[Congressional Record Volume 143, Number 50 (Thursday, April 24, 1997)]
[Senate]
[Pages S3665-S3670]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. D'AMATO:
  S. 644. A bill to amend the Public Health Service Act and the 
Employee Retirement Income Security Act of 1974 to establish standards 
for relationships between group health plans and health insurance 
issuers with enrollees, health professionals, and providers; to the 
Committee on Labor and Human Resources.


               the patient access to responsible care act

  Mr. D'AMATO. Mr. President, I am introducing this bill in an effort 
to protect the vast majority of patients in this country. Currently, in 
order to control the cost of health care, managed care organizations 
often place limits on the delivery of necessary medical services. I 
believe American families must be guaranteed basic health rights when 
dealing with HMOs and managed care providers. The bottom line in 
medicine must be the health of the patient, not the profits of any 
given company. This legislation, the Patient Access to Responsible Care 
Act, will meet this obligation.
  With this Act, I seek to establish basic protections for patients and 
health care providers in order to ensure the best medical care for 
patients. I envision these basic provisions giving Americans a set of 
health rights, in the form of a Patients' Bill of Rights, when dealing 
with HMOs and other health insurance plans. These rights include:
  The Right to Choose Your Own Doctor. This bill will allow patients to 
select their own doctors within their plan and change their selection 
of doctor as the patient feels necessary. It also gives patients, who 
are in managed care-only health plans, the option to see doctors 
outside their HMOs for an additional fee.
  The Right to Quality Health Care. This legislation will ensure that 
doctors are not prohibited or limited in any way from discussing a 
patient's health status, treatment options or any other medical 
communications. It also stops HMOs from using financial incentives for 
doctors to deny or limit care to patients. We must make sure that 
health care decisions are based on sound medical criteria and not the 
financial bottom line.
  The Right to Justice. This Act closes loopholes in current law that 
allow the vast majority of health insurance plans to escape legal 
responsibility for decisions causing needless injury or death to a 
patient. Currently, self-insured managed care plans cannot be held 
liable for a patient's wrongful death or personal injuries resulting 
from plan policies even when those policies directly contributed to the 
patient's death or injury. This is wrong and this bill would guarantee 
that if HMO policies hurt patients, the HMO will be held accountable 
for their actions.
  In addition, within a patient's health plan, this bill guarantees 
patients can quickly and easily appeal adverse decisions by their 
manage care plans. We've heard too many horror stories of patients who 
have been denied treatment by a health plans' policy. In addition, the 
appeals process is too bureaucratic and lengthy, sometimes resulting in 
tragic consequences. We must always put the quality of patient care 
first.
  The Right to Full Disclosure. This bill also provides that health 
insurance plans make available to each patient a list of what health 
care is covered, what are the plans costs and profits, and how much is 
the plan spending on marketing and other non-medical costs. This is a 
sort of ``truth-in-lending'' statement for health plans.
  When I first considered introducing this Patients' Bill of Rights, I 
was concerned about how prevalent a need there was for this type of 
legislation. I quickly found numerous instances where patients were 
suffering adverse outcomes from poor medical decisions made by managed 
care companies. The most publicized recent case is Corcoran versus 
United Health Care. In this case, Ms. Corcoran, a Louisiana woman with 
a high risk pregnancy, was admitted to a hospital under her physician's 
orders. She was discharged from the hospital after her health plan 
refused to pay for her care. The health plan would only authorize a 
visiting nurse to check on the woman at home. At one point, when the 
nurse was absent, the unborn child went into distress and died. The 
U.S. Court of Appeals for the 5th Circuit ruled that the woman had no 
right to sue the HMO for damages because the insurance plan was 
governed under ERISA laws. These laws preempt state insurance laws 
allowing patients to seek due process. Americans cannot expect health 
care with this type of managed health care.

  As I said before, there are numerous instances where managed care is 
revealed to be ruled by a company's profits. In New York, a diabetic 
developed an infection in his foot that had become gangrenous and had 
spread all the way to his groin. Almost his entire leg was infected and 
the blood vessels clogged. His doctor, a cardio-vascular specialist, 
feared that the gentleman could lose his foot if treatment was not 
initiated immediately. So, as a responsible physician, he admitted his 
patient to the hospital where he was immediately treated with 
intravenous antibiotics to combat the infection. Once in the hospital, 
the gentleman's HMO contacted the doctor to find out how long he 
anticipated the hospital stay would be. Since the man had clogged blood 
vessels and had to undergo a vascular bypass in order to be treated, 
the doctor estimated a stay between 10 and 15 days.
  Upon learning this, an HMO official went to the gentleman's hospital 
room, and without even notifying the doctor, told the man that ``he 
could watch Oprah and be treated as well from home with a visiting 
nurse.'' The gentleman's doctor repeatedly argued with the HMO that it 
was not medically safe to release his patient from the hospital. But, 
with fluid still draining from his wounds and the doctor still 
protesting against the early discharge, the gentleman was sent home 
just a week after being admitted. The next day, the HMO sent a nurse--
not a cardiovascular specialist or even a doctor, but a nurse--to his 
home to evaluate his condition and to show his wife how to change the 
dressing covering his wounds. With this state of affairs, the man 
eventually required surgery. With the early discharge and the lack of 
responsible care on the part of the HMO, the surgery had to be 
postponed because the patient's blood had become too thin to safely 
perform surgery.
  In Georgia, a 2-year old boy was suffering from a high fever which 
did not respond to medication. His parents followed the insurance 
company's instructions for pre-authorization of emergency room care and 
attempted to drive 42 miles to the preferred hospital. The couple 
passed five emergency rooms along the way. Before they could reach the 
preferred hospital, their son went into cardiac arrest and stopped 
breathing. The child slipped into a coma, developed gangrene in his 
extremities, and subsequently lost his arms and legs to amputation.
  In California, a young girl was diagnosed with Wilm's tumor, a rare 
childhood kidney cancer. The families new HMO required that the girl's 
surgery be performed by a surgeon within the managed care plan. None of 
the plan's surgeons had any experience with Wilm's tumor. The family 
chose to use an expert surgeon outside of the plan who had a proven 
track record with this type of tumor. The surgery was a success and the 
child has fully recovered. However, the HMO denied coverage for going 
outside of their system causing the family to enter a 2 year legal 
battle with the plan. In the first ever enforcement action against an 
HMO for a patient complaint, the state imposed a $500,000 fine against 
the plan for denying appropriate medical care.
  In Colorado, a 75-year old woman was diagnosed with Kidney Cancer, 
but her plan refused to authorize surgery to remove the kidney and 
tumor of such an elderly woman. The plan only relented and allowed the 
surgery to be performed when a Congressman finally intervened on her 
behalf. The lady's cancer is now in full remission.
  In Texas, a 17-year old Texas girl was critically injured in a head-
on car crash that left her with severe head trauma, a broken back, a 
crushed pelvis, and numerous other injuries. She

[[Page S3666]]

eventually pulled through, but her health plan refused to pay $40,000 
of her hospital bill because her family had not received ``prior 
authorization'' for her emergency admission to the hospital--even 
though the hospital was a preferred provider for the plan.
  These stories are not isolated incidents. They do not happen just in 
New York and Georgia, but across the nation. They speak for the 
thousands of patients across the country who have been denied access to 
the responsible care they need and deserve.
  Mr. President, I believe it would be beneficial for my colleagues if 
I summarized what rights this bill will provide for patients across the 
country and how this bill meets those rights.
  First of all, we are trying to increase patient access to plans and 
doctors. Patients, including those in under served inner-city and rural 
areas, are ensured their choice of doctor within the plan. The bill 
will ensure that health plans have enough doctors to guarantee this 
choice. Patients will also have access to any specialist required by 
their medical condition within the plan. In addition, patients are to 
have emergency health care without the burden of seeking prior approval 
from their health plan.
  Also in this Act, patients will have an expanded choice of health 
care providers inside and outside of the network. People can either go 
through the network, or choose a plan that allows them to go out of the 
network, although at a higher cost. They will be allowed to select 
their own personal doctors within their plan and change their selection 
as the patient feels necessary. Patients will also be given the option 
to choose a health insurance plan that covers health care options not 
offered in the network. The managed care plan would reimburse the costs 
of these services based on rates consistent with those negotiated under 
the plan. Patients would be responsible for any remaining costs.
  This bill will include a prohibition on gag rules. Patients are 
ensured that the health plan will not in any way limit doctors from 
discussing the patient's health status, treatment options or any other 
medical communication. Health plans can not offer any incentives, 
financial or otherwise, for doctors to deny or limit any health care.
  In addition, this Bill of Rights forces HMOs to be responsible for 
their decisions. Currently, HMOs can not be held liable for wrongful 
death or personal injury suffered by the medical decision making 
policies of the plan, action may only be brought against the doctor and 
the hospital. Even if the HMO or the plan had in place a policy which 
directly contributed to death or injury of a patient, they are 
protected. This bill changes that by ensuring that managed care plans 
are held responsible for any medical decisions that they make. This 
bill says that if you make a medical decision, no matter who you are, 
you will be responsible for your actions. ERISA was never intended to 
be used as a shield for health plans providing negligent medical care. 
Also, there will be a provision providing due process on patient 
appeals claims made to their heath plans. Within the plan, patients 
will be guaranteed the ability to quickly and easily appeal adverse 
decisions.
  The act will establish an information disclosure provision allowing 
patients to make informed decisions about which health plan would be 
best for them. This is a sort of ``Truth in Lending'' statement for 
HMO's. Every health plan will be required to disclose information about 
plan benefits, appeals procedures, plan performance measures, history 
of patient satisfaction, as well as the number and type of health care 
providers participating in the network. Based on this information, 
patients will be guaranteed the ability to make informed decisions 
about the quality of their health care and the managed care companies 
they choose from.
  In addition, there will be doctor and patient protections from 
discrimination. The provision allows any doctor who meets a clear set 
of standards the opportunity to be a member of any managed care plan. 
In addition, patients will not be discriminated against based on their 
personal background or preexisting conditions, such as long-term and 
costly diseases.
  Mr. President, we have an obligation to set minimum health care 
standards in the private sector to protect American families and ensure 
they have access to quality health care. We cannot allow the profits of 
the company to get in the way of patient health.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 644

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Patient 
     Access to Responsible Care 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. Patient protection standards under the Public Health Service 
              Act.

                 ``Part C--Patient Protection Standards

``Sec. 2770. Notice; additional definitions; construction.
``Sec. 2771. Enrollee access to care.
``Sec. 2772. Enrollee choice of health professionals and providers.
``Sec. 2773. Nondiscrimination against enrollees and in the selection 
              of health professionals; equitable access to networks.
``Sec. 2774. Prohibition of interference with certain medical 
              communications.
``Sec. 2775. Development of plan policies.
``Sec. 2776. Due process for enrollees.
``Sec. 2777. Due process for health professionals and providers.
``Sec. 2778. Information reporting and disclosure.
``Sec. 2779. Confidentiality; adequate reserves.
``Sec. 2780. Quality improvement program.
Sec. 3. Patient protection standards under the Employee Retirement 
              Income Security Act of 1974.
Sec. 4. Non-preemption of State law respecting liability of group 
              health plans.

     SEC. 2. PATIENT PROTECTION STANDARDS UNDER 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; CONSTRUCTION.

       ``(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) Enrollee.--The term `enrollee' means, with respect to 
     health insurance coverage offered by a health insurance 
     issuer, an individual enrolled with the issuer to receive 
     such coverage.
       ``(2) Health professional.--The term `health professional' 
     means a physician or other health care practitioner licensed, 
     accredited, or certified to perform specified health services 
     consistent with State law.
       ``(3) Network.--The term `network' means, with respect to a 
     health insurance issuer offering health insurance coverage, 
     the participating health professionals and providers through 
     whom the plan or issuer provides health care items and 
     services to enrollees.
       ``(4) Network coverage.--The term `network coverage' means 
     health insurance coverage offered by a health insurance 
     issuer that provides or arranges for the provision of health 
     care items and services to enrollees through participating 
     health professionals and providers.
       ``(5) Participating.--The term `participating' means, with 
     respect to a health professional or provider, a health 
     professional or provider that provides health care items and 
     services to enrollees under network coverage under an 
     agreement with the health insurance issuer offering the 
     coverage.
       ``(6) Prior authorization.--The term `prior authorization' 
     means the process of obtaining prior approval from a health 
     insurance issuer as to the necessity or appropriateness of 
     receiving medical or clinical services for treatment of a 
     medical or clinical condition.
       ``(7) Provider.--The term `provider' means a health 
     organization, health facility, or health agency that is 
     licensed, accredited, or certified to provide health care 
     items and services under applicable State law.
       ``(8) Service area.--The term `service area' means, with 
     respect to a health insurance issuer with respect to health 
     insurance coverage, the geographic area served by the issuer 
     with respect to the coverage.
       ``(9) Utilization review.--The term `utilization review' 
     means prospective, concurrent, or retrospective review of 
     health care items and services for medical necessity, 
     appropriateness, or quality of care that includes prior 
     authorization requirements for coverage of such items and 
     services.

[[Page S3667]]

       ``(c) No Requirement for Any Willing Provider.--Nothing in 
     this part shall be construed as requiring a health insurance 
     issuer that offers network coverage to include for 
     participation every willing provider or health professional 
     who meets the terms and conditions of the plan or issuer.

     ``SEC. 2771. ENROLLEE ACCESS TO CARE.

       ``(a) General Access.--
       ``(1) In general.--Subject to paragraphs (2), and (3), a 
     health insurance issuer shall establish and maintain adequate 
     arrangements, as defined by the applicable State authority, 
     with a sufficient number, mix, and distribution of health 
     professionals and providers to assure that covered items and 
     services are available and accessible to each enrollee under 
     health insurance coverage--
       ``(A) in the service area of the issuer;
       ``(B) in a variety of sites of service;
       ``(C) with reasonable promptness (including reasonable 
     hours of operation and after-hours services);
       ``(D) with reasonable proximity to the residences and 
     workplaces of enrollees; and
       ``(E) in a manner that--
       ``(i) takes into account the diverse needs of enrollees, 
     and
       ``(ii) reasonably assures continuity of care.

     For a health insurance issuer that serves a rural or 
     medically underserved area, the issuer shall be treated as 
     meeting the requirement of this subsection if the issuer has 
     arrangements with a sufficient number, mix, and distribution 
     of health professionals and providers having a history of 
     serving such areas. The use of telemedicine and other 
     innovative means to provide covered items and services by a 
     health insurance issuer that serves a rural or medically 
     underserved area shall also be considered in determining 
     whether the requirement of this subsection is met.
       ``(2) Rule of construction.--Nothing in this subsection 
     shall be construed as requiring a health insurance issuer to 
     have arrangements that conflict with its responsibilities to 
     establish measures designed to maintain quality and control 
     costs.
       ``(3) Definitions.--For purposes of paragraph (1):
       ``(A) Medically underserved area.--The term `medically 
     underserved area' means an area that is designated as a 
     health professional shortage area under section 332 of the 
     Public Health Service Act or as a medically underserved area 
     for purposes of section 330 or 1302(7) of such Act.
       ``(B) Rural area.--The term `rural area' means an area that 
     is not within a Standard Metropolitan Statistical Area or a 
     New England County Metropolitan Area (as defined by the 
     Office of Management and Budget).
       ``(b) Emergency and Urgent Care.--
       ``(1) In general.--A health insurance issuer shall--
       ``(A) assure the availability and accessibility of 
     medically or clinically necessary emergency services and 
     urgent care services within the service area of the issuer 24 
     hours a day, 7 days a week;
       ``(B) require no prior authorization for items and services 
     furnished in a hospital emergency department to an enrollee 
     (without regard to whether the health professional or 
     hospital has a contractual or other arrangement with the 
     issuer) with symptoms that would reasonably suggest to a 
     prudent layperson an emergency medical condition (including 
     items and services described in subparagraph (C)(iii));
       ``(C) cover (and make reasonable payments for)--
       ``(i) emergency services,
       ``(ii) services that are not emergency services but are 
     described in subparagraph (B),
       ``(iii) medical screening examinations and other ancillary 
     services necessary to diagnose, treat, and stabilize an 
     emergency medical condition, and
       ``(iv) urgent care services, without regard to whether the 
     health professional or provider furnishing such services has 
     a contractual (or other) arrangement with the issuer; and
       ``(D) make prior authorization determinations for--
       ``(i) services that are furnished in a hospital emergency 
     department (other than services described in clauses (i) and 
     (iii) of subparagraph (C)), and
       ``(ii) urgent care services, within the time periods 
     specified in (or pursuant to) section 2776(a)(8).
       ``(2) Definitions.--For purposes of this subsection:
       ``(A) Emergency medical condition.--The term `emergency 
     medical condition' means a medical condition (including 
     emergency labor and delivery) 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 could reasonably be expected 
     to result in--
       ``(i) placing the patient's health 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 health care items and services that are necessary for 
     the diagnosis, treatment, and stabilization of an emergency 
     medical condition.
       ``(C) Urgent care services.--The term `urgent care 
     services' means health care items and services that are 
     necessary for the treatment of a condition that--
       ``(i) is not an emergency medical condition,
       ``(ii) requires prompt medical or clinical treatment, and
       ``(iii) poses a danger to the patient if not treated in a 
     timely manner, as defined by the applicable State authority 
     in consultation with relevant treating health professionals 
     or providers.
       ``(c) Specialized Services.--
       ``(1) In general.--A health insurance issuer offering 
     network coverage shall demonstrate that enrollees have access 
     to specialized treatment expertise when such treatment is 
     medically or clinically indicated in the professional 
     judgment of the treating health professional, in consultation 
     with the enrollee.
       ``(2) Definition.--For purposes of paragraph (1), the term 
     `specialized treatment expertise' means expertise in 
     diagnosing or treating--
       ``(A) unusual diseases or conditions, or
       ``(B) diseases and conditions that are unusually difficult 
     to diagnose or treat.
       ``(d) Incentive Plans.--
       ``(1) In general.--In the case of a health insurance issuer 
     that offers network coverage, any health professional or 
     provider incentive plan operated by the issuer with respect 
     to such coverage shall meet the following requirements:
       ``(A) No specific payment is made directly or indirectly 
     under the plan to a professional or provider or group of 
     professionals or providers as an inducement to reduce or 
     limit medically necessary services provided with respect to a 
     specific enrollee.
       ``(B) If the plan places such a professional, provider, or 
     group at substantial financial risk (as determined by the 
     Secretary) for services not provided by the professional, 
     provider, or group, the issuer--
       ``(i) provides stop-loss protection for the professional, 
     provider, or group that is adequate and appropriate, based on 
     standards developed by the Secretary that take into account 
     the number of professionals or providers placed at such 
     substantial financial risk in the group or under the coverage 
     and the number of individuals enrolled with the issuer who 
     receive services from the professional, provider, or 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 Secretary with descriptive 
     information regarding the plan, sufficient to permit the 
     Secretary to determine whether the plan is in compliance with 
     the requirements of this paragraph.
       ``(2) In this subsection, the term `health professional or 
     provider incentive plan' means any compensation arrangement 
     between a health insurance issuer and a health professional 
     or provider or professional or provide group that may 
     directly or indirectly have the effect of reducing or 
     limiting services provided with respect to individuals 
     enrolled with the issuer.

     ``SEC. 2772. ENROLLEE CHOICE OF HEALTH PROFESSIONALS AND 
                   PROVIDERS.

       ``(a) Choice of Personal Health Professional.--A health 
     insurance issuer shall permit each enrollee under network 
     coverage to--
       ``(1) select a personal health professional from among the 
     participating health professionals of the issuer, and
       ``(2) change that selection as appropriate.
       ``(b) Point-of-Service Option.--
       ``(1) In general.--If a health insurance issuer offers to 
     enrollees health insurance coverage which provides for 
     coverage of services only if such services are furnished 
     through health professionals and providers who are members of 
     a network of health professionals and providers who have 
     entered into a contract with the issuer to provide such 
     services, the issuer shall also offer to such enrollees (at 
     the time of enrollment) the option of health insurance 
     coverage which provides for coverage of such services which 
     are not furnished through health professionals and providers 
     who are members of such a network.
       ``(2) Fair premiums.--The amount of any additional premium 
     required for the option described in paragraph (1) may not 
     exceed an amount that is fair and reasonable, as established 
     by the applicable State authority, in consultation with the 
     National Association of Insurance Commissioners, based on the 
     nature of the additional coverage provided.
       ``(3) Cost-sharing.--Under the option described in 
     paragraph (1), the health insurance coverage shall provide 
     for reimbursement rates for covered services offered by 
     health professionals and providers who are not participating 
     health professionals or providers that are not less than the 
     reimbursement rates for covered services offered by 
     participating health professionals and providers. Nothing in 
     this paragraph shall be construed as protecting an enrollee 
     against balance billing by a health professional or provider 
     that is not a participating health professional or provider.
       ``(c) Continuity of Care.--A health insurance issuer 
     offering network coverage shall--
       ``(1) ensure that any process established by the issuer to 
     coordinate care and control costs does not create an undue 
     burden, as defined by the applicable State authority, for 
     enrollees with special health care needs or chronic 
     conditions;

[[Page S3668]]

       ``(2) ensure direct access to relevant specialists for the 
     continued care of such enrollees when medically or clinically 
     indicated in the judgment of the treating health 
     professional, in consultation with the enrollee;
       ``(3) in the case of an enrollee with special health care 
     needs or a chronic condition, determine whether, based on the 
     judgment of the treating health professional, in consultation 
     with the enrollee, it is medically or clinically necessary to 
     use a specialist or a care coordinator from an 
     interdisciplinary team to ensure continuity of care; and
       ``(4) in circumstances under which a change of health 
     professional or provider might disrupt the continuity of care 
     for an enrollee, such as--
       ``(A) hospitalization, or
       ``(B) dependency on high-technology home medical equipment,
     provide for continued coverage of items and services 
     furnished by the health professional or provider that was 
     treating the enrollee before such change for a reasonable 
     period of time.

     For purposes of paragraph (4), a change of health 
     professional or provider may be due to changes in the 
     membership of an issuer's health professional and provider 
     network, changes in the health coverage made available by an 
     employer, or other similar circumstances.

     ``SEC. 2773. NONDISCRIMINATION AGAINST ENROLLEES AND IN THE 
                   SELECTION OF HEALTH PROFESSIONALS; EQUITABLE 
                   ACCESS TO NETWORKS.

       ``(a) Nondiscrimination Against Enrollees.--No health 
     insurance issuer may discriminate (directly or through 
     contractual arrangements) in any activity that has the effect 
     of discriminating against an individual on the basis of race, 
     national origin, gender, language, socioeconomic status, age, 
     disability, health status, or anticipated need for health 
     services.
       ``(b) Nondiscrimination in Selection of Network Health 
     Professionals.--A health insurance issuer offering network 
     coverage shall not discriminate in selecting the members of 
     its health professional network (or in establishing the terms 
     and conditions for membership in such network) on the basis 
     of--
       ``(1) the race, national origin, gender, age, or disability 
     (other than a disability that impairs the ability of an 
     individual to provide health care services or that may 
     threaten the health of enrollees) of the health professional; 
     or
       ``(2) the health professional's lack of affiliation with, 
     or admitting privileges at, a hospital (unless such lack of 
     affiliation is a result of infractions of quality standards 
     and is not due to a health professional's type of license).
       ``(c) Nondiscrimination in Access to Health Plans.--While 
     nothing in this section shall be construed as an `any willing 
     provider' requirement (as referred to in section 2770(c)), a 
     health insurance issuer shall not discriminate in 
     participation, reimbursement, or indemnification against a 
     health professional, who is acting within the scope of the 
     health professional's license or certification under 
     applicable State law, solely on the basis of such license or 
     certification.

     ``SEC. 2774. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
                   COMMUNICATIONS.

       ``(a) In General.--The provisions of any contract or 
     agreement, or the operation of any contract or agreement, 
     between a health insurance issuer and a health professional 
     shall not prohibit or restrict the health professional from 
     engaging in medical communications with his or her patient.
       ``(b) Nullification.--Any contract provision or agreement 
     described in subsection (a) shall be null and void.
       ``(c) Medical communication defined.--For purposes of this 
     section, the term `medical communication' means a 
     communication made by a health professional with a patient of 
     the health professional (or the guardian or legal 
     representative of the patient) with respect to--
       ``(1) the patient's health status, medical care, or legal 
     treatment options;
       ``(2) any utilization review requirements that may affect 
     treatment options for the patient; or
       ``(3) any financial incentives that may affect the 
     treatment of the patient.

     ``SEC. 2775. DEVELOPMENT OF PLAN POLICIES.

       ``A health insurance issuer that offers network coverage 
     shall establish mechanisms to consider the recommendations, 
     suggestions, and views of enrollees and participating health 
     professionals and providers regarding--
       ``(1) the medical policies of the issuer (including 
     policies relating to coverage of new technologies, 
     treatments, and procedures);
       ``(2) the utilization review criteria and procedures of the 
     issuer;
       ``(3) the quality and credentialing criteria of the issuer; 
     and
       ``(4) the medical management procedures of the issuer.

     ``SEC. 2776. DUE PROCESS FOR ENROLLEES.

       ``(a) Utilization Review.--The utilization review program 
     of a health insurance issuer shall--
       ``(1) be developed (including any screening criteria used 
     by such program) with the involvement of participating health 
     professionals and providers;
       ``(2) to the extent consistent with the protection of 
     proprietary business information (as defined for purposes of 
     section 552 of title 5, United States Code) release, upon 
     request, to affected health professionals, providers, and 
     enrollees the screening criteria, weighting elements, and 
     computer algorithms used in reviews and a description of the 
     method by which they were developed;
       ``(3) uniformly apply review criteria that are based on 
     sound scientific principles and the most recent medical 
     evidence;
       ``(4) use licensed, accredited, or certified health 
     professionals to make review determinations (and for services 
     requiring specialized training for their delivery, use a 
     health professional who is qualified through equivalent 
     specialized training and experience);
       ``(5) subject to reasonable safeguards, disclose to health 
     professionals and providers, upon request, the names and 
     credentials of individuals conducting utilization review;
       ``(6) not compensate individuals conducting utilization 
     review for denials of payment or coverage of benefits;
       ``(7) comply with the requirement of section 2771 that 
     prior authorization not be required for emergency and related 
     services furnished in a hospital emergency department;
       ``(8) make prior authorization determinations--
       ``(A) in the case of services that are urgent care services 
     described in section 2771(b)(2)(C), within 30 minutes of a 
     request for such determination, and
       ``(B) in the case of other services, within 24 hours after 
     the time of a request for determination;
       ``(9) include in any notice of such determination an 
     explanation of the basis of the determination and the right 
     to an immediate appeal;
       ``(10) treat a favorable prior authorization review 
     determination as a final determination for purposes of making 
     payment for a claim submitted for the item or service 
     involved unless such determination was based on false 
     information knowingly supplied by the person requesting the 
     determination;
       ``(11) provide timely access, as defined by the applicable 
     State authority, to utilization review personnel and, if such 
     personnel are not available, waives any prior authorization 
     that would otherwise be required; and
       ``(12) provide notice of an initial determination on 
     payment of a claim within 30 days after the date the claim is 
     submitted for such item or service, and include in such 
     notice an explanation of the reasons for such determination 
     and of the right to an immediate appeal.
       ``(b) Appeals Process.--A health insurance issuer shall 
     establish and maintain an accessible appeals process that--
       ``(1) reviews an adverse prior authorization 
     determination--
       ``(A) for urgent care services, described in subsection 
     (a)(8)(A), within 1 hour after the time of a request for such 
     review, and
       ``(B) for other services, within 24 hours after the time of 
     a request for such review;
       ``(2) reviews an initial determination on payment of claims 
     described in subsection (a)(12) within 30 days after the date 
     of a request for such review;
       ``(3) provides for review of determinations described in 
     paragraphs (1) and (2) by an appropriate clinical peer 
     professional who is in the same or similar specialty as would 
     typically provide the item or service involved (or another 
     licensed, accredited, or certified health professional 
     acceptable to the plan and the person requesting such 
     review); and
       ``(4) provides for review of--
       ``(A) the determinations described in paragraphs (1), (2), 
     and (3), and
       ``(B) enrollee complaints about inadequate access to any 
     category or type of health professional or provider in the 
     network of the issuer or other matters specified by this 
     part,

     by an appropriate clinical peer professional who is in the 
     same or similar specialty as would typically provide the item 
     or service involved (or another licensed, accredited, or 
     certified health professional acceptable to the issuer and 
     the person requesting such review) that is not involved in 
     the operation of the plan or in making the determination or 
     policy being appealed.

     The procedures specified in this subsection shall not be 
     construed as preempting or superseding any other reviews or 
     appeals an issuer is required by law to make available.

     ``SEC. 2777. DUE PROCESS FOR HEALTH PROFESSIONALS AND 
                   PROVIDERS.

       ``(a) In General.--A health insurance issuer with respect 
     to its offering of network coverage shall--
       ``(1) allow all health professionals and providers in its 
     service area to apply to become a participating health 
     professional or provider during at least one period in each 
     calendar year;
       ``(2) provide reasonable notice to such health 
     professionals and providers of the opportunity to apply and 
     of the period during which applications are accepted;
       ``(3) provide for review of each application by a 
     credentialing committee with appropriate representation of 
     the category or type of health professional or provider;
       ``(4) select participating health professionals and 
     providers based on objective standards of quality developed 
     with the suggestions and advice of professional associations, 
     health professionals, and providers;
       ``(5) make such selection standards available to--
       ``(A) those applying to become a participating provider or 
     health professional;
       ``(B) health plan purchasers, and
       ``(C) enrollees;
       ``(6) when economic considerations are taken into account 
     in selecting participating

[[Page S3669]]

     health professionals and providers, use objective criteria 
     that are available to those applying to become a 
     participating provider or health professional and enrollees;
       ``(7) adjust any economic profiling to take into account 
     patient characteristics (such as severity of illness) that 
     may result in atypical utilization of services;
       ``(8) make the results of such profiling available to 
     insurance purchasers, enrollees, and the health professional 
     or provider involved;
       ``(9) notify any health professional or provider being 
     reviewed under the process referred to in paragraph (3) of 
     any information indicating that the health professional or 
     provider fails to meet the standards of the issuer;
       ``(10) offer a health professional or provider receiving 
     notice pursuant to the requirement of paragraph (9) with an 
     opportunity to--
       ``(A) review the information referred to in such paragraph, 
     and
       ``(B) submit supplemental or corrected information;
       ``(11) not include in its contracts with participating 
     health professionals and providers a provision permitting the 
     issuer to terminate the contract `without cause';
       ``(12) provide a due process appeal that conforms to the 
     process specified in section 412 of the Health Care Quality 
     Improvement Act of 1986 (42 U.S.C. 11112) for all 
     determinations that are adverse to a health professional or 
     provider; and
       ``(13) unless a health professional or provider poses an 
     imminent harm to enrollees or an adverse action by a 
     governmental agency effectively impairs the ability to 
     provide health care items and services, provide--
       ``(A) reasonable notice of any decision to terminate a 
     health professional or provider `for cause' (including an 
     explanation of the reasons for the determination),
       ``(B) an opportunity to review and discuss all of the 
     information on which the determination is based, and
       ``(C) an opportunity to enter into a corrective action 
     plan, before the determination becomes subject to appeal 
     under the process referred to in paragraph (12).
       ``(b) Rule of Construction.--The requirements of subsection 
     (a) shall not be construed as preempting or superseding any 
     other reviews and appeals a health insurance issuer is 
     required by law to make available.

     ``SEC. 2778. INFORMATION REPORTING AND DISCLOSURE.

       ``(a) In General.--A health insurance issuer offering 
     health insurance coverage shall provide enrollees and 
     prospective enrollees with information about--
       ``(1) coverage provisions, benefits, and any exclusions--
       ``(A) by category of service,
       ``(B) by category or type of health professional or 
     provider, and
       ``(C) if applicable, by specific service, including 
     experimental treatments;
       ``(2) the percentage of the premium charged by the issuer 
     that is set aside for administration and marketing of the 
     issuer;
       ``(3) the percentage of the premium charged by the issuer 
     that is expended directly for patient care;
       ``(4) the number, mix, and distribution of participating 
     health professionals and providers;
       ``(5) the ratio of enrollees to participating health 
     professionals and providers by category and type of health 
     professional and provider;
       ``(6) the expenditures and utilization per enrollee by 
     category and type of health professional and provider;
       ``(7) the financial obligations of the enrollee and the 
     issuer, including premiums, copayments, deductibles, and 
     established aggregate maximums on out-of-pocket costs, for 
     all items and services, including--
       ``(A) those furnished by health professionals and providers 
     that are not participating health professionals and 
     providers, and
       ``(B) those furnished to an enrollee who is outside the 
     service area of the coverage;
       ``(8) utilization review requirements of the issuer 
     (including prior authorization review, concurrent review, 
     post-service review, post-payment review, and any other 
     procedures that may lead to denial of coverage or payment for 
     a service);
       ``(9) financial arrangements and incentives that may--
       ``(A) limit the items and services furnished to an 
     enrollee,
       ``(B) restrict referral or treatment options, or
       ``(C) negatively affect the fiduciary responsibility of a 
     health professional or provider to an enrollee;
       ``(10) other incentives for health professionals and 
     providers to deny or limit needed items or services;
       ``(11) quality indicators for the issuer and participating 
     health professionals and providers, including performance 
     measures such as appropriate referrals and prevention of 
     secondary complications following treatment;
       ``(12) grievance procedures and appeals rights under the 
     coverage, and summary information about the number and 
     disposition of grievances and appeals in the most recent 
     period for which complete and accurate information is 
     available; and
       ``(13) the percentage of utilization review determinations 
     made by the issuer that disagree with the judgment of the 
     treating health professional or provider and the percentage 
     of such determinations that are reversed on appeal.
       ``(b) Regulations.--The Secretary, in collaboration with 
     the Secretary of Labor, shall issue regulations to 
     establish--
       ``(1) the styles and sizes of type to be used with respect 
     to the appearance of the publication of the information 
     required under subsection (a);
       ``(2) standards for the publication of information to 
     ensure that such publication is--
       ``(A) readily accessible, and
       ``(B) in common language easily understood,

     by individuals with little or no connection to or 
     understanding of the language employed by health 
     professionals and providers, health insurance issuers, or 
     other entities involved in the payment or delivery of health 
     care services, and
       ``(3) the placement and positioning of information in 
     health plan marketing materials.

     ``SEC. 2779. CONFIDENTIALITY; ADEQUATE RESERVES.

       ``(a) Confidentiality.--
       ``(1) In general.--A health insurance issuer shall 
     establish mechanisms and procedures to ensure compliance with 
     applicable Federal and State laws to protect the 
     confidentiality of individually identifiable information held 
     by the issuer with respect to an enrollee, health 
     professional, or provider.
       ``(2) Definition.--For purposes of paragraph (1), the term 
     `individually identifiable information' means, with respect 
     to an enrollee, a health professional, or a provider, any 
     information, whether oral or recorded in any medium or form, 
     that identifies or can readily be associated with the 
     identity of the enrollee, the health professional, or the 
     provider.
       ``(b) Financial Reserves; Solvency.--A health insurance 
     issuer shall--
       ``(1) meet such financial reserve or other solvency-related 
     requirements as the applicable State authority may establish 
     to assure the continued availability of (and appropriate 
     payment for) covered items and services for enrollees; and
       ``(2) establish mechanisms specified by the applicable 
     State authority to protect enrollees, health professionals, 
     and providers in the event of failure of the issuer.
     Such requirements shall not unduly impede the establishment 
     of health insurance issuers owned and operated by health care 
     professionals or providers or by non-profit community-based 
     organizations.

     ``SEC. 2780. QUALITY IMPROVEMENT PROGRAM.

       ``(a) In General.--A health insurance issuer shall 
     establish a quality improvement program (consistent with 
     subsection (b)) that systematically and continuously assesses 
     and improves--
       ``(1) enrollee health status, patient outcomes, processes 
     of care, and enrollee satisfaction associated with health 
     care provided by the issuer; and
       ``(2) the administrative and funding capacity of the issuer 
     to support and emphasize preventive care, utilization, access 
     and availability, cost effectiveness, acceptable treatment 
     modalities, specialists referrals, the peer review process, 
     and the efficiency of the administrative process.
       ``(b) Functions.--A quality improvement program established 
     pursuant to subsection (a) shall--
       ``(1) assess the performance of the issuer and its 
     participating health professionals and providers and report 
     the results of such assessment to purchasers, participating 
     health professionals and providers, and administrative 
     personnel;
       ``(2) demonstrate measurable improvements in clinical 
     outcomes and plan performance measured by identified 
     criteria, including those specified in subsection (a)(1); and
       ``(3) analyze quality assessment data to determine specific 
     interactions in the delivery system (both the design and 
     funding of the health insurance coverage and the clinical 
     provision of care) that have an adverse impact on the quality 
     of care.''.
       (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:

[[Page S3670]]

     ``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, and part D insofar as it applies 
     to section 2706 or part C, shall not be construed to preempt 
     any State law, or the enactment or implementation of such a 
     State law, that provides protections for individuals that are 
     equivalent to or stricter than the protections provided under 
     such provisions.''.
       (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 Patient Protection 
     Requirements.--Subject to subsection (b), the provisions of 
     section 2752 and part C, and part D insofar as it applies to 
     section 2752 or part C, shall not be construed to preempt any 
     State law, or the enactment or implementation of such a State 
     law, that provides protections for individuals that are 
     equivalent to or stricter than the protections provided under 
     such provisions.''.
       (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 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. PATIENT PROTECTION STANDARDS UNDER 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 of title XXVII 
     of the Public Health Service Act.
       ``(b) References in Application.--In applying subsection 
     (a) under this part, any reference in such part 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) 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, and subpart C insofar as it applies to section 
     713 or such part, shall not be construed to preempt any State 
     law, or the enactment or implementation of such a State law, 
     that provides protections for individuals that are equivalent 
     to or stricter than the protections provided under such 
     provisions.''.
       (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.

     SEC. 4. NON-PREEMPTION OF STATE LAW RESPECTING LIABILITY OF 
                   GROUP HEALTH PLANS.

       (a) In General.--Section 514(b) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144(b)) is amended by 
     redesignating paragraph (9) as paragraph (10) and inserting 
     the following new paragraph:
       ``(9) Subsection (a) of this section shall not be construed 
     to preclude any State cause of action to recover damages for 
     personal injury or wrongful death against any person that 
     provides insurance or administrative services to or for an 
     employee welfare benefit plan maintained to provide health 
     care benefits.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to causes of action arising on or after the date 
     of the enactment of this Act.
                                 ______