[Congressional Record Volume 143, Number 21 (Tuesday, February 25, 1997)]
[Senate]
[Pages S1558-S1569]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BIDEN:
  S. 352. A bill to require the United States Sentencing Commission to 
amend the Federal sentencing guidelines to provide an enhanced penalty 
for follow-on bombings; to the Committee on the Judiciary.


               The Police and rescue squad protection act

 Mr. BIDEN. Mr. President, the bombings in Atlanta over the 
past 2 months--the second of which occurred last weekend--have marked 
the opening of yet another unfortunate new chapter in the escalation of 
domestic terrorism.
  While the magnitude of these attacks were far less than the World 
Trade Center and Oklahoma City bombings, they were noteworthy for the 
pernicious technique this criminal--or criminal organization--used:
  First, the terrorists attracted police, firefighters, and rescue 
workers to the scene by detonating one bomb,
  And then, with the unmistakable intent to injure the public safety 
officers responding to the first explosion, detonated a second 
explosive device in the parking lot outside the location of the first 
bombing.
  According to the experts, this tactic is one imported from the hotbed 
of terrorist activity--the Middle East.
  On two occasions last year, follow-on bombs were detonated in 
Southern Lebanon. One almost killed Israel's northern commander--Maj. 
Gen. Amiram Levine.
  Then this January, only 6 days before the Atlanta abortion clinic 
bombing, two bombs were detonated only 10 minutes apart near a bus 
station in Tel Aviv. Thirteen people were injured, including one police 
officer who came to the scene in response to the first bomb and was 
wounded by the second.
  Last month in Atlanta, the first bomb injured no one, but the 
``follow-on'' bomb wounded seven people, including two FBI agents, one 
ATF agent, and two local firefighters. Experts have stated that many 
more rescue workers would have been injured had the force of the second 
blast not been deflected by a car, which just happened to be parked in 
the right spot.
  Five people were injured by the bomb that exploded in an Atlanta 
restaurant last Friday, but fortunately, the police found the second 
bomb and detonated it with a remote-controlled robot.
  Of course, all terrorist acts are horrific. But this follow-on 
bombing tactic

[[Page S1559]]

is especially henious because the technique is designed to do one 
thing-- kill the police, firefighters, paramedics, and all the other 
professionals who unhesitatingly rush to the scene of a bombing to 
provide aid to the wounded.

  Mark my words: now that this tactic has been employed in Atlanta, 
covered by the national media, and probably communicated across the 
country through the Internet, some other devious, sick, individual, 
somewhere in the United States, will do it again. Mark my words.
  I believe that those who employ tactics aimed exclusively at injuring 
the police, firefighters, and other public safety officers should be 
punished above and beyond whatever punishment they would receive for 
destroying property or causing injury.
  That is why today I am introducing the Police and Rescue Squad 
Protection Act.
  The bill will increase the punishment for anyone who plants a follow-
on bomb with the intent to injure public safety officers. And it 
clearly states that anyone who detonates, or attempts to detonate one 
bomb right after another bomb in the same location is acting with the 
criminal intent to injure law enforcement and emergency medical 
officials.
  In my view, this legislation will send a strong message that we will 
not tolerate the grotesque tactics that we've seen in the streets of 
Tel Aviv, and now, in Atlanta.
  More importantly, this legislation honors those who, without fear or 
hesitation, put themselves in jeopardy at a time of crisis.
  If this bill deters one terrorist from planting a follow-on bomb and 
saves the life of one police officer, firefighter, ambulance driver, or 
paramedic that rushes to the scene of a crime, then it will have been 
well worth the energy expended to enact it.
  I hope my colleagues will join me in this effort.
                                 F_____
                                 
      By Mr. KENNEDY:
  S. 353. A bill to amend title XXVII of the Public Health Service Act 
and part 7 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 to establish standards for protection of consumers 
in managed care plans and other health plans; to the Committee on Labor 
and Human Resources.


              THE HEALTH INSURANCE BILL OF RIGHTS OF 1997

  Mr. KENNEDY. Mr. President, I am introducing today the Health 
Insurance Bill of Rights Act to provide quality assurance and patient 
protection. Companion legislation is being introduced in the House of 
Representatives by Congressman Dingell, Congressman Waxman, Congressman 
Cardin, and others.
  This legislation is a needed response to the surging growth of 
managed care and the rapid changes taking place in the health insurance 
market--changes that too often put insurance industry profits ahead of 
patients' health needs.
  Managed care has mushroomed over the past decade. In 1987, only 13 
percent of privately insured Americans were enrolled in HMOs. Today, 
that figure is 75 percent. At its best, managed care offers the 
opportunity to achieve both greater efficiency and higher quality in 
health care. In too many cases, however, the pressure for profits leads 
to lesser care--not better care. Too many managed care firms and other 
insurance companies have decided that the shortest route to higher 
profits and a competitive edge is by denying patients the care they 
need and deserve.
  Some of the most flagrant abuses by insurance plans have been 
documented in recent months:
  Just last year Congress enacted legislation to block drive-by 
deliveries and prevent new mothers and their babies from being evicted 
from hospitals in less than 48 hours.
  Breast cancer patients are being forced to undergo mastectomies on an 
outpatient basis, when sound medical advice requires a reasonable 
hospital stay.
  Children are being permanently injured or even losing their lives 
because their parents are forced to drive past the nearest emergency 
room to a more distant hospital because it has the contract with their 
health plan.
  Doctors are being subjected to gag rules that keep them from giving 
their patients their best medical advice.
  People with rare and dangerous diseases are being denied access to 
specialists to treat their conditions.
  Patients can't get needed pharmaceutical drugs, because the 
particular drug they need is not on the list of drugs approved for 
coverage by their insurance plan; sometimes such lists are developed 
and administered by pharmaceutical companies bent on selling their own 
drugs and blocking competition.

  Patients are being misdiagnosed, sometimes with fatal results, 
because insurance plans cut corners on diagnostic tests.
  Victims of cancer and other serious diseases are being denied 
participation in quality clinical trials offering the only hope of cure 
for otherwise incurable conditions.
  Children afflicted with serious, chronic conditions are being denied 
access to the medical centers with the only available expertise to 
treat their conditions effectively.
  These abuses are not typical of most insurance companies. But they 
are common enough that an overwhelming 80 percent of Americans now 
believe that their quality of care is often compromised by their 
insurance plan to save money. It is time to deal with these festering 
problems. Good business practices can improve health care, but health 
care must be more than just another business.
  The legislation we are introducing today establishes basic standards 
for insurance plans in six specific areas:
  First, access to care, including specialty care, emergency care, and 
clinical trials.
  Second, standards for quality of care.
  Third, information that must be available to patients.
  Fourth, expeditious and fair appeal procedures when physicians or 
patients disagree with plan decisions.
  Fifth, protection of the doctor-patient relationship, by banning gag 
rules and objectionable compensation arrangements.
  Sixth, a requirement that plan guidelines may not override good 
medical practice.
  These steps will not eliminate every abuse that occurs in the 
insurance industry, but they will go a long way to addressing the major 
problems patients confront.
  At the most basic level, the legislation establishes a right to 
needed care. A patient facing a health emergency should not be required 
to go to a distant emergency room, or to obtain prior authorization for 
care. Someone suffering from a serious condition requiring specialty 
care should not be denied that care because an insurance company thinks 
it is too expensive. Someone with a condition that cannot be addressed 
by conventional therapies should have a reasonable opportunity to 
participate in a quality clinical trial that offers the hope of 
effective treatment. Plans should set up clear, fair, and timely appeal 
procedures for cases in which the plan fails to fulfill its 
obligations.

  Historically, patients have relied on their personal physician to be 
the best source of impartial advice on needed care. This legislation 
maintains that critical role by prohibiting plans from restricting 
doctor-patient communications or from establishing compensation plans 
that bribe or penalize doctors into representing the plan's interest at 
the expense of their patients' health.
  To maintain and improve quality of care, all managed care plans will 
be required to set up a separate unit dedicated to quality, and to 
collect data to verify that the plan, in fact, is providing care that 
meets objective quality standards.
  Patients will be guaranteed full information about plan coverage, 
appeal rights, access to primary care doctors and other specialists, 
and other needed information. Plans will be required to collect and 
make available standardized data for consumers to compare plans.
  These provisions add up to a health insurance bill of rights that 
will protect millions of Americans.
  I look forward to working with a broad range of physician, patient, 
and industry groups as Congress considers this legislation. Action is 
essential and overdue to provide these needed protections. The bottom 
line in health care must be patient needs, not industry profits. 
Concerned citizens in all parts of the country are demanding action, 
and Congress owes them a response.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.

[[Page S1560]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 353

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Health 
     Insurance Bill of Rights Act of 1997''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Amendments to the Public Health Service Act.

                 ``Part C--Patient Protection Standards

``Sec. 2770. Notice; additional definitions.

                      ``Subpart 1--Access to Care

``Sec. 2771. Access to emergency care.
``Sec. 2772. Access to specialty care.
``Sec. 2773. Continuity of care.
``Sec. 2774. Choice of provider.
``Sec. 2775. Coverage for individuals participating in approved 
              clinical trials.
``Sec. 2776. Access to needed prescription drugs.

                     ``Subpart 2--Quality Assurance

``Sec. 2777. Internal quality assurance program.
``Sec. 2778. Collection of standardized data.
``Sec. 2779. Process for selection of providers.
``Sec. 2780. Drug utilization program.
``Sec. 2781. Standards for utilization review activities.

                    ``Subpart 3--Patient Information

``Sec. 2782. Patient information.
``Sec. 2783. Protection of patient confidentiality.

                   ``Subpart 4--Grievance Procedures

``Sec. 2784. Establishment of complaint and appeals process.
``Sec. 2785. Provisions relating to appeals of utilization review 
              determinations and similar determinations.
``Sec. 2786. State health insurance ombudsmen.

``Subpart 5--Protection of Providers Against Interference with Medical 
           Communications and Improper Incentive Arrangements

``Sec. 2787. Prohibition of interference with certain medical 
              communications.
``Sec. 2788. Prohibition against transfer of indemnification or 
              improper incentive arrangements.

``Subpart 6--Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

``Sec. 2789. Promoting good medical practice.
Sec. 3. Amendments to the Employee Retirement Income Security Act of 
              1974.
``Sec. 713. Patient protection standards.

     SEC. 2. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

       (a) Patient Protection Standards.--Title XXVII of the 
     Public Health Service Act is amended--
       (1) by redesignating part C as part D, and
       (2) by inserting after part B the following new part:

                 ``Part C--Patient Protection Standards

     ``SEC. 2770. NOTICE; ADDITIONAL DEFINITIONS.

       ``(a) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 711(d) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this part as if such section 
     applied to such issuer and such issuer were a group health 
     plan.
       ``(b) Additional Definitions.--For purposes of this part:
       ``(1) Nonparticipating physician or provider.--The term 
     `nonparticipating physician or provider' means, with respect 
     to health care items and services furnished to an enrollee 
     under health insurance coverage, a physician or provider that 
     is not a participating physician or provider for such 
     services.
       ``(2) Participating physician or provider.--The term 
     `participating physician or provider' means, with respect to 
     health care items and services furnished to an enrollee under 
     health insurance coverage, a physician or provider that 
     furnishes such items and services under a contract or other 
     arrangement with the health insurance issuer offering such 
     coverage.

                      ``Subpart 1--Access to Care

     ``SEC. 2771. ACCESS TO EMERGENCY CARE.

       ``(a) Prohibition of Certain Restrictions on Coverage of 
     Emergency Services.
       ``(1) In general.--If health insurance coverage provides 
     any benefits with respect to emergency services (as defined 
     in paragraph (2)(B)), the health insurance issuer offering 
     such coverage shall cover emergency services furnished to an 
     enrollee--
       ``(A) without the need for any prior authorization 
     determination,
       ``(B) subject to paragraph (3), whether or not the 
     physician or provider furnishing such services is a 
     participating physician or provider with respect to such 
     services, and
       ``(C) subject to paragraph (3), without regard to any other 
     term or condition of such coverage (other than an exclusion 
     of benefits, or an affiliation or waiting period, permitted 
     under section 2701).
       ``(2) Emergency services; emergency medical condition.--For 
     purposes of this section--
       ``(A) Emergency medical condition based on prudent 
     layperson.--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--
       ``(i) 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,
       ``(ii) serious impairment to bodily functions, or
       ``(iii) serious dysfunction of any bodily organ or part.
       ``(B) Emergency services.--The term `emergency services' 
     means--
       ``(i) a medical screening examination (as required under 
     section 1867 of the Social Security Act) that is within the 
     capability of the emergency department of a hospital, 
     including ancillary services routinely available to the 
     emergency department, to evaluate an emergency medical 
     condition (as defined in subparagraph (A)), and
       ``(ii) within the capabilities of the staff and facilities 
     available at the hospital, such further medical examination 
     and treatment as are required under section 1867 of the 
     Social Security Act to stabilize the patient.
       ``(C) Trauma and burn centers.--The provisions of clause 
     (ii) of subparagraph (B) apply to a trauma or burn center, in 
     a hospital, that--
       ``(i) is designated by the State, a regional authority of 
     the State, or by the designee of the State, or
       ``(ii) is in a State that has not made such designations 
     and meets medically recognized national standards.
       ``(3) Application of network restriction permitted in 
     certain cases.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     if a health insurance issuer in relation to health insurance 
     coverage denies, limits, or otherwise differentiates in 
     coverage or payment for benefits other than emergency 
     services on the basis that the physician or provider of such 
     services is a nonparticipating physician or provider, the 
     issuer may deny, limit, or differentiate in coverage or 
     payment for emergency services on such basis.
       ``(B) Network restrictions not permitted in certain 
     exceptional cases.--The denial or limitation of, or 
     differentiation in, coverage or payment of benefits for 
     emergency services under subparagraph (A) shall not apply in 
     the following cases:
       ``(i) Circumstances beyond control of enrollee.--The 
     enrollee is unable to go to a participating hospital for such 
     services due to circumstances beyond the control of the 
     enrollee (as determined consistent with guidelines and 
     subparagraph (C)).
       ``(ii) Likelihood of an adverse health consequence based on 
     layperson's judgment.--A prudent layperson possessing an 
     average knowledge of health and medicine could reasonably 
     believe that, under the circumstances and consistent with 
     guidelines, the time required to go to a participating 
     hospital for such services could result in any of the adverse 
     health consequences described in a clause of subsection 
     (a)(2)(A).
       ``(iii) Physician referral.--A participating physician or 
     other person authorized by the plan refers the enrollee to an 
     emergency department of a hospital and does not specify an 
     emergency department of a hospital that is a participating 
     hospital with respect to such services.
       ``(C) Application of `beyond control' standards.--For 
     purposes of applying subparagraph (B)(i), receipt of 
     emergency services from a nonparticipating hospital shall be 
     treated under the guidelines as being `due to circumstances 
     beyond the control of the enrollee' if any of the following 
     conditions are met:
       ``(i) Unconscious.--The enrollee was unconscious or in an 
     otherwise altered mental state at the time of initiation of 
     the services.
       ``(ii) Ambulance delivery.--The enrollee was transported by 
     an ambulance or other emergency vehicle directed by a person 
     other than the enrollee to the nonparticipating hospital in 
     which the services were provided.
       ``(iii) Natural disaster.--A natural disaster or civil 
     disturbance prevented the enrollee from presenting to a 
     participating hospital for the provision of such services.
       ``(iv) No good faith effort to inform of change in 
     participation during a contract year.--The status of the 
     hospital changed from a participating hospital to a 
     nonparticipating hospital with respect to emergency services 
     during a contract year and the plan or issuer failed to make 
     a good faith effort to notify the enrollee involved of such 
     change.
       ``(v) Other conditions.--There were other factors (such as 
     those identified in guidelines) that prevented the enrollee 
     from controlling selection of the hospital in which the 
     services were provided.
       ``(b) Assuring Coordinated Coverage of Maintenance Care and 
     Post-Stabilization Care.--
       ``(1) In general.--In the case of an enrollee who is 
     covered under health insurance coverage issued by a health 
     insurance issuer and who has received emergency services 
     pursuant to a screening evaluation conducted (or

[[Page S1561]]

     supervised) by a treating physician at a hospital that is a 
     nonparticipating provider with respect to emergency services, 
     if--
       ``(A) pursuant to such evaluation, the physician identifies 
     post-stabilization care (as defined in paragraph (3)(B)) that 
     is required by the enrollee,
       ``(B) the coverage provides benefits with respect to the 
     care so identified and the coverage requires (but for this 
     subsection) an affirmative prior authorization determination 
     as a condition of coverage of such care, and
       ``(C) the treating physician (or another individual acting 
     on behalf of such physician) initiates, not later than 30 
     minutes after the time the treating physician determines that 
     the condition of the enrollee is stabilized, a good faith 
     effort to contact a physician or other person authorized by 
     the issuer (by telephone or other means) to obtain an 
     affirmative prior authorization determination with respect to 
     the care,

     then, without regard to terms and conditions specified in 
     paragraph (2) the issuer shall cover maintenance care (as 
     defined in paragraph (3)(A)) furnished to the enrollee during 
     the period specified in paragraph (4) and shall cover post-
     stabilization care furnished to the enrollee during the 
     period beginning under paragraph (5) and ending under 
     paragraph (6).
       ``(2) Terms and conditions waived.--The terms and 
     conditions (of coverage) described in this paragraph that are 
     waived under paragraph (1) are as follows:
       ``(A) The need for any prior authorization determination.
       ``(B) Any limitation on coverage based on whether or not 
     the physician or provider furnishing the care is a 
     participating physician or provider with respect to such 
     care.
       ``(C) Any other term or condition of the coverage (other 
     than an exclusion of benefits, or an affiliation or waiting 
     period, permitted under section 2701 and other than a 
     requirement relating to medical necessity for coverage of 
     benefits).
       ``(3) Maintenance care and post-stabilization care 
     defined.--In this subsection:
       ``(A) Maintenance care.--The term `maintenance care' means, 
     with respect to an individual who is stabilized after 
     provision of emergency services, medically necessary items 
     and services (other than emergency services) that are 
     required by the individual to ensure that the individual 
     remains stabilized during the period described in paragraph 
     (4).
       ``(B) Post-stabilization care.--The term `post-
     stabilization care' means, with respect to an individual who 
     is determined to be stable pursuant to a medical screening 
     examination or who is stabilized after provision of emergency 
     services, medically necessary items and services (other than 
     emergency services and other than maintenance care) that are 
     required by the individual.
       ``(4) Period of required coverage of maintenance care.--The 
     period of required coverage of maintenance care of an 
     individual under this subsection begins at the time of the 
     request (or the initiation of the good faith effort to make 
     the request) under paragraph (1)(C) and ends when--
       ``(A) the individual is discharged from the hospital;
       ``(B) a physician (designated by the issuer involved) and 
     with privileges at the hospital involved arrives at the 
     emergency department of the hospital and assumes 
     responsibility with respect to the treatment of the 
     individual; or
       ``(C) the treating physician and the issuer agree to 
     another arrangement with respect to the care of the 
     individual.
       ``(5) When post-stabilization care required to be 
     covered.--
       ``(A) When treating physician unable to communicate 
     request.--If the treating physician or other individual makes 
     the good faith effort to request authorization under 
     paragraph (1)(C) but is unable to communicate the request 
     directly with an authorized person referred to in such 
     paragraph within 30 minutes after the time of initiating such 
     effort, then post-stabilization care is required to be 
     covered under this subsection beginning at the end of such 
     30-minute period.
       ``(B) When able to communicate request, and no timely 
     response.--
       ``(i) In general.--If the treating physician or other 
     individual under paragraph (1)(C) is able to communicate the 
     request within the 30-minute period described in subparagraph 
     (A), the post-stabilization care requested is required to be 
     covered under this subsection beginning 30 minutes after the 
     time when the issuer receives the request unless a person 
     authorized by the plan or issuer involved communicates (or 
     makes a good faith effort to communicate) a denial of the 
     request for the prior authorization determination within 30 
     minutes of the time when the issuer receives the request and 
     the treating physician does not request under clause (ii) to 
     communicate directly with an authorized physician concerning 
     the denial.
       ``(ii) Request for direct physician-to-physician 
     communication concerning denial.--If a denial of a request is 
     communicated under clause (i), the treating physician may 
     request to communicate respecting the denial directly with a 
     physician who is authorized by the issuer to deny or affirm 
     such a denial.
       ``(C) When no timely response to request for physician-to-
     physician communication.--If a request for physician-to-
     physician communication is made under subparagraph (B)(ii), 
     the post-stabilization care requested is required to be 
     covered under this subsection beginning 30 minutes after the 
     time when the issuer receives the request from a treating 
     physician unless a physician, who is authorized by the issuer 
     to reverse or affirm the initial denial of the care, 
     communicates (or makes a good faith effort to communicate) 
     directly with the treating physician within such 30-minute 
     period.
       ``(D) Disagreements over post-stabilization care.--If, 
     after a direct physician-to-physician communication under 
     subparagraph (C), the denial of the request for the post-
     stabilization care is not reversed and the treating physician 
     communicates to the issuer involved a disagreement with such 
     decision, the post-stabilization care requested is required 
     to be covered under this subsection beginning as follows:
       ``(i) Delay to allow for prompt arrival of physician 
     assuming responsibility.--If the issuer communicates that a 
     physician (designated by the plan or issuer) with privileges 
     at the hospital involved will arrive promptly (as determined 
     under guidelines) at the emergency department of the hospital 
     in order to assume responsibility with respect to the 
     treatment of the enrollee involved, the required coverage of 
     the post-stabilization care begins after the passage of such 
     time period as would allow the prompt arrival of such a 
     physician.
       ``(ii) Other cases.--If the issuer does not so communicate, 
     the required coverage of the post-stabilization care begins 
     immediately.
       ``(6) No requirement of coverage of post-stabilization care 
     if alternate plan of treatment.--
       ``(A) In general.--Coverage of post-stabilization care is 
     not required under this subsection with respect to an 
     individual when--
       ``(i) subject to subparagraph (B), a physician (designated 
     by the plan or issuer involved) and with privileges at the 
     hospital involved arrives at the emergency department of the 
     hospital and assumes responsibility with respect to the 
     treatment of the individual; or
       ``(ii) the treating physician and the issuer agree to 
     another arrangement with respect to the post-stabilization 
     care (such as an appropriate transfer of the individual 
     involved to another facility or an appointment for timely 
     followup treatment for the individual).
       ``(B) Special rule where once care initiated.--Required 
     coverage of requested post-stabilization care shall not end 
     by reason of subparagraph (A)(i) during an episode of care 
     (as determined by guidelines) if the treating physician 
     initiated such care (consistent with a previous paragraph) 
     before the arrival of a physician described in such 
     subparagraph.
       ``(7) Construction.--Nothing in this subsection shall be 
     construed as--
       ``(A) preventing an issuer from authorizing coverage of 
     maintenance care or post-stabilization care in advance or at 
     any time; or
       ``(B) preventing a treating physician or other individual 
     described in paragraph (1)(C) and an issuer from agreeing to 
     modify any of the time periods specified in paragraphs (5) as 
     it relates to cases involving such persons.
       ``(c) Limits on Cost-Sharing for Services Furnished in 
     Emergency Departments.--If health insurance coverage provides 
     any benefits with respect to emergency services, the health 
     insurance issuer offering such coverage may impose cost 
     sharing with respect to such services only if the following 
     conditions are met:
       ``(1) Limitations on cost-sharing differential for 
     nonparticipating providers.--
       ``(A) No differential for certain services.--In the case of 
     services furnished under the circumstances described in 
     clause (i), (ii), or (iii) of subsection (a)(3)(B) (relating 
     to circumstances beyond the control of the enrollee, the 
     likelihood of an adverse health consequence based on 
     layperson's judgment, and physician referral), the cost-
     sharing for such services provided by a nonparticipating 
     provider or physician does not exceed the cost-sharing for 
     such services provided by a participating provider or 
     physician.
       ``(B) Only reasonable differential for other services.--In 
     the case of other emergency services, any differential by 
     which the cost-sharing for such services provided by a 
     nonparticipating provider or physician exceeds the cost-
     sharing for such services provided by a participating 
     provider or physician is reasonable (as determined under 
     guidelines).
       ``(2) Only reasonable differential between emergency 
     services and other services.--Any differential by which the 
     cost-sharing for services furnished in an emergency 
     department exceeds the cost-sharing for such services 
     furnished in another setting is reasonable (as determined 
     under guidelines).
       ``(3) Construction.--Nothing in paragraph (1)(B) or (2) 
     shall be construed as authorizing guidelines other than 
     guidelines that establish maximum cost-sharing differentials.
       ``(d) Information on Access to Emergency Services.--A 
     health insurance issuer, to the extent a health insurance 
     issuer offers health insurance coverage, shall provide 
     education to enrollees on--
       ``(1) coverage of emergency services (as defined in 
     subsection (a)(2)(B)) by the issuer in accordance with the 
     provisions of this section,
       ``(2) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent,

[[Page S1562]]

       ``(3) any cost sharing applicable to emergency services,
       ``(4) the process and procedures of the plan for obtaining 
     emergency services, and
       ``(5) the locations of--
       ``(A) emergency departments, and
       ``(B) other settings,

     in which participating physicians and hospitals provide 
     emergency services and post-stabilization care.
       ``(e) General Definitions.--For purposes of this section:
       ``(1) Cost sharing.--The term `cost sharing' means any 
     deductible, coinsurance amount, copayment or other out-of-
     pocket payment (other than premiums or enrollment fees) that 
     a health insurance issuer offering health insurance issuer 
     imposes on enrollees with respect to the coverage of 
     benefits.
       ``(2) Good faith effort.--The term `good faith effort' has 
     the meaning given such term in guidelines and requires such 
     appropriate documentation as is specified under such 
     guidelines.
       ``(3) Guidelines.--The term `guidelines' means guidelines 
     established by the Secretary after consultation with an 
     advisory panel that includes individuals representing 
     emergency physicians, health insurance issuers, including at 
     least one health maintenance organization, hospitals, 
     employers, the States, and consumers.
       ``(4) Prior authorization determination.--The term `prior 
     authorization determination' means, with respect to items and 
     services for which coverage may be provided under health 
     insurance coverage, a determination (before the provision of 
     the items and services and as a condition of coverage of the 
     items and services under the coverage) of whether or not such 
     items and services will be covered under the coverage.
       ``(5) Stabilize.--The term `to stabilize' means, with 
     respect to an emergency medical condition, to provide (in 
     complying with section 1867 of the Social Security Act) such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from the 
     facility.
       ``(6) Stabilized.--The term `stabilized' means, with 
     respect to an emergency medical condition, that no material 
     deterioration of the condition is likely, within reasonable 
     medical probability, to result from or occur before an 
     individual can be transferred from the facility, in 
     compliance with the requirements of section 1867 of the 
     Social Security Act.
       ``(7) Treating physician.--The term `treating physician' 
     includes a treating health care professional who is licensed 
     under State law to provide emergency services other than 
     under the supervision of a physician.

     ``SEC. 2772. ACCESS TO SPECIALTY CARE.

       ``(a) Obstetrical and Gynecological Care.--
       ``(1) In general.--If a health insurance issuer, in 
     connection with the provision of health insurance coverage, 
     requires or provides for an enrollee to designate a 
     participating primary care provider--
       ``(A) the issuer shall permit a female enrollee to 
     designate a physician who specializes in obstetrics and 
     gynecology as the enrollee's primary care provider; and
       ``(B) if such an enrollee has not designated such a 
     provider as a primary care provider, the issuer--
       ``(i) may not require prior authorization by the enrollee's 
     primary care provider or otherwise for coverage of routine 
     gynecological care (such as preventive women's health 
     examinations) and pregnancy-related services provided by a 
     participating physician who specializes in obstetrics and 
     gynecology to the extent such care is otherwise covered, and
       ``(ii) may treat the ordering of other gynecological care 
     by such a participating physician as the prior authorization 
     of the primary care provider with respect to such care under 
     the coverage.
       ``(2) Construction.--Nothing in paragraph (1)(B)(ii) shall 
     waive any requirements of coverage relating to medical 
     necessity or appropriateness with respect to coverage of 
     gynecological care so ordered.
       ``(b) Specialty Care.--
       ``(1) Referral to specialty care for enrollees requiring 
     treatment by specialists.--
       ``(A) In general.--In the case of an enrollee who is 
     covered under health insurance coverage offered by a health 
     insurance issuer and who has a condition or disease of 
     sufficient seriousness and complexity to require treatment by 
     a specialist, the issuer shall make or provide for a referral 
     to a specialist who is available and accessible to provide 
     the treatment for such condition or disease.
       ``(B) Specialist defined.--For purposes of this subsection, 
     the term `specialist' means, with respect to a condition, a 
     health care practitioner, facility, or center (such as a 
     center of excellence) that has adequate expertise through 
     appropriate training and experience (including, in the case 
     of a child, appropriate pediatric expertise) to provide high 
     quality care in treating the condition.
       ``(C) Care under referral.--Care provided pursuant to such 
     referral under subparagraph (A) shall be--
       ``(i) pursuant to a treatment plan (if any) developed by 
     the specialist and approved by the issuer, in consultation 
     with the designated primary care provider or specialist and 
     the enrollee (or the enrollee's designee), and
       ``(ii) in accordance with applicable quality assurance and 
     utilization review standards of the issuer.

     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an enrollee from requiring a 
     specialist to provide the primary care provider with regular 
     updates on the specialty care provided, as well as all 
     necessary medical information.
       ``(D) Referrals to participating providers.--An issuer is 
     not required under subparagraph (A) to provide for a referral 
     to a specialist that is not a participating provider, unless 
     the issuer does not have an appropriate specialist that is 
     available and accessible to treat the enrollee's condition 
     and that is a participating provider with respect to such 
     treatment.
       ``(E) Treatment of nonparticipating providers.--If an 
     issuer refers an enrollee to a nonparticipating specialist, 
     services provided pursuant to the approved treatment plan 
     shall be provided at no additional cost to the enrollee 
     beyond what the enrollee would otherwise pay for services 
     received by such a specialist that is a participating 
     provider.
       ``(2) Specialists as primary care providers.--
       ``(A) In general.--A health insurance issuer, in connection 
     with the provision of health insurance coverage, shall have a 
     procedure by which a new enrollee upon enrollment, or an 
     enrollee upon diagnosis, with an ongoing special condition 
     (as defined in subparagraph (C)) may receive a referral to a 
     specialist for such condition who shall be responsible for 
     and capable of providing and coordinating the enrollee's 
     primary and specialty care. If such an enrollee's care would 
     most appropriately be coordinated by such a specialist, the 
     issuer shall refer the enrollee to such specialist.
       ``(B) Treatment as primary care provider.--Such specialist 
     shall be permitted to treat the enrollee without a referral 
     from the enrollee's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the enrollee's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment plan (referred to in paragraph (1)(C)(i)).
       ``(C) Ongoing special condition defined.--In this 
     paragraph, the term `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.
       ``(D) Terms of referral.--The provisions of subparagraphs 
     (C) through (E) of paragraph (1) shall apply with respect to 
     referrals under subparagraph (A) of this paragraph in the 
     same manner as they apply to referrals under paragraph 
     (1)(A).
       ``(3) Standing referrals.--
       ``(A) In general.--A health insurance issuer, in connection 
     with the provision of health insurance coverage, shall have a 
     procedure by which an enrollee who has a condition that 
     requires ongoing care from a specialist may receive a 
     standing referral to such specialist for treatment of such 
     condition. If the issuer, or the primary care provider in 
     consultation with the medical director of the issuer and the 
     specialist (if any), determines that such a standing referral 
     is appropriate, the issuer shall make such a referral to such 
     a specialist.
       ``(C) Terms of referral.--The provisions of subparagraphs 
     (C) through (E) of paragraph (1) shall apply with respect to 
     referrals under subparagraph (A) of this paragraph in the 
     same manner as they apply to referrals under paragraph 
     (1)(A).

     ``SEC. 2773. CONTINUITY OF CARE.

       ``(a) In General.--If a contract between a health insurance 
     issuer, in connection with the provision of health insurance 
     coverage, and a health care provider is terminated (other 
     than by the issuer for failure to meet applicable quality 
     standards or for fraud) and an enrollee is undergoing a 
     course of treatment from the provider at the time of such 
     termination, the issuer shall--
       ``(1) notify the enrollee of such termination, and
       ``(2) subject to subsection (c), permit the enrollee to 
     continue the course of treatment with the provider during a 
     transitional period (provided under subsection (b)).
       ``(b) Transitional Period.--
       ``(1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend for at least--
       ``(A) 60 days from the date of the notice to the enrollee 
     of the provider's termination in the case of a primary care 
     provider, or
       ``(B) 120 days from such date in the case of another 
     provider.
       ``(2) Institutional care.--The transitional period under 
     this subsection for institutional or inpatient care from a 
     provider shall extend until the discharge or termination of 
     the period of institutionalization and shall include 
     reasonable follow-up care related to the institutionalization 
     and shall also include institutional care scheduled prior to 
     the date of termination of the provider status.
       ``(3) Pregnancy.--If--
       ``(A) an 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 date 
     of the termination,

     the transitional period under this subsection with respect to 
     provider's treatment of the

[[Page S1563]]

     pregnancy shall extend through the provision of post-partum 
     care directly related to the delivery.
       ``(4) Terminal illness.--
       ``(A) In general.--If--
       ``(i) an enrollee was determined to be terminally ill (as 
     defined in subparagraph (B)) at the time of a provider's 
     termination of participation, and
       ``(ii) 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 enrollee's life for care directly 
     related to the treatment of the terminal illness.
       ``(B) Definition.--In subparagraph (A), an enrollee is 
     considered to be `terminally ill' if the enrollee has a 
     medical prognosis that the enrollee's life expectancy is 6 
     months or less.
       ``(c) Permissible Terms and Conditions.--An issuer may 
     condition coverage of continued treatment by a provider under 
     subsection (a)(2) upon the provider agreeing to the following 
     terms and conditions:
       ``(1) The provider agrees to continue to accept 
     reimbursement from the issuer at the rates applicable prior 
     to the start of the transitional period as payment in full.
       ``(2) The provider agrees to adhere to the issuer's quality 
     assurance standards and to provide to the issuer necessary 
     medical information related to the care provided.
       ``(3) The provider agrees otherwise to adhere to the 
     issuer's policies and procedures, including procedures 
     regarding referrals and obtaining prior authorization and 
     providing services pursuant to a treatment plan approved by 
     the issuer.

     ``SEC. 2774. CHOICE OF PROVIDER.

       ``(a) Primary Care.--A health insurance issuer that offers 
     health insurance coverage shall permit each enrollee to 
     receive primary care from any participating primary care 
     provider who is available to accept such enrollee.
       ``(b) Specialists.--
       ``(1) In general.--Subject to paragraph (2), a health 
     insurance issuer that offers health insurance coverage shall 
     permit each enrollee to receive medically necessary specialty 
     care, pursuant to appropriate referral procedures, from any 
     qualified participating health care provider who is available 
     to accept such enrollee for such care.
       ``(2) Limitation.--Paragraph (1) shall not apply to 
     speciality care if the issuer clearly informs enrollees of 
     the limitations on choice of participating providers with 
     respect to such care.
       ``(c) List of Participating Providers.--For disclosure of 
     information about participating primary care and specialty 
     care providers, see section 2782(b)(3).

     ``SEC. 2775. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 
                   APPROVED CLINICAL TRIALS.

       ``(a) In General.--If a health insurance issuer offers 
     health insurance coverage to a qualified enrollee (as defined 
     in subsection (b)), the issuer--
       ``(1) may not deny the enrollee participation in the 
     clinical trial referred to in subsection (b)(2);
       ``(2) subject to subsection (c), may not deny (or limit or 
     impose additional conditions on) the coverage of routine 
     patient costs for items and services furnished in connection 
     with participation in the trial; and
       ``(3) may not discriminate against the enrollee on the 
     basis of the enrollee's participation in such trial.
       ``(b) Qualified Enrollee Defined.--For purposes of 
     subsection (a), the term `qualified enrollee' means an 
     enrollee under health insurance coverage who meets the 
     following conditions:
       ``(1) The enrollee has a life-threatening or serious 
     illness for which no standard treatment is effective.
       ``(2) The enrollee is eligible to participate in an 
     approved clinical trial with respect to treatment of such 
     illness.
       ``(3) The enrollee and the referring physician conclude 
     that the enrollee's participation in such trial would be 
     appropriate.
       ``(4) The enrollee's participation in the trial offers 
     potential for significant clinical benefit for the enrollee.
       ``(c) Payment.--
       ``(1) In general.--Under this section an issuer shall 
     provide for payment for routine patient costs described in 
     subsection (a)(2) but is not required to pay for costs of 
     items and services that are reasonably expected (as 
     determined by the Secretary) to be paid for by the sponsors 
     of an approved clinical trial.
       ``(2) Payment rate.--In the case of covered items and 
     services provided by--
       ``(A) a participating provider, the payment rate shall be 
     at the agreed upon rate, or
       ``(B) a nonparticipating provider, the payment rate shall 
     be at the rate the issuer would normally pay for comparable 
     services under subparagraph (A).
       ``(d) Approved Clinical Trial Defined.--In this section, 
     the term `approved clinical trial' means a clinical research 
     study or clinical investigation approved and funded by one or 
     more of the following:
       ``(1) The National Institutes of Health.
       ``(2) A cooperative group or center of the National 
     Institutes of Health.
       ``(3) The Department of Veterans Affairs.
       ``(4) The Department of Defense.

     ``SEC. 2776. ACCESS TO NEEDED PRESCRIPTION DRUGS.

       ``If a health insurance issuer offers health insurance 
     coverage that provides benefits with respect to prescription 
     drugs but the coverage limits such benefits to drugs included 
     in a formulary, the issuer shall--
       ``(1) ensure participation of participating physicians in 
     the development of the formulary;
       ``(2) disclose the nature of the formulary restrictions; 
     and
       ``(3) provide for exceptions from the formulary limitation 
     when medical necessity, as determined by the enrollee's 
     physician subject to reasonable review by the issuer, 
     dictates that a non-formulary alternative is indicated.

                     ``Subpart 2--Quality Assurance

     ``SEC. 2777. INTERNAL QUALITY ASSURANCE PROGRAM.

       ``(a) Requirement.--A health insurance issuer that offers 
     health insurance coverage shall establish and maintain an 
     ongoing, internal quality assurance and continuous quality 
     improvement program that meets the requirements of subsection 
     (b).
       ``(b) Program Requirements.--The requirements of this 
     subsection for a quality improvement program of an issuer are 
     as follows:
       ``(1) Administration.--The issuer has a separate 
     identifiable unit with responsibility for administration of 
     the program.
       ``(2) Written plan.--The issuer has a written plan for the 
     program that is updated annually and that specifies at least 
     the following:
       ``(A) The activities to be conducted.
       ``(B) The organizational structure.
       ``(C) The duties of the medical director.
       ``(D) Criteria and procedures for the assessment of 
     quality.
       ``(E) Systems for ongoing and focussed evaluation 
     activities.
       ``(3) Systematic review.--The program provides for 
     systematic review of the type of health services provided, 
     consistency of services provided with good medical practice, 
     and patient outcomes.
       ``(4) Quality criteria.--The program--
       ``(A) uses criteria that are based on performance and 
     clinical outcomes where feasible and appropriate, and
       ``(B) includes criteria that are directed specifically at 
     meeting the needs of at-risk populations and enrollees with 
     chronic or severe illnesses.
       ``(5) System for reporting.--The program has procedures for 
     reporting of possible quality concerns by providers and 
     enrollees and for remedial actions to correct quality 
     problems, including written procedures for responding to 
     concerns and taking appropriate corrective action.
       ``(6) Data collection.--The program provides for the 
     collection of systematic, scientifically based data to be 
     used in the measure of quality.
       ``(c) Deeming.--For purposes of subsection (a), the 
     requirements of subsection (b) are deemed to be met with 
     respect to a health insurance issuer if the issuer--
       ``(1) is a qualified health maintenance organization (as 
     defined in section 1310(d)), or
       ``(2) is accredited by a national accreditation 
     organization that is certified by the Secretary.

     ``SEC. 2778. COLLECTION OF STANDARDIZED DATA.

       ``(a) In General.--A health insurance issuer that offers 
     health insurance coverage shall collect uniform quality data 
     that include--
       ``(1) a minimum uniform data set described in subsection 
     (b), and
       ``(2) additional data that are consistent with the 
     requirements of a nationally recognized body identified by 
     the Secretary.
       ``(b) Minimum Uniform Data Set.--The Secretary shall 
     specify the data required to be included in the minimum 
     uniform data set under subsection (a)(1) and the standard 
     format for such data. Such data shall include at least--
       ``(1) aggregate utilization data;
       ``(2) data on the demographic characteristics of enrollees;
       ``(3) data on disease-specific and age-specific mortality 
     rates of enrollees;
       ``(4) data on enrollee satisfaction, including data on 
     enrollee disenrollment and grievances; and
       ``(5) data on quality indicators.
       ``(c) Availability.--A summary of the data collected under 
     subsection (a) shall be disclosed under section 2782(b)(4).

     ``SEC. 2779. PROCESS FOR SELECTION OF PROVIDERS.

       ``(a) In General.--A health insurance issuer that offers 
     health insurance coverage shall have a written process for 
     the selection of participating health care professionals, 
     including minimum professional requirements.
       ``(b) Verification of Background.--Such process shall 
     include verification of a health care provider's license, a 
     history of suspension or revocation, and liability claim 
     history.
       ``(c) Restriction.--Such process shall not use a high-risk 
     patient base or location of a provider in an area with 
     residents with poorer health status as a basis for excluding 
     providers from participation.

     ``SEC. 2780. DRUG UTILIZATION PROGRAM.

       ``A health insurance issuer that provides health insurance 
     coverage that includes benefits for prescription drugs shall 
     establish and maintain a drug utilization program which--
       ``(1) encourages appropriate use of prescription drugs by 
     enrollees and providers,
       ``(2) monitors illnesses arising from improper drug use or 
     from adverse drug reactions or interactions, and
       ``(3) takes appropriate action to reduce the incidence of 
     improper drug use and adverse drug reactions and 
     interactions.

[[Page S1564]]

     ``SEC. 2781. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES.

       ``(a) Compliance with Requirements.--
       ``(1) In general.--A health insurance issuer shall conduct 
     utilization review activities in connection with the 
     provision of health insurance coverage only in accordance 
     with a utilization review program that meets the requirements 
     of this section.
       ``(2) Use of outside agents.--Nothing in this section shall 
     be construed as preventing a health insurance issuer from 
     arranging through a contract or otherwise for persons or 
     entities to conduct utilization review activities on behalf 
     of the issuer, so long as such activities are conducted in 
     accordance with a utilization review program that meets the 
     requirements of this section.
       ``(3) Utilization review defined.--For purposes of this 
     section, the terms `utilization review' and `utilization 
     review activities' mean procedures used to monitor or 
     evaluate the clinical necessity, appropriateness, efficacy, 
     or efficiency of health care services, procedures or 
     settings, and includes ambulatory review, prospective review, 
     concurrent review, second opinions, case management, 
     discharge planning, or retrospective review.
       ``(b) Written Policies and Criteria.--
       ``(1) Written policies.--A utilization review program shall 
     be conducted consistent with written policies and procedures 
     that govern all aspects of the program.
       ``(2) Use of written criteria.--
       ``(A) In general.--Such a program shall utilize written 
     clinical review criteria developed pursuant to the program 
     with the input of appropriate physicians.
       ``(B) Continuing use of standards in retrospective 
     review.--If a health care service has been specifically pre-
     authorized or approved for an enrollee under such a program, 
     the program shall not, pursuant to retrospective review, 
     revise or modify the specific standards, criteria, or 
     procedures used for the utilization review for procedures, 
     treatment, and services delivered to the enrollee during the 
     same course of treatment.
       ``(C) No adverse determination based on refusal to observe 
     service.--Such a program shall not base an adverse 
     determination on--
       ``(i) a refusal to consent to observing any health care 
     service, or
       ``(ii) lack of reasonable access to a health care 
     provider's medical or treatment records, unless the program 
     has provided reasonable notice to the enrollee.
       ``(c) Conduct of Program Activities.--
       ``(1) Administration by health care professionals.--A 
     utilization review program shall be administered by qualified 
     health care professionals who shall oversee review decisions. 
     In this subsection, the term `health care professional' means 
     a physician or other health care practitioner licensed, 
     accredited, or certified to perform specified health services 
     consistent with State law.
       ``(2) Use of qualified, independent personnel.--
       ``(A) In general.--A utilization review program shall 
     provide for the conduct of utilization review activities only 
     through personnel who are qualified and, to the extent 
     required, who have received appropriate training in the 
     conduct of such activities under the program.
       ``(B) Peer review of adverse clinical determinations.--Such 
     a program shall provide that clinical peers shall evaluate 
     the clinical appropriateness of adverse clinical 
     determinations. In this subsection, the term `clinical peer' 
     means, with respect to a review, a physician or other health 
     care professional who holds a non-restricted license in a 
     State and in the same or similar specialty as typically 
     manages the medical condition, procedure, or treatment under 
     review.
       ``(C) Prohibition of contingent compensation 
     arrangements.--Such a program shall not, with respect to 
     utilization review activities, permit or provide compensation 
     or anything of value to its employees, agents, or contractors 
     in a manner that--
       ``(i) provides incentives, direct or indirect, for such 
     persons to make inappropriate review decisions, or
       ``(ii) is based, directly or indirectly, on the quantity or 
     type of adverse determinations rendered.
       ``(D) Prohibition of conflicts.--Such a program shall not 
     permit a health care professional who provides health care 
     services to an enrollee to perform utilization review 
     activities in connection with the health care services being 
     provided to the enrollee.
       ``(3) Toll-free telephone number.--Such a program shall 
     provide that--
       ``(A) appropriate personnel performing utilization review 
     activities under the program are reasonably accessible by 
     toll-free telephone not less than 40 hours per week during 
     normal business hours to discuss patient care and allow 
     response to telephone requests, and
       ``(B) the program has a telephone system capable of 
     accepting, recording, or providing instruction to incoming 
     telephone calls during other than normal business hours and 
     to ensure response to accepted or recorded messages not less 
     than one business day after the date on which the call was 
     received.
       ``(4) Limits on frequency.--Such a program shall not 
     provide for the performance of utilization review activities 
     with respect to a class of services furnished to an enrollee 
     more frequently than is reasonably required to assess whether 
     the services under review are medically necessary.
       ``(5) Limitation on information requests.--Under such a 
     program, information shall be required to be provided by 
     health care providers only to the extent it is necessary to 
     perform the utilization review activity involved.
       ``(d) Deadline for Determinations.--
       ``(1) Prior authorization services.--Except as provided in 
     paragraph (2), in the case of a utilization review activity 
     involving the prior authorization of health care items and 
     services, the utilization review program shall make a 
     determination concerning such authorization, and provide 
     notice of the determination to the enrollee or the enrollee's 
     designee and the enrollee's health care provider by telephone 
     and in writing, as soon as possible in accordance with the 
     medical exigencies of the cases, and in no event later than 3 
     business days after the date of receipt of the necessary 
     information respecting such determination.
       ``(2) Continued care.--In the case of a utilization review 
     activity involving authorization for continued or extended 
     health care services, or additional services for an enrollee 
     undergoing a course of continued treatment prescribed by a 
     health care provider, the utilization review program shall 
     make a determination concerning such authorization, and 
     provide notice of the determination to the enrollee or the 
     enrollee's designee and the enrollee's health care provider 
     by telephone and in writing, within 1 business day of the 
     date of receipt of the necessary information respecting such 
     determination. Such notice shall include, with respect to 
     continued or extended health care services, the number of 
     extended services approved, the new total of approved 
     services, the date of onset of services, and the next review 
     date.
       ``(3) Previously provided services.--In the case of a 
     utilization review activity involving retrospective review of 
     health care services previously provided, the utilization 
     review program shall make a the determination concerning such 
     services, and provide notice of the determination to the 
     enrollee or the enrollee's designee and the enrollee's health 
     care provider by telephone and in writing, within 30 days of 
     the date of receipt of the necessary information respecting 
     such determination.
       ``(4) Reference to special rules for emergency services, 
     maintenance care, and post-stabilization care.--For waiver of 
     prior authorization requirements in certain cases involving 
     emergency services and maintenance care and post-
     stabilization care, see sections 2771(a)(1)(A) and 
     2771(a)(2)(A), respectively.
       ``(e) Notice of Adverse Determinations.--
       ``(1) In general.--Notice of an adverse determination under 
     a utilization review program (including as a result of a 
     reconsideration under subsection (f)) shall be in writing and 
     shall include--
       ``(A) the reasons for the determination (including the 
     clinical rationale);
       ``(B) instructions on how to initiate an appeal under 
     section 2785; and
       ``(C) notice of the availability, upon request of the 
     enrollee (or the enrollee's designee) of the clinical review 
     criteria relied upon to make such determination.
       ``(2) Specification of any additional information.--Such a 
     notice shall also specify what (if any) additional necessary 
     information must be provided to, or obtained by, person 
     making the determination in order to make a decision on such 
     an appeal.
       ``(f) Reconsideration.--
       ``(1) At request of provider.--In the event that a 
     utilization review program provides for an adverse 
     determination without attempting to discuss such matter with 
     the enrollee's health care provider who specifically 
     recommended the health care service, procedure, or treatment 
     under review, such health care provider shall have the 
     opportunity to request a reconsideration of the adverse 
     determination under this subsection.
       ``(2) Timing and conduct.--Except in cases of retrospective 
     reviews, such reconsideration shall occur as soon as possible 
     in accordance with the medical exigencies of the cases, and 
     in no event later than 1 business day after the date of 
     receipt of the request and shall be conducted by the 
     enrollee's health care provider and the health care 
     professional making the initial determination or a designated 
     qualified health care professional if the original 
     professional cannot be available.
       ``(3) Notice.--In the event that the adverse determination 
     is upheld after reconsideration, the utilization review 
     program shall provide notice as required under subsection 
     (e).
       ``(4) Construction.--Nothing in this subsection shall 
     preclude the enrollee from initiating an appeal from an 
     adverse determination under section 2785.

                    ``Subpart 3--Patient Information

     ``SEC. 2782. PATIENT INFORMATION.

       ``(a) Disclosure Requirement.--A health insurance issuer in 
     connection with the provision of health insurance coverage 
     shall submit to the applicable State authority, provide to 
     enrollees (and prospective enrollees), and make available to 
     the public, in writing the information described in 
     subsection (b).
       ``(b) Information.--The information described in this 
     subsection includes the following:
       ``(1) Description of coverage.--A description of coverage 
     provisions, including health care benefits, benefit limits, 
     coverage exclusions, coverage of emergency care, and the 
     definition of medical necessity used in determining whether 
     benefits will be covered.

[[Page S1565]]

       ``(2) Enrollee financial responsibility.-- An explanation 
     of an enrollee's financial responsibility for payment of 
     premiums, coinsurance, copayments, deductibles, and any other 
     charges, including limits on such responsibility and 
     responsibility for health care services that are provided by 
     nonparticipating providers or are furnished without meeting 
     applicable utilization review requirements.
       ``(3) Information on providers.--A description--
       ``(A) of procedures for enrollees to select, access, and 
     change participating primary and specialty providers,
       ``(B) of the rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers, and
       ``(C) in the case of each participating provider, of the 
     name, address, and telephone number of the provider, the 
     credentials of the provider, and the provider's availability 
     to accept new patients.
       ``(4) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and rights to reconsideration and appeal) under 
     any utilization review program under section 2781 or any drug 
     utilization program under section 2780, as well as a summary 
     of the minimum uniform data collected under section 
     2778(a)(1).
       ``(5) Grievance procedures.--Information on the grievance 
     procedures under sections 2784 and 2785, including 
     information describing--
       ``(A) the grievance procedures used by the issuer to 
     process and resolve disputes between the issuer and an 
     enrollee (including method for filing grievances and the time 
     frames and circumstances for acting on grievances);
       ``(B) written complaints and appeals, by type of complaint 
     or appeal, received by the issuer relating to its coverage; 
     and
       ``(C) the disposition of such complaints and appeals.
       ``(6) Payment methodology.--A description of the types of 
     methodologies the issuer uses to reimburse different classes 
     of providers and, as specified by the Secretary, the 
     financial arrangements or contractual provisions with 
     providers.
       ``(7) Information on issuer.--Notice of appropriate mailing 
     addresses and telephone numbers to be used by enrollees in 
     seeking information or authorization for treatment.
       ``(8) Assuring communications with enrollees.--A 
     description of how the issuer addresses the needs of non-
     English-speaking enrollees and others with special 
     communications needs, including the provision of information 
     described in this subsection to such enrollees.
       ``(c) Form of Disclosure.--
       ``(1) Uniformity.--Information required to be disclosed 
     under this section shall be provided in accordance with 
     uniform, national reporting standards specified by the 
     Secretary, after consultation with applicable State 
     authorities, so that prospective enrollees may compare the 
     attributes of different issuers and coverage offered within 
     an area.
       ``(2) Information into handbook.--Nothing in this section 
     shall be construed as preventing an issuer from making the 
     information under subsection (b) available to enrollees 
     through an enrollee handbook or similar publication.
       ``(3) Updating.--The information on participating providers 
     described in subsection (a)(3)(C) shall be updated not less 
     frequently than monthly. Nothing in this section shall 
     prevent an issuer from changing or updating other information 
     made available under this section.
       ``(4) Construction.--Nothing in subsection (a)(6) shall be 
     construed as requiring disclosure of individual contracts or 
     financial arrangements between an issuer and any provider. 
     Nothing in this subsection shall be construed as preventing 
     the information described in subsection (a)(3)(C) from being 
     provided in a separate document.

     ``SEC. 2783. PROTECTION OF PATIENT CONFIDENTIALITY.

       ``A health insurance issuer that offers health insurance 
     coverage shall establish appropriate policies and procedures 
     to ensure that all applicable State and Federal laws to 
     protect the confidentiality of individually identifiable 
     medical information are followed.

                   ``Subpart 4--Grievance Procedures

     ``SEC. 2784. ESTABLISHMENT OF COMPLAINT AND APPEALS PROCESS.

       ``(a) Establishment of System.--A health insurance issuer 
     in connection with the provision of health insurance coverage 
     shall establish and maintain a system to provide for the 
     presentation and resolution of complaints and appeals brought 
     by enrollees, designees of enrollees, or by health care 
     providers acting on behalf of an enrollee and with the 
     enrollee's consent, regarding any aspect of the issuer's 
     health care services, including complaints regarding quality 
     of care, choice and accessibility of providers, network 
     adequacy, and compliance with the requirements of this part.
       ``(b) Components of System.--Such system shall include the 
     following components (which shall be consistent with 
     applicable requirements of section 2785):
       ``(1) Written notification to all enrollees and providers 
     of the telephone numbers and business addresses of the issuer 
     employees responsible for resolution of complaints and 
     appeals.
       ``(2) A system to record and document, over a period of at 
     least 3 years, all complaints and appeals made and their 
     status.
       ``(3) The availability of an enrollee services 
     representative to assist enrollees, as requested, with 
     complaint and appeal procedures.
       ``(4) Establishment of a specified deadline (not to exceed 
     30 days after the date of receipt of a complaint or appeal) 
     for the issuer to respond to complaints or appeals.
       ``(5) A process describing how complaints and appeals are 
     processed and resolved.
       ``(6) Procedures for follow-up action, including the 
     methods to inform the complainant or appellant of the 
     resolution of a complaint or appeal.
       ``(7) Notification to the continuous quality improvement 
     program under section 2777(a) of all complaints and appeals 
     relating to quality of care.
       ``(c) No Reprisal for Exercise of Rights.--A health 
     insurance issuer shall not take any action with respect to an 
     enrollee or a health care provider that is intended to 
     penalize the enrollee, a designee of the enrollee, or the 
     health care provider for discussing or exercising any rights 
     provided under this part (including the filing of a complaint 
     or appeal pursuant to this section).

     ``SEC. 2785. PROVISIONS RELATING TO APPEALS OF UTILIZATION 
                   REVIEW DETERMINATIONS AND SIMILAR 
                   DETERMINATIONS.

       ``(a) Right of Appeal.--
       ``(1) In general.--An enrollee in health insurance coverage 
     offered by a health insurance issuer, and any provider acting 
     on behalf of the enrollee with the enrollee's consent, may 
     appeal any appealable decision (as defined in paragraph (2)) 
     under the procedures described in this section and (to the 
     extent applicable) section 2784. Such enrollees and providers 
     shall be provided with a written explanation of the appeal 
     process upon the conclusion of each stage in the appeal 
     process and as provided in section 2782(a)(5)
       ``(2) Appealable decision defined.--In this section, the 
     term `appealable decision' means any of the following:
       ``(A) An adverse determination under a utilization review 
     program under section 2781.
       ``(B) Denial of access to specialty and other care under 
     section 2772.
       ``(C) Denial of continuation of care under section 2773.
       ``(D) Denial of a choice of provider under section 2774.
       ``(E) Denial of coverage of routine patient costs in 
     connection with an approval clinical trial under section 
     2775.
       ``(F) Denial of access to needed drugs under section 
     2776(3).
       ``(G) The imposition of a limitation that is prohibited 
     under section 2789.
       ``(H) Denial of payment for a benefit,
       ``(b) Informal Internal Appeal Process (Stage 1).--
       ``(1) In general.--Each issuer shall establish and maintain 
     an informal internal appeal process (an appeal under such 
     process in this section referred to as a `stage 1 appeal') 
     under which any enrollee or any provider acting on behalf of 
     an enrollee with the enrollee's consent, who is dissatisfied 
     with any appealable decision has the opportunity to discuss 
     and appeal that decision with the medical director of the 
     issuer or the health care professional who made the decision.
       ``(2) Timing.--All appeals under this paragraph shall be 
     concluded as soon as possible in accordance with the medical 
     exigencies of the cases, and in no event later than 72 hours 
     in the case of appeals from decisions regarding urgent care 
     and 5 days in the case of all other appeals.
       ``(3) Further review.--If the appeal is not resolved to the 
     satisfaction of the enrollee at this level by the deadline 
     under paragraph (2), the issuer shall provide the enrollee 
     and provider (if any) with a written explanation of the 
     decision and the right to proceed to a stage 2 appeal under 
     subsection (c).
       ``(c) Formal Internal Appeal Process (Stage 2).--
       ``(1) In general.--Each issuer shall establish and maintain 
     a formal internal appeal process (an appeal under such 
     process in this section referred to as a `stage 2 appeal') 
     under which any enrollee or provider acting on behalf of an 
     enrollee with the enrollee's consent, who is dissatisfied 
     with the results of a stage 1 appeal has the opportunity to 
     appeal the results before a panel that includes a physician 
     or other health care professional (or professionals) selected 
     by the issuer who have not been involved in the appealable 
     decision at issue in the appeal.
       ``(2) Availability of clinical peers.--The panel under 
     subparagraph (A) shall have available either clinical peers 
     (as defined in section 2781(c)(2)(B)) who have not been 
     involved in the appealable decision at issue in the appeal or 
     others who are mutually agreed upon by the parties. If 
     requested by the enrollee or enrollee's provider with the 
     enrollee's consent, such a peer shall participate in the 
     panel's review of the case.
       ``(3) Timely acknowledgment.--The issuer shall acknowledge 
     the enrollee or provider involved of the receipt of a stage 2 
     appeals upon receipt of the appeal.
       ``(4) Deadline.--
       ``(A) In general.--The issuer shall conclude each stage 2 
     appeal as soon as possible after the date of the receipt of 
     the appeal in accordance with medical exigencies of the case 
     involved, but in no event later than 72 hours in the case of 
     appeals from decisions

[[Page S1566]]

     regarding urgent care and (except as provided in subparagraph 
     (B)) 20 business days in the case of all other appeals.
       ``(B) Extension.--An issuer may extend the deadline for an 
     appeal that does not relate to a decision regarding urgent or 
     emergency care up to an additional 20 business days where it 
     can demonstrate to the applicable State authority reasonable 
     cause for the delay beyond its control and where it provides, 
     within the original deadline under subparagraph (A), a 
     written progress report and explanation for the delay to such 
     authority and to the enrollee and provider involved.
       ``(5) Notice.--If an issuer denies a stage 2 appeal, the 
     issuer shall provide the enrollee and provider involved with 
     written notification of the denial and the reasons therefore, 
     together with a written notification of rights to any further 
     appeal
       ``(d) Direct Use of Further Appeals.--In the event that the 
     issuer fails to comply with any of the deadlines for 
     completion of appeals under this section or in the event that 
     the issuer for any reason expressly waives its rights to an 
     internal review of an appeal under subsection (b) or (c), the 
     enrollee and provider involved shall be relieved of any 
     obligation to complete the appeal stage involved and may, at 
     the enrollee's or provider's option, proceed directly to seek 
     further appeal through any applicable external appeals 
     process.
       ``(e) External Appeal Process in Case of Use of 
     Experimental Treatment to Save Life of Patient.--
       ``(1) In general.--In the case of an enrollee described in 
     paragraph (2), the health insurance issuer shall provide for 
     an external independent review process respecting the 
     issuer's decision not to cover the experimental therapy 
     (described in paragraph (2)(B)(ii)).
       ``(2) Enrollee described.--An enrollee described in this 
     paragraph is an enrollee who meets the following 
     requirements:
       ``(A) The enrollee has a terminal condition that is highly 
     likely to cause death within 2 years.
       ``(B) The enrollee's physician certifies that--
       ``(i) there is no standard, medically appropriate therapy 
     for successfully treating such terminal condition, but
       ``(ii) based on medical and scientific evidence, there is a 
     drug, device, procedure, or therapy (in this section referred 
     to as the `experimental therapy') that is more beneficial 
     than any available standard therapy.
       ``(C) The issuer has denied coverage of the experimental 
     therapy on the basis that it is experimental or 
     investigational.
       ``(3) Description of process and decision.--The process 
     under this subsection shall provide for a determination on a 
     timely basis, by a panel of independent, impartial physicians 
     appointed by a State authority or by an independent review 
     organization certified by the State, of the medical 
     appropriateness of the experimental therapy. The decision of 
     the panel shall be in writing and shall be accompanied by an 
     explanation of the basis for the decision. A decision of the 
     panel that is favorable to the enrollee may not be appealed 
     by the issuer except in the case of misrepresentation of a 
     material fact by the enrollee or a provider. A decision of 
     the panel that is not favorable to the enrollee may be 
     appealed by the enrollee.
       ``(4) Issuer covering process costs.--Direct costs of the 
     process under this subsection shall be borne by the issuer, 
     and not by the enrollee.
       ``(f) Other Independent or External Review.--
       ``(1) In general.--In the case of appealable decision 
     described in paragraph (2), the health insurance issuer shall 
     provide for--
       ``(A) an external review process for such decisions 
     consistent with the requirements of paragraph (3), or
       ``(B) an internal independent review process for such 
     decisions consistent with the requirements of paragraph (4).
       ``(2) Appealable decision described.--An appealable 
     decision described in this paragraph is decision that does 
     not involve a decision described in subsection (e)(1) but 
     involves--
       ``(A) a claim for benefits involving costs over a 
     significant threshold, or
       ``(B) assuring access to care for a serious condition.
       ``(3) External review process.--The requirements of this 
     subsection for an external review process are as follows:
       ``(A) The process is established under State law and 
     provides for review of decisions on stage 2 appeals by an 
     independent review organization certified by the State.
       ``(B) If the process provides that decisions in such 
     process are not binding on issuers, the process must provide 
     for public methods of disclosing frequency of noncompliance 
     with such decisions and for sanctioning issuers that 
     consistently refuse to take appropriate actions in response 
     to such decisions.
       ``(C) Results of all such reviews under the process are 
     disclosed to the public, along with at least annual 
     disclosure of information on issuer compliance.
       ``(D) All decisions under the process shall be in writing 
     and shall be accompanied by an explanation of the basis for 
     the decision.
       ``(E) Direct costs of the process shall be borne by the 
     issuer, and not by the enrollee.
       ``(F) The issuer shall provide for publication at least 
     annually of information on the numbers of appeals and 
     decisions considered under the process.
       ``(4) Internal, independent review process.--The 
     requirements of this subsection for an internal, independent 
     review process are as follows:
       ``(A)(i) The process must provide for the participation of 
     persons who are independent of the issuer in conducting 
     reviews and (ii) the Secretary must have found (through 
     reviews conducted no less often than biannually) the process 
     to be fair and impartial.
       ``(B) If the process provides that decisions in such 
     process are not binding on issuers, the process must provide 
     for public methods of disclosing frequency of noncompliance 
     with such decisions and for sanctioning issuers that 
     consistently refuse to take appropriate actions in response 
     to such decisions.
       ``(C) Results of all such reviews under the process are 
     disclosed to the public, along with at least annual 
     disclosure of information on issuer compliance.
       ``(D) All decisions under the process shall be in writing 
     and shall be accompanied by an explanation of the basis for 
     the decision.
       ``(E) Direct costs of the process shall be borne by the 
     issuer, and not by the enrollee.
       ``(F) The issuer shall provide for publication at least 
     annually of information on the numbers of appeals and 
     decisions considered under the process.

     The Secretary may delegate the authority under subparagraph 
     (A)(ii) to applicable State authorities.
       ``(5) Oversight.--The Secretary (and applicable State 
     authorities in the case of delegation of Secretarial 
     authority under paragraph (4)) shall conduct reviews not less 
     often than biannually of the fairness and impartiality 
     issuers who desired to use an internal, independent review 
     process described in paragraph (4) to satisfy the requirement 
     of paragraph (1).
       ``(6) Report.--The Secretary shall provide for periodic 
     reports on the effectiveness of this subsection in assuring 
     fair and impartial reviews of stage 2 appeals. Such reports 
     shall include information on the number of stage 2 appeals 
     (and decisions), for each of the types of review processes 
     described in paragraph (2), by health insurance coverage.
       ``(g) Construction.--Nothing in this part shall be 
     construed as removing any legal rights of enrollees under 
     State or Federal law, including the right to file judicial 
     actions to enforce rights.

     ``SEC. 2786. STATE HEALTH INSURANCE OMBUDSMEN.

       ``(a) In General.--Each State that obtains a grant under 
     subsection (c) shall establish and maintain a Health 
     Insurance Ombudsman. Such Ombudsman may be part of a 
     independent, nonprofit entity, and shall be responsible for 
     at least the following:
       ``(1) To assist consumers in the State in choosing among 
     health insurance coverage.
       ``(2) To provide counseling and assistance to enrollees 
     dissatisfied with their treatment by health insurance issuers 
     in regard to such coverage and in the filing of complaints 
     and appeals regarding determinations under such coverage.
       ``(3) To investigate instances of poor quality or improper 
     treatment of enrollees by health insurance issuers in regard 
     to such coverage and to bring such instances to the attention 
     of the applicable State authority.
       ``(b) Federal Role.--In the case of any State that does not 
     establish and maintain such an Ombudsman under subsection 
     (a), the Secretary shall provide for the establishment and 
     maintenance of such an official as will carry out with 
     respect to that State the functions otherwise provided under 
     subsection (a) by a Health Insurance Ombudsman.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such amounts 
     as may be necessary to provide for grants to States to 
     establish and operate Health Insurance Ombudsmen under 
     subsection (a) or for the operation of Ombudsmen under 
     subsection (b).

``Subpart 5--Protection of Providers Against Interference with Medical 
           Communications and Improper Incentive Arrangements

     ``SEC. 2787. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
                   COMMUNICATIONS.

       ``(a) Prohibition.--
       ``(1) General rule.--The provisions of any contract or 
     agreement, or the operation of any contract or agreement, 
     between a health insurance issuer in relation to health 
     insurance coverage (including any partnership, association, 
     or other organization that enters into or administers such a 
     contract or agreement) and a health care provider (or group 
     of health care providers) shall not prohibit or restrict the 
     provider from engaging in medical communications with the 
     provider's patient.
       ``(2) Nullification.--Any contract provision or agreement 
     described in paragraph (1) shall be null and void.
       ``(3) Prohibition on provisions.--A contract or agreement 
     described in paragraph (1) shall not include a provision that 
     violates paragraph (1).
       ``(b) Rules of Construction.--Nothing in this section shall 
     be construed--
       ``(1) to prohibit the enforcement, as part of a contract or 
     agreement to which a health care provider is a party, of any 
     mutually agreed upon terms and conditions, including terms 
     and conditions requiring a health care provider to 
     participate in, and cooperate with, all programs, policies, 
     and procedures developed or operated by a health insurance 
     issuer to assure, review, or improve the quality and 
     effective utilization of health care services (if such 
     utilization is according to

[[Page S1567]]

     guidelines or protocols that are based on clinical or 
     scientific evidence and the professional judgment of the 
     provider) but only if the guidelines or protocols under such 
     utilization do not prohibit or restrict medical 
     communications between providers and their patients; or
       ``(2) to permit a health care provider to misrepresent the 
     scope of benefits covered under health insurance coverage or 
     to otherwise require a health insurance issuer to reimburse 
     providers for benefits not covered under the coverage.
       ``(c) Protection of Religious or Moral Expression.--
       ``(1) In general.--An health insurance issuer may fully 
     advise--
       ``(A) licensed or certified health care providers at the 
     time of their employment with the issuer or at any time 
     during such employment, or
       ``(B) enrollees at the time of their enrollment for health 
     insurance coverage with the issuer or at any time during 
     which such enrollees have such coverage,

     of the coverage's limitations on providing particular medical 
     services (including limitations on referrals for care 
     provided outside of the coverage) based on the religious or 
     moral convictions of the issuer.
       ``(2) Health care providers.--Nothing in this section shall 
     be construed to alter the rights and duties of a health care 
     provider to determine what medical communications are 
     appropriate with respect to each patient, except as provided 
     for in subsection (a).
       ``(d) Medical Communication Defined.--
       ``(1) In general.--In this section, the term `medical 
     communication' means any communication made by a health care 
     provider with a patient of the health care provider (or the 
     guardian or legal representative of such patient) with 
     respect to--
       ``(A) the patient's health status, medical care, or 
     treatment options;
       ``(B) any utilization review requirements that may affect 
     treatment options for the patient; or
       ``(C) any financial incentives that may affect the 
     treatment of the patient.
       ``(2) Misrepresentation.--The term `medical communication' 
     does not include a communication by a health care provider 
     with a patient of the health care provider (or the guardian 
     or legal representative of such patient) if the communication 
     involves a knowing or willful misrepresentation by such 
     provider.

     ``SEC. 2788. PROHIBITION AGAINST TRANSFER OF INDEMNIFICATION 
                   OR IMPROPER INCENTIVE ARRANGEMENTS.

       ``(a) Prohibition of Transfer of Indemnification.--No 
     contract or agreement between a health insurance issuer (or 
     any agent acting on behalf of such an issuer) and a health 
     care provider shall contain any clause purporting to transfer 
     to the health care provider by indemnification or otherwise 
     any liability relating to activities, actions, or omissions 
     of the issuer or agent (as opposed to the provider).
       ``(b) Prohibition of Improper Physician Incentive Plans.--
       ``(1) In general.--A health insurance issuer offering 
     health insurance coverage may not operate any physician 
     incentive plan unless the following requirements are met:
       ``(A) No specific payment is made directly or indirectly by 
     the issuer to a physician or physician group as an inducement 
     to reduce or limit medically necessary services provided with 
     respect to a specific individual enrolled with the issuer.
       ``(B) If the plan places a physician or physician group at 
     substantial financial risk (as determined by the Secretary) 
     for services not provided by the physician or physician 
     group, the issuer--
       ``(i) provides stop-loss protection for the physician or 
     group that is adequate and appropriate, based on standards 
     developed by the Secretary that take into account the number 
     of physicians placed at such substantial financial risk in 
     the group or under the plan and the number of individuals 
     enrolled with the issuer who receive services from the 
     physician or the physician group, and
       ``(ii) conducts periodic surveys of both individuals 
     enrolled and individuals previously enrolled with the issuer 
     to determine the degree of access of such individuals to 
     services provided by the issuer and satisfaction with the 
     quality of such services.
       ``(C) The issuer provides the applicable State authority 
     (or the Secretary if such authority is implementing this 
     section) with descriptive information regarding the plan, 
     sufficient to permit the authority (or the Secretary in such 
     case) to determine whether the plan is in compliance with the 
     requirements of this paragraph.
       ``(2) Physician incentive plan defined.--In this section, 
     the term `physician incentive plan' means any compensation 
     arrangement between a health insurance issuer and a physician 
     or physician group that may directly or indirectly have the 
     effect of reducing or limiting services provided with respect 
     to individuals enrolled with the issuer.
       ``(3) Application of medicare rules.--The Secretary shall 
     provide for the application of rules under this subsection 
     that are substantially the same as the rules established to 
     carry out section 1876(i)(8) of the Social Security Act.

``Subpart 6--Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

     ``SEC. 2789. PROMOTING GOOD MEDICAL PRACTICE.

       ``(a) Prohibiting Arbitrary Limitations or Conditions for 
     the Provision of Services.--A health insurance issuer, in 
     connection with the provision of health insurance coverage, 
     may not impose limits on the manner in which particular 
     services are delivered if the services are medically 
     necessary and appropriate for the treatment or diagnosis of 
     an illness or injury to the extent that such treatment or 
     diagnosis is otherwise a covered benefit.
       ``(b) Medical Necessity and Appropriateness Defined.--In 
     subsection (a), the term `medically necessary and 
     appropriate' means, with respect to a service or benefit, a 
     service or benefit determined by the treating physician 
     participating in the health insurance coverage after 
     consultation with the enrollee, to be required, accordingly 
     to generally accepted principles of good medical practice, 
     for the diagnosis or direct care and treatment of an illness 
     or injury of the enrollee.
       ``(c) Construction.--Subsection (a) shall not be construed 
     as requiring coverage of particular services the coverage of 
     which is otherwise not covered under the terms of the 
     coverage.''.
       (b) Application to Group Health Insurance Coverage.--
       (1) Subpart 2 of part A of title XXVII of the Public Health 
     Service Act is amended by adding at the end the following new 
     section:

     ``SEC. 2706. PATIENT PROTECTION STANDARDS.

       ``(a) In General.--Each health insurance issuer shall 
     comply with patient protection requirements under part C with 
     respect to group health insurance coverage it offers.
       ``(b) Assuring Coordination.--The Secretary of Health and 
     Human Services and the Secretary of Labor shall ensure, 
     through the execution of an interagency memorandum of 
     understanding between such Secretaries, that--
       ``(1) regulations, rulings, and interpretations issued by 
     such Secretaries relating to the same matter over which such 
     Secretaries have responsibility under part C (and this 
     section) and section 713 of the Employee Retirement Income 
     Security Act of 1974 are administered so as to have the same 
     effect at all times; and
       ``(2) coordination of policies relating to enforcing the 
     same requirements through such Secretaries in order to have a 
     coordinated enforcement strategy that avoids duplication of 
     enforcement efforts and assigns priorities in 
     enforcement.''.''.
       (2) Section 2792 of such Act (42 U.S.C. 300gg-92) is 
     amended by inserting ``and section 2706(b)'' after ``of 
     1996''.
       (c) Application to Individual Health Insurance Coverage.--
     Part B of title XXVII of the Public Health Service Act is 
     amended by inserting after section 2751 the following new 
     section:

     ``SEC. 2752. PATIENT PROTECTION STANDARDS.

       ``Each health insurance issuer shall comply with patient 
     protection requirements under part C with respect to 
     individual health insurance coverage it offers.''.
       (d) Modification of Preemption Standards.--
       (1) Group health insurance coverage.--Section 2723 of such 
     Act (42 U.S.C. 300gg-23) is amended--
       (A) in subsection (a)(1), by striking ``subsection (b)'' 
     and inserting ``subsections (b) and (c)'';
       (B) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (C) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Special Rules in Case of Patient Protection 
     Requirements.--Subject to subsection (a)(2), the provisions 
     of section 2706 and part C (other than section 2771), and 
     part D insofar as it applies to section 2706 or part C, shall 
     not prevent a State from establishing requirements relating 
     to the subject matter of such provisions (other than section 
     2771) so long as such requirements are at least as stringent 
     on health insurance issuers as the requirements imposed under 
     such provisions. Subsection (a) shall apply to the provisions 
     of section 2771 (and section 2706 insofar as it relates to 
     such section).''.
       (2) Individual health insurance coverage.--Section 2762 of 
     such Act (42 U.S.C. 300gg-62), as added by section 
     605(b)(3)(B) of Public Law 104-204, is amended--
       (A) in subsection (a), by striking ``subsection (b), 
     nothing in this part'' and inserting ``subsections (b) and 
     (c)'', and
       (B) by adding at the end the following new subsection:
       ``(c) Special Rules in Case of Managed Care Requirements.--
     Subject to subsection (b), the provisions of section 2752 and 
     part C (other than section 2771), and part D insofar as it 
     applies to section 2752 or part C, shall not prevent a State 
     from establishing requirements relating to the subject matter 
     of such provisions so long as such requirements are at least 
     as stringent on health insurance issuers as the requirements 
     imposed under such section. Subsection (a) shall apply to the 
     provisions of section 2771 (and section 2752 insofar as it 
     relates to such section).''.
       (e) Additional Conforming Amendments.--
       (1) Section 2723(a)(1) of such Act (42 U.S.C. 300gg-
     23(a)(1)) is amended by striking ``part C'' and inserting 
     ``parts C and D''.
       (2) Section 2762(b)(1) of such Act (42 U.S.C. 300gg-
     62(b)(1)) is amended by striking ``part C'' and inserting 
     ``part D''.
       (f) Effective Dates.--(1)(A) Subject to subparagraph (B), 
     the amendments made by subsections (a), (b), (d)(1), and (e) 
     shall apply with respect to group health insurance coverage 
     for group health plan years beginning on or after July 1, 
     1998 (in this subsection referred to as the ``general 
     effective date'') and

[[Page S1568]]

     also shall apply to portions of plan years occurring on and 
     after January 1, 1999.
       (B) In the case of group health insurance coverage provided 
     pursuant to a group health plan maintained pursuant to 1 or 
     more collective bargaining agreements between employee 
     representatives and 1 or more employers ratified before the 
     date of enactment of this Act, the amendments made by 
     subsections (a), (b), (d)(1), and (e) shall not apply to plan 
     years beginning before the later of--
       (i) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of enactment of this Act), or
       (ii) the general effective date.

     For purposes of clause (i), any plan amendment made pursuant 
     to a collective bargaining agreement relating to the plan 
     which amends the plan solely to conform to any requirement 
     added by subsection (a) or (b) shall not be treated as a 
     termination of such collective bargaining agreement.
       (2) The amendments made by subsections (a), (c), (d)(2), 
     and (e) shall apply with respect to individual health 
     insurance coverage offered, sold, issued, renewed, in effect, 
     or operated in the individual market on or after the general 
     effective date.

     SEC. 3. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY 
                   ACT OF 1974.

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

     ``SEC. 713. PATIENT PROTECTION STANDARDS.

       ``(a) In General.--Subject to subsection (b), a group 
     health plan (and a health insurance issuer offering group 
     health insurance coverage in connection with such a plan) 
     shall comply with the requirements of part C (other than 
     section 2786) of title XXVII of the Public Health Service 
     Act.
       ``(b) Application.--In applying subsection (a) under this 
     part, any reference in such subpart C--
       ``(1) to a health insurance issuer and health insurance 
     coverage offered by such an issuer is deemed to include a 
     reference to a group health plan and coverage under such 
     plan, respectively;
       ``(2) to the Secretary is deemed a reference to the 
     Secretary of Labor;
       ``(3) to an applicable State authority is deemed a 
     reference to the Secretary of Labor; and
       ``(4) to an enrollee with respect to health insurance 
     coverage is deemed to include a reference to a participant or 
     beneficiary with respect to a group health plan.
       ``(c) Group Health Plan Ombudsman.--With respect to group 
     health plans that provide benefits other than through health 
     insurance coverage, the Secretary shall provide for the 
     establishment and maintenance of such a Federal Group Health 
     Plan Ombudsman that will carry out with respect to such plans 
     the functions described in section 2786(a) of the Public 
     Health Service Act with respect to health insurance issuers 
     that offer group health insurance coverage.
       ``(d) Assuring Coordination.--The Secretary of Health and 
     Human Services and the Secretary of Labor shall ensure, 
     through the execution of an interagency memorandum of 
     understanding between such Secretaries, that--
       ``(1) regulations, rulings, and interpretations issued by 
     such Secretaries relating to the same matter over which such 
     Secretaries have responsibility under such part C (and 
     section 2706 of the Public Health Service Act) and this 
     section are administered so as to have the same effect at all 
     times; and
       ``(2) coordination of policies relating to enforcing the 
     same requirements through such Secretaries in order to have a 
     coordinated enforcement strategy that avoids duplication of 
     enforcement efforts and assigns priorities in enforcement.''.
       (b) Modification of Preemption Standards.--Section 731 of 
     such Act (42 U.S.C. 1191) is amended--
       (1) in subsection (a)(1), by striking ``subsection (b)'' 
     and inserting ``subsections (b) and (c)'';
       (2) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (3) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Special Rules in Case of Patient Protection 
     Requirements.--Subject to subsection (a)(2), the provisions 
     of section 713 and part C of title XXVII of the Public Health 
     Service Act (other than section 2771 of such Act), and 
     subpart C insofar as it applies to section 713 or such part, 
     shall not prevent a State from establishing requirements 
     relating to the subject matter of such provisions (other than 
     section 2771 of such Act) so long as such requirements are at 
     least as stringent on health insurance issuers as the 
     requirements imposed under such provisions. Subsection (a) 
     shall apply to the provisions of section 2771 of such Act 
     (and section 713 of this Act insofar as it relates to such 
     section).''.
       (c) Conforming Amendments.-- (1) Section 732(a) of such Act 
     (29 U.S.C. 1185(a)) is amended by striking ``section 711'' 
     and inserting ``sections 711 and 713''.
       (2) The table of contents in section 1 of such Act is 
     amended by inserting after the item relating to section 712 
     the following new item:

``Sec. 713. Patient protection standards.''.

       (3) Section 734 of such Act (29 U.S.C. 1187) is amended by 
     inserting ``and section 713(d)'' after ``of 1996''.
       (d) Effective Date.--(1) Subject to paragraph (2), the 
     amendments made by this section shall apply with respect to 
     group health plans for plan years beginning on or after July 
     1, 1998 (in this subsection referred to as the ``general 
     effective date'') and also shall apply to portions of plan 
     years occurring on and after January 1, 1999.
       (2) In the case of a group health plan maintained pursuant 
     to 1 or more collective bargaining agreements between 
     employee representatives and 1 or more employers ratified 
     before the date of enactment of this Act, the amendments made 
     by this section shall not apply to plan years beginning 
     before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of enactment of this Act), or
       (B) the general effective date.

     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by subsection (a) shall not be treated as a 
     termination of such collective bargaining agreement.
                                  ____


      Summary of the Quality Assurance and Patient Protection Act

       Subpart 1: Access to care.
       Subpart 2: Quality Assurance.
       Subpart 3. Patient Information.
       Subpart 4: Grievance Procedures.
       Subpart 5: Protection of providers against interference 
     with medical communications and improper incentive 
     arrangements.
       Subpart 6: Promoting good medical practice and protecting 
     the doctor-patient relationship.


                       Subpart 1: Access to Care

       Emergency care.--A plan may not deny coverage for emergency 
     care assessment and stabilization if a prudent layperson 
     would seek such care given the symptoms experienced. Prior 
     authorization for such care is not required. After assessment 
     and stabilization, further needed care is covered if 
     medically necessary.
       Access to specialty care.--Obstetrician/gynecologist 
     care.--If a plan requires patients to designate a primary 
     care physician, women have the right to choose an 
     obstetrician/gynecologist as their primary care provider. In 
     any case, they have the right to direct access to an 
     obstetrician/gynecologist for routine gynecological care and 
     pregnancy services without prior authorization from their 
     primary care provider.
       Other specialty care.--Enrollees with life-threatening, 
     chronic, degenerative or other serious conditions which 
     require specialty care must be provided access to the 
     appropriate specialists or centers of excellence capable of 
     providing quality care for the condition. If a plan does not 
     have a participating specialist for a condition covered under 
     the plan, the plan must refer the patient to a non-
     participating specialist at no additional cost.
       A plan must have a procedure to allow individuals with a 
     serious illness and ongoing need for specialty care to 
     receive care from a specialist who will coordinate all care 
     for that individual.
       A plan must have a procedure for standing referrals for 
     individuals requiring on-going specialty care if a primary 
     care provider, in consultation with the patient, the medical 
     director of the plan and specialist (if any) determine that a 
     standing referral is needed.
       Continuity of Care.--If a plan or provider terminates a 
     contract for reasons other than failure to meet quality 
     requirements, the plan must allow an enrollee continued 
     treatment with the provider for a transitional period. Time 
     frames vary depending upon type of care being provided (e.g. 
     primary, institutional, pregnancy, terminal, etc.)
       Participation in clinical trials.--If an enrollee has a 
     serious condition for which there is no effective standard 
     treatment and is eligible for an approved clinical trial that 
     offers the potential for substantial clinical benefit, the 
     plan must pay for the routine patient costs of participation 
     in the trial.
       Choice of Provider.--A plan must provide an updated list of 
     all participating providers and their ability to accept 
     additional patients. Enrollees must be permitted to obtain 
     services from any provider within the plan identified in the 
     plan documents as available to the enrollee.
       Prescription Drugs.--If a plan provides benefits for 
     prescription drugs within a formulary, the plan must allow 
     physicians to participate in the development of the plan 
     formulary, disclose the nature of formulary restrictions, and 
     provide for exceptions when medically necessary.


                      Subpart 2: Quality Assurance

       Internal quality assurance program.--Every plan is required 
     to establish and maintain a quality assurance and improvement 
     program that uses data based on both performance and patient 
     outcomes.
       Collection of standardized data.--Plans must report certain 
     standard information to state agencies and the public. The 
     information must be reported in accordance with uniform 
     national standards to be specified by the Secretary. This 
     information will include at least utilization data, 
     demographic data, mortality rates, disenrollment statistics 
     and satisfaction surveys, and quality indicators.
       Selection of providers.--The plan must have a written 
     process for selection of providers including a listing of the 
     professional

[[Page S1569]]

     requirements. The process must include verification of the 
     provider's credentials. Plans may not use a high risk patient 
     base or a provider's location in an area serving residents 
     with poor health status as a basis for exclusion.
       Drug utilization program.--If the plan covers prescription 
     medications, it must have a plan to encourage appropriate 
     drug use and monitor and reduce illness arising from improper 
     use.
       Standards for utilization review activities.--Utilization 
     review refers to the plan's review of requests for care. It 
     is defined as evaluation of clinical necessity and efficacy. 
     Written clinical review criteria are required. Utilization 
     review must be supervised by a licensed physician. Its 
     activities must be executed by appropriately qualified staff. 
     There can be no incentives to render adverse determinations. 
     Deadlines for response to requests for authorization of care 
     are established. Adverse determinations must be in writing 
     and include the reasons for the determination. Such notices 
     must also include instructions for making an appeal.


                     Subpart 3: Patient Information

       Patient Information.--Plans must describe and make 
     available to current and prospective enrollees procedures for 
     providing emergency care and care outside normal business 
     hours, for selecting and changing physicians, and for 
     obtaining consultations. They must also list participating 
     providers by category and make clear which members of that 
     list are available to a prospective or current enrollee. The 
     plan must provide information which describes coverage, 
     financial responsibilities of enrollees, methods of obtaining 
     referrals, utilization review processes, and grievance 
     procedures and must include a description of how the plan 
     addresses the needs of non-English speaking enrollees and 
     others with special communication needs. It must describe how 
     providers are paid.
       Protection of patient confidentiality.--A program to assure 
     compliance with state and federal confidentiality 
     requirements must be in place.


                    Subpart 4: Grievance Procedures

       Provisions relating to appeals of utilization review 
     determination and similar determinations.--A plan must 
     establish and maintain a system to handle and resolve 
     complaints brought against the plan by enrollees and 
     providers. The system should address all aspects of the 
     plan's services, including complaints regarding quality of 
     care, choice and accessibility of providers, and network 
     adequacy. The legislation specifies several components of 
     such a system, including provisions for staffing and staff 
     accessibility, information about appeal procedures, and the 
     time frame within which the plan must respond to complaints. 
     The bill provides for a two stage appeal process, with 
     requirements for a review panel of non-involved providers and 
     consultants employed by the plan in the second phase. Written 
     explanation of each stage of an appeal must be provided. 
     Timely decisions are required. Examples of adverse 
     determinations include denial for emergency care, access to 
     specialists, choice of provider, continuity of care, or 
     payment for routine costs in connection with an approved 
     clinical trial. In the case of experimental therapy to save 
     the life of a patient, an external independent review process 
     with mandatory decision powers is available if the plan 
     chooses not to provide coverage for the treatment. For 
     appeals of other important issues, the plan must either (1) 
     participate in an independent review process established by 
     the state (or the Secretary of Labor for self-insured plans) 
     to make advisory determinations; or (2) establish a third 
     stage of appeal within the plan certified by the Secretary as 
     fair, impartial, and involving independent reviewers to make 
     advisory decisions.
       Health Insurance Ombudsman.--A Health Insurance Ombudsman 
     will be established in each state to assist consumers in 
     choosing health insurance, and to provide assistance to 
     patients dissatisfied with their treatment. Assistance 
     includes aiding enrollees in filing complaints and appeals, 
     investigating poor quality or improper treatment, and 
     bringing such instances to the attention of the applicable 
     state authority or, in the case of self-insured insurance 
     plans, to the attention of the Secretary of Labor. The 
     legislation authorizes funds to be appropriated to the 
     Secretary to provide grants to state authorities to establish 
     the program.


 Subpart 5: Protection of Providers against Interference with Medical 
                 Communications and Improper Incentives

       Prohibition of interference with certain medical 
     communications.--The plan may not prohibit or restrict the 
     provider from engaging in medical communications with the 
     enrollee. Such communications may include discussion of the 
     enrollee's health status, medical care, or treatment options; 
     provisions of the plan's utilization review requirements; or 
     any financial incentives that may affect the treatment of the 
     enrollee.
       Ban on improper incentive arrangements.--There may be no 
     incentives to limit medically necessary services. Provider 
     risk is limited. The Secretary shall apply the same rules 
     which apply to the Medicare program. The plan may not have a 
     contract which requires transfer of liability for malpractice 
     caused by the plan from the plan to the provider.


 Subpart 6: Promoting Good Medical Practice and Protecting the Doctor-
                          Patient Relationship

       Plans are prohibited from denying coverage for medically 
     necessary and appropriate care otherwise covered by the plan, 
     as determined by the treating physician and consistent with 
     generally accepted principles of good medical practice. This 
     provision would prohibit plans from arbitrarily limiting care 
     provided, for example, by requiring that mastectomies be 
     provided on an outpatient basis.
                                 ______