Congressional Record, Volume 144 Issue 96 (Friday, July 17, 1998)

[Congressional Record Volume 144, Number 96 (Friday, July 17, 1998)]
[Senate]
[Pages S8482-S8512]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. BRYAN (for himself and Mr. McCain):
S. 2326. A bill to require the Federal Trade Commission to prescribe
regulations to protect the privacy of personal information collected
from and about children on the Internet, to provide greater parental
control over the collection and use of that information, and for other
purposes; to the Committee on Commerce, Science, and Transportation.

the children's online privacy protection act of 1998

Mr. BRYAN. Mr. President, today the chairman of the Senate Commerce
Committee and I are introducing ``the Children's Online Privacy
Protection Act of 1998.'' Commercial Web sites are currently collecting
and disseminating personal information collected from children that may
compromise their safety and most certainly invades their privacy. This
legislation will ensure that commercial Web sites that collect and use
personal information from children will have safeguards in place to
protect you and your family.
The Internet is quickly becoming an significant force in the lives of
our children as it moves swiftly into homes and classrooms around the
country. Currently more than 3 million children under the age of 18 are
online and the number is expected to grow to 15 million by the turn of
the century.
I think all would agree that proficiency with the Internet is a
critical and vital skill that will be necessary for academic
achievement in the next century. The benefits of the Internet are
extraordinary. Reference information such as news, weather, sports,
stock quotes, movie reviews, encyclopedia and online airline fares are
readily available. Users can conduct transactions such as stock
trading, make travel arrangements, bank, and shop online.
Millions of people communicate through electronic mail to family and
friends around the world, and others use the public message boards to
make new friends and share common interests. As an educational and
entertainment tool, users can learn about virtually any topic or take a
college course.
Unfortunately, the same marvelous advances in computer and
telecommunication technology that allow our children to reach out to
new resources of knowledge and cultural experiences are also leaving
them unwittingly vulnerable to exploitation and harm by deceptive
marketers and criminals.
Earlier this spring, I held several meetings in Nevada with educators
and parents' representatives to alert them of some of the deceptive
practices found on the Internet. Representatives of the FBI and Federal
Trade Commission informed Nevadans about some of the Internet's
pitfalls. I found it extremely informative and enlightening and to some
extent frightening.
You may be startled to learn what information other people are
collecting about you and your family may have a profound impact upon
their privacy and, indeed, their safety.

Once what may seem to be harmless information has made its way onto
the Internet, there is no way of knowing what uses may be put to that
information.
Senator McCain and I wrote to the FTC asking them to investigate
online privacy issues. Recently, the FTC completed the survey of a
number of web sites and found that 89 percent of children's sites
collect personal information from children, and less than 10 percent of
the sites provide for parental control over the collection and use of
this personal information.
I was, frankly, surprised to learn the kinds of information these web
sites are collecting from our children. Some were asking where the
child went to school, what sports he or she liked, what siblings they
had, their pet's name, what kind of time they had after school alone
without the supervision of parents.
Others were collecting personal financial information like what the
family income was, does the family own stocks or certificates of
deposit, did their grandparents give them any financial gifts?
Web sites were using games, contests, and offers of free merchandise
to entice children to give them exceedingly personal and private
information about themselves and their families. Some even used cartoon
characters who asked children for personal information, such as a
child's name and address and e-mail address, date of birth, telephone
number, and Social Security number.

[[Page S8483]]

Much of this information appears to be harmless, but companies are
attempting to build a wealth of information about you and your family
without an adult's approval--a profile that will enable them to target
and to entice your children to purchase a range of products.
The Internet gives marketers the capability of interacting with your
children and developing a relationship without your knowledge.
Where can this interactive relationship go? Will your child be
receiving birthday cards and communications with online cartoon
characters for particular products?
Senator McCain and I believe there must be safeguards against the
online collecting of information from children without a parent's
knowledge or consent. If a child answers a phone and starts answering
questions, a parent automatically becomes suspicious and asks who they
are talking to. When a child is on the Internet, parents often have no
knowledge of whom their child is interacting.
That is why we are introducing legislation that would require the FTC
to come up with rules to govern these kind of activities. The FTC's
rules would require commercial web sites to:
(1) Provide notice of its personal information collection and use
practices;
(2) Obtain parental consent for the collection, use or disclosure of
personnel information from children 12 and under;
(3) Provide parents with an opportunity to opt-out of the collection
and/or use of personal information collected from children 13 to 16;
(4) Provide parents access to his or her child's personal
information;
(5) Establish and maintain reasonable procedures to ensure the
confidentiality, security, accuracy, and integrity of personal
information on children.
The FTC must come up with these rules within 1 year. The FTC may
provide incentives for industry self-regulatory efforts including safe
harbors for industry created guidelines. The bill permits States'
attorneys general to enforce the act.
I believe these represent reasonable steps we should take to protect
our privacy. Although time is short in this session, I hope we can find
a way to enact these commonsense proposals this Congress.
Most people who use online services have positive experiences. The
fact that deceptive acts may be committed on the Internet, is not a
reason to avoid using the service. To tell children to stop using the
Internet would be like telling them to forgo attending college because
students are sometimes victimized on campus. A better strategy is for
children to learn how to be street smart in order to better safeguard
themselves from potentially deceptive situations.
The Internet offers unlimited potential for assisting our child's
growth and development. However, we must not send our children off on
this adventure without proper guidance and supervision.
Mr. President, in my judgment, the legislation offered today by the
senior Senator from Arizona and I provides those reasonable guidelines.
I hope colleagues will join with me in making sure this legislation is
enacted in this situation.
______

By Mr. COATS (for himself and Mr. Lieberman):
S. 2327. A bill to provide grants to grassroots organizations in
certain cities to develop youth intervention models; to the Committee
on the Judiciary.

national youth crime prevention demonstration act

Mr. COATS. Mr. President, America currently struggles with a
disturbing and growing trend of youth violence. Between 1985 and 1994,
the arrest rate for murders by juveniles increased 150 percent, while
the rate for adults during this time increased 11 percent. Every day,
in our communities and in the media, we see horrific examples of this
crime. A 13-year-old girl murders her 3-year-old nephew and dumps him
in the trash. A 13-year-old boy is stabbed to death while sitting on
his back porch. A group of teenagers hails a cab and, after the driver
takes them to their destination, they shoot him dead in an armed
robbery.
I did not have to look far for these examples. Each occurred in
Indiana, a State generally known as a safe State, a good place to raise
a family, not a dangerous place, yet a State where arrests for violent
juvenile crimes have skyrocketed 19 percent in the early 1990's.
Juvenile violence is no longer a stranger in any ZIP code.
Yet, the problem is expected to grow worse. Crime experts who study
demographics warn of a coming crime wave based on the number of
children who currently are younger than 10 years old. These experts
warn that if current trends are not changed, we might someday look back
at our current juvenile crime epidemic as ``the good old days.'' This
spiraling upward trend in youth crime and violence is cause for grave
concern. So one might ask, what is driving this epidemic?
Over 30 years ago, our colleague Daniel Patrick Moynihan, then an
official in the Johnson administration, wrote that when a community's
families are shattered, crime, violence and rage ``are not only to be
expected, they are virtually inevitable.'' He wrote those words in
1965. Since then, arrests of violent juvenile criminals have tripled.
Last Congress, the Subcommittee on Children and Families, which I
chair, held a hearing about the role of government in combating
juvenile crime. The experts were clear: while government efforts are
important, they are also fundamentally limited and incomplete.
Government is ultimately powerless to form the human conscience that
chooses between right and wrong.
Locking away juveniles might prevent them from committing further
crimes, but it does not address the fact that violence is symptomatic
of a much deeper, moral and spiritual void in our Nation. In the battle
against violent crime, solid families are America's strongest line of
defense. But government can be an effective tool if it joins private
institutions (families, churches, schools, community groups, and non-
profit organizations) in preventing and confronting juvenile crime with
the moral ideals that defeat despair and nurture lives.
Today, I rise to introduce the National Youth Crime Prevention Act
which will empower local communities to address the rising trend in
youth violence. Specifically, this legislation authorizes the Attorney
General to award $5 million annually for five years to the National
Center for Neighborhood Enterprise to conduct national demonstration
projects in eight cities. These projects would aim to end youth crime,
violence and family disintegration by building neighborhood capacity
and linking proven grassroots organizations within low-income
neighborhoods with sources from the public sector, including local
housing authorities, law enforcement agencies, and other public
entities. The demonstration projects will take place in Washington, DC;
Detroit, Michigan; Hartford, Connecticut; Indianapolis, Indiana;
Chicago, Illinois; San Antonio, Texas; Dallas, Texas; and Los Angeles,
California.

With these funds, the National Center for Neighborhood Enterprise
will work with the grassroots organizations in the demonstration cities
to establish Violence Free Zone Initiatives. These initiatives would
involve successful youth intervention models in partnership with law
enforcement, local housing authorities, private foundations, and other
public and private partners. To be eligible for the grants, the
nonprofit organizations within the demonstration cities must have
experience in crime prevention and youth mediation projects and must
have a history of cultivating cooperative relationships with other
local organizations, housing facilities and law enforcement agencies.
Funds may be used for youth mediation, youth mentoring, life skills
training, job creation and entrepreneurship, organizational development
and training, development of long-term intervention plans,
collaboration with law enforcement, comprehensive support services,
local agency partnerships and activities to further community
objectives in reducing youth crime and violence.
The success of this approach has already been demonstrated. Last
year, The National Center for Neighborhood Enterprise assisted The
Alliance for Concerned Men in creating a ``Violence Free Zone'' in
Benning Terrace in Southeast DC. The Alliance of Concerned Men brokered
peace treaties among the gangs that inhabit, and frequently dominate,
the city's public

[[Page S8484]]

housing complexes. Benning Terrace in Southeast Washington, known to
the DC police department as one of the most dangerous areas of the
city, has not had a single murder since the Alliance's peace treaty
went into effect early last year. Subsequently, the National Center for
Neighborhood Enterprise brought the Alliance, the youths, and the DC
Housing Receiver together to develop and implement a plan for jobs and
life skills training for the young people and the community itself.
Grassroots organizations are the key to implementing the most
effective innovative strategies to address community problems. Their
efforts help restore hardpressed inner-city neighborhoods by developing
the social, human and economic capital that is key to real, long-term
renewal of urban communities. The National Youth Crime Prevention
Demonstration Act will provide critical assistance to our Nation's
inner-cities as they combat the rising trend in youth violence by
linking proven grassroots organizations with established public sector
entities.
Mr. President, I urge my colleagues to support this important
legislation, and I ask unanimous consent that the text of the National
Youth Crime Prevention Demonstration Act be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 2327

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``National Youth Crime
Prevention Demonstration Act''.

SEC. 2. PURPOSES.

The purposes of this Act are as follows:
(1) To establish a demonstration project that establishes
violence-free zones that would involve successful youth
intervention models in partnership with law enforcement,
local housing authorities, private foundations, and other
public and private partners.
(2) To document best practices based on successful
grassroots interventions in cities, including Washington,
District of Columbia; Boston, Massachusetts; Hartford,
Connecticut; and other cities to develop methodologies for
widespread replication.
(3) To increase the efforts of the Department of Justice,
the Department of Housing and Urban Development, and other
agencies in supporting effective neighborhood mediating
approaches.

SEC. 3. ESTABLISHMENT OF NATIONAL YOUTH CRIME PREVENTION
DEMONSTRATION PROJECT.

The Attorney General shall, subject to appropriations,
award a grant to the National Center for Neighborhood
Enterprise (referred to in this Act as the ``National
Center'') to enable the National Center to award grants to
grassroots entities in the following 8 cities:
(1) Washington, District of Columbia.
(2) Detroit, Michigan.
(3) Hartford, Connecticut.
(4) Indianapolis, Indiana.
(5) Chicago (and surrounding metropolitan area), Illinois.
(6) San Antonio, Texas.
(7) Dallas, Texas.
(8) Los Angeles, California.

SEC. 4. ELIGIBILITY.

(a) In General.--To be eligible to receive a grant under
this Act, a grassroots entity referred to in section 3 shall
submit an application to the National Center to fund
intervention models that establish violence-free zones.
(b) Selection Criteria.--In awarding grants under this Act,
the National Center shall consider--
(1) the track record of a grassroots entity and key
participating individuals in youth group mediation and crime
prevention;
(2) the engagement and participation of a grassroots entity
with other local organizations; and
(3) the ability of a grassroots entity to enter into
partnerships with local housing authorities, law enforcement
agencies, and other public entities.

SEC. 5. USES OF FUNDS.

(a) In General.--Funds received under this Act may be used
for youth mediation, youth mentoring, life skills training,
job creation and entrepreneurship, organizational development
and training, development of long-term intervention plans,
collaboration with law enforcement, comprehensive support
services and local agency partnerships, and activities to
further community objectives in reducing youth crime and
violence.
(b) Guidelines.--The National Center will identify local
lead grassroots entities in each designated city which
include the Alliance of Concerned Men of Washington in the
District of Columbia; the Hartford Youth Peace Initiative in
Hartford, Connecticut; the Family Help-Line in Los Angeles,
California; the Victory Fellowship in San Antonio, Texas; and
similar grassroots entities in other designated cities.
(c) Technical Assistance.--The National Center, in
cooperation with the Attorney General, shall also provide
technical assistance for startup projects in other cities.

SEC. 6. REPORTS.

The National Center shall submit a report to the Attorney
General evaluating the effectiveness of grassroots agencies
and other public entities involved in the demonstration
project.

SEC. 7. DEFINITIONS.

For purposes of this Act--
(1) the term ``grassroots entity'' means a not-for-profit
community organization with demonstrated effectiveness in
mediating and addressing youth violence by empowering at-risk
youth to become agents of peace and community restoration;
and
(2) the term ``National Center for Neighborhood
Enterprise'' is a not-for-profit organization incorporated in
the District of Columbia.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated to
carry out this Act--
(1) $5,000,000 for fiscal year 1999;
(2) $5,000,000 for fiscal year 2000;
(3) $5,000,000 for fiscal year 2001;
(4) $5,000,000 for fiscal year 2002; and
(5) $5,000,000 for fiscal year 2003.
(b) Reservation.--The National Center for Neighborhood
Enterprise may use not more than 20 percent of the amounts
appropriated pursuant to subsection (a) in any fiscal year
for administrative costs, technical assistance and training,
comprehensive support services, and evaluation of
participating grassroots organizations.
______

By Mr. JEFFORDS (for himself, Mr. Bingaman, and Mr. Graham):
S. 2329. A bill to amend the Internal Revenue Code of 1986 to enhance
the portability of retirement benefits, and for other purposes; to the
Committee on Finance.

the retirement portability account (rap) act.

Mr. JEFFORDS. Mr. President, today I am introducing S. 2329, the
Retirement Portability Account (RAP) Act. This bill is a close
companion to H.R. 3503 introduced by our colleagues Earl Pomeroy of
North Dakota and Jim Kolbe of Arizona earlier this year. In addition,
it contains certain elements of H.R. 3788, the Portman-Cardin bill,
which relate to increased pension portability. Generally this bill is
intended to be a further iteration of the concepts embodied in both of
those bills. It standardizes the rules in the Internal Revenue Code
(IRC) which regulate how portable a worker's retirement savings account
is, and while it does not make portability of pension benefits perfect,
it greatly improves the status quo. Consistent with ``greatly improving
the status quo'', this bill contains no mandates. No employer will be
``required'' to accept rollovers from other plans. A rollover will
occur when the employee offers, and the employer agrees to accept, a
rollover from another plan.
Under current law, it is not possible for an individual to move an
accumulated retirement savings account from a section 401(k) (for-
profit) plan to a section 457 (state and local government) deferred
compensation plan, to an Individual Retirement Account (IRA), then to a
section 403(b) (non-profit organization) plan and ultimately back into
a section 401(k) plan, without violating various restrictions on the
movement of their money. The RAP Act will make it possible for workers
to take their retirement savings with them when they change jobs
regardless of the type of employer for which they work.
This bill will also help make IRAs more portable and will improve the
uses of conduit IRAs. Conduit IRAs are individual retirement accounts
to which certain distributions from a qualified retirement plan or from
another individual retirement account have been transferred. RAP
changes the rules regulating these IRAs so that workers leaving the
for-profit, non-profit or governmental field can use a conduit IRA as a
parking spot for a pre-retirement distribution. These special accounts
are needed by many workers until they have another employer-sponsored
plan in which to rollover their savings.
In many instances, this bill will allow an individual to rollover an
IRA consisting exclusively of tax-deductible contributions into a
retirement plan at his or her new place of employment, thus helping the
individual consolidate retirement savings in a single account. Under
certain circumstances, the RAP Act will also allow workers to rollover
any after-tax contributions made at his or her previous workplace, into
a new retirement plan.

[[Page S8485]]

Current law requires a worker who changes jobs to face a deadline of
60 days within which to roll over any retirement savings benefits
either into an Individual Retirement Account, or into the retirement
plan of his or her new employer. Failure to meet the deadline can
result in both income and excise taxes being imposed on the account. We
believe that this deadline should be waived under certain circumstances
and we have outlined them in the bill. Consistent with the Pomeroy-
Kolbe bill, in case of a Presidentially-declared natural disaster or
military service in a combat zone, the Treasury Department will have
the authority to disallow imposition of any tax penalty for the account
holder. Consistent with the additional change proposed by the Portman-
Cardin bill, however, we have included a waiver of tax penalties in the
case of undue hardship, such as a serious personal injury or illness
and we have given the Department of the Treasury the authority to waive
this deadline, as well.
The Retirement Account Portability bill will also change two
complicated rules which harm both plan sponsors and plan participants;
one dealing with certain business sales (the so-called ``same desk''
rule) and the other dealing with retirement plan distribution options.
Each of these rules has impeded true portability of pensions and we
believe they ought to be changed.
In addition, this bill will extend the Pension Benefit Guaranty
Corporation's (PBGC) Missing Participant program to defined benefit
multiemployer pension plans. Under current law, the PBGC has
jurisdiction over both single-employer and multiemployer defined
benefit pension plans. A few years ago, the agency initiated a program
to locate missing participants from terminated, single-employer plans.
The program attempts to locate individuals who are due a benefit, but
who have not filed for benefits due to them, or who have attempted to
find their former employer but failed to receive their benefits. This
bill expands the missing participant program to multiemployer pension
plans.
I know of no reason why individuals covered by a multiemployer
pension plans should not have the same protections as participants of
single-employer pension plans and this change will help more former
employees receive all the benefits to which they are entitled. This
bill does not expand the missing participants program to defined
contribution plans. Supervision of defined contribution plans is
outside the statutory jurisdiction of the PBGC and I have not heard
strong arguments for including those plans within the jurisdiction of
the agency.
In a particularly important provision, the Retirement Account
Portability bill will allow public school teachers and other state and
local employees who move between different states and localities to use
their savings in their section 403(b) plan or section 457 deferred
compensation arrangement to purchase ``service credit'' in the plan in
which they are currently participating, and thus obtain greater pension
benefits in the plan in which they conclude their career. However, the
bill does not allow the use of a lump sum cash-out from a defined
benefit plan to be rolled over to a section 403(b) or section 457 plan.
As a final note, this bill, this bill does not reduce the vesting
schedule from the current five year cliff vesting (or seven year
graded) to a three year cliff or six year graded vesting schedule. I am
not necessarily against the shorter vesting schedules, but I feel that
this abbreviated vesting schedule makes a dramatic change to tax law
without removing some of the disincentives to maintaining a pension
plan that businesses--especially small businesses--desperately need.
Mr. President, I ask unanimous consent that a summary of the bill be
printed in the Record.
There being no objection, the summary was ordered to be printed in
the Record, as follows:

Increasing Portability for Pension Plan Participants: Facilitating
Rollovers

Under current law, an ``eligible rollover distribution''
may be either (1) rolled over by the distributee into an
``eligible retirement plan'' if such rollover occurs within
60 days of the distribution, or (2) directly rolled over by
the distributing plan to an ``eligible retirement plan.'' An
``eligible rollover distribution'' does not include any
distribution which is required under section 401(a)(9) or any
distribution which is part of a series of substantially equal
periodic payments made for life, life expectancy or over a
period of ten years or more. An ``eligible retirement plan''
is another section 401 plan, a section 403(a) plan or an IRA.
(If the distributee is a surviving spouse of a participant,
``eligible retirement plans'' consist only of IRAs.) Under
these rules, for example, amounts distributed from a section
401(k) plan may not be rolled over to a section 403(b)
arrangement.
In the case of a section 403(b) arrangement, distributions
which would be eligible rollover distributions except for the
fact that they are distributed from a section 403(b)
arrangement may be rolled over to another section 403(b)
arrangement or an IRA. Under these rules, amounts distributed
from a section 403(b) may not be rolled over into a section
401(k) plan.
When an ``eligible rollover distribution'' is made, the
plan administrator must provide a written notice to the
distributee explaining the availability of a direct rollover
to another plan or an IRA, that failure to exercise that
option will result in 20% being withheld from the
distribution and that amounts not directly rolled over may be
rolled over by the distributee within 60 days.
Under ``conduit IRA'' rules, an amount may be rolled over
from a section 401 or 403(a) plan to an IRA and subsequently
rolled over to a section 401 or 403(a) plan if amounts in the
IRA are attributable only to rollovers from section 401 or
403(a) plans. Also under conduit IRA rules, an amount may be
rolled over from a section 403(b) arrangement to an IRA and
subsequently rolled over to a section 403(b) arrangement if
amounts in the IRA are attributable only to rollovers from
section 403(b) arrangements.
In the case of a section 457 deferred compensation plan,
distributions may not be rolled over by a distributee;
however, amounts may be transferred from one section 457 plan
to another section 457 plan without giving rise to income to
the plan participant.
A participant in a section 457 plan is taxed on plan
benefits that are not transferred when such benefits are paid
or when they are made available. In contrast, a participant
in a qualified plan or a section 403(b) arrangement is only
taxed on plan benefits that are actually distributed.
Under this proposal, ``eligible rollover distributions''
from a section 401 plan could be rolled over to another
section 401 plan, a section 403(a) plan, a section 403(b)
arrangement, a section 457 deferred compensation plan
maintained by a state or local government or an IRA.
Likewise, ``eligible rollover distributions'' from a section
403(b) arrangement could be rolled over to the same broad
array of plans and IRAs. Thus, an eligible rollover
distribution from a section 401(k) plan could be rolled over
to a section 403(b) arrangement and vice versa. (As under
current law, if the distributee is a surviving spouse of a
participant, the distribution could only be rolled over into
an IRA.)
Eligible rollover distributions from all section 457
deferred compensation plans could be rolled over to the same
broad array of plans and IRAs; however, the rules regarding
the mandatory 20% withholding would not apply to the section
457 plans. A section 457 plan maintained by a government
would be made an eligible retirement plan for purposes of
accepting rollovers from section 401(k), section 403(b) and
other plans.
The written notice required to be provided when an
``eligible rollover distribution'' is made would be expanded
to apply to section 457 plans and to include a description of
restrictions and tax consequences which will be different if
the plan to which amounts are transferred is a different type
of plan from the distribution plan.
Participants who mix amounts eligible for special capital
gains and averaging treatment with amounts not so eligible
would lose such treatment.
A participant in a section 457 plan would only be taxed on
plan benefits that are not transferred or rolled over when
they are actually paid.
These changes would take effect for distributions made
after December 31, 1998.
The reason for this expansion of current law rules
permitting rollovers is to allow plan participants to put all
of their retirement plan savings in one vehicle if they
change jobs. Given the increasing mobility of the American
workforce, it is important to make pension savings portable
for those who change employment. This proposal contains no
mandates requiring employers to accept rollovers from their
new employees. A rollover occurs when the employee makes an
offer to move his/her money and the employer accepts the
funds.
Because of the rule that taxes section 457 plan
participants on benefits made available, section 457 plans
cannot provide plan participants with the flexibility to
change benefit payments to fit their changing needs. There is
no policy justification for this lack of flexibility.

rollovers of individual retirement accounts to qualified plans

Under current law, a taxpayer is not permitted to roll
amounts held in an individual retirement account (IRA) (other
than a conduit IRA), to a section 401 plan, a 403(a) plan, a
403(b) arrangement or a section 457 deferred compensation
plan. Currently, the maximum direct IRA contribution is
$2,000. Since 1986, generally only individuals with income
below certain limits are able to fully deduct

[[Page S8486]]

IRA contributions. For others, IRA contributions have been
nondeductible or partially deductible in some or all years.
To the extent that IRA contributions are non-deductible, they
have ``basis'' which is not taxed the second time upon
distribution from the IRA. The burden of maintaining records
of IRA basis has been the taxpayer's, since only the taxpayer
has had the information to determine his or her basis at the
outset and as an ongoing matter.
IRAs are generally subject to different regulatory schemes
than other retirement savings plans, such as section 401(k)s
or section 457 deferred compensation plans, although the 10
percent tax penalty on early distributions applies to both
qualified plans and IRAs. For example, one cannot take a loan
from an IRA, although a recent change in law will make it
easier to make a penalty-free withdrawal from an IRA to
finance a first-time home purchase or higher-education
expenses.
Under the bill, rollovers of contributory IRAs would be
permitted if and only if the individual has never made any
nondeductible contributions to his or her IRA and has never
had a Roth IRA. The IRA may then be rolled over into a
section 401 plan, a section 403(a) plan, a 403(b) arrangement
or a section 457 deferred compensation plan. Since the vast
majority of IRAs contain only deductible contributions, this
change will allow many individuals to consolidate their
retirement savings into one account. For those who have both
nondeductible and deductible contributions, they may still
have two accounts, one containing the majority of funds
consolidated in one place and one containing the
nondeductible IRA contributions. Once IRA money is rolled
over into a plan however, the IRA contributions would become
plan money and subject to the rules of the plan except that
participants who mix amounts for special capital gains and
averaging treatment with amounts not so eligible would lose
such treatment. Employers will not be required to accept
rollovers for IRAs.
These changes would apply to distributions after December
31, 1998.
The reasons for this change is to take another step toward
increased portability of retirement savings. While this
proposal would not guarantee that all retirement savings
would be completely portable, it will increase the extent to
which such savings are portable and fungible. Other rules and
requirements affecting IRAs and their differences and
similarities to plan money will continue to be the subject of
Congressional scrutiny.

rollovers of after-tax contributions and rollovers not made within 60
days of receipt

Under current law, employees are allowed to make after-tax
contributions to IRAs, 401(k) plans, and other plans. They
are not permitted to roll over distributions of those after-
tax contributions to an IRA or another plan.
Rollovers from qualified plans to an IRA (or from an IRA to
another IRA) must occur within 60 days of the initial
distribution. Income tax withholding rules apply to certain
distributions that are not direct trustee-to-trustee
transfers from the qualified plan to an IRA or another plan.
The proposal would allow after-tax contributions to be
included in a rollover contribution to an IRA or other types
of retirement plans, but it does not require the receiving
trustee to track or report the basis. That requirement would
be the responsibility of the taxpayer, as in the case of
nondeductible IRA contributions.
The IRS is given the authority to extend the 60-day period
where the failure to comply with such requirements is
attributable to casualty, disaster or other events beyond the
reasonable control of the individual subject to such
requirements.
These changes would generally apply to distributions made
after December 31, 1998. The hardship exception to the 60-day
rollover period would apply to such 60-day periods expiring
after the date of enactment.
These changes are warranted because after-tax savings in
retirement plans enhance retirement security and are
particularly attractive to low and middle income taxpayers.
Allowing such distributions to be rolled over to an IRA or a
plan will increase the chances that those amounts would be
retained until needed for retirement.
Often individuals, particularly widows, widowers and
individuals with injuries of illnesses, miss the 60-day
window. In other instances, individuals miss the 60-day
rollover period because of the failure of third parties to
perform as directed. Finally, victims of casualty or natural
disaster should not be penalized. A failure to satisfy the
60-day rule, by even one day can result in catastrophic tax
consequences for a taxpayer that can include immediate
taxation of the individual's entire retirement savings (often
in a high tax bracket), a 10% early distribution tax, and a
substantial depletion of retirement savings. By giving the
IRS the authority to provide relief from the 60-day
requirement for failures outside the control of the
individual, the proposal would give individuals in these
situations the ability to retain their retirement savings in
an IRA or a qualified plan.

Treatment of Forms of Distribution

Under current law, section 411(d)(6), the ``anti-cutback''
rule generally provides that when a participant's benefits
are transferred from one plan to another, the transferee plan
must preserve all forms of distribution that were available
under the transferor plan.
Under this proposal, an employee may elect to waive his or
her section 411(d)(6) rights and transfer benefits from one
defined contribution plan to another defined contribution
plan without requiring the transferee plan to preserve the
optional forms of benefits under the transferor plan if
certain requirements are satisfied to ensure the protection
of participants' interests. This proposal would also apply to
plan mergers and other transactions having the effect of a
direct transfer, including consolidation of benefits
attributable to different employers within a multiple
employer plan.
These changes would apply to transfers after December 31,
1998.
The requirement that a defined contribution plan preserve
all forms of distribution included in transferor plans
significantly increases the cost of plan administration,
particularly for employers that make numerous business
acquisitions. The requirements also causes confusion among
plan participants who can have separate parts of their
retirement benefits subject to sharply different plan
provision and requirements. The increased cost for the plan
and the confusion for the participant brought about by the
requirement to preserve all forms of distribution are based
on a rule intended to protect a participant's right not to
have an arbitrary benefit reduction. The current rule sweeps
too broadly since it protects both significant and
insignificant rights. Where a participant determines the
rights to be insignificant and wants to consolidate his or
her retirement benefits, there is no reason not to permit his
consolidation. This consolidation increases portability and
reduces administrative costs.

Rationalization of Restrictions on Distributions, The ``Same Desk''
Rule

Generally, under current law, distributions from 401(k)
plans are limited to separation from service, death,
disability, age 59\1/2\, hardship, plan termination without
maintenance of another plan, and certain corporate
transactions. The term ``separation from service'' has been
interpreted to include a ``same desk'' rule. Under the ``same
desk'' rule, distributions to a terminated employee are not
permitted if the employee continues performing the same
functions for a successor employer (such as a joint venture
owned in part by the former employer or the buyer in a
business acquisition). The same desk rule also applies to
section 403(b) arrangements and section 457 plans, but does
not apply to other types of plans such as defined benefit
plans.
Under this proposal, the ``same desk rule'' would be
eliminated by replacing ``separation from service'' with
``severance from employment''. Conforming changes would be
mad in the comparable provisions of section 403(b)
arrangements and eligible deferred compensation plans under
section 457. This change would apply to distributions after
December 31, 1998.
Under this proposal, affected employees would be able to
roll over their 401(k) account balance to an IRA or to their
new employer's 401(k) plan. Modifying the same desk rule so
that all of a worker's retirement funds can be transferred to
the new employer after a business sale has taken place will
allow the employee to keep his or her retirement nest egg in
a single place. It will also coordinate the treatment of
defined benefit plan benefits with the treatment of 401(k)
plans in these types of transactions. Employees do not
understand why their 401(k) account must remain with the
former employer until they terminate employment with their
new employer, especially since this restriction does not
apply to other plans in which they participate. The corporate
transaction exception provides some relief from the same desk
rule but is inapplicable in numerous cases.

Purchase of Service Credit in Governmental Defined Benefit Plans

Under current law, employees of State and local governments
often have the option of purchasing service credits in their
State defined benefit plans in order to make up for the time
spent in another State or district. These employees cannot
currently use the money they have saved in their section
403(b) arrangements or section 457 plans to purchase these
service credits.
This proposal would permit State and local government
employees the option to use the funds in their section 403(b)
arrangements or section 457 deferred compensation plans to
purchase service credits.
These changes would apply to trustee-to-trustee transfers
after December 31, 1998.
This change will permit employees of State and local
governments, particularly teachers, who often move between
States and school districts in the course of their careers,
to buy a larger defined benefit pension with the savings they
have accumulated in a section 403(b) arrangement or section
457 deferred compensation plan. The greater number of years
of credit that they purchase would reflect a full career of
employment rather than two or more shorter periods of
employment in different States or districts. Allowing the
more flexible use of existing account balances in 403(b)
arrangements or section 457 plans will allow more of these
employees to purchase service credits and earn a full defined
benefit pension.

Missing Participants Program

Under current law in the case of certain terminated single
employer defined benefit plans, the Pension Benefit Guaranty
Corporation (PBGC) will act as a clearinghouse for benefits
due to participants who cannot

[[Page S8487]]

be located (``missing participants''). Under the program,
when a plan is terminated and is unable to locate former
workers who are entitled to benefits, the terminating plan is
allowed to transfer these benefits to the PBGC which then
attempts to locate the employees in question. The missing
participants program is limited to certain defined benefit
plans.
This proposal would expand the PBGC's missing participant
program to cover multiemployer defined benefit pension plans.
The program would not apply to governmental plans or to
church plans not covered by the PBGC, however. If a plan
covered by the new program has missing participants when the
plan terminates, at the option of the plan (or employer, in
the case of a single employer plan), the missing
participants' benefits could be transferred to the PBGC along
with related information.
This change would take effect with respect to distributions
from t4erminating multiemployer plans that occur after the
PBGC has adopted final regulations implementing the
provision.
By permitting sponsors the option of transferring pension
funds to the PBGC, the chances that a missing participant
will be able to recover benefits could be increased.

Disregarding Rollovers for Purposes of the Cash Out Amount

Under current law, if a terminated participant has a vested
accrued benefit of $5,000 or less, the plan may distribute
such benefit in a lump sum without the consent of the
participant or the participant's spouse. This $5,000 cash-out
limit is not indexed for inflation. In applying the $5,000
cash-out rule, the plan sponsor is under regulations required
to look back to determine if an individual's account every
exceeded $5,000 at the time of any prior distribution.
Rollover amounts count in determining the maximum balance
which can be involuntarily cashed out.
This proposal would allow a plan sponsor to disregard
rollover amounts in determining eligibility for the cash-out
rule, that is, whether a participant's vested accrued benefit
exceeds $5,000.
This proposal would apply to distributions after December
31, 1998.
The reason for this change is to remove a possible reason
for employers to refuse to accept rollovers.

Plan Amendments

Under current law, there is generally a short period of
time to make plan amendments that reflect the amendments to
the law. In addition, the anti-cutback rules can have the
unintentioned effect of preventing an employer from amending
its plan to reflect a change in the law.
Amendments to a plan or annuity contract made pursuant to
any amendment made by this bill are not required to be made
before the last day of the first plan year beginning on or
after January 1, 2001. In the case of a governmental plan,
the date for amendments is extended to the first plan year
beginning on or after January 1, 2003. Operational compliance
would, of course be required with respect to all plans as of
the applicable effective date of any amendment made by this
Act.
In addition, timely amendments to a plan or annuity
contract made pursuant to any amendment made by this Act
shall be deemed to satisfy the anti-cutback rules.
The reason for this change is that plan sponsors need an
appropriate amount of time to make changes to their plan
documents.
______

By Mr. LOTT (for Mr. Nickles, for himself, Mr. Frist, Ms.
Collins, Mr. Jeffords, Mr. Roth, Mr. Santorum, Mr. Hagel, Mr.
Gramm, Mr. Coats, Mr. Lott, Mr. Mack, Mr. Craig, Mr. Coverdell,
Mr. Abraham, Mr. Allard, Mr. Ashcroft, Mr. Bennett, Mr. Bond,
Mr. Brownback, Mr. Burns, Mr. Cochran, Mr. Domenici, Mr. Enzi,
Mr. Faircloth, Mr. Gorton, Mr. Grams, Mr. Grassley, Mr. Hatch,
Mr. Helms, Mr. Hutchinson, Mrs. Hutchison, Mr. Inhofe, Mr.
Kempthorne, Mr. Lugar, Mr. McCain, Mr. Murkowski, Mr. Roberts,
Mr. Sessions, Mr. Shelby, Mr. Smith of New Hampshire, Mr. Smith
of Oregon, Ms. Snowe, Mr. Thomas, Mr. Thompson, Mr. Thurmond,
and Mr. Warner):
S. 2330. A bill to improve the access and choice of patients to
quality, affordable health care; read the first time.

PATIENTS' BILL OF RIGHTS

Mr. NICKLES. Mr. President, today I am introducing the Republican
Patients' Bill of Rights. Joining me in this effort are 46 of my
colleagues who recognize the importance of ensuring that all Americans
are able to not only receive the care they have been promised, but also
receive the highest quality of care available. The foundation of this
proposal was to address some of the very real concerns that consumers
have about their health care needs.
We know that many Americans have believed they were denied coverage
that their plans were supposed to cover. We recognize that some
individuals fear that their health care plans will not give them access
to specialists when they need them. We know that some Americans think
their health care plans care more about cost than they do about
quality.
In contrast, we also know that many Americans are happy and satisfied
with their health care plan. We know that 81 percent of managed care
enrollees are satisfied with their current health care plan. Another
recent analysis suggest that 79 percent of consumers in HMOs would
recommend their coverage. In addition Americans are leery of Washington
solutions and increased federal intervention.
Last January, the Leader asked me to put together a group of
colleagues to address the issue of health care quality. For the past
seven months, Senators Frist, Collins, Hagel, Roth, Jeffords, Coats,
Santorum, and Gramm worked tirelessly to put together a responsible,
credible package that would preserve what is best about our Nation's
health care while at the same time determine ways to improve upon--
without stifling--the quality of care our nation delivers. We set out
to rationally examine the issues and develop reasonable solutions
without injuring patient access to affordable, high quality care.
This was no easy task. We spent month after month talking to experts
who understand the difficulty and complexity of our system. We met with
representatives from all aspects of the industry including the Mayo
Clinic, the Henry Ford Health Systems, the American Medical
Association, the American Hospital Association, the National Committee
for Quality Assurance, the Joint Commission on the Accreditation of
Healthcare Organizations, Corporate Medical Directors, Commissioners
from the President's Quality Commission, Purchasers, Families USA, the
Employee Benefit Research Institute and many others.
After many, many months of dissecting serious questions about our
system we determined that there were indeed some areas in which we
could improve patient access and quality.
We have put together an innovative plan that will answer the problems
that exist in the industry while at the same time preserving
affordability, which is of utmost importance. Mr. President, I think
you agree that if someone loses their health insurance because a
politician playing doctor drives prices to an unaffordable level, you
have hardly given them more rights or better quality health care.
We are proud of what we have been able to accomplish. For the first
time, patients can choose to be unencumbered in their relationship with
their doctor. They will be able to choose their own doctor and get the
middle man out of the way. There will be no corporate bureaucrat, no
government bureaucrat and no lawyer standing between a patient and
their doctor.
Mr. President, the bill we introduce today:
Protects consumers in employer-sponsored plans that are exempt from
state regulation. People enrolled in such plans will have the right to:
Choose their doctors. Our bill contains both ``point-of-service'' and
``continuity of care'' requirements that will enhance consumer choice.
See their ob-gyns and pediatricians without referral. Our bill will
give patients direct access to pediatricians and ob-gyns without prior
referral from a ``gatekeeper.''
Have a ``prudent layperson'' standard applied to their claims for
emergency care. The GOP alternative will require health plans to
cover--without prior authorization--emergency care that a ``prudent
layperson'' would consider medically necessary.
Communicate openly with their doctors without ``gag'' clauses.
Holds health plans accountable for their decisions.
Extends to enrollees in ERISA health plans and their doctors the
right to appeal adverse coverage decisions to a physician who was not
involved in the initial coverage determination.
Allows enrollees to appeal adverse coverage determinations to
independent medical experts who have no affiliation with the health
plan. Determinations by these experts will be binding on the health
plan.
Requires health plans to disclose to enrollees consumer information,
including what's covered, what's not,

[[Page S8488]]

how much they'll have to pay in deductibles and coinsurance, and how to
appeal adverse coverage decisions to independent medical experts.
Guarantees consumers access to their medical records.
Requires health care providers, health plans, employers, health and
life insurers, and schools and universities to permit an individual to
inspect, copy and amend his or her own medical information.
Requires health care providers, health plans, health oversight
agencies, public health authorities, employers, health and life
insurers, health researchers, law enforcement officials, and schools
and universities to establish appropriate safeguards to protect the
confidentiality, security, accuracy and integrity of protected health
information and notify enrollees of these safeguards.

Protects patients from genetic discrimination in health insurance.
Prohibits health plans from collecting or using predictive genetic
information about a patient to deny health insurance coverage or set
premium rates.
Promotes quality improvement by supporting research to give patients
and physicians better information regarding quality.
Establishes the Agency for Healthcare Quality Research (AHQR), whose
purpose is to foster overall improvement in healthcare quality and
bridge the gap between what we know and what we do in healthcare today.
The Agency is built on the platform of the current Agency for Health
Care Policy and Research, but is refocused and enhanced to become the
hub and driving force of federal efforts to improve the quality of
healthcare in all practice environments--not just managed care.
The role of the Agency is not to mandate a national definition of
quality, but to support the science necessary to provide information to
patients regarding the quality of the care they receive, to allow
physicians to compare their quality outcomes with their peers, and to
enable employers and individuals to be prudent purchasers based on
quality.
Supports research, screening, treatment, education, and data
collection activities to improve the health of women.
Promotes basic and clinical research for osteoporosis; breast and
ovarian cancer; and aging processes regarding women.
Expands research efforts into the underlying causes and prevention of
cardiovascular diseases in women--the leading cause of death among
American women.
Supports data collection through the National Center for Health
Statistics and the National Program of Cancer Registries, which are the
leading sources of national data on the health status of women in the
U.S.
Supports the National Breast and Cervical Cancer Early Detection
Program, which provides for regular screening for breast and cervical
cancers to underserved women.
Requires that the length of hospital stay after a mastectomy,
lumpectomy or lymph node dissection be determined only by the
physician, in consultation with the patient, and without the need to
obtain authorization from the health plan. If a plan covers
mastectomies, it also must cover breast reconstruction after a
mastectomy.
Makes health insurance more accessible and affordable by:
Allowing self-employed people to deduct the full amount of their
health care premiums.
Making medical savings accounts available to everyone.
Reforming cafeteria plans to let consumers save for future health
care costs.
Mr. President, this bill is a comprehensive bill of rights that will
benefit all Americans, and I am proud to join with so many of my
colleagues in introducing it.
Mr. President, I want to take a moment to address some criticisms
that have been made of our bill. These criticisms highlight some
significant differences between our bill and the health care bill
introduced by Senate Democrats. Mr. President, our bill does differ
significantly from the Senate Democrats' bill.
Our bill is the ``Patients' Bill of Rights.'' Theirs is the
``Lawyers' Right to Bill.''
Our bill lets doctors decide whether care is medically necessary.
Theirs lets lawyers decide.
Our bill empowers an independent medical expert to order an insurance
company to pay for medically necessary care so that patients suffer no
harm. Theirs allows trial lawyers to sue health plans after harm is
done.
Mr. President, when my insurance company tells me that they won't
cover a service for my family, I want the ability to appeal that
decision to a doctor who doesn't work for my insurance company. And I
want that appeal handled promptly, so that my family receives the
benefit. That is what our bill requires.
The Democrats' bill creates new ways for trial lawyers to make money.
According to a June 1998 study by Multinational Business Services, the
Democrats' bill would create 56 new Federal causes of action--56 new
reasons to sue people in Federal court.
That's fine for trial lawyers, but it doesn't do much for patients.
Patients want their claim disputes handled promptly and fairly.
According to a study by the General Accounting Office, it takes an
average of 25 months--more than two years--to resolve a malpractice
suit. One cause that the GAO studied took 11 years to resolve! I'm sure
the lawyers who handled that case did quite well for themselves. But
what about the patient?
Under our bill, patients can appeal directly to an outside medical
expert for a prompt review of their claim--without having to incur any
legal expenses. In medical malpractice litigation, patients receive an
average of only 43 cents of every dollar awarded. The rest goes to
lawyers and court fees.
Our bill assures that health care dollars are used to serve patients.
Their bill diverts these dollars away from patients and into the
pockets of trial lawyers.
Another big difference between our bill and the one introduced by
Senate Democrats is that their bill takes a ``big government'' approach
to health reform.
Mr. President, it was just four years ago that we debated Clintoncare
on the Senate floor. President Clinton wanted government-run health
care for all Americans. He wanted it then; he wants it still.
Just last September, President Clinton told the Service Employees
Union that he was ``glad'' that he had pushed for the federal
government to take over health care. ``Now if what I tried to do before
won't work,'' the President said, ``maybe we can do it another way. A
step at a time until we eventually finish this.''
The Democrats' bill would take us a step closer to the President's
dream of a health care system run by federal bureaucrats and trial
lawyers. The study I cited earlier by Multinational Business Services
found that their bill would impose 359 new federal mandates, 59 new
sets of Federal regulations, and require the government to hire 3,828
new federal bureaucrats.
Our bill relies on State Insurance Commissioners to protect those
Americans who are enrolled in state-regulated plans. We protect the
unprotected by providing new federal safeguards to the 48 million
Americans who are enrolled in plans that the states are not permitted
to regulate.
Their bill imposes a risky and complicated scheme that relies on
federal bureaucrats at the Health Care Financing Administration (HCFA)
to enforce patients' rights in states that do not conform to the
federal mandates in their bill.
HCFA is the agency that oversees the federal Medicare and Medicaid
programs. Last year, in the Balanced Budget Act, Congress created new
consumer protections for Medicare beneficiaries--a ``Patients' Bill of
Rights'' for the 38.5 million senior citizens and disabled Americans
who rely on Medicare for their health care.
We asked HCFA to protect those rights. How have they done? I regret
to say, Mr. President, that they have not done very well at all.
On July 16, a GAO witness testified before the Ways and Means
Committee on how well HCFA was doing in enforcing the Medicare
patients' bill of rights. According to GAO, HCFA has ``missed 25
percent of the implementation deadlines, including the quality-of-care
medical review process for skilled nursing facilities. It is clear

[[Page S8489]]

that HCFA will continue to miss implementation deadlines as it attempts
to balance the resource demands generated by the Balanced Budget Act
with other competing objectives.''
Mr. President, I won't detail all of the ways that HCFA has failed--
the fact that it is delaying implementation of a prostate screening
program to which Medicare beneficiaries are entitled, the fact that it
has failed to establish a quality-of-care medical review process for
skilled nursing facilities, the fact that it is far behind schedule in
developing a new payment system for home health services. The list goes
on and on.
But let me focus on one failure that is especially relevant. All of
us agree that people have the right to information about their health
plans. When they have the choice of more than one plan, accurate
information that compares the plans is critical.
Last year, Congress allocated $95 million to HCFA to develop an
information and education program for Medicare beneficiaries. This
money was to be used for publishing and mailing handbooks containing
comparative plan information to seniors, establishing a toll-free
number and Internet website, and sponsoring health information fairs.
Well, there haven't been any information fairs and the toll-free
number isn't operational. They do have a website, but they've decided
to mail comparative information handbooks only to seniors in 5 states:
Washington, Oregon, Ohio, Florida and Arizona. So for the princely sum
of a $95 million, only about 5.5 million seniors will receive important
information about their health plans, leaving 32.5 million seniors
without these handbooks. At that rate, HCFA would need more than $1
billion each year just for handbooks.
Mr. President, if this agency is struggling to protest the rights of
38.5 million Medicare beneficiaries, how can we ask it to protect the
rights of up as many as 100 million people enrolled in private health
plans?
We believe that consumer protections are too important to entrust to
a cumbersome and inefficient federal government. State governments have
long been in the business of insurance regulation and the federal
government should not usurp their role.
The federal government should protect those who are enrolled in plans
that are exempt from state regulation and those enrolled in the
programs it runs, like Medicare and Medicaid. The federal government
should start protecting the rights of senior citizens under Medicare,
instead of meddling in areas where it doesn't belong.
Mr. President, our bill is a truly comprehensive bill of rights for
patients, providing new consumer protections for the 48 million
Americans who are unprotected by state law, giving the 124 million
Americans enrolled in employer-sponsored plans new rights to appeal
adverse coverage decisions, protecting the civil rights of consumers to
gain access to their medical records, protecting consumers against
discrimination based on genetic tests, promoting quality improvement,
establishing a new women's health initiative, and giving millions of
Americans access to affordable health insurance through medical savings
accounts.
The doctor-patient relationship is one of the most important in
people's lives. Our legislation preserves and protects that
relationship, while taking many common-sense steps forward to affirm
and expand quality and access. I look forward with my colleagues and
many cosponsors, to the floor debate on this vital issue.
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. 2330

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 ``Patients'
Bill of Rights Act''.
(b) Table Of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--PATIENT BILL OF RIGHTS

Subtitle A--Right to Advice and Care

Sec. 101. Patient right to medical advice and care.

``SUBPART C--PATIENT RIGHT TO MEDICAL ADVICE AND CARE

``Sec. 721. Patient access to emergency medical care.
``Sec. 722. Offering of choice of coverage options.
``Sec. 723. Patient access to obstetric and gynecological care.
``Sec. 724. Patient access to pediatric care.
``Sec. 725. Continuity of care.
``Sec. 726. Protection of patient-provider communications.
``Sec. 727. Generally applicable provisions.
Sec. 102. Effective date and related rules.

Subtitle B--Right to Information About Plans and Providers

Sec. 111. Information about plans.
Sec. 112. Information about providers.

Subtitle C--Right to Hold Health Plans Accountable

Sec. 121. Amendment to Employee Retirement Income Security Act of 1974.

TITLE II--INDIVIDUAL RIGHTS WITH RESPECT TO PERSONAL MEDICAL
INFORMATION

Sec. 201. Short title.

Subtitle A--Access to Medical Records

Sec. 211. Inspection and copying of protected health information.
Sec. 212. Amendment of protected health information.
Sec. 213. Notice of confidentiality practices.

Subtitle B--Establishment of Safeguards

Sec. 221. Establishment of safeguards.

Subtitle C--Enforcement; Definitions

Sec. 231. Civil penalty.
Sec. 232. Definitions.

TITLE III--GENETIC INFORMATION AND SERVICES

Sec. 301. Short title.
Sec. 302. Amendments to Employee Retirement Income Security Act of
1974.
Sec. 303. Amendments to the Public Health Service Act.
Sec. 304. Amendments to the Internal Revenue Code of 1986.

TITLE IV--HEALTHCARE QUALITY RESEARCH

Sec. 401. Short title.
Sec. 402. Amendment to the Public Health Service Act.

``TITLE IX--AGENCY FOR HEALTHCARE QUALITY RESEARCH

``Part A--Establishment and General Duties

``Sec. 901. Mission and duties.
``Sec. 902. General authorities.

``Part B--Healthcare Improvement Research

``Sec. 911. Healthcare outcome improvement research.
``Sec. 912. Private-public partnerships to improve organization and
delivery.
``Sec. 913. Information on quality and cost of care.
``Sec. 914. Information systems for healthcare improvement.
``Sec. 915. Research supporting primary care delivery and access in
underserved areas.
``Sec. 916. Clinical practice and technology innovation.
``Sec. 917. Coordination of Federal Government quality improvement
efforts.

``Part C--Foundation for Healthcare Quality Research

``Sec. 921. Foundation for Healthcare Quality Research.

``Part D--General Provisions

``Sec. 931. Advisory Council for Healthcare Quality Research.
``Sec. 932. Peer review with respect to grants and contracts.
``Sec. 933. Certain provisions with respect to development, collection,
and dissemination of data.
``Sec. 934. Dissemination of information.
``Sec. 935. Additional provisions with respect to grants and contracts.
``Sec. 936. Certain administrative authorities.
``Sec. 937. Funding.
``Sec. 938. Definitions.
Sec. 403. References.
Sec. 404. Study.

TITLE V--WOMEN'S HEALTH RESEARCH AND PREVENTION

Sec. 501. Short title.

Subtitle A--Provisions Relating to Women's Health Research at the
National Institutes of Health

Sec. 511. Extension of program for research and authorization of
national program of education regarding the drug DES.
Sec. 512. Research on osteoporosis, Paget's disease, and related bone
disorders.
Sec. 513. Research on cancer.
Sec. 514. Research on heart attack, stroke, and other cardiovascular
diseases in women.
Sec. 515. Aging processes regarding women.
Sec. 516. Office of Research on Women's Health.

Subtitle B--Provisions Relating to Women's Health at the Centers for
Disease Control and Prevention

Sec. 521. National Center for Health Statistics.

[[Page S8490]]

Sec. 522. National program of cancer registries.
Sec. 523. National breast and cervical cancer early detection program.
Sec. 524. Centers for Research and Demonstration of Health Promotion.
Sec. 525. Community programs on domestic violence.

Subtitle C--Women's Health and Cancer Rights

Sec. 531. Short title.
Sec. 532. Findings.
Sec. 533. Amendments to the Employee Retirement Income Security Act of
1974.
Sec. 534. Amendments to the Public Health Service Act relating to the
group market.
Sec. 535. Amendment to the Public Health Service Act relating to the
individual market.
Sec. 536. Amendments to the Internal Revenue Code of 1986.
Sec. 537. Research study on the management of breast cancer.

TITLE VI--ENHANCED ACCESS TO HEALTH INSURANCE COVERAGE

Sec. 601. Carryover of unused benefits from cafeteria plans, flexible
spending arrangements, and health flexible spending
accounts.
Sec. 602. Full deduction of health insurance costs for self-employed
individuals.
Sec. 603. Full availability of medical savings accounts.
Sec. 604. Permitting contribution towards medical savings account
through Federal employees health benefits program
(FEHBP).

TITLE I--PATIENT BILL OF RIGHTS

Subtitle A--Right to Advice and Care

SEC. 101. PATIENT RIGHT TO MEDICAL ADVICE AND CARE.

(a) In General.--Part 7 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1185 et seq.) is amended--
(1) by redesignating subpart C as subpart D; and
(2) by inserting after subpart B the following:

``Subpart C--Patient Right to Medical Advice and Care

``SEC. 721. PATIENT ACCESS TO EMERGENCY MEDICAL CARE.

``(a) In General.--To the extent that the group health plan
provides coverage for benefits consisting of emergency
medical care (as defined in subsection (c)), except for items
or services specifically excluded--
``(1) the plan shall provide coverage for benefits, without
requiring preauthorization, for appropriate emergency medical
screening examinations (within the capability of the
emergency facility) to the extent that a prudent layperson,
who possesses an average knowledge of health and medicine,
would determine such examinations to be necessary to
determine whether emergency medical care (as so defined) is
necessary, and
``(2) the plan shall provide coverage for benefits for
additional emergency medical services following an emergency
medical screening examination (if determined necessary under
paragraph (1)) to the extent that a prudent emergency medical
professional would determine such additional emergency
services to be necessary to avoid the consequences described
in paragraph (2) of subsection (c).
``(b) Uniform Cost-Sharing Required.--Nothing in this
section shall be construed as preventing a group health plan
from imposing any form of cost-sharing applicable to any
participant or beneficiary (including coinsurance,
copayments, deductibles, and any other charges) in relation
to coverage for benefits described in subsection (a), if such
form of cost-sharing is uniformly applied under such plan,
with respect to similarly situated participants and
beneficiaries, to all benefits consisting of emergency
medical care (as defined in subsection (c)) provided to such
similarly situated participants and beneficiaries under the
plan.
``(c) Definition of Emergency Medical Care.--In this
section:
``(1) In general.--The term ``emergency medical care''
means, with respect to a participant or beneficiary under a
group health plan, covered inpatient and outpatient services
that--
``(A) are furnished by a provider that is qualified to
furnish such services; and
``(B) are needed to evaluate or stabilize an emergency
medical condition (as defined in paragraph (2)).
``(2) Emergency medical condition.--The term ``emergency
medical care'' 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 participant or beneficiary
(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. 722. OFFERING OF CHOICE OF COVERAGE OPTIONS.

``(a) Requirement.--
``(1) Offering of point-of-service coverage option.--Except
as provided in paragraph (2), if a group health plan provides
coverage for benefits only through a defined set of
participating health care professionals, the plan shall offer
the participant the option to purchase point-of-service
coverage (as defined in subsection (b)) for all such benefits
for which coverage is otherwise so limited. Such option shall
be made available to the participant at the time of
enrollment under the plan and at such other times as the plan
offers the participant a choice of coverage options.
``(2) Exception in the case of multiple issuer or coverage
options.--Paragraph (1) shall not apply with respect to a
participant in a group health plan if the plan offers the
participant--
``(A) a choice of health insurance coverage through more
than one health insurance issuer; or
``(B) two or more coverage options that differ
significantly with respect to the use of participating health
care professionals or the networks of such professionals that
are used.
``(b) Point-of-Service Coverage Defined.--In this section,
the term `point-of-service coverage' means, with respect to
benefits covered under a group health plan, coverage of such
benefits when provided by a nonparticipating health care
professional.
``(c) Small Employer Exemption.--
``(1) In general.--This section shall not apply to any
group health plan of a small employer.
``(2) Small employer.--For purposes of paragraph (1), the
term `small employer' means, in connection with a group
health plan with respect to a calendar year and a plan year,
an employer who employed an average of at least 2 but not
more than 50 employees on business days during the preceding
calendar year and who employs at least 2 employees on the
first day of the plan year. For purposes of this paragraph,
the provisions of subparagraph (C) of section 712(c)(1) shall
apply in determining employer size.
``(d) Rule of Construction.--Nothing in this section shall
be construed--
``(1) as requiring coverage for benefits for a particular
type of health care professional;
``(2) as requiring an employer to pay any costs as a result
of this section or to make equal contributions with respect
to different health coverage options;
``(3) as preventing a group health plan from imposing
higher premiums or cost-sharing on a participant for the
exercise of a point-of-service coverage option; or
``(4) to require that a group health plan include coverage
of health care professionals that the plan excludes because
of fraud, quality of care, or other similar reasons with
respect to such professionals.

``SEC. 723. PATIENT ACCESS TO OBSTETRIC AND GYNECOLOGICAL
CARE.

``(a) In General.--In any case in which a group health
plan--
``(1) provides coverage for benefits consisting of--
``(A) gynecological care (such as preventive women's health
examinations); or
``(B) obstetric care (such as pregnancy-related services);
provided by a participating physician who specializes in such
care; and
``(2) requires or provides for designation by a participant
or beneficiary of a participating primary care provider;

if the primary care provider designated by such a participant
or beneficiary is not such a physician as described in
paragraph (1), then the plan shall meet the requirements of
subsection (b).
``(b) Requirements.--A group health plan meets the
requirements of this subsection, in connection with the
coverage of benefits described in subsection (a) consisting
of care described in subparagraph (A) or (B) of subsection
(a)(1), if the plan--
``(1) does not require authorization or a referral by the
primary care provider in order to obtain coverage for such
benefits, and
``(2) treats the ordering of other routine care of the same
type, by the participating physician providing the care
described in subparagraph (A) or (B) of subsection (a)(1), as
the authorization of the primary care provider with respect
to such care.
``(c) Rule of Construction.--Nothing in subsection (b)(2)
shall waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
gynecological or obstetric care so ordered.

``SEC. 724. PATIENT ACCESS TO PEDIATRIC CARE.

``(a) In General.--In any case in which a group health
plan--
``(1) provides coverage for benefits consisting of
pediatric care by a participating pediatrician; and
``(2) requires or provides for designation by a participant
or beneficiary of a participating primary care provider;

if the primary care provider designated by such a participant
or beneficiary is not a physician as described in paragraph
(1), then the plan shall meet the requirements of subsection
(b).
``(b) Requirements.--A group health plan meets the
requirements of this subsection, in connection with the
coverage of benefits described in subsection (a) consisting
of care described in subsection (a)(1), if the plan--
``(1) does not require authorization or a referral by the
primary care provider in order to obtain coverage for such
benefits, and
``(2) treats the ordering of other routine care of the same
type, by the participating

[[Page S8491]]

physician providing the care described in subsection (a)(1),
as the authorization of the primary care provider with
respect to such care.
``(c) Construction.--Nothing in subsection (b)(2) shall
waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
pediatric care so ordered.

``SEC. 725. CONTINUITY OF CARE.

``(a) In General.--
``(1) Termination of provider.--If a contract between a
group health plan and a health care provider is terminated
(as defined in paragraph (2)), or benefits or coverage
provided by a health care provider are terminated because of
a change in the terms of provider participation in a group
health plan, and an individual who is a participant or
beneficiary in the plan is undergoing a course of treatment
from the provider at the time of such termination, the plan
shall--
``(A) notify the individual on a timely basis of such
termination, and
``(B) in the case of termination described in paragraph
(2), (3), of (4) of subsection (b), and subject to subsection
(c), permit the individual to continue or be covered with
respect to the course of treatment with the provider's
consent during a transitional period (as provided under
subsection (b)).
``(2) Termination.--In this section, the term `terminated'
includes, with respect to a contract, the expiration or
nonrenewal of the contract by the group health plan, but does
not include a termination of the contract by the plan for
failure to meet applicable quality standards or for fraud.
``(b) Transitional Period.--
``(1) General rule.--Except as provided in paragraph (3),
the transitional period under this subsection shall extend
for up to 90 days from the date of the notice described in
subsection (a)(1)(A) of the provider's termination.
``(2) Institutional care.--Subject to paragraph (1), the
transitional period under this subsection for institutional
or inpatient care from a provider shall extend until the
discharge or termination of the period of
institutionalization and also shall include institutional
care provided within a reasonable time of the date of
termination of the provider status if the care was scheduled
before the date of the announcement of the termination of the
provider status under subsection (a)(1)(A) or if the
individual on such date was on an established waiting list or
otherwise scheduled to have such care.
``(3) Pregnancy.--Notwithstanding paragraph (1), if--
``(A) a participant or beneficiary has entered the second
trimester of pregnancy at the time of a provider's
termination of participation; and
``(B) the provider was treating the pregnancy before the
date of the termination;

the transitional period under this subsection with respect to
provider's treatment of the pregnancy shall extend through
the provision of post-partum care directly related to the
delivery.
``(4) Terminal illness.--Subject to paragraph (1), if--
``(A) a participant or beneficiary was determined to be
terminally ill (as determined under section 1861(dd)(3)(A) of
the Social Security Act) prior to a provider's termination of
participation; and
``(B) the provider was treating the terminal illness before
the date of termination;

the transitional period under this subsection shall extend
for the remainder of the individual's life for care directly
related to the treatment of the terminal illness.
``(c) Permissible Terms and Conditions.--A group health
plan may condition coverage of continued treatment by a
provider under subsection (a)(1)(B) upon the provider
agreeing to the following terms and conditions:
``(1) The provider agrees to accept reimbursement from the
plan and individual involved (with respect to cost-sharing)
at the rates applicable prior to the start of the
transitional period as payment in full (or, in the case
described in subsection (b)(2), at the rates applicable under
the replacement plan after the date of the termination of the
contract with the group health plan) and not to impose cost-
sharing with respect to the individual in an amount that
would exceed the cost-sharing that could have been imposed if
the contract referred to in subsection (a)(1) had not been
terminated.
``(2) The provider agrees to adhere to the quality
assurance standards of the plan responsible for payment under
paragraph (1) and to provide to such plan necessary medical
information related to the care provided.
``(3) The provider agrees otherwise to adhere to such
plan's policies and procedures, including procedures
regarding referrals and obtaining prior authorization and
providing services pursuant to a treatment plan (if any)
approved by the plan.
``(d) Rule of Construction.--Nothing in this section shall
be construed to require the coverage of benefits which would
not have been covered if the provider involved remained a
participating provider.
``(e) Definition.--In this section, the term `health care
provider' or `provider' means--
``(1) any individual who is engaged in the delivery of
health care services in a State and who is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State; and
``(2) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, is so
licensed.

``SEC. 726. PROTECTION OF PATIENT-PROVIDER COMMUNICATIONS.

``(a) In General.--Subject to subsection (b), a group
health plan (in relation to a participant or beneficiary)
shall not prohibit a health care professional from advising
such a participant or beneficiary who is a patient of the
professional about the health status of the participant or
beneficiary or medical care or treatment for the condition or
disease of the participant or beneficiary, regardless of
whether coverage for such care or treatment are provided
under the contract, if the professional is acting within the
lawful scope of practice.
``(b) Rule of Construction.--Nothing in this section shall
be construed as requiring a group health plan to provide
specific benefits under the terms of such plan.

``SEC. 727. GENERALLY APPLICABLE PROVISIONS.

``(a) Applicability.--The provisions of this subpart shall
apply to group health plans. Such provisions shall not apply
to a health insurance issuer that is licensed by a State and
subject to State laws that regulate insurance within the
meaning of section 514(b)(2), while engaged in the business
of insurance in such State.
``(b) Treatment of multiple coverage options.--In the case
of a group health plan that provides benefits under 2 or more
coverage options, the requirements of sections 721, 723, 724,
725 and 726 shall apply separately with respect to each
coverage option.''.
(b) Rule with Respect to Certain Plans.--
(1) In general.--Notwithstanding any other provision of
law, health insurance issuers may offer, and eligible
individuals may purchase, high deductible health plans
described in section 220(c)(2)(A) of the Internal Revenue
Code of 1986. Effective for the 4-year period beginning on
the date of the enactment of this Act, such health plans
shall not be required to provide payment for any health care
items or services that are exempt from the plan's deductible.
(2) Existing state laws.--A State law relating to payment
for health care items and services in effect on the date of
enactment of this Act that is preempted under paragraph (1),
shall not apply to high deductible health plans after the
expiration of the 4-year period described in such paragraph
unless the State reenacts such law after such period.
(c) Conforming Amendment.--The table of contents in section
1 of such Act is amended--
(1) in the item relating to subpart C, by striking
``Subpart C'' and inserting ``Subpart D''; and
(2) by adding at the end of the items relating to subpart B
of part 7 of subtitle B of title I of such Act the following
new items:

``Subpart C--Patient Right to Medical Advice and Care

SEC. 102. EFFECTIVE DATE AND RELATED RULES.

(a) In General.--The amendments made by this subtitle shall
apply with respect to plan years beginning on or after
January 1 of the second calendar year following the date of
the enactment of this Act. The Secretary shall issue all
regulations necessary to carry out the amendments made by
this section before the effective date thereof.
(b) Limitation on Enforcement Actions.--No enforcement
action shall be taken, pursuant to the amendments made by
this subtitle, against a group health plan with respect to a
violation of a requirement imposed by such amendments before
the date of issuance of regulations issued in connection with
such requirement, if the plan has sought to comply in good
faith with such requirement.

Subtitle B--Right to Information About Plans and Providers

SEC. 111. INFORMATION ABOUT PLANS.

(a) In General.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by adding at the end the
following:

``SEC. 713. HEALTH PLAN COMPARATIVE INFORMATION.

``(a) Requirement.--A group health plan, or health
insurance issuer in connection with group health insurance
coverage, shall, not later than 12 months after the date of
enactment of this section, provide for the disclosure, in a
clear and accurate form to each enrollee, or upon request to
a potential enrollee eligible to receive benefits under the
plan, or plan sponsor with which the plan or issuer has
contracted, of the information described in subsection (b).
``(b) Required Information.--The informational materials to
be distributed under this section shall include for each
health benefit plan the following:
``(1) A description of the covered items and services under
each such plan and any in- and out-of-network features of
each such plan.

[[Page S8492]]

``(2) A description of any cost-sharing, including
premiums, deductibles, coinsurance, and copayment amounts,
for which the enrollee will be responsible, including any
annual or lifetime limits on benefits, for each such plan.
``(3) A description of any optional supplemental benefits
offered by each such plan and the terms and conditions
(including premiums or cost-sharing) for such supplemental
coverage.
``(4) A description of any restrictions on payments for
services furnished to an enrollee by a health care
professional that is not a participating professional and the
liability of the enrollee for additional payments for these
services.
``(5) A description of the service area of each such plan,
including the provision of any out-of-area coverage.
``(6) A description of the extent to which enrollees may
select the primary care provider of their choice, including
providers both within the network and outside the network of
each such plan (if the plan permits out-of-network services).
``(7) A description of the procedures for advance
directives and organ donation decisions if the plan maintains
such procedures.
``(8) A description of the requirements and procedures to
be used to obtain preauthorization for health services
(including telephone numbers and mailing addresses),
including referrals for specialty care.
``(9) A summary of the rules and methods for appealing
coverage decisions and filing grievances (including telephone
numbers and mailing addresses), as well as other available
remedies.
``(10) A summary of the rules for access to emergency room
care. Also, any available educational material regarding
proper use of emergency services.
``(11) A description of whether or not coverage is provided
for experimental treatments, investigational treatments, or
clinical trials and the circumstances under which access to
such treatments or trials is made available.
``(12) A description of the specific preventative services
covered under the plan if such services are covered.
``(13) A statement that the following information, and
instructions on obtaining such information (including
telephone numbers and, if available, Internet websites),
shall be made available upon request:
``(A) The names, addresses, telephone numbers, and State
licensure status of the plan's participating health care
professionals and participating health care facilities, and,
if available, the education, training, speciality
qualifications or certifications of such professionals.
``(B) A summary description of the methods used for
compensating participating health care professionals, such as
capitation, fee-for-service, salary, or a combination
thereof. The requirement of this subparagraph shall not be
construed as requiring plans to provide information
concerning proprietary payment methodology.
``(C) A summary description of the methods used for
compensating health care facilities, including per diem, fee-
for-service, capitation, bundled payments, or a combination
thereof. The requirement of this subparagraph shall not be
construed as requiring plans to provide information
concerning proprietary payment methodology.
``(D) A summary description of the procedures used for
utilization review.
``(E) The list of the specific prescription medications
included in the formulary of the plan, if the plan uses a
defined formulary, and any provision for obtaining off-
formulary medications.
``(F) A description of the specific exclusions from
coverage under the plan.
``(G) Any available information related to the availability
of translation or interpretation services for non-English
speakers and people with communication disabilities,
including the availability of audio tapes or information in
Braille.
``(H) Any information that is made public by accrediting
organizations in the process of accreditation if the plan is
accredited, or any additional quality indicators that the
plan makes available.
``(c) Manner of Distribution.--
``(1) In general.--The information described in this
section shall be distributed in an accessible format that is
understandable to an average plan enrollee.
``(2) Rule of construction.--For purposes of this section,
a group health plan, or health insurance issuer in connection
with group health insurance coverage, in reliance on records
maintained by the plan or issuer, shall be deemed to have met
the requirements of this section if the plan or issuer
provides the information requested under this section--
``(A) in the case of the plan, to participants and
beneficiaries at the address contained in such records with
respect to such participants and beneficiaries; or
``(B) in the case of the issuer, to the employer of a
participant if the employer provides for the coverage of such
participant under the plan involved or to participants and
beneficiaries at the address contained in such records with
respect to such participants and beneficiaries.
``(d) Rule of Construction.--Nothing in this section may be
construed to prohibit a group health plan, or health
insurance issuer in connection with group health insurance
coverage, from distributing any other additional information
determined by the plan or issuer to be important or necessary
in assisting participants and beneficiaries enrollees or upon
request potential participants in the selection of a health
plan or from providing information under subsection (b)(13)
as part of the required information.
``(e) Health care professional.--In this section, the term
`health care professional' means a physician (as defined in
section 1861(r) of the Social Security Act) or other health
care professional if coverage for the professional's services
is provided under the health plan involved for the services
of the professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist, physician
assistant, physical or occupational therapist and therapy
assistant, speech-language pathologist, audiologist,
registered or licensed practical nurse (including nurse
practitioner, clinical nurse specialist, certified registered
nurse anesthetist, and certified nurse-midwife), licensed
certified social worker, registered respiratory therapist,
and certified respiratory therapy technician.''.
(b) Conforming Amendments.--
(1) Section 732(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1185(a)) is amended by
striking ``section 711, and inserting ``sections 711 and
713''.
(2) The table of contents in section 1 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001) is
amended by inserting after the item relating to section 712,
the following:
``Sec. 713. Health plan comparative information.''.

SEC. 112. INFORMATION ABOUT PROVIDERS.

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

Subtitle C--Right to Hold Health Plans Accountable

SEC. 121. AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.

(a) In General.--Section 503 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1133) is amended to
read as follows:

``SEC. 503. CLAIMS PROCEDURE, COVERAGE DETERMINATION,
GRIEVANCES AND APPEALS.

``(a) Claims Procedure.--In accordance with regulations of
the Secretary, every employee benefit plan shall--
``(1) provide adequate notice in writing to any participant
or beneficiary whose claim for benefits under the plan has
been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by
the participant, and
``(2) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
review by the appropriate named fiduciary of the decision
denying the claim.
``(b) Coverage Determinations Under Group Health Plans.--
``(1) Procedures.--
``(A) In general.--A group health plan or health insurance
issuer conducting utilization review shall ensure that
procedures are in place for--
``(i) making determinations regarding whether an enrollee
is eligible to receive a payment or coverage for health
services under the plan or coverage involved and any cost-
sharing amount that the enrollee is required to pay with
respect to such service;
``(ii) notifying covered enrollees (or the legal
representative of such enrollees) and the treating health
care professionals involved regarding determinations made
under the plan or issuer and any additional payments that the
enrollee may be required to make with respect to such
service; and
``(iii) responding to requests, either written or oral, for
coverage determinations or for internal appeals from an
enrollee (or the legal representative of such enrollee) or
the treating health care professional.
``(B) Oral requests.--With respect to an oral request
described in subparagraph (A)(iii), a group health plan or
health insurance issuer may require that the requesting
individual provide written evidence of such request.
``(2) Timeline for making determinations.--
``(A) Routine determination.--A group health plan or a
health insurance issuer shall maintain procedures to ensure
that prior authorization determinations concerning the
provision of non-emergency items or services are made within
30 days from the date on

[[Page S8493]]

which the request for a determination is submitted, except
that such period may be extended where certain circumstances
exist that are determined by the Secretary to be beyond
control of the plan or issuer.
``(B) Expedited determination.--
``(i) In general.--A prior authorization determination
under this subsection shall be made within 72 hours after a
request is received by the plan or issuer under clause (ii)
or (iii).
``(ii) Request by enrollee.--A plan or issuer shall
maintain procedures for expediting a prior authorization
determination under this subsection upon the request of an
enrollee if, based on such a request, the plan or issuer
determines that the normal time for making such a
determination could seriously jeopardize the life or health
of the enrollee.
``(iii) Documentation by health care professional.--A plan
or issuer shall maintain procedures for expediting a prior
authorization determination under this subsection if the
request involved indicates that the treating health care
professional has documented, based on the medical exigencies,
that a determination under the procedures described in
subparagraph (A) could seriously jeopardize the life or
health of the enrollee.
``(C) Concurrent determinations.--A plan or issuer shall
maintain procedures to certify or deny coverage of an
extended stay or additional services.
``(D) Retrospective determination.--A plan or issuer shall
maintain procedures to ensure that, with respect to the
retrospective review of a determination made under paragraph
(1), the determination shall be made within 30 working days
of the date on which the plan or issuer receives all
necessary information.
``(3) Notice of determinations.--
``(A) Routine determination.--With respect to a coverage
determination of a plan or issuer under paragraph (2)(A), the
plan or issuer shall issue notice of such determination to
the enrollee (or the legal representative of the enrollee),
and consistent with the medical exigencies of the case, to
the treating health care professional involved not later than
2 working days after the date on which the determination is
made.
``(B) Expedited determination.--With respect to a coverage
determination of a plan or issuer under paragraph (2)(B), the
plan or issuer shall issue notice of such determination to
the enrollee (or the legal representative of the enrollee),
and consistent with the medical exigencies of the case, to
the treating health care professional involved within the 72
hour period described in paragraph (2)(B).
``(C) Concurrent reviews.--With respect to the
determination under a plan or issuer under paragraph (1) to
certify or deny coverage of an extended stay or additional
services, the plan or issuer shall issue notice of such
determination to the treating health care professional and to
the enrollee involved (or the legal representative of the
enrollee) within 1 working day of the date on which the
initial notice was issued.
``(D) Retrospective reviews.--With respect to the
retrospective review under a plan or issuer of a
determination made under paragraph (1), a determination shall
be made within 30 working days of the date on which the plan
or issuer receives all necessary information. The plan or
issuer shall issue written notice of an approval or
disapproval of a determination under this subparagraph to the
enrollee (or the legal representative of the enrollee) and
health care provider involved within 5 working days of the
date on which such determination is made.
``(E) Requirements of notice of adverse coverage
determinations.--A written or electronic notice of an adverse
coverage determination under this subsection, or of an
expedited adverse coverage determination under paragraph
(2)(B), shall be provided to the enrollee (or the legal
representative of the enrollee) and treating health care
professional (if any) involved and shall include--
``(i) the reasons for the determination (including the
clinical or scientific-evidence based rationale used in
making the determination) written in a manner to be
understandable to the average enrollee;
``(ii) the procedures for obtaining additional information
concerning the determination; and
``(iii) notification of the right to appeal the
determination and instructions on how to initiate an appeal
in accordance with subsection (d).
``(c) Grievances.--A group health plan or a health
insurance issuer shall have written procedures for addressing
grievances between the plan and enrollees. Determinations
under such procedures shall be non-appealable.
``(d) Internal Appeal of Coverage Determinations.--
``(1) In general.--An enrollee (or the legal representative
of the enrollee) and the treating health care professional
with the consent of the enrollee (or the legal representative
of the enrollee), may appeal any adverse coverage
determination under subsection (b) under the procedures
described in this subsection.
``(2) Records.--A group health plan and a health insurance
issuer shall maintain written records, for at least 6 years,
with respect to any appeal under this subsection for purposes
of internal quality assurance and improvement.
``(3) Routine determinations.--A group health plan or a
health insurance issuer shall provide for the consideration
of an appeal of an adverse routine determination under this
subsection not later than 30 working days after the date on
which a request for such appeal is received.
``(4) Expedited determination.--
``(A) In general.--An expedited determination with respect
to an appeal under this subsection shall be made in
accordance with the medical exigencies of the case, but in no
case more than 72 hours after the request for such appeal is
received by the plan or issuer under subparagraph (B) or (C).
``(B) Request by enrollee.--A plan or issuer shall maintain
procedures for expediting a prior authorization determination
under this subsection upon the request of an enrollee if,
based on such a request, the plan or issuer determines that
the normal time for making such a determination could
seriously jeopardize the life or health of the enrollee.
``(C) Documentation by health care professional.--A plan or
issuer shall maintain procedures for expediting a prior
authorization determination under this subsection if the
request involved indicates that the treating health care
professional has documented, based on the medical exigencies
that a determination under the procedures described in
paragraph (2) could seriously jeopardize the life or health
of the enrollee.
``(5) Conduct of review.--A review of an adverse coverage
determination under this subsection shall be conducted by an
individual with appropriate expertise who was not involved in
the initial determination.
``(6) Lack of medical necessity.--An appeal under this
subsection relating to a determination to deny coverage based
on a lack of medical necessity or appropriateness, or based
on an experimental or investigational treatment, shall be
made only by a physician with appropriate expertise in the
field of medicine involved who was not involved in the
initial determination.
``(7) Notice.--
``(A) In general.--Written notice of a determination made
under an internal review process shall be issued to the
enrollee (or the legal representative of the enrollee) and
the treating health care professional not later than 2
working days after the completion of the review (or within
the 72-hour period referred to in paragraph (4) if
applicable).
``(B) Adverse coverage determinations.--With respect to an
adverse coverage determination made under this subsection,
the notice described in subparagraph (A) shall include--
``(i) the reasons for the determination (including the
clinical or scientific-evidence based rationale used in
making the determination) written in a manner to be
understandable to the average enrollee;
``(ii) the procedures for obtaining additional information
concerning the determination; and
``(iii) notification of the right to an external review
under subsection (e) and instructions on how to initiate such
a review.
``(e) External Review.--
``(1) In general.--A group health plan or a health
insurance issuer shall have written procedures to permit an
enrollee (or the legal representative of the enrollee) access
to an external review with respect to a coverage
determination concerning a particular item or service where
the plan, in consultation with the plan's legal
representative, has determined that--
``(A) the particular item or service involved, when
medically appropriate and necessary, is generally a covered
benefit under the terms and conditions of the contract
between the plan or issuer and the enrollee;
``(B) the coverage determination involved denied coverage
for such item or service because the provision of such item
or service--
``(i) does not meet the plan's or issuer's requirements for
medical appropriateness or necessity and the amount involved
exceeds $1,000; or
``(ii) would constitute experimental or investigational
treatment and there is a significant risk of placing the life
or health of the enrollee in jeopardy; and
``(C) the enrollee has completed the internal appeals
process with respect to such determination.
``(2) Initiation of the external review process.--
``(A) Filing of request.--An enrollee (or the legal
representative of the enrollee) who desires to have an
external review conducted under this subsection shall file a
written request for such a review with the plan or issuer
involved not later than 30 working days after the receipt of
a final denial of a claim under subsection (d). Any such
request shall include the consent of the enrollee (or the
legal representative of the enrollee) for the release of
medical information and records to external reviewers
regarding the enrollee if such information is necessary for
the proper conduct of the external review.
``(B) Information and notice.--Not later than 5 working
days after the receipt of a request under subparagraph (A),
the plan or issuer involved shall select an external appeals
entity under paragraph (3)(A) that shall be responsible for
designating an external reviewer under paragraph (3)(B).
``(C) Provision of information.--The plan or issuer
involved shall forward all necessary information (including
medical records, any relevant review criteria, the clinical
rationale consistent with the terms and conditions of the
contract between the plan or issuer and the enrollee for the
coverage denial, and evidence of the enrollee's coverage) to
the

[[Page S8494]]

external reviewer selected under paragraph (3)(B).
``(D) Notification.--The plan or issuer involved shall send
a written notification to the enrollee (or the legal
representative of the enrollee) and the plan administrator,
indicating that an external review has been initiated.
``(3) Conduct of external review.--
``(A) Designation of external appeals entity by plan or
issuer.--A plan or issuer that receives a request for an
external review under paragraph (2)(A) shall designate one of
the following entities to serve as the external appeals
entity:
``(i) An external review entity licensed or credentialed by
a State.
``(ii) A State agency established for the purpose of
conducting independent external reviews.
``(iii) Any entity under contract with the Federal
Government to provide external review services.
``(iv) Any entity accredited as an external review entity
by an accrediting body recognized by the Secretary for such
purpose.
``(v) Any fully accredited teaching hospital.
``(vi) Any other entity meeting criteria established by the
Secretary for purposes of this subparagraph.
``(B) Designation of external reviewer by external appeals
entity.--The external appeals entity designated under
subparagraph (A) shall designate one or more individuals to
serve as external reviewers with respect to a request
receives under paragraph (2)(A). Such reviewers shall be
independent medical experts who shall--
``(i) be appropriately credentialed or licensed in any
State to deliver health care services;
``(ii) not have any material, professional, familial, or
financial affiliation with the case under review, the
enrollee involved, the treating health care professional, the
institution where the treatment would take place, or the
manufacturer or any drug, device, procedure, or other therapy
proposed for the enrollee whose treatment is under review;
``(iii) be experts in the treatment of the enrollee's
medical condition and knowledgeable about the recommended
therapy;
``(iv) receive only reasonable and customary compensation
from the group health plan or health insurance issuer in
connection with the external review that is not contingent on
the decision rendered by the reviewer; and
``(v) not be held liable for decisions regarding medical
determinations (but may be held liable for actions that are
arbitrary and capricious).
``(4) Standard of review.--
``(A) In general.--An external reviewer shall--
``(i) make a determination based on the medical necessity,
appropriateness, experimental or investigational nature of
the coverage denial;
``(ii) take into consideration any evidence-based decision
making or clinical practice guidelines used by the group
health plan or health insurance issuer in conducting
utilization review; or
``(iii) submit a report on the final determinations of the
review involved to--

``(I) the plan or issuer involved;
``(II) the enrollee involved (or the legal representative
of the enrollee); and
``(III) the health care professional involved.

``(B) Notice.--The plan or issuer involved shall ensure
that the enrollee receives notice, within 30 days after the
determination of the independent medical expert, regarding
the actions of the plan or issuer with respect to the
determination of such expert under the external review.
``(5) Timeframe for review.--An external reviewer shall
complete a review of an adverse coverage determination in
accordance with the medical exigencies of the case, but in no
case later than 30 working days after the later of--
``(A) the date on which such reviewer is designated; or
``(B) the date on which all information necessary to
completing such review is received.
``(6) Binding determination.--The determination of an
external reviewer under this subsection shall be binding upon
the plan or issuer if the provisions of this subsection or
the procedures implemented under such provisions were
complied with by the external reviewer.
``(7) Study.--Not later than 2 years after the date of
enactment of this section, the General Accounting Office
shall conduct a study of a statistically appropriate sample
of completed external reviews. Such study shall include an
assessment of the process involved during an external review
and the basis of decisionmaking by the external reviewer. The
results of such study shall be submitted to the appropriate
committees of Congress.
``(8) Continuing legal rights of enrollees.--Nothing in
this section shall be construed as removing any legal rights
of participants, beneficiaries, enrollees, and others under
State or Federal law, including the right to file judicial
actions to enforce rights.
``(f) Rule of Construction.--Nothing in this section shall
be construed to prohibit a plan administrator or plan
fiduciary or health plan medical director from requesting an
external review by an external reviewer without first
completing the internal review process.
``(g) Definitions.--In this section:
``(1) Adverse coverage determination.--The term `adverse
coverage determination' means a coverage determination under
the plan which results in a denial of coverage or
reimbursement.
``(2) Coverage determination.--The term `coverage
determination' means with respect to items and services for
which coverage may be provided under a health plan, a
determination of whether or not such items and services are
covered or reimbursable under the coverage and terms of the
contract.
``(3) Enrollee.--The term enrollee means a participant or
beneficiary.
``(4) Grievance.--The term `grievance' means any enrollee
complaint that does not involve a coverage determination.
``(5) Prior authorization determination.--The term `prior
authorization determination' means a coverage determination
prior to the provision of the items and services as a
condition of coverage of the items and services under the
coverage.
``(6) Treating health care professional.--The term
`treating health care professional' with respect to a group
health plan, health insurance issuer or provider sponsored
organization means a practitioner who is acting within the
scope of their State licensure or certification for the
delivery of health care services and who is primarily
responsible for delivering those services to the enrollee.
``(7) Utilization review.--The term `utilization review'
with respect to a group health plan or health insurance
coverage means a set of formal techniques designed to monitor
the use of, or evaluate the clinical necessity,
appropriateness, efficacy, or efficiency of, health care
services, procedures, or settings. Techniques may include
ambulatory review, prospective review, second opinion,
certification, concurrent review, case management, discharge
planning or retrospective review.''.
(b) Enforcement.--Section 502(c)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)(1))
is amended by inserting after ``or section 101(e)(1)'' the
following: ``, or fails to comply with a coverage
determination as required under section 503(e)(6),''.
(c) Conforming Amendment.--The table of contents in section
1 of the Employee Retirement Income Security Act of 1974 is
amended by strike the item relating to section 503 and
inserting the following new item:

``Sec. 503. Claims procedures, coverage determination, grievances and
appeals.''.

TITLE II--INDIVIDUAL RIGHTS WITH RESPECT TO PERSONAL MEDICAL
INFORMATION

SEC. 201. SHORT TITLE.

This title may be cited as the ''Personal Medical
Information Access Act''.

Subtitle A--Access to Medical Records

SEC. 211. INSPECTION AND COPYING OF PROTECTED HEALTH
INFORMATION.

(a) In General.--At the request of an individual and except
as provided in subsection (b), a health care provider, health
plan, employer, health or life insurer, school, or university
shall permit an individual who is the subject of protected
health information or the individual's designee, to inspect
and copy protected health information concerning the
individual, including records created under section 212 that
such entity maintains. Such entity may set forth appropriate
procedures to be followed for such inspection or copying and
may require an individual to pay reasonable costs associated
with such inspection or copying.
(b) Exceptions.--Unless ordered by a court of competent
jurisdiction, an entity described in subsection (a) is not
required to permit the inspection or copying of protected
health information if any of the following conditions are
met:
(1) Endangerment to life or safety.--The entity determines
that the disclosure of the information could reasonably be
expected to endanger the life or physical safety of an
individual.
(2) Confidential source.--The information identifies, or
could reasonably lead to the identification of, a person who
provided information under a promise of confidentiality
concerning the individual who is the subject of the
information.
(3) Information compiled in anticipation of litigation.--
The information is compiled principally--
(A) in the reasonable anticipation of a civil, criminal, or
administrative action or proceeding; or
(B) for use in such an action or proceeding.
(4) Research purposes.--The information was collected for a
research project monitored by an institutional review board,
such project is not complete, and the researcher involved
reasonably believes that access to such information would
harm the conduct of the research or invalidate or
undermine the validity of the research.
(c) Denial of a Request for Inspection or Copying.--If an
entity described in subsection (a) denies a request for
inspection or copying pursuant to subsection (b), the entity
shall inform the individual in writing of--
(1) the reasons for the denial of the request for
inspection or copying;
(2) any procedures for further review of the denial; and
(3) the individual's right to file with the entity a
concise statement setting forth the request for inspection or
copying.

[[Page S8495]]

(d) Statement Regarding Request.--If an individual has
filed a statement under subsection (c)(3), the entity in any
subsequent disclosure of the portion of the information
requested under subsection (a) shall include--
(1) a copy of the individual's statement; and
(2) a concise statement of the reasons for denying the
request for inspection or copying.
(e) Inspection and Copying of Segregable Portion.--An
entity described in subsection (a) shall permit the
inspection and copying under subsection (a) of any reasonably
segregable portion of protected health information after
deletion of any portion that is exempt under subsection (b).
(f) Deadline.--An entity described in subsection (a) shall
comply with or deny, in accordance with subsection (c), a
request for inspection or copying of protected health
information under this section not later than 45 days after
the date on which the entity receives the request.
(g) Rules Governing Agents.--An agent of an entity
described in subsection (a) shall not be required to provide
for the inspection and copying of protected health
information, except where--
(1) the protected health information is retained by the
agent; and
(2) the agent has received in writing a request from the
entity involved to fulfill the requirements of this section;

at which time such information shall be provided to the
requesting entity. Such requesting entity shall comply with
subsection (f) with respect to any such information.
(h) Rule of Construction.--This section shall not be
construed to require an entity described in subsection (a) to
conduct a formal, informal, or other hearing or proceeding
concerning a request for inspection or copying of protected
health information.

SEC. 212. AMENDMENT OF PROTECTED HEALTH INFORMATION.

(a) Requirement.--
(1) In general.--Except as provided in subsection (b) and
subject to paragraph (2), a health care provider, health
plan, employer, health or life insurer, school, or university
that receives from an individual a request in writing to
amend protected health information shall--
(A) amend such information as requested;
(B) inform the individual of the amendment that has been
made; and
(C) make reasonable efforts to inform any person to whom
the unamended portion of the information was previously
disclosed, of any nontechnical amendment that has been made.
(2) Compliance.--An entity described in paragraph (1) shall
comply with the requirements of such paragraph within 45 days
of the date on which the request involved is received if the
entity--
(A) created the protected health information involved; and
(B) determines that such information is in fact inaccurate.
(b) Refusal To Amend.--If an entity described in subsection
(a) refuses to make the amendment requested under such
subsection, the entity shall inform the individual in writing
of--
(1) the reasons for the refusal to make the amendment;
(2) any procedures for further review of the refusal; and
(3) the individual's right to file with the entity a
concise statement setting forth the requested amendment and
the individual's reasons for disagreeing with the refusal.
(c) Statement of Disagreement.--If an individual has filed
a statement of disagreement under subsection (b)(3), the
entity involved, in any subsequent disclosure of the disputed
portion of the information--
(1) shall include a copy of the individual's statement; and
(2) may include a concise statement of the reasons for not
making the requested amendment.
(d) Rules Governing Agents.--The agent of an entity
described in subsection (a) shall not be required to make
amendments to protected health information, except where--
(1) the protected health information is retained by the
agent; and
(2) the agent has been asked by such entity to fulfill the
requirements of this section.
If the agent is required to comply with this section as
provided for in paragraph (2), such agent shall be subject to
the 45-day deadline described in subsection (a).
(e) Repeated Requests for Amendments.--If an entity
described in subsection (a) receives a request for an
amendment of information as provided for in such subsection
and a statement of disagreement has been filed pursuant to
subsection (c), the entity shall inform the individual of
such filing and shall not be required to carry out the
procedures required under this section.
(f) Rules of Construction.--This section shall not be
construed to--
(1) require that an entity described in subsection (a)
conduct a formal, informal, or other hearing or proceeding
concerning a request for an amendment to protected health
information;
(2) require a provider to amend an individual's protected
health information as to the type, duration, or quality of
treatment the individual believes he or she should have been
provided; or
(3) permit any deletions or alterations of the original
information.

SEC. 213. NOTICE OF CONFIDENTIALITY PRACTICES.

(a) Preparation of Written Notice.--A health care provider,
health plan, health oversight agency, public health
authority, employer, health or life insurer, health
researcher, school or university shall post or provide, in
writing and in a clear and conspicuous manner, notice of the
entity's confidentiality practices, that shall include--
(1) a description of an individual's rights with respect to
protected health information;
(2) the procedures established by the entity for the
exercise of the individual's rights; and
(3) the right to obtain a copy of the notice of the
confidentiality practices required under this subtitle.
(b) Model Notice.--The Secretary, in consultation with the
National Committee on Vital and Health Statistics and the
National Association of Insurance Commissioners, and after
notice and opportunity for public comment, shall develop and
disseminate model notices of confidentiality practices. Use
of the model notice shall serve as an absolute defense
against claims of receiving inappropriate notice.

Subtitle B--Establishment of Safeguards

SEC. 221. ESTABLISHMENT OF SAFEGUARDS.

A health care provider, health plan, health oversight
agency, public health authority, employer, health or life
insurer, health researcher, law enforcement official, school
or university shall establish and maintain appropriate
administrative, technical, and physical safeguards to protect
the confidentiality, security, accuracy, and integrity of
protected health information created, received, obtained,
maintained, used, transmitted, or disposed of by such entity.

Subtitle C--Enforcement; Definitions

SEC. 231. CIVIL PENALTY.

(a) Violation.--A health care provider, health researcher,
health plan, health oversight agency, public health agency,
law enforcement agency, employer, health or life insurer,
school, or university, or the agent of any such individual or
entity, who the Secretary, in consultation with the Attorney
General, determines has substantially and materially failed
to comply with this Act shall, for a violation of this title,
be subject, in addition to any other penalties that may be
prescribed by law, to a civil penalty of not more than $500
for each such violation, but not to exceed $5,000 in the
aggregate for multiple violations.
(b) Procedures for Imposition of Penalties.--Section 1128A
of the Social Security Act, other than subsections (a) and
(b) and the second sentence of subsection (f) of that
section, shall apply to the imposition of a civil, monetary,
or exclusionary penalty under this section in the same manner
as such provisions apply with respect to the imposition of a
penalty under section 1128A of such Act.

SEC. 232. DEFINITIONS.

In this title:
(1) Agent.--The term ``agent'' means a person who
represents and acts for another under the contract or
relation of agency, or whose function is to bring about,
modify, affect, accept performance of, or terminate
contractual obligations between the principal and a third
person, including a contractor.
(2) Disclose.--The term ``disclose'' means to release,
transfer, provide access to, or otherwise divulge protected
health information to any person other than the individual
who is the subject of such information. Such term includes
the initial disclosure and any subsequent redisclosures of
protected health information.
(3) Employer.--The term ``employer'' has the meaning given
such term under section 3(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(5)), except that
such term shall include only employers of 2 or more
employees.
(4) Health care provider.--The term ``health care
provider'' means a person who, with respect to a specific
item of protected health information, receives, creates,
uses, maintains, or discloses the information while acting in
whole or in part in the capacity of--
(A) a person who is licensed, certified, registered, or
otherwise authorized by Federal or State law to provide an
item or service that constitutes health care in the ordinary
course of business, or practice of a profession;
(B) a Federal, State, or employer-sponsored program that
directly provides items or services that constitute health
care to beneficiaries; or
(C) an officer, employee, or agent of a person described in
subparagraph (A) or (B).
(5) Health or life insurer.--The term ``health or life
insurer'' means a health insurance issuer as defined in
section 2791 of the Public Health Service Act (42 U.S.C.
300gg-91) or a life insurance company as defined in section
816 of the Internal Revenue Code of 1986.
(6) Health plan.--The term ``health plan'' means any health
insurance plan, including any hospital or medical service
plan, dental or other health service plan or health
maintenance organization plan, provider sponsored
organization, or other program providing or arranging for the
provision of health benefits, whether or not funded through
the purchase of insurance.
(7) Person.--The term ``person'' means a government,
governmental subdivision,

[[Page S8496]]

agency or authority; corporation; company; association; firm;
partnership; society; estate; trust; joint venture;
individual; individual representative; tribal government; and
any other legal entity.
(8) Protected health information.--The term ``protected
health information'' means any information (including
demographic information) whether or not recorded in any form
or medium--
(A) that relates to the past, present or future--
(i) physical or mental health or condition of an individual
(including the condition or other attributes of individual
cells or their components);
(ii) provision of health care to an individual; or
(iii) payment for the provision of health care to an
individual;
(B) that is created by a health care provider, health plan,
health researcher, health oversight agency, public health
authority, employer, law enforcement official, health or life
insurer, school or university; and
(C) that is not nonidentifiable health information.
(9) School or university.--The term ``school or
university'' means an institution or place for instruction or
education, including an elementary school, secondary school,
or institution of higher learning, a college, or an
assemblage of colleges united under one corporate
organization or government.
(10) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(11) Writing.--The term ``writing'' means writing in either
a paper-based or computer-based form, including electronic
signatures.

TITLE III--GENETIC INFORMATION AND SERVICES

SEC. 301. SHORT TITLE.

This title may be cited as the ``Genetic Information
Nondiscrimination in Health Insurance Act of 1998''.

SEC. 302. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974.

(a) Prohibition of Health Discrimination on the Basis of
Genetic Information or Genetic Services.--
(1) No enrollment restriction for genetic services.--
Section 702(a)(1)(F) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1182(a)(1)(F)) is amended by
inserting before the period the following: ``(including
information about a request for or receipt of genetic
services)''.
(2) No discrimination in group premiums based on predictive
genetic information.--Subpart B of part 7 of subtitle B of
title I of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1185 et seq.) (as amended by section 111) is
further amended by adding at the end the following:

``SEC. 714. PROHIBITING PREMIUM DISCRIMINATION AGAINST GROUPS
ON THE BASIS OF PREDICTIVE GENETIC INFORMATION.

``A group health plan, or a health insurance issuer
offering group health insurance coverage in connection with a
group health plan, shall not adjust premium or contribution
amounts for a group on the basis of predictive genetic
information concerning an individual in the group or a family
member of the individual (including information about a
request for or receipt of genetic services).''.
(3) Conforming amendment.--Section 702(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1182(b)) is
amended by adding at the end the following:
``(3) Reference to related provision.--For a provision
prohibiting the adjustment of premium or contribution amounts
for a group under a group health plan on the basis of
predictive genetic information (including information about a
request for or receipt of genetic services), see section
714.''.
(b) Limitation on Collection of Predictive Genetic
Information.--Section 702 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1182) is amended by adding at
the end the following:
``(c) Collection of Predictive Genetic Information.--
``(1) Limitation on requesting or requiring predictive
genetic information.--Except as provided in paragraph (2), a
group health plan, or a health insurance issuer offering
health insurance coverage in connection with a group health
plan, shall not request or require predictive genetic
information concerning an individual or a family member of
the individual (including information about a request for or
receipt of genetic services).
``(2) Information needed for diagnosis, treatment, or
payment.--
``(A) In general.--Notwithstanding paragraph (1), a group
health plan or health insurance issuer that provides health
care items and services to an individual or dependent may
request (but may not require) that such individual or
dependent disclose, or authorize the collection or disclosure
of, predictive genetic information for purposes of diagnosis,
treatment, or payment relating to the provision of health
care items and services to such individual or dependent.
``(B) Notice of confidentiality practices and description
of safeguards.--As a part of a request under subparagraph
(A), the group health plan or health insurance issuer shall
provide to the individual or dependent a description of the
procedures in place to safeguard the confidentiality, as
described in sections 213 and 221 of the Patients' Bill of
Rights Act, of such individually identifiable information.''.
(c) Definitions.--Section 733(d) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1191b(d)) is amended
by adding at the end the following:
``(5) Family member.--The term `family member' means with
respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual; and
``(C) all other individuals related by blood to the
individual or the spouse or child described in subparagraph
(A) or (B).
``(6) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member (including information about a request for or
receipt of genetic services).
``(7) Genetic services.--The term `genetic services' means
health services provided to obtain, assess, or interpret
genetic information for diagnostic and therapeutic purposes,
and for genetic education and counseling.
``(8) Predictive genetic information.--
``(A) In general.--The term `predictive genetic
information' means--
``(i) information about an individual's genetic tests which
are associated with a statistically significant increased
risk of developing a disease or disorder;
``(ii) information about genetic tests of family members of
the individual; or
``(iii) information about the occurrence of a disease or
disorder in family members that predicts a statistically
significant increased risk of a disease or disorder in the
individual.
``(B) Exceptions.--The term `predictive genetic
information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information derived from routine physical tests,
such as the chemical, blood, or urine analyses of the
individual, unless such analyses are genetic tests; and
``(iii) information about physical exams of the individual
and other information relevant to determining the current
health status of the individual so long as such information
does not include information described in clauses (i), (ii),
or (iii) of subparagraph (A).
``(9) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites, in order to detect disease-related
genotypes, mutations, phenotypes, or karyotypes.''.
(d) Effective Date.--Except as provided in this section,
this section and the amendments made by this section shall
apply with respect to group health plans for plan years
beginning 1 year after the date of the enactment of this Act.

SEC. 303. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

(a) Amendments Relating to the Group Market.--
(1) Prohibition of health discrimination on the basis of
genetic information in the group market.--
(A) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is
amended by adding at the end the following:

``SEC. 2706. PROHIBITING PREMIUM DISCRIMINATION AGAINST
GROUPS ON THE BASIS OF PREDICTIVE GENETIC
INFORMATION IN THE GROUP MARKET.

``A group health plan, or a health insurance issuer
offering group health insurance coverage in connection with a
group health plan shall not adjust premium or contribution
amounts for a group on the basis of predictive genetic
information concerning an individual in the group or a family
member of the individual (including information about a
request for or receipt of genetic services).''.
(B) Conforming amendment.--Section 2702(b) of the Public
Health Service Act (42 U.S.C. 300gg-1(b)) is amended by
adding at the end the following:
``(3) Reference to related provision.--For a provision
prohibiting the adjustment of premium or contribution amounts
for a group under a group health plan on the basis of
predictive genetic information (including information about a
request for or receipt of genetic services), see section
2706.''.
(C) Limitation on collection and disclosure of predictive
genetic information.--Section 2702 of the Public Health
Service Act (42 U.S.C. 300gg-1) is amended by adding at the
end the following:
``(c) Collection of Predictive Genetic Information.--
``(1) Limitation on requesting or requiring predictive
genetic information.--Except as provided in paragraph (2), a
group health plan, or a health insurance issuer offering
health insurance coverage in connection with a group health
plan, shall not request or require predictive genetic
information concerning an individual or a family member of
the individual (including information about a request for or
receipt of genetic services).
``(2) Information needed for diagnosis, treatment, or
payment.--
``(A) In general.--Notwithstanding paragraph (1), a group
health plan or health insurance issuer that provides health
care items and services to an individual or dependent may
request (but may not require) that such individual or
dependent disclose,

[[Page S8497]]

or authorize the collection or disclosure of, predictive
genetic information for purposes of diagnosis, treatment, or
payment relating to the provision of health care items and
services to such individual or dependent.
``(B) Notice of confidentiality practices and description
of safeguards.--As a part of a request under subparagraph
(A), the group health plan or health insurance issuer shall
provide to the individual or dependent a description of the
procedures in place to safeguard the confidentiality, as
described in sections 213 and 221 of the Patients' Bill of
Rights Act, of such individually identifiable information.''.
(2) Definitions.--Section 2791(d) of the Public Health
Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at
the end the following:
``(15) Family member.--The term `family member' means, with
respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual; and
``(C) all other individuals related by blood to the
individual or the spouse or child described in subparagraph
(A) or (B).
``(16) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member.
``(17) Genetic services.--The term `genetic services' means
health services provided to obtain, assess, or interpret
genetic information for diagnostic and therapeutic purposes,
and for genetic education and counseling.
``(18) Predictive genetic information.--
``(A) In general.--The term `predictive genetic
information' means--
``(i) information about an individual's genetic tests which
is associated with a statistically significant increased risk
of developing a disease or disorder;
``(ii) information about genetic tests of family members of
the individual; or
``(iii) information about the occurrence of a disease or
disorder in family members that predicts a statistically
significant increased risk of a disease or disorder in the
individual.
``(B) Exceptions.--The term `predictive genetic
information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information derived from routine physical tests,
such as the chemical, blood, or urine analyses of the
individual, unless such analyses are genetic tests; and
``(iii) information about physical exams of the individual
and other information relevant to determining the current
health status of the individual so long as such information
does not include information described in clauses (i), (ii),
or (iii) of subparagraph (A).
``(19) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites, in order to detect disease-related
genotypes, mutations, phenotypes, or karyotypes.''.
(b) Amendment Relating to the Individual Market.--The first
subpart 3 of part B of title XXVII of the Public Health
Service Act (42 U.S.C. 300gg-11 et seq.) (relating to other
requirements) is amended--
(1) by redesignating such subpart as subpart II; and
(2) by adding at the end the following:

``SEC. 2752. PROHIBITION OF HEALTH DISCRIMINATION ON THE
BASIS OF PREDICTIVE GENETIC INFORMATION.

``(a) Prohibition on Predictive Genetic Information as a
Condition of Eligibility.--A health insurance issuer offering
health insurance coverage in the individual market may not
use predictive genetic information as a condition of
eligibility of an individual to enroll in individual health
insurance coverage (including information about a request for
or receipt of genetic services).
``(b) Prohibition on Predictive Genetic Information in
Setting Premium Rates.--A health insurance issuer offering
health insurance coverage in the individual market shall not
adjust premium rates for individuals on the basis of
predictive genetic information concerning such an enrollee or
a family member of the enrollee (including information about
a request for or receipt of genetic services).
``(c) Collection of Predictive Genetic Information.--
``(1) Limitation on requesting or requiring predictive
genetic information.--Except as provided in paragraph (2), a
health insurance issuer offering health insurance coverage in
the individual market shall not request or require predictive
genetic information concerning an individual or a family
member of the individual (including information about a
request for or receipt of genetic services).
``(2) Information needed for diagnosis, treatment, or
payment.--
``(A) in general.--Notwithstanding paragraph (1), a health
insurance issuer that provides health care items and services
to an individual or dependent may request (but may not
require) that such individual or dependent disclose, or
authorize the collection or disclosure of, predictive genetic
information for purposes of diagnosis, treatment, or payment
relating to the provision of health care items and services
to such individual or dependent.
``(B) Notice of confidentiality practices and description
of safeguards.--As a part of a request under subparagraph
(A), the health insurance issuer shall provide to the
individual or dependent a description of the procedures in
place to safeguard the confidentiality, as described in
sections 213 and 221 of the Patients' Bill of Rights Act, of
such individually identifiable information.''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to--
(1) group health plans, and health insurance coverage
offered in connection with group health plans, for plan years
beginning after 1 year after the date of enactment of this
Act; and
(2) health insurance coverage offered, sold, issued,
renewed, in effect, or operated in the individual market
after 1 year after the date of enactment of this Act.

SEC. 304. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

(a) Prohibition of Health Discrimination on the Basis of
Predictive Genetic Information.--
(1) In general.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:

``SEC. 9813. PROHIBITING HEALTH DISCRIMINATION AGAINST GROUPS
ON THE BASIS OF PREDICTIVE GENETIC INFORMATION.

``Sec. 9813. Prohibiting premium discrimination against groups on the
basis of predictive genetic information.''.

(b) Limitation on Collection of Predictive Genetic
Information.--Section 9802 of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``(c) Collection of Predictive Genetic Information.--
``(1) Limitation on requesting or requiring predictive
genetic information.--Except as provided in paragraph (2), a
group health plan, or a health insurance issuer offering
health insurance coverage in connection with a group health
plan, shall not request or require predictive genetic
information concerning an individual or a family member of
the individual (including information about a request for or
receipt of genetic services).
``(2) Information needed for diagnosis, treatment, or
payment.--
``(A) In general.--Notwithstanding paragraph (1), a group
health plan or health insurance issuer that provides health
care items and services to an individual or dependent may
request (but may not require) that such individual or
dependent disclose, or authorize the collection or disclosure
of, predictive genetic information for purposes of diagnosis,
treatment, or payment relating to the provision of health
care items and services to such individual or dependent.
``(B) Notice of confidentiality practices; description of
safeguards.--As a part of a request under subparagraph (A),
the group health plan or health insurance issuer shall
provide to the individual or dependent a description of the
procedures in place to safeguard the confidentiality, as
described in sections 213 and 221 of the Patients' Bill of
Rights Act, of such individually identifiable information.''.
(c) Definitions.--Section 9832(d) of the Internal Revenue
Code of 1986 is amended by adding at the end the following:
``(6) Family member.--The term `family member' means, with
respect to an individual--
``(A) the spouse of the individual;
``(B) a dependent child of the individual, including a
child who is born to or placed for adoption with the
individual; and
``(C) all other individuals related by blood to the
individual or the spouse or child described in subparagraph
(A) or (B).
``(7) Genetic information.--The term `genetic information'
means information about genes, gene products, or inherited
characteristics that may derive from an individual or a
family member.
``(8) Genetic services.--The term `genetic services' means
health services provided to obtain, assess, or interpret
genetic information for diagnostic and therapeutic purposes,
and for genetic education and counseling.
``(9) Predictive genetic information.--
``(A) In general.--The term `predictive genetic
information' means--
``(i) information about an individual's genetic tests which
is associated with a statistically significant increased risk
of developing a disease or disorder;
``(ii) information about genetic tests of family members of
the individual; or

[[Page S8498]]

``(iii) information about the occurrence of a disease or
disorder in family members that predicts a statistically
significant increased risk of a disease or disorder in the
individual.
``(B) Exceptions.--The term `predictive genetic
information' shall not include--
``(i) information about the sex or age of the individual;
``(ii) information derived from routine physical tests,
such as the chemical, blood, or urine analyses of the
individual, unless such analyses are genetic tests; and
``(iii) information about physical exams of the individual
and other information relevant to determining the current
health status of the individual so long as such information
does not include information described in clauses (i), (ii),
or (iii) of subparagraph (A).
``(10) Genetic test.--The term `genetic test' means the
analysis of human DNA, RNA, chromosomes, proteins, and
certain metabolites, in order to detect disease-related
genotypes, mutations, phenotypes, or karyotypes.''.
(d) Effective Date.--Except as provided in this section,
this section and the amendments made by this section shall
apply with respect to group health plans for plan years
beginning after 1 year after the date of the enactment of
this Act.

TITLE IV--HEALTHCARE QUALITY RESEARCH

SEC. 401. SHORT TITLE.

This title may be cited as the ``Healthcare Quality
Research Act of 1998''.

SEC. 402. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT.

Title IX of the Public Health Service Act (42 U.S.C. 299 et
seq.) is amended to read as follows:

``TITLE IX--AGENCY FOR HEALTHCARE QUALITY RESEARCH

``PART A--ESTABLISHMENT AND GENERAL DUTIES

``SEC. 901. MISSION AND DUTIES.

``(a) In General.--There is established within the Public
Health Service an agency to be known as the Agency for
Healthcare Quality Research. In carrying out this subsection,
the Secretary shall redesignate the Agency for Health Care
Policy and Research as the Agency for Healthcare Quality
Research.
``(b) Mission.--The purpose of the Agency is to enhance the
quality, appropriateness, and effectiveness of healthcare
services, and access to such services, through the
establishment of a broad base of scientific research and
through the promotion of improvements in clinical practice,
including the prevention of diseases and other health
conditions. The Agency shall promote healthcare quality
improvement by--
``(1) conducting and supporting research that develops and
presents scientific evidence regarding all aspects of
healthcare, including--
``(A) the development and assessment of methods for the
purposes of enhancing patient participation in their own care
and for facilitating shared patient-physician decision-
making;
``(B) the outcomes, effectiveness, and cost-effectiveness
of healthcare practices, including preventive measures and
primary care;
``(C) existing and innovative technologies;
``(D) the costs and utilization of, and access to
healthcare;
``(E) the ways in which healthcare services are organized,
delivered, and financed and the interaction and impact of
these factors on the quality of patient care;
``(F) methods for measuring quality and strategies for
improving quality; and
``(G) ways in which patients, consumers, and practitioners
acquire new information about best practices and health
benefits, and the determinants of their use of this
information;
``(2) synthesizing and disseminating available scientific
evidence for use by patients, consumers, practitioners,
providers, purchasers, policy makers, and educators; and
``(3) advancing private and public efforts to improve
healthcare quality.
``(c) Requirements With Respect to Rural Areas and Priority
Populations.--In carrying out subsection (b), the Director
shall undertake and support research, demonstration projects,
and evaluations with respect to--
``(1) the delivery of health services in rural areas
(including frontier areas);
``(2) health services for low-income groups, and minority
groups;
``(3) the health of children;
``(4) the elderly; and
``(5) people with special healthcare needs, including
chronic care and end-of-life healthcare.
``(d) Appointment of Director.--There shall be at the head
of the Agency an official to be known as the Director for
Healthcare Quality Research. The Director shall be appointed
by the Secretary. The Secretary, acting through the Director,
shall carry out the authorities and duties established in
this title.

``SEC. 902. GENERAL AUTHORITIES.

``(a) In General.--In carrying out section 901(b), the
Director shall support demonstration projects, conduct and
support research, evaluations, training, research networks,
multi-disciplinary centers, technical assistance, and the
dissemination of information, on healthcare, and on systems
for the delivery of such care, including activities with
respect to--
``(1) the quality, effectiveness, efficiency,
appropriateness and value of healthcare services;
``(2) quality measurement and improvement;
``(3) the outcomes, cost, cost-effectiveness, and use of
healthcare services and access to such services;
``(4) clinical practice, including primary care and
practice-oriented research;
``(5) healthcare technologies, facilities, and equipment;
``(6) healthcare costs, productivity, and market forces;
``(7) health promotion and disease prevention, including
clinical preventive services;
``(8) health statistics, surveys, database development, and
epidemiology; and
``(9) medical liability.
``(b) Health Services Training Grants.--The Director may
provide training grants in the field of health services
research related to activities authorized under subsection
(a), to include pre- and post-doctoral fellowships and
training programs, young investigator awards, and other
programs and activities as appropriate. In carrying out this
subsection, the Director shall make use of funds made
available under section 478.
``(c) Multidisciplinary Centers.--The Director may provide
financial assistance to assist in meeting the costs of
planning and establishing new centers, and operating existing
and new centers, for multidisciplinary health services
research, demonstration projects, evaluations, training, and
policy analysis with respect to the matters referred to in
subsection (a).
``(d) Relation to Certain Authorities Regarding Social
Security.--Activities authorized in this section may include,
and shall be appropriately coordinated with experiments,
demonstration projects, and other related activities
authorized by the Social Security Act and the Social Security
Amendments of 1967. Activities under subsection (a)(2) of
this section that affect the programs under titles XVIII and
XIX of the Social Security Act shall be carried out
consistent with section 1142 of such Act.
``(e) Disclaimer.--Nothing in this title shall be construed
to imply that the Agency's role is to mandate national
standards of clinical practice or quality healthcare
standards. Recommendations resulting from projects funded and
published by the Agency shall include a corresponding
disclaimer.
``(f) Rule of Construction.--Nothing in this section shall
be construed to imply that quality measurement is a science
of uniform national standards. In research and quality
improvement activities, the Agency shall consider a wide
range of choices, providers, healthcare delivery systems, and
individual preferences.

``PART B--HEALTHCARE IMPROVEMENT RESEARCH

``SEC. 911. HEALTHCARE OUTCOME IMPROVEMENT RESEARCH.

``(a) Evidence Rating Systems.--In collaboration with
experts from the public and private sector, the Agency shall
identify and disseminate methods or systems used to assess
healthcare research results, particularly to rate the
strength of the scientific evidence behind healthcare
practice and technology recommendations in the research
literature. The Agency shall make methods or systems for
evidence rating widely available. Agency publications
containing healthcare recommendations shall indicate the
level of substantiating evidence using such methods or
systems.
``(b) Healthcare Improvement Research Centers and Provider-
Based Research Networks.--
``(1) In general.--In order to address the full continuum
of care and outcomes research, to link research to practice
improvement, and to speed the dissemination of research
findings to community practice settings, the Agency shall
employ research strategies and mechanisms that will link
research directly with clinical practice in geographically
diverse locations throughout the United States, including--
``(A) Healthcare Improvement Research Centers that combine
demonstrated multidisciplinary expertise in outcomes or
quality improvement research with linkages to relevant sites
of care;
``(B) Practice-based Research Networks, including plan,
facility, or delivery system sites of care (especially
primary care), that can evaluate and promote quality
improvement; and
``(C) other innovative mechanisms or strategies.
``(2) Requirements.--The Director is authorized to
establish the requirements for entities applying for grants
under this subsection.
``(c) Expansion of the Health Services Research
Workforce.--
``(1) Grants.--The Agency shall, through the awarding of
grants, support eligible entities at geographically diverse
locations throughout the United States to enable such
entities to carry out research training programs that are
dedicated to health services research training at the
doctoral, post-doctoral, and junior faculty levels.
``(2) Requirements.--In developing priorities for the
allocation of training funds under this subsection, the
Director shall take into consideration shortages in the
number of trained researchers addressing the priority
populations.

[[Page S8499]]

``SEC. 912. PRIVATE-PUBLIC PARTNERSHIPS TO IMPROVE
ORGANIZATION AND DELIVERY.

``(a) Support for Efforts To Develop Information on
Quality.--
``(1) Scientific and technical support.--In its role as the
principal agency for healthcare quality research, the Agency
shall provide scientific and technical support for private
and public efforts to improve healthcare quality, including
accrediting organizations.
``(2) Role of the agency.--With respect to paragraph (1),
the role of the Agency shall include--
``(A) the identification and assessment of methods for the
evaluation of the health of enrollees in health plans by type
of plan, provider, and provider arrangements;
``(B) the ongoing development, testing, and dissemination
of quality measures, including measures of health and
functional outcomes, that take into account appropriate
variations in individual preferences;
``(C) the compilation and dissemination of healthcare
quality measures developed in the private and public sector;
``(D) assistance in the development of improved healthcare
information systems;
``(E) the development of survey tools for the purpose of
measuring participant and beneficiary assessments of their
healthcare; and
``(F) the integration of information on quality into
purchaser and consumer decision-making processes.
``(b) Demonstration Program Regarding Centers for Education
and Research on Therapeutics.--
``(1) In general.--The Secretary, acting through the
Director and in consultation with the Commissioner of Food
and Drugs, shall establish a demonstration program for the
purpose of making one or more grants for the establishment
and operation of one or more centers to carry out the
activities specified in paragraph (2).
``(2) Required activities.--The activities referred to in
this paragraph are the following:
``(A) The conduct of state-of-the-art clinical research for
the following purposes:
``(i) To increase awareness of--

``(I) new uses of drugs, biological products, and devices;
``(II) ways to improve the effective use of drugs,
biological products, and devices; and
``(III) risks of new uses and risks of combinations of
drugs and biological products.

``(ii) To provide objective clinical information to the
following individuals and entities:

``(I) Healthcare practitioners and other providers of
Healthcare goods or services.
``(II) Pharmacy benefit managers and purchasers.
``(III) Health maintenance organizations and other managed
healthcare organizations.
``(IV) Healthcare insurers and governmental agencies.
``(V) Patients and consumers.

``(iii) To improve the quality of healthcare while reducing
the cost of Healthcare through--

``(I) the appropriate use of drugs, biological products, or
devices; and
``(II) the prevention of adverse effects of drugs,
biological products, and devices and the consequences of such
effects, such as unnecessary hospitalizations.

``(B) The conduct of research on the comparative
effectiveness, cost-effectiveness, and safety of drugs,
biological products, and devices.
``(C) Such other activities as the Secretary determines to
be appropriate, except that a grant may not be expended to
assist the Secretary in the review of new drugs.
``(3) Application for grant.--A grant under paragraph (1)
may be made only if an application for the grant is submitted
to the Secretary and the application is in such form, is made
in such manner, and contains such agreements, assurances, and
information as the Secretary determines to be necessary to
carry out this section.
``(4) Peer review.--A grant under paragraph (1) may be made
only if the application for the grant has undergone
appropriate technical and scientific peer review.
``(c) Reducing Errors in Medicine.--The Director shall
conduct and support research and build private-public
partnerships to--
``(1) identify the causes of preventable healthcare errors
and patient injury in healthcare delivery systems;
``(2) develop, demonstrate, and evaluate strategies for
reducing errors and improving patient safety; and
``(3) promote the implementation of effective strategies
throughout the healthcare industry.

``SEC. 913. INFORMATION ON QUALITY AND COST OF CARE.

``(a) In General.--In carrying out 902(a), the Director
shall--
``(1) collect data from a nationally representative sample
of the population on the cost and use of healthcare,
including the types of healthcare services Americans use,
their access to healthcare services, frequency of use, how
much is paid for the services used, the source of those
payments, the types and costs of private health insurance,
access, satisfaction, and quality of care for the general
population and also for children, uninsured persons, poor and
near-poor individuals, and persons with special healthcare
needs, including end-of-life healthcare;
``(2) develop databases and tools that enable States to
track the quality, access, and use of healthcare services
provided to their residents; and
``(3) enter into agreements with public or private entities
to use, link, or acquire databases for research authorized
under this title.
``(b) Quality and Outcomes Information.--
``(1) In general.--To enhance the understanding of the
quality of care, the determinants of health outcomes and
functional status, the needs of special populations as well
as an understanding of these changes over time, their
relationship to healthcare access and use, and to monitor the
overall national impact of Federal and State policy changes
on healthcare, the Director, beginning in fiscal year 2000,
shall ensure that the survey conducted under subsection
(a)(1) will--
``(A) provide information on the quality of care and
patient outcomes for frequently occurring clinical conditions
for a nationally representative sample of the population; and
``(B) provide reliable national estimates for children and
persons with special healthcare needs through the use of
supplements or periodic expansions of the survey.
``(2) Annual report.--Beginning in fiscal year 2002, the
Secretary, acting through the Director, shall submit to
Congress an annual report on national trends in the quality
of healthcare provided to the American people.

``SEC. 914. INFORMATION SYSTEMS FOR HEALTHCARE IMPROVEMENT.

``In order to foster a range of innovative approaches to
the management and communication of health information, the
Agency shall support research to evaluate and initiatives to
advance--
``(1) the use of information systems for the study of
healthcare quality, including the generation of both
individual provider and plan-level comparative performance
measures;
``(2) training for healthcare practitioners and researchers
in the use of information systems;
``(3) the creation of effective linkages between various
sources of health information, including the development of
information networks;
``(4) the delivery and coordination of evidence-based
healthcare services, using real-time decision-support
programs;
``(5) the structure, content, definition, and coding of
health information data and medical vocabularies and shall
consult with other Federal entities;
``(6) the evaluation and use of computer-based health
records in outpatient and inpatient settings as a personal
health record for individual health assessment and
maintenance, and for monitoring public health and outcomes of
care within populations; and
``(7) the protection of individually identifiable
information in health services research and healthcare
quality improvement.

``SEC. 915. RESEARCH SUPPORTING PRIMARY CARE DELIVERY AND
ACCESS IN UNDERSERVED AREAS.

``(a) Preventive Services Task Force.--
``(1) Purpose.--The Agency shall provide ongoing
administrative, research, and technical support for the
operation of the Preventive Services Task Force. The Agency
shall coordinate and support the dissemination of the
Preventive Services Task Force recommendations.
``(2) Operation.--The Preventive Services Task Force shall
review the scientific evidence related to the effectiveness,
appropriateness, and cost-effectiveness of clinical
preventive services for the purpose of developing
recommendations, and updating previous recommendations,
regarding their usefulness in daily clinical practice. In
carrying out its responsibilities under paragraph (1), the
Task Force shall not be subject to the provisions of Appendix
2 of title 5, United States Code.
``(b) Primary Care Delivery Research.--
``(1) In general.--There is established within the Agency a
Center for Primary Care Delivery Research (referred to in
this subsection as the `Center') that shall serve as the
principal source of funding for primary care delivery
research in the Department of Health and Human Services. For
purposes of this paragraph, primary care delivery research
focuses on the first contact when illness or health concerns
arise, the diagnosis, treatment or referral to specialty
care, preventive care, and the relationship between the
clinician and the patient in the context of the family and
community.
``(2) Research.--In carrying out this section, the Center
shall conduct and support research on--
``(A) the nature and characteristics of primary care
delivery practice;
``(B) producing evidence for the management of commonly
occurring clinical problems;
``(C) the management of undifferentiated clinical problems;
``(D) the continuity and coordination of health services;
and
``(E) the application and impact of telemedicine and other
distance technologies.
``(3) Demonstration.--The Agency shall support
demonstrations into the use of new information tools aimed at
improving shared decision-making between patients and their
care-givers.

``SEC. 916. CLINICAL PRACTICE AND TECHNOLOGY INNOVATION.

``(a) In General.--The Director shall promote innovation in
evidence-based clinical practice and healthcare technologies
by--
``(1) conducting and supporting research on the
development, diffusion, and use of healthcare technology;

[[Page S8500]]

``(2) developing, evaluating, and disseminating
methodologies for healthcare practice and technology
assessment;
``(3) conducting intramural and supporting extramural
assessments of existing and new healthcare practices and
technologies;
``(4) promoting education, training, and providing
technical assistance in the use of healthcare practice and
healthcare technology assessment methodologies and results;
and
``(5) working with the National Library of Medicine and the
public and private sector to develop an electronic
clearinghouse of currently available assessments and those in
progress.
``(b) Specification of Process.--
``(1) In general.--Not later than June 1, 1999, the
Director shall develop and publish a description of the
methods used by the Agency and its contractors for practice
and technology assessment.
``(2) Consultations.--In carrying out this subsection, the
Director shall cooperate and consult with the Administrator
of the Health Care Financing Administration, the Director of
the National Institutes of Health, the Commissioner of Food
and Drugs, and the heads of any other interested Federal
department or agency, professional societies, and other
private and public entities.
``(3) Methodology.--The methods employed in practice and
technology assessments under paragraph (1) shall consider--
``(A) safety, efficacy, and effectiveness;
``(B) legal, social, and ethical implications;
``(C) costs, benefits, and cost-effectiveness;
``(D) comparisons to alternative technologies and
practices; and
``(E) requirements of Food and Drug Administration approval
to avoid duplication.
``(c) Specific Assessments.--
``(1) In general.--The Director shall conduct and support
specific assessments of healthcare technologies and
practices.
``(2) Grants and contracts.--The Director may make grants
to, or enter into cooperative agreements or contracts with,
entities described in paragraph (3) for the establishment of
collaborative arrangements for the purpose of conducting
assessments of experimental, emerging, existing, or
potentially outmoded healthcare technologies, and for related
activities.
``(3) Eligible entities.--An entity described in this
paragraph is an entity that is determined to be appropriate
by the Director, including academic medical centers, research
institutions, professional organizations, third party payers,
other governmental agencies, and consortia of appropriate
research entities established for the purpose of conducting
technology assessments.

``SEC. 917. COORDINATION OF FEDERAL GOVERNMENT QUALITY
IMPROVEMENT EFFORTS.

``(a) Requirement.--
``(1) In general.--The Secretary, acting through the
Director, shall coordinate all research, evaluations, and
demonstrations related to health services research and
quality measurement and improvement activities undertaken and
supported by the Federal Government.
``(2) Specific activities.--The Director, in collaboration
with the appropriate Federal officials representing all
concerned executive agencies and departments, shall develop
and manage a process to--
``(A) improve interagency coordination, priority setting,
and the use and sharing of research findings and data
pertaining to Federal quality improvement programs and health
services research;
``(B) strengthen the research information infrastructure,
including databases, pertaining to Federal health services
research and healthcare quality improvement initiatives;
``(C) set specific goals for participating agencies and
departments to further health services research and
healthcare quality improvement; and
``(D) strengthen the management of Federal healthcare
quality improvement programs.
``(b) Study by the Institute of Medicine.--
``(1) In general.--To provide the Department of Health and
Human Services with independent, expert advice in redesigning
its quality oversight functions, and pertinent research
programs, the Secretary shall enter into a contract with the
Institute of Medicine--
``(A) to describe and evaluate current quality improvement
research and monitoring processes through--
``(i) an overview of pertinent health services research
activities and quality improvement efforts with particular
attention paid to those performed by the peer review
organizations;
``(ii) an analysis of the various partnership activities
that the Department of Health and Human Services has pursued
with private sector accreditation and other quality
measurement organizations;
``(iii) the exploration of programmatic areas where
partnership activities could be pursued to improve quality
oversight of the medicare and medicaid programs under titles
XVIII and XIX of the Social Security Act; and
``(iv) an identification of opportunities for enhancing
health system efficiency through simplification and reduction
in redundancy of public and private sector quality
improvement efforts; and
``(B) to identify options and make recommendations to
improve the efficiency and effectiveness of such quality
improvement programs and to optimize public/private sector
accreditation bodies through--
``(i) the improved coordination of activities across the
medicare and medicaid programs under titles XVIII and XIX of
the Social Security Act and various health services research
programs;
``(ii) greater consistency and standardization of oversight
activities across traditional fee-for-service and managed
care components of these programs;
``(iii) the strengthening of patient choice and
participation by incorporating state-of-the-art quality
monitoring tools and making information on quality available;
and
``(iv) the enhancement of the most effective programs,
consolidation as appropriate, and elimination of duplicative
activities within various federal agencies.
``(2) Requirements.--
``(A) In general.--The Secretary shall enter into a
contract with the Institute of Medicine for the preparation--
``(i) not later than 12 months after the date of enactment
of this title, of a report providing an overview of the
quality improvement programs of the Department of Health and
Human Services for the medicare, medicaid, and CHIP programs
under titles XVIII, XIX, and XXI of the Social Security Act;
and
``(ii) not later than 24 months after the date of enactment
of this title, of a final report containing recommendations
for a comprehensive system and public-private partnerships
for healthcare quality improvement.
``(B) Reports.--The Secretary shall submit the reports
described in subparagraph (A) to the Committee on Finance and
the Committee on Labor and Human Resources of the Senate and
the Committee on Ways and Means and the Committee on Commerce
of the House of Representatives.

``PART C--FOUNDATION FOR HEALTHCARE QUALITY RESEARCH

``SEC. 921. FOUNDATION FOR HEALTHCARE QUALITY RESEARCH.

``(a) In General.--The Secretary shall, acting through the
Director of the Agency for Healthcare Quality Research,
establish a nonprofit corporation to be known as the
Foundation for Healthcare Research (hereafter in this section
referred to as the `Foundation'). The Foundation shall not be
an agency or instrumentality of the United States Government.
``(b) Purpose of Foundation.--The purpose of the Foundation
shall be to--
``(1) support the Agency for Healthcare Quality Research in
its mission;
``(2) foster public-private partnerships to support the
programs and activities of the Agency;
``(3) advance collaboration with healthcare researchers
from universities, industry, and nonprofit organizations; and
``(4) develop linkages with users of healthcare and quality
research, including patients, consumers, practitioners and
other healthcare providers, health plans and insurers, large
private or public sector purchasers of healthcare, healthcare
policy makers, and healthcare educators.
``(c) Certain Activities of Foundation.--In carrying out
subsection (b), the Foundation may solicit and accept gifts,
grants, and other donations, establish accounts, and invest
and expend funds in support of a broad range of research,
training, dissemination, and other activities with respect to
the purpose described in such subsection. In addition, the
Foundation is authorized to support the following:
``(1) A program to provide and administer endowed positions
that are associated with the research program of the Agency
for Healthcare Quality Research. Such endowments may be
expended for the compensation of individuals holding the
positions, for staff, equipment, quarters, travel, and other
expenditures that are appropriate in supporting the endowed
positions.
``(2) A program to provide and administer fellowships and
grants to research personnel in order to work and study in
association with the Agency for Healthcare Quality Research.
Such fellowships and grants may include stipends, travel,
health insurance benefits, and other appropriate expenses.
The recipients of fellowships shall be selected by the donors
and the Foundation upon the recommendation of the Agency for
Healthcare Quality Research, and shall be subject to the
agreement of the Director of the Agency for Healthcare
Quality Research and the Executive Director of the
Foundation.
``(d) General Structure of Foundation; Nonprofit Status.--
``(1) Board of directors.--The Foundation shall have a
Board of Directors (in this section referred to as the
Board), which shall be established and conducted in
accordance with subsection (e). The Board shall establish the
general policies of the Foundation for carrying out
subsection (b), including the establishment of the bylaws of
the Foundation.
``(2) Executive director.--The Foundation shall have an
executive director (in this section referred to as the
`Director'), who shall be appointed by the Board, who shall
serve at the pleasure of the Board, and for whom the Board
shall establish the rate of compensation. Subject to
compliance with the policies and bylaws established by the
Board pursuant to paragraph (1), the Director shall be
responsible for the daily operations of the Foundation in
carrying out subsection (b).
``(3) Nonprofit status.--In carrying out subsection (b),
the Board shall establish such

[[Page S8501]]

policies and bylaws under paragraph (1), and the Director
shall carry out such activities under paragraph (2), as may
be necessary to ensure that the Foundation maintains status
as an organization that--
``(A) is described in subsection (c)(3) of section 501 of
the Internal Revenue Code of 1986; and
``(B) is, under subsection (a) of such section, exempt from
taxation.
``(e) Board of Directors.--
``(1) Certain bylaws.--
``(A) In general.--The Board shall ensure that bylaws
established under subsection (a)(1) include bylaws for the
following:
``(i) Policies for the selection of the officers,
employees, agents, and contractors of the Foundation.
``(ii) Policies, including ethical standards, for the
acceptance and disposition of donations to the Foundation and
for the disposition of the assets of the Foundation.
``(iii) Policies for the conduct of the general operations
of the Foundation.
``(iv) Policies for writing, editing, printing, and
publishing of books and other materials, and the acquisition
of patents and licenses for devices and procedures developed
by the Foundation.
``(B) Requirements.--The Board shall ensure that the bylaws
established under subsection (d)(1) (and activities carried
out under such bylaws) do not--
``(i) reflect unfavorably upon the ability of the
Foundation, or the Agency for Healthcare Quality Research, to
carry out its responsibilities or official duties in a fair
and objective manner; or
``(ii) compromise, or appear to compromise, the integrity
of any governmental program or any officer or employee
involved in such program.
``(2) Composition.--
``(A) In general.--Subject to subparagraph (B), the Board
shall be composed of 7 individuals, appointed in accordance
with paragraph (4), who collectively possess education or
experience appropriate for representing the constituencies
described in subsection (b). Each such individual shall be a
voting member of the Board.
``(B) Additional members.--The Board may, through
amendments to the bylaws of the Foundation, provide that the
number of members of the Board shall be a greater number than
the number specified in subparagraph (A).
``(3) Chair.--The Board shall, from among the members of
the Board, designate an individual to serve as the chair of
the Board (in this subsection referred to as the `Chair').
``(4) Appointments, vacancies, and terms.--The following
shall apply to the Board:
``(A) Any vacancy in the membership of the Board shall be
filled by appointment by the Board, after consideration of
suggestions made by the Chair and the Director regarding the
appointments. Any such vacancy shall be filled not later than
the expiration of the 180-day period beginning on the date on
which the vacancy occurs.
``(B) The term of office of each member of the Board
appointed under subparagraph (A) shall be 5 years. A member
of the Board may continue to serve after the expiration of
the term of the member until the expiration of the 180-day
period beginning on the date on which the term of the member
expires.
``(C) A vacancy in the membership of the Board shall not
affect the power of the Board to carry out the duties of the
Board. If a member of the Board does not serve the full term
applicable under subparagraph (B), the individual appointed
to fill the resulting vacancy shall be appointed for the
remainder of the term of the predecessor of the individual.
``(5) Compensation.--Members of the Board may not receive
compensation for service on the Board. The members may be
reimbursed for travel, subsistence, and other necessary
expenses incurred in carrying out the duties of the Board.
``(f) Certain Responsibilities of Executive Director.--In
carrying out subsection (d)(2), the Director shall carry out
the following functions:
``(1) Hire, promote, compensate, and discharge officers and
employees of the Foundation, and define the duties of the
officers and employees.
``(2) Accept and administer donations to the Foundation,
and administer the assets of the Foundation.
``(3) Establish a process for the selection of candidates
for holding endowed positions under subsection (c).
``(4) Enter into such financial agreements as are
appropriate in carrying out the activities of the Foundation.
``(5) Take such action as may be necessary to acquire
patents and licenses for devices and procedures developed by
the Foundation and the employees of the Foundation.
``(6) Adopt, alter, and use a corporate seal, which shall
be judicially noticed.
``(7) Commence and respond to judicial proceedings in the
name of the Foundation.
``(8) Other functions that are appropriate in the
determination of the Director.
``(g) General Provisions.--
``(1) Authority for accepting funds.--The Director of the
Agency for Healthcare Quality Research may accept and
utilize, on behalf of the Federal Government, any gift,
donation, bequest, or devise of real or personal property
from the Foundation for the purpose of aiding or facilitating
the work of such Agency. Funds may be accepted and utilized
by such Director under the preceding sentence without regard
to whether the funds are designated as general-purpose funds
or special-purpose funds. Any funds transferred under this
paragraph shall be subject to all Federal limitations
relating to federally funded research.
``(2) Authority for acceptance of voluntary services.--
``(A) In general.--The Director of the Agency for
Healthcare Quality Research may accept, on behalf of the
Federal Government, any voluntary services provided to such
Agency by the Foundation for the purpose of aiding or
facilitating the work of such Agency. In the case of an
individual, such Director may accept the services provided
under the preceding sentence by the individual for not more
than 2 years.
``(B) Limitation.--The limitation established in
subparagraph (A) regarding the period of time in which
services may be accepted applies to each individual who is
not an employee of the Federal Government and who serves in
association with the Agency for Healthcare Quality Research
pursuant to financial support from the Foundation.
``(3) Administrative control.--No officer, employee, or
member of the Board of the Foundation may exercise any
administrative or managerial control over any Federal
employee.
``(4) Applicability of certain standards to non-federal
employees.--In the case of any individual who is not an
employee of the Federal Government and who serves in
association with the Agency for Healthcare Quality Research
pursuant to financial support from the Foundation, the
Foundation shall negotiate a memorandum of understanding with
the individual and the Director of the Agency for Healthcare
Quality Research specifying that the individual--
``(A) shall be subject to the ethical and procedural
standards regulating Federal employment, scientific
investigation, and research findings (including publications
and patents) that are required of individuals employed by the
Agency for Healthcare Quality Research, including standards
under this Act, the Ethics in Government Act, and the
Technology Transfer Act; and
``(B) shall be subject to such ethical and procedural
standards under chapter 11 of title 18, United States Code
(relating to conflicts of interest), as the Director of such
Agency determines is appropriate, except such memorandum may
not provide that the individual shall be subject to the
standards of section 209 of such chapter.
``(5) Financial conflicts of interest.--Any individual who
is an officer, employee, or member of the Board of the
Foundation may not directly or indirectly participate in the
consideration or determination by the Foundation of any
question affecting--
``(A) any direct or indirect financial interest of the
individual; or
``(B) any direct or indirect financial interest of any
business organization or other entity of which the individual
is an officer or employee or in which the individual has a
direct or indirect financial interest.
``(6) Audits; availability of records.--The Foundation
shall--
``(A) provide for biennial audits of the financial
condition of the Foundation; and
``(B) make such audits, and all other records, documents,
and other papers of the Foundation, available to the
Secretary and the Comptroller General of the United States
for examination or audit.
``(7) Reports.--
``(A) In general.--Not later than February 1 of each fiscal
year, the Foundation shall publish a report describing the
activities of the Foundation during the preceding fiscal
year. Each such report shall include for the fiscal year
involved a comprehensive statement of the operations,
activities, financial condition, and accomplishments of the
Foundation.
``(B) Financial requirement.--With respect to the financial
condition of the Foundation, each report under subparagraph
(A) shall include the source, and a description of, all gifts
to the Foundation each report under subparagraph (A) shall
include the source, and a description of, all gifts to the
Foundation of real or personal property, and the source
and amount of all gifts to the Foundation of money. Each
such report shall include a specification of any
restrictions on the purposes for which gifts to the
Foundation may be used.
``(C) Public inspection.--The Foundation shall make copies
of each report submitted under subparagraph (A) available for
public inspection, and shall upon request provide a copy of
the report to any individual for a charge not exceeding the
cost of providing the copy.
``(8) Liaison from the agency for healthcare quality
research.--The Director of the Agency for Healthcare Quality
Research shall serve as the liaison representative of such
Agency and the Foundation.
``(h) Federal Funding.--
``(1) Authority for financial support.--
``(A) In general.--The Secretary, acting through the
Director of the Agency for Healthcare Quality Research,
shall--
``(i) for fiscal year 1999, support the work of the
Committee, established pursuant to subsection (i); and
``(ii) for fiscal year 2000 and each subsequent fiscal
year, make a grant to the Foundation.
``(B) Limitations.--Financial support under subparagraph
(A) may be expended--
``(i) in the case of the Committee, only for the purpose of
carrying out the duties established in subsection (i); and

[[Page S8502]]

``(ii) in the case of the Foundation, only for the purpose
of the administrative expenses of the Foundation.
``(C) Remaining funds.--For the purposes described in
subparagraph (B), any portion of the financial support
provided to the Committee under subparagraph (A)(i) for
fiscal year 1999 that remains unobligated after the Committee
completes the duties established in subsection (i) shall be
available to the Foundation.
``(2) Funds.--
``(A) Authorization of appropriations.--For the purpose of
providing financial support under paragraph (1), there is
authorized to be appropriated for the Foundation $500,000 for
each fiscal year.
``(B) Grants.--For the purpose of grants under paragraph
(1), the Secretary may for each fiscal year make available
not more than $500,000 from the amounts appropriated for the
fiscal year for the programs of the Department of Health and
Human Services. Such amounts may be made available without
regard to whether amounts have been appropriated under
subparagraph (A).
``(3) Certain restriction.--If the Foundation receives
Federal funds for the purpose of serving as a fiscal
intermediary between Federal agencies, the Foundation may not
receive such funds for the indirect costs of carrying out
such purpose in an amount exceeding 10 percent of the direct
costs of carrying out such purpose. The preceding sentence
may not be construed as authorizing the expenditure of any
grant under paragraph (1) for such purpose.
``(i) Establishment of Committee.--
``(1) In general.--The Secretary shall establish in
accordance with this subsection a committee (referred to in
this subsection as the `Committee') to carry out the
functions described in paragraph (2).
``(2) Functions.--The functions referred to in paragraph
(1) for the Committee are as follows:
``(A) To carry out such activities as may be necessary to
incorporate the Foundation under the laws of the State
involved, including serving as incorporators for the
Foundation. Such activities shall include ensuring that the
articles of incorporation for the Foundation require that the
Foundation be established and operated in accordance with the
applicable provisions of this part (or any successor to this
part), including such provisions as may be in effect pursuant
to amendments enacted after the date of the enactment of the
Healthcare Quality Research Act of 1998.
``(B) To ensure that the Foundation qualifies for and
maintains the status described in subsection (d)(3)
(regarding taxation).
``(C) To establish the general policies and initial bylaws
of the Foundation, which bylaws shall include the bylaws
described in subsections (d)(3) and (e)(1).
``(D) To provide for the initial operation of the
Foundation, including providing for quarters, equipment, and
staff.
``(E) To appoint the initial members of the Board in
accordance with the requirements established in subsection
(e)(2)(A) for the composition of the Board and establish
their respective terms, and other such qualifications as the
Committee may determine to be appropriate.
``(3) Completion of functions of committee; initial meeting
of board.--
``(A) In general.--The Committee shall complete the
functions required in paragraph (1) not later than 1 year
following the appointment of the last member of the
Committee. The Committee shall terminate upon the expiration
of the 30-day period beginning on the date on which the
Secretary determines that the functions have been completed.
``(B) Initial meeting.--The initial meeting of the Board
shall be held not later than 90 days after the Committee has
completed its functions.
``(4) Composition.--The Committee shall be composed of 7
members, each of whom shall be a voting member. Of the
members of the Committee--
``(A) not fewer than 2 members shall have broad, general
experience in healthcare; and
``(B) not fewer than 2 members shall have broad, general
experience in the creation of a nonprofit private
organization, one of whom shall have expertise in the legal
structuring of nonprofit organizations (without regard to
whether the individuals have experience in healthcare).
``(5) Chair.--The Committee shall, from among the members
of the Committee, designate an individual to serve as the
chair of the Committee.
``(6) Terms; vacancies.--The term of members of the
Committee shall be for the duration of the Committee. A
vacancy in the membership of the Committee shall not affect
the power of the Committee to carry out the duties of the
Committee. If a member of the Committee does not serve the
full term, the individual appointed to fill the resulting
vacancy shall be appointed for the remainder of the term of
the predecessor of the individual.
``(7) Compensation.--Members of the Committee may not
receive compensation for service on the Committee. Members of
the Committee may be reimbursed for travel, subsistence, and
other necessary expenses incurred in carrying out the duties
of the Committee.
``(8) Committee support.--The Director of the Agency for
Healthcare Quality Research may, from amounts available to
the Director for the general administration of such Agency,
provide staff and financial support to assist the Committee
with carrying out the functions described in paragraph (2).
In providing such staff and support, the Director may both
detail employees and contract for assistance.

``PART D--GENERAL PROVISIONS

``SEC. 931. ADVISORY COUNCIL FOR HEALTHCARE QUALITY RESEARCH.

``(a) Establishment.--There is established an advisory
council to be known as the Advisory Council for Healthcare
Quality Research.
``(b) Duties.--
``(1) In general.--The Advisory Council shall advise the
Secretary and the Director with respect to activities to
carry out the purpose of the Agency under section 901(b).
``(2) Certain recommendations.--Activities of the Advisory
Council under paragraph (1) shall include making
recommendations to the Director regarding--
``(A) priorities regarding healthcare research, especially
studies related to quality, outcomes, cost and the
utilization of, and access to, healthcare services;
``(B) the field of healthcare research and related
disciplines, especially issues related to training needs, and
dissemination of information on quality; and
``(C) the appropriate role of the Agency in each of these
areas in light of private sector activity and identification
of opportunities for public-private sector partnerships.
``(c) Membership.--
``(1) In general.--The Advisory Council shall, in
accordance with this subsection, be composed of appointed
members and ex officio members. All members of the Advisory
Council shall be voting members other than the individuals
designated under paragraph (3)(B) who shall be ex officio
members of the Advisory Council.
``(2) Appointed members.--The Secretary shall appoint to
the Advisory Council 21 appropriately qualified individuals.
At least 17 members of the Advisory Council shall be
representatives of the public who are not officers or
employees of the United States. The Secretary shall ensure
that the appointed members of the Council, as a group, are
representative of professions and entities concerned with, or
affected by, activities under this title and under section
1142 of the Social Security Act. Of such members--
``(A) 4 shall be individuals distinguished in the conduct
of research, demonstration projects, and evaluations with
respect to healthcare;
``(B) 4 shall be individuals distinguished in the practice
of medicine of which at least 1 shall be a primary care
practitioner;
``(C) 3 shall be individuals distinguished in the health
professions;
``(D) 4 shall be individuals either representing the
private healthcare sector, including health plans, providers,
and purchasers or individuals distinguished as administrators
of healthcare delivery systems;
``(E) 4 shall be individuals distinguished in the fields of
healthcare quality improvement, economics, information
systems, law, ethics, business, or public policy; and
``(F) 2 shall be individuals representing the interests of
patients and consumers of healthcare.
``(3) Ex officio members.--The Secretary shall designate as
ex officio members of the Advisory Council--
``(A) the Director of the National Institutes of Health,
the Director of the Centers for Disease Control and
Prevention, the Administrator of the Health Care Financing
Administration, the Assistant Secretary of Defense (Health
Affairs), and the Chief Medical Officer of the Department of
Veterans Affairs; and
``(B) such other Federal officials as the Secretary may
consider appropriate.
``(d) Terms.--Members of the Advisory Council appointed
under subsection (c)(2) shall serve for a term of 3 years. A
member of the Council appointed under such subsection may
continue to serve after the expiration of the term of the
members until a successor is appointed.
``(e) Vacancies.--If a member of the Advisory Council
appointed under subsection (c)(2) does not serve the full
term applicable under subsection (d), the individual
appointed to fill the resulting vacancy shall be appointed
for the remainder of the term of the predecessor of the
individual.
``(f) Chair.--The Director shall, from among the members of
the Advisory Council appointed under subsection (c)(2),
designate an individual to serve as the chair of the Advisory
Council.
``(g) Meetings.--The Advisory Council shall meet not less
than once during each discrete 4-month period and shall
otherwise meet at the call of the Director or the chair.
``(h) Compensation and Reimbursement of Expenses.--
``(1) Appointed members.--Members of the Advisory Council
appointed under subsection (c)(2) shall receive compensation
for each day (including travel time) engaged in carrying out
the duties of the Advisory Council unless declined by the
member. Such compensation may not be in an amount in excess
of the maximum rate of basic pay payable for GS-18 of the
General Schedule.
``(2) Ex officio members.--Officials designated under
subsection (c)(3) as ex officio members of the Advisory
Council may not receive compensation for service on the
Advisory Council in addition to the compensation otherwise
received for duties carried out as officers of the United
States.
``(i) Staff.--The Director shall provide to the Advisory
Council such staff, information, and other assistance as may
be necessary to carry out the duties of the Council.

[[Page S8503]]

``SEC. 932. PEER REVIEW WITH RESPECT TO GRANTS AND CONTRACTS.

``(a) Requirement of Review.--
``(1) In general.--Appropriate technical and scientific
peer review shall be conducted with respect to each
application for a grant, cooperative agreement, or contract
under this title.
``(2) Reports to director.--Each peer review group to which
an application is submitted pursuant to paragraph (1) shall
report its finding and recommendations respecting the
application to the Director in such form and in such manner
as the Director shall require.
``(b) Approval as Precondition of Awards.--The Director may
not approve an application described in subsection (a)(1)
unless the application is recommended for approval by a peer
review group established under subsection (c).
``(c) Establishment of Peer Review Groups.--
``(1) In general.--The Director shall establish such
technical and scientific peer review groups as may be
necessary to carry out this section. Such groups shall be
established without regard to the provisions of title 5,
United States Code, that govern appointments in the
competitive service, and without regard to the provisions of
chapter 51, and subchapter III of chapter 53, of such title
that relate to classification and pay rates under the General
Schedule.
``(2) Membership.--The members of any peer review group
established under this section shall be appointed from among
individuals who by virtue of their training or experience are
eminently qualified to carry out the duties of such peer
review group. Officers and employees of the United States may
not constitute more than 25 percent of the membership of any
such group. Such officers and employees may not receive
compensation for service on such groups in addition to the
compensation otherwise received for duties carried out as
such officers and employees.
``(3) Duration.--Notwithstanding section 14(a) of the
Federal Advisory Committee Act, peer review groups
established under this section shall continue in existence
until otherwise provided by law.
``(4) Qualifications.--Members of any peer-review group
shall, at a minimum, meet the following requirements:
``(A) Such members shall agree in writing to treat
information received, records, reports, and recommendations
as confidential information.
``(B) Such members shall agree in writing to recuse
themselves from participation in the peer-review of specific
applications which present a potential personal conflict of
interest or appearance of such conflict, including employment
in the applicant organization, stock ownership, or any
financial or other arrangement that might introduce bias in
the process of peer-review.
``(d) Authority for Procedural Adjustments in Certain
Cases.--In the case of applications described in subsection
(a)(1) for financial assistance whose direct costs will not
exceed $100,000, the Director may make appropriate
adjustments in the procedures otherwise established by the
Director for the conduct of peer review under this section.
Such adjustments may be made for the purpose of encouraging
the entry of individuals into the field of research, for the
purpose of encouraging clinical practice-oriented research,
and for such other purposes as the Director may determine to
be appropriate.
``(e) Regulations.--The Secretary shall issue regulations
for the conduct of peer review under this section.

``SEC. 933. CERTAIN PROVISIONS WITH RESPECT TO DEVELOPMENT,
COLLECTION, AND DISSEMINATION OF DATA.

``(a) Standards With Respect to Utility of Data.--
``(1) In general.--With respect to data developed or
collected by any entity for the purpose described in section
901(b), the Director shall, in order to assure that utility,
accuracy, and sufficiency of such data for all interested
entities, establish recommendations for methods of developing
and collecting such data. Such recommendations shall include
recommendations for the development and collection of data on
the outcomes of healthcare services and procedures. Such
recommendations shall recognize the differences between types
of healthcare plans, delivery systems, healthcare providers,
and provider arrangements.
``(2) Relationship with medicare program.--In any case
where recommendations under paragraph (1) may affect the
administration of the program under title XVIII of the Social
Security Act, they shall be in the form of recommendations to
the Secretary for such program.
``(b) Statistics.--The Director shall--
``(1) take such action as may be necessary to assure that
statistics developed under this title are of high quality,
timely, and comprehensive, as well as specific, standardized,
and adequately analyzed and indexed; and
``(2) publish, make available, and disseminate such
statistics on as wide a basis as is practicable.
``(c) Authority Regarding Certain Requests.--Upon request
of a public or private entity, the Director may undertake
research or analyses otherwise authorized by this title
pursuant to arrangements under which such entity will pay the
cost of the services provided. Amounts received by the
Director under such arrangements shall be available to the
Director for obligation until expended.

``SEC. 934. DISSEMINATION OF INFORMATION.

``(a) In General.--The Administrator shall--
``(1) without regard to section 501 of title 44, United
States Code, promptly publish, make available, and otherwise
disseminate, in a form understandable and on as broad a basis
as practicable so as to maximize its use, the results of
research, demonstration projects, and evaluations conducted
or supported under this title;
``(2) promptly make available to the public data developed
in such research, demonstration projects, and evaluations;
``(3) building upon, but without duplicating, information
services provided by the National Library of Medicine and
considering applicable interagency agreements, provide
indexing, abstracting, translating, publishing, and other
services leading to a more effective and timely dissemination
of information on research, demonstration projects, and
evaluations with respect to healthcare to public and private
entities and individuals engaged in the improvement of
healthcare delivery and the general public, and undertake
programs to develop new or improved methods for making such
information available; and
``(4) as appropriate, provide technical assistance to State
and local government and health agencies and conduct liaison
activities to such agencies to foster dissemination.
``(b) Prohibition Against Restrictions.--Except as provided
in subsection (c), the Director may not restrict the
publication or dissemination of data from, or the results of,
projects conducted or supported under this title.
``(c) Limitation on Use of Certain Information.--No
information, if an establishment or person supplying the
information or described in it is identifiable, obtained in
the course of activities undertaken or supported under this
title may be used for any purpose other than the purpose for
which it was supplied unless such establishment or person has
consented (as determined under regulations of the Director)
to its use for such other purpose. Such information may not
be published or released in other form if the person who
supplied the information or who is described in it is
identifiable unless such person has consented (as determined
regulations of the Director) to its publication or release in
other form.
``(d) Penalty.--Any person who violates subsection (c)
shall be subject to a civil monetary penalty of not more than
$10,000 for each such violation involved. Such penalty shall
be imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A of the Social
Security Act are imposed and collected under that section.

``SEC. 935. ADDITIONAL PROVISIONS WITH RESPECT TO GRANTS AND
CONTRACTS.

``(a) Priorities.--In establishing priorities to carry out
this title, subject to the availability of funds, the
Director shall consider--
``(1) the needs and priorities of healthcare programs that
are operated by or supported, in whole or in part, by Federal
agencies;
``(2) the healthcare needs of low-income groups, minority
groups, children, the elderly, and persons with special
healthcare needs and issues related to the delivery of
healthcare services in rural areas (including frontier
areas).
``(b) Financial Conflicts of Interest.--With respect to
projects for which awards of grants, cooperative agreements,
or contracts are authorized to be made under this title, the
Director shall by regulation define--
``(1) the specific circumstances that constitute financial
interests in such projects that will, or may be reasonably
expected to, create a bias in favor of obtaining results in
the projects that are consistent with such interests; and
``(2) the actions that will be taken by the Director in
response to any such interests identified by the Director.
``(c) Requirement of Application.--The Director may not,
with respect to any program under this title authorizing the
provision of grants, cooperative agreements, or contracts,
provide any such financial assistance unless an application
for the assistance is submitted to the Secretary and the
application is in such form, is made in such manner, and
contains such agreements, assurances, and information as the
Director determines to be necessary to carry out the program
in involved.
``(d) Provision of Supplies and Services in Lieu of
Funds.--
``(1) In general.--Upon the request of an entity receiving
a grant, cooperative agreement, or contract under this title,
the Secretary may, subject to paragraph (2), provide
supplies, equipment, and services for the purpose of aiding
the entity in carrying out the project involved and, for such
purpose, may detail to the entity any officer or employee of
the Department of Health and Human Services.
``(2) Corresponding reduction in funds.--With respect to a
request described in paragraph (1), the Secretary shall
reduce the amount of the financial assistance involved by an
amount equal to the costs of detailing personnel and the fair
market value of any supplies, equipment, or services provided
by the Director. The Secretary shall, for the payment of
expenses incurred in complying with such request, expend the
amounts withheld.
``(e) Applicability of Certain Provisions With Respect to
Contracts.--Contracts may be entered into under this part
without

[[Page S8504]]

regard to sections 3648 and 3709 of the Revised Statutes (31
U.S.C. 529; 41 U.S.C. 5).

``SEC. 936. CERTAIN ADMINISTRATIVE AUTHORITIES.

``(a) Deputy Director and Other Officers and Employees.--
``(1) Deputy director.--The Director may appoint a deputy
director for the Agency.
``(2) Other officers and employees.--The Director may
appoint and fix the compensation of such officers and
employees as may be necessary to carry out this title. Except
as otherwise provided by law, such officers and employees
shall be appointed in accordance with the civil service laws
and their compensation fixed in accordance with title 5,
United States Code.
``(b) Facilities.--The Secretary, in carrying out this
title--
``(1) may acquire, without regard to the Act of March 3,
1877 (40 U.S.C. 34), by lease or otherwise through the
Director of General Services, buildings or portions of
buildings in the District of Columbia or communities located
adjacent to the District of Columbia for use for a period not
to exceed 10 years; and
``(2) may acquire, construct, improve, repair, operate, and
maintain laboratory, research, and other necessary facilities
and equipment, and such other real or personal property
(including patents) as the Secretary deems necessary.
``(c) Provision of Financial Assistance.--The Director, in
carrying out this title, may make grants to public and
nonprofit entities and individuals, and may enter into
cooperative agreements or contracts with public and private
entities and individuals.
``(d) Utilization of Certain Personnel and Resources.--
``(1) Department of health and human services.--The
Director, in carrying out this title, may utilize personnel
and equipment, facilities, and other physical resources of
the Department of Health and Human Services, permit
appropriate (as determined by the Secretary) entities and
individuals to utilize the physical resources of such
Department, and provide technical assistance and advice.
``(2) Other agencies.--The Director, in carrying out this
title, may use, with their consent, the services, equipment,
personnel, information, and facilities of other Federal,
State, or local public agencies, or of any foreign
government, with or without reimbursement of such agencies.
``(e) Consultants.--The Secretary, in carrying out this
title, may secure, from time to time and for such periods as
the Director deems advisable but in accordance with section
3109 of title 5, United States Code, the assistance and
advice of consultants from the United States or abroad.
``(f) Experts.--
``(1) In general.--The Secretary may, in carrying out this
title, obtain the services of not more than 50 experts or
consultants who have appropriate scientific or professional
qualifications. Such experts or consultants shall be obtained
in accordance with section 3109 of title 5, United States
Code, except that the limitation in such section on the
duration of service shall not apply.
``(2) Travel expenses.--
``(A) In general.--Experts and consultants whose services
are obtained under paragraph (1) shall be paid or reimbursed
for their expenses associated with traveling to and from
their assignment location in accordance with sections 5724,
5724a(a), 5724a(c), and 5726(C) of title 5, United States
Code.
``(B) Limitation.--Expenses specified in subparagraph (A)
may not be allowed in connection with the assignment of an
expert or consultant whose services are obtained under
paragraph (1) unless and until the expert agrees in writing
to complete the entire period of assignment, or 1 year,
whichever is shorter, unless separated or reassigned for
reasons that are beyond the control of the expert or
consultant and that are acceptable to the Secretary. If the
expert or consultant violates the agreement, the money spent
by the United States for the expenses specified in
subparagraph (A) is recoverable from the expert or consultant
as a debt of the United States. The Secretary may waive in
whole or in part a right of recovery under this subparagraph.
``(g) Voluntary and Uncompensated Services.--The Director,
in carrying out this title, may accept voluntary and
uncompensated services.

``SEC. 937. FUNDING.

``(a) Intent.--To ensure that the United States's
investment in biomedical research is rapidly translated into
improvements in the quality of patient care, there must be a
corresponding investment in research on the most effective
clinical and organizational strategies for use of these
findings in daily practice. The authorization levels in
subsections (b) and (c) provide for a proportionate increase
in healthcare research as the United State's investment in
biomedical research increases.
``(b) Authorization of Appropriations.--For the purpose of
carrying out this title, there are authorized to be
appropriated $180,000,000 for fiscal year 1999, and such sums
as may be necessary for each of the fiscal years 2000 through
2003.
``(c) Evaluations.--In addition to amounts available
pursuant to subsection (b) for carrying out this title, there
shall be made available for such purpose, from the amounts
made available pursuant to section 241 (relating to
evaluations), an amount equal to 40 percent of the maximum
amount authorized in such section 241 to be made available
for a fiscal year.
``(d) Centers for Education and Research on Therapeutics.--
For the purpose of carrying out the demonstration program
regarding centers for education and research on therapeutics
under section 912(b), there are authorized to be appropriated
$2,000,000 for fiscal year 1998, and $3,000,000 for fiscal
year 1999, and such sums as may be necessary for each of the
fiscal years 2000 through 2003.

``SEC. 938. DEFINITIONS.

``In this title:
``(1) Advisory council.--The term `Advisory Council' means
the Advisory Council on Healthcare Quality Research
established under section 931.
``(2) Agency.--The term `Agency' means the Agency for
Healthcare Quality.
``(3) Director.--The term `Director' means the Director for
the Agency for Healthcare Quality Research.''.

SEC. 403. REFERENCES.

Effective upon the date of enactment of this Act, any
reference in law to the ``Agency for Health Care Policy and
Research'' shall be deemed to be a reference to the ``Agency
for Healthcare Quality Research''.

SEC. 404. STUDY.

(a) Study.--Not later than 30 days after the date of
enactment of any Act providing for a qualifying health care
benefit (as defined in subsection (b), the Secretary of
Health and Human Services, in consultation with the Agency
for Healthcare Quality Research, the National Institutes of
Health, and the Institute of Medicine, shall conduct a study
concerning such benefit that scientifically evaluates--
(1) the safety and efficacy of the benefit, particularly
the effect of the benefit on outcomes of care;
(2) the cost, benefits and value of such benefit;
(3) the benefit in comparison to alternative approaches in
improving care; and
(4) the overall impact that such benefit will have on
health care as measured through research.
(b) Qualifying Health Care Benefit.--In this section, the
term ``qualifying health care benefit'' means a health care
benefit that--
(1) is disease- or health condition-specific;
(2) requires the provision of or coverage for health care
items or services;
(3) applies to group health plan, individual health plans,
or health insurance issuers under part 7 of subtitle B of
title I of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1181 et seq.) or under title XXVII of the
Public Health Service Act (42 U.S.C. 300gg et seq.); and
(4) was provided under an Act (or amendment) enacted on or
after January 1, 1998.
(c) Reports.--Not later than 3 years after the date of
enactment of any Act described in subsection (a), the
Secretary of Health and Human Services shall prepare and
submit to the appropriate committees of Congress a report
based on the study conducted under such subsection with
respect to the qualifying health care benefit involved.

TITLE V--WOMEN'S HEALTH RESEARCH AND PREVENTION

SEC. 501. SHORT TITLE.

This title may be cited as the ``Women's Health Research
and Prevention Amendments of 1998''.

Subtitle A--Provisions Relating to Women's Health Research at the
National Institutes of Health

SEC. 511. EXTENSION OF PROGRAM FOR RESEARCH AND AUTHORIZATION
OF NATIONAL PROGRAM OF EDUCATION REGARDING THE
DRUG DES.

(a) In General.--Section 403A(e) of the Public Health
Service Act (42 U.S.C. 283a(e)) is amended by striking
``1996'' and inserting ``2001''.
(b) National Program for Education of Health Professionals
and Public.--From amounts appropriated for carrying out
section 403A of the Public Health Service Act (42 U.S.C.
283a), the Secretary of Health and Human Services, acting
through the heads of the appropriate agencies of the Public
Health Service, shall carry out a national program for the
education of health professionals and the public with respect
to the drug diethylstilbestrol (commonly known as DES). To
the extent appropriate, such national program shall use
methodologies developed through the education demonstration
program carried out under such section 403A. In developing
and carrying out the national program, the Secretary shall
consult closely with representatives of nonprofit private
entities that represent individuals who have been exposed to
DES and that have expertise in community-based information
campaigns for the public and for health care providers. The
implementation of the national program shall begin during
fiscal year 1999.

SEC. 512. RESEARCH ON OSTEOPOROSIS, PAGET'S DISEASE, AND
RELATED BONE DISORDERS.

Section 409A(d) of the Public Health Service Act (42 U.S.C.
284e(d)) is amended by striking ``and 1996'' and inserting
``through 2001''.

SEC. 513. RESEARCH ON CANCER.

(a) In General.--Section 417B(a) of the Public Health
Service Act (42 U.S.C. 286a-8(a)) is amended by striking
``and 1996'' and inserting ``through 2001''.
(b) Research on Breast Cancer.--Section 417B(b)(1) of the
Public Health Service Act (42 U.S.C. 286a-8(b)(1)) is
amended--
(1) in subparagraph (A), by striking ``and 1996'' and
inserting ``through 2001''; and
(2) in subparagraph (B), by striking ``and 1996'' and
inserting ``through 2001''.

[[Page S8505]]

(c) Research on Ovarian and Related Cancer Research.--
Section 417B(b)(2) of the Public Health Service Act (42
U.S.C. 286a-8(b)(2)) is amended by striking ``and 1996'' and
inserting ``through 2001''.

SEC. 514. RESEARCH ON HEART ATTACK, STROKE, AND OTHER
CARDIOVASCULAR DISEASES IN WOMEN.

Subpart 2 of part C of title IV of the Public Health
Service Act (42 U.S.C. 285b et seq.) is amended by inserting
after section 424 the following:

``heart attack, stroke, and other cardiovascular diseases in women

``Sec. 424A. (a) In General.--The Director of the Institute
shall expand, intensify, and coordinate research and related
activities of the Institute with respect to heart attack,
stroke, and other cardiovascular diseases in women.
``(b) Coordination With Other Institutes.--The Director of
the Institute shall coordinate activities under subsection
(a) with similar activities conducted by the other national
research institutes and agencies of the National Institutes
of Health to the extent that such Institutes and agencies
have responsibilities that are related to heart attack,
stroke, and other cardiovascular diseases in women.
``(c) Certain Programs.--In carrying out subsection (a),
the Director of the Institute shall conduct or support
research to expand the understanding of the causes of, and to
develop methods for preventing, cardiovascular diseases in
women. Activities under such subsection shall include
conducting and supporting the following:
``(1) Research to determine the reasons underlying the
prevalence of heart attack, stroke, and other cardiovascular
diseases in women, including African-American women and other
women who are members of racial or ethnic minority groups.
``(2) Basic research concerning the etiology and causes of
cardiovascular diseases in women.
``(3) Epidemiological studies to address the frequency and
natural history of such diseases and the differences among
men and women, and among racial and ethnic groups, with
respect to such diseases.
``(4) The development of safe, efficient, and cost-
effective diagnostic approaches to evaluating women with
suspected ischemic heart disease.
``(5) Clinical research for the development and evaluation
of new treatments for women, including rehabilitation.
``(6) Studies to gain a better understanding of methods of
preventing cardiovascular diseases in women, including
applications of effective methods for the control of blood
pressure, lipids, and obesity.
``(7) Information and education programs for patients and
health care providers on risk factors associated with heart
attack, stroke, and other cardiovascular diseases in women,
and on the importance of the prevention or control of such
risk factors and timely referral with appropriate diagnosis
and treatment. Such programs shall include information and
education on health-related behaviors that can improve such
important risk factors as smoking, obesity, high blood
cholesterol, and lack of exercise.
``(d) Authorization of Appropriations.--For the purpose of
carrying out this section, there is authorized to be
appropriated such sums as may be necessary for each of the
fiscal years 1999 through 2001. The authorization of
appropriations established in the preceding sentence is in
addition to any other authorization of appropriation that is
available for such purpose.''.

SEC. 515. AGING PROCESSES REGARDING WOMEN.

Section 445I of the Public Health Service Act (42 U.S.C.
285e-11) is amended by striking ``and 1996'' and inserting
``through 2001''.

SEC. 516. OFFICE OF RESEARCH ON WOMEN'S HEALTH.

Section 486(d)(2) of the Public Health Service Act (42
U.S.C. 287d(d)(2)) is amended by striking ``Director of the
Office'' and inserting ``Director of the National Institutes
of Health''.

Subtitle B--Provisions Relating to Women's Health at the Centers for
Disease Control and Prevention

SEC. 521. NATIONAL CENTER FOR HEALTH STATISTICS.

Section 306(n) of the Public Health Service Act (42 U.S.C.
242k(n)) is amended--
(1) in paragraph (1), by striking ``through 1998'' and
inserting ``through 2002''; and
(2) in paragraph (2), by striking ``through 1998'' and
inserting ``through 2002''.

SEC. 522. NATIONAL PROGRAM OF CANCER REGISTRIES.

Section 399L(a) of the Public Health Service Act (42 U.S.C.
280e-4(a)) is amended by striking ``through 1998'' and
inserting ``through 2002''.

SEC. 523. NATIONAL BREAST AND CERVICAL CANCER EARLY DETECTION
PROGRAM.

(a) Grants.--Section 1501(b) of the Public Health Service
Act (42 U.S.C. 300k(b)) is amended--
(1) in paragraph (1), by striking ``nonprofit''; and
(2) in paragraph (2), by striking ``that are not nonprofit
entities''.
(b) Preventive Health.--Section 1509(d) of the Public
Health Service Act (42 U.S.C. 300n-4a(d)(1)) is amended by
striking ``through 1998'' and inserting ``through 2002''.
(c) General Program.--Section 1510(a) of the Public Health
Service Act (42 U.S.C. 300n-5(a)) is amended by striking
``through 1998'' and inserting ``through 2002''.

SEC. 524. CENTERS FOR RESEARCH AND DEMONSTRATION OF HEALTH
PROMOTION.

Section 1706(e) of the Public Health Service Act (42 U.S.C.
300u-5(e)) is amended by striking ``through 1998'' and
inserting ``through 2002''.

SEC. 525. COMMUNITY PROGRAMS ON DOMESTIC VIOLENCE.

Section 318(h)(2) of the Family Violence Prevention and
Services Act (42 U.S.C. 10418(h)(2)) is amended by striking
``fiscal year 1997'' and inserting ``for each of the fiscal
years 1997 through 2002''.

Subtitle C--Women's Health and Cancer Rights

SEC. 531. SHORT TITLE.

This subtitle may be cited as the ``Women's Health and
Cancer Rights Act of 1998''.

SEC. 532. FINDINGS.

Congress finds that--
(1) the offering and operation of health plans affect
commerce among the States;
(2) health care providers located in a State serve patients
who reside in the State and patients who reside in other
States; and
(3) in order to provide for uniform treatment of health
care providers and patients among the States, it is necessary
to cover health plans operating in 1 State as well as health
plans operating among the several States.

SEC. 533. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.

(a) In General.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.), as amended by sections 111 and 302, is
further amended by adding at the end the following new
section:

``SEC. 715. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER AND COVERAGE FOR
RECONSTRUCTIVE SURGERY FOLLOWING MASTECTOMIES.

``(a) Inpatient Care.--
``(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage in
connection with a group health plan, that provides medical
and surgical benefits shall ensure that inpatient coverage
with respect to the surgical treatment of breast cancer
(including a mastectomy, lumpectomy, or lymph node dissection
for the treatment of breast cancer) is provided for a period
of time as is determined by the attending physician, in his
or her professional judgment consistent with scientific
evidence-based practices or guidelines, in consultation with
the patient, to be medically appropriate.
``(2) Exception.--Nothing in this section shall be
construed as requiring the provision of inpatient coverage if
the attending physician in consultation with the patient
determine that a shorter period of hospital stay is medically
appropriate.
``(b) Reconstructive Surgery.--A group health plan, and a
health insurance issuer providing health insurance coverage
in connection with a group health plan, that provides medical
and surgical benefits with respect to a mastectomy shall
ensure that, in a case in which a mastectomy patient elects
breast reconstruction, coverage is provided for--
``(1) all stages of reconstruction of the breast on which
the mastectomy has been performed;
``(2) surgery and reconstruction of the other breast to
produce a symmetrical appearance; and
``(3) the costs of prostheses and complications of
mastectomy including lymphedemas;

in the manner determined by the attending physician and the
patient to be appropriate. Such coverage may be subject to
annual deductibles and coinsurance provisions as may be
deemed appropriate and as are consistent with those
established for other benefits under the plan or coverage.
Written notice of the availability of such coverage shall be
delivered to the participant upon enrollment and annually
thereafter.
``(c) Notice.--A group health plan, and a health insurance
issuer providing health insurance coverage in connection with
a group health plan shall provide notice to each participant
and beneficiary under such plan regarding the coverage
required by this section in accordance with regulations
promulgated by the Secretary. Such notice shall be in writing
and prominently positioned in any literature or
correspondence made available or distributed by the plan or
issuer and shall be transmitted--
``(1) in the next mailing made by the plan or issuer to the
participant or beneficiary;
``(2) as part of any yearly informational packet sent to
the participant or beneficiary; or
``(3) not later than January 1, 1999;

[[Page S8506]]

and conditions applicable to other inpatient benefits under
the plan, except that the provision of such inpatient stay
benefits shall not be contingent upon such notification.
``(e) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to a patient eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide monetary payments or rebates to individuals
to encourage such individuals to accept less than the minimum
protections available under this section;
``(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because such provider
provided care to an individual participant or beneficiary in
accordance with this section;
``(4) provide incentives (monetary or otherwise) to an
attending provider to induce such provider to provide care to
an individual participant or beneficiary in a manner
inconsistent with this section; and
``(5) subject to subsection (f)(2), restrict benefits for
any portion of a period within a hospital length of stay
required under subsection (a) in a manner which is less
favorable than the benefits provided for any preceding
portion of such stay.
``(f) Rules of Construction.--
``(1) In general.--Nothing in this section shall be
construed to require a patient who is a participant or
beneficiary--
``(A) to undergo a mastectomy or lymph node dissection in a
hospital; or
``(B) to stay in the hospital for a fixed period of time
following a mastectomy or lymph node dissection.
``(2) Cost sharing.--Nothing in this section shall be
construed as preventing a group health plan or issuer from
imposing deductibles, coinsurance, or other cost-sharing in
relation to benefits for hospital lengths of stay in
connection with a mastectomy or lymph node dissection for the
treatment of breast cancer under the plan (or under health
insurance coverage offered in connection with a group health
plan), except that such coinsurance or other cost-sharing for
any portion of a period within a hospital length of stay
required under subsection (a) may not be greater than such
coinsurance or cost-sharing for any preceding portion of such
stay.
``(3) Level and type of reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
``(g) Preemption, Relation to State Laws.--
``(1) In general.--Nothing in this section shall be
construed to preempt any State law with respect to health
insurance coverage that--
``(A) relates to hospital length of stays after a
mastectomy, lumpectomy, or lymph node dissection;
``(B) relates to coverage of reconstructive breast surgery
after a mastectomy, lumpectomy, of lymph node dissection; or
``(C) requires coverage for breast cancer treatments
(including breast reconstruction) in accordance with
scientific evidence-based practices or guidelines recommended
by established medical associations.
``(2) Application of section.--With respect to a State
law--
``(A) described in paragraph (1)(A), the provisions of this
section relating to breast reconstruction shall apply in such
State; and
``(B) described in paragraph (1)(B), the provisions of this
section relating to length of stays for surgical breast
treatment shall apply in such State.
``(3) Erisa.--Nothing in this section shall be construed to
affect or modify the provisions of section 514 with respect
to group health plans.''.
(b) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 note) is amended by inserting after the item
relating to section 714 the following new item:

``Sec. 715. Required coverage for minimum hospital stay for
mastectomies and lymph node dissections for the treatment
of breast cancer and coverage for reconstructive surgery
following mastectomies.''.

(c) Effective Dates.--The amendments made by this section
shall apply with respect to plan years beginning on or after
the date of enactment of this Act.

SEC. 534. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT
RELATING TO THE GROUP MARKET.

(a) In General.--Subpart 2 of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-4 et seq.), as
amended by section 303(a), is further amended by adding at
the end the following new section:

``SEC. 2707. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER AND COVERAGE FOR
RECONSTRUCTIVE SURGERY FOLLOWING MASTECTOMIES.

in the manner determined by the attending physician and the
patient to be appropriate. Such coverage may be subject to
annual deductibles and coinsurance provisions as may be
deemed appropriate and as are consistent with those
established for other benefits under the plan or coverage.
Written notice of the availability of such coverage shall be
delivered to the enrollee upon enrollment and annually
thereafter.
``(c) Notice.--A group health plan, and a health insurance
issuer providing health insurance coverage in connection with
a group health plan shall provide notice to each participant
and beneficiary under such plan regarding the coverage
required by this section in accordance with regulations
promulgated by the Secretary. Such notice shall be in writing
and prominently positioned in any literature or
correspondence made available or distributed by the plan or
issuer and shall be transmitted--
``(1) in the next mailing made by the plan or issuer to the
participant or beneficiary;
``(2) as part of any yearly informational packet sent to
the participant or beneficiary; or
``(3) not later than January 1, 1999;

whichever is earlier.
``(d) No Authorization Required.--
``(1) In general.--An attending physician shall not be
required to obtain authorization from the plan or issuer for
prescribing any length of stay in connection with a
mastectomy, a lumpectomy, or a lymph node dissection for the
treatment of breast cancer.
``(2) Prenotification.--Nothing in this section shall be
construed as preventing a plan or issuer from requiring
prenotification of an inpatient stay referred to in this
section if such requirement is consistent with terms and
conditions applicable to other inpatient benefits under the
plan, except that the provision of such inpatient stay
benefits shall not be contingent upon such notification.
``(e) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to a patient eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide monetary payments or rebates to individuals
to encourage such individuals to accept less than the minimum
protections available under this section;
``(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because such provider
provided care to an individual participant or beneficiary in
accordance with this section;
``(4) provide incentives (monetary or otherwise) to an
attending provider to induce such provider to provide care to
an individual participant or beneficiary in a manner
inconsistent with this section; and
``(5) subject to subsection (f)(2), restrict benefits for
any portion of a period within a hospital length of stay
required under subsection (a) in a manner which is less
favorable than the benefits provided for any preceding
portion of such stay.
``(f) Rules of Construction.--
``(1) In general.--Nothing in this section shall be
construed to require a patient who is a participant or
beneficiary--
``(A) to undergo a mastectomy or lymph node dissection in a
hospital; or
``(B) to stay in the hospital for a fixed period of time
following a mastectomy or lymph node dissection.
``(2) Cost sharing.--Nothing in this section shall be
construed as preventing a group health plan or issuer from
imposing deductibles, coinsurance, or other cost-sharing in
relation to benefits for hospital lengths of stay in
connection with a mastectomy or lymph node dissection for the
treatment of breast cancer under the plan (or under health
insurance coverage offered in connection with a group health
plan), except that such coinsurance or other cost-sharing

[[Page S8507]]

for any portion of a period within a hospital length of stay
required under subsection (a) may not be greater than such
coinsurance or cost-sharing for any preceding portion of such
stay.
``(3) Level and type of reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
``(g) Preemption, Relation to State Laws.--
``(1) In general.--Nothing in this section shall be
construed to preempt any State law with respect to health
insurance coverage that--
``(A) relates to a hospital length of stay after a
mastectomy, lumpectomy, or lymph node dissection;
``(B) relates to coverage of reconstructive breast surgery
after a mastectomy, lumpectomy, or lymph node dissection; or
``(C) requires coverage for breast cancer treatments
(including breast reconstruction) in accordance with
scientific evidence-based practices or guidelines recommended
by established medical associations.
``(2) Application of section.--With respect to a State
law--
``(A) described in paragraph (1)(A), the provisions of this
section relating to breast reconstruction shall apply in such
State; and
``(B) described in paragraph (1)(B), the provisions of this
section relating to length of stays for surgical breast
treatment shall apply in such State.
``(3) Erisa.--Nothing in this section shall be construed to
affect or modify the provisions of section 514 with respect
to group health plans.''.
(b) Effective Dates.--The amendments made by this section
shall apply to group health plans for plan years beginning on
or after the date of enactment of this Act.

SEC. 535. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING
TO THE INDIVIDUAL MARKET.

(a) In General.--Subpart 3 of part B of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-51 et seq.), as
amended by section 303(b), is further amended by adding at
the end the following new section:

``SEC. 2753. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER.

``The provisions of section 2707 shall apply to health
insurance coverage offered by a health insurance issuer in
the individual market in the same manner as they apply to
health insurance coverage offered by a health insurance
issuer in connection with a group health plan in the small or
large group market.''.
(b) Effective Date.--The amendment made by this section
shall apply with respect to health insurance coverage
offered, sold, issued, renewed, in effect, or operated in the
individual market on or after the date of enactment of this
Act.

SEC. 536. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

(a) In General.--Subchapter A of chapter 100 of the
Internal Revenue Code of 1986 (relating to group health plan
portability, access, and renewability requirements) is
amended by inserting after section 9803 the following new
section:

``SEC. 9804. REQUIRED COVERAGE FOR MINIMUM HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER AND COVERAGE FOR
RECONSTRUCTIVE SURGERY FOLLOWING MASTECTOMIES.

whichever is earlier.
``(d) No Authorization Required.--
``(1) In general.--A, attending physician shall not be
required to obtain authorization from the plan or issuer for
prescribing any length of stay in connection with a
mastectomy, a lumpectomy, or a lymph node dissection for the
treatment of breast cancer.
``(2) Prenotification.--Nothing in this section shall be
construed as preventing a plan or issuer from requiring
prenotification of an inpatient stay referred to in this
section if such requirement is consistent with terms and
conditions applicable to other inpatient benefits under the
plan, except that the provision of such inpatient stay
benefits shall not be contingent upon such notification.
``(e) Prohibitions.--A group health plan, and a health
insurance issuer offering group health insurance coverage in
connection with a group health plan, may not--
``(1) deny to a patient eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan, solely for the purpose of avoiding the
requirements of this section;
``(2) provide monetary payments or rebates to individuals
to encourage such individuals to accept less than the minimum
protections available under this section;
``(3) penalize or otherwise reduce or limit the
reimbursement of an attending provider because such provider
provided care to an individual participant or beneficiary in
accordance with this section;
``(4) provide incentives (monetary or otherwise) to an
attending provider to induce such provider to provide care to
an individual participant or beneficiary in a manner
inconsistent with this section; and
``(5) subject to subsection (f)(2), restrict benefits for
any portion of a period within a hospital length of stay
required under subsection (a) in a manner which is less
favorable than the benefits provided for any preceding
portion of such stay.
``(f) Rules of Construction.--
``(1) In general.--Nothing in this section shall be
construed to require a patient who is a participant or
beneficiary--
``(A) to undergo a mastectomy or lymph node dissection in a
hospital; or
``(B) to stay in the hospital for a fixed period of time
following a mastectomy or lymph node dissection.
``(2) Cost sharing.--Nothing in this section shall be
construed as preventing a group health plan or issuer from
imposing deductibles, coinsurance, or other cost-sharing in
relation to benefits for hospital lengths of stay in
connection with a mastectomy or lymph node dissection for the
treatment of breast cancer under the plan (or under health
insurance coverage offered in connection with a group health
plan), except that such coinsurance or other cost-sharing for
any portion of a period within a hospital length of stay
required under subsection (a) may not be greater than such
coinsurance or cost-sharing for any preceding portion of such
stay.
``(3) Level and type of reimbursements.--Nothing in this
section shall be construed to prevent a group health plan or
a health insurance issuer offering group health insurance
coverage from negotiating the level and type of reimbursement
with a provider for care provided in accordance with this
section.
``(g) Preemption, Relation to State Laws.--
``(1) In general.--Nothing in this section shall be
construed to preempt any State law with respect to health
insurance coverage that--
``(A) relates to a hospital length of stay after a
mastectomy, lumpectomy, or lymph node dissection;
``(B) relates to coverage of reconstructive breast surgery
after a mastectomy, lumpectomy, or lymph node dissection; or
``(C) requires coverage for breast cancer treatments
(including breast reconstruction) in accordance with
scientific evidence-based practices or guidelines recommended
by established medical associations.
``(2) Application of section.--With respect to a State
law--
``(A) described in paragraph (1)(A), the provisions of this
section relating to breast reconstruction shall apply in such
State; and
``(B) described in paragraph (1)(B), the provisions of this
section relating to length of stays for surgical breast
treatment shall apply in such State.
``(3) Erisa.--Nothing in this section shall be construed to
affect or modify the provisions of section 514 with respect
to group health plans.''.

[[Page S8508]]

(b) Conforming Amendments.--
(1) The heading for subtitle K of such Code is amended to
read as follows:

``Subtitle K--Group Health Plan Portability, Access, Renewability, and
Other Requirements''.

(2) The heading for chapter 100 of such Code is amended to
read as follows:

``CHAPTER 100--GROUP HEALTH PLAN PORTABILITY, ACCESS, RENEWABILITY, AND
OTHER REQUIREMENTS''.

(3) Section 4980D(a) of such Code is amended by striking
``and renewability'' and inserting ``renewability, and
other''.
(c) Clerical Amendments.--
(1) The table of contents for chapter 100 of such Code is
amended inserting after the item relating to section 9803 the
following new item:

``Sec. 9804. Required coverage for minimum hospital stay for
mastectomies and lymph node dissections for the treatment
of breast cancer and coverage for reconstructive surgery
following mastectomies.''.

(2) The item relating to subtitle K in the table of
subtitles for such Code is amended by striking ``and
renewability'' and inserting ``renewability, and other''.
(3) The item relating to chapter 100 in the table of
chapters for subtitle K of such Code is amended by striking
``and renewability'' and inserting ``renewability, and
other''.
(d) Effective Dates.--The amendments made by this section
shall apply with respect to plan years beginning on or after
the date of enactment of this Act.

SEC. 537. RESEARCH STUDY ON THE MANAGEMENT OF BREAST CANCER.

(a) Study.--To improve survival, quality of life and
patient satisfaction in the care of patients with breast
cancer, the Agency for Health Care Policy and Research shall
conduct a study of the scientific issues relating to--
(1) disease management strategies for breast cancer that
can achieve better patient outcomes;
(2) controlled clinical evidence that links specific
clinical procedures to improved health outcomes;
(3) the definition of quality measures to evaluate plan and
provider performance in the management of breast cancer;
(4) the identification of quality improvement interventions
that can change the process of care to achieve better
outcomes for individuals with breast cancer;
(5) preventive strategies utilized by health plans for the
treatment of breast cancer; and
(6) the extent of clinical practice variation including its
impact on cost, quality and outcomes.
(b) Report.--Not later than January 1, 2000, the Agency for
Health Care Policy and Research shall prepare and submit to
the appropriate committees of Congress a report concerning
the results of the study conducted under subsection (a).

TITLE VI--ENHANCED ACCESS TO HEALTH INSURANCE COVERAGE

SEC. 601. CARRYOVER OF UNUSED BENEFITS FROM CAFETERIA PLANS,
FLEXIBLE SPENDING ARRANGEMENTS, AND HEALTH
FLEXIBLE SPENDING ACCOUNTS.

(a) In General.--Section 125 of the Internal Revenue Code
of 1986 (relating to cafeteria plans) is amended by
redesignating subsections (h) and (i) as subsections (i) and
(j) and by inserting after subsection (g) the following new
subsection:
``(h) Allowance of Carryovers of Unused Benefits to Later
Taxable Years.--
``(1) In general.--For purposes of this title--
``(A) a plan or other arrangement shall not fail to be
treated as a cafeteria plan or flexible spending or similar
arrangement, and
``(B) no amount shall be required to be included in gross
income by reason of this section or any other provision of
this chapter,

solely because under such plan or other arrangement any
nontaxable benefit which is unused as of the close of a
taxable year may be carried forward to 1 or more succeeding
taxable years.
``(2) Limitation.--Paragraph (1) shall not apply to amounts
carried from a plan to the extent such amounts exceed $500
(applied on an annual basis). For purposes of this paragraph,
all plans and arrangements maintained by an employer or any
related person shall be treated as 1 plan.
``(3) Allowance of rollover.--
``(A) In general.--In the case of any unused benefit
described in paragraph (1) which consists of amounts in a
health flexible spending account or dependent care flexible
spending account, the plan or arrangement shall provide that
a participant may elect, in lieu of such carryover, to have
such amounts distributed to the participant.
``(B) Amounts not included in income.--Any distribution
under subparagraph (A) shall not be included in gross income
to the extent that such amount is transferred in a trustee-
to-trustee transfer, or is contributed within 60 days of the
date of the distribution, to--
``(i) an individual retirement plan other than a Roth IRA
(as defined in section 408A(b)),
``(ii) a qualified cash or deferred arrangement described
in section 401(k),
``(iii) a plan under which amounts are contributed by an
individual's employer for an annuity contract described in
section 403(b),
``(iv) an eligible deferred compensation plan described in
section 457, or
``(v) a medical savings account (within the meaning of
section 220).

Any amount rolled over under this subparagraph shall be
treated as a rollover contribution for the taxable year from
which the unused amount would otherwise be carried.
``(C) Treatment of rollover.--Any amount rolled over under
subparagraph (B) shall be treated as an eligible rollover
under section 219, 220, 401(k), 403(b), or 457, whichever is
applicable, and shall not be taken into account in applying
any limitation (or participation requirement) on employer or
employee contributions under such section or any other
provision of this chapter for the taxable year of the
rollover.
``(4) Cost-of-living adjustment.--In the case of any
taxable year beginning in a calendar year after 1998, the
$500 amount under paragraph (2) shall be adjusted at the same
time and in the same manner as under section 415(d)(2),
except that the base period taken into account shall be the
calendar quarter beginning October 1, 1997, and any increase
which is not a multiple of $50 shall be rounded to the next
lowest multiple of $50.''
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.

SEC. 602. FULL DEDUCTION OF HEALTH INSURANCE COSTS FOR SELF-
EMPLOYED INDIVIDUALS.

(a) In General.--Section 162(l)(1) of the Internal Revenue
Code of 1986 (relating to allowance of deductions) is amended
to read as follows:
``(1) Allowance of deduction.--In the case of an individual
who is an employee within the meaning of section 401(c)(1),
there shall be allowed as a deduction under this section an
amount equal to the amount paid during the taxable year for
insurance which constitutes medical care for the taxpayer,
his spouse, and his dependents.''
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.

SEC. 603. FULL AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

(a) Availability Not Limited To Accounts for Employees of
Small Employers and Self-Employed Individuals.--
(1) In general.--Section 220(c)(1)(A) of the Internal
Revenue Code of 1986 (relating to eligible individual) is
amended to read as follows:
``(A) In general.--The term `eligible individual' means,
with respect to any month, any individual if--
``(i) such individual is covered under a high deductible
health plan as of the 1st day of such month, and
``(ii) such individual is not, while covered under a high
deductible health plan, covered under any health plan--

``(I) which is not a high deductible health plan, and
``(II) which provides coverage for any benefit which is
covered under the high deductible health plan.''.

(2) Conforming amendments.--
(A) Section 220(c)(1) of such Code is amended by striking
subparagraphs (C) and (D).
(B) Section 220(c) of such Code is amended by striking
paragraph (4) (defining small employer) and by redesignating
paragraph (5) as paragraph (4).
(C) Section 220(b) of such Code is amended by striking
paragraph (4) (relating to deduction limited by compensation)
and by redesignating paragraphs (5), (6), and (7) as
paragraphs (4), (5), and (6), respectively.
(b) Removal of Limitation on Number of Taxpayers Having
Medical Savings Accounts.--
(1) In general.--Section 220 of the Internal Revenue Code
of 1986 (relating to medical savings accounts) is amended by
striking subsections (i) and (j).
(2) Medicare+choice.--Section 138 of such Code (relating to
Medicare+Choice MSA) is amended by striking subsection (f).
(c) Reduction in High Deductible Plan Minimum Annual
Deductible.--Section 220(c)(2)(A) of the Internal Revenue
Code of 1986 (relating to high deductible health plan) is
amended--
(1) by striking ``$1,500'' in clause (i) and inserting
``$1,000'', and
(2) by striking ``$3,000'' in clause (ii) and inserting
``$2,000''.
(d) Increase in Contribution Limit to 100 Percent of Annual
Deductible.--
(1) In general.--Section 220(b)(2) of the Internal Revenue
Code of 1986 (relating to monthly limitation) is amended to
read as follows:
``(2) Monthly limitation.--The monthly limitation for any
month is the amount equal to \1/12\ of the annual deductible
of the high deductible health plan of the individual.''
(2) Conforming amendment.--Section 220(d)(1)(A) of such
Code is amended by striking ``75 percent of''.
(e) Limitation on Additional Tax on Distributions Not Used
for Qualified Medical Expenses.--Section 220(f)(4) of the
Internal Revenue Code of 1986 (relating to additional tax on
distributions not used for qualified medical expenses) is
amended by adding at the end the following:
``(D) Exception in Case of Sufficient Account Balance.--
Subparagraph (A) shall not apply to any payment or
distribution in any taxable year, but only to the extent such
payment or distribution does not reduce the fair market value
of the assets of the medical savings account to an amount
less than the annual deductible for the high deductible

[[Page S8509]]

health plan of the account holder (determined as of January 1
of the calendar year in which the taxable year begins).''.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.

SEC. 604. PERMITTING CONTRIBUTION TOWARDS MEDICAL SAVINGS
ACCOUNT THROUGH FEDERAL EMPLOYEES HEALTH
BENEFITS PROGRAM (FEHBP).

(a) Government Contribution to Medical Savings Account.--
(1) In general.--Section 8906 of title 5, United States
Code, is amended by adding at the end the following:
``(j)(1) In the case of an employee or annuitant who is
enrolled in a catastrophic plan described by section 8903(5),
there shall be a Government contribution under this
subsection to a medical savings account established or
maintained for the benefit of the individual. The
contribution under this subsection shall be in addition to
the Government contribution under subsection (b).
``(2) The amount of the Government contribution under this
subsection with respect to an individual is equal to the
amount by which--
``(A) the maximum contribution allowed under subsection
(b)(1) with respect to any employee or annuitant, exceeds
``(B) the amount of the Government contribution actually
made with respect to the individual under subsection (b) for
coverage under the catastrophic plan.
``(3) The Government contributions under this subsection
shall be paid into a medical savings account (designated by
the individual involved) in a manner that is specified by the
Office and consistent with the timing of contributions under
subsection (b).
``(4) Subsections (f) and (g) shall apply to contributions
under this section in the same manner as they apply to
contributions under subsection (b).
``(5) For the purpose of this subsection, the term `medical
savings account' has the meaning given such term by section
220(d) of the Internal Revenue Code of 1986.''.
(2) Allowing payment of full amount of charge for
catastrophic plan.--Section 8906(b)(2) of such title is
amended by inserting ``(or 100 percent of the subscription
charge in the case of a catastrophic plan)'' after ``75
percent of the subscription charge''.
(b) Offering of Catastrophic Plans.--
(1) In general.--Section 8903 of title 5, United States
Code, is amended by adding at the end the following:
``(5) Catastrophic plans.--One or more plans described in
paragraph (1), (2), or (3), but which provide benefits of the
types referred to by paragraph (5) of section 8904(a),
instead of the types referred to in paragraphs (1), (2), and
(3) of such section.''.
(2) Types of benefits.--Section 8904(a) of such title is
amended by inserting after paragraph (4) the following new
paragraph:
``(5) Catastrophic plans.--Benefits of the types named
under paragraph (1) or (2) of this subsection or both, to the
extent expenses covered by the plan exceed $500.''.
(3) Disregarding catastrophic plans in determining level of
government contributions.--Section 8906(a)(3) of such title
is amended by inserting ``described by section 8903(3)''
after ``plans''.
(c) Effective Date.--The amendments made by this section
shall apply to contract terms beginning on or after January
1, 1999.

Mr. FRIST. Mr. President, I am pleased to rise today to introduce the
``Patients' Bill of Rights'' with my colleague from Oklahoma, Senator
Don Nickles, the members of the Senate Republican Task Force on Health
Care Quality, and our distinguished Majority Leader, Senator Trent
Lott.
This bill is a product of several months of thoughtful discussion and
debate among Republican members to reach a consensus proposal to
improve health care quality.
As a physician who has practiced medicine for twenty years, I know
that health care is delivered best when the relationship between doctor
and patient is given the highest priority. My goal is to provide the
necessary support to empower doctors and patients to make important
health care decisions.
This proposal includes a ``Patients' Bill of Rights'' which offers
protection for patients by insuring them full access to information
about their health plan; making sure patients receive necessary
emergency care; allowing patients to keep their doctor during a
pregnancy or extended illness, even if their doctor is dropped by their
plan; and allowing patients direct access to obstetric and
gynecological care and pediatric care without having to obtain a
referral from a gatekeeper.
Many consumers fear that their health care plans will not give them
access to care when they need it most, that they will be denied the
benefits they have paid for and been promised, and that their health
plans care more about cost than they do about quality. A critical
measure of this bill is to hold health plans accountable for the
coverage decisions they make and to take the power of denial of care
out of the hands of HMOs and place it in the hands of independent
medical experts. Our bill requires health plans to make coverage
determinations in less than 72 hours if a doctor determines that
further delay could jeopardize the life or health of a patient. We want
to protect patients before harm occurs by setting up a process for
patients and their families to get an immediate answer. Furthermore, we
require health plans to provide quick internal grievance and
independent external appeals processes in cases where a plan may deny
coverage for necessary medical action or because it is an experimental
procedure.
Our bill fills a need by providing protections for patients who rely
on plans that states cannot touch. Our bill provides independent review
of health plans for 125 million Americans without lining the pockets of
trial lawyers in the process. Further litigation serves to divert
billions of dollars away from health care and puts in the pockets of
trial lawyers.
Our bill guarantees patients the right to have access to their own
medical information and the right to amend their medical information if
mistakes are made. We require health plans to inform a patient of the
plan's practices to protect the confidentiality of their medical record
and requires health plans to establish safeguards to protect the
confidentiality and security of health information.
Our bill has a strong focus on quality and a firm commitment to
improve quality. Some believe that quality can be legislated. Some here
in Washington believe they know how to define quality. Yet the risk of
writing today's concept of quality into law, is that it is an evolving
science and if we are too rigid, we fail to capture the innovation that
improves quality of care and our ability to measure it.
Our legislation promotes quality improvement by supporting research
to give patients and physicians better information regarding quality.
The ``Patients' Bill of Rights'' establishes an Agency for Health Care
Quality Research (AHQR), whose purpose is to foster overall improvement
in health care quality through supporting pertinent research and
disseminating information. The Agency is built on the platform of the
current Agency for Health Care Policy and Research, but is refocused
and enhanced to become the hub and driving force of federal efforts to
improve quality of health care in all practice environments--from
managed care to solo private practice, from urban to rural settings,
and from federal to non-federal programs.
The role of the Agency is not to mandate a national definition of
quality, but to support the science necessary to provide information to
patients regarding the quality of the care they receive; to allow
physicians to compare their quality outcomes with their peers; and to
enable employers and individuals to be prudent purchasers based on
quality.
The new Agency will build public-private partnerships to advance and
share quality measures. Quality means different things to different
people. Therefore, in collaboration with the private sector, the Agency
shall conduct research that can figure out what quality really means to
patients and clinicians, how to measure quality, and what actions can
improve care.
It will promote quality by sharing information. While proven medical
advances are made daily, patients wait too long to benefit from these
discoveries. We must get the science to the people by better sharing of
information and more effective dissemination. The Agency is required to
develop evidence-rating systems to help people judge the quality of
science.
The Agency plays an important role in facilitating innovation in
patient care with streamlined assessment of new technologies. Patients
should benefit from breakthrough technologies sooner, while inefficient
methods should be phased out faster. The Agency will be accessible to
both private and public entities for technology assessments and will
share information on assessment methodologies.
Currently, quality measurement too often requires manual chart
reviews for such simple data as frequently of procedures, infection
rates, or other complications. Improved computer systems will advance
quality scoring and facilitate decision-making in patient care.

[[Page S8510]]

The Agency will aggressively support the development of state-of-the-
art information systems systems for health care quality.
While most policy discussions this year are targeting managed care,
quality improvement is just as important to the solo private
practitioner. The Agency will focus on primary care delivery research
to examine how science is translated in the doctor's office. The agency
will specifically address quality in rural and other underserved areas
by advancing telemedicine services and other distance technologies.
Most of the many federal health care programs today support some kind
of health services research and conduct various quality improvement
projects. The Agency shall coordinate these initiatives to avoid
disjointed, uncoordinated, or duplicative efforts.
Finally, this debate is due to the fact that patients want to know if
they receive quality health care. But compared to what? Statistically
accurate, sample-based national surveys will efficiently provide
reliable and affordable data--without excessive, overly intrusive, and
potentially destructive, mandatory reporting requirements. This is
accomplished through an expansion of the current Medical Expenditure
Panel Survey to require that outcomes be measured and reported to
Congress so the public may better determine the state of quality, and
cost, of the nation's health care.
The role of the AHQR is not to mandate national standards of clinical
practice. Definitions and measures of quality are an evolving science,
a science critically important to making educated and appropriate
choices in a rapidly changing and dynamic health care system. This bill
will go a long way in bridging the gap between what we know and what we
do in health care today.
The bill we are introducing today has a strong focus on women's
health issues. On March 6, 1998, I introduced S. 1722, the ``Women's
Health Research and Prevention Amendments of 1998'' with our Majority
Leader, Senator Trent Lott, to increase awareness of some of the most
pressing diseases and health issues that women in our country face.
These provisions, which have been included in the Patients' Bill of
Rights Act, focus on women's health research and prevention activities
at the National Institutes of Health and the Centers for Disease
Control and Prevention. The goal of these provisions is to create
greater awareness of women's health issues and to highlight the
critical role our public health agencies, the NIH and CDC, play in
providing a broad spectrum of activities to improve women's health--
including research, screening, prevention, treatment, education, and
data collection.
Among others, these provisions promote basic and clinical research
for osteoporosis and breast and ovarian cancer. We expand our research
efforts into the underlying causes and prevention of cardiovascular
diseases in women--the leading cause of death in U.S. women. The bill
reauthorizes the National Breast and Cervical Cancer Screening Program
which provides for crucial screening services for breast and cervical
cancers to underserved women and supports data collection through the
National Center for Health Statistics and the National Program of
Cancer Registries which are the leading sources of national data on the
health status of U.S. women.
The reauthorization of these research programs will help assure
scientific progress in our fight against these diseases and will lessen
their burden on women and their families. We have the support of nearly
the full Senate Labor and Human Resources committee and many members of
the United States Senate from both sides of the aisle for these
provisions. The level of support for these programs is a testament to
the need to combat the disease affecting women and to maintain the
crucial health services that help prevent these diseases.
One of the provisions I am most proud to include in this bill is the
prohibition on genetic discrimination in healthy insurance practices.
We as a nation must face the fear of discrimination in health insurance
practices based on our increasing ability to gather genetic information
about ourselves and our families. Our ability to predict what diseases
individuals may be at risk for in the future has caused great concern
that this powerful information--the information we all carry in our
genes--may be used against us.
I am deeply troubled when I hear from the Tennessee Breast Cancer
Coalition that genetic counselors are facing women everyday who are
afraid of the consequences of genetic testing. Women are avoiding
genetic testing due to concerns about loss of health insurance coverage
for themselves or their families--even though a genetic test might
reveal that a woman is not at high risk and therefore allow her to make
more informed health care choices.
I am a strong advocate for legislation which would prohibit
discrimination in health insurance against healthy individuals and
their families based on their genetic information. We all carry genetic
mutations that may place us at risk for future disease--therefore we
are all at risk for discrimination. If I receive a genetic test which
shows I am at risk for cancer, diabetes, or heart disease, should this
predictive information be used against me or my family? Particularly
when I am currently healthy and, in fact, may never develop the
illness? I think the American public has answered quite clearly,
``no.''
The Senate Republican Task Force made the same decision to say
``no.'' Not only are we addressing the rights of patients today--but we
are thinking forward to future concerns of patients. I must commend the
efforts of my colleague Senator Snowe whose original bill, S. 89, has
provided a framework and the sound principles for the basis of the
legislation. She has supported the Task Force effort and worked with us
step by step to craft this legislation. I must also commend the members
of the Task Force, particularly Senator Jeffords, who had the foresight
to include these provisions.
Our bill prohibits health insurers from collecting genetic
information about a patient; prohibits health insurers from using
predictive genetic information to deny coverage; prohibits health
insurers from using predictive genetic information in setting premiums
or rates; and requires health insurers to inform patients of the health
plans' confidentiality practices and safeguards in place if a patient
wishes to disclose genetic information for purposes of treatment.
Preventing genetic discrimination has enormous implications for
improving the quality of care patients receive. As a physician and
researcher, I am particularly concerned that the fear of discrimination
will prevent individuals from participating in research studies and
therefore hinder the scientific answers we need which hold the promise
of higher quality medical care. I am concerned that individuals feel
safe taking advantage of new genetic technologies to improve their
medical care.
The goal of our bill is to provide the public with peace of mind. If
families or individuals want to undergo genetic testing, this bill will
ensure that insurance companies cannot discriminate based on this
information. We must act now. Only with these measures can we ensure
that knowledge about our genetic heritage will be used to improve our
health--and not force us to hide in fear that this information will
cause us harm.
Finally, our bill enhances access and choice of health insurance
coverage by increasing access to and affordability of health care. The
bill includes provisions to allow self-employed individuals to fully
deduct their health care expenses; provides greater flexibility to
employees who utilize flexible spending accounts to pay for health
care; and gives incentives to individuals to have control over their
health care decisions and costs through expansion of the use of Medical
Savings Accounts. This option will allow a patient to access the
physician of their choice and choose the medical treatment they need
without any interference from a gatekeeper.
The ``Patient's Bill of Rights'' offers all Americans: quality
improvement built on a foundation of science, patient protection to
access the care they need from the provider of choice, trust in the
health care delivery system, and access to affordable health insurance
coverage. I am pleased that this bill represents a forward-looking
approach to provide for continuous improvement in health care quality.
It meets our goal of assuring that the doctor and patient define
quality, not HMOs, not bureaucrats and not trial attorneys.

[[Page S8511]]

Mr. JEFFORDS. Mr. President, I want to begin by commending Senator
Nickles and all of the Members who participated in putting the
``Patients' Bill of Rights'' legislation together. I think it is solid
legislation that will result in a greatly improved health care system
for Americans and I am proud to be a co-sponsor of the ``Patients' Bill
of Rights.''
As always, there has been a flurry of work over the past few weeks as
we have put this legislation together. But this last minute work is
only possible because we have laid a solid foundation throughout the
entire 105th Congress.
Over the past 14 months, the Labor and Human Resources Committee has
held 11 hearings related to the issues of health care quality,
confidentiality, genetic discrimination and the Health Care Financing
Administration's (HCFA) implementation of its new health insurance
responsibilties. Senator Bill Frist's Public Health and Safety
Subcommittee has also held three hearings on the work of the Agency of
Health Care Policy and Research (AHCPR). Each of these hearings helped
us in developing the separate pieces of legislation that are reflected
in our ``Patients'' Bill of Rights.''
Other colleagues here and on the House side, have worked ont this
subject for an extended period of time. Many of the protections that
are included in the ``Patients' Bill of Rights'' are similar to those
fashioned by Senator Roth and the Finance Committee last year when we
provided many of these same protections to plans that serve Medicare
patients.
As we prepared this legislation we had three goals in mind. First,
give families the protections they want and need. Second, ensure that
medical decisions are made by physicians in consultation with their
patients. And finally, keep the cost of this legislation low so it does
not displace anyone from being able to get health-care coverage.
Information about products or services is the keystone to any well
functioning market. This bill requires full information disclosure by
an employer about the health plans he or she offers to employees.
People need to know what the plan will cover and what their out-of-
pocket expenses will be. They need to know where and how they will get
their health care and who will be providing those services. They also
need to know how adverse decisions by the plan can be appealed, both
internally and externally to an independent reviewer.
This aspect of our bill, that gives enrollees a new ERISA remedy of
an external grievance and appeals process, is one of which I am
particularly proud since it is the cornerstone of S 1712, the Health
Care QUEST Act, that I introduced with Senator Lieberman. Under the
``Patients' Bill of Rights,'' enrollees will get timely decisions about
what will be covered. Furthermore, if an individual disagrees with the
plan's decision, that individual may ultimately appeal the decision to
an independent external reviewer. The reviewer's decision will be
binding on the part of the health plan. But, the patient maintains his
or her current rights under ERISA to go to court.
The medical records provisions, which my committee has also worked on
for the past year and are contained in S. 1921, the Health Care PIN
Act, which I introduced with Senator Dodd, will give people the right
to inspect and copy their personal medical information and it will
allow them to amend the record if there is inaccurate information. The
bill will ensure that the holders of the information safeguard the
medical records. It requires them to share, in writing, their
confidentiality policies and procedures with individuals.
The 104th Congress enacted the Kassebaum/Kennedy legislation, also
known as the Health Insurance Portability and Accountability Act of
1996 (HIPAA) Many consider this legislation to be the most significant
federal health insurance reform of the past decade. During this
Congress, I have tried to closely monitor the impact of HIPAA over the
past year to ensure its successful implementation and consistency with
legislative intent.
The federal regulators at HCFA have faced an overwhelming new set of
health insurance duties under HIPAA. In the five states that have
failed to or chosen not to pass the legislation required by HIPAA
(California, Massachusetts, Michigan, Rhode Island, and Missouri), the
Department of Health and Human Services is now required to act as
insurance regulator for the state HIPAA provisions.
Based on the findings of a GAO report that I will be releasing next
week, our experience under HIPAA demonstrates that HCFA is ill equipped
to carry out the role of insurance regulator. Building a dual system of
overlapping state and federal health insurance regulation is in no
one's best interest. The principle that the states should continue to
regulate the private health insurance market guided the design of our
``Patients' Bill of Rights'' legislation.
Our legislation creates new federal managed care standards to cover
those 48 million Americans covered by ERISA plans that the states
cannot protect. We feel that it would be inappropriate to set federal
health insurance standards that duplicate the responsibility of the 50
state insurance departments and have HCFA enforce them.
A recent example demonstrates why this is such a concern. The
Balanced Budget Act of 1997 establishes a prospective payment system
(PPS) for home health care in fiscal year 2000. The payment system
designed for the interim period is proving to be an intolerable burden
for the home health agencies that serve Vermont's Medicare
beneficiaries. At a July 16th House Ways and Means hearing, HCFA's
administrator stated that she intended to postpone the development of a
Medicare prospective payment systems for home health services. Her
statement that she is delaying this mandate will result in many home
health providers not receiving the reimbursement that they deserve and
puts many of those providers at risk.
Given HCFA's inability to carry out its current responsibilities, I
believe it would be irresponsible to promise the American people that
they will be able to receive new federal guarantees in the private
health insurance system if we are relying on HCFA to enforce these
rights.
Our proposal, by keeping the regulation of health insurance where it
belongs--at the state level--provides the American people with a real
Patients' Bill of Rights that they can have the confidence in knowing
will be enforced.
I am afraid that the political battle over this legislation will be
the subject that dominates the headlines. But the real issue here is to
give Americans the protections they want and need in a package that
they can afford and that we can enact. That is why I and others here
have been working on this legislation since the beginning of this
Congress, and why I hope the ``Patients' Bill of Rights'' we have
introduced today will be adopted before the end of the Congress and
signed into law by the President.
______

By Mr. LUGAR:
S. 2331. A bill to provide a limited waiver for certain foreign
students of the requirement to reimburse local educational agencies for
the costs of the students' education; to the Committee on the
Judiciary.

limited waiver of costs requirements for foreign students

Mr. LUGAR. Mr. President, I rise today to introduce a bill to
permit local school districts to waive the cost requirements of foreign
students studying in our public high schools in the United States on F-
1 visas. The law now mandates that all foreign students who are not in
a government-funded exchange program must pay or reimburse the costs of
their education in American public schools.
In those public school districts flooded with foreign students who
pay no taxes, this requirement makes good sense. However, in those
school districts which enroll a small number of foreign students and
bear a tolerable burden there may be no need or desire for
reimbursement. The decision to enroll and to require cost reimbursement
should be made at the local level. Current law, however, does not
permit this local discretion. The bill I am introducing will allow
local school districts to waive the requirement that foreign students
must pay for the cost of their education. The decision to waive or not
waive this requirement should be made at the grass roots level, not in
Washington and my bill seeks to preserve this principle. It would amend
the Illegal Immigration Reform and Immigrant Responsibility Act of 1996
(IIRIRA).

[[Page S8512]]

Foreign exchange students bring knowledge, cultural exposure and
understanding to American students, schools and communities. I have
been a proponent of cultural and educational exchanges and have
supported most international exchange programs over the years--both
those which bring foreign visitors here and those which send American
students, scholars and practitioners abroad. I remain committed to
these programs.
In 1996, I supported the Illegal Immigration Reform and Immigrant
Responsibility Act. This law states that as of November 30, 1996,
IIRIRA prohibits any alien from receiving an F-1 student visa to attend
a public elementary school, grades K-8, or a publicly-funded adult
education program unless they pay the unsubsidized, per capita cost of
their education in advance. My bill would not change current law
relating to elementary schools or adult education. It would not pertain
to students on formal, government-funded international exchanges. It
would simply allow high school officials to waive the cost of education
of high school-level foreign students in order to enroll an exchange
student, should they wish to do so. I believe this has been an
unintended consequence of IIRIRA.
Several cities have ``Sister City'' arrangements between American
cities and cities in foreign countries. One valuable component of these
arrangements is an exchange program for high school students enabling
American youth to spend a year in a foreign high school while students
from abroad spend a year in a high school here. No tuition is generally
exchanged under the sister city agreement, but current U.S. law states
that visitors to our country must pay the unsubsidized cost of their
education, even though American students are exempted from the cost
requirement.
Along the Alaska-Yukon, Alaska-British Columbia and U.S.-Mexican
borders there are schools serving very remote communities on both sides
of the border. After enactment of the 1996 law, Canadian or Mexican
students were no longer eligible to enter the United States to attend
the local public school even though governments and the local school
districts agreed to enroll the students.
Many school districts prefer to enroll one or two exchange students a
year. Reciprocal exchange agreements are beneficial and host families
enjoy these students in their homes. American exchange students
attending schools in Germany, for example, are not subjected to the
same tuition requirements for their schooling, yet they gain an
understanding of German history and culture and benefit from their
travels. Currently, U.S. law requires foreign students to pay tuition
before they arrive in the United States. The extra paper work, the up-
front costs and the extra burden these requirements place on foreign
students tend to undermine the purposes of cultural exchanges.
I remain mindful to past abuses of F-1 visas and am sympathetic to
the burden that large enrollments of foreign students place on American
public schools. My purpose in introducing this bill today is not to
weaken the law as it currently reads, but to provide an outlet for our
schools to give an educational opportunity for enrolling international
exchange students.

____________________