[Congressional Record Volume 144, Number 106 (Friday, July 31, 1998)]
[Senate]
[Pages S9561-S9596]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE OLD JICARILLA ADMINISTRATIVE SITE CONVEYANCE ACT OF 1998
Mr. DOMENICI. Mr. President, today I am introducing a bill to direct
the Secretary of Agriculture to convey a ten acre parcel of land, known
as the old Jicarilla administrative site, to San Juan College. This
legislation will provide long-term benefits for the people of San Juan
County, New Mexico, and especially the students and faculty of San Juan
College.
This legislation allows for transfer by the Secretary of Agriculture
real property and improvements at an abandoned and surplus
administrative site of the Carson National Forest to San Juan College.
The site is known as the old Jicarilla Ranger District Station, near
the village of Gobanador, New Mexico. The Jicarilla Station will
continue to be used for public purposes, including educational and
recreational purposes of the college.
Mr. President, the Forest Service has determined that this site is of
no further use to them, since the Jicarilla District Ranger moved into
a new administrative facility in the town of Bloomfield, New Mexico.
The facility has had no occupants for several years, and it is my
understanding that the Forest Service reported to the General Services
Administration that the improvements on the site were considered
surplus, and would be available for disposal under their administrative
procedures.
This legislation is patterned after S. 1510, approved by the Senate
earlier this month, by which the property and improvements of a
similarly abandoned Forest Service facility in New Mexico will be
transferred to Rio Arriba County. The administration has indicated its
support for the passage of that bill, and I hope that this bill will
gain their support, as well.
Mr. President, since the Forest Service has no interest in
maintaining Federal ownership of this land and the surplus facilities,
and San Juan College could put this small tract to good use, this
legislation is a win-win situation for the federal government and
northwestern New Mexico. I look the Senate's rapid consideration of
this legislation, and urge my colleagues to support its passage.
Mr. President, I ask unanimous consent that the text of the bill and
a letter of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2402
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. OLD JICARILLA ADMINISTRATIVE SITE.
(a) Conveyance of Property.--Not later than one year after
the date of enactment of this Act, the Secretary of
Agriculture (herein ``the Secretary'') shall convey to San
Juan College, in Farmington, New Mexico, subject to the terms
and conditions under subsection (c), all right, title, and
interest of the United States in and to a parcel of real
property (including any improvements on the land) consisting
of approximately ten acres known as the ``Old Jicarilla
Administrative Site'' located in San Juan County, New Mexico
(T29N; R5W; Section 29 Southwest of Southwest \1/4\).
(b) Description of Property.--The exact acreage and legal
description of the real property conveyed under subsection
(a) shall be determined by a survey satisfactory to the
Secretary and the President of San Juan College. The cost of
the survey shall be borne by San Juan College.
(c) Terms and Conditions.--
(1) Notwithstanding exceptions of application under the
Recreation and Public Purposes Act (43 U.S.C. 869(c)),
consideration for the conveyance described in subsection (a)
shall be--
(A) an amount that is consistent with the Bureau of Land
Management special pricing program for Governmental entities
under the Recreation and Public Purposes Act; and,
(B) an agreement between the Secretary and San Juan College
indemnifying the Government of the United States from all
liability of the Government that arises from the property.
(2) The lands conveyed by this Act shall be used for
educational and recreational purposes. If such lands cease to
be used for such purposes, at the option of the United
States, such lands will revert to the United States.
____
San Juan College,
Office of the President,
Farmington, NM, August 21, 1997.
Hon. Pete V. Domenici,
U.S. Senate,
Washington, DC.
Dear Senator Domenici: The United States Forest Service has
indicated a willingness to turn some property over to San
Juan College. The property was formerly the Carson National
Forest Jicarilla District Visitor Center Site. It is located
in Gobernador and was formerly the headquarters for the
Forest Service for this area. The office has subsequently
moved into Bloomfield, and the property has had no occupants
for several years.
At the suggestion of Phil Settles, the Forest Service
Director, I would like to request that some legislation be
introduced that would allow for the transfer of the property
from the Forest Service to San Juan College. The College
would use the area for educational and recreational purposes.
A description of the property is attached.
Please let me know what additional steps must be taken in
order to expedite the transfer. Thank you very much.
Sincerely,
James C. Henderson, Ed.D.
______
By Mr. SANTORUM:
S. 2403. A bill to prohibit discrimination against health care
entities that refuse to provide, provide coverage for, pay for, or
provide referrals for abortions; to the Committee on Labor and Human
Resources.
THE HEALTH CARE ENTITY PROTECTION ACT
Mr. SANTORUM. Mr. President, I am introducing legislation
today that will offer protection from government discrimination to
health care providers who have religious or moral objections to
performing abortions.
As HCFA prepares to implement the Medicare+Choice program, the need
for this bill has become evident. Congress created Medicare+Choice to
give beneficiaries more options in their health plans. The Balanced
Budget Act of 1997 (BBA) requires all health care providers who
participate in the program to provide all services covered under
Medicare Parts A and B, except hospice care. HCFA is interpreting this
mandate to require coverage for abortion, consistent with the Hyde
restrictions. The problem is that many religious health care systems--
and even some secular providers--have strong misgivings about
performing, providing coverage for, or paying for any elective
abortions. Absent specific legislative clarification, these providers
will be shut out of the Medicare+Choice program.
HCFA's interpretation of the BBA has come as a surprise to many
health systems wishing to participate in the Medicare+Choice program.
The issue of whether providers would have to cover abortion services
was never addressed during last summer's extensive debate. Instead,
this Congress focused on designing a program which would give seniors
the broadest possible range of health care choices, so they could
[[Page S9562]]
choose a provider based on their own individual needs.
In 1996, Congress prohibited government discrimination against health
care providers who choose not to teach abortion procedures in their
graduate medical programs. The Senate approved this legislation as an
amendment to the Omnibus Consolidated Rescissions and Appropriations
Act by a vote of 63-37. The Health Care Entity Protection Act merely
clarifies that these protections extend to all providers who have
religious or moral objections to performing, providing coverage of, or
paying for induced abortions. I would emphasise that nothing in this
bill prevents providers from voluntarily offering abortion services; it
simply gives them a right to choose whether they will so do.
I believe that my colleagues on both sides of the abortion debate can
support the Health Care Entity Protection Act. I would like to
reiterate that this bill simply clarifies protections that already
exist under current law. I hope the Senate will recognize the moral
gravity of the abortion issue and forge a consensus across party and
ideological lines to protect institutions, doctors, and health systems
who, as a matter of conscience, cannot perform or provide for
abortions.
______
By Mr. MACK (for himself and Mr. Graham):
S. 2404. A bill to establish designations for United States Postal
Service buildings located in Coconut Grove, Opa Locka, Carol City, and
Miami, Florida; to the Committee on Governmental Affairs.
United States postal service legislation
Mr. GRAHAM. Mr. President, I rise today together with my friends and
distinguished colleague, Senator Mack, to introduce legislation to name
five United States Post Offices in Miami-Dade County, Florida after
five prominent civic and community leaders. By doing so, we are joining
the entire Florida delegation in the United States House of
Representatives in honoring these individuals of great importance to
our state.
This legislation honors these five individuals service, commitment,
and dedication to their communities. Athalie Range is a multi-faceted
local community leader and humanitarian Garth Reeves, Sr. is a
publisher, banker, and entrepreneur. William R. ``Billy'' Rolle was a
teacher, coach, and community education leader. Essie Silva was a
leader and proponent of business development for South Florida's
Africa-American community. Helen Miller was the first African-American
female Mayor in Dade County, Florida.
While these five individuals come from different backgrounds and
professions they have one similar quality: dedication to their
communities. Through their service, they have made immeasurable
contributions to South Florida and our entire state. Mr. President, let
me say a few words about each of these outstanding individuals:
Athalie Range has been a leader in South Florida for over 30 years.
She was the first African-American and second woman to be elected to
the Miami City Commission. Governor Reubin Askew appointed her the
first African-American department head in the state of Florida. Ms.
Range has also been the recipient of over 160 awards and honors. I have
had the pleasure of knowing and learning from Ms. Range for many years.
Her commitment to improving the quality of life for all citizens has
been constant and meaningful.
Garth Reeves has been committed to excellence and achievement in
South Florida for over 50 years. As the owner and publisher of the
Miami Times, he has covered many of the important news stories of the
last half-century. He has also been an exemplary civic leader who
served on the Boards of Trustees of Miami-Dade Community College, Barry
University, Bethune-Cookman College, and Florida Memorial College.
Essie D. Silva was a proponent of South Florida economic development
her whole life. She chaired the Government Affairs Department of the
Miami-Dade Chamber of Commerce and led groups to lobby in Tallahassee
and Washington. In addition to her business activities, Ms. Silva was
instrumental in establishing the Sunstreet Carnival, a popular family
festival held in Miami.
Helen Miller became the first African-American female Mayor elected
in Miami-Dade County when Opa Locka residents chose her as their Mayor
in 1982. She has served on over forty different community boards
dedicated to improving the quality of life in South Florida. She was a
woman of tremendous vigor and leadership who was recognized as the
elder stateswoman of Opa Locka, Florida. She passed away on October 2,
1996, in Opa Locka, Florida.
William R. ``Billy'' Rolle dedicated his life in one of our most
important professions--teaching. He spent over thirty five years as a
teacher, coach, band instructor, and assistant principal. In all these
different roles he continued to inspire young people to reach their
full potential. Also, Mr. Rolle helped organize the First Annual
Goombay Festival, a popular Caribbean event held in Miami. He passed
away on January 20, 1998, in Miami, Florida.
Mr. President, the accomplishments of these five individuals are
worthy of having a post office designation. All of these post offices
that will bear the names of the individuals will be located in the
communities where they lived. It is appropriate that we grant this
honor to salute their life long commitment to their community. I urge
all my colleagues to join Senator Mack and me in supporting this
important legislation.
______
By Mr. FAIRCLOTH:
S. 2405. A bill to amend the Fair Labor Standards Act of 1938 to
exempt licensed funeral directors from the minimum wage and overtime
compensation requirements of that Act; to the Committee on Labor and
Human Resources.
fair labor standards act amendments
Mr. FAIRCLOTH. Mr. President, today I am introducing
legislation together with my good friend, Senator DeWine, to exempt
licensed funeral directors from the overtime provisions of the Fair
Labor Standards Act.
Under current law, licensed funeral directors do not meet the test
for the ``professionals'' exemption under the Wage and Hour regulations
of the Fair Labor Standards Act. Consequently, they are not exempt from
minimum wage and overtime requirements. Given the nature of their
work--on-duty or on-call 24 hours a day, 7 days a week, 365 days a
year--this requirement places an economic hardship on small funeral
homes and the families of licensed funeral directors. With erratic and
unpredictable work hours, most licensed funeral directors would prefer
the option of comp time in lieu of overtime pay in order to spend more
time with their families.
Requiring licensed funeral directors to be paid for overtime work
forces small business owners to allocate revenues for that purpose,
thereby inhibiting salaries and bonuses. To avoid the financial strain,
some even resort to using only part-time funeral directors.
Over the years, Congress has provided 17 exemptions to the Act.
Included are such diverse exemptions as employees of amusement or
recreational establishments, outside salespeople, seasonal agricultural
workers, apprentices, employees of newspapers with a circulation of
less than 4,000, switchboard operators of independently-owned telephone
companies with fewer than 750 stations, and the more recent amendments
related to criminal investigators, computer analysts, programmers, and
software engineers.
Mr. President, I strongly believe that small businesses, such as
funeral homes, must be given flexibility to provide their key employees
with the options for alternative overtime compensation in order for
them to survive, grow, and remain the premier source of employment in
our communities.
In that regard and on behalf of your local funeral homes and their
licensed funeral directors, I urge my colleagues to support this
legislation.
______
By Mr. BOND (for himself, Mr. Coverdell, Mr. Domenici, Mr.
Kempthorne, and Ms. Snowe):
S. 2407. A bill to amend the Small Business Act and the Small
Business Investment Act of 1958 to improve the programs of the Small
Business Administration; to the Committee on Small Business.
[[Page S9563]]
small business programs restructuring and reform act of 1998
Mr. BOND. Mr. President, today, I have been joined by Senators
Coverdell, Domenici, Kempthorne, and Snowe to introduce ``The Small
Business Programs Restructuring and Reform Act of 1998'' to restructure
and refine Small Business Administration programs that are designed to
help small businesses succeed. In drafting this legislation, I followed
one key principle--will the change help small businesses? Many of SBA's
programs are dependent upon the private sector to make loans and
investments or to provide services to small businesses. ``The Small
Business Programs Restructuring and Reform Act of 1998'' is intended to
make Federal small business programs work more effectively while
stimulating greater interest in the private sector to support small
business owners and their employees.
The small business sector is the fastest growing segment of our
economy. Its sustained growth throughout this decade has enabled our
Nation to experience one of its greatest periods of prosperity. During
this time span, small businesses have been responsible for the net
increase of new jobs in the United States. Today, small businesses
employ over \1/2\ of all American workers. Small businesses produce 55
percent of our Nation's gross domestic product. Our Nation's sustained
economic growth would not be possible were it not for the strength of
the small business sector. One would hate to imagine where we would be
without a robust small business community.
The Committee on Small Business opened the 105th Congress with a
hearing on Homebased and Women-owned businesses. We received testimony
on the significant economic contribution being made by the 8 million
women-owned businesses and on the importance of business education,
training, and financial assistance to this growing segment of our
economy.
To assist the rapid growth of small businesses owned by women,
Section 2 of ``The Small Business Programs Restructuring and Reform Act
of 1998'' would increase the authorization level to $12 million from $8
million per year for the Women's Business Center program. This increase
would ensure that new Center sites will be opened without jeopardizing
the currently funded Centers from receiving funds for five years.
To verify the SBA provides the Women's Business Center program with
the staff and administrative support required to support a $12 million
program, the bill directs the General Accounting Office to undertake a
baseline and follow-up study of the SBA's administration of the
program. These independent audits will assist Congress in its oversight
of SBA's supervision and administration of the program. Knowing that
the Administration has previously recommended a budget that would have
shut down the program, we want to make sure it is receiving the
appropriate level of staffing and agency resources.
Last year, Congress passed the ``Small Business Reauthorization Act
of 1997,'' which increased the authorization for the Women Business
Center Program to $8 million from $4 million and extended the number of
years grantees can receive grants to five years from three years. The
goal was to have a Women's Business Center operating in every state and
additional sites in states where there is sufficient demand. Consistent
with our view, the Administration's budget request for Fiscal Year 1999
recommended an increase in the authorization level to $9 million.
Senators Kerry and Cleland introduced S. 2157 which would authorize
the Administration's request and would go one step further by
increasing the authorization level to $10.5 million in FY 2000, and $12
million in FY 2001. I am encouraged to see such a strong show of
support for the program--only two years after Congress killed the
Administration's recommendation to strike all funding for the program.
Section 2 of the bill includes a new provision to provide parity
between Centers operating under three-year agreements with SBA when the
Reauthorization Act was enacted and those Centers awarded five-year
grants since that time. Section 2 amends the law to provide the same
matching requirement in year four for all Centers receiving SBA grants.
Under the 1997 Act, Centers that receive a two-year extension at the
conclusion of a three-year grant have to raise two non-federal dollars
for every federal dollar awarded; under Section 2, they will have to
raise one non-federal dollar for each federal dollar--which is the
fourth year matching requirement for Centers receiving newly awarded
five year grants. The 2 non-federal dollars to one federal dollar
matching requirement will remain in force for the fifth year of all
awardees.
Section 3 of ``The Small Business Programs Restructuring and Reform
Act of 1998'' would make the SBIR Program permanent. Testimony before
the Committee on Small Business and the findings of the General
Accounting Office clearly support this Congressional action. The bill
would also increase the set aside from 2.5 percent to 3.5 percent.
Beginning in FY 2001, the program would be increased by \1/4\ of 1
percent in each of the next four fiscal years.
Congress established the SBIR Program in 1982 because small
businesses are a principal source of innovation in the United States.
Under this program, Federal agencies with extramural research and
development budgets of $100 million or more are required to set aside
no less than 2.5 percent of that amount for small businesses. The SBIR
Program was last re-authorized in 1992 and will terminate in FY 2000
unless Congress acts first.
In April 1998, the General Accounting Office issued its comprehensive
report on the state of the SBIR Program, and in June 1998, GAO
addressed that report in testimony before the Committee on Small
Business. The unmistakable message was very clear--this is a good
program that is running well. There are ten Federal agencies that
participate in the program, and GAO concluded they are all adhering to
the program's funding requirements. Competition has been intense among
small business R&D firms in response to solicitations from the ten
agencies. GAO found, however, it was very rare for an agency to make an
award when the agency received only one proposal in response to a
solicitation was received.
The bill would make a significant change in the program to encourage
better outreach to states that receive few awards each year. GAO
reported in FY 1996 that California received a total of 904 awards for
a total of $207 million and Massachusetts received 628 awards for a
total of $148 million. On the other hand, there were a great number of
states receiving 11 or fewer awards. The bill would permit each of the
ten participating agencies to spend up to 2% of the SBIR set aside pool
of funds to support an outreach program, to promote better
commercialization of the R&D awards, and to offset some administrative
expenses. At least one-third of these non-award funds must be spent on
outreach in those states that receive 25 or fewer awards each year.
Earlier this year, I introduced S. 2173, the ``Assistive and
Universally Designed Technology Improvement Act,'' to encourage the
development and production of actual products for the marketplace for
assistive technology end-users. As part of my effort to reach that
goal, the ``Small Business Programs Restructuring and Reform Act of
1998'' includes a provision encouraging all ten Federal agencies
participating in the SBIR Program to solicit proposals to advance
research and development in this critical area.
In 1958, Congress created the SBIC Program to assist small business
owners obtain investment capital. Forty years later, small businesses
continue to experience difficulty in obtaining investment capital from
banks and traditional investment sources. SBICs are frequently their
only sources of investment capital. In 1992 and 1996, the Committee on
Small Business worked closely with SBA to correct earlier deficiencies
in the law in order to ensure the future of the program. Today, the
SBIC Program is booming. Its performance since 1994 has been
astounding.
Section 4 of ``The Small Business Programs Restructuring and Reform
Act of 1998'' would make a relatively small change in the operation of
the program. This change, however, would help smaller, small businesses
to be more attractive to investors. The bill would permit SBICs to
accept royalty payments contingent on future performance from companies
in which they invest as a form of equity return for their investment.
[[Page S9564]]
SBA already permits SBICs to receive warrants from small businesses,
which give the investing SBIC the right to acquire a portion of the
equity of the small business. By pledging royalties or warrants, the
small business is able to reduce the interest that would otherwise be
payable by the small business to the SBIC. Importantly, the royalty
feature provides the smaller, small business with an incentive to
attract SBIC investments when the return may otherwise be insufficient
to attract venture capital.
Section 5 of ``The Small Business Programs Restructuring and Reform
Act of 1998'' would require the SBA to make permanent a pilot program
initiated two years ago to permit certain Certified Development
Companies (CDCs) to foreclose and liquidate defaulted loans that they
have originated under the 504 Loan Program. This is a necessary step to
ensure the 504 program remains viable.
Currently, SBA liquidates and forecloses almost every loan made under
the 504 Loan Program. SBA has been performing this task poorly. The
Administration's FY 1999 budget submission estimates that recoveries on
defaulted loans under the 504 Loan Program will decline from 34.27% in
FY 1998 to 30.67% in FY 1999. It is important to note that all loans
made under the 504 loan program are fully secured by real estate. It is
inconceivable that SBA recovers only thirty cents on the dollar on
fully-secured real estate loans.
Because the 504 Program is self-funded through user fees, with no
appropriation required by Congress, borrowers must pay higher fees to
compensate for the SBA's inability to recover a reasonable portion of
defaulted loans. As borrower fees have increased, the 504 Loan Program
has been priced out of the reach of certain small businesses. The 504
Loan Program was enacted to provide larger loans to small businesses
for plant acquisition, construction or expansion. Such loans create
jobs and improve the economic health of communities. Congress should
not allow such opportunities to be limited because the SBA has been
unable to recover funds on defaulted loans effectively.
In 1996, Congress passed, at my urging, the Small Business Programs
Improvement Act, which established a pilot program that allowed
approximately 20 CDCs to liquidate loans that they had originated.
Reports on this pilot program indicate it has been a success--CDCs are
obtaining higher recoveries than the SBA. This bill makes the pilot
program permanent and permits CDCs that have the ability to manage loan
liquidations to do so. This change in the law is designed to increase
the recoveries on defaulted loans thereby decreasing borrower fees.
Consequently, more small businesses will have access to 504 loans,
which will create more jobs and will help sustain the economic growth
this country has been experiencing.
The ``Small Business Reauthorization Act of 1997'' included the
creation of the HUBZone Program, which raised the goal to 23% from 20%
for prime contracts being awarded by the Federal government to small
business. This increase was advocated by the SBA Administrator and was
embraced by the Clinton Administration.
It has been brought to the attention of the Committee on Small
Business that some Federal agencies may be using bookkeeping ploys to
reduce the amount of contract dollars going into the pool of contracts
used for calculating the older 20% small business set aside goal. By
reducing the overall dollar volume of contracts, the value of contracts
counted under the older 20% set aside goal is also reduced. Now that
Congress has increased the goal to 23%, I am concerned there may be
greater pressure on the agencies to ``juggle the books.''
In order for the Committee on Small Business to conduct its oversight
of the small business contract set aside goal, Section 6 of the bill
directs the SBA to send a report to the Committee on Small Business
each year highlighting any Federal agency that alters its statistical
methodology in tracking its efforts to meet the 23% goal. The bill also
directs the Administrator of SBA to notify the Committee and the SBA
Chief Counsel for Advocacy prior to approving any request from an
agency to change how it reports its small business contracting efforts.
Last year, when Congress approved the ``Small Business
Reauthorization Act of 1997,'' it included a separate title to improve
business opportunities for service-disabled veterans. The Senate and
House Committees on Small Business believed strongly that these
individuals deserve better support from the Federal agencies than they
have received historically. Last year's bill included a provision
requiring the SBA to complete a comprehensive report containing the
findings and recommendations of the SBA Administrator on the needs of
small businesses owned and controlled by service-disabled veterans.
Although this report should be received by the Congress no later than
the first week of September, SBA's efforts to date to complete this
report within the statutory deadline are disappointing.
Section 7 of ``The Small Business Programs Restructuring and Reform
Act of 1998'' would go one step further to strengthen the mandate that
SBA's programs be more responsive to all veteran small business owners.
The bill would direct that veterans receive comprehensive help at SBA.
The bill elevates the Office of Veterans Affairs at SBA to the Office
of Veterans Business Development, which would be headed by an Associate
Administrator, who would report directly to the SBA Administrator.
In addition, the bill would establish an Advisory Committee on
Veterans' Business Affairs composed of 15 members. Eight members would
be veterans who own small businesses, and seven members will be
representatives of national veterans service organizations. Further,
the bill would create the position of National Veterans' Business
Coordinator within the Service Corps of Retired Executives (SCORE)
Program. This new position would work in the SBA headquarters to ensure
that SCORE's programs nationwide include entrepreneurial counseling and
training for veterans.
Section 7 of the bill would make veteran small business owners
eligible to apply for small, start-up loans under SBA's Microloan
Program. And the SBA Office of Advocacy would be directed to evaluate
annually efforts by Federal agencies, business and industry to help
business that are owned and controlled by veterans.
The ``Small Business Programs Restructuring and Reform Act of 1998''
is a sound bill that will help small business owners, particularly
those who are struggling or in the business start-up phase to compete
more effectively. I urge my colleagues to support this legislation.
Mr. President, I ask unanimous consent the full 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. 2407
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 ``Small Business Programs
Restructuring and Reform Act of 1998''.
SEC. 2. WOMEN'S BUSINESS CENTER PROGRAM.
(a) Findings.--Congress finds that--
(1) with small business concerns owned and controlled by
women being created at a rapid rate in the United States,
there is a need to increase the authorization level for the
women's business center program under section 29 of the Small
Business Act (15 U.S.C. 656) in order to establish additional
women's business center sites throughout the Nation that
focus on entrepreneurial training programs for women; and
(2) increased funding for the women's business center
program will ensure that--
(A) new women's business center sites can be established to
reach women located in geographic areas not presently served
by an existing women's business center without jeopardizing
the full funding of existing women's business centers for the
term prescribed by law; and
(B) the Small Business Administration achieves the goal of
establishing at least 1 sustainable women's business center
in each State.
(b) Authorization of Appropriations.--
(1) In general.--Section 29(k)(1) of the Small Business Act
(15 U.S.C. 656(k)(1)) is amended to read as follows:
``(1) Authorization.--There is authorized to be
appropriated to carry out this section, $12,000,000 for
fiscal year 1999 and each fiscal year thereafter.''.
(2) Effective date.--The amendment made by this subsection
shall take effect on October 1, 1998.
(c) Terms of Assistance.--
(1) In general.--Section 308(b) of the Small Business
Reauthorization Act of 1997 (15 U.S.C. 656 note) is amended--
[[Page S9565]]
(A) by striking ``(b)'' and all that follows through
``paragraph (2), any organization'' and inserting the
following:
``(b) Applicability.--Any organization''; and
(B) by striking paragraph (2).
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the enactment of the
Small Business Reauthorization Act of 1997.
(d) General Accounting Office Reporting Requirements.--
(1) Baseline report.--Not later than October 31, 1999, the
Comptroller General of the United States shall--
(A) conduct a review of the administration of the women's
business center program under section 29 of the Small
Business Act (15 U.S.C. 656) by the Office of Women's
Business Ownership of the Small Business Administration,
which shall include an analysis of--
(i) the operation of the women's business center program by
the Administration;
(ii) the efforts of the Administration to meet the
legislative objectives established for the program;
(iii) the oversight role of the Administration of the
operations of women's business centers;
(iv) the manner in which the women's business centers
operate;
(v) the benefits provided by the women's business centers
to small business concerns owned and controlled by women; and
(vi) any other matters that the Comptroller General
determines to be appropriate; and
(B) submit to the Committees on Small Business of the
Senate and House of Representatives a report describing the
results of the review under subparagraph (A).
(2) Followup report.--Not later than October 31, 2002, the
Comptroller General of the United States shall--
(A) conduct a review of any changes, during the period
beginning on the date on which the report is submitted under
paragraph (1)(B) and ending on the date on which the report
is submitted under subparagraph (B) of this paragraph, in the
administration of the women's business center program under
section 29 of the Small Business Act (15 U.S.C. 656) by the
Office of Women's Business Ownership of the Small Business
Administration, which shall include an analysis of any
changes during that period in--
(i) the operation of the women's business center program by
the Administration;
(ii) the efforts of the Administration to meet the
legislative objectives established for the program;
(iii) the oversight role of the Administration of the
operations of women's business centers;
(iv) the manner in which the women's business centers
operate;
(v) the benefits provided by the women's business centers
to small business concerns owned and controlled by women; and
(vi) any other matters that the Comptroller General
determines to be appropriate; and
(B) submit to the Committees on Small Business of the
Senate and House of Representatives a report describing the
results of the review under subparagraph (A).
SEC. 3. SBIR PROGRAM.
(a) Assistive Technology.--Section 9(c) of the Small
Business Act (15 U.S.C. 638(c)) is amended by adding at the
end the following: ``In order to carry out the purposes of
this section, the Administration shall, to the maximum extent
practicable, encourage Federal agencies to fund programs for
the research and development of assistive and universally
designed technology that is designed to result in the
availability of new products for individuals with
disabilities (as defined in section 3 of the Americans with
Disabilities Act of 1990 (42 U.S.C. 12102)).''.
(b) Federal Agency Expenditures for the SBIR Program.--
(1) Required expenditure amounts; definition of extramural
budget.--Section 9(f)(1) of the Small Business Act (15 U.S.C.
638(f)(1)) is amended--
(A) by striking subparagraphs (A) through (C) and inserting
the following:
``(A) not less than 2.5 percent of that budget in each of
fiscal years 1999 and 2000;
``(B) not less than 2.75 percent of that budget in fiscal
year 2001;
``(C) not less than 3 percent of that budget in fiscal year
2002;
``(D) not less than 3.25 percent of that budget in fiscal
year 2003; and
``(E) not less than 3.5 percent of that budget in each
fiscal year thereafter;''; and
(B) by adding at the end the following: ``Notwithstanding
any other provision of law, any rule, regulation, or order
promulgated by the Director of the Office of Management and
Budget relating to the definition of the term `extramural
budget' in subsection (e)(1) shall, except with respect to
the Federal agencies specifically identified in that
subsection, apply uniformly to all departments and agencies
of the Federal Government that are subject to the
requirements of this section.''.
(2) Limitations relating to administrative costs.--Section
9(f)(2) of the Small Business Act (15 U.S.C. 638(f)(2)(A)) is
amended--
(1) in the matter preceding subparagraph (A), by striking
``A Federal agency'' and inserting ``In any fiscal year, a
Federal agency''; and
(2) in subparagraph (A)--
(A) by striking ``any of'' and inserting ``more than the
lesser of $2,000,000 or 2 percent of''; and
(B) by inserting ``, funding program outreach for States
receiving 25 or fewer awards in that fiscal year, and funding
increased activities to promote commercialization of SBIR
awards, of which not less than one-third shall be used to
support program outreach'' before the semicolon.
(d) Repeal of Termination Provision.--Section 9 of the
Small Business Act (15 U.S.C. 638) is amended by striking
subsection (m) and inserting the following:
``(m) [Reserved].''.
SEC. 4. SBIC PROGRAM.
Section 308(i)(2) of the Small Business Investment Act of
1958 (15 U.S.C. 687(i)(2)) is amended by adding at the end
the following: ``In this paragraph, the term `interest'
includes only the maximum mandatory sum, expressed in dollars
or as a percentage rate, that is payable with respect to the
business loan amount received by the small business concern,
and does not include the value, if any, of contingent
obligations, including warrants, royalty, or conversion
rights, granting the small business investment company an
ownership interest in the equity or future revenue of the
small business concern receiving the business loan.''.
SEC. 5. CERTIFIED DEVELOPMENT COMPANY PROGRAM.
(a) In General.--Title V of the Small Business Investment
Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at
the end the following:
``SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS.
``(a) In General.--The Administration shall authorize
qualified State and local development companies (as defined
in section 503(e)) that meet the requirements of subsection
(b) to foreclose and liquidate loans in the portfolios of
those companies that are funded with the proceeds of
debentures guaranteed by the Administration under section
503.
``(b) Requirements.--The requirements of this subsection
are that--
``(1) the qualified State or local development company--
``(A) participated in the loan liquidation pilot program
established by section 204 of the Small Business Programs
Improvement Act of 1996 (15 U.S.C. 695 note), as in effect on
the day before the promulgation of final regulations by the
Administration implementing this section; or
``(B) is participating in the Accredited Lenders Program
under section 507 or the Premier Certified Lenders Program
under section 508; or
``(2)(A) during the 3 most recent fiscal years, the
qualified State or local development company has made an
average of not less than 10 loans per year that are funded
with the proceeds of debentures guaranteed under section 503;
and
``(B) 1 or more of the employees of the qualified State or
local development company have--
``(i) not less than 1 year of experience in administering
the liquidation and workout of problem loans secured in a
manner substantially similar to loans funded with the
proceeds of debentures guaranteed under section 503; or
``(ii) completed a training program on loan liquidation
developed by the Administration in conjunction with qualified
State and local development companies that meet the
requirements of this subsection.
``(c) Authority of Development Companies.--
``(1) In general.--Each qualified State or local
development company authorized to foreclose and liquidate
loans under this section shall, with respect to any loan
described in subsection (a) in the portfolio of the
development company that is in default--
``(A) perform all liquidation and foreclosure functions,
including the purchase of any other indebtedness secured by
the property securing the loan, in a reasonable and sound
manner and according to commercially accepted practices,
pursuant to a liquidation plan, which shall be approved in
advance by the Administration in accordance with paragraph
(2)(A);
``(B) litigate any matter relating to the performance of
the functions described in subparagraph (A), except that the
Administration may monitor the conduct of any such litigation
to which the qualified State or local development company is
a party; and
``(C) take other appropriate actions to mitigate loan
losses in lieu of total liquidation or foreclosure, including
restructuring the loan, which such actions shall be in
accordance with prudent loan servicing practices and pursuant
to a workout plan, which shall be approved in advance by the
Administration in accordance with paragraph (2)(C).
``(2) Administration approval.--
``(A) Liquidation plan.--In carrying out paragraph (1), a
qualified State or local development company shall submit to
the Administration a proposed liquidation plan. Any request
under this subparagraph shall be approved or denied by the
Administration not later than 10 business days after the date
on which the request is submitted. If the Administration does
not approve or deny a request for approval of a liquidation
plan before the expiration of the 10-business day period
beginning on the date on which the request is submitted, the
request shall be considered to be approved.
``(B) Purchase of indebtedness.--In carrying out paragraph
(1)(A), a qualified State or local development company shall
submit
[[Page S9566]]
to the Administration a request for written approval from the
Administration before committing the Administration to
purchase any other indebtedness secured by the property
securing the loan at issue. Any request under this
subparagraph shall be approved or denied by the
Administration not later than 10 business days after the date
on which the request is submitted.
``(C) Workout plan.--In carrying out paragraph (1)(C), a
qualified State or local development company may submit to
the Administration a proposed workout plan. Any request under
this subparagraph shall be approved or denied by the
Administration not later than 20 business days after the date
on which the request is submitted. If the Administration does
not approve or deny a request for approval of a workout plan
before expiration of the 20-business day period beginning on
the date on which the request is submitted, the request shall
be considered to be approved.
``(3) Conflict of interest.--A qualified State or local
development company that is liquidating or foreclosing a loan
under this section shall not take any action that would
result in an actual or apparent conflict of interest between
the qualified State or local development company, or any
employee thereof, and any third party lender, associate of a
third party lender, or any other person participating in any
manner in the liquidation or foreclosure of the loan.
``(d) Suspension or Revocation of Authority.--The authority
of a qualified State or local development company to
foreclose and liquidate loans under this section may be
suspended or revoked by the Administration, if the
Administration determines that the qualified State or local
development company--
``(1) does not meet the requirements of subsection (b); or
``(2) has failed to comply with any requirement of this
section or any applicable rule or regulation of the
Administration regarding the foreclosure and liquidation of
loans under this section, or has violated any other
applicable provision of law.
``(e) Report.--
``(1) In general.--The Administration shall annually submit
to the Committees on Small Business of the House of
Representatives and the Senate a report on the results of the
delegation of authority to qualified State and local
development companies to liquidate and foreclose loans under
this section.
``(2) Information included.--Each report under this
paragraph shall include information, with respect to each
qualified State or local development company authorized to
foreclose and liquidate loans under this section, and in the
aggregate, relating to--
``(A) the total dollar amount of each loan liquidated and
the total cost of each project financed with that loan;
``(B) the total dollar amount guaranteed by the
Administration;
``(C) total dollar losses;
``(D) total recoveries both as a percentage of the amount
guaranteed and the total cost of the project financed; and
``(E) a comparison between--
``(i) the information described in subparagraphs (A)
through (D) with respect to loans foreclosed and liquidated
by qualified State and local development companies under this
section during the 3-year period preceding the date on which
the report is submitted; and
``(ii) the same information with respect to loans
foreclosed and liquidated by the Administration during that
period.''.
(b) Regulations.--
(1) In general.--Not later than 120 days after the date of
enactment of this Act, the Administrator of the Small
Business Administration shall promulgate such regulations as
may be necessary to carry out section 510 of the Small
Business Investment Act of 1958, as added by subsection (a)
of this section.
(2) Elimination of pilot program.--Effective on the date on
which final regulations are promulgated under paragraph (1),
section 204 of the Small Business Programs Improvement Act of
1996 (15 U.S.C. 695 note) is repealed.
SEC. 6. SMALL BUSINESS FEDERAL CONTRACT SET-ASIDES.
Section 15(h) of the Small Business Act (15 U.S.C. 644(h))
is amended--
(1) by redesignating paragraphs (2) and (3) as paragraphs
(3) and (4), respectively;
(2) by inserting after paragraph (1) the following:
``(2)(A) Not later than 180 days after the last day of each
fiscal year, based on the reports submitted under paragraph
(1) for that fiscal year, the Administration shall submit to
the Committees on Small Business of the House of
Representatives and the Senate a report, which shall
include--
``(i) the information required by paragraph (3);
``(ii) a detailed description of the procurement data that
is included in the reports submitted under paragraph (1) for
that fiscal year, which shall identify--
``(I) any data on contracts from Federal agencies that is
excluded from those reports, accompanied by an explanation
for such exclusion; and
``(II) each Federal agency that has submitted a report that
deviates from the requirements of paragraphs (3) and (4),
accompanied by an explanation of the reasons for each such
deviation;
``(iii) a detailed description of any change in statistical
methodology used by any Federal agency that is reflected in
any statistic in the report submitted under paragraph (1) for
that fiscal year, including any inclusion or exclusion of the
value of any contracts or types of contracts in any statistic
represented by the Federal agency in the report submitted
under paragraph (1) as the total value of contracts or
subcontracts awarded by the Federal agency or as the total
value of contracts or subcontracts awarded to small business
concerns; and
``(iv) with respect to each change in statistical
methodology by a Federal agency described in clause (iii), a
separate calculation (which shall be provided to the
Administration by the Federal agency) of the total value of
contracts for that fiscal year, using the statistical
methodology used by the Federal agency during each of the 2
preceding fiscal years.
``(B)(i) Not less than 45 days before issuing any waiver or
permissive letter allowing any Federal agency or group of
agencies to make any change in statistical methodology
described in subparagraph (A)(iii), the Administration shall
submit to the Committees on Small Business of the House of
Representatives and the Senate, and to the Chief Counsel for
Advocacy of the Administration, a copy of that waiver or
letter.
``(ii) Not later than 30 days after the submission of a
waiver or letter under clause (i), the Chief Counsel for
Advocacy of the Administration shall submit to the Committees
on Small Business of the House of Representatives and the
Senate, and to each affected Federal agency, the written
comments of the Chief Counsel regarding the appropriateness
of the decision of the Administration to issue the waiver or
letter.''; and
(3) in paragraph (4), as redesignated, by striking
``paragraph (2)'' and inserting ``paragraphs (2) and (3)''.
SEC. 7. ASSISTANCE FOR VETERANS.
(a) Definitions.--Section 3 of the Small Business Act (15
U.S.C. 632) is amended by adding at the end the following:
``(q) Definitions Relating to Veterans.--In this Act:
``(1) Service-disabled veteran.--The term `service-disabled
veteran' means a veteran with a disability that is service-
connected (as defined in section 101(16) of title 38, United
States Code).
``(2) Small business concern owned and controlled by
service-disabled veterans.--The term `small business concern
owned and controlled by service-disabled veterans' means a
small business concern--
``(A) not less than 51 percent of which is owned by 1 or
more service-disabled veterans or, in the case of any
publicly owned business, not less than 51 percent of the
stock of which is owned by 1 or more service-disabled
veterans; and
``(B) the management and daily business operations of which
are controlled by 1 or more service-disabled veterans.
``(3) Small business concern owned and controlled by
veterans.--The term `small business concern owned and
controlled by veterans' means a small business concern--
``(A) not less than 51 percent of which is owned by 1 or
more veterans or, in the case of any publicly owned business,
not less than 51 percent of the stock of which is owned by 1
or more veterans; and
``(B) the management and daily business operations of which
are controlled by 1 or more veterans.
``(4) Veteran.--The term `veteran' has the meaning given
the term in section 101(2) of title 38, United States
Code.''.
(b) Office of Veterans Business Development.--
(1) Associate Administrator for Veterans Business
Development.--Section 4(b)(1) of the Small Business Act (15
U.S.C. 633(b)(1)) is amended--
(A) in the fifth sentence, by striking ``four'' and
inserting ``5''; and
(B) by inserting after the fifth sentence the following:
``One shall be the Associate Administrator for Veterans
Business Development, who shall administer the Office of
Veterans Business Development established under section
32.''.
(2) Establishment of office.--The Small Business Act (15
U.S.C. 631 et seq.) is amended--
(A) by redesignating section 32 as section 33; and
(B) by inserting after section 31 the following:
``SEC. 32. VETERANS PROGRAMS.
``(a) Office of Veterans Business Development.--
``(1) Establishment.--There is established in the
Administration an Office of Veterans Business Development,
which shall be administered by the Associate Administrator
for Veterans Business Development (in this section referred
to as the `Associate Administrator') appointed under section
4(b)(1).
``(2) Associate administrator for veterans business
development.--The Associate Administrator shall be--
``(A) a career appointee in the competitive service or in
the Senior Executive Service; and
``(B) responsible for the formulation and execution of the
policies and programs of the Administration that provide
assistance to small business concerns owned and controlled by
veterans and small business concerns owned and controlled by
service-disabled veterans.
``(b) Advisory Committee on Veterans Business Affairs.--
[[Page S9567]]
``(1) In general.--There is established an advisory
committee to be known as the Advisory Committee on Veterans
Business Affairs (in this subsection referred to as the
`Committee'), which shall serve as an independent source of
advice and policy recommendations to the Administrator
(through the Associate Administrator), to Congress, and to
the President.
``(2) Membership.--
``(A) In general.--The Committee shall be composed of 15
members, each of whom shall be appointed by the
Administrator, of whom--
``(i) 8 shall be veterans who are owners of small business
concerns; and
``(ii) 7 shall be representatives of national veterans
service organizations.
``(B) Political affiliation.--Not more than 8 members of
the Committee shall be of the same political party as the
President.
``(C) Prohibition on federal employment.--No member of the
Committee may be an officer or employee of the Federal
Government. If any member of the Committee commences
employment as an officer or employee of the Federal
Government after the date on which the member is appointed to
the Committee, the member may continue to serve as a member
of the Committee for not more than 30 days after the date on
which the member commences employment as such an officer or
employee.
``(D) Service term.--Each member of the Committee shall
serve for a term of 3 years.
``(E) Vacancies.--Not later than 30 days after the date on
which a vacancy in the membership of the Committee occurs,
the vacancy be filled in the same manner as the original
appointment.
``(F) Chairperson.--The Committee shall select a
Chairperson from among the members of the Committee. Any
vacancy in the office of the Chairperson of the Committee
shall be filled by the Committee at the first meeting of the
Committee following the date on which the vacancy occurs.
``(G) Initial appointments.--Not later than 60 days after
the date of enactment of this Act, the Administrator shall
appoint the initial members of the Committee.
``(3) Duties.--The Committee shall--
``(A) review, coordinate, and monitor plans and programs
developed in the public and private sectors, that affect the
ability of veteran-owned business enterprises to obtain
capital and credit;
``(B) promote and assist in the development of business
information and surveys relating to veterans;
``(C) monitor and promote the plans, programs, and
operations of the departments and agencies of the Federal
Government that may contribute to the establishment and
growth of veteran's business enterprises;
``(D) develop and promote new initiatives, policies,
programs, and plans designed to foster veteran's business
enterprises; and
``(E) advise and assist in the design of a comprehensive
plan, which shall be updated annually, for joint public-
private sector efforts to facilitate growth and development
of veteran's business enterprises.
``(4) Powers.--
``(A) Hearings.--The Committee may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Committee considers advisable to
carry out the duties of the Committee under this subsection.
``(B) Information from federal agencies.--The Committee may
secure directly from any department or agency of the Federal
Government such information as the Committee considers to be
necessary to carry out the duties of the Committee under this
subsection. Upon request of the Chairperson of the Committee,
the head of such department or agency shall furnish such
information to the Committee.
``(C) Postal services.--The Committee may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
``(D) Gifts.--The Committee may accept, use, and dispose of
gifts or donations of services or property.
``(5) Meetings.--
``(A) In general.--The Committee shall meet not less than
biannually at the call of the Chairperson, and otherwise upon
the request of the Administrator.
``(B) Location.--Each meeting of the full Committee shall
be held at the headquarters of the Administration located in
Washington, District of Columbia. The Administrator shall
provide suitable meeting facilities and such administrative
support as may be necessary for each meeting of the
Committee.
``(6) Personnel matters.--
``(A) No compensation.--Members of the Committee shall
serve without compensation for their services to the
Committee.
``(B) Travel expenses.--The members of the Committee shall
be reimbursed for travel and subsistence expenses in the same
manner and to the same extent as members of advisory boards
and committees under section 8(b)(13).
``(c) Score Program.--The Administrator shall enter into a
memorandum of understanding with the Service Core of Retired
Executives (in this subsection referred to as `SCORE')
participating in the program under section 8(b)(1)(B) for--
``(1) the appointment by SCORE in its national office of a
National Veterans Business Coordinator, whose exclusive
duties shall be those relating to veterans' business matters,
and who shall be responsible for the establishment and
administration of a program to provide entrepreneurial
counseling and training to veterans through the chapters of
SCORE throughout the United States;
``(2) the establishment and maintenance of a toll-free
telephone number and an Internet website to provide access
for veterans to information about the entrepreneurial
services available to veterans through SCORE; and
``(3) the collection of statistics concerning services
provided by SCORE to veterans and service-disabled veterans
and the inclusion of those statistics in each annual report
published by the Administrator under section 4(b)(2)(B).
``(d) Annual Report.--The Administrator shall annually
submit to the Committees on Small Business of the House of
Representative and the Senate a report on the needs of small
business concerns owned by controlled by veterans and small
business concerns owned and controlled by service-disabled
veterans, which shall include--
``(1) the availability of programs of the Administration
for and the degree of utilization of those programs by those
small business concerns during the preceding 12-month period;
``(2) the percentage and dollar value of Federal contracts
awarded to those small business concerns during the preceding
12-month period; and
``(3) proposed methods to improve delivery of all Federal
programs and services that could benefit those small business
concerns.''.
(c) Office of Advocacy.--Section 202 of Public Law 94-305
(15 U.S.C. 634b) is amended--
(1) in paragraph (10), by striking ``and'' at the end;
(2) in paragraph (11), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(12) evaluate the efforts of each Federal agency and of
private industry to assist small business concerns owned and
controlled by veterans and small business concerns owned and
controlled by service-disabled veterans, and make appropriate
recommendations to the Administrator and to Congress in order
to promote the establishment and growth of those small
business concerns.''.
(d) Microloan Program.--Section 7(m)(1)(A)(i) of the Small
Business Act (15 U.S.C. 636(m)(1)(A)(i)) is amended by
striking ``low-income, and'' and inserting ``low-income
individuals, veterans,''.
______
By Mr. CHAFEE (for himself, Mr. Rockefeller, Mr. DeWine, Mr.
Levin, Mr. Bond, Mr. Moynihan, Mr. Kerrey, Ms. Landrieu, and
Mr. Dorgan):
S. 2408. A bill to promote the adoption of children with special
needs; to the Committee on Finance.
THE ADOPTION EQUALITY ACT OF 1998
Mr. CHAFEE. Mr. President, I am pleased today to introduce the
Adoption Equality Act of 1998, legislation that will make it easier for
children with special needs to find permanent, adoptive homes. I want
to extend my sincere thanks to Senator Rockefeller for his commitment
to this legislation and to foster and adoptive children generally.
Senator Rockefeller joins me as an original cosponsor, as do Senators
DeWine, Kerrey, Bond, Levin, Landrieu, Dorgan and Moynihan.
Nationwide there are 500,000 children in foster care. In Rhode Island
there are approximately 1,600 children in foster care. On average,
these children will spend more than two years in out-of-home care
before they are either returned home to their biological families or
freed for adoption.
The majority of the children who have been legally freed for
adoption--95 percent--have special-needs, which in the world of child
welfare means that they are children who are hard to place. They may be
older children, they may be children in sibling groups that the state
does not want to separate, they may have physical disabilities or
mental or emotional problems, or they may belong to a minority group.
The federal government provides an incentive to families wishing to
open their homes to these children by offering some of them a monthly
subsidy to help defray the cost of adopting these children. It is
expensive to care for children, and even more expensive if the child
has special needs. The monthly subsidy, which is less than the monthly
payment for the child to be in foster care, is used to defray some of
these additional costs.
What makes no sense about the current system is that the federal
government only makes these subsidies available to special-needs
children who are being adopted whose biological families were poor. If
the child is being adopted by a low-income family, but their biological
family was not low-income, that child will not receive a federal
adoption subsidy.
[[Page S9568]]
This system makes no sense to me, and that is why we are introducing
the Adoption Equality Act today. This measure would make all special-
needs children eligible for a modest federal adoption subsidy,
regardless of the income of their biological parents. The income of the
prospective adoptive parents would be taken into account when
calculating the amount of the subsidy, as it is under current law.
Mr. President, I believe this is a simply issue of fairness to these
children and the families who adopt them. We should be doing everything
we can to help these children find permanent homes. The Adoption
Equality Act builds upon the critical reforms we made last year in the
enactment of the Adoption and Safe Families Act. I urge my colleagues
to join me in cosponsoring and passing this bill. Thank you Mr.
President. I ask unanimous consent that the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2408
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 ``Adoption Equality Act of
1998''.
SEC. 2. PROMOTION OF ADOPTION OF CHILDREN WITH SPECIAL NEEDS.
(a) In General.--Section 473(a) of the Social Security Act
(42 U.S.C. 673(a)) is amended by striking paragraph (2) and
inserting the following:
``(2)(A) For purposes of paragraph (1)(B)(ii), a child
meets the requirements of this paragraph if such child--
``(i) prior to termination of parental rights and the
initiation of adoption proceedings was in the care of a
public or licensed private child care agency or Indian tribal
organization either pursuant to a voluntary placement
agreement (provided the child was in care for not more than
180 days) or as a result of a judicial determination to the
effect that continuation in the home would be contrary to the
safety and welfare of such child, or was residing in a foster
family home or child care institution with the child's minor
parent (either pursuant to such a voluntary placement
agreement or as a result of such a judicial determination);
and
``(ii) has been determined by the State pursuant to
subsection (c) to be a child with special needs, which needs
shall be considered by the State, together with the
circumstances of the adopting parents, in determining the
amount of any payments to be made to the adopting parents.
``(B) Notwithstanding any other provision of law, and
except as provided in paragraph (7), a child who is not a
citizen or resident of the United States and who meets the
requirements of subparagraph (A) shall be treated as meeting
the requirements of this paragraph for purposes of paragraph
(1)(B)(ii).
``(C) A child who meets the requirements of subparagraph
(A), who was determined eligible for adoption assistance
payments under this part with respect to a prior adoption (or
who would have been determined eligible for such payments had
the Adoption and Safe Families Act of 1997 been in effect at
the time that such determination would have been made), and
who is available for adoption because the prior adoption has
been dissolved and the parental rights of the adoptive
parents have been terminated or because the child's adoptive
parents have died, shall be treated as meeting the
requirements of this paragraph for purposes of paragraph
(1)(B)(ii).''.
(b) Exception.--Section 473(a) of the Social Security Act
(42 U.S.C. 673(a)) is amended by adding at the end the
following:
``(7)(A) Notwithstanding any other provision of this
subsection, no payment may be made to parents with respect to
any child that--
``(i) would be considered a child with special needs under
subsection (c);
``(ii) is not a citizen or resident of the United States;
and
``(iii) was adopted outside of the United States or was
brought into the United States for the purpose of being
adopted.
``(B) Subparagraph (A) shall not be construed as
prohibiting payments under this part for a child described in
subparagraph (A) that is placed in foster care subsequent to
the failure, as determined by the State, of the initial
adoption of such child by the parents described in such
subparagraph.''.
(c) Requirement for Use of State Savings.--Section 473(a)
of the Social Security Act (42 U.S.C. 673(a)), as amended by
subsection (b), is amended by adding at the end the
following:
``(8) A State shall spend an amount equal to the amount of
savings (if any) in State expenditures under this part
resulting from the application of paragraph (2) on and after
the effective date of the amendment to such paragraph made by
section 2(a) of the Adoption Equality Act of 1998 to provide
to children or families any service (including post-adoption
services) that may be provided under this part or part B.''.
(d) Effective Date.--The amendments made by this section
shall take effect on October 1, 1998.
SEC. 3. REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS.
(a) In General.--Section 1903 of the Social Security Act
(42 U.S.C. 1396b) is amended--
(1) in subsection (a)(7), by striking ``section
1919(g)(3)(B)'' and inserting ``subsection (x) and section
1919(g)(3)(C)''; and
(2) by adding at the end the following:
``(x) Adjustments to Payments for Administrative Costs.--
``(1) Reductions in payments for administrative costs based
on determinations of amounts attributable to benefiting
programs.--
``(A) In general.--Subject to paragraph (2), effective for
each of fiscal years 1999 through 2002, the Secretary shall
reduce, for each such fiscal year, the amount paid under
subsection (a)(7) to each State by an amount equal to the
amount determined for the medicaid program under section
16(k)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C.
2025(k)(2)(B)). The Secretary shall, to the extent
practicable, make the reductions required by this paragraph
on a quarterly basis.
``(B) Application.--If the Secretary does not make the
determinations required by section 16(k)(2)(B) of the Food
Stamp Act of 1977 (7 U.S.C. 2025(k)(2)(B)) by September 30,
1999--
``(i) during the fiscal year in which the determinations
are made, the Secretary shall reduce the amount paid under
subsection (a)(7) to each State by an amount equal to the sum
of the amounts determined for the medicaid program under
section 16(k)(2)(B) of the Food Stamp Act of 1977 for fiscal
year 1999 through the fiscal year during which the
determinations are made; and
``(ii) for each subsequent fiscal year through fiscal year
2002, subparagraph (A) applies.
``(C) Application of appeal of determinations.--The
provisions of section 16(k)(4) of the Food Stamp Act of 1977
(7 U.S.C. 20205(k)(4)) apply to reductions in payments under
this subsection in the same manner as they apply to
reductions under section 16(k) of that Act.
``(2) Bonus payment for program alignment.--
``(A) In general.--
``(i) Amount.--In addition to any other payment made under
this title to a State for a fiscal year, the Secretary shall
pay to each State that satisfies the requirements of clause
(ii) a portion of the amount by which--
``(I) any decrease in Federal outlays for amounts paid
under subsection (a)(7) with respect to the State for the
fiscal year as a result of the application of paragraph (1),
as determined by the Congressional Budget Office, exceeds
``(II) any increase in Federal outlays with respect to the
State for the fiscal year as a result of the application of
section 473(a), as amended by section 2 of the Adoption
Equality Act of 1998, as determined by the Congressional
Budget Office.
``(ii) Requirements.--A State satisfies the requirements of
this clause if the Secretary determines that--
``(I) the State's income and resource eligibility rules
under section 1931, taking into account the income standards
and methodologies applied by the State, are not more
restrictive than the income and resource eligibility rules
applied by the State for the temporary assistance to needy
families program funded under part A of title IV (other than
for a welfare-to-work program funded under section
403(a)(5)); and
``(II) the State assures the Secretary that families
applying for assistance under the temporary assistance to
needy families program funded under part A of title IV (other
than families applying solely for assistance under a welfare-
to-work program funded under section 403(a)(5)) may apply for
medical assistance under the State plan under this title
without having to submit a separate application for such
medical assistance.
``(B) Construction.--Nothing in subparagraph (A) shall be
construed as--
``(i) affecting the application of section 1931;
``(ii) affecting any application requirements established
under this title or by regulation promulgated under the
authority of this title, including the requirements
established under section 1902(a)(8); or
``(iii) conditioning the right of an individual to apply
for medical assistance under the State plan under this title
upon an application for assistance under any State program
funded under part A of title IV.
``(3) Allocation of administrative costs.--
``(A) In general.--No funds or expenditures described in
subparagraph (B) may be used to pay for costs--
``(i) eligible for reimbursement under subsection (a)(7)
(or costs that would have been eligible for reimbursement but
for this subsection); and
``(ii) allocated for reimbursement to the medicaid program
under a plan submitted by a State to the Secretary to
allocate administrative costs for public assistance programs.
``(B) Funds and expenditures.--Subparagraph (A) applies
to--
``(i) funds made available to carry out part A of title IV
or title XX;
``(ii) expenditures made as qualified State expenditures
(as defined in section 409(a)(7)(B);
``(iii) any other Federal funds (except funds provided
under subsection (a)(7)); and
``(iv) any other State funds that are--
[[Page S9569]]
``(I) expended as a condition of receiving Federal funds;
or
``(II) used to match Federal funds under a Federal program
other than the medicaid program.''.
(b) Copies of Report on Review of Methodology Used to Make
Certain Determinations.--Section 502(b)(2) of the
Agricultural Research, Extension, and Education Reform Act of
1998 (Public Law 105-185; 112 Stat. 523) is amended by
inserting ``, the Committee on Commerce of the House of
Representatives, the Committee on Finance of the Senate,''
after ``Representatives''.
Mr. ROCKEFELLER. Mr. President, I support the introduction of
The Adoption Equality Act of 1998.
I am proud to be a co-sponsor of The Adoption Equality Act of 1998,
part of a continuing effort to improve the lives of abused and
neglected children in my state of West Virginia and across the nation.
I would like to begin by sharing my special thanks with my colleague
and good friend, Senator Chafee, not only for his work on this
important legislation, but for his ongoing commitment to bringing about
meaningful change for America's most vulnerable children. I also want
to express my sincere gratitude to the other cosponsors of this bill,
Senators DeWine, Kerrey, Bond, Levin, Landrieu, Dorgan, and Moynihan. I
am so pleased to see that the strong and unique bipartisan coalition
forged during the adoption debate last fall is continuing the job yet
to be done on behalf of abused and neglected children.
Last fall, our bipartisan coalition introduced--and the Senate
unanimously passed--The Adoption and Safe Families Act. That
legislation, signed into law on November 19, 1997, fundamentally
shifted the focus of the American foster system by insisting for the
first time that health and safety should be the paramount consideration
when a State makes any decision regarding the well-being of an abused
and neglected child. That legislation is designed to move children out
of foster care and into adoptive homes more quickly than ever before.
I am also proud to report that West Virginia is launching its own
special initiative to promote adoption. This June, state officials
reported that there were 3003 children in the custody of West Virginia.
870 of these children have adoption as the goal of their permanency
plans, and 95% of these children have special needs. The State has
committed to hiring additional specialists to provide adoption services
and is seeking federal support to enhance these efforts. It is
wonderful to know that West Virginia and other states are so
enthusiastic about moving forward to promote adoptions and to help
children find safe and stable homes.
The Adoption and Safe Families Act took into account the unique
circumstances of ``special needs'' children--those children who, for
whatever reason, are difficult to place in adoptive homes. States now
receive a special bonus for each special needs adoption. Most
significantly, the Adoption and Safe Families Act took the first
essential step in ensuring ongoing health coverage for all special
needs children who are adopted into new families.
While I am satisfied that The Adoption and Safe Families Act will
strengthen the American foster care system, I made it clear that it was
only the first step in many to make things significantly better for
abused and neglected children.
The Adoption Equality Act is an essential second step in this ongoing
process. This important legislation will promote and increase adoptions
by making all special needs children eligible for Federal adoption
subsidies. This bill is designed to ``level the playing field'' by
ensuring that all loving adoptive families have the support they need
to address the fundamental needs of the children they raise.
Federal adoption subsidies, already authorized under section IV-E of
the Social Security Act, usually take the form of monthly payments
provided to families who adopt special needs children. These payments
provide essential income support to help families finance the daily
costs of raising these children and to cover the expense of special
services. Federal adoption subsidies play a vital role in the lives of
thousands of special needs children. Many families that I have visited
in West Virginia and across the country have told me that without this
essential support, they would not have been able to afford to take in
the children who have become such an important part of their family.
This bill will fix the one remaining barrier that keeps many adoptive
families from accessing precious Federal adoption subsidies. Under
current law, a special needs child is only eligible for Federal
adoption subsidies if his biological family was poor enough to qualify
for welfare benefits under the now-defunct Aid to Families with
Dependent Children Program (AFDC). If his family doesn't qualify under
1994 AFDC standards, even the hardest to place child cannot receive
federal adoption subsidies.
In other words, a special needs child's eligibility for federal
adoption subsidies is dependent on the income of the parents that
abused or neglected him. This is simply wrong.
The Adoption Equality Act will eliminate this tragic anomaly in
Federal law by making all special needs children eligible for Federal
adoption subsidies. This is a responsible way to make sure that willing
adoptive families have the support that they need to take care of all
the needs of their new child, whether those include food and clothing,
therapy, tutoring, or a new addition to their home.
Throughout my travels as the Chair of the National Commission on
Children and my meetings with families in West Virginia, I have
observed a recurring theme. I have come to understand that in many
cases, a family wants to adopt a child more than anything. And yet,
there is often a barrier that stands in its way. The lack of adequate
financial resources is at the top of that list. This legislation help
alleviate this unnecessary burden.
In closing, I want to reiterate a point that I made during the debate
over the Adoption and Safe Families Act. At the heart of the ongoing
discussions about what is the best policy for abused and neglected
children, there have been many complex questions raised about how
Federal taxpayer dollars should be spent and who is worthy of receiving
them. As we struggle with these difficult issues--which often pit
social against fiscal responsibility--I keep returning to the same
fundamental lesson I have learned from the families I have met: if we
cannot build social policy that not only protects our children, but
gives them the best possible chance to succeed in life, we have failed
to do our job as a government and a society.
The Adoption Equality Act is designed to make sure that all abused
and neglected children, even the most vulnerable special needs kids,
have this real chance for security and happiness.
______
By Mr. DODD (for himself and Mr. Bennett):
S. 2409. A bill to amend the Internal Revenue Code of 1986 to allow a
tax credit for business-provided student education and training; to the
Committee on Finance.
Businesses Educating Students in Technology (BEST) Act
Mr. DODD. Mr. President, today I introduce legislation, along
with my distinguished colleague from Utah, Senator Bennett, to help
alleviate a serious shortage of students graduating from our nation's
colleges and universities with technology-based education and skills.
Technology is reshaping our world at a rapid pace. Competition to
meet the needs, wants, and expectations of consumers has accelerated
the rate of technological progress to a level inconceivable even just a
few decades ago. Today, technology is playing an increasingly important
role in the lives of every American and is a key ingredient to
sustaining America's economic growth. It is the wellspring from which
new businesses, high-wage jobs, and a rising quality of life will flow
in the 21st century.
Today, we are fortunate that our economy is strong. We have created
more than 16 million new jobs since 1993. We have the lowest
unemployment in 28 years, the smallest welfare rolls in 27 years, and
the lowest inflation in 32 years. If we want to build on this progress,
we must encourage our people to develop and use emerging technologies.
Technological progress is the single most important determining
factor in sustaining growth in our economy. It is estimated that
technological innovation has accounted for as much as half
[[Page S9570]]
the nation's long-term economic growth over the past 50 years and is
expected to account for an even higher percentage in the next 50 years.
And yet, there is mounting evidence that we are not doing enough to
help our people make the most of technological change. Our businesses
are practically desperate for workers with skills in computers and
other technologically advanced systems. More than 350,000 information
technology positions are currently unfilled throughout the United
States. The number of students graduating from colleges with computer
science degrees has declined dramatically. In my home state of
Connecticut, public and private colleges combined produced only 299
computer science graduates in 1997, a 50 percent decline from 1987. We
are not alone. Nationwide, the number of graduates with bachelor's
degrees in computer science dropped 43 percent between 1986 and 1994.
The Department of Commerce estimates that 1.3 million new jobs will
be created over the next decade for systems analysts, computer
engineers and computer scientists. Yet, at a time when our nation is
struggling to fill these positions, our colleges are graduating fewer
skilled information technology students.
At large and mid-sized companies there is one vacancy for every 10
information technology jobs, and eight out of 10 companies expect to
hire information technology workers in the year ahead. According to the
U.S. Bureau of Labor Statistics, this trend will only continue through
2006.
This shortage of skilled and knowledgeable workers is perhaps the
most significant threat to our continued economic expansion. Clearly,
we must do more as a country to eliminate this shortage.
We need to turn our attention to our work force and focus on it as a
critical part of our economic development. We must put more emphasis on
human capital, and we need to educate more students in the diverse
areas of technology.
In Connecticut, many businesses are taking initiatives to do so. They
are establishing scholarships, donating lab equipment, planning
curricula, and sending employees into schools to instruct and help
prepare students for technology-based jobs.
One Connecticut company, The Pfizer Corporation, recently announced
that it will spend $19 million to build an animal vaccine research
laboratory at The University of Connecticut. This partnership will not
only lead to advancements in gene technology and animal health, but it
will also promote joint research projects in which company scientists
will work alongside professors and students.
Another example in Connecticut is the support provided to the
biotechnology program at Middlesex Community-Technical College by The
Bristol Myers Squibb Pharmaceutical Research Institute and the CuraGen
Corporation. These companies have established scholarships, donated lab
equipment, and encouraged their research scientists to give lectures to
the students.
And yet, Mr. President, businesses and academic institutions
shouldn't have to tackle alone the challenge of helping students obtain
the learning and skills they need to succeed in the coming century. The
federal government can and should work with our technology-based
businesses and places of learning to encourage innovation and education
that will create jobs and prosperity for our people.
That is why I am pleased to introduce legislation today that will
encourage businesses to work in and with educational institutions in
order to improve technology-based learning--so that more of our
students will be able to win the best jobs of the 21st century economy.
This bill will give a tax credit to any business that goes into a
university, college, or community-technical school and engages in
technology-based educational activities which are directly related to
the business of that company.
Businesses could claim a tax credit for 40 percent of these
educational expenses, up to a maximum of $100,000 for any one company.
It is my hope, Mr. President, that this tax credit will provide the
incentive for more of our nation's companies to play an active role in
the education, training, and skill development of our nation's most
valuable resource--its students.
If businesses take advantage of this credit, not only will they have
a larger pool of skilled workers to draw from, but our nation will have
a better-educated population that possesses the knowledge to succeed in
the information-based economy of the future.
I urge my colleagues to join me in supporting this legislation. I ask
unanimous consent that a copy of this legislation be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2409
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 ``Businesses Educating
Students in Technology (BEST) Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Technological progress is the single most important
determining factor in sustaining growth in the Nation's
economy. It is estimated that technological innovation has
accounted for as much as half the Nation's long-term economic
growth over the past 50 years and will account for an even
higher percentage in the next 50 years.
(2) The number of jobs requiring technological expertise is
growing rapidly. For example, it is estimated that 1,300,000
new computer engineers, programmers, and systems analysts
will be needed over the next decade in the United States
economy. Yet, our Nation's computer science programs are only
graduating 25,000 students with bachelor's degrees yearly.
(3) There are more than 350,000 information technology
positions currently unfilled throughout the United States,
and the number of students graduating from colleges with
computer science degrees has declined dramatically.
(4) In order to help alleviate the shortage of graduates
with technology-based education and skills, businesses in a
number of States have formed partnerships with colleges,
universities, community-technical schools, and other
institutions of higher learning to give lectures, donate
equipment, plan curricula, and perform other activities
designed to help students acquire the skills and knowledge
needed to fill jobs in technology-based industries.
(5) Congress should encourage these partnerships by
providing a tax credit to businesses that enter into them.
Such a tax credit will help students obtain the knowledge and
skills they need to obtain jobs in technology-based
industries which are among the best paying jobs being created
in the economy. The credit will also assist businesses in
their efforts to develop a more highly-skilled, better
trained workforce that can fill the technology jobs such
businesses are creating.
SEC. 3. ALLOWANCE OF CREDIT FOR BUSINESS-PROVIDED STUDENT
EDUCATION AND TRAINING.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business related credits) is amended by adding at the end the
following:
``SEC. 45D. BUSINESS-PROVIDED STUDENT EDUCATION AND TRAINING.
``(a) Allowance of Credit.--For purposes of section 38, the
business-provided student education and training credit
determined under this section for the taxable year is an
amount equal to 40 percent of the qualified student education
and training expenditures of the taxpayer for such taxable
year.
``(b) Dollar Limitation.--The credit allowable under
subsection (a) for any taxable year shall not exceed
$100,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualified student education and training
expenditure.--
``(A) In general.--The term `qualified student education
and training expenditure' means--
``(i) any amount paid or incurred by the taxpayer for the
qualified student education and training services provided by
any employee of the taxpayer, and
``(ii) the basis of the taxpayer in any tangible personal
property contributed by the taxpayer and used in connection
with the provision of such services.
``(B) Exclusion for amounts funded by grants, etc.--The
term `qualified student education and training expenditure'
shall not include any amount to the extent such amount is
funded by any grant, contract, or otherwise by another person
(or any governmental entity).
``(2) Qualified student education and training services.--
``(A) In general.--The term `qualified student education
and training services' means technology-based education and
training of students in any eligible educational institution
in employment skills related to the trade or business of the
taxpayer.
``(B) Eligible educational institution.--The term `eligible
educational institution' has the meaning given such term by
section 529(e)(5).
``(d) Special Rules.--For purposes of this section--
[[Page S9571]]
``(1) Aggregation rules.--All persons which are treated as
a single employer under subsections (a) and (b) of section 52
shall be treated as a single taxpayer.
``(2) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(3) Allocation in the case of partnerships.--In the case
of partnerships, the credit shall be allocated among partners
under regulations prescribed by the Secretary.
``(f) No Double Benefit.--No deduction or credit shall be
allowed under any other provision of this chapter with
respect to any expenditure taken into account in computing
the amount of the credit determined under this section.''
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of 1986 is
amended--
(A) by striking out ``plus'' at the end of paragraph (11),
(B) by striking out the period at the end of paragraph
(12), and inserting a comma and ``plus'', and
(C) by adding at the end the following:
``(13) the business-provided student education and training
credit determined under section 45D.''
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by adding
at the end the following:
``Sec. 45D. Business-provided student education and training credit.''
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.
______
By Mr. GRAHAM (for himself, Mr. Moynihan, and Mr. D'Amato):
S. 2410. A bill to amend titles XIX and XXI of the Social Security
Act to give States the options of providing medical assistance to
certain legal immigrant children and to increase allotments to
territories under the State Children's Health Insurance Program; to the
Committee on Finance.
Medicaid Children's Health Improvement Amendments of 1998
Mr. GRAHAM. Mr. President, today, along with Senators
Moynihan and D'Amato, I introduce the Medicaid Children's Health
Improvement Amendments of 1998. This legislation, which was introduced
in the House of Representatives last week, would attempt to correct a
situation currently jeopardizing the health of many of the children
living in our territories.
Last year Congress passed what was the single largest investment in
health care for children since the passage of Medicaid in 1965.'' As a
result, the United States will invest an additional $24 billion in
children's health care over the next five years. However, not all of
our nation's poor children are celebrating this victory.
In the negotiations over the budget reconciliation, the initial
proposal providing 1.5 percent of the funding to our nation's
territories, which represented a fair distribution, was reduced to a
mere 0.25 percent. The children's health care program ultimately
included in the Balanced Budget Act of 1997 provides Puerto Rico with
approximately 0.22 percent of the overall national funding for the
program and 0.03 percent for Guam, the U.S. Virgin Islands, American
Samoa and the Northern Mariana Islands. For Puerto Rico alone this
would mean less than $11 million per year for a jurisdiction with close
to four million U.S. citizens.
It is absolutely outrageous that the United States would continue to
endorse a discriminatory policy that denies equal health care to the
children of its territories. If this legislation was enacted most of
Guam's 5,000 uninsured children would finally receive the coverage that
they rightfully deserve. It would also approximately multiply the
number of children covered in the U.S. Virgin Islands by six.
In addition to providing additional funding for the children's health
insurance program in our territories, this legislation includes a
provision that would grant states the option to provide health care
coverage to legal immigrant children who entered the United States on
or after August 22, 1996. Welfare reform prohibits states from covering
these immigrant children.
As we know, children without health insurance do not get important
care for preventable diseases. Many uninsured children are hospitalized
for acute asthma attacks that could have been prevented, or suffer from
permanent hearing loss from untreated ear infections. Without adequate
health care, common illnesses can turn into life-long crippling
diseases, whereas appropriate treatment and care can help children with
diseases like diabetes live relatively normal lives. A lack of adequate
medical care will also hinder the social and educational development of
children, as children who are sick and left untreated are less able to
learn.
I hope that with the help of my colleagues in Congress we will be
able to rectify the discrimination against the children of our
territories and afford them the same treatment as the other children in
the nation. They deserve no less. Programs created to protect our
nation's children should represent the highest and most pure ideals of
our society.
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. 2410
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 ``Medical and Children's
Health Improvement Amendments of 1998''.
SEC. 2. STATE OPTION TO COVER LEGAL IMMIGRANT CHILDREN UNDER
MEDICAID AND THE CHILDREN'S HEALTH INSURANCE
PROGRAM.
(a) Medicaid.--Section 1902(a)(10(A)(ii) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
(1) by strike ``or'' at the end of subclause (XIII);
(2) by adding ``or'' at the end of subclause (XIV); and
(3) by adding after subclause (XIV) the following new
subclause:
``(XV) who are described in section 1905(a)(i) and who
would be eligible for medical assistance (or for a greater
amount of medical assistance) under the State plan under this
title but for the provisions of section 403 or section 421 of
Public Law 104-193, but the State may not exercise the option
of providing medical assistance under this subclause with
respect to a subcategory of individuals described in this
subclause;''.
(b) Children's Health Insurance Program.--Section 2110(b)
of the Social Security Act (42 U.S.C. 1397jj(b)) is amended--
(1) in paragraph (1)(A), by inserting before the semicolon
``(including, at the option of the State, a child described
in paragraph (3)(B))''; and
(2) in paragraph (3)--
(A) by striking ``Special Rule.--'' and inserting ``Special
Rules.--
``(A) Health insurance coverage.--'';
(B) by intending the remainder of the text accordingly; and
(C) by adding at the end the following new subparagraph:
``(B) Eligibility for legal immigrant children.--For
purposes of paragraph (1)(A), a child is described in this
subparagraph if--
``(i) the child would be determined eligible for child
health assistance under this title but for provisions of
sections 403 and section 421 of Public Law 104-193; and
``(ii) the State exercises the option to provide medical
assistance to the category of individuals described in
section 1902(a)(10)(A)(ii)(XV).''.
SEC. 3. INCREASED ALLOTMENTS UNDER CHILDREN'S HEALTH
INSURANCE PROGRAM FOR TERRITORIES.
(a) In General.--Section 2104(c) of the Social Security Act
(42 U.S.C. 1397dd(c)) is amended by adding at the end the
following new paragraph:
``(4) Additional allotment.--
``(A) In general.--In addition to the allotment under
paragraph (1), the Secretary shall allot each commonwealth
and territory described in paragraph (3) the applicable
percentage specified in paragraph (2) of the amount
appropriated under subparagraph (B).
``(B) Appropriation.--For purposes of providing allotments
pursuant to subparagraph (A), there is appropriated, out of
any money in the Treasury not otherwise appropriated--
``(i) $34,200,000 for each of fiscal years 1999 through
2001;
``(ii) $25,200,000 for each of fiscal years 2002 through
2004;
``(iii) $32,400,000 for each of fiscal years 2005 and 2006;
and
``(iv) $40,000,000 for fiscal year 2007.''.
(b) Conforming Amendment.--Section 2104(b)(1) of such Act
(42 U.S.C. 1397dd(b)(1)) is amended by inserting
``(determined without regard to paragraph (4) thereof)''
after ``subsection (c)''.
______
By Mr. BURNS (for himself and Mr. Hollings):
S. 2412. A bill to create employment opportunities and to promote
economic growth establishing a public-private partnership between the
United States travel and tourism industry and every level of government
to work to make the United States the premiere travel and tourism
destination in the world, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
the visit usa act
Mr. BURNS. Mr. President, today I introduce legislation to
strengthen
[[Page S9572]]
America's tourism and travel related industry--the Value In Supporting
International Tourism Act of 1998 (Visit USA Act). This legislation is
a follow-on to the National Tourism Act, Public Law 104-288, enacted
two years ago.
In the National Tourism Act, Congress created the U.S. National
Tourism Organization (USNTO) in order to re-establish the United States
as the premiere destination for tourists throughout the world. While
international travel and tourism remains the United States largest
service export, its third largest industry, and a major producer of
jobs and tax revenue for federal, state and local governments, our
share of the international tourism market is threatened unless action
is taken now.
Public Law 104-288 authorized a public-private partnership, including
a broad cross-section of the U.S. travel and tourism industry, charged
with working with government to (1) promote and increase the U.S. share
of the international tourism market, (2) develop and implement a
national travel and tourism strategy, (3) advise the President and
Congress on how to implement this strategy and on other critical
matters affecting the travel and tourism industry, (4) conduct travel
and tourism market research, and (5) promote the interests of the U.S.
travel and tourism industry at international trade shows. The USNTO was
authorized to conduct activities necessary to advance these national
interests.
The USNTO was also charged with developing a long-term financing plan
for the organization. On January 14, 1998, the Board of the USNTO
fulfilled its statutory mandate by submitting a report to Congress
outlining, among other things, a long-term marketing plan to promote
the United States as the premiere international travel destination. The
Board is firmly committed to work with Congress to secure appropriate
funding for an international marketing effort.
Private sector and state support for the promotion of the United
States as an international tourist destination exceeds $1 billion
annually. This support, together with the commitment of the USNTO Board
of Directors to use only non-governmental sources of funding for all
USNTO general and administrative costs, provides a substantial
commitment from the ``private'' side of the partnership and a
foundation for a successful public-private partnership.
The Visit USA Act establishes an international visitor assistance
task force. This interagency body will support the creation of a toll-
free telephone line to assist foreign tourists visiting the United
States. It will also work to improve signage at airports and other key
travel facilities, and facilitate distribution of multilingual travel
and tourism materials. Each of these activities is intended to be
conducted at minimal or zero cost to the federal government.
This legislation also requires the Secretary of Commerce to report to
Congress on how federal lands are used and on how they may have
influenced the tourism market, on any changes in the international
tourist commerce, on the impact tourism has on the U.S. economy, and on
our balance of trade.
The facts concerning the increasingly competitive international
tourism justify this legislative approach. While competition for the
international tourism dollar has become one among national governments,
the U.S. government is the only major industrialized nation that does
not promote its tourism market abroad. Other governments spend millions
on tourism marketing. In 1995, for example, Australia spent $88
million, the UK and Spain each spent $79 million, and France spent $73
million to promote tourism.
Tourism is a significant element of the U.S. economy. The industry
that depends on spending by foreign tourists is diverse, and includes
restaurants, hotels, travel agencies, shops, tour bus services, rental
car agencies, theaters, airlines, and theme parks. In particular, small
businesses depend on revenues from international tourism.
I encourage all Senators to join in supporting this important effort
to strengthen our tourism-related economy. The dividends to be realized
as a result of this modest investment will benefit every state and
every congressional district.
Mr. HOLLINGS. Mr. President, today Senator Burns and I are
introducing a bill, the Visit USA Act, which will further the
international standing of the U.S. travel and tourism industry. As co-
chairman of the United States Senate Tourism Caucus along with Senator
Burns, I know that the tourism industry is a winner for the United
States. The Visit USA Act would improve U.S. international marketing
and services to travelers in the United States by: creating a toll-free
number for international travelers to call for assistance in their
native language; improving signs in transportation facilities; and
authorizing appropriations for the marketing program of the U.S.
National Tourism Organization (NTO).
Tourism is more than cameras and Bermuda shorts. Travel and tourism
is a big business. Last year it produced a record $26 billion trade
surplus, and the industry continues to grow. In my state of South
Carolina, tourism generates over $6.5 billion and is responsible for
113,000 jobs. Over 46 million international visitors came to the United
States and spent over $90 billion in 1997. These visitors generated
more than $5 billion in Federal taxes alone. To compete with other
nations for a larger share of international tourism over the next
decade, we must support an international tourism marketing effort. The
Visit USA Act would do just that by providing for international
promotion of the United States while making travel to this country
simpler and more understandable for our foreign guests.
______
By Mr. McCAIN (for himself and Mr. Kyl):
S. 2413. A bill to provide for the development of a management plan
for the Woodland Lake Park tract in Apache-Sitgreaves National Forest
in the State of Arizona reflecting the current use of the tract as a
public park; to the Committee on Energy and Natural Resources.
apache-sitgreaves national forest legislation
Mr. McCAIN. Mr. President, I am proud to introduce
legislation, along with my colleague, Senator Jon Kyl, that will
preserve a valuable tract of park land for future public enjoyment in
the Apache-Sitgreaves National Forest in Pinetop-Lakeside, Arizona.
This proposal authorizes the U.S. Forest Service to develop a
management plan to maintain the current recreational use of 583 acres
known as Woodland Lake Park.
Mr. President, I want to laud the cooperation forged between the U.S.
Forest Service and the town of Pinetop-Lakeside. The initiative
requires the acting supervisor of the Apache-Sitgreaves National
Forest, under the direction of the Secretary of Agriculture, to work
with the town to ensure Woodland Lake Park remains open and accessible
to the public. The parties will have 180 days to draft a management
plan for the park.
Although the town of Pinetop-Lakeside seeks to one day acquire
Woodland Lake Park, the management of this land by the Forest Service
is crucial to preserving this resource in the interim. Federal
oversight will ensure that the estimated 50,000 residents every year
who take pleasure in the lake and along the beautiful wooded trails
will continue to do so for years to come.
I look forward to continued constructive collaboration between the
Forest Service and the town of Pinetop-Lakeside. I ask unanimous
consent that the legislation be entered into the Record.
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. 2413
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MANAGEMENT OF WOODLAND LAKE PARK TRACT, APACHE-
SITGREAVES NATIONAL FOREST, ARIZONA, FOR
RECREATIONAL PURPOSES.
(a) Management Plan Required.--Not later than 180 days
after the date of the enactment of this Act, the Secretary of
Agriculture, acting through the supervisor of Apache-
Sitgreaves National Forest in the State of Arizona, shall
prepare a management plan for the Woodland Lake Park tract
that is designed to ensure that the tract is managed by the
Forest Service for recreational purposes consistent with the
use of the tract as a public park by the town of Pinetop-
Lakeside, Arizona. The forest supervisor shall prepare the
management plan in consultation with the town of Pinetop-
Lakeside.
[[Page S9573]]
(b) Prohibition on Conveyance.--The Secretary of
Agriculture may not convey any right, title, or interest of
the United States in and to the Woodland Lake Park tract
unless the conveyance of the tract--
(1) is made to the town of Pinetop-Lakeside; or
(2) is specifically authorized by a law enacted after the
date of the enactment of this Act.
(c) Definition.--The terms ``Woodland Lake Park tract'' and
``tract'' mean the parcel of land in Apache-Sitgreaves
National Forest in the State of Arizona that consists of
approximately 583 acres and is known as the Woodland Lake
Park tract.
Mr. KYL. Mr. President, the U.S. Forest Service owns a large
parcel of land within the boundaries of the town of Pinetop-Lakeside
which has historically been used as a park, not only by the town
residents, but also by the thousands of tourists who vacation in this
bucolic area of Eastern Arizona each year. The town wants to maintain
this land as a park. However, the Forest Service has refused to renew
the town's special use permit for the largest section of this park,
possibly paving the way for the land to be sold to private investors.
The bill that Senator McCain and I are introducing, and Representative
Hayworth is introducing in the House, prevents the Forest Service from
selling the land to any entity other than the town, and requires the
Forest Service, in conjunction with the town, to develop a management
plan ``designed to ensure that the tract is managed by the Forest
Service for recreational purposes.''
Mr. President, the town of Pinetop-Lakeside has been trying to find a
way to acquire this parcel from the Forest Service for over 10 years,
to no avail. This bill will satisfy the town's goal of preserving this
land as a park, while being fair to the American taxpayer. However, the
legislation will not solve the problems of communities that seek to
acquire Forest Service lands to preserve open space, or to fulfill
other essential governmental functions. I intend to continue to seek a
long-term solution to those problems.
______
By Mr. BURNS.
S. 2414. A bill to establish terms and conditions under which the
Secretary of the Interior shall convey leaseholds in certain Properties
around Canyon Ferry Reservoir, Montana; to the Committee on Energy and
Natural Resources.
canyon ferry reservoir legislation
Mr. BURNS. Mr. President, today I introduce a companion bill
to one recently introduced in the House by Congressman Rick Hill, of
Montana. This is a bill that will authorize the Bureau of Reclamation
to convey certain properties around Canyon Ferry Reservoir in Montana
to leaseholders. This bill has the support of a number of
organizations, groups and communities in the area of Canyon Ferry and
in Montana in general.
The purpose of my bill today, is to get the ball rolling on this
legislation. I am aware that currently there is legislation in the
Environment and Public Works Committee of a similar nature. But it
appears stalled, and does not address the concerns of a number of the
groups and communities in the area around Canyon Ferry. The bills
basically address the conveyance of this land in the same way, but it
is the disposal of the funds received that changes these two bills. So
I come here today to propose this legislation to accelerate the process
and get Congress involved and moving on this very issue.
I have made a pledge to the people in this area of Montana that I
will do all I can to assist them in getting something done on this bill
this session before we leave for the year. These people have attempted
to work with the Bureau of Reclamation to clear up a number of issues
which have come up over the past five or more years. The result of
their work has been continued stalling by the Bureau of Reclamation in
working with the citizens. As a result then we have been forced to work
on legislation that will remove the stumbling blocks and rectify and
clarify the situation.
Senator Baucus, Congressman Hill and I have worked for the past year
developing legislation to address the concerns of these people. We have
come ninety percent of the way and now it is necessary for us to move
that extra ten percent and get something done to the benefit of the
general public and the citizens of Montana.
Canyon Ferry is a man-made reservoir on the Missouri River in Central
Montana right outside of our capital Helena. It is a wonderful area for
outdoor recreation and draws people from all over the state and in many
cases all across the nation. There are a number of people who have
built cabin sites on the lake both for the purpose of weekend living
but also there are a number of year around residences.
This legislation will work to continue to provide opportunities for
all people to enjoy the splendor of Canyon Ferry. In addition there
will be ample opportunity for the surrounding communities to develop
new ways for the public to enjoy the lake and the various recreational
facilities around the lake. The citizens of Montana expect and deserve
an opportunity to enjoy this wonderful area. The funds derived from the
conveyance of these properties will allow for the continued
construction of facilities that will allow more Montanans a chance to
enjoy Canyon Ferry.
I give my pledge to the people of Montana that I will continue to
work this issue with the members of the Montana delegation, Senator
Baucus and Congressman Hill to clear this bill and get something done.
I know the majority of people in the area want to see something done,
and this is the vehicle to do that. I look forward to working with the
Chairman of the Energy and Natural Resources Committee to get this done
and out as soon as possible.
______
By Mr. SANTORUM:
S. 2415. A bill to amend the Internal Revenue Code of 1986 to reduce
the tax on beer to its pre-1991 level; to the Committee on Finance.
REPEALING THE BEER TAX
Mr. SANTORUM. Mr. President, I today introduce legislation pertaining
to the federal excise tax on beer.
The federal excise tax on beer was doubled as part of the 1991
Omnibus Budget Reconciliation Act. Today, it remain as the only
``luxury tax'' enacted as part of OBRA '91. While taxes on furs,
jewelry, and yachts were repealed through subsequent legislation, the
federal beer tax remains in place with continued and far reaching
negative effects.
The excise tax on beer is among the more regressive federal taxes.
Since the 100 percent tax was levied in 1991, it has cost the industry
as many as 50,000 jobs. Beer in particular continues to suffer under a
disproportionate burden of taxation. Forty-three percent of the cost of
beer is comprised of both state and federal taxes. This legislation
seeks to correct this inequity and will restore the level of federal
excise tax to the pre-1991 tax rate.
Mr. President, this bill represents companion legislation to H.R.
158, introduced by Representative Phil English. The House bill
currently carries 95 cosponsors. I commend this Senate legislation to
my colleagues for their consideration.
______
By Mr. CHAFEE (for himself, Mr. Graham, Mr. Lieberman, Mr.
Specter, and Mr. Baucus):
S. 2416. A bill to amend the Public Health Service Act, the Employee
Retirement Income Security Act of 1974, and the Internal Revenue Code
of 1986 to protect consumers in managed care plans and other health
coverage; to the Committee on Finance.
Promoting Responsible Managed Care Act of 1998
Mr. CHAFEE. Mr. President, today, I am pleased to join with
Senators Bob Graham, Joe Lieberman, Arlen Specter and Max Baucus in
introducing a bipartisan managed care reform bill--the Promoting
Responsible Managed Care Act of 1998.
In November 1997, a number of us formed the bipartisan, bicameral
Congressional Task Force on Health Care Quality to better understand
the mounting public frustration over managed care. The task force heard
from numerous consumer and provider groups, and received presentations
from the sponsors of all of the major managed care reform bills now
pending in Congress. The bill we are introducing today, the Promoting
Responsible Managed Care Act of 1998, has benefited greatly from the
efforts of the task force, and we wish to thank all participants, on
both sides of the aisle, for their attentiveness and diligence.
This legislation was developed in accordance with the following
principles:
Bipartisan legislation which can be enacted this year.
[[Page S9574]]
Provides all Americans in privately insured health plans with basic
federal protections.
Meaningful enforcement which holds managed care plans accountable,
and provides individuals harmed by such plans with just compensation.
Report cards to enable consumers to make informed health care choices
based on plan performance.
As my colleagues well know, next month the Senate is headed for a
polarized debate on managed care reform, which may well result in
gridlock. Each party has put forward a plan which contains features
unacceptable to the other side--such as exposing insurers to lawsuits
in state court in the case of the Daschle plan, and the broad expansion
of medical savings accounts (MSAs) in the case of the Nickles plan.
It is for this very reason that we have put forward a bipartisan
plan--one which blends the best features of both the Democratic and
Republican plans, but omits the so-called poison pills. When it comes
to restoring public confidence in managed care and ensuring a basic
floor of federal patient protections, gridlock simply will not be an
acceptable outcome.
We believe Congress has the responsibility to step up to the plate in
the remaining weeks of this session and to enact legislation which the
President can sign into law to address the outstanding concerns
Americans have about their managed care. Indeed, despite continuing
opposition from the insurance industry to the enactment of any reform
legislation, many of the managed care industry's own leaders have
privately expressed concern about the future of managed care if
legislative action is not taken soon to strengthen public confidence.
In our estimation, given the hardened positions of both parties, the
only way Congress can succeed in that endeavor this year is for a
bipartisan centrist plan to emerge once it becomes clear that neither
the Daschle or Nickles plan has the requisite support to cross the
finish line.
What we would like to do now is to take a few minutes to lay out the
key components of our proposal. First, I will talk about the scope of
the bill--a topic which you will be hearing a lot about in the coming
weeks. Then, Senator Graham will outline our patient protection
provisions, and Senator Lieberman will discuss the importance of arming
consumers with meaningful Report Card information, and a credible
enforcement regime to ensure that managed care plans play by the rules.
In 1996, Congress passed significant reforms of the private health
insurance marketplace with respect to the issue of portability. The
Health Insurance Portability and Accountability Act, also known as the
Kassebaum-Kennedy bill, established a federal floor of portability
protections for all 161 million privately insured Americans.
We see no reason for narrowing the scope of the patient protections
in this next and far more consequential area of reform. Thus, like the
Daschle plan and the House-passed GOP bill, the Promoting Responsible
Managed Care Act would apply to all privately insured Americans.
This approach preserves state prerogatives to enact more stringent
standards, while assuring a minimum floor of federal protections for
all Americans in private health plans--whether those plans are
regulated at the state or federal level. In contrast, the Senate
Republican plan proposes to provide a more limited range of patient
protections to a much narrower band of the American population--
primarily those 48 million enrollees in self-funded ERISA plans.
While it is true that individuals in these plans have fewer
protections than those in state-regulated plans, that alone is
insufficient reason for denying these basic quality improvements and
safeguards to all 161 million Americans in privately insured managed
care plans. Such a bifurcation would, in our judgment, create many
unnecessary and inequitable circumstances for consumers, and exacerbate
the already unlevel playing field which exists in the health insurance
marketplace.
Mr. President, I ask unanimous consent that the bill, a summary of
the bill, and excerpts of what organizations are saying about the
Promoting Responsible Managed Care Act be printed in the Record.
There being no objection, the items were ordered to be printed in the
Record, as follows:
S. 2416
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 ``Promoting
Responsible Managed Care Act of 1998''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Preemption; State flexibility; construction.
Sec. 4. Regulations.
TITLE I--PROMOTING RESPONSIBLE MANAGED CARE
Subtitle A--Grievance and Appeals
Sec. 101. Definitions and general provisions relating to grievance and
appeals.
Sec. 102. Utilization review activities.
Sec. 103. Establishment of process for grievances.
Sec. 104. Coverage determinations.
Sec. 105. Internal appeals (reconsiderations).
Sec. 106. External appeals (reviews).
Subtitle B--Consumer Information
Sec. 111. Health plan information.
Sec. 112. Health care quality information.
Sec. 113. Confidentiality and accuracy of enrollee records.
Sec. 114. Quality assurance.
Subtitle C--Patient Protection Standards
Sec. 121. Emergency services.
Sec. 122. Enrollee choice of health professionals and providers.
Sec. 123. Access to approved services.
Sec. 124. Nondiscrimination in delivery of services.
Sec. 125. Prohibition of interference with certain medical
communications.
Sec. 126. Provider incentive plans.
Sec. 127. Provider participation.
Sec. 128. Required coverage for appropriate hospital stay for
mastectomies and lymph node dissections for the treatment
of breast cancer; required coverage for reconstructive
surgery following mastectomies.
Subtitle D--Enhanced Enforcement Authority
Sec. 141. Investigations and reporting authority, injunctive relief
authority, and increased civil money penalty authority
for Secretary of Health and Human Services for violations
of patient protection standards.
Sec. 142. Authority for Secretary of Labor to impose civil penalties
for violations of patient protection standards.
TITLE II--PATIENT PROTECTION STANDARDS UNDER THE PUBLIC HEALTH SERVICE
ACT
Sec. 201. Application to group health plans and group health insurance
coverage.
Sec. 202. Application to individual health insurance coverage.
TITLE III--PATIENT PROTECTION STANDARDS UNDER THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974
Sec. 301. Application of patient protection standards to group health
plans and group health insurance coverage under the
Employee Retirement Income Security Act of 1974.
Sec. 302. Enforcement for economic loss caused by coverage
determinations.
TITLE IV--PATIENT PROTECTION STANDARDS UNDER THE INTERNAL REVENUE CODE
OF 1986
Sec. 401. Amendments to the Internal Revenue Code of 1986.
TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.
SEC. 2. DEFINITIONS.
(a) Incorporation of General Definitions.--The provisions
of section 2971 of the Public Health Service Act shall apply
for purposes of this section, section 3, and title I in the
same manner as they apply for purposes of title XXVII of such
Act.
(b) Secretary.--Except as otherwise provided, for purposes
of this section and title I, the term ``Secretary'' means the
Secretary of Health and Human Services, in consultation with
the Secretary of Labor and the Secretary of the Treasury, and
the term ``appropriate Secretary'' means the Secretary of
Health and Human Services in relation to carrying out title I
under sections 2706 and 2751 of the Public Health Service
Act, the Secretary of Labor in relation to carrying out title
I under section 713 of the Employee Retirement Income
Security Act of 1974, and the Secretary of the Treasury in
relation to carrying out title I under chapter 100 and
section 4980D of the Internal Revenue Code of 1986.
(c) Additional Definitions.--For purposes of this section
and title I:
(1) Applicable authority.--The term ``applicable
authority'' means--
[[Page S9575]]
(A) in the case of a group health plan, the Secretary of
Health and Human Services and the Secretary of Labor; and
(B) in the case of a health insurance issuer with respect
to a specific provision of title I, the applicable State
authority (as defined in section 2791(d) of the Public Health
Service Act), or the Secretary of Health and Human Services,
if such Secretary is enforcing such specific provision under
section 2722(a)(2) or 2761(a)(2) of the Public Health Service
Act.
(2) Clinical peer.--The term ``clinical peer'' means, with
respect to a review or appeal, a physician (allopathic or
osteopathic) or other health care professional who holds a
non-restricted license in a State and who is appropriately
credentialed, licensed, certified, or accredited in the same
or similar specialty as manages (or typically manages) the
medical condition, procedure, or treatment under review or
appeal and includes a pediatric specialist where appropriate;
except that only a physician may be a clinical peer with
respect to the review or appeal of treatment rendered by a
physician.
(3) Health care provider.--The term ``health care
provider'' includes a physician or other health care
professional, as well as an institutional provider of health
care services.
(4) Nonparticipating.--The term ``nonparticipating'' means,
with respect to a health care provider that provides health
care items and services to a participant, beneficiary, or
enrollee under a group health plan or health insurance
coverage, a health care provider that is not a participating
health care provider with respect to such items and services.
(5) Participating.--The term ``participating'' mean, with
respect to a health care provider that provides health care
items and services to a participant, beneficiary, or enrollee
under a group health plan or health insurance coverage
offered by a health insurance issuer, a health care provider
that furnishes such items and services under a contract or
other arrangement with the plan or issuer.
SEC. 3. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.
(a) Continued Applicability of State Law With Respect to
Health Insurance Issuers.--
(1) In general.--Subject to paragraphs (2) and (3), title I
shall not be construed to supersede any provision of State
law which establishes, implements, or continues in effect any
standard or requirement solely relating to health insurance
issuers in connection with group health insurance coverage
except to the extent that such standard or requirement
prevents the application of a requirement of such title.
(2) Continued preemption with respect to group health
plans.--Nothing in title I shall be construed to affect or
modify the provisions of section 514 of the Employee
Retirement Income Security Act of 1974 with respect to group
health plans.
(3) Construction with respect to time periods.--Subject to
paragraph (2), nothing in title I shall be construed to
prohibit a State from establishing, implementing, or
continuing in effect any requirement or standard that uses a
shorter period of time, than that provided under such title,
for any internal or external appeals process to be used by
health insurance issuers.
(b) Rules of Construction.--Nothing in title I (other than
section 128) shall be construed as requiring a group health
plan or health insurance coverage to provide specific
benefits under the terms of such plan or coverage.
(c) Definitions.--For purposes of this section:
(1) State law.--The term ``State law'' includes all laws,
decisions, rules, regulations, or other State action having
the effect of law, of any State. A law of the United States
applicable only to the District of Columbia shall be treated
as a State law rather than a law of the United States.
(2) Inclusion of political subdivisions of a state.--The
term ``State'' also includes any political subdivisions of a
State or any agency or instrumentality thereof.
(d) Treatment of Religious Nonmedical Providers.--
(1) In general.--Nothing in this Act (or the amendments
made thereby) shall be construed to--
(A) restrict or limit the right of group health plans, and
of health insurance issuers offering health insurance
coverage in connection with group health plans, to include as
providers religious nonmedical providers;
(B) require such plans or issuers to--
(i) utilize medically based eligibility standards or
criteria in deciding provider status of religious nonmedical
providers;
(ii) use medical professionals or criteria to decide
patient access to religious nonmedical providers;
(iii) utilize medical professionals or criteria in making
decisions in internal or external appeals from decisions
denying or limiting coverage for care by religious nonmedical
providers; or
(iv) compel a participant or beneficiary to undergo a
medical examination or test as a condition of receiving
health insurance coverage for treatment by a religious
nonmedical provider; or
(C) require such plans or issuers to exclude religious
nonmedical providers because they do not provide medical or
other data otherwise required, if such data is inconsistent
with the religious nonmedical treatment or nursing care
provided by the provider.
(2) Religious nonmedical provider.--For purposes of this
subsection, the term ``religious nonmedical provider'' means
a provider who provides no medical care but who provides only
religious nonmedical treatment or religious nonmedical
nursing care.
SEC. 4. REGULATIONS.
The Secretaries of Health and Human Services, Labor, and
the Treasury shall issue such regulations as may be necessary
or appropriate to carry out this Act. Such regulations shall
be issued consistent with section 104 of Health Insurance
Portability and Accountability Act of 1996. Such Secretaries
may promulgate any interim final rules as the Secretaries
determine are appropriate to carry out this Act.
TITLE I--PROMOTING RESPONSIBLE MANAGED CARE
Subtitle A--Grievance and Appeals
SEC. 101. DEFINITIONS AND GENERAL PROVISIONS RELATING TO
GRIEVANCE AND APPEALS.
(a) Definitions.--In this subtitle:
(1) Authorized representative.--The term ``authorized
representative'' means, with respect to a covered individual,
an individual who--
(A) is--
(i) any treating health care professional of the covered
individual (acting within the scope of the professional's
license or certification under applicable State law), or
(ii) any legal representative of the covered individual
(or, in the case of a deceased individual, the legal
representative of the estate of the individual),
regardless of whether such professional or representative is
affiliated with the plan or issuer involved; and
(B) is acting on behalf of the covered individual with the
individual's consent.
(2) Coverage determination.--The term ``coverage
determination'' means a determination by a group health plan
or a health insurance issuer with respect to any of the
following:
(A) A decision whether to pay for emergency services (as
defined in section 121(a)(2)(B)).
(B) A decision whether to pay for health care services not
described in subparagraph (A) that are furnished by a
provider that is a participating health care provider with
the plan or issuer.
(C) A decision whether to provide benefits or payment for
such benefits.
(D) A decision whether to discontinue a benefit.
(E) A decision resulting from the application of
utilization review (as defined in section 102(a)(1)(C)).
Such term includes, pursuant to section 104(d)(2), the
failure to provide timely notice under section 104(d).
(3) Covered individual.--The term ``covered individual''
means an individual who is a participant or beneficiary in a
group health plan or an enrollee in health insurance coverage
offered by a health insurance issuer.
(4) Grievance.--The term ``grievance'' means any complaint
or dispute other than one involving a coverage determination.
(5) Reconsideration.--The term ``reconsideration'' is
defined in section 105(a)(7).
(6) Utilization review.--The term ``utilization review'' is
defined in section 102(a)(1)(C).
(b) Summary of Rights of Individuals.--In accordance with
the provisions of this subtitle, a covered individual has the
following rights with respect to a group health plan and with
respect to a health insurance issuer in connection with the
provision of health insurance coverage:
(1) The right to have grievances between the covered
individual and the plan or issuer heard and resolved as
provided in section 103.
(2) The right to a timely coverage determination as
provided in section 104.
(3) The right to request expedited treatment of a coverage
determination as provided in section 104(c).
(4) If dissatisfied with any part of a coverage
determination, the following appeal rights:
(A) The right to a timely reconsideration of an adverse
coverage determination as provided in section 105.
(B) The right to request expedited treatment of such a
reconsideration as provided in section 105(c).
(C) If, as a result of a reconsideration of the adverse
coverage determination, the plan or issuer affirms, in whole
or in part, its adverse coverage determination, the right to
request and receive a review of, and decision on, such
determination by a qualified external appeal entity as
provided in section 106.
(c) Requirements.--
(1) Procedures.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage shall, with respect to the provision of
benefits under such plan or coverage--
(A) establish and maintain--
(i) grievance procedures in accordance with section 103;
(ii) procedures for coverage determinations consistent with
section 104; and
(iii) appeals procedures for adverse coverage
determinations in accordance with sections 105 and 106; and
(B) provide for utilization review consistent with section
102.
(2) Delegation.--A group health plan or a health insurance
issuer in connection with the provision of health insurance
coverage
[[Page S9576]]
that delegates any of its responsibilities under this
subtitle to another entity or individual through which the
plan or issuer provides health care services shall ultimately
be responsible for ensuring that such entity or individual
satisfies the relevant requirements of this subtitle.
SEC. 102. UTILIZATION REVIEW ACTIVITIES.
(a) In General.--
(1) Compliance with requirements.--
(A) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall conduct utilization review
activities in connection with the provision of benefits under
such plan or coverage only in accordance with a utilization
review program that meets the requirements of this section.
(B) Use of outside agents.--Nothing in this section shall
be construed as preventing a group health plan or health
insurance issuer from arranging through a contract or
otherwise for persons or entities to conduct utilization
review activities on behalf of the plan or issuer, so long as
such activities are conducted in accordance with a
utilization review program that meets the requirements of
this section.
(C) Utilization review defined.--For purposes of this
section, the terms ``utilization review'' and ``utilization
review activities'' mean procedures used to monitor or
evaluate the clinical necessity, appropriateness, efficacy,
or efficiency of health care services, procedures or
settings, and includes prospective review, concurrent review,
second opinions, case management, discharge planning, or
retrospective review.
(2) Written policies and criteria.--
(A) Written policies.--A utilization review program shall
be conducted consistent with written policies and procedures
that govern all aspects of the program.
(B) Use of written criteria.--
(i) In general.--Such a program shall utilize written
clinical review criteria developed pursuant to the program
with the input of appropriate physicians. Such criteria shall
include written clinical review criteria described in section
114(b)(4)(B).
(ii) Continuing use of standards in retrospective review.--
If a health care service has been specifically pre-authorized
or approved for a covered individual under such a program,
the program shall not, pursuant to retrospective review,
revise or modify the specific standards, criteria, or
procedures used for the utilization review for procedures,
treatment, and services delivered to the individual during
the same course of treatment.
(3) Conduct of program activities.--
(A) Administration by health care professionals.--
(i) In general.--A utilization review program shall be
administered by qualified health care professionals who shall
oversee review decisions.
(ii) Health care professional defined.--In this subsection,
the term ``health care professional'' means a physician or
other health care practitioner licensed, accredited, or
certified to perform specified health services consistent
with State law.
(B) Use of qualified, independent personnel.--
(i) In general.--A utilization review program shall provide
for the conduct of utilization review activities only through
personnel who are qualified and, to the extent required, who
have received appropriate training in the conduct of such
activities under the program.
(ii) Peer review of sample of adverse clinical
determinations.--Such a program shall provide that clinical
peers (as defined in section 2(c)(2)) shall evaluate the
clinical appropriateness of at least a sample of adverse
clinical determinations.
(iii) Prohibition of contingent compensation
arrangements.--Such a program shall not, with respect to
utilization review activities, permit or provide compensation
or anything of value to its employees, agents, or contractors
in a manner that--
(I) provides direct or indirect incentives for such persons
to make inappropriate review decisions; or
(II) is based, directly or indirectly, on the quantity or
type of adverse determinations rendered.
(iv) Prohibition of conflicts.--Such a program shall not
permit a health care professional who provides health care
services to a covered individual to perform utilization
review activities in connection with the health care services
being provided to the individual. A group health plan, or a
health insurance issuer in connection with the provision of
health insurance coverage, may not retaliate against a
covered individual or health care provider based on such
individual's or provider's use of, or participation in, the
utilization review program under this section.
(C) Accessibility of review.--Such a program shall provide
that appropriate personnel performing utilization review
activities under the program are reasonably accessible by
toll-free telephone during normal business hours to discuss
patient care and allow response to telephone requests, and
that appropriate provision is made to receive and respond
promptly to calls received during other hours.
(D) Limits on frequency.--Such a program shall not provide
for the performance of utilization review activities with
respect to a class of services furnished to a covered
individual more frequently than is reasonably required to
assess whether the services under review are medically
necessary or appropriate.
(E) Limitation on information requests.--Such a program
shall provide that information shall be required to be
provided by health care providers only to the extent it is
necessary to perform the utilization review activity
involved.
(F) Review of preliminary utilization review decision.--
Such a program shall provide that a covered individual who is
dissatisfied with a preliminary utilization review decision
has the opportunity to discuss the decision with, and have
such decision reviewed by, the medical director of the plan
or issuer involved (or the director's designee) who has the
authority to reverse the decision.
(b) Standards Relating to Medical Decision Making.--
(1) In general.--In providing for a coverage determination
in the process of carrying out utilization review, a group
health plan, and a health insurance issuer in connection with
the provision of health insurance coverage, may not
arbitrarily interfere with or alter the decision of the
treating physician if the services are medically necessary or
appropriate for treatment or diagnosis to the extent that
such treatment or diagnosis is otherwise a covered benefit.
(2) Construction.--Paragraph (1) shall not be construed as
prohibiting a plan or issuer from limiting the delivery of
services to one or more health care providers within a
network of such providers.
(3) No change in coverage.--Paragraph (1) shall not be
construed as requiring coverage of particular services the
coverage of which is otherwise not covered under the terms of
the plan or coverage or from conducting utilization review
activities consistent with this section.
(4) Medical necessity or appropriateness defined.--In
paragraph (1), the term ``medically necessary or
appropriate'' means, with respect to a service or benefit, a
service or benefit which is consistent with generally
accepted principles of professional medical practice.
SEC. 103. ESTABLISHMENT OF PROCESS FOR GRIEVANCES.
(a) Establishment.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall provide meaningful procedures for
timely hearing and resolution of grievances brought by
covered individuals regarding any aspect of the plan's or
issuer's services, including a decision not to expedite a
coverage determination or reconsideration under section
104(c)(4)(B)(ii)(II) or 105(c)(4)(B)(ii)(II).
(b) Guidelines.--The grievance procedures required under
subsection (a) shall meet all guidelines established by the
appropriate Secretary.
(c) Distinguished from Coverage Determinations and
Appeals.--The grievance procedures required under subsection
(a) shall be separate and distinct from procedures regarding
coverage determinations under section 104 and
reconsiderations under section 105 and external reviews by a
qualified external appeal entity under section 106 (which
address appeals of coverage determinations).
SEC. 104. COVERAGE DETERMINATIONS.
(a) Requirement.--
(1) Responsibilities.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall establish and maintain procedures
for making timely coverage determinations (in accordance with
the requirements of this section) regarding the benefits a
covered individual is entitled to receive from the plan or
issuer, including the amount of any copayments, deductibles,
or other cost sharing applicable to such benefits. Under this
section, the plan or issuer shall have a standard procedure
for making such determinations, and procedures for expediting
such determinations in cases in which application of the
standard deadlines could seriously jeopardize the covered
individual's life, health, or ability to regain or maintain
maximum function or (in the case of a child under the age of
6) development.
(2) Parties who may request coverage determinations.--Any
of the following may request a coverage determination
relating to a covered individual and are parties to such
determination:
(A) The covered individual and an authorized representative
of the individual.
(B) A health care provider who has furnished an item or
service to the individual and formally agrees to waive any
right to payment directly from the individual for that item
or service.
(C) Any other provider or entity (other than the group
health plan or health insurance issuer) determined by the
appropriate Secretary to have an appealable interest in the
determination.
(3) Effect of coverage determination.--A coverage
determination is binding on all parties unless it is
reconsidered pursuant to section 105 or reviewed pursuant to
section 106.
(b) Determination by Deadline.--
(1) In general.--In the case of a request for a coverage
determination, the group health plan or health insurance
issuer shall provide notice pursuant to subsection (d) to the
person submitting the request of its determination as
expeditiously as the health condition of the covered
individual involved requires, but in no case later than
deadline established under paragraph (2) or, if a request for
expedited treatment of a coverage
[[Page S9577]]
determination is granted under subsection (c), the deadline
established under paragraph (3).
(2) Standard deadline.--
(A) In general.--The deadline established under this
paragraph is, subject to subparagraph (B), 14 calendar days
after the date the plan or issuer receives the request for
the coverage determination.
(B) Extension.--The plan or issuer may extend the deadline
under subparagraph (A) by up to 14 calendar days if--
(i) the covered individual (or an authorized representative
of the individual) requests the extension; or
(ii) the plan or issuer justifies to the applicable
authority a need for additional information to make the
coverage determination and how the delay is in the interest
of the covered individual.
(3) Expedited treatment deadline.--
(A) In general.--The deadline established under this
paragraph is, subject to subparagraphs (B) and (C), 72 hours
after the date the plan or issuer receives the request for
the expedited treatment under subsection (c).
(B) Extension.--The plan or issuer may extend the deadline
under subparagraph (A) by up to 5 calendar days if--
(i) the covered individual (or an authorized representative
of the individual) requests the extension; or
(ii) the plan or issuer justifies to the applicable
authority a need for additional information to make the
coverage determination and how the delay is in the interest
of the covered individual.
(C) How information from nonparticipating providers
affects deadlines for expedited coverage determinations.--In
the case of a group health plan or health insurance issuer
that requires medical information from nonparticipating
providers in order to make a coverage determination, the
deadline specified under subparagraph (A) shall begin when
the plan or issuer receives such information.
Nonparticipating providers shall make reasonable and diligent
efforts to expeditiously gather and forward all necessary
information to the plan or issuer in order to receive timely
payment.
(c) Expedited Treatment.--
(1) Request for expedited treatment.--A covered individual
(or an authorized representative of the individual) may
request that the plan or issuer expedite a coverage
determination involving the issues described in subparagraphs
(C), (D), or (E) of section 101(a)(2).
(2) Who may request.--To request expedited treatment of a
coverage determination, a covered individual (or authorized
representative of the individual) shall submit an oral or
written request directly to the plan or issuer (or, if
applicable, to the entity that the plan or issuer has
designated as responsible for making the determination).
(3) Provider support.--
(A) In general.--A physician or other health care provider
may provide oral or written support for a request for
expedited treatment under this subsection.
(B) Prohibition of punitive action.--A group health plan
and a health insurance issuer in connection with the
provision of health insurance coverage shall not take or
threaten to take any punitive action against a physician or
other health care provider acting on behalf or in support of
a covered individual seeking expedited treatment under this
subsection.
(4) Processing of requests.--A group health plan and a
health insurance issuer in connection with the provision of
health insurance coverage shall establish and maintain the
following procedures for processing requests for expedited
treatment of coverage determinations:
(A) An efficient and convenient means for the submission of
oral and written requests for expedited treatment. The plan
or issuer shall document all oral requests in writing and
maintain the documentation in the case file of the covered
individual involved.
(B) A means for deciding promptly whether to expedite a
determination, based on the following requirements:
(i) For a request made or supported by a physician, the
plan or issuer shall expedite the coverage determination if
the physician indicates that applying the standard deadline
under subsection (b)(2) for making the determination could
seriously jeopardize the covered individual's life, health,
or ability to regain or maintain maximum function or (in the
case of a child under the age of 6) development.
(ii) For another request, the plan or issuer shall expedite
the coverage determination if the plan or issuer determines
that applying such standard deadline for making the
determination could seriously jeopardize the covered
individual's life, health, or ability to regain or maintain
maximum function or (in the case of a child under the age of
6) development.
(5) Actions following denial of request for expedited
treatment.--If a group health plan or a health insurance
issuer in connection with the provision of health insurance
coverage denies a request for expedited treatment of a
coverage determination under this subsection, the plan or
issuer shall--
(A) make the coverage determination within the standard
deadline otherwise applicable; and
(B) provide the individual submitting the request with--
(i) prompt oral notice of the denial of the request, and
(ii) within 2 business days a written notice that--
(I) explains that the plan or issuer will process the
coverage determination request within the standard deadlines;
(II) informs the requester of the right to file a grievance
if the requester disagrees with the plan's or issuer's
decision not to expedite the determination; and
(III) provides instructions about the grievance process and
its timeframes.
(6) Action on accepted request for expedited treatment.--If
a group health plan or health insurance issuer grants a
request for expedited treatment of a coverage determination,
the plan or issuer shall make the determination and provide
the notice under subsection (d) within the deadlines
specified under subsection (b)(3).
(d) Notice of Coverage Determinations.--
(1) Requirement.--
(A) In general.--A group health plan or health insurance
issuer that makes a coverage determination that--
(i) is completely favorable to the covered individual shall
provide the party submitting the request for the coverage
determination with notice of such determination; or
(ii) is adverse, in whole or in part, to the covered
individual shall provide such party with written notice of
the determination, including the information described in
subparagraph (B).
(B) Content of written notice.--A written notice under
subparagraph (A)(ii) shall--
(i) provide the specific reasons for the determination
(including, in the case of a determination relating to
utilization review, the clinical rationale for the
determination) in clear and understandable language;
(ii) include notice of the availability of the clinical
review criteria relied upon in making the coverage
determination;
(iii) describe the reconsideration and review processes
established to carry out sections 105 and 106, including the
right to, and conditions for, obtaining expedited
consideration of requests for reconsideration or review;and
(iv) comply with any other requirements specified by the
appropriate Secretary.
(2) Failure to provide timely notice.--Any failure of a
group health plan or health insurance issuer to provide a
covered individual with timely notice of a coverage
determination as specified in this section shall constitute
an adverse coverage determination and a timely request for a
reconsideration with respect to such determination shall be
deemed to have been made pursuant to the section 105(a)(2).
(3) Provision of oral notice with written confirmation in
case of expedited treatment.--If a group health plan or
health insurance issuer grants a request for expedited
treatment under subsection (c), the plan or issuer may first
provide notice of the coverage determination orally within
the deadlines established under subsection (b)(3) and then
shall mail written confirmation of the determination within 2
business days of the date of oral notification.
SEC. 105. INTERNAL APPEALS (RECONSIDERATIONS).
(a) Requirement.--
(1) Responsibilities.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall establish and maintain procedures
for making timely reconsiderations of coverage determinations
in accordance with this section. Under this section, the plan
or issuer shall have a standard procedure for making such
determinations, and procedures for expediting such
determinations in cases in which application of the standard
deadlines could seriously jeopardize the covered individual's
life, health, or ability to regain or maintain maximum
function or (in the case of a child under the age of 6)
development.
(2) Parties who may request reconsideration.--Any party to
a coverage determination may request a reconsideration of the
determination under this section. Such party shall submit an
oral or written request directly with the group health plan
or health insurance issuer that made the determination. The
party who files a request for reconsideration may withdraw it
by filing a written request for withdrawal with the group
health plan or health insurance issuer involved.
(3) Deadline for filing request.--
(A) In general.--Except as provided in subparagraph (B), a
party to a coverage determination shall submit the request
for a reconsideration within 60 calendar days from the date
of the written notice of the coverage determination.
(B) Extending time for filing request.--Such a party may
submit a written request to the plan or issuer to extend the
deadline specified in subparagraph (A). If such a party
demonstrates in the request for the extension good cause for
such extension, the plan or issuer may extend the deadline.
(4) Parties to the reconsideration.--
(A) In general.--The parties to the reconsideration are the
parties to the coverage determination, as described in
section 104(a)(2), and any other provider or entity (other
than the plan or issuer) whose rights with respect to the
coverage determination may be affected by the reconsideration
(as determined by the entity that conducts the
reconsideration).
(B) Opportunity to submit evidence.--A group health plan
and a health insurance issuer shall provide the parties to
the reconsideration with a reasonable opportunity to
[[Page S9578]]
present evidence and allegations of fact or law, related to
the issue in dispute, in person as well as in writing. The
plan or issuer shall inform the parties of the conditions for
submitting the evidence, especially any time limitations.
(5) Effect of reconsideration.--A decision of a plan or
issuer after reconsideration is binding on all parties unless
it is reviewed pursuant to section 106.
(6) Limitation on conducting reconsideration.--In
conducting the reconsideration under this subsection, the
following rules shall apply:
(A) The person or persons conducting the reconsideration
shall not have been involved in making the underlying
coverage determination that is the basis for such
reconsideration.
(B) If the issuer involved in the reconsideration is the
plan's or issuer's denial of coverage based on a lack of
medical necessity, a clinical peer (as defined in section
2(c)(2)) shall make the reconsidered determination.
(7) Reconsideration defined.--In this subtitle, the term
``reconsideration'' means a review under this section of a
coverage determination that is adverse to the covered
individual involved, including a review of the evidence and
findings upon which it was based and any other evidence the
parties submit or the group health plan or health insurance
issuer obtains.
(b) Determination by Deadline.--
(1) In general.--In the case of a request for a
reconsideration, the group health plan or health insurance
issuer shall provide notice pursuant to subsection (d) to the
person submitting the request of its determination as
expeditiously as the health condition of the covered
individual involved requires, but in no case later than the
deadline established under paragraph (2) or, if a request for
expedited treatment of a reconsideration is granted under
subsection (c), the deadline established under paragraph (3).
(2) Standard deadline.--
(A) In general.--The deadline established under this
paragraph is, subject to subparagraph (B)--
(i) in the case of a reconsideration regarding the coverage
of benefits, 30 calendar days after the date the plan or
issuer receives the request for the reconsideration, or
(ii) in other cases, 60 days after such date.
(B) Extension.--The plan or issuer may extend the deadline
under subparagraph (A) by up to 14 calendar days if--
(i) the covered individual (or an authorized representative
of the individual) requests the extension; or
(ii) the plan or issuer justifies to the applicable
authority a need for additional information to make the
reconsideration and how the delay is in the interest of the
covered individual.
(3) Expedited treatment deadline.--
(A) In general.--The deadline established under this
paragraph is, subject to subparagraphs (B) and (C), 72 hours
after the date the plan or issuer receives the request for
the expedited treatment under subsection (d).
(B) Extension.--The plan or issuer may extend the deadline
under subparagraph (A) by up to 5 calendar days if--
(i) the covered individual (or an authorized representative
of the individual) requests the extension; or
(ii) the plan or issuer justifies to the applicable
authority a need for additional information to make the
reconsideration and how the delay is in the interest of the
covered individual.
(C) How information from nonparticipating providers
affects deadlines for expedited reconsiderations.--In the
case of a group health plan or health insurance issuer that
requires medical information from nonparticipating providers
in order to make a reconsideration, the deadline specified
under subparagraph (A) shall begin when the plan or issuer
receives such information. Nonparticipating providers shall
make reasonable and diligent efforts to expeditiously gather
and forward all necessary information to the plan or issuer
in order to receive timely payment.
(c) Expedited Treatment.--
(1) Request for expedited treatment.--A covered individual
(or an authorized representative of the individual) may
request that the plan or issuer expedite a reconsideration
involving the issues described in subparagraphs (C), (D), or
(E) of section 101(a)(2).
(2) Who may request.--To request expedited treatment of a
reconsideration, a covered individual (or an authorized
representative of the individual) shall submit an oral or
written request directly to the plan or issuer (or, if
applicable, to the entity that the plan or issuer has
designated as responsible for making the decision relating to
the reconsideration).
(3) Provider support.--
(A) In general.--A physician or other health care provider
may provide oral or written support for a request for
expedited treatment under this subsection.
(B) Prohibition of punitive action.--A group health plan
and a health insurance issuer in connection with the
provision of health insurance coverage shall not take or
threaten to take any punitive action against a physician or
other health care provider acting on behalf or in support of
a covered individual seeking expedited treatment under this
subsection.
(4) Processing of requests.--A group health plan and a
health insurance issuer in connection with the provision of
health insurance coverage shall establish and maintain the
following procedures for processing requests for expedited
treatment of reconsiderations:
(A) An efficient and convenient means for the submission of
oral and written requests for expedited treatment. The plan
or issuer shall document all oral requests in writing and
maintain the documentation in the case file of the covered
individual involved.
(B) A means for deciding promptly whether to expedite a
reconsideration, based on the following requirements:
(i) For a request made or supported by a physician, the
plan or issuer shall expedite the reconsideration if the
physician indicates that applying the standard deadline under
subsection (b)(2) for making the reconsideration
determination could seriously jeopardize the covered
individual's life, health, or ability to regain or maintain
maximum function or (in the case of a child under the age of
6) development.
(ii) For another request, the plan or issuer shall expedite
the reconsideration if the plan or issuer determines that
applying such standard deadline for making the
reconsideration determination could seriously jeopardize the
covered individual's life, health, or ability to regain or
maintain maximum function or (in the case of a child under
the age of 6) development.
(5) Actions following denial of request for expedited
treatment.--If a group health plan or a health insurance
issuer in connection with the provision of health insurance
coverage denies a request for expedited treatment of a
reconsideration under this subsection, the plan or issuer
shall--
(A) make the reconsideration determination within the
standard deadline otherwise applicable; and
(B) provide the individual submitting the request with--
(i) prompt oral notice of the denial of the request, and
(ii) within 2 business days a written notice that--
(I) explains that the plan or issuer will process the
reconsideration request within the standard deadlines;
(II) informs the requester of the right to file a grievance
if the requester disagrees with the plan's or issuer's
decision not to expedite the reconsideration; and
(III) provides instructions about the grievance process and
its timeframes.
(6) Action on accepted request for expedited treatment.--If
a group health plan or health insurance issuer grants a
request for expedited treatment of a reconsideration, the
plan or issuer shall make the reconsideration determination
and provide the notice under subsection (d) within the
deadlines specified under subsection (b)(3).
(d) Notice of Decision in Reconsiderations.--
(1) Requirement.--
(A) In general.--A group health plan or health insurance
issuer that makes a decision in the reconsideration that--
(i) is completely favorable to the covered individual shall
provide the party submitting the request for the
reconsideration with notice of such decision; or
(ii) is adverse, in whole or in part, to the covered
individual shall--
(I) provide such party with written notice of the decision,
including the information described in subparagraph (B), and
(II) prepare the case file (including such notice) for the
covered individual involved, to be available for submission
(if requested) under section 106(a).
(B) Content of written notice.--The written notice under
subparagraph (A)(ii)(I) shall--
(i) provide the specific reasons for the decision in the
reconsideration (including, in the case of a decision
relating to utilization review, the clinical rationale for
the decision) in clear and understandable language;
(ii) include notice of the availability of the clinical
review criteria relied upon in making the decision;
(iii) describe the review processes established to carry
out sections 106, including the right to, and conditions for,
obtaining expedited consideration of requests for review
under such section; and
(iv) comply with any other requirements specified by the
appropriate Secretary.
(2) Failure to provide timely notice.--Any failure of a
group health plan or health insurance issuer to provide a
covered individual with timely notice of a decision in a
reconsideration as specified in this section shall constitute
an affirmation of the adverse coverage determination and the
plan or issuer shall submit the case file to the qualified
external appeal entity under section 106 within 24 hours of
expiration of the deadline otherwise applicable.
(3) Provision of oral notice with written confirmation in
case of expedited treatment.--If a group health plan or
health insurance issuer grants a request for expedited
treatment under subsection (c), the plan or issuer may first
provide notice of the decision in the reconsideration orally
within the deadlines established under subsection (b)(3) and
then shall mail written confirmation of the decision within 2
business days of the date of oral notification.
(4) Affirmation of an adverse coverage determination under
expedited treatment.--If, as a result of its reconsideration,
the plan or issuer affirms, in whole or in part, a coverage
determination that is adverse to the covered individual and
the reconsideration received expedited treatment under
subsection (c), the plan or issuer shall
[[Page S9579]]
submit the case file (including the written notice of the
decision in the reconsideration) to the qualified external
appeal entity as expeditiously as the covered individual's
health condition requires, but in no case later than within
24 hours of its affirmation. The plan or issuer shall make
reasonable and diligent efforts to assist in gathering and
forwarding information to the qualified external appeal
entity.
(5) Notification of individual.--If the plan or issuer
refers the matter to an qualified external appeal entity
under paragraph (2) or (4), it shall concurrently notify the
individual (or an authorized representative of the
individual) of that action.
SEC. 106. EXTERNAL APPEALS (REVIEWS).
(a) Review by Qualified External Appeal Entity.--
(1) In general.--If a qualified external appeal entity
obtains a case file under section 105(d) or under paragraph
(2) and determines that--
(A) the individual's appeal is supported by the opinion of
the individual's treating physician; or
(B) such appeal is not so supported but--
(i) there is a significant financial amount in controversy
(as defined by the Secretary); or
(ii) the appeal involves services for the diagnosis,
treatment, or management of an illness, disability, or
condition which the entity finds, in accordance with
standards established by the entity and approved by the
Secretary, constitutes a condition that could seriously
jeopardize the covered individual's life, health, or ability
to regain or maintain maximum function or (in the case of a
child under the age of 6) development;
the entity shall review and resolve under this section any
remaining issues in dispute.
(2) Request for review.--
(A) In general.--A party to a reconsidered determination
under section 105 that receives notice of an unfavorable
determination under section 105(d) may request a review of
such determination by a qualified external appeal entity
under this section.
(B) Time for request.--To request such a review, such party
shall submit an oral or written request directly to the plan
or issuer (or, if applicable, to the entity that the plan or
issuer has designated as responsible for making the
determination).
(C) If review is requested.--If a party provides the plan
or issuer (or such an entity) with notice of a request for
such review, the plan or issuer (or such entity) shall submit
the case file to the qualified external appeal entity as
expeditiously as the covered individual's health condition
requires, but in no case later than 2 business days from the
date the plan or issuer (or entity) receives such request.
The plan or issuer (or entity) shall make reasonable and
diligent efforts to assist in gathering and forwarding
information to the qualified external appeal entity.
(3) Notice and timing for review.--The qualified external
appeal entity shall establish and apply rules for the timing
and content of notices for reviews under this section
(including appropriate expedited treatment of reviews under
this section) that are similar to the applicable requirements
for timing and content of notices in the case of
reconsiderations under subsections (b), (c), and (d) of
section 105.
(4) Parties.--The parties to the review by a qualified
external appeal entity under this section shall be the same
parties listed in section 105(a)(4) who qualified during the
plan's or issuer's reconsideration, with the addition of the
plan or issuer.
(b) General Elements of External Appeals.--
(1) Contract with qualified external appeal entity.--
(A) Contract requirement.--Subject to subparagraph (B), the
external appeal review under this section of a determination
of a plan or issuer shall be conducted under a contract
between the plan or issuer and 1 or more qualified external
appeal entities.
(B) Eligibility for designation as external review
entity.--Entities eligible to conduct reviews brought under
this subsection shall include--
(i) any State licensed or credentialed external review
entity;
(ii) a State agency established for the purpose of
conducting independent external reviews; and
(iii) an independent, external entity that contracts with
the appropriate Secretary.
(C) Licensing and credentialing.--
(i) In general.--In licensing or credentialing entities
described in subparagraph (B)(i), the State agent shall use
licensing and certification procedures developed by the State
in consultation with the National Association of Insurance
Commissioners.
(ii) Special rule.--In the case of a State that--
(I) has not established such licensing or credentialing
procedures within 24 months of the date of enactment of this
Act, the State shall license or credential such entities in
accordance with procedures developed by the Secretary; or
(II) refuses to designate such entities, the Secretary
shall license or credential such entities.
(D) Qualifications.--An entity (which may be a governmental
entity) shall meet the following requirements in order to be
a qualified external appeal entity:
(i) There is no real or apparent conflict of interest that
would impede the entity from conducting external appeal
activities independent of the plan or issuer.
(ii) The entity conducts external appeal activities through
clinical peers (as defined in section 2(c)(2)).
(iii) The entity has sufficient medical, legal, and other
expertise and sufficient staffing to conduct external appeal
activities for the plan or issuer on a timely basis
consistent with subsection (a)(3).
(iv) The entity meets such other requirements as the
appropriate Secretary may impose.
(E) Limitation on plan or issuer selection.--If an
applicable authority permits more than 1 entity to qualify as
a qualified external appeal entity with respect to a group
health plan or health insurance issuer and the plan or issuer
may select among such qualified entities, the applicable
authority--
(i) shall assure that the selection process will not create
any incentives for qualified external appeal entities to make
a decision in a biased manner; and
(ii) shall implement procedures for auditing a sample of
decisions by such entities to assure that no such decisions
are made in a biased manner.
(F) Other terms and conditions.--The terms and conditions
of a contract under this paragraph shall be consistent with
the standards the appropriate Secretary shall establish to
assure that there is no real or apparent conflict of interest
in the conduct of external appeal activities. Such contract
shall provide that the direct costs of the process (not
including costs of representation of a covered individual or
other party) shall be paid by the plan or issuer, and not by
the covered individual.
(2) Elements of process.--An external appeal process under
this section shall be conducted consistent with standards
established by the appropriate Secretary that include at
least the following:
(A) Fair process; de novo determination.--The process shall
provide for a fair, de novo determination.
(B) Opportunity to submit evidence, have representation,
and make oral presentation.--Any party to a review under this
section--
(i) may submit and review evidence related to the issues in
dispute,
(ii) may use the assistance or representation of 1 or more
individuals (any of whom may be an attorney), and
(iii) may make an oral presentation.
(C) Provision of information.--The plan or issuer involved
shall provide timely access to all its records relating to
the matter being reviewed under this section and to all
provisions of the plan or health insurance coverage
(including any coverage manual) relating to the matter.
(3) Admissible evidence.--In addition to personal health
and medical information supplied with respect to an
individual whose claim for benefits has been appealed and the
opinion of the individual's treating physician or health care
professional, an external appeals entity shall take into
consideration the following evidence:
(A) The results of studies that meet professionally
recognized standards of validity and replicability or that
have been published in peer-reviewed journals.
(B) The results of professional consensus conferences
conducted or financed in whole or in part by one or more
government agencies.
(C) Practice and treatment guidelines prepared or financed
in whole or in part by government agencies.
(D) Government-issued coverage and treatment policies.
(E) To the extent that the entity determines it to be free
of any conflict of interest--
(i) the opinions of individuals who are qualified as
experts in one or more fields of health care which are
directly related to the matters under appeal, and
(ii) the results of peer reviews conducted by the plan or
issuer involved.
(c) Notice of Determination by External Appeal Entity.--
(1) Responsibility for the notice.--After the qualified
external appeal entity has reviewed and resolved the
determination that has been appealed, such entity shall mail
a notice of its final decision to the parties.
(2) Content of the notice.--The notice described in
paragraph (1) shall--
(A) describe the specific reasons for the entity's
decisions; and
(B) comply with any other requirements specified by the
appropriate Secretary.
(d) Effect of Determination.--A final decision by the
qualified external appeal entity after a review of the
determination that has been appealed is final and binding on
the group health plan or the health insurance issuer.
Subtitle B--Consumer Information
SEC. 111. HEALTH PLAN INFORMATION.
(a) Disclosure Requirement.--
(1) Group health plans.--A group health plan shall--
(A) provide to participants and beneficiaries at the time
of initial coverage under the plan (or the effective date of
this section, in the case of individuals who are participants
or beneficiaries as of such date), at least annually
thereafter, and at the beginning of any open enrollment
period provided under the plan, the information described in
subsection (b) in printed form;
(B) provide to participants and beneficiaries information
in printed form on material changes in the information
described in paragraphs (1), (2)(A), (2)(B), (3)(A), (6),
[[Page S9580]]
and (7) of subsection (b), or a change in the health
insurance issuer through which coverage is provided, within a
reasonable period of (as specified by the Secretary, but not
later than 30 days after) the effective date of the changes;
and
(C) upon request, make available to participants and
beneficiaries, the applicable authority, and prospective
participants and beneficiaries, the information described in
subsections (b) and (c) in printed form.
(2) Health insurance issuers.--A health insurance issuer in
connection with the provision of health insurance coverage
shall--
(A) provide to individuals enrolled under such coverage at
the time of enrollment, and at least annually thereafter,
(and to plan administrators of group health plans in
connection with which such coverage is offered) the
information described in subsection (b) in printed form;
(B) provide to enrollees and such plan administrators
information in printed form on material changes in the
information described in paragraphs (1), (2)(A), (2)(B),
(3)(A), (6), and (7) of subsection (b), or a change in the
health insurance issuer through which coverage is provided,
within a reasonable period of (as specified by the Secretary,
but later than 30 days after) the effective date of the
changes; and
(C) upon request, make available to the applicable
authority, to individuals who are prospective enrollees, to
plan administrators of group health plans that may obtain
such coverage, and to the public the information described in
subsections (b) and (c) in printed form.
(3) Exemption authority.--Upon application of one or more
group health plans or health insurance issuers, the
appropriate Secretary, under procedures established by such
Secretary, may grant an exemption to one or more plans or
issuers from compliance with one or more of the requirements
of paragraph (1) or (2). Such an exemption may be granted for
plans and issuers as a class with similar characteristics,
such as private fee-for-service plans described in section
1859(b)(2) of the Social Security Act.
(4) Establishment of internet site.--The appropriate
Secretaries shall provide for the establishment of 1 or more
sites on the Internet to provide technical support and
information concerning the rights of participants,
beneficiaries, and enrollees under this title.
(b) Information Provided.--The information described in
this subsection with respect to a group health plan or health
insurance coverage offered by a health insurance issuer
includes the following:
(1) Service area.--The service area of the plan or issuer.
(2) Benefits.--Benefits offered under the plan or coverage,
including--
(A) covered benefits, including benefits for preventive
services, benefit limits, and coverage exclusions, any
optional supplemental benefits under the plan or coverage and
the terms and conditions (including premiums or cost-sharing)
for such supplemental benefits, and any out-of-area coverage;
(B) cost sharing, such as premiums, deductibles,
coinsurance, and copayment amounts, including any liability
for balance billing, any maximum limitations on out of pocket
expenses, and the maximum out of pocket costs for services
that are provided by nonparticipating providers or that are
furnished without meeting the applicable utilization review
requirements;
(C) the extent to which benefits may be obtained from
nonparticipating providers, and any supplemental premium or
cost-sharing in so obtaining such benefits;
(D) the extent to which a participant, beneficiary, or
enrollee may select from among participating providers and
the types of providers participating in the plan or issuer
network;
(E) process for determining experimental coverage or
coverage in cases of investigational treatments and clinical
trials; and
(F) use of a prescription drug formulary.
(3) Access.--A description of the following:
(A) The number, mix, and distribution of health care
providers under the plan or coverage.
(B) The procedures for participants, beneficiaries, and
enrollees to select, access, and change participating primary
and specialty providers.
(C) The rights and procedures for obtaining referrals
(including standing referrals) to participating and
nonparticipating providers.
(D) Any limitations imposed on the selection of qualifying
participating health care providers, including any
limitations imposed under section 122(a)(2)(B).
(E) How the plan or issuer addresses the needs of
participants, beneficiaries, and enrollees and others who do
not speak English or who have other special communications
needs in accessing providers under the plan or coverage,
including the provision of information described in this
subsection and subsection (c) to such individuals, including
the provision of information in a language other than English
if 5 percent of the number of participants, beneficiaries,
and enrollees communicate in that language instead of
English, and including the availability of interpreters,
audio tapes, and information in braille to meet the needs of
people with special communications needs.
(4) Out-of-area coverage.--Out-of-area coverage provided by
the plan or issuer.
(5) Emergency coverage.--Coverage of emergency services,
including--
(A) the appropriate use of emergency services, including
use of the 911 telephone system or its local equivalent in
emergency situations and an explanation of what constitutes
an emergency situation;
(B) the process and procedures of the plan or issuer for
obtaining emergency services; and
(C) the locations of (i) emergency departments, and (ii)
other settings, in which plan physicians and hospitals
provide emergency services and post-stabilization care.
(6) Prior authorization rules.--Rules regarding prior
authorization or other review requirements that could result
in noncoverage or nonpayment.
(7) Grievance and appeals procedures.--All appeal or
grievance rights and procedures under the plan or coverage,
including the method for filing grievances and the time
frames and circumstances for acting on grievances and
appeals, the name, address, and telephone number of the
applicable authority with respect to the plan or issuer, and
the availability of assistance through an ombudsman to
individuals in relation to group health plans and health
insurance coverage.
(8) Quality assurance.--A summary description of the data
on quality indicators and measures submitted under section
112(a) for the plan or issuer, including a summary
description of the data on process and outcome satisfaction
of participants, beneficiaries, and enrollees (including data
on individual voluntary disenrollment and grievances and
appeals) described in section 112(b)(3)(D), and notice that
information comparing such indicators and measures for
different plans and issuers is available through the Agency
for Health Care Policy and Research.
(9) Summary of provider financial incentives.--A summary
description of the information on the types of financial
payment incentives (described in section 1852(j)(4) of the
Social Security Act) provided by the plan or issuer under the
coverage.
(10) Information on issuer.--Notice of appropriate mailing
addresses and telephone numbers to be used by participants,
beneficiaries, and enrollees in seeking information or
authorization for treatment.
(11) Information on licensure.--Information on the
licensure, certification, or accreditation status of the plan
or issuer.
(12) Availability of technical support and information.--
Notice that technical support and information concerning the
rights of participants, beneficiaries, and enrollees under
this title are available from the Secretary of Labor (in the
case of group health plans) or the Secretary of Health and
Human Services (in the case of health insurance issuers),
including the telephone numbers and mailing address of the
regional offices of the appropriate Secretary and the
Internet address to obtain such information and support.
(13) Advance directives and organ donation decisions.--
Information regarding the use of advance directives and organ
donation decisions under the plan or coverage.
(14) Participating provider list.--A list of current
participating health care providers for the relevant
geographic area, including the name, address and telephone
number of each provider.
(15) Availability of information on request.--Notice that
the information described in subsection (c) is available upon
request and how and where (such as the telephone number and
Internet website) such information may be obtained.
(c) Information Made Available Upon Request.--The
information described in this subsection is the following:
(1) Utilization review activities.--A description of
procedures used and requirements (including circumstances,
time frames, and appeal rights) under any utilization review
program under section 102(a), including under any drug
formulary program under section 123(b).
(2) Grievance and appeals information.--Information on the
number of grievances and internal and external appeals and on
the disposition in the aggregate of such matters, including
information on the reasons for the disposition of external
appeal cases.
(3) Method of compensation.--A summary description as to
the method of compensation of participating health care
professionals and health care facilities, including
information on the types of financial payment incentives
(described in section 1852(j)(4) of the Social Security Act)
provided by the plan or issuer under the coverage and on the
proportion of participating health care professionals who are
compensated under each type of incentive under the plan or
coverage.
(4) Confidentiality policies and procedures.--A description
of the policies and procedures established to carry out
section 112.
(5) Formulary restrictions.--A description of the nature of
any drug formula restrictions, including the specific
prescription medications included in any formulary and any
provisions for obtaining off-formulary medications.
(6) Additional information on participating providers.--For
each current participating health care provider described in
subsection (b)(14)--
(A) the licensure or accreditation status of the provider;
(B) to the extent possible, an indication of whether the
provider is available to accept new patients;
(C) in the case of medical personnel, the education,
training, speciality qualifications or certification,
speciality focus, affiliation
[[Page S9581]]
arrangements, and specialty board certification (if any) of
the provider; and
(D) any measures of consumer satisfaction and quality
indicators for the provider.
(7) Percentage of premiums used for benefits (loss-
ratios).--In the case of health insurance coverage only (and
not with respect to group health plans that do not provide
coverage through health insurance coverage), a description of
the overall loss-ratio for the coverage (as defined in
accordance with rules established or recognized by the
Secretary of Health and Human Services).
(8) Quality information developed.--Quality information on
processes and outcomes developed as part of an accreditation
or licensure process for the plan or issuer to the extent the
information is publicly available.
(d) Form of Disclosure.--
(1) Uniformity.--Information required to be disclosed under
this section shall be provided in accordance with uniform,
national reporting standards specified by the Secretary,
after consultation with applicable State authorities, so that
prospective enrollees may compare the attributes of different
issuers and coverage offered within an area within a type of
coverage. Such information shall be provided in an accessible
format that is understandable to the average participant,
beneficiary, or enrollee involved.
(2) Information into handbook.--Nothing in this section
shall be construed as preventing a group health plan or
health insurance issuer from making the information under
subsections (b) and (c) available to participants,
beneficiaries, and enrollees through an enrollee handbook or
similar publication.
(3) Updating participating provider information.--The
information on participating health care providers described
in subsections (b)(14) and (c)(6) shall be updated within
such reasonable period as determined appropriate by the
Secretary. A group health plan or health insurance issuer
shall be considered to have complied with the provisions of
such subsection if the plan or issuer provides the directory
or listing of participating providers to participants and
beneficiaries or enrollees once a year and such directory or
listing is updated within such a reasonable period to reflect
any material changes in participating providers. Nothing in
this section shall prevent a plan or issuer from changing or
updating other information made available under this section.
(4) Rule of mailing to last address.--For purposes of this
section, a plan or issuer, in reliance on records maintained
by the plan or issuer, shall be deemed to have met the
requirements of this section with respect to the disclosure
of information to a participant, beneficiary, or enrollee if
the plan or issuer transmits the information requested to the
participant, beneficiary, or enrollee at the address
contained in such records with respect to such participant,
beneficiary, or enrollee.
(e) Enrollee Assistance.--
(1) In general.--Each State that obtains a grant under
paragraph (3) shall provide for creation and operation of a
Health Insurance Ombudsman through a contract with a not-for-
profit organization that operates independent of group health
plans and health insurance issuers. Such Ombudsman shall be
responsible for at least the following:
(A) To provide consumers in the State with information
about health insurance coverage options or coverage options
offered within group health plan.
(B) To provide counseling and assistance to enrollees
dissatisfied with their treatment by health insurance issuers
and group health plans in regard to such coverage or plans
and with respect to grievances and appeals regarding
determinations under such coverage or plans.
(2) Federal role.--In the case of any State that does not
provide for such an Ombudsman under paragraph (1), the
Secretary may provide for the creation and operation of a
Health Insurance Ombudsman through a contract with a not-for-
profit organization that operates independent of group health
plans and health insurance issuers and that is to provide
consumers in the State with information about health
insurance coverage options or coverage options offered within
group health plans.
(3) Eligibility.--To be eligible to serve as a Health
Insurance Ombudsman under this section, a not-for-profit
organization shall provide assurances that--
(A) the organization has no real or perceived conflict of
interest in providing advice and assistance to consumers
regarding health insurance coverage, and
(B) the organization is independent of health insurance
issuers, health care providers, health care payors, and
regulators of health care or health insurance.
(4) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary of Health and Human
Services such amounts as may be necessary to provide for
grants to States for contracts for Health Insurance Ombudsmen
under paragraph (1) or contracts for such Ombudsmen under
paragraph (2).
(5) Construction.--Nothing in this section shall be
construed to prevent the use of other forms of enrollee
assistance.
(f) Construction.--Nothing in this section shall be
construed as requiring public disclosure of individual
contracts or financial arrangements between a group health
plan or health insurance issuer and any provider.
SEC. 112. HEALTH CARE QUALITY INFORMATION.
(a) Collection and Submission of Information on Quality
Indicators and Measures.--
(1) In general.--A group health plan and a health insurance
issuer that offers health insurance coverage shall collect
and submit to the Director for the Agency for Health Care
Policy and Research (in this section referred to as the
``Director'') aggregate data on quality indicators and
measures (as defined in subsection (g)) that includes the
minimum uniform data set specified under subsection (b). Such
data shall not include patient identifiers.
(2) Data sampling methods.--The Director shall develop data
sampling methods for the collection of data under this
subsection.
(3) Exemption authority.--The provisions of section
111(a)(3) shall apply to the requirements of paragraph (1) in
the same manner as they apply to the requirements referred to
in such section.
(b) Minimum Uniform Data Set.--
(1) In general.--The Secretary shall specify (and may from
time to time update) by rule the data required to be included
in the minimum uniform data set under subsection (a) and the
standard format for such data.
(2) Design.--Such specification shall--
(A) take into consideration the different populations
served (such as children and individuals with disabilities);
(B) be consistent where appropriate with requirements
applicable to Medicare+Choice health plans under
1851(d)(4)(D) of the Social Security Act;
(C) take into consideration such differences in the
delivery system among group health plans and health insurance
issuers as the Secretary deems appropriate;
(D) be consistent with standards adopted to carry out part
C of title XI of the Social Security Act; and
(E) be consistent where feasible with existing health plan
quality indicators and measures used by employers and
purchasers.
(3) Minimum data.--The data in such set shall include, to
the extent determined feasible by the appropriate Secretary,
at least--
(A) data on process measures of clinical performance for
health care services provided by health care professionals
and facilities;
(B) data on outcomes measures of morbidity and mortality
including to the extent feasible and appropriate data for
pediatric and gender-specific measures; and
(C) data on data on satisfaction of such individuals,
including data on voluntary disenrollment and grievances.
The minimum data set under this paragraph shall be
established by the appropriate Secretaries using a negotiated
rulemaking process under subchapter III of chapter 5 of title
5, United States Code.
(c) Dissemination of Information.--
(1) In general.--The Director shall publicly disseminate
(through printed media and the Internet) information on the
aggregate data submitted under this section.
(2) Formats.--The information shall be disseminated in a
manner that provides for a comparison of health care quality
among different group health plans and health insurance
issuers, with appropriate differentiation by delivery system.
In disseminating the information, the Director may reference
an appropriate benchmark (or benchmarks) for performance with
respect to specific quality indicators and measures (or
groups of such measures).
(d) Health Care Quality Research and Information.--The
Secretary of Health and Human Services, acting through the
Director, shall conduct and support research demonstration
projects, evaluations, and the dissemination of information
with respect to measurement, status, improvement, and
presentation of quality indicators and measures and other
health care quality information.
(e) National Reports on Health Care Quality.--
(1) Report on national goals.--Not later than 18 months
after the date of enactment of this Act, and every 2 years
thereafter, the Secretary of Health and Human Services shall
prepare and submit to the appropriate committees of Congress
and the President a report that--
(A) establishes national goals for the improvement of the
quality of health care; and
(B) contains recommendations for achieving the national
goals established under paragraph (1).
(2) Report on health related topics.--Not later than 30
months after the date of enactment of this Act and every 2
years thereafter, such Secretary shall prepare and submit to
Congress and the President a report that addresses at least 1
of the following (or a related matter):
(A) The availability, applicability, and appropriateness of
information to consumers regarding the quality of their
health care.
(B) The state of information systems and data collecting
capabilities for measuring and reporting on quality
indicators.
(C) The impact of quality measurement on access to and the
cost of medical care.
(D) Barriers to continuous quality improvement in medical
care.
(E) The state of health care quality measurement research
and development.
(f) Authorization of Appropriations.--There are authorized
to be appropriated $25,000,000 for each fiscal year
(beginning with fiscal year 1999) to carry out this section.
Any such amounts appropriated for a fiscal year shall remain
available, without fiscal year limitation, until expended.
[[Page S9582]]
(g) Quality Indicators and Measures Defined.--For purposes
of this section, the term ``quality indicators and measures''
means structural characteristics, patient-encounter data, and
the subsequent health status change of a patient as a result
of health care services provided by health care professionals
and facilities.
SEC. 113. CONFIDENTIALITY AND ACCURACY OF ENROLLEE RECORDS.
A group health plan or a health insurance issuer shall
establish procedures with respect to medical records or other
health information maintained regarding participants,
beneficiaries, and enrollees to safeguard the privacy of any
individually identifiable information about them.
SEC. 114. QUALITY ASSURANCE.
(a) Requirement.--A group health plan, and a health
insurance issuer that offers health insurance coverage, shall
establish and maintain an ongoing, internal quality assurance
and continuous quality improvement program that meets the
requirements of subsection (b).
(b) Program Requirements.--The requirements of this
subsection for a quality improvement program of a plan or
issuer are as follows:
(1) Administration.--The plan or issuer has an identifiable
unit with responsibility for administration of the program.
(2) Written plan.--The plan or issuer has a written plan
for the program that is updated annually and that specifies
at least the following:
(A) The activities to be conducted.
(B) The organizational structure.
(C) The duties of the medical director.
(D) Criteria and procedures for the assessment of quality.
(3) Systematic review.--The program provides for systematic
review of the type of health services provided, consistency
of services provided with good medical practice, and patient
outcomes.
(4) Quality criteria.--The program--
(A) uses criteria that are based on performance and patient
outcomes where feasible and appropriate;
(B) includes criteria that are directed specifically at
meeting the needs of at-risk populations and covered
individuals with chronic conditions or severe illnesses,
including gender-specific criteria and pediatric-specific
criteria where available and appropriate;
(C) includes methods for informing covered individuals of
the benefit of preventive care and what specific benefits
with respect to preventive care are covered under the plan or
coverage; and
(D) makes available to the public a description of the
criteria used under subparagraph (A).
(5) System for identifying.--The program has procedures for
identifying possible quality concerns by providers and
enrollees and for remedial actions to correct quality
problems, including written procedures for responding to
concerns and taking appropriate corrective action.
(6) Data analysis.--The program provides, using data that
include the data collected under section 112, for an analysis
of the plan's or issuer's performance on quality measures.
(7) Drug utilization review.--The program provides for a
drug utilization review program which--
(A) encourages appropriate use of prescription drugs by
participants, beneficiaries, and enrollees and providers, and
(B) takes appropriate action to reduce the incidence of
improper drug use and adverse drug reactions and
interactions.
(c) Deeming.--For purposes of subsection (a), the
requirements of--
(1) subsection (b) (other than paragraph (5)) are deemed to
be met with respect to a health insurance issuer that is a
qualified health maintenance organization (as defined in
section 1310(c) of the Public Health Service Act); or
(2) subsection (b) are deemed to be met with respect to a
health insurance issuer that is accredited by a national
accreditation organization that the Secretary certifies as
applying, as a condition of certification, standards at least
a stringent as those required for a quality improvement
program under subsection (b).
(d) Variation Permitted.--The Secretary may provide for
variations in the application of the requirements of this
section to group health plans and health insurance issuers
based upon differences in the delivery system among such
plans and issuers as the Secretary deems appropriate.
(e) Consultation in Medical Policies.--A group health plan,
and health insurance issuer that offers health insurance
coverage, shall consult with participating physicians (if
any) regarding the plan's or issuer's medical policy,
quality, and medical management procedures.
Subtitle C--Patient Protection Standards
SEC. 121. EMERGENCY SERVICES.
(a) Coverage of Emergency Services.--
(1) In general.--If a group health plan, or health
insurance coverage offered by a health insurance issuer,
provides any benefits with respect to emergency services (as
defined in paragraph (2)(B)), the plan or issuer shall cover
emergency services furnished under the plan or coverage--
(A) without the need for any prior authorization
determination;
(B) whether or not the health care provider furnishing such
services is a participating provider with respect to such
services;
(C) in a manner so that, if such services are provided to a
participant, beneficiary, or enrollee by a nonparticipating
health care provider--
(i) the participant, beneficiary, or enrollee is not liable
for amounts that exceed the amounts of liability that would
be incurred if the services were provided by a participating
health care provider, and
(ii) the plan or issuer pays an amount that is not less
than the amount paid to a participating health care provider
for the same services; and
(D) without regard to any other term or condition of such
plan or coverage (other than exclusion or coordination of
benefits, or an affiliation or waiting period, permitted
under section 2701 of the Public Health Service Act, section
701 of the Employee Retirement Income Security Act of 1974,
or section 9801 of the Internal Revenue Code of 1986, and
other than applicable cost-sharing).
(2) Definitions.--In this section:
(A) Emergency medical condition based on prudent layperson
standard.--The term ``emergency medical condition'' means a
medical condition manifesting itself by acute symptoms of
sufficient severity (including severe pain) such that a
prudent layperson, who possesses an average knowledge of
health and medicine, could reasonably expect the absence of
immediate medical attention to result in a condition
described in clause (i), (ii), or (iii) of section
1867(e)(1)(A) of the Social Security Act.
(B) Emergency services.--The term ``emergency services''
means--
(i) a medical screening examination (as required under
section 1867 of the Social Security Act) that is within the
capability of the emergency department of a hospital,
including ancillary services routinely available to the
emergency department to evaluate an emergency medical
condition (as defined in subparagraph (A)), and
(ii) within the capabilities of the staff and facilities
available at the hospital, such further medical examination
and treatment as are required under section 1867 of such Act
to stabilize the patient.
(b) Reimbursement for Maintenance Care and Post-
Stabilization Care.--In the case of services (other than
emergency services) for which benefits are available under a
group health plan, or under health insurance coverage offered
by a health insurance issuer, the plan or issuer shall
provide for reimbursement with respect to such services
provided to a participant, beneficiary, or enrollee other
than through a participating health care provider in a manner
consistent with subsection (a)(1)(C) if the services are
maintenance care or post-stabilization care covered under the
guidelines established under section 1852(d)(2) of the Social
Security Act (relating to promoting efficient and timely
coordination of appropriate maintenance and post-
stabilization care of an enrollee after an enrollee has been
determined to be stable), in accordance with regulations
established to carry out such section.
SEC. 122. ENROLLEE CHOICE OF HEALTH PROFESSIONALS AND
PROVIDERS.
(a) Choice of Personal Health Professional.--
(1) Primary Care.--A group health plan, and a health
insurance issuer that offers health insurance coverage, shall
permit each participant, beneficiary, and enrollee--
(A) to receive primary care from any participating primary
care provider who is available to accept such individual, and
(B) in the case of a participant, beneficiary, or enrollee
who has a child who is also covered under the plan or
coverage, to designate a participating physician who
specializes in pediatrics as the child's primary care
provider.
(2) Specialists.--
(A) In general.--Subject to subparagraph (B), a group
health plan and a health insurance issuer that offers health
insurance coverage shall permit each participant,
beneficiary, or enrollee to receive medically necessary or
appropriate specialty care, pursuant to appropriate referral
procedures, from any qualified participating health care
provider who is available to accept such individual for such
care.
(B) Limitation.--Subparagraph (A) shall not apply to
specialty care if the plan or issuer clearly informs
participants, beneficiaries, and enrollees of the limitations
on choice of participating providers with respect to such
care.
(b) Specialized Services.--
(1) Obstetrical and gynecological care.--
(A) In general.--If a group health plan, or a health
insurance issuer in connection with the provision of health
insurance coverage, requires or provides for a participant,
beneficiary, or enrollee to designate a participating primary
care provider, and an individual who is female has not
designated a participating physician specializing in
obstetrics and gynecology as a primary care provider, the
plan or issuer--
(i) may not require authorization or a referral by the
individual's primary care provider or otherwise for coverage
of routine gynecological care (such as preventive women's
health examinations) and pregnancy-related services provided
by a participating health care professional who specializes
in obstetrics and gynecology to the extent such care is
otherwise covered, and
(ii) may treat the ordering of other gynecological care by
such a participating physician as the authorization of the
primary care provider with respect to such care under the
plan or coverage.
[[Page S9583]]
(B) Construction.--Nothing in subparagraph (A)(ii) shall
waive any requirements of coverage relating to medical
necessity or appropriateness with respect to coverage of
gynecological care so ordered.
(2) Specialty care.--
(A) Specialty care for covered services.--
(i) In general.--If--
(I) an individual is a participant or beneficiary under a
group health plan or an enrollee who is covered under health
insurance coverage offered by a health insurance issuer,
(II) the individual has a condition or disease of
sufficient seriousness and complexity to require treatment by
a specialist, and
(III) benefits for such treatment are provided under the
plan or coverage,
the plan or issuer shall make or provide for a referral to a
specialist who is available and accessible to provide the
treatment for such condition or disease.
(ii) Specialist defined.--For purposes of this paragraph,
the term ``specialist'' means, with respect to a condition, a
health care practitioner, facility, or center (such as a
center of excellence) that has adequate expertise through
appropriate training and experience (including, in the case
of a child, appropriate pediatric expertise) to provide high
quality care in treating the condition.
(iii) Care under referral.--A group health plan or health
insurance issuer may require that the care provided to an
individual pursuant to such referral under clause (i) be--
(I) pursuant to a treatment plan, only if the treatment
plan is developed by the specialist and approved by the plan
or issuer, in consultation with the designated primary care
provider or specialist and the individual (or the
individual's designee), and
(II) in accordance with applicable quality assurance and
utilization review standards of the plan or issuer.
Nothing in this paragraph shall be construed as preventing
such a treatment plan for an individual from requiring a
specialist to provide the primary care provider with regular
updates on the specialty care provided, as well as all
necessary medical information.
(iv) Referrals to participating providers.--A group health
plan or health insurance issuer is not required under clause
(i) to provide for a referral to a specialist that is not a
participating provider, unless the plan or issuer does not
have an appropriate specialist that is available and
accessible to treat the individual's condition and that is a
participating provider with respect to such treatment.
(v) Treatment of nonparticipating providers.--If a plan or
issuer refers an individual to a nonparticipating specialist
pursuant to clause (i), services provided pursuant to the
approved treatment plan (if any) shall be provided at no
additional cost to the individual beyond what the individual
would otherwise pay for services received by such a
specialist that is a participating provider.
(B) Specialists as primary care providers.--
(i) In general.--A group health plan, or a health insurance
issuer, in connection with the provision of health insurance
coverage, shall have a procedure by which an individual who
is a participant, beneficiary, or enrollee and who has an
ongoing special condition (as defined in clause (iii)) may
receive a referral to a specialist for such condition who
shall be responsible for and capable of providing and
coordinating the individual's primary and specialty care. If
such an individual's care would most appropriately be
coordinated by such a specialist, such plan or issuer shall
refer the individual to such specialist.
(ii) Treatment as primary care provider.--Such specialist
shall be permitted to treat the individual without a referral
from the individual's primary care provider and may authorize
such referrals, procedures, tests, and other medical services
as the individual's primary care provider would otherwise be
permitted to provide or authorize, subject to the terms of
the treatment plan (referred to in subparagraph (A)(iii)(I)).
(iii) Ongoing special condition defined.--In this
subparagraph, the term ``special condition'' means a
condition or disease that--
(I) is life-threatening, degenerative, or disabling, and
(II) requires specialized medical care over a prolonged
period of time.
(iv) Terms of referral.--The provisions of clauses (iii)
through (v) of subparagraph (A) apply with respect to
referrals under clause (i) of this subparagraph in the same
manner as they apply to referrals under subparagraph (A)(i).
(C) Standing referrals.--
(i) In general.--A group health plan, and a health
insurance issuer in connection with the provision of health
insurance coverage, shall have a procedure by which an
individual who is a participant, beneficiary, or enrollee and
who has a condition that requires ongoing care from a
specialist may receive a standing referral to such specialist
for treatment of such condition. If the plan or issuer, or if
the primary care provider in consultation with the medical
director of the plan or issuer and the specialist (if any),
determines that such a standing referral is appropriate, the
plan or issuer shall make such a referral to such a
specialist.
(ii) Terms of referral.--The provisions of clauses (iii)
through (v) of subparagraph (A) apply with respect to
referrals under clause (i) of this subparagraph in the same
manner as they apply to referrals under subparagraph (A)(i).
(c) Continuity of Care.--
(1) In general.--
(A) Termination of provider.--If a contract between a group
health plan, or a health insurance issuer in connection with
the provision of health insurance coverage, and a health care
provider is terminated (as defined in subparagraph (C)), 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, beneficiary, or enrollee in the plan or
coverage is undergoing a course of treatment from the
provider at the time of such termination, the plan or issuer
shall--
(i) notify the individual on a timely basis of such
termination, and
(ii) subject to paragraph (3), permit the individual to
continue or be covered with respect to the course of
treatment with the provider during a transitional period
(provided under paragraph (2)) if the plan or issuer is
notified orally or in writing of the facts and circumstances
concerning the course of treatment.
(B) Treatment of termination of contract with health
insurance issuer.--If a contract for the provision of health
insurance coverage between a group health plan and a health
insurance issuer is terminated and, as a result of such
termination, coverage of services of a health care provider
is terminated with respect to an individual, the provisions
of subparagraph (A) (and the succeeding provisions of this
section) shall apply under the group health plan in the same
manner as if there had been a direct contract between the
group health plan and the provider that had been terminated,
but only with respect to benefits that are covered under the
group health plan after the contract termination.
(C) Termination.--In this section, the term ``terminated''
includes, with respect to a contract, the expiration or
nonrenewal of the contract, but does not include a
termination of the contract by the plan or issuer for failure
to meet applicable quality standards or for fraud.
(2) Transitional period.--
(A) In general.--Except as provided in subparagraphs (B)
through (D), the transitional period under this subsection
shall extend for at least 90 days from the date of the notice
described in paragraph (1)(A)(i) of the provider's
termination.
(B) Institutional care.--The transitional period under this
subsection for institutional or inpatient care from a
provider shall extend until the discharge or termination of
the period of institutionalization and also shall include
institutional care provided within a reasonable time of the
date of termination of the provider status.
(C) Pregnancy.--If--
(i) a participant, beneficiary, or enrollee has entered the
second trimester of pregnancy at the time of a provider's
termination of participation, and
(ii) the provider was treating the pregnancy before date of
the termination,
the transitional period under this subsection with respect to
provider's treatment of the pregnancy shall extend through
the provision of post-partum care directly related to the
delivery.
(D) Terminal illness.--If--
(i) a participant, beneficiary, or enrollee was determined
to be terminally ill (as determined under section
1861(dd)(3)(A) of the Social Security Act) at the time of a
provider's termination of participation, and
(ii) the provider was treating the terminal illness before
the date of termination,
the transitional period under this subsection shall extend
for the remainder of the individual's life for care directly
related to the treatment of the terminal illness, but in no
case is the transitional period required to extend for longer
than 180 days.
(3) Permissible terms and conditions.--A group health plan
or health insurance issuer may condition coverage of
continued treatment by a provider under paragraph (1)(A)(ii)
upon the provider agreeing to the following terms and
conditions:
(A) The provider agrees to accept reimbursement from the
plan or issuer 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 paragraph (1)(B), at the rates applicable under
the replacement plan or issuer after the date of the
termination of the contract with the health insurance issuer)
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 paragraph
(1)(A) had not been terminated.
(B) The provider agrees to adhere to the quality assurance
standards of the plan or issuer responsible for payment under
subparagraph (A) and to provide to such plan or issuer
necessary medical information related to the care provided.
(C) The provider agrees otherwise to adhere to such plan's
or issuer's policies and procedures, including procedures
regarding utilization review and referrals, and obtaining
prior authorization and providing services pursuant to a
treatment plan (if any) approved by the plan or issuer.
(4) Construction.--Nothing in this subsection shall be
construed to require the coverage of benefits which would not
have been covered if the provider involved remained a
participating provider.
[[Page S9584]]
(d) Protection Against Involuntary Disenrollment Based on
Certain Conditions.--
(1) In general.--Subject to paragraph (2), a group health
plan and a health insurance issuer in connection with the
provision of health insurance coverage may not disenroll an
individual under the plan or coverage because the
individual's behavior is considered disruptive, unruly,
abusive, or uncooperative to the extent that the individual's
continued enrollment under the coverage seriously impairs the
plan's or issuer's ability to furnish covered services if the
circumstances for the individual's behavior is directly
related to diminished mental capacity, severe and persistent
mental illness, or a serious childhood mental and emotional
disorder.
(2) Exception.--Paragraph (1) shall not apply if the
behavior engaged in directly threatens bodily injury to any
person.
(e) General Access.--
(1) In general.--Each group health plan, and each health
insurance issuer offering health insurance coverage, that
provides benefits, in whole or in part, through participating
health care providers shall have (in relation to the
coverage) a sufficient number, distribution, and variety of
qualified participating health care providers to ensure that
all covered health care services, including specialty
services, will be available and accessible in a timely manner
to all participants, beneficiaries, and enrollees under the
plan or coverage.
(2) Treatment of Certain Providers.--The qualified health
care providers under paragraph (1) may include Federally
qualified health centers, rural health clinics, migrant
health centers, high-volume, disproportionate share
hospitals, and other essential community providers located in
the service area of the plan or issuer and shall include such
providers if necessary to meet the standards established to
carry out such subsection.
SEC. 123. ACCESS TO APPROVED SERVICES.
(a) Coverage for Individuals Participating in Approved
Clinical Trials.--
(1) Coverage.--
(A) In general.--If a group health plan, or health
insurance issuer that is providing health insurance coverage,
provides coverage to a qualified individual (as defined in
paragraph (2)), the plan or issuer--
(i) may not deny the individual participation in the
clinical trial referred to in paragraph (2)(B);
(ii) subject to paragraph (3), may not deny (or limit or
impose additional conditions on) the coverage of routine
patient costs for items and services furnished in connection
with participation in the trial; and
(iii) may not discriminate against the individual on the
basis of the enrollee's participation in such trial.
(B) Exclusion of certain costs.--For purposes of
subparagraph (A)(ii), routine patient costs do not include
the cost of the tests or measurements conducted primarily for
the purpose of the clinical trial involved.
(C) Use of in-network providers.--If one or more
participating providers is participating in a clinical trial,
nothing in subparagraph (A) shall be construed as preventing
a plan or issuer from requiring that a qualified individual
participate in the trial through such a participating
provider if the provider will accept the individual as a
participant in the trial.
(2) Qualified individual defined.--For purposes of
paragraph (1), the term ``qualified individual'' means an
individual who is a participant or beneficiary in a group
health plan, or who is an enrollee under health insurance
coverage, and who meets the following conditions:
(A)(i) The individual has a life-threatening or serious
illness for which no standard treatment is effective.
(ii) The individual is eligible to participate in an
approved clinical trial according to the trial protocol with
respect to treatment of such illness.
(iii) The individual's participation in the trial offers
meaningful potential for significant clinical benefit for the
individual.
(B) Either--
(i) the referring physician is a participating health care
professional and has concluded that the individual's
participation in such trial would be appropriate based upon
the individual meeting the conditions described in
subparagraph (A); or
(ii) the participant, beneficiary, or enrollee provides
medical and scientific information establishing that the
individual's participation in such trial would be appropriate
based upon the individual meeting the conditions described in
subparagraph (A).
(3) Payment.--
(A) In general.--Under this subsection a group health plan
or health insurance issuer shall provide for payment for
routine patient costs described in paragraph (1)(A) but is
not required to pay for costs of items and services that are
reasonably expected (as determined by the Secretary) to be
paid for by the sponsors of an approved clinical trial.
(B) Payment rate.--In the case of covered items and
services provided by--
(i) a participating provider, the payment rate shall be at
the agreed upon rate, or
(ii) a nonparticipating provider, the payment rate shall be
at the rate the plan or issuer would normally pay for
comparable services under subparagraph (A).
(4) Approved clinical trial defined.--
(A) In general.--In this subsection, the term ``approved
clinical trial'' means a clinical research study or clinical
investigation approved and funded (which may include funding
through in-kind contributions) by one or more of the
following:
(i) The National Institutes of Health.
(ii) A cooperative group or center of the National
Institutes of Health.
(iii) Either of the following if the conditions described
in subparagraph (B) are met:
(I) The Department of Veterans Affairs.
(II) The Department of Defense.
(B) Conditions for departments.--The conditions described
in this subparagraph, for a study or investigation conducted
by a Department, are that the study or investigation has been
reviewed and approved through a system of peer review that
the Secretary determines--
(i) to be comparable to the system of peer review of
studies and investigations used by the National Institutes of
Health, and
(ii) assures unbiased review of the highest scientific
standards by qualified individuals who have no interest in
the outcome of the review.
(5) Construction.--Nothing in this subsection shall be
construed to limit a plan's or issuer's coverage with respect
to clinical trials.
(b) Access to Prescription Drugs.--
(1) In General.--If a group health plan, or health
insurance issuer that offers health insurance coverage,
provides benefits with respect to prescription drugs but the
coverage limits such benefits to drugs included in a
formulary, the plan or issuer shall--
(A) ensure participation of participating physicians and
pharmacists in the development of the formulary; and
(B) disclose to providers and, disclose upon request under
section 111(c)(5) to participants, beneficiaries, and
enrollees, the nature of the formulary restrictions; and
(C) consistent with the standards for a utilization review
program under section 102(a), provide for exceptions from the
formulary limitation when a non-formulary alternative is
medically indicated.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a group health plan (or health
insurance issuer in connection with health insurance
coverage) to provide any coverage of prescription drugs or as
preventing such a plan or issuer from negotiating higher
cost-sharing in the case a non-formulary alternative is
provided under paragraph (1)(C).
SEC. 124. NONDISCRIMINATION IN DELIVERY OF SERVICES.
(a) Application to Delivery of Services.--Subject to
subsection (b), a group health plan, and health insurance
issuer in relation to health insurance coverage, may not
discriminate against a participant, beneficiary, or enrollee
in the delivery of health care services consistent with the
benefits covered under the plan or coverage or as required by
law based on race, color, ethnicity, national origin,
religion, sex, age, mental or physical disability, sexual
orientation, genetic information, or source of payment.
(b) Construction.--Nothing in subsection (a) shall be
construed as relating to the eligibility to be covered, or
the offering (or guaranteeing the offer) of coverage, under a
plan or health insurance coverage, the application of any
pre-existing condition exclusion consistent with applicable
law, or premiums charged under such plan or coverage. To the
extent that health care providers are permitted under State
and Federal law to prioritize the admission or treatment of
patients based on such patients' individual religious
affiliation, group health plans and health insurance issuers
may reflect those priorities in referring patients to such
providers.
SEC. 125. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL
COMMUNICATIONS.
(a) In General.--An organization on behalf of a group
health plan (as described in subsection (a)(2)) or a health
insurance issuer shall not penalize (financially or
otherwise) a health care professional for advocating on
behalf of his or her patient or for providing information or
referral for medical care (as defined in section 2791(a)(2)
of the Public Health Service Act) consistent with the health
care needs of the patient and with the code of ethical
conduct, professional responsibility, conscience, medical
knowledge, and license of the health care professional.
(b) Construction.--Nothing in subsection (a) shall be
construed as requiring a health insurance issuer or a group
health plan to pay for medical care not otherwise paid for or
covered by the plan provided by nonparticipating health care
professionals, except in those instances and to the extent
that the issuer or plan would normally pay for such medical
care.
(c) Assistance and Support.--A group health plan or a
health insurance issuer shall not prohibit or otherwise
restrict a health care professional from providing letters of
support to, or in any way assisting, enrollees who are
appealing a denial, termination, or reduction of service in
accordance with the procedures under subtitle A.
SEC. 126. PROVIDER INCENTIVE PLANS.
(a) Prohibition of Transfer of Indemnification.--
(1) In general.--No contract or agreement between a group
health plan or health insurance issuer (or any agent acting
on behalf of such a plan or issuer) and a health care
provider shall contain any provision purporting to transfer
to the health care provider by indemnification or otherwise
any liability relating to activities, actions, or omissions
of the plan, issuer, or agent (as opposed to the provider).
[[Page S9585]]
(2) Nullification.--Any contract or agreement provision
described in paragraph (1) shall be null and void.
(b) Prohibition of Improper Physician Incentive Plans.--
(1) In general.--A group health plan and a health insurance
issuer offering health insurance coverage may not operate any
physician incentive plan (as defined in subparagraph (B) of
section 1876(i)(8) of the Social Security Act) unless the
requirements described in subparagraph (A) of such section
are met with respect to such a plan.
(2) Application.--For purposes of carrying out paragraph
(1), any reference in section 1876(i)(8) of the Social
Security Act to the Secretary, an eligible organization, or
an individual enrolled with the organization shall be treated
as a reference to the applicable authority, a group health
plan or health insurance issuer, respectively, and a
participant, beneficiary, or enrollee with the plan or
organization, respectively.
SEC. 127. PROVIDER PARTICIPATION.
(a) In General.--A group health plan and a health insurance
issuer that offers health insurance coverage shall, if it
provides benefits through participating health care
professionals, have a written process for the selection of
participating health care professionals under the plan or
coverage. Such process shall include--
(1) minimum professional requirements;
(2) providing notice of the rules regarding participation;
(3) providing written notice of participation decisions
that are adverse to professionals; and
(4) providing a process within the plan or issuer for
appealing such adverse decisions, including the presentation
of information and views of the professional regarding such
decision.
(b) Verification of Background.--Such process shall include
verification of a health care provider's license and a
history of suspension or revocation.
(c) Restriction.--Such process shall not use a high-risk
patient base or location of a provider in an area with
residents with poorer health status as a basis for excluding
providers from participation.
(d) General Nondiscrimination.--
(1) In general.--Subject to paragraph (2), such process
shall not discriminate with respect to selection of a health
care professional to be a participating health care provider,
or with respect to the terms and conditions of such
participation, based on the professional's race, color,
religion, sex, national origin, age, sexual orientation, or
disability (consistent with the Americans with Disabilities
Act of 1990).
(2) Rules.--The appropriate Secretary may establish such
definitions, rules, and exceptions as may be appropriate to
carry out paragraph (1), taking into account comparable
definitions, rules, and exceptions in effect under
employment-based nondiscrimination laws and regulations that
relate to each of the particular bases for discrimination
described in such paragraph.
SEC. 128. REQUIRED COVERAGE FOR APPROPRIATE HOSPITAL STAY FOR
MASTECTOMIES AND LYMPH NODE DISSECTIONS FOR THE
TREATMENT OF BREAST CANCER; REQUIRED COVERAGE
FOR RECONSTRUCTIVE SURGERY FOLLOWING
MASTECTOMIES.
(a) Coverage of Inpatient Care for Surgical Treatment of
Breast Cancer.--
(1) In general.--A group health plan, and a health
insurance issuer providing health insurance coverage, 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 generally accepted principles of professional
medical practice, in consultation with the patient, to be
medically necessary or 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
necessary or appropriate.
(b) Coverage of Reconstructive Surgery Following
Mastectomies.--A group health plan, and a health insurance
issuer providing health insurance coverage, 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 or enrollee upon enrollment and
annually thereafter.
(c) 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 group health plan or health
insurance 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 or
health insurance coverage, except that the provision of such
inpatient stay benefits shall not be contingent upon such
notification.
(d) Prohibitions.--A group health plan and a health
insurance issuer offering health insurance coverage may not--
(1) deny to a patient eligibility, or continued
eligibility, to enroll or to renew coverage under the terms
of the plan or coverage, 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, beneficiary, or enrollee 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, beneficiary, or enrollee in a
manner inconsistent with this section; and
(5) subject to subsection (e)(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.
(e) Rules of Construction.--
(1) In general.--Nothing in this section shall be construed
to require a patient who is a participant, beneficiary, or
enrollee--
(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 health insurance
coverage, 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 from negotiating the level and type
of reimbursement with a provider for care provided in
accordance with this section.
Subtitle D--Enhanced Enforcement Authority
SEC. 141. INVESTIGATIONS AND REPORTING AUTHORITY, INJUNCTIVE
RELIEF AUTHORITY, AND INCREASED CIVIL MONEY
PENALTY AUTHORITY FOR SECRETARY OF HEALTH AND
HUMAN SERVICES FOR VIOLATIONS OF PATIENT
PROTECTION STANDARDS.
(a) Investigations and Reporting Authority.--
(1) In general.--For purposes of carrying out sections
2722(b) and 2761(b) of the Public Health Service Act with
respect to enforcement of the provisions of sections 2706 and
2752, respectively, of such Act (as added by title II of this
Act)--
(A) the Secretary of Health and Human Services shall have
the same authorities with respect to compelling health
insurance issuers to produce information and to conducting
investigations in cases of violations of such provisions as
the Secretary of Labor has under section 504 of the Employee
Retirement Income Security Act of 1974 with respect to
violations of title I of such Act; and
(B) section 504(c) of the Employee Retirement Income
Security Act of 1974 shall apply to investigations conducted
under paragraph (1) in the same manner as it applies to
investigations conducted under title I of such Act.
(2) Reporting authority.--In exercising authority under
paragraph (1), the Secretary may require--
(A) States that have indicated an intention to assume
authority under section 2722(a)(1) or 2761(a) of the Public
Health Service Act to report to the Secretary on enforcement
efforts undertaken to assure compliance with the requirements
of sections 2706 and 2752, respectively, of such Act; and
(B) health insurance issuers to submit reports to assure
compliance with such requirements.
(b) Authority for Injunctive Relief.--In addition to the
authority referred to in subsection (a), the Secretary of
Health and Human Services has the same authority with respect
to enforcement of the provisions of this title as the
Secretary of Labor has under subsection (a)(5) of section 502
of the Employee Retirement Income Security Act of 1974 (as
applied without regard to subsection (b) of that section) and
the related provisions of part 5 of subtitle B of title I of
[[Page S9586]]
such Act with respect to enforcement of such title I of such
Act.
(c) Increase in Civil Money Penalties.--
(1) In general.--In the case of a civil money penalty that
may be imposed under section 2722(b)(2) or 2761(b) of the
Public Health Service Act with respect to a failure to meet
the provisions of sections 2706 and 2752, respectively, of
such Act, the maximum amount of penalty otherwise provided
under section 2722(b)(2)(C)(i) of such Act may,
notwithstanding the amounts specified in such section, and
subject to paragraph (2), be up to the greatest of the
following:
(A) Failures involving unreasonable denial or delay in
benefits impacting on life or health.--In the case of a
failure that results in an unreasonable denial or delay in
benefits that has seriously jeopardized (or has substantial
likelihood of seriously jeopardizing) the individual's life,
health, or ability to regain or maintain maximum function or
(in the case of a child under the age of 6) development, the
greater of the following:--
(i) Pattern or practice failure.--If the failure reflects a
pattern or practice of wrongful conduct, $250,000, plus the
amount (if any) determined under paragraph (2).
(ii) Other failures.--In the case of a failure that does
not reflect a pattern or practice of wrongful conduct,
$50,000 for each individual involved, plus the amount (if
any) determined under paragraph (2).
(B) Other failures.--In the case of a failure not described
in subparagraph (A), the greater of the following:
(i) Pattern and practice failures.--In the case of a
failure that reflects a pattern or practice of wrongful
conduct $50,000, plus the amount (if any) determined under
paragraph (2).
(ii) Other failures.--In the case of a failure that does
not reflect a pattern or practice of wrongful conduct,
$10,000 for each individual involved, plus the amount (if
any) determined under paragraph (2).
(2) Continuing failure without correction.--In the case of
a failure which is not corrected within the first week
beginning with the date on which the failure is established,
the maximum amount of the penalty under paragraph (1) shall
be increased by $10,000 for each full succeeding week in
which the failure is not so corrected.
(d) Authorization of Appropriations.--In addition to any
other amounts authorized to be appropriated, there are
authorized to be appropriated to the Secretary of Health and
Human Services such sums as may be necessary to carry out
this section.
SEC. 142. AUTHORITY FOR SECRETARY OF LABOR TO IMPOSE CIVIL
PENALTIES FOR VIOLATIONS OF PATIENT PROTECTION
STANDARDS.
(a) In General.--Section 502(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132(c)) is amended by
redesignating paragraphs (6) and (7) as paragraphs (7) and
(8), respectively, and by inserting after paragraph (5) the
following new paragraph:
``(6)(A) The Secretary may assess a civil penalty against a
person acting in the capacity of a fiduciary of a group
health plan (as defined in 733(a)) so as to cause a violation
of section 713.
``(B) Subject to subparagraph (C), the maximum amount which
may be assessed under subparagraph (A) is the greatest of the
following:
``(i) In the case of a failure that results in an
unreasonable denial or delay in benefits that seriously
jeopardized (or has substantial likelihood of seriously
jeopardizing) the individual's life, health, or ability to
regain or maintain maximum function or (in the case of a
child under the age of 6) development, the greater of the
following:--
``(I) If the failure reflects a pattern or practice of
wrongful conduct, $250,000, plus the amount (if any)
determined under subparagraph (C).
``(II) In the case of a failure that does not reflect a
pattern or practice of wrongful conduct, $50,000 for each
individual involved, plus the amount (if any) determined
under subparagraph (C).
``(ii) In the case of a failure not described in clause
(i), the greater of the following:
``(I) In the case of a failure that reflects a pattern or
practice of wrongful conduct $50,000, plus the amount (if
any) determined under subparagraph (C).
``(II) In the case of a failure that does not reflect a
pattern or practice of wrongful conduct, $10,000 for each
individual involved, plus the amount (if any) determined
under subparagraph (C).
``(C) In the case of a failure which is not corrected
within the first week beginning with the date on which the
failure is established, the maximum amount of the penalty
under subparagraph (B) shall be increased by $10,000 for each
full succeeding week in which the failure is not so
corrected.''.
(b) Conforming Amendment.--Section 502(a)(6) of such Act
(29 U.S.C. 1132(a)(6)) is amended by striking ``paragraph
(2), (4), (5), or (6)'' and inserting ``paragraph (2), (4),
(5), (6), or (7)''.
(c) Authorization of Appropriations.--In addition to any
other amounts authorized to be appropriated, there are
authorized to be appropriated to the Secretary of Labor such
sums as may be necessary to carry out the amendments made by
this section.
TITLE II--PATIENT PROTECTION STANDARDS UNDER PUBLIC HEALTH SERVICE ACT
SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH
INSURANCE COVERAGE.
(a) In General.--Subpart 2 of part A of title XXVII of the
Public Health Service Act is amended by adding at the end the
following new section:
``SEC. 2706. PATIENT PROTECTION STANDARDS.
``(a) In General.--Each group health plan shall comply with
patient protection requirements under title I of the
Promoting Responsible Managed Care Act of 1998, and each
health insurance issuer shall comply with patient protection
requirements under such title with respect to group health
insurance coverage it offers, and such requirements shall be
deemed to be incorporated into this subsection.
``(b) Notice.--A group health plan shall comply with the
notice requirement under section 711(d) of the Employee
Retirement Income Security Act of 1974 with respect to the
requirements referred to in subsection (a) and a health
insurance issuer shall comply with such notice requirement as
if such section applied to such issuer and such issuer were a
group health plan.''.
(b) Conforming Amendment.--Section 2721(b)(2)(A) of such
Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting
``(other than section 2706)'' after ``requirements of such
subparts''.
(c) Reference to Enhanced Enforcement Authority.--For
provisions providing for enhanced authority to enforce the
patient protection requirements of title I under the Public
Health Service Act, see section 141.
SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE
COVERAGE.
Part B of title XXVII of the Public Health Service Act is
amended by inserting after section 2751 the following new
section:
``SEC. 2752. PATIENT PROTECTION STANDARDS.
``(a) In General.--Each health insurance issuer shall
comply with patient protection requirements under title I of
the Promoting Responsible Managed Care Act of 1998 with
respect to individual health insurance coverage it offers,
and such requirements shall be deemed to be incorporated into
this subsection.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 711(d)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements of such title as if such section
applied to such issuer and such issuer were a group health
plan.''.
TITLE III--PATIENT PROTECTION STANDARDS UNDER THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974
SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO
GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE
COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974.
(a) In General.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 is
amended by adding at the end the following new section:
``SEC. 713. PATIENT PROTECTION STANDARDS.
``(a) In General.--Subject to subsection (b), a group
health plan (and a health insurance issuer offering group
health insurance coverage in connection with such a plan)
shall comply with the requirements of title I of the
Promoting Responsible Managed Care Act of 1998 (as in effect
as of the date of the enactment of such Act), and such
requirements shall be deemed to be incorporated into this
subsection.
``(b) Plan Satisfaction of Certain Requirements.--
``(1) Satisfaction of certain requirements through
insurance.--For purposes of subsection (a), insofar as a
group health plan provides benefits in the form of health
insurance coverage through a health insurance issuer, the
plan shall be treated as meeting the following requirements
of title I of the Promoting Responsible Managed Care Act of
1998 with respect to such benefits and not be considered as
failing to meet such requirements because of a failure of the
issuer to meet such requirements so long as the plan sponsor
or its representatives did not cause such failure by the
issuer:
``(A) Section 121 (relating to access to emergency care).
``(B) Section 122 (relating to choice of providers).
``(C) Section 122(b) (relating to specialized services).
``(D) Section 122(c)(1)(A) (relating to continuity in case
of termination of provider contract) and section 122(c)(1)(B)
(relating to continuity in case of termination of issuer
contract), but only insofar as a replacement issuer assumes
the obligation for continuity of care.
``(E) Section 123(a) (relating to coverage for individuals
participating in approved clinical trials.)
``(F) Section 123(b) (relating to access to needed
prescription drugs).
``(G) Section 122(e) (relating to adequacy of provider
network).
``(H) Subtitle B (relating to consumer information).
``(2) Information.--With respect to information required to
be provided or made available under section 111 of such Act,
in the case of a group health plan that provides benefits in
the form of health insurance coverage through a health
insurance issuer, the Secretary shall determine the
circumstances under which the plan is not required to provide
or make available the information (and is not liable for the
issuer's failure to provide or make available the
information), if the issuer is obligated to provide and make
[[Page S9587]]
available (or provides and makes available) such information.
``(3) Grievance and internal appeals.--With respect to the
grievance system and internal appeals process required to be
established under sections 102 and 103 of such Act, in the
case of a group health plan that provides benefits in the
form of health insurance coverage through a health insurance
issuer, the Secretary shall determine the circumstances under
which the plan is not required to provide for such system and
process (and is not liable for the issuer's failure to
provide for such system and process), if the issuer is
obligated to provide for (and provides for) such system and
process.
``(4) External appeals.--Pursuant to rules of the
Secretary, insofar as a group health plan enters into a
contract with a qualified external appeal entity for the
conduct of external appeal activities in accordance with
section 106 of such Act, the plan shall be treated as meeting
the requirement of such section and is not liable for the
entity's failure to meet any requirements under such section.
``(5) Application to prohibitions.--Pursuant to rules of
the Secretary, if a health insurance issuer offers health
insurance coverage in connection with a group health plan and
takes an action in violation of any of the following sections
of such Act, the group health plan shall not be liable for
such violation unless the plan caused such violation:
``(A) Section 124 (relating to nondiscrimination in
delivery of services).
``(B) Section 125 (relating to prohibition of interference
with certain medical communications).
``(C) Section 126 (relating to provider incentive plans).
``(D) Section 102(b) (relating to providing medically
necessary care).
``(6) Construction.--Nothing in this subsection shall be
construed to affect or modify the responsibilities of the
fiduciaries of a group health plan under part 4 of subtitle
B.
(b) Satisfaction of ERISA Claims Procedure Requirement.--
Section 503 of such Act (29 U.S.C. 1133) is amended by
inserting ``(a)'' after ``Sec. 503.'' and by adding at the
end the following new subsection:
``(b) In the case of a group health plan (as defined in
section 733) compliance with the requirements of subtitle D
(and section 113) of title I of the Promoting Responsible
Managed Care Act of 1998 in the case of a claims denial shall
be deemed compliance with subsection (a) with respect to such
claims denial.''.
(c) Conforming Amendments.--(1) Section 732(a) of such Act
(29 U.S.C. 1185(a)) is amended by striking ``section 711''
and inserting ``sections 711 and 713''.
(2) The table of contents in section 1 of such Act is
amended by inserting after the item relating to section 712
the following new item:
``Sec. 713. Patient protection standards.''.
(3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is
amended by inserting ``(other than section 144(b))'' after
``part 7''.
(d) Reference to Enhanced Enforcement Authority.--For
provisions providing for enhanced authority to enforce the
patient protection requirements of title I under the Employee
Retirement Income Security Act of 1974, see section 142.
SEC. 302. ENFORCEMENT FOR ECONOMIC LOSS CAUSED BY COVERAGE
DETERMINATIONS.
(a) In General.--Section 502(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132), as amended by
section 142(a) of this Act, is amended by redesignating
paragraphs (7) and (8) as paragraphs (8) and (9),
respectively, and by inserting after paragraph (6) the
following new paragraph:
``(7)(A) In any case in which--
``(i) a coverage determination (as defined in section
101(a)(2) of the Promoting Responsible Managed Care Act of
1998) under a group health plan (as defined in section
503(b)(8)) is not made on a timely basis or is made on such a
basis but is not made in accordance with the terms of the
plan, this title, or title I of such Act, and
``(ii) a participant or beneficiary suffers injury
(including loss of life, health, or the ability to regain or
maintain maximum function or (in the case of a child under
the age of 6) development) as a result of such coverage
determination,
any person or persons who are responsible under the terms of
the plan for the making of such coverage determination are
liable to the aggrieved participant or beneficiary for the
amount of the economic loss suffered by the participant or
beneficiary caused by such coverage determination. Any
question of fact in any cause of action under this paragraph
shall be based on the preponderance of the evidence after de
novo review.
``(B) For purposes of subparagraph (A), the term `economic
loss' means any pecuniary loss (including the loss of
earnings or other benefits related to employment, medical
expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment
opportunities) caused by the coverage determination. Such
term does not include punitive damages or damages for pain
and suffering, inconvenience, emotional distress, mental
anguish, loss of consortium, injury to reputation,
humiliation, and other nonpecuniary losses.
``(C) Nothing in this paragraph shall be construed as
requiring exhaustion of administrative process in the case of
severe bodily injury or death.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to coverage determinations made on or after the date of
the enactment of this Act.
TITLE IV--PATIENT PROTECTION STANDARDS UNDER THE INTERNAL REVENUE CODE
OF 1986.
SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.
Subchapter B of chapter 100 of the Internal Revenue Code of
1986 (as amended by section 1531(a) of the Taxpayer Relief
Act of 1997) is amended--
(1) in the table of sections, by inserting after the item
relating to section 9812 the following new item:
``Sec. 9813. Standard relating to patient protection
standards.''; and
(2) by inserting after section 9812 the following:
``SEC. 9813. STANDARD RELATING TO PATIENT PROTECTION
STANDARDS.
``A group health plan shall comply with the requirements of
title I of the Promoting Responsible Managed Care Act of 1998
(as in effect as of the date of the enactment of such Act),
and such requirements shall be deemed to be incorporated into
this section.''.
TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION
SEC. 501. EFFECTIVE DATES.
(a) Group Health Coverage.--
(1) In general.--Subject to paragraph (2), the amendments
made by sections 201(a), 301, and 401 (and title I insofar as
it relates to such sections) shall apply with respect to
group health plans, and health insurance coverage offered in
connection with group health plans, for plan years beginning
on or after January 1, 1999 (in this section referred to as
the ``general effective date'') and also shall apply to
portions of plan years occurring on and after such date.
(2) Treatment of collective bargaining agreements.--In the
case of a group health plan maintained pursuant to 1 or more
collective bargaining agreements between employee
representatives and 1 or more employers ratified before the
date of enactment of this Act, the amendments made by
sections 201(a), 301, and 401 (and title I insofar as it
relates to such sections) shall not apply to plan years
beginning before the later of--
(A) the date on which the last collective bargaining
agreement relating to the plan terminates (determined without
regard to any extension thereof agreed to after the date of
enactment of this Act), or
(B) the general effective date.
For purposes of subparagraph (A), any plan amendment made
pursuant to a collective bargaining agreement relating to the
plan which amends the plan solely to conform to any
requirement added by this Act shall not be treated as a
termination of such collective bargaining agreement.
(b) Individual Health Insurance Coverage.--The amendments
made by section 202 shall apply with respect to individual
health insurance coverage offered, sold, issued, renewed, in
effect, or operated in the individual market on or after the
general effective date.
SEC. 502. COORDINATION IN IMPLEMENTATION.
Section 104(1) of Health Insurance Portability and
Accountability Act of 1996 is amended by striking ``this
subtitle (and the amendments made by this subtitle and
section 401)'' and inserting ``the provisions of part 7 of
subtitle B of title I of the Employee Retirement Income
Security Act of 1974, the provisions of parts A and C of
title XXVII of the Public Health Service Act, chapter 100 of
the Internal Revenue Code of 1986, and title I of the
Promoting Responsible Managed Care Act of 1998''.
____
PROMOTING RESPONSIBLE MANAGED CARE ACT OF 1998
Principles
Today, a majority of the U.S. population is enrolled in
some form of managed care--a system which has enabled
employers, insurers and taxpayers to achieve significant
savings in the delivery of health care services. However,
there is growing anxiety among many Americans that insurance
health plan accountants--not doctors--are determining what
services and treatments they receive. Congress has an
opportunity to enact legislation this year which will ensure
that patients receive the benefits and services to which they
are entitled, without compromising the savings and
coordination of care that can be achieved through managed
care. However, to ensure the most effective result,
legislation must embody the following principles:
It must be bipartisan and balanced.
It must offer all 161 million privately insured Americans--
not just those in self-funded ERISA plans--a floor of basic
federal patient protections.
It must establish credible federal enforcement remedies to
ensure that managed care plans play by the rules and that
individuals harmed by such entities are justly compensated.
It should encourage managed care plans to compete on the
basis of quality--not just price. ``Report card'' information
will provide consumers with the information they need to make
informed choices based on plan performance.
Summary
``The Promoting Responsible Managed Care Act of 1998''
blends the best features of both the Democratic and
Republican plans.
[[Page S9588]]
The legislation would restore public confidence in managed
care through a comprehensive set of policy changes that would
apply to all private health plans in the country. These
include strengthened federal enforcement to ensure managed
care plans play by the rules; compensation for individuals
harmed by the decisions of managed care plans; an independent
external system for processing complaints and appealing
adverse decisions; information requirements to allow
competition based on quality; and, a reasonable set of
patient protection standards to ensure patients have access
to appropriate medical care.
Scope of protection
Basic protections for all privately insured Americans.--All
private insurance plans would be required to meet basic
federal patient protections regardless of whether they are
regulated at the state or federal level. This approach
follows the blueprint established with the enactment of the
Health Insurance Portability and Accountability Act of 1996,
which allows states to build upon a basic framework of
federal protections.
Enforcement and compensation
Strengthened federal enforcement to ensure managed care
plans play by the rules.--To ensure compliance with the
bill's provisions, current federal law would be strengthened
by giving the Secretaries of Labor and Health & Human
Services enhanced authorities to enjoin managed care plans
from denying medically necessary care and to levy fines (up
to $50,000 for individual cases and up to $250,000 for a
pattern of wrongful conduct). This provision would ensure
that enforcement of federal law is not dependent upon
individuals bringing court cases to enforce plan compliance.
Rather, it provides for real federal enforcement of new
federal protections.
Compensation for individuals harmed by the decisions of
managed care plans.--All privately insured individuals would
have access to federal courts for economic loss resulting
from injury caused by the improper denial of care by managed
care plans. Economic loss would be defined as any pecuniary
loss caused by the decision of the managed care plan, and
would include lost earnings or other benefits related to
employment, medical expenses, and business or employment
opportunities. Awards for economic loss would be uncapped and
attorneys fees could be awarded at the discretion of the
court.
Coverage determination, grievance and appeals
Coverage determination based on medical necessity.--When
making determinations whether to provide a benefit (or where
or how that benefit should be provided) health plans would be
prohibited from arbitrarily interfering with the decision of
the treating physician if the services are medically
necessary and a covered benefit. Medically necessary services
would be defined by the treating physician in accordance with
generally accepted principles of professional medical
practice--not as defined by the plan. Plans would be required
to make coverage determinations in a timely manner, and have
a process for making expedited determinations.
Internal appeals.--Patients would be assured the right to
appeal the following: failure to cover emergency services,
the denial, reduction or termination of benefits, or any
decision regarding the clinical necessity, appropriateness,
efficacy, or efficiency of health care services, procedures
or settings. The plan would be required to have a timely
internal review system, using health care professionals
independent of the case at hand, and procedures for
expediting decisions in cases in which the standard timeline
could seriously jeopardize the covered individual's life,
health, ability to regain or maintain maximum function, or
(in the case of a child under the age of 6) development.
External appeals.--Individuals would be assured access to
an external, independent appeals process for cases of
sufficient seriousness or which exceed a certain monetary
threshold that were not resolved to the patient's
satisfaction through the internal appeals process. The
external appeal entity would have the authority to decide
whether a particular plan decision is in fact externally
appealable, not the plan. A reasonable medical practice
standard would be established against which to measure plan
conduct, and the range of evidence that is permissible in an
external review would include valid studies that have been
carried out by entities without a conflict of interest. The
external appeal process would require a fair, ``de novo''
determination, the plan would pay the costs of the process,
and any decision would be binding on the plan.
Consumer information
Comparative information.--Consumers would be given uniform
comparative information on quality measures in order to make
informed choices. Data would include: patient satisfaction,
delivery of health care services such as immunizations, and
resulting changes in beneficiary health. Variations would be
allowed based on plan type.
Plan information.--Patients would be provided with
information on benefits, cost-sharing, access to services,
grievance and appeals, etc. A grant program would be
authorized to provide enrollees with information about their
coverage options, and with grievance and appeals processes.
Confidentiality of enrollee records.--Plans would be
required to have procedures to safeguard the privacy of
individually identifiable information.
Quality assurance.--Plans would be required to establish an
internal quality assurance program. Accredited plans would be
deemed to have met this requirement, and variations would be
allowed based on plan type.
Patient protection standards
Emergency services.--Coverage of emergency services would
be based upon the ``prudent layperson'' standard, and,
importantly, would include reimbursement for post-
stabilization and maintenance care. Prior authorization of
services would be prohibited.
Enrollee choice of health professionals and providers.--
Patients would be assured that plans would:
allow women to obtain obstetrical/gynecological services
without a referral from a primary care provider;
allow plan enrollees to choose pediatricians as the primary
care provider for their children;
have a sufficient number, distribution and variety of
providers;
allow enrollees to choose any provider within the plan's
network, who is available to accept such individual (unless
the plan informs enrollee of limitations on choice);
provide access to specialists, pursuant to a treatment
plan;
in the case of a contract termination, allow continuation
of care for a set period of time for chronic and terminal
illnesses, pregnancies, and institutional care.
Access to approved services.--Plans would be required to
cover routine patient costs incurred through participation in
an approved clinical trial. In addition, they would be
required to use plan physicians and pharmacists in
development of formularies, disclose formulary restrictions,
and provide an exception process for non-formulary treatments
when medically necessary.
Nondiscrimination in delivery of services.--Discrimination
on the basis of race, religion, sex, disability and other
characteristics would be prohibited.
Prohibition of interference with certain medical
communications.--Plans would be prohibited from using ``gag
rules'' to restrict physicians from discussing health status
and legal treatment options with patients.
Provider incentive plans.--Plans would be barred from using
financial incentives as an inducement to physicians for
reducing or limiting the provision of medically necessary
services.
Provider participation.--Plans would be required to provide
a written description of their physician and provider
selection procedures. This process would include a
verification of a health care provider's license, and plans
would be barred from discriminating against providers based
on race, religion and other characteristics.
Appropriate standards of care for mastectomy patients.--
Plans would be required to cover the length of hospital stay
for a mastectomy, lumpectomy or lymph node dissection that is
determined by the physician to be appropriate for the patient
and consistent with generally accepted principles of
professional medical practice. Plans covering mastectomies
would also be required to cover breast reconstructive
surgery.
____
What Organizations Are Saying About the Promoting Responsible Managed
Care Act of 1998
National Association of Children's Hospitals, Inc.: ``As
you have recognized, children have health and developmental
needs that are markedly different than the needs of the adult
population and require pediatric expertise to understand,
diagnose, and treat health problems correctly. . . . Again,
we applaud you for your important and bipartisan efforts to
address children's unique health care needs as part of your
legislation. . . .''
National Mental Health Association: ``On behalf of the
National Mental Health Association and its 330 affiliates
nationwide, I am writing to express strong support for the
Promoting Responsible Managed Care Act of 1998. . . . NMHA
was particularly gratified to learn that you included
language in your important compromise legislation which
guarantees access to psychotropic medications. . . .
Finally--alone among all the managed care bills introduced in
this session of Congress--your legislation prohibits the
involuntary disenrollment of adults with severe and
persistent mental illnesses and children with serious mental
and emotional disturbances.''
American Academy of Pediatrics: ``Children are not little
adults. Their care should be provided by physician
specialists who are appropriately educated in the unique
physical and developmental issues surrounding the care of
infants, children, adolescents, and young adults. We are
particularly pleased that you recognize this and have
included access to appropriate pediatric specialists, as well
as other protections for children, as key provisions of your
legislation.''
National Alliance for the Mentally Ill: ``Thank you for
your efforts on behalf of people with severe mental
illnesses. Your bipartisan approach to this difficult issue
is an important step forward in placing the interests of
consumers and families ahead of politics. NAMI looks forward
to working with you to ensure passage of meaningful managed
care consumer protection legislation in 1998.''
American Cancer Society: ``. . . I commend you on your
bipartisan effort to craft patient
[[Page S9589]]
protection legislation that meets the needs of cancer
patients under managed care. . . . Your legislation grants
patients access to specialists, ensures continuity of care .
. . and permits for specialists to serve as the primary care
physician for a patient who is undergoing treatment for a
serious or life-threatening illness. Most critically, your
bill promotes access to clinical trials for patients for whom
standard care has not proven most effective.''
American Protestant Health Alliance: ``Your proposal
strikes a balance which is most appropriate. As each of us is
aware, often we have missed the opportunity to enact health
policy changes, only to return later and achieve fewer gains
than we might have earlier. It would be tragic if we allowed
this year's opportunity to escape our grasp. We are pleased
to stand with you in support of your proposal.''
American College of Physicians/American Society of Internal
Medicine: ``We believe your bill contains necessary patient
protections, as well as provisions designed to foster quality
improvement, and therefore has the potential to improve the
quality of care patients receive. The College is particularly
pleased that your proposal covers all Americans, rather than
only those individuals who are insured by large employers
under ERISA.''
National Association of Public Hospitals & Health Systems:
``This legislation provides consumers with the information to
make informed decisions about their managed care plans,
offers consumers protections from disincentives to provide
care, and provides consumers with meaningful claims review,
appeals and grievance procedures. We applaud your leadership
in this area and we look forward to working with you to shape
final legislation.''
Mental Health Liaison Group (a coalition of 19 national
groups): ``By establishing a clear grievance and appeals
process, assuring access to mental health specialists, and
assuring the availability of emergency services, your bill
begins to establish the consumer protections necessary for
the delivery of quality mental health care to every
American.''
Council of Jewish Federations: ``Your provisions on
continuity of care also provide landmark protections for
consumers in our community and in the broader community as
well. Overall, your legislation provides important safeguards
for consumers and providers that are involved in managed
care.''
Families USA: ``We are pleased that your bill . . . would
establish many protections important to consumers, such as
access to specialists, prescription drugs and consumer
assistance. In addition, your external appeals language
addresses many consumer concerns in this area.''
National Association of Chain Drug Stores: ``. . . we
applaud your efforts . . . in crafting a bipartisan managed
care proposal. . . . Your bill, ``Promoting Responsible
Managed Care Act'' takes a realistic step in improving the
health care system for all Americans.''
Catholic Health Association: ``The Catholic Health
Association of the United States (CHA) applauds your
bipartisan leadership in Congress to help enact legislation
this year protecting consumers who receive health care
through managed care plans. The Chafee-Graham-Lieberman bill
is a sound piece of legislation.''
National Association of Community Health Centers: ``We
appreciate the bipartisan efforts you have undertaken to
correct the deficiencies in the managed care system. . . . We
applaud your inclusion of standards for the determination of
medical necessity (Section 102) that are based on generally
accepted principles of medical practice. . . . We also
appreciate your inclusion of federally qualified health
centers (FQHCs) as providers that may be included in the
network.''
Mr. GRAHAM. Mr. President, I want to commend Senator Chafee,
Senator Lieberman, Senator Specter, and Senator Baucus for your
outstanding leadership on an issue of vital importance to the country--
protecting patients from abuses by managed care organizations.
Mr. President, what looms before the Senate is ominous. If nothing
changes, when we return in September, we appear destined to be
witnesses to the Senate's version of a massive train wreck in the form
of managed care debate.
The Republican train and the Democratic train are racing toward each
other with ever-increasing speed and hostility, neither side willing to
apply the brakes and switch tracks--neither side mindful of the havoc
the wreck could cause.
If we don't switch tracks, the wreck is inevitable. And the
casualties will not be either political party. Instead, they will be
the American public, who have asked us to provide them with basic
federal protections.
My colleagues and I are simply not willing to sacrifice the
opportunity to pass meaningful managed care reform this year for the
opportunity to score political points.
Over the past few years, it has become increasingly clear that the
American people are anxious about their health security as a
consequence of managed care. Even managed care plans are nervous about
the possibility of declining enrollment due to an increasing lack of
consumer confidence.
Our bill seeks to leave the decision-making to doctors and their
patients, and to ensure that patients get what they are paying for with
their hard-earned dollars.
Our goal is to hold insurance companies accountable for the benefits
and services they claim to be delivering. Patients want the right to
see a specialist when they need one; our bill assures that. Patients
want assurances they will get the medicines their doctors say they
need, not just what's on a plan's formulary; our bill assures that.
Patients want to know that plans are not providing financial incentives
to their doctors to withhold medically necessary treatment; our bill
assures that. Parents want to know that a pediatrician is available to
serve as their child's primary care provider; our bill assures that.
Women want to know that they can see their ob/gyn without first
getting permission from the plan's gatekeeper; our plan assures that.
However, having said all of that, it is vitally important to look at
the fine print when comparing the patient protections contained in each
of these proposals because, as the saying goes, the Devil is in the
details.
For example, all of the plans would require insurers to pay for
emergency services. However, the GOP plan lacks a critical protection
which was enacted into law for Medicare and Medicaid beneficiaries as
part of the Balanced Budget Act of 1997--reimbursement for post-
stabilization care.
Each bill contains an external appeals process to allow patients to
appeal denials or limitations of care to an independent entity.
However, the Republican proposal would prevent any complaint for a
service valued at less than $1,000.00 from being referred to an
external appeals body. Picture the situation where a woman is denied a
mammogram which, had it been done, would have resulted in early
detection of breast cancer and you begin to understand why this
provision is problematic.
In closing while the idea of playing the blame game up to the fall
elections might be appealing to some, we are asking our colleagues,
through this legislation, to take another course of action--to pass
meaningful and effective patient protections for 161 million Americans
this year.
Mr. LIEBERMAN. Mr. President, I am delighted to join Senators
Chafee, Graham, Specter, and Baucus to introduce the Promoting
Responsible Managed Care Act of 1998. Our bill is a bipartisan effort
that we believe can be enacted this year.
Our effort is modest in authorship because we have chosen to draw
from both Republican and Democratic bills, but bold in goal. We aim to
bring protections to 161 million Americans without delay before this
Congress adjourns. Included in those bold protections are new rights of
access to specialists, access to independent grievance and appeals,
quality report cards, and compensation if a plan's actions result in
their injury. Excluded are those provisions, even some with appeal,
that are likely to prevent any Congressional action on patients' rights
this year.
Over the last decade we have crossed over a turbulent river of change
in health care. The raging cost escalation of the 80's and 90's
buffeted families and tore away an ever increasing share of their
paycheck to pay for health insurance coverage. Some couldn't afford the
price, and lost their hold on health care--for themselves and their
families.
Today, the on flowing health care costs have slowed, but left behind
permanent changes in the health care shoreline. We have a tool that has
dammed up health care costs--managed care. Yet, after more than a
decade of cost increases, we have over forty-one million uninsured
among us that can't afford coverage. We need to be mindful of these
uninsured and the millions close to losing their insurance whenever we
intervene in the health care market in ways that raise costs.
Managed care has calmed the rise in medical costs that buffeted us so
badly and brought double-digit inflation under control. The average
rate of increase of costs of medical plans
[[Page S9590]]
dropped 10 percent between 1991 and 1996. Without managed care, costs
would be higher, millions more would be uninsured, and wages and
salaries would be lower.
Today over 75 percent of Americans who receive their health coverage
through their employer are in some form of managed care. Consumers no
longer have a family doctor--they have a gatekeeper. They don't pick a
physician--they (or in most cases, their employer) pick a network. A
family's access to care, to drugs, to specialists all can be limited by
the managed care organization.
Now that cost increases have slowed, it is also time to focus on
health care quality. Many people are nervous about the quality of their
managed care plans. They are concerned that the success of managed care
in containing costs, has come at the expense of health care quality.
People want to know that they can get health care for their children
from pediatricians, go see a specialist if their condition warrants
some special attention, even go the emergency room if they feel that it
is necessary.
They want to know that they aren't going to be locked out of medical
care by an unresponsive managed care bureaucracy, vainly calling an
unanswered phone to get approval for necessary medical care.
The entry of managed care into the health care marketplace has
created competition that has lowered prices, enabling better access for
millions to health care. But we also need to introduce competition over
quality into this marketplace.
Our bill covers all 161 million Americans who are privately-insured.
It includes patient protection standards to protect patient's access to
the physician of their choice including women's access to obstetrical/
gynecological specialists, a childs to a pediatrician, and other
patients to specialists such as oncologists pursuant to a treatment
plan.
It protects continuity of care, so that patients can continue to see
their physician through an illness or pregnancy despite changes in the
managed care network.
Plans would be prohibited from using ``gag rules'' to restrict
physicians communication with their patients.
Visits to emergency rooms would be covered based on the ``prudent
layperson'' standard and would include reimbursement for post
stabilization and maintenance care.
Most important, we have included strong enforcement to protect these
rights and protect the health and lives of all 161 privately insured
Americans.
We have four important enforcement rights. We give consumers the
right to obtain performance information so they don't get trapped in a
bad health plan in the first place, establish a new grievance and
appeals process so that consumers have a speedy process and fair
setting to seek needed healthcare, give the U.S. Department of Labor
and Health and Human Services the right to place heavy fines on health
plans that don't protect patients, and finally, if all three fail, give
the patient new rights to sue for compensation in federal courts if all
the new protections fail and they are injured as the result of a
decision by their managed care plan.
Our first enforcement tool is to empower consumer choice based on
accurate, comparable information with information about their health
care options. Millions of American healthcare consumers can get more
information about the quality of a toaster oven or a candy bar than
about their health plan. Report cards on health care quality should be
the rule not the exception. Consumers who choose between plans,
employers who purchase them, and plans and providers who compete for
business will all drive up quality if report cards on their performance
become the rule not the exception.
Some of the large employers in my state joined together years ago to
hold health plans accountable. These companies stood up to say before
they would even offer a health plan to their employees, that plan would
have to agree to provide their record of performance and outcome on
critical services such as breast cancer screening, prenatal care,
asthma and diabetic treatment.
Workers at these companies now choose the plan with the best
performance for them. All workers in America should have that right. It
drives up quality and drives down bad managed care plans.
We require that all health plans be held accountable by reporting how
well they are doing in providing the services that keep people healthy.
We allow the Secretary to develop requirements that will work for
different types of insurance, but get critical quality information to
workers and purchasers. Although Senator Nickles' bill includes
voluminous information requirements, nowhere does he ask for the most
critical information--how good a job is a health plan doing in keeping
members of that plan healthy and alive.
Our second enforcement tool gives consumers in a health plan the
right to appeal a denial of coverage to a independent, external panel
of fair-minded experts under specific, quick deadlines.
When consumers need health care services, delays and indecision can
be critical. The appeals process protects patients health by getting
decisions made quickly and services provided before their medical
condition worsens. No longer will consumers and their doctors spend
months or even years fighting through a morass of managed care
bureaucrats none of whom seem accountable, and all of whom add their
own dollop of delay to a final decision.
We have adopted the ``gold standard'' set by the Medicare program
which guarantees an answer in 72 hours or less for urgent care, and in
less than one month for even the most routine decisions. Consumers have
full rights to appeal any denial of care--both internally and to an
external body for a completely independent review.
Third, we fix ERISA--a law that was enacted in 1974--so that it no
longer blunts enforcement of patient protections. Under current law
there are no meaningful enforcement remedies available to Americans who
get their insurance through their employers. The U.S. Departments of
Labor and Health and Human Services can do little to carry out their
enforcement responsibilities. Individuals can not seek compensation
when their health care plan makes a decision that injures them. A
person, grievously harmed by their plan, can only sue for the cost of
the benefit wrongly denied. For example, under current ERISA law, a
mother on death's bed with cancer wrongly denied. For example, under
current ERISA law, a mother on death's bed with cancer because she
didn't get a mammogram would only be able to sue her health plan for
the cost of the mammogram.
The Democrats have chosen to address this problem by allowing
participants in ERISA plans to seek redress, including uncapped
punitive damages, in state courts, an absolute nonstarter with the
Republicans. The Republican plan simply extends the enforcement
mechanism provided under current law, which is to say the cost of the
benefit denied, and have thrown in a small additional fine of $100 a
day in cases where a health plan refuses to comply with the decision of
the external appeal entity. $100 is a cruel compensation for a family
that has lost a breadwinner through the botched denial of coverage of a
managed care plan.
We believe it is vitally important for Congress to step up to the
plate with a real federal patient rights enforcement. In order to
ensure that plans abide by the new patient protections in our bill, we
give new civil money penalty and injunctive relief authority to the
Secretaries of Health and Human Services and Labor. Plans that violate
the law can be compelled to pay for it--up to $250,000.
Finally, there will be those tragic instances where our broad, new
protections fail. A person is injured despite their new rights and
powers and the managed care organization is at fault. Under our plan,
people can take their plan to court, and sue that plan for the full
amount of any damages equal to their economic loss plus attorney's
fees. The injured person can get back the loss of earnings or other
benefits related to employment, medical expense loss, replacement
services loss, loss due to death, burial costs, and loss of business or
employment opportunities, caused by the coverage determination of the
managed care plan. For the injured person and their family, the dollars
probably can never compensate for the loss of health, but we think that
it is critical that at least their
[[Page S9591]]
economic losses by paid when a plan causes the injury.
That is our plan, a stronghold of patient rights protected by four
well-buttressed walls of individual and government enforcement. We have
given patients the strongest tools at our disposal--information, appeal
rights, agency enforcement, and access to the courts. Our proposal has
these strengths, but not the baggage of provisions that partisans of
either party I fear may use to prevent congressional action. I urge the
passage of the Promoting Responsible Managed Care Act of 1998 so that
161 million Americans can receive its protections without
delay.
Mr. BAUCUS. Mr. President, I rise today to join Senators
Chafee, Graham, Lieberman, and Specter in introducing the Promoting
Responsible Managed Care Act of 1998. This bill will provide needed
protections for all patients, while omitting the most polarizing
aspects of the two major managed care bills designed by Republican and
Democratic leaders. This bill seeks to establish a middle ground so
that patients can be guaranteed quality health care this year.
Mr. President, this legislation provides improved quality health care
for all 161 million Americans enrolled in private health insurance
plans, including managed care plans. The measure will protect the
doctor-patient relationship, make information readily available, create
quality standards, insure a timely appeals process, and provide
patients with better access to care.
By offering report cards on health plans, patients will be given the
opportunity to make informed choices when selecting a health plan. This
bill will also guarantee patients access to their specialists, and
ensure that people have needed emergency treatment available wherever
they are. Patients will not just receive stabilization in the emergency
room, but will be guaranteed care afterwards as well.
The bipartisan bill gives women direct access to obstetrician-
gynecologists, and children direct access to pediatricians.
Prescription drugs which doctors deem necessary to patient care,
whether on provider formulary lists or not, will now be made available.
Routine costs associated with plan-approved clinical trials will also
be guaranteed. Gag clauses, which undermine the patient-doctor
relationship by penalizing doctors for referring patients to
specialists or discussing costly medical procedures, will be
prohibited.
Mr. President, under the bipartisan bill, independent parties would
be given the authority to rule on managed care denials through an
appeals process, guaranteeing that each patient has a chance to appeal
HMO decisions. Enforcement laws will help guarantee these provisions.
This legislation will allow the Department of Health and Human Services
and the Department of Labor to levy civil monetary penalties to managed
care plans which do not abide by the bill's provisions. Also, self and
fully-insured patients will be granted access to federal courts to
claim compensatory damages.
Mr. President, in health care, quality patient care should be the
bottom line. I believe that the bottom line is achieved by Democratic
plan. But with a Democratic plan that is unlikely to pass in this
Republican-controlled Senate, and a Republican measure which would
likely be vetoed by the president, this proposal stands as a fresh
start to significant managed care reform. This bipartisan and balanced
measure will ensure that quality care prevails over political
differences, and I urge the Senate to pass it.
______
By Mr. SESSIONS:
S. 2417. A bill to provide for allowable catch quota for red snapper
in the Gulf of Mexico, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
national marine fisheries legislation
Mr. SESSIONS. Mr. President, I rise today to introduce
legislation, which I have drafted to address a matter which is of
growing concern in my state. In particular, my constituents who live
and work in the coastal communities of Alabama have voiced serious and
legitimate concerns about the validity of recently issued National
Marine Fisheries Service regulations which threaten to reduce the total
allowable catch of red snapper in the Gulf of Mexico this year. The red
snapper stock in the Gulf of Mexico is a very important economic asset
for my state and, in fact, serves as a major economic linchpin for many
of these coastal communities. I believe that my bill presents a
reasonable solution to ensuring the long-term viability of the snapper
stocks while also ensuring continuity and economic stability for
individuals and communities who are so reliant on the income that
commercial and recreational snapper fishing provides. Additionally, I
feel that this bill could provide relief for persons in the shrimp
industry, who feel that they have been unduly and unfairly burdened by
NMFS regulatory requirements. Mr. President, I would also like to
stress that this bill would assist all Gulf Coast communities that rely
on the red snapper as an asset and I would hope that my colleagues who
are hearing the same concerns from their constituencies will join with
me in support of this bill.
Mr. President, I will have more to say about this bill in the future.
For the sake of brevity, however, I would simply like to highlight some
of the features in my legislation. To begin with, it maintains a total
allowable catch of 9,120,000 pounds for each calendar year 1998 through
2001 which is to be allocated according to the current 51% commercial
and 49% recreational split. The intent of this language is to provide
certainty to our coastal communities by establishing a total allowable
catch quota for this time period which cannot be lowered. The bill also
provides that release of this quota cannot be conditioned upon the
performance of bycatch reduction devices over the 1998-2001 time
period. Additionally, the legislation maintains the current minimum
size limits, and maintains the National Marine Fisheries Service's
recently established 4 bag limit. My bill also requires the Secretary
of Commerce to immediately review existing turtle excluder devices to
see if they can be certified as bycatch reduction devices in the hopes
that, if they can be so certified, shrimpers will be spared the cutting
of an additional hole in their nets. Finally, my bill will also require
a future study of bycatch reduction efficiency to be undertaken by the
Secretary so that snapper management techniques can be based on
accurate, and scientifically sound, understanding of the role that
bycatch reduction devices can play in our efforts to continue to
strengthen the replenishing snapper stocks. In my view, this bill adds
clarity and stability to a situation that has been needlessly
complicated over the past several years, and will allow both the
regulators and the regulated community an opportunity to ``catch their
breath'' as we determine the proper steps to take in resolving this
ongoing debate.
______
By Mr. JEFFORDS (for himself, Mr. Leahy, and Mr. Warner):
S. 2418. A bill to establish rural opportunity communities, and for
other purposes; to the Committee on Finance.
RURAL OPPORTUNITIES EMPOWERMENT ACT OF 1998
Mr. JEFFORDS. Mr. President, today with my friend and
colleague, Senator Leahy, I introduce the Rural Opportunities
Empowerment Act of 1998--a bipartisan bill that will do a great deal to
assist urban and rural areas develop communities in economic need.
The legislation will do a number of things. It builds off the
Taxpayer Relief Act of 1997, which authorized 20 rural and urban
Empowerment Zones, and creates new opportunities for those communities
desperately in need of federal assistance, but unable to access those
funds.
Our legislation will help scores of communities across the country
seeking to improve their local economy through desperately needed
federal funds. Within our legislation, monies are provided for the 20
Empowerment Zones authorized last year. Also, new grants are created
for communities that are not able or eligible to compete for the EZ
Round II competition this fall. Additional points will be given to
those Enterprise Communities who have met a high standard of
performance and who are seeking to be designated as an Empowerment
Zone. Finally, a small amount of money will be provided to the
Secretary to reward so-called ``Top Performers,'' and allow
[[Page S9592]]
them to be able to continue their operations so additional goals of
their strategic plan are met.
Mr. President, the Department of Housing and Urban Development (HUD)
and the U.S. Department of Agriculture's (USDA) Empowerment Zones and
Enterprise Communities provide critical resources for those rural and
urban areas in economic distress. Many of these communities intend to
apply for a Round II Empowerment Zone designation. Vermont's old North
End in Burlington, for example, has met numerous milestones in their
strategic plan by successfully leveraging additional monies from the
private sources. If Congress does not pass this legislation there will
be no funding. Burlington's application for an Empowerment Zone
designation under Round II this fall will be useless.
Providing rehabilitation and tax breaks to businesses who are
interested in investing in a depressed area has been an impressive
success in Burlington and elsewhere and my legislation will not only
allow Burlington to compete for Empowerment Zone status in Round II,
but it will also require HUD to disseminate best EC practices to other
ECs around the country who may not be performing as impressively. This
legislation is not only good for rural and urban communities, it is
good government.
I ask my colleagues to work with me and with Senator Leahy to ensure
that this legislation is passed in the short time we have left in the
105th Congress. I will be working with the Finance Committee to ensure
that this Congress does not forget those communities who look toward
the federal government to provide incentives for the private sector to
invest in economically depressed areas.
Mr. LEAHY. Mr. President, I am pleased to join Senator
Jeffords today in introducing the Rural Opportunity Communities Act of
1998. This bill will greatly enhance the Empowerment Zone program by
providing incentives to reward well performing Empowerment Zones and
Enterprise Communities. The bill will also offer communities which face
significant economic problems, but do not fit the strict definitions of
the Empowerment Zone program with an alternative built on the same
long-term, comprehensive, community-based planning.
In 1995 the first round of Empowerment Zones and Enterprise
Communities were designated. Those communities have well demonstrated
the potential of the program to revitalize inner-city neighborhoods and
poverty stricken rural areas. In Burlington's Old North End, Vermont's
only Enterprise Community, the benefits of this program have been
tremendous. What was once a decaying section of the city is now a vital
neighborhood. Equally important, the ``New North End'' has become an
integral part of the city through the network of organizations and
community members that pulled together to develop a plan to revitalize
the area.
A new round of Empowerment Zone awards will allow additional
communities to benefit from the program. This bill further enhances the
Empowerment Zone program by recognizing those communities which have
made the most progress in implementing their ten year plans and
improving their neighborhoods. These model Empowerment Zones and
Enterprise Communities will be eligible to compete for special
incentive grants so that the successful programs they have initiated
can continue to flourish. The success of well-performing Enterprise
Communities will also be recognized by giving them additional points on
their applications for empowerment zone status.
FInally, the bill establishes a special demonstration program, the
Rural Opportunity Communities. This demonstration is designed to test
the Empowerment Zone model of long-term, community based planning, with
communities which are facing economic problems different from those
defined by the Empowerment Zone program. Among other factors, the ROC
demonstration will recognize the very real problem of under-employment,
a significant problem in Vermont. The northeastern corner of Vermont,
known as the Northeast Kingdom, is regularly responsible for one of the
highest unemployment rates in the state. This is a very rural area
where many families also hold down multiple jobs to make ends meet.
Last year I worked to bring together a group of economic development
organizations and local officials to take a broader look at the
problems facing the region, and work to find a common approach to
addressing those problems. Since that time this group, known as the
Northeast Kingdom Enterprise Collaborative, has continued to grow and
has begun to lay the groundwork for a long-term plan for the three-
county area. The ROC demonstration will offer a perfect opportunity for
areas like the Northeast Kingdom, that are interested in pursuing this
Empowerment Zone model, to gain access to the resources they need.
______
By Mr. D'AMATO:
S. 2419. A bill to amend the Public Utility Regulatory Policies Act
of 1978 to protect the nation's electricity ratepayers by ensuring that
rates charged by qualifying small power producers and qualifying
cogenerators do not exceed the incremental cost to the purchasing
utility of alternative electric energy at the time of delivery, and for
other purposes; to the Committee on Energy and Natural Resources.
the electric power consumer rate relief act of 1998
Mr. D'AMATO. Mr. President, I ask unanimous consent that the text of
the bill, S. 2419, be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2419
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 ``Electric Power Consumer Rate
Relief Act of 1998''.
SEC. 2. FINDINGS.
Congress finds that--
(1) certain courts have found that States are preempted
under the Public Utility Regulatory Policies Act of 1978 from
engaging in certain ratepayer protection activities critical
to ensuring reasonable rates for in-State ratepayers;
(2) those courts have found that, although States have the
authority initially to establish rates charged by qualifying
small power producers and qualifying cogenerators to local
electric utilities, that such States thereafter are preempted
by that Act from ensuring over time that rates--
(A) are just and reasonable to the retail electric
consumers of purchasing electric utilities and are in the
public interest; and
(B) do not exceed the incremental cost to such purchasing
electric utilities of alternative electric energy at the time
of delivery;
(3) other courts have found that States are preempted from
monitoring effectively the operating and efficiency
performance of in-State cogeneration and small power
production facilities for the purpose of determining whether
such facilities meet Federal Energy Regulatory Commission
standards for qualifying cogenerators; and
(4) that Act should be amended to clarify the intent of
Congress that States have the authority--
(A) to ensure that rates charged by qualifying small power
producers andqualifying cogenerators to purchasing electric
utilities--
(i) are just and reasonable to the electric consumers of
such purchasing electric utilities and in the public
interest; and
(ii) do not exceed the incremental cost to such purchasing
electric utilities of alternative electric energy at the time
of delivery; and
(B) to establish effective programs for monitoring the
operating and efficiency performance of in-State cogeneration
and small power production facilities for the purpose of
determining whether such facilities meet Federal Energy
Regulatory Commission standards for qualifying cogenerators.
SEC. 3. IMPLEMENTATION OF RULES.
Section 210(f)(1) of the Public Utility Regulatory Policies
Act of 1978 (16 U.S.C. 824a-3(f)(1)) is amended--
(1) by striking ``(1) Beginning'' and inserting the
following:
``(1) By state regulatory authorities.--
``(A) In general.--Beginning''; and
(2) by adding at the end the following:
``(B) Requirements.--Notwithstanding any other provision of
this section, a State regulatory authority may ensure that
rates charged by qualifying small power producers and
qualifying cogenerators--
``(i) are just and reasonable to the electric consumers of
the purchasing electric utility and in the public interest;
and
``(ii) do not exceed the incremental cost at the time of
delivery to the purchasing utility of alternative electric
energy and capacity.
``(C) Monitoring.--A State regulatory authority may
establish programs for monitoring the operating and
efficiency performance of in-State cogeneration and small
power production facilities for the purpose of determining
whether the facilities meet standards established by the
Commission for qualifying facilities.
``(D) Amendment of contract.--A State regulatory authority
may require that any
[[Page S9593]]
contract entered into before the date of enactment of this
paragraph be amended to conform to any requirements imposed
under subparagraph (B).''.
______
By Mr. HARKIN (for himself, Mr. Hatch, Mr. Daschle, Mr. Craig,
Ms. Milkulski, Mr. D'Amato, Ms. Moseley-Braun, Mr. Grassley and
Mr. Wellstone):
S. 2420. A bill to establish within the National Institutes of Health
an agency to be known as the National Center for Complementary and
Alternative Medicine; to the Committee on Labor and Human Resources.
center for complementary and alternative legislation
Mr. HARKIN. Mr. President, today I am introducing a bill,
cosponsored by Senators Daschle, Hatch, Grassley, D'Amato, Wellstone,
Mikulski, Craig, and Moseley-Braun to improve and expand rigorous
scientific review of alternative and complementary therapies. This bill
will elevate the NIH's Office of Alternative Medicine to Center status.
It would be renamed the ``National Center for Complementary and
Alternative Medicine.''
Mr. President, the American public supports this bill. Increasingly,
Americans are turning to complementary and alternative medicine.
According to a recent study by Harvard University researchers, fully
one third of Americans regularly use complementary and alternative
medicine. This same study found that in 1990, American consumers spent
more than $14 billion on these practices. In that year there were 425
million visits to complementary and alternative practitioners--more
than those to conventional primary care practitioners!
These practices, which range from acupuncture, to chiropractic care,
to naturopathic, herbal and homeopathic remedies, are not simply
complementary and alternative, but are integral to how millions of
Americans manage their health and treat their illnesses. Yet there is
little scientific research being done to investigate and validate these
therapies.
We must reexamine our spending priorities. Approximately 90 million
Americans suffer from chronic illnesses which cost society roughly $659
billion in health care expenditures, lost productivity and premature
death. According to the Centers for Disease Control, we spend $28.6
billion Medicare dollars on diabetes alone--a disease which can be
treated effectively with low-cost alternative therapies. A Robert Wood
Johnson Foundation study recently published in the Journal of the
American Medical Association (JAMA) revealed that the current health
care delivery system is not meeting the needs of the chronically ill in
the United States. The study also concluded that such trends reveal
skyrocketing costs, increasing numbers of people in need and a
dysfunctional system of care. Alternative medical therapies could offer
a cost-saving alternative to this trend.
We are in an era when we must take a closer look at ways to provide
cost-effective, preventive health care, and as we do so, Congress must
act to strengthen the mission of the Office of Alternative Medicine in
finding safe and effective treatments and preventive methods for
chronic conditions. Patients throughout our nation are suffering
because there is a lack of available information on alternative
medicine.
In 1992, after finding that the National Institutes of Health (NIH)
was largely ignoring this increasingly important area, at my urging
Congress passed legislation creating the Office of Alternative Medicine
(OAM) within NIH. At that time, Congress charged OAM with assuring
objective, rigorous scientific review of alternative therapies. They
were to investigate and validate therapies so that consumers would be
better informed as to what treatments work and what treatments don't.
It is now clear that without greater authority to initiate research
projects and assure unbiased and rigorous peer review, alternative
therapies will not be adequately reviewed. The main problem is that the
Office has no authority to directly provide research funding to any
medical professional seeking to study the safety and effectiveness of
alternative treatments. And unlike all other major organizations within
NIH, the OAM has no autonomy to oversee its mission and goals. Because
the Office must work through other Institutes to carry out research
projects, promising projects are blocked and considerable time and
resources are wasted.
The bill we are introducing would increase the status and authority
of the Office of Alternative Medicine by creating in its place a
National Center for Complementary and Alternative Medicine at NIH. The
principal change in authority is granting the Center the ability to
directly fund research proposals and other projects. This will not only
assure that alternative therapies receive the review they need and
deserve, it will improve efficiency by eliminating unnecessary
bureaucratic steps required by the current set up.
Our bill also addresses another shortcoming of the NIH's current
handling of alternative medicine research. The hallmark of rigorous
scientific review at NIH is the peer review process. However, when it
comes to alternative and complementary therapies, there is no true peer
review. There are no complementary or alternative medicine specialists
on NIH peer review panels. That means, for example, that when a
research proposal comes in on chiropractic care, it often is reviewed
by peer review panels that include no chiropractors. Rather, these
proposals may be reviewed by scientists who have little or no
experience in or knowledge about chiropractic care.
This has three negative results. First, these projects are not being
reviewed by individuals with expertise in the fields contemplated by
the research. This reduces the scientific quality of the review
process. Second, because those reviewing these proposals have no
expertise in this area, they may be less likely to support their
approval. And, third, because those seeking NIH support of alternative
medicine research know that their proposals will not receive true peer
review, they may hesitate to apply, thereby reducing the number and
quality of research proposals. Our proposal corrects this problem by
requiring that projects are reviewed by scientists with expertise in
the particular area of complementary and alternative medicine proposed
to be studied.
The federal government and state-of-the-art science must begin to
catch up with the public's increasing demand for information and
answers regarding alternative and complementary health care. The time
is now. I urge you and my colleagues to support this important bill
that will improve the quality of health care for Americans.
______
By Mr. CONRAD:
S. 2421. A bill to provide for the permanent extension of income
averaging for farmers; to the Committee on Finance.
permanent extension of income averaging for farmers
Mr. CONRAD. Mr. President, I am taking the floor today to introduce a
bill which will respond to a critical problem faced by farmers. This
proposal would amend the provision in the Taxpayer Relief Act of 1997
the temporarily reinstated income averaging for farmers.
When income averaging was eliminated as part of the Tax Reform Act of
1986, Congress acted primarily on the assumption that fewer tax
brackets and dramatically lower marginal tax rates would substantially
reduce the number of taxpayers whose fluctuating incomes could subject
them to higher progressive rates. Congress was also concerned that
income averaging, as it existed at that time, was effectively targeted
on taxpayers who actually experienced wildly fluctuating incomes.
Today, it is hard to imagine a group of taxpayers whose incomes
fluctuate more wildly than farmers. There is no place where that kind
of fluctuation is more vividly demonstrated than in my own state of
North Dakota. In 1996, North Dakota farm income came in at $764
million. A year later, it was $15 million. That is a 98 percent
decrease, Mr. President! Fluctuations just don't come much wilder than
that.
Reflecting on the situation, I think Congress made a mistake
eliminating income averaging altogether in 1986--at least with respect
to farmers. Fluctuating income is a fact of life in agriculture, and to
the extent that the Internal Revenue Code can respond to that reality,
it should do so.
[[Page S9594]]
The change we made in 1997 was a good one, but it did not go far
enough to help many farmers who desperately need it. That reinstatement
of income averaging for farmers should have made farmers' incomes in
1997 eligible for averaging and the reinstatement should have been
permanent. The bill I introduce today does both.
This bill will provide modest, but much needed, assistance to farmers
who were devastated in 1997, and provide it in a way that is consistent
with the approach Congress took in the Taxpayer Relief Act last year.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2421
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PERMANENT EXTENSION OF INCOME AVERAGING FOR
FARMERS.
Section 933(c) of the Taxpayer Relief Act of 1997 is
amended by striking ``after December 31, 1997, and before
January 1, 2001'' and inserting ``after December 31, 1996''.
______
By Mr. MACK (for himself, Mr. D'Amato, Mr. Coverdell, Mr.
McConnell, Mr. Murkowski, Mr. Gorton, and Mr. Nickles):
S. 2422. A bill to provide incentives for states to establish and
administer periodic teacher testing and merit pay programs for
elementary school and secondary teachers; to the Committee on Labor and
Human Resources.
measure to encourage results in teaching act of 1998
Mr. MACK. Mr. President, I rise today to introduce legislation with
my friend and colleague, Senator D'Amato, to ensure that every
classroom in America is staffed with a competent, qualified and caring
teacher. During the past several months, Congress has debated a number
of initiatives to further this goal, including an amendment that
Senator D'Amato and I introduced and passed as part of the Education
Savings Accounts package. Our amendment passed with bipartisan support,
and we are here today to pursue this legislation in light of the
President's veto of the ESA bill.
As early as the 1890s, the United States was the world's premiere
industrial power, boasting a manufacturing sector roughly equal to that
of Great Britain, Germany and France combined. While relatively new,
this industrial order grew at a remarkable pace, leading many to concur
with Teddy Roosevelt's prediction that the Twentieth Century would be
``America's Century.''
As we stand at the edge of a new millennium, another economic
revolution in underway. But unlike the industrial revolution of one
hundred years ago, this new revolution is defined not by large
factories and natural resources, but by something a little less
tangible and a little more human. I believe the 21st Century will be
known as the ``Century of Knowledge,'' where ingenuity and innovation
will prove to be the most critical of resources. Now, if our children
are to be prepared for the challenges ahead, educational excellence
must become our first order of business.
The President has placed education near the top of his domestic
agenda. I am pleased that he, too, recognizes the importance of
providing our children with an education second to none. This is an
area where we can easily agree. However, I am discouraged that none of
his proposals confronts the most basic, the most important, and the
most neglected aspect of public education: the quality of instruction
in the classroom. It cannot be overstated that the best teachers
produce the best students. Unless the quality of teaching improves, all
other very worthwhile reforms, from smaller classes and higher salaries
to newer buildings and computers in the classroom--are meaningless.
Good teachers are the backbone to a good education. Every student in
America has a fundamental right to be taught by a skilled and well-
prepared teacher. Teachers make all the difference in the learning
process. America's classrooms are staffed with many dedicated,
knowledgeable, and hardworking teachers. Studies show again and again
that teacher expertise is one of the most important factors in
determining student achievement.
Nevertheless, the case for sweeping reform is not difficult to make.
The United States already spends more money per pupil than virtually
any industrialized democracy in the world. Nonetheless, our children
frequently score near the bottom in international exams in science and
math. If the teacher-student relationship--which in my opinion is the
most basic building-block in the educational process--is defective, no
amount of resources will be able to turn bad schools into good schools.
Throwing more money at the problem is no longer the answer. Again, real
reforms are needed.
Mr. President, real education reform begins in America's classrooms.
Any reform must include measures to ensure that teachers are qualified
to teach the subjects they are teaching. To my dismay, I have learned
that all across the country, many teachers are being assigned to teach
classes for which they have no formal training. Consider these
statistics:
One out of five English classes were taught by teachers who did not
have at least a minor in English, literature, communications, speech,
journalism, English education, or reading education.
One out of four mathematics classes were taught by teachers without
at least a minor in mathematics or mathematics education.
Nearly 4 out of 10 life science or biology classes were taught by
teachers without at least a minor in biology or life science.
More than half of physical science classes were taught by teachers
without at least a minor in physics, chemistry, geology or earth
science.
More than half of history or world civilization classes were taught
by teachers who did not have at least a minor in history.
Students in schools with the highest minority enrollments have less
than a 50% chance of getting a science or mathematics teacher who holds
a license and a degree in the field he or she teaches.
Our schools and classrooms should be staffed with teachers who have
the appropriate training and background. One way to determine this
would be to test teachers on their knowledge of the subject areas they
teach.
Teacher testing is an important first step toward upgrading the
quality of classroom instruction. Testing would identify teachers who
are not making the grade, and would enable principals to help weaker
teachers improve. Much has been made about social promotion,
where students are often pushed on to the next grade with his or her
peers despite the fact that the student has not met the criteria needed
to advance. In my opinion, teachers face social promotion too. They are
kept on staff regardless of performance. That is wrong. States should
measure the expertise of their teachers through periodic teacher
testing.
Common sense also dictates that we should not concentrate all our
attention on underperforming teachers. We must also recognize that
there are many great teachers who are successfully challenging their
students on a daily basis. Today, our public schools compensate
teachers based almost solely on seniority, not on their performance
inside the classroom. Merit-pay would differentiate between teachers
who are hard-working and inspiring, and those who fall short.
The legislation we are introducing today, known as the MERIT ACT--
which stands for Measures to Enhance Results in Teaching--is the same
legislation that passed the Senate during debate on the Education
Savings Accounts bill. It rewards states that test its teachers on
their subject matter knowledge, and pays its teachers based on merit.
Here is how it works: we will make half of any additional funding
over the FY 1999 level for the Eisenhower Professional Development
Program available to states that periodically test elementary and
secondary school teachers, and reward teachers based on merit and
proven performance. There will be NO reduction in current funding to
states under this program based on this legislation. As funding
increases for this program, so will the amount each state receives.
Incentives will and should be provided to those states that take the
initiative to establish teacher testing and merit pay programs.
Again, I want to emphasize that all current money being spent on this
program is unaffected by this legislation.
[[Page S9595]]
Only additional money will be used as an incentive for states to enact
teacher testing and merit pay programs.
Finally, this amendment enables states to also use federal education
money to establish and administer teacher testing and merit pay
programs. This broad approach will enable states to staff their schools
with the best and most qualified teachers, thereby enhancing learning
for all students. In turn, teachers can be certain that all of their
energy, dedication and expertise will be rewarded. And it can be done
without placing new mandates on states or increasing the federal
bureaucracy.
Mr. President, as I pointed out earlier, the Senate has already
debated this innovative approach when we considered the Education
Savings Accounts bill. I was impressed that we passed the amendment
with bipartisan support by a vote of 63-35, and that it was included in
the Conference report sent to the President for his signature. I was
disappointed, however, when the President vetoed that important
legislation on July 22, 1998, despite his own earlier involvement in
developing a teacher testing program in his home state of Arkansas
while he was Governor.
As Governor, Bill Clinton enthusiastically supported teacher testing,
and while Governor of South Carolina, Secretary of Education Richard
Riley advocated a merit-pay plan. In fact, then-Governor Clinton in
1984 said that he was more convinced than ever that competency tests
were needed to take inventory of teacher' basic skills. He said,
``Teachers who don't pass the test shouldn't be in the classroom''.
Since coming to Washington, however, neither the President nor
Secretary Riley has tried to do for the children of America what they
as Governors fought to do for the children of their own states. Our
nation's children deserve better.
While Bill Clinton let an opportunity for true reform pass him by, I
am encouraged by the recent action taken by the American Federation of
Teachers. They, too, recognize that true reform begins in the classroom
and that teacher quality must be at the heart of that reform. They
recently passed a resolution affirming the need for improved teacher
quality, which also states that they will take a more active role in
reviewing teacher performance and dismissing teachers that cannot be
helped. This same proposal was rejected two years ago by the
Federation's membership. Again, I am encouraged by this change of
heart. I am hopeful that we can work together with the AFT and any
other organization interested in moving forward to improve teacher
quality. While we may not agree on every approach, I would like to
commence an ongoing dialogue on this important issue.
Mr. President, I must also point out how timely this legislation is
in light of the recent reports out of the state of Massachusetts, which
tested prospective teachers with a tenth-grade level exam. Sadly, 60
percent of those taking the test failed. It's unfortunate that the poor
results of the test overshadow the positive contributions teachers make
day in and day out to challenge the imagination of their students.
That's why it's important to help teachers become the best they can be
and to reward the outstanding teachers who are making a difference in
the lives of our youth. Our children deserve nothing less. That's what
this legislation does.
The President's lack of support for merit pay and teacher testing has
only temporarily set back the call for excellence in education. But I
will continue to press forward with plans to ensure that our classrooms
are led by capable teachers, and I will continue the fight to give
dedicated professionals who teach our children a personal stake in the
quality of the instruction they provide. If we accomplish these
reforms, and place the interests of students above the preservation of
the status quo, then the extraordinary dynamism of the American people
will continue, and the 21st Century will, once again, be the ``American
Century''.
I hope there will again be broad, bipartisan support for this
important initiative.
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:
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS; AND PURPOSES.
(a) Short Title.--This Act may be cited as the ``Measures
to Encourage Results in Teaching Act of 1998''.
(b) Findings.--Congress makes the following findings:
(1) All students deserve to be taught by well-educated,
competent, and qualified teachers.
(2) More than ever before, education has and will continue
to become the ticket not only to economic success but to
basic survival. Students will not succeed in meeting the
demands of a knowledge-based, 21st century society and
economy if the students do not encounter more challenging
work in school. For future generations to have the
opportunities to achieve success the future generations will
need to have an education and a teacher workforce second to
none.
(3) No other intervention can make the difference that a
knowledgeable, skillful teacher can make in the learning
process. At the same time, nothing can fully compensate for
weak teaching that, despite good intentions, can result from
a teacher's lack of opportunity to acquire the knowledge and
skill needed to help students master the curriculum.
(4) The Federal Government established the Dwight D.
Eisenhower Professional Development Program in 1985 to ensure
that teachers and other educational staff have access to
sustained and high-quality professional development. This
ongoing development must include the ability to demonstrate
and judge the performance of teachers and other instructional
staff.
(5) States should evaluate their teachers on the basis of
demonstrated ability, including tests of subject matter
knowledge, teaching knowledge, and teaching skill. States
should develop a test for their teachers and other
instructional staff with respect to the subjects taught by
the teachers and staff, and should administer the test every
3 to 5 years.
(6) Evaluating and rewarding teachers with a compensation
system that supports teachers who become increasingly expert
in a subject area, are proficient in meeting the needs of
students and schools, and demonstrate high levels of
performance measured against professional teaching standards,
will encourage teachers to continue to learn needed skills
and broaden teachers' expertise, thereby enhancing education
for all students.
(c) Purposes.--The purposes of this Act are as follows:
(1) To provide incentives for States to establish and
administer periodic teacher testing and merit pay programs
for elementary school and secondary school teachers.
(2) To encourage States to establish merit pay programs
that have a significant impact on teacher salary scales.
(3) To encourage programs that recognize and reward the
best teachers, and encourage those teachers that need to do
better.
SEC. 2. STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY.
(a) Amendments.--Title II of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 6601 et seq.) is amended--
(1) by redesignating part D as part E;
(2) by redesignating sections 2401 and 2402 as sections
2501 and 2502, respectively; and
(3) by inserting after part C the following:
``PART D--STATE INCENTIVES FOR TEACHER TESTING AND MERIT PAY
``SEC. 2401. STATE INCENTIVES FOR TEACHER TESTING AND MERIT
PAY.
``(a) State Awards.--Notwithstanding any other provision of
this title, from funds described in subsection (b) that are
made available for a fiscal year, the Secretary shall make an
award to each State that--
``(1) administers a test to each elementary school and
secondary school teacher in the State, with respect to the
subjects taught by the teacher, every 3 to 5 years; and
``(2) has an elementary school and secondary school teacher
compensation system that is based on merit.
``(b) Available Funding.--The amount of funds referred to
in subsection (a) that are available to carry out this
section for a fiscal year is 50 percent of the amount of
funds appropriated to carry out this title that are in excess
of the amount so appropriated for fiscal year 1999, except
that no funds shall be available to carry out this section
for any fiscal year for which--
``(1) the amount appropriated to carry out this title
exceeds $600,000,000; or
``(2) each of the several States is eligible to receive an
award under this section.
``(c) Award Amount.--A State shall receive an award under
this section in an amount that bears the same relation to the
total amount available for awards under this section for a
fiscal year as the number of States that are eligible to
receive such an award for the fiscal year bears to the total
number of all States so eligible for the fiscal year.
``(d) Use of Funds.--Funds provided under this section may
be used by States to carry out the activities described in
section 2207.
``(e) Definition of State.--For the purpose of this
section, the term `State' means each of the 50 States and the
District of Columbia.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on October 1, 1999.
[[Page S9596]]
SEC. 3. TEACHER TESTING AND MERIT PAY.
(a) In General.--Notwithstanding any other provision of
law, a State may use Federal education funds--
(1) to carry out a test of each elementary school or
secondary school teacher in the State with respect to the
subjects taught by the teacher; or
(2) to establish a merit pay program for the teachers.
(b) Definitions.--In this section, the terms ``elementary
school'' and ``secondary school'' have the meanings given the
terms in section 14101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 8801).
Mr. D'AMATO. Mr. President, I rise with my friend and colleague,
Senator Mack, to introduce the MERIT Act. The MERIT Act seeks to reward
those teachers who provide, day in and day out, magic in the
classrooms, to reward them with a salary to match their importance. We
should develop a methodology of rewarding those truly outstanding
teachers and seeing to it that we keep them, retain them. Truly
outstanding teachers are the unsung heroes of our communities.
Unfortunately, however, great education does not take place for every
child in every classroom, and that is sad. But it is something we can
strive for and work to change.
The bill that Senator Mack and I introduce comes on the heels of
receiving some discouraging news, news from Massachusetts where a test
of prospective teachers was given and nearly 60 percent of them failed.
It was a test at the eighth-grade level. I firmly believe that most New
York teachers are very good. But, nonetheless, I must ask the question,
Why not have the best? Why not reach out to them? Why not attract them?
The Massachusetts test was a good idea, but we should also give
periodic competency tests to teachers who are already in the system.
Most teachers are very dedicated and highly competent, but some are
not. Some teachers who are highly skilled in one or two subject areas
may be forced to teach other subjects in which they lack the
competence. When that happens, our children are the ones who suffer.
Another desperately needed reform is merit pay for outstanding
teachers. We must reward the best teachers. In most of our Nation's
schools there is no financial incentive for the truly outstanding
teachers. Great teachers, who help our children achieve educational
excellence, should be rewarded.
The measure introduced today by Senator Mack and myself, the MERIT
Act, is the same measure that passed the Senate on April 21 by a vote
of 63 to 35. This legislation provides incentives for States to
establish periodic teacher assessments and merit rewards. Incentives
are provided through the Eisenhower Professional Development Program.
The measure sets aside 50 percent of the funds appropriated over the
fiscal year 1999 levels in the program, and then distributes them to
States that have established teacher testing and merit pay. Last year,
fiscal year 1998, Congress appropriated $335 million for this program
to subsidize training for teachers. That is an increase of $25 million
from the year before. Should we not be able to use this program to
ensure that teachers are actually improving their teaching skills, as
well as substantive knowledge? Teacher testing will help accomplish
that goal.
But let me be clear. As the Eisenhower Professional Development
Program funding increases, so will each State and local government's
share, with 50 percent of the increase reserved for those States that
put in place a mechanism by which to periodically measure the ability,
knowledge, and skills of teachers, and implement a pay scale to reward
those determined and dedicated teachers. When we look at reforming our
public schools, one thing must always be kept foremost in our efforts,
and that is, we must put our children first. Our children are the best
and the brightest. They are our most precious resource.
So, when it comes to recruiting and retaining the best young
professionals, I believe, in order to do that, we are going to have to
pay them adequately. We are going to have to reward their
accomplishments and see to it that the truly outstanding are rewarded
with merit pay so we can assure our children get that opportunity. I
hope our colleagues will join in this effort to improve America's
schools and help prepare our children for the 21st century.
______
By Mr. ABRAHAM:
S. 2423. A bill to improve the accuracy of the budget and revenue
estimates of the Congressional Budget Office by creating an independent
CBO Economic Council and requiring full disclosures of the methodology
and assumptions used by CBO in producing the estimates; to the
Committee on the Budget and the Committee on Governmental Affairs,
jointly, pursuant to the order of August 4, 1977, that if one Committee
reports, the other Committee have thirty days to report or be
discharged.
____________________