity to approve or disapprove the 
     release of identifiable personal patient information by the 
     health plan, except where such release is required under 
     applicable law.

     SEC. 308. DISCRIMINATION.

       (a) Enrollees.--A health plan (network or non-network) may 
     not discriminate or engage (directly or through contractual 
     arrangements) in any activity, including the selection of 
     service area, that has the effect of discriminating against 
     an individual on the basis of race, culture, national origin, 
     gender, language, socio-economic status, age, disability, 
     health status including genetic information, or anticipated 
     utilization of health services.
       (b) Providers.--A health plan may not discriminate in the 
     selection of members of the health provider or provider 
     network (and in establishing the terms and conditions for 
     membership in the network) of the plan based on--
       (1) the race, national origin, culture, age or disability 
     of the health provider; or
       (2) the socio-economic status, disability, health status, 
     or anticipated utilization of health services of the patients 
     of the health provider.

     SEC. 309. PROHIBITION ON SELECTIVE MARKETING.

       A health plan may not engage in marketing or other 
     practices intended to discourage or limit the issuance of 
     health plans to individuals on the basis of health condition, 
     geographic area, industry, or other risk factors.
                   TITLE IV--MISCELLANEOUS PROVISIONS

     SEC. 401. ENFORCEMENT.

       (a) In General.--A State shall prohibit the offering or 
     issuance of any health plan in such State if such plan does 
     not--
       (1) have in place a utilization review program that is 
     certified by the State as meeting the requirements of title 
     II;
       (2) comply with the standards developed under title III;
       (3) have in place a credentialing program that meets the 
     requirements of section 305;
       (4) comply with the requirements of title IV; and
       (5) meet any other requirements determined appropriate by 
     the Secretary.
       (b) Self-Insured Plans.--The Secretary of Labor may take 
     corrective action to terminate or disqualify a self-insured 
     plan that does not meet the standards developed under this 
     subsection.

     SEC. 402. EFFECTIVE DATE.

       (a) In General.--Except as otherwise provided in this 
     section, this Act shall take effect on the date of enactment 
     of this Act.
       (b) Standards.--The standards and programs required under 
     this Act shall apply to health plans beginning on January 1, 
     1999.
       (c) Office for Consumer Information, Counseling and 
     Assistance with Health Care.--A State shall have in place the 
     Office required under section 101 on January 1, 1999. The 
     Secretary may award grants for the establishment of such 
     Offices beginning on the date of enactment of this Act.
       (d) Other Requirements.--The requirements of title IV shall 
     apply to health plans beginning on January 1, 1999.
       (e) Regulations.--The Secretaries described in section 
     301(a) may promulgate regulations to carry out this Act.

     SEC. 403. PREEMPTION.

       Nothing in this Act shall be construed to preempt any State 
     law, or the implementation of such a State law, that provides 
     protections for individuals that are equivalent to or 
     stricter than the provisions of this Act.
                                 ______