[Congressional Record Volume 143, Number 157 (Sunday, November 9, 1997)]
[Senate]
[Pages S12301-S12304]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. BOXER:
  S. 1499. A bill to amend the title XXVII of the Public Health Service 
Act and other laws to assure the rights of enrollees under managed care 
plans; to the Committee on Labor and Human Resources.


       the health insurance consumer's bill of rights act of 1997

  Mrs. BOXER. Mr. President, today I am introducing the Health 
Insurance Consumer's bill of rights. I have been working closely on 
this bill with Congressman Chuck Schumer, who has introduced companion 
legislation in the House.
  Our will address an increasing crisis of confidence in our Nation's 
health care system. This crisis of confidence is especially evident for 
the increasing number of Americans enrolled in managed care health 
plans.
  A recent survey conducted by the Henry Kaiser Family Foundation and 
Harvard University found that only 44 percent of enrollees in managed 
care health care plans believe it is very likely that necessary 
treatments would be covered if they became seriously ill. Fully 69 
percent of enrollees in traditional fee-for-service plans believed they 
would be adequately covered.
  The survey found that the American people hold managed care plans 
generally in low esteem and they support efforts to improve the health 
insurance system. That, Mr. President, is exactly what the Boxer-
Schumer bill aims to do.
  The Health Insurance Consumer's bill of rights requires all health 
insurance plans to meet basic requirements for conduct, coverage, and 
consumer disclosure.
  Specifically, the bill requires that all managed care plans have an 
adequate number of primary care physicians and specialists to meet the 
health care needs of their enrollees. It requires health plans to cover 
emergency care, terminate so-called gag rules that limit communication 
between a doctor and a patient. It requires the annual disclosure of a 
wealth of important consumer information to enrollees and potential 
enrollees, and finally, this bill contains a number of important 
provisions to ensure that women are treated fairly in managed care 
plans.
  I want to make clear that the Schumer-Boxer bill is not antimanaged 
care. On the contrary, the bill accepts that managed care plans are the 
chosen kind of coverage for millions of Americans. It is precisely for 
that reason that Congress must act to ensure that managed care plans 
act responsibly and provide quality coverage.
  I hope the Senate will consider this bill carefully and act upon it 
early next year.
  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. 1499

       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 Consumer's 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.

                TITLE I--HEALTH INSURANCE BILL OF RIGHTS

Sec. 101. Health insurance bill of rights.

               ``Part C--Health Insurance Bill of Rights

``Sec. 2770. Notice; additional definitions.

  ``Subpart 1--Access to Primary Care Physicians, Specialists, Out of 
     Network Providers, Emergency Room Services, Prescription Drugs

``Sec. 2771. Access to personnel and facilities; assuring adequate 
              choice of health care professionals.
``Sec. 2772. Access to specialty care.
``Sec. 2773. Access to emergency care.
``Sec. 2774. Coverage for individuals participating in approved 
              clinical trials.
``Sec. 2775. Continuity of care.
``Sec. 2776. Prohibition of interference with certain medical 
              communications.
``Sec. 2777. Access to needed prescription drugs.

   ``Subpart 2--Utilization Review, Grievance, Appeals, and Quality 
                              Improvement

``Sec. 2779. Standards for utilization review activities, complaints, 
              and appeals.
``Sec. 2780. Quality improvement program.

                     ``Subpart 3--Nondiscrimination

``Sec. 2784. Nondiscrimination.

                      ``Subpart 4--Confidentiality

``Sec. 2785. Medical records and confidentiality.

                        ``Subpart 5--Disclosures

``Sec. 2786. Health prospectus; disclosure of information.

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

``Sec. 2787. Promoting good medical practice.

       TITLE II--APPLICATION OF BILL OF RIGHTS UNDER VARIOUS LAWS

Sec. 201. Amendments to the Public Health Service Act.
Sec. 202. Managed care requirements under the Employee Retirement 
              Income Security Act of 1974.
Sec. 203. Managed care requirements under the Internal Revenue Code of 
              1986.
Sec. 204. Managed care requirements under medicare, medicaid, and the 
              Federal employees health benefits program (FEHBP).
Sec. 205. Effective dates.
                TITLE I--HEALTH INSURANCE BILL OF RIGHTS

     SEC. 101. HEALTH INSURANCE BILL OF RIGHTS.

       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--Health Insurance Bill of Rights

     ``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) Enrollee.--The term `enrollee' means an individual 
     who is entitled to benefits under a group health plan or 
     under health insurance coverage.
       ``(2) Health care professional.--The term `health care 
     professional' means a physician or other health care 
     practitioner providing health care services.
       ``(3) Health care provider.--The term `health care 
     provider' means a clinic, hospital physician organization, 
     preferred provider organization, independent practice 
     association, community service provider, family planning 
     clinic, or other appropriately licensed provider of health 
     care services or supplies.
       ``(4) Managed care.--The term `managed care' means, with 
     respect to a group health plan or health insurance coverage, 
     such a plan or coverage that provides financial incentives 
     for enrollees to obtain benefits through participating health 
     care providers or professionals.
       ``(5) Nonparticipating.--The term `nonparticipating' means, 
     with respect to a health care provider or professional and a 
     group health plan or health insurance coverage, such a 
     provider or professional that is not a participating provider 
     or professional with respect to such services.
       ``(6) Participating.--The term `participating' means, with 
     respect to a health care provider or professional and a group 
     health plan or health insurance coverage offered by a health 
     insurance issuer, such a provider or professional that has 
     entered into an agreement or arrangement with the plan or 
     issuer with respect to the provision of health care services 
     to enrollees under the plan or coverage.
       ``(7) Primary care practitioner.--The term `primary care 
     practitioner' means, with respect to a group health plan or 
     health insurance coverage offered by a health insurance 
     issuer, a health care professional (who may be trained in 
     family practice, general practice, internal medicine, 
     obstetrics and

[[Page S12302]]

     gynecology, or pediatrics and who is practicing within the 
     scope of practice authorized by State law) designated by the 
     plan or issuer to coordinate, supervise, or provide ongoing 
     care to enrollees.

  ``Subpart 1--Access to Primary Care Physicians, Specialists, Out of 
     Network Providers, Emergency Room Services, Prescription Drugs

     ``SEC. 2771. ACCESS TO PERSONNEL AND FACILITIES; ASSURING 
                   ADEQUATE CHOICE OF HEALTH CARE PROFESSIONALS.

       ``A managed care group health plan (and a health insurance 
     issuer offering managed care group health insurance coverage) 
     shall comply with regulations promulgated by the Secretary 
     that ensure that such plans and issuers--
       ``(1) have a sufficient number and type of primary care 
     practitioners and specialists, throughout the service area to 
     meet the needs of enrollees and to provide meaningful choice;
       ``(2) maintain a mix of primary care practitioners that is 
     adequate to meet the needs of the enrollees' varied 
     characteristics, including age, gender, race, and health 
     status; and
       ``(3) include, to the extent possible, a variety of primary 
     care providers (including community health centers, rural 
     health clinics, and family planning clinics).

     ``SEC. 2772. ACCESS TO SPECIALTY CARE.

       ``A managed care group health plan (and a health insurance 
     issuer offering managed care group health insurance coverage) 
     shall comply with regulations promulgated by the Secretary 
     that ensure that such plans and issuers provide enrollees 
     with--
       ``(1) access to specialty care;
       ``(2) standing referrals to specialists;
       ``(3) access to nonparticipating providers;
       ``(4) direct access (without the need for a referral) to 
     health care professionals trained in obstetrics and 
     gynecology; and
       ``(5) a process that permits a health care provider trained 
     in obstetrics and gynecology to be designated and treated as 
     a primary care practitioner.

     ``SEC. 2773. ACCESS TO EMERGENCY CARE.

       ``(a) In General.--If a group health plan or health 
     insurance coverage provides any benefits with respect to 
     emergency services (as defined in subsection (b)(1)), the 
     plan or the health insurance issuer offering such coverage 
     shall--
       ``(1) provide for emergency services without regard to 
     prior authorization or the emergency care provider's 
     contractual relationship with the organization; and
       ``(2) comply with such guidelines as the Secretary of 
     Health and Human Services may prescribe relating to promoting 
     efficient and timely coordination of appropriate maintenance 
     and post-stabilization care of an enrollee after the enrollee 
     has been determined to be stable under section 1867 of the 
     Social Security Act.
       ``(b) Definition of Emergency Services.--In this 
     subsection--
       ``(1) In general.--The term `emergency services' means, 
     with respect to an enrollee under a plan or coverage, 
     inpatient and outpatient services covered under the plan or 
     coverage that--
       ``(A) are furnished by a provider that is qualified to 
     furnish such services under the plan or coverage, and
       ``(B) are needed to evaluate or stabilize an emergency 
     medical condition (as defined in subparagraph (B)).
       ``(2) 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--
       ``(A) placing the health of the individual (or, with 
     respect to a pregnant woman, the health of the woman or her 
     unborn child) in serious jeopardy,
       ``(B) serious impairment to bodily functions, or
       ``(C) serious dysfunction of any bodily organ or part.

     ``SEC. 2774. COVERAGE FOR INDIVIDUALS PARTICIPATING IN 
                   APPROVED CLINICAL TRIALS.

       ``(a) In General.--If a group health plan provides 
     benefits, or a health insurance issuer offers health 
     insurance coverage to, a qualified enrollee (as defined in 
     subsection (b)), the plan or 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 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 a plan or 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 plan or 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 by the Food and Drug 
     Administration or 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. 2775. CONTINUITY OF CARE.

       ``A managed care group health plan (and a health insurance 
     issuer offering managed care group health insurance coverage) 
     shall comply with regulations promulgated by the Secretary 
     that ensure that such plans and issuers provide continuity of 
     coverage in the case of the terminated coverage where an 
     enrollee is undergoing a course of treatment with the 
     provider at the time of such termination.

     ``SEC. 2776. 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 group health plan or health insurance issuer 
     (offering health insurance coverage in connection with a 
     group health plan) 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' has the meaning 
     given such term by the Secretary.

     ``SEC. 2777. ACCESS TO NEEDED PRESCRIPTION DRUGS.

       ``If a group health plan, or 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 plan or issuer 
     shall ensure in accordance with regulations of the Secretary 
     that--
       ``(1) the nature of the formulary restrictions is fully 
     disclosed to enrollees; and
       ``(2) exceptions from the formulary restriction are 
     provided when medically necessary or appropriate.

   ``Subpart 2--Utilization Review, Grievance, Appeals, and Quality 
                              Improvement

     ``SEC. 2779. STANDARDS FOR UTILIZATION REVIEW ACTIVITIES, 
                   COMPLAINTS, AND APPEALS.

       ``A group health plan and a health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan shall comply with standards established by the 
     Secretary relating to its conduct of utilization review 
     activities. Such standards shall include the following:
       ``(1) A requirement that a plan or issuer develop written 
     policies and criteria concerning utilization review 
     activities.
       ``(2) A requirement that a plan or issuer provide notice of 
     such policies and criteria and the written notice of adverse 
     determinations.
       ``(3) A restriction on the use of contingent compensation 
     arrangements with providers.
       ``(4) A requirement establishing deadlines to ensure timely 
     utilization review determinations.
       ``(5) The establishment of an adequate process for filing 
     complaints, and appealing decisions, concerning utilization 
     review determinations, including the mandatory use of an 
     outside review panel to make decisions on such appeals.
       ``(6) A requirement that a plan or issuer that utilizes 
     clinical practice guidelines uniformly apply review criteria 
     that are based on sound scientific principles and the most 
     recent medical evidence.

     ``SEC. 2780. QUALITY IMPROVEMENT PROGRAM.

       ``(a) In General.--A group health plan and health insurance 
     issuer offering health insurance coverage shall make 
     arrangements for an ongoing quality improvement program for 
     health care services it provides to enrollees. Such a program 
     shall meet standards established by the Secretary, including 
     standards relating to--
       ``(1) the measurement of health outcomes relevant to all 
     populations, including women;
       ``(2) evaluation of high risk services;
       ``(3) monitoring utilization of services;
       ``(4) ensuring appropriate action to improve quality of 
     care; and
       ``(5) providing for an independent external review of the 
     program.

[[Page S12303]]

                     ``Subpart 3--Nondiscrimination

     ``SEC. 2784. NONDISCRIMINATION.

       ``(a) Enrollees.--A group health plan or health insurance 
     issuer offering health insurance coverage (whether or not a 
     managed care plan or coverage) may not discriminate or engage 
     (directly or through contractual arrangements) in any 
     activity, including the selection of service area, that has 
     the effect of discriminating against an individual on the 
     basis of race, culture, national origin, gender, sexual 
     orientation, language, socioeconomic status, age, disability, 
     genetic makeup, health status, payer source, or anticipated 
     need for healthcare services.
       ``(b) Providers.--Such a plan or issuer may not 
     discriminate in the selection of members of the health 
     provider or provider network (and in establishing the terms 
     and conditions for membership in the network) of the plan or 
     coverage based on any of the factors described in subsection 
     (a).
       ``(c) Services.--Such a plan or issuer may not exclude 
     coverage (including procedures and drugs) if the effect is to 
     discriminate in violation of subsection (a) or (b).

                      ``Subpart 4--Confidentiality

     ``SEC. 2785. MEDICAL RECORDS AND CONFIDENTIALITY.

       ``A managed care group health plan (and a health insurance 
     issuer offering managed care group health insurance) shall--
       ``(1) establish written policies and procedures for the 
     handling of medical records and enrollee communications to 
     ensure enrollee confidentiality;
       ``(2) ensure the confidentiality of specified enrollee 
     information, including, prior medical history, medical record 
     information and claims information, except where disclosure 
     of this information is required by law; and
       ``(3) not release any individual patient record 
     information, unless such a release is authorized in writing 
     by the enrollee or otherwise required be law.

                        ``Subpart 5--Disclosures

     ``SEC. 2786. HEALTH PROSPECTUS; DISCLOSURE OF INFORMATION.

       ``(a) Disclosure.--Each group health plan, and each health 
     insurance issuer providing health insurance coverage, shall 
     provide to each enrollee at the time of enrollment and on an 
     annual basis, and shall make available to each prospective 
     enrollee upon request--
       ``(1) a prospectus that relates to the plan or coverage 
     offered and that meets the requirements of subsection (b); 
     and
       ``(2) additional information described in subsection (c).
       ``(b) Prospectus.--
       ``(1) In general.--Each prospectus under this subsection 
     for a plan or coverage--
       ``(A) shall contain the information described in paragraphs 
     (2) through (4) concerning the plan or coverage,
       ``(B) shall contain such additional information as the 
     Secretary deems appropriate, and
       ``(C) shall be no longer than 3 pages in length and in a 
     format specified by the Secretary, for purposes of comparison 
     by prospective enrollees.
       ``(2) Qualitative information.--The information described 
     in this paragraph is a summary of the quality assessment data 
     on the plan or coverage. The data shall--
       ``(A) be the similar to the types of data as are collected 
     for managed care plans under title XVIII of the Social 
     Security Act, as determined by the Secretary and taking into 
     account differences between the populations covered under 
     such title and the populations covered under this title;
       ``(B) be collected by independent, auditing agencies;
       ``(C) include--
       ``(i) a description of the types of methodologies 
     (including capitation, financial incentive or bonuses, fee-
     for-service, salary, and withholds) used by the plan or 
     issuer to reimburse physicians, including the proportions of 
     physicians who have each of these types of arrangements; and
       ``(ii) cost-sharing requirements for enrollees.
     The information under subparagraph (C) shall include, upon 
     request, information on the reimbursement methodology used by 
     the plan or issuer or medical groups for individual 
     physicians, but do not require the disclosure of specific 
     reimbursement rates.
       ``(3) Quantitative information.--The information described 
     in this paragraph is measures of performance of the plan or 
     issuer (in relation to coverage offered) with respect to each 
     of the following and such other salient data as the Secretary 
     may specify:
       ``(A) The ratio of physicians to enrollees, including the 
     ratio of physicians who are obstetrician/gynecologists to 
     adult, female enrollees.
       ``(B) The ratio of specialists to enrollees.
       ``(C) The incentive structure used for payment of primary 
     care physicians and specialists.
       ``(D) Patient outcomes for procedures, including procedures 
     specific to female enrollees.
       ``(E) The number of grievances filed under the plan or 
     coverage.
       ``(F) The number of requests for procedures for which 
     utilization review board review or approval is required and 
     the number (and percentage) of such requests that are denied.
       ``(G) The number of appeals filed from denial of such 
     requests and the number (and percentage) of such appeals that 
     are approved, such numbers and percentages broken down by 
     gender of the enrollee involved.
       ``(H) Disenrollment data.
       ``(4) Description of benefits.--The information described 
     in this paragraph is a description of the benefits provided 
     under the plan or coverage, as well as explicit exclusions, 
     including a description of the following:
       ``(A) Coverage policy with respect to coverage for female-
     specific benefits, including screening mammography, hormone 
     replacement therapy, bone density testing, osteoporosis 
     screening, maternity care, and reconstructive surgery 
     following a mastectomy.
       ``(B) The costs of copayments for treatments, including any 
     exceptions.
       ``(c) Additional Information.--The additional information 
     described in this subsection is information about each of the 
     following:
       ``(1) The plan's or issuer's structure and provider 
     network, including the names and credentials of physicians in 
     the network.
       ``(2) Coverage provided and excluded, including out-of-area 
     coverage.
       ``(3) Procedures for utilization management.
       ``(4) Procedures for determining coverage for 
     investigational or experimental treatments as well as 
     definitions for coverage terms.
       ``(5) Any restrictive formularies or prior approval 
     requirements for obtaining prescription drugs, including, 
     upon request, information on whether or not specific drugs 
     are covered.
       ``(6) Use of voluntary or mandatory arbitration.
       ``(7) Procedures for receiving emergency care and out-of-
     network services when those services are not available in the 
     network and information on the coverage of emergency 
     services, including--
       ``(A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       ``(B) the process and procedures for obtaining emergency 
     services; and
       ``(C) the locations of (i) emergency departments, and (ii) 
     other settings, in which physicians and hospitals provide 
     emergency services and post-stabilization care.
       ``(8) How to contact agencies that regulate the plan or 
     issuer.
       ``(9) How to contact consumer assistance agencies, such as 
     ombudsmen programs.
       ``(10) How to obtain covered services.
       ``(11) How to receive preventive health services and health 
     education.
       ``(12) How to select providers and obtain referrals.
       ``(13) How to appeal health plan decisions and file 
     grievances.
       ``(d) State Authority to Require Additional Information.--
       ``(1) In general.--Subject to paragraph (2), this section 
     shall not be construed as preventing a State from requiring 
     health insurance issuers, in relation to their offering of 
     health insurance coverage, to disclose separately information 
     (including comparative ratings of health insurance coverage) 
     in addition to the information required to be disclosed under 
     this section.
       ``(2) Continued preemption with respect to group health 
     plans.--Nothing in this part shall be construed to affect or 
     modify the provisions of section 514 with respect to group 
     health plans.

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

     ``SEC. 2787. PROMOTING GOOD MEDICAL PRACTICE.

       ``(a) Prohibiting Arbitrary Limitations or Conditions for 
     the Provision of Services.--A group health plan and 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 or appropriate to the extent that such 
     procedure or treatment is otherwise a covered benefit.
       ``(b) 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.''.
       TITLE II--APPLICATION OF BILL OF RIGHTS UNDER VARIOUS LAWS

     SEC. 201. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

       (a) Application to Group Health Insurance Coverage.--
     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. MANAGED CARE REQUIREMENTS.

       ``Each health insurance issuer shall comply with the 
     applicable requirements under part C with respect to group 
     health insurance coverage it offers.''.
       (b) 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. MANAGED CARE REQUIREMENTS.

       ``Each health insurance issuer shall comply with the 
     applicable requirements under part C with respect to 
     individual health insurance coverage it offers, in the same 
     manner as such requirements apply to group health insurance 
     coverage.''.
       (c) Modification of Preemption Standards.--
       (1) Group health insurance coverage.--Section 2723 of such 
     Act (42 U.S.C. 300gg-23) is amended--

[[Page S12304]]

       (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 Managed Care 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 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 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 Managed Care 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 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.''.
       (d) 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''.
       (e) Assuring Coordination.--Section 104(1) of the Health 
     Insurance Portability and Accountability Act of 1996 (Public 
     Law 104-191) is amended by striking ``under this subtitle 
     (and the amendments made by this subtitle and section 401)'' 
     and inserting ``title XXVII of the Public Health Service Act, 
     under part 7 of subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974, and chapter 100 of 
     the Internal Revenue Code of 1986''.

     SEC. 202. MANAGED CARE REQUIREMENTS 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. MANAGED CARE REQUIREMENTS.

       ``(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 applicable 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.''.
       (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 Managed Care 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. Managed care requirements.''.

     SEC. 203. MANAGED CARE REQUIREMENTS UNDER THE INTERNAL 
                   REVENUE CODE OF 1986.

       (a) In General.--Subchapter B of part 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. 9813. MANAGED CARE REQUIREMENTS.

       ``(a) In General.--Subject to subsection (b), a group 
     health plan shall comply with the applicable requirements of 
     part C of title XXVII of the Public Health Service Act.
       ``(b) References in Application.--In applying subsection 
     (a) under this subchapter, any reference in such part C--
       ``(1) to the Secretary is deemed a reference to the 
     Secretary of the Treasury; and
       ``(2) to an applicable State authority is deemed a 
     reference to the Secretary.''.
       (b) Clerical Amendment.--The table of sections in 
     subchapter B of chapter 100 of such Code is amended by 
     inserting after the item relating to section 9812 the 
     following new item:

``Sec. 9813. Managed care requirements.''.

     SEC. 204. MANAGED CARE REQUIREMENTS UNDER MEDICARE, MEDICAID, 
                   AND THE FEDERAL EMPLOYEES HEALTH BENEFITS 
                   PROGRAM (FEHBP).

       (a) Medicare.--Section 1852 of the Social Security Act (42 
     U.S.C. 1395w-22), as inserted by section 4001 of the Balanced 
     Budget Act of 1997 (Public Law 101-33), is amended by adding 
     at the end the following new subsection:
       ``(l) Managed Care Requirements.--Each Medicare+Choice 
     organization that offers a Medicare+Choice plan described in 
     section 1851(a)(1)(A) shall comply with the applicable 
     requirements of part C of title XXVII of the Public Health 
     Service Act in the same manner as such requirements apply 
     with respect to health insurance coverage offered by a health 
     insurance issuer, except to the extent such requirements are 
     less protective of enrollees than the requirements 
     established under this part.''.
       (b) Medicaid.--Section 1932(b)(8) of the Social Security 
     Act, as added by section 4704(a) of the Balanced Budget Act 
     of 1997, is amended--
       (1) by striking ``and mental health'' and inserting ``, 
     mental health, and managed care'',
       (2) by inserting ``and of part C'' after ``of part A'', and
       (3) by inserting before the period at the end the 
     following: ``, except to the extent such requirements are 
     less protective of enrollees than the requirements 
     established under this title''.
       (c) Federal Employees' Health Benefits Program (FEHBP).--
     Chapter 89 of title 5, United States Code, is amended--
       (1) by inserting after the item relating to section 8905a 
     the following new section:

     ``Sec. 8905b. Application of managed care requirements

       ``Each health benefit plan offered under this chapter shall 
     comply with the applicable requirements of part C of title 
     XXVII of the Public Health Service Act in the same manner as 
     such requirements apply with respect to health insurance 
     coverage offered by a health insurance issuer, except to the 
     extent such requirements are less protective of enrollees 
     than the requirements established under this chapter.''; and
       (2) in the table of sections, by inserting the following 
     item after the item relating to section 8905a:

``8905b.   Application of managed care requirements.''.

     SEC. 205. EFFECTIVE DATES.

       (a) General Effective Date for Group Health Plans.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by section 101, subsections (a), (c)(1), and (d) of 
     section 201, and sections 203 and 204 shall apply with 
     respect to group health insurance coverage for group health 
     plan years beginning on or after July 1, 1998 (in this 
     section referred to as the ``general effective date'') and 
     also shall apply to portions of plan years occurring on and 
     after January 1, 1999.
       (2) Treatment of group health plans maintained pursuant to 
     certain collective bargaining agreements.--In the case of a 
     group health plan, or 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 
     described in paragraph (1) 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 such amendments shall not be treated as 
     a termination of such collective bargaining agreement.
       (b) General Effective Date for Health Insurance Coverage.--
     The amendments made by section 101 and subsections (b), 
     (c)(2), and (d) of section 201 shall apply with respect to 
     individual health insurance coverage offered, sold, issued, 
     renewed, in effect, or operated in the individual market on 
     or after the general effective date.
       (c) Effective Date for Coordination.--The amendment made by 
     section 201(e) shall take effect on the date of the enactment 
     of this Act.
       (d) Federal Programs.--The amendments made by section 204 
     shall take effect on January 1, 1999.
                                 ______