[Congressional Record Volume 145, Number 9 (Wednesday, January 20, 1999)]
[Senate]
[Pages S791-S797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself and Ms. Snowe):
  S. 265. A bill entitled ``Hospital Length of Stay Act of 1999''; to 
the Committee on Finance.


                  hospital length of stay act of 1999

  Mrs. FEINSTEIN. Mr. President, today, Senator Olympia Snowe and I are 
introducing a bill to guarantee that the decision of how long a patient 
receives care in the hospital is left to the attending physician. Our 
legislation would require health insurance plans to cover the length of 
hospital stay for any procedure or illness as determined by the 
attending physician, in consultation with the patient, to be medically 
appropriate.
  The bill is endorsed by the American Medical Association, the 
American

[[Page S793]]

College of Surgeons, the American College of Obstetricians and 
Gynecologists, the American Academy of Neurology, and the American 
Psychological Association.
  Only a physician taking care of the patient, who understands the 
patient's history, medical condition and needs, should make the 
decision as to how much hospital care a person needs. Physicians are 
trained to evaluate all the unique needs and problems of each 
individual patient. Every patient's condition varies and the course of 
their illness also varies. Some patients are fragile or weak. Others do 
not respond well to general anesthesia. Complications arise. Each 
patient is a unique individual with varying degrees of health.
  The American Medical Association, concerned that pre-determined 
length of stay criteria are ``moving away from scientific, patient-
focused principles of care,'' resulting in ``quicker and sicker'' 
discharges and poor patient outcomes, has developed patient-based 
discharge criteria. These criteria include considerations such as the 
patient's physiological, psychological, social and functional needs. 
The AMA criteria say: ``Patients should not be discharged from the 
hospital when their disease or symptoms cannot be adequately treated or 
monitored in the discharge setting.''
  Lengths of stay should not be determined by insurance company clerks, 
actuaries or non-medical personnel. It is the attending physician, not 
a physician or other representative of an insurance company, that 
should decide when to admit and discharge someone.
  A number of physicians and other health care providers have expressed 
to me their great frustration with the current health care climate, in 
which they feel they spend too much of their time trying to justify 
their decisions on medical necessity to insurance companies.
  For example, Donna Damico, a nurse in a Maryland psychiatric unit of 
a hospital, told National Public Radio on October 1, 1997: ``I spend my 
days watching the care on my unit be directed by faceless people from 
insurance companies on the other end of the phone. My hospital employs 
a full-time nurse whose entire job is to talk to insurance reviewers * 
* * The reviewer's background can range anywhere from high school 
graduate to nurse, social worker or even actual physicians.''
  In 1996, we addressed the problem of ``drive-through'' baby 
deliveries because insurance plans would only pay for one day of 
hospital car for childbirth. This was fraught with problems like 
jaundiced babies that had to be rehospitalized and mothers who 
developed problems which only worsened because they were sent home 
despite physicians' view that a mother's and baby's stability are not 
usually reached until the third post-partum day.
  We have also been told of so-called ``drive-through'' mastectomies. 
Some HMO's have made mastectomy an outpatient procedure. Women who have 
had a radical mastectomy at 7:30 a.m. have been out on the street at 
4:30 that afternoon, dizzy and weak, unable to cope with drainage tubes 
and disfigurement. Senator Snowe and I are introducing a separate bill 
to address this.
  A California pediatrician told me of a child with very bad asthma. 
The insurance plan authorized 3 days in the hospital; the doctor wanted 
4-5 days. He told us about a baby with infant botulism (poisoning), a 
baby with a toxin that had spread from the intestine to the nervous 
system so that the child could not breathe. The doctor thought a 10-14 
day hospital stay was medically necessary for the baby; the insurance 
plan insisted on one week.
  A California neurologist told us about a seven-year-old girl with an 
ear infection who went to the doctor feverish. When her illness 
developed into pneumonia, she was admitted to the hospital. After two 
days she was sent home, but she then returned to the hospital three 
times because her insurance plan only covered a certain number of days. 
The third time she returned she had meningitis, which can be life 
threatening. The doctor said that if this girl had stayed in the 
hospital the first time for five to seven days, the antibiotics would 
have killed the infection, and the meningitis would never have 
developed.

  A 27-year-old man from central California had a heart transplant and 
was forced out of the hospital after 4 days because his HMO would not 
pay for more days. He died.
  Nurses in St. Luke's Hospital, San Francisco, say that women are 
being sent home after only two nights after a hysterectomy and two 
nights for a Caesarean section delivery, both of which are major 
abdominal surgeries, even though physicians think the women are not 
ready to go home.
  Lisa Breakey, a San Jose speech pathologist, came to my office and 
told us that she is providing home health for stroke patients she used 
to see in the hospital. She sees patients in their homes who have tubes 
in their stomach for feeding and tracheotomy tubes in their throats for 
breathing. These trach tubes have an inflated balloon or cuff which a 
family member must deflate and inflate by using a needle. Family 
members are supposed to suction the patient's mouth and throat before 
they deflate the cuff. Families, she stressed, are providing intensive 
care, for which they are unprepared and untrained. Bedrooms have become 
hospital rooms.
  Another California physician told us about a patient who needed total 
hip replacement because her hip had failed. The doctor believed a 
seven-day stay was warranted; the plan would only authorize five.
  Rep. Greg Ganske, a physician serving in the House, told the story of 
a six-year-old child who nearly drowned. The child was put on a 
ventilator and it appeared that he would not live. The hospital got a 
call from the insurance company, asking if the doctor had considered 
sending the boy home because home ventilation is cheaper.
  These cases can be summarized in the comments of a Chico, California, 
maternity ward nurse: ``People's treatment depends on the type of 
insurance they have rather than what's best for them.''
  As I have mentioned, premature discharges can increase readmissions 
and medical complications.
  On March 23, 1998, American Medical News (according to Dr. David 
Phillips) reported that the ``shift toward outpatient treatment 
actually has come at quite a high price * * * an increased loss of 
lives.'' This University of California study found that medication 
errors are 3 times higher among outpatients than inpatients and medical 
personnel in outpatient care provide limited oversight of medications' 
side effects.
  Ms. Damico, the nurse interviewed on NPR, said, ``Patients return to 
us in acute states because their insurance will no longer pay the same 
amount for their outpatient treatment * * * [They] deteriorate to the 
point of suicidal thoughts or attempts and need to return to the 
hospital.'' She cited the example of a suicidal woman whose plan denied 
a hospital admission requested by her physician. After the doctor told 
her of the denial, she took twenty 50-milligram tabs of Benadryl, was 
then admitted, and the plan then had to pay for hospital care, an 
ambulance and emergency room fees.
  So not only do premature discharges compromise health, they also 
ultimately cost the insurer more.
  Physicians say they have to fight almost daily with insurance 
companies to give patients the hospital care they need and to justify 
their decisions about patient care.
  An American Medical Association review of a managed care contract 
(Aetna US Healthcare) found that the contract gives ``the company the 
unilateral authority to change material terms of the contract and to 
make determinations of medical necessity * * * without regard to 
physician determinations or scientific or clinical protocols. * * *,'' 
according to the January 19, 1998 American Medical News.
  A study by the American Academy of Neurology found that the 
guidelines (Milliman and Robertson) used by many insurance companies on 
length of stay are ``extraordinarily short in comparison to a large 
National Library of Medicine database * * * And that [the guidelines] 
do not relate to anything resembling the average hospital patient or 
attending physician * * *.'' The neurologists found that these 
guidelines were ``statistically developed,'' and not scientifically 
sound or clinically relevant.

  A study in the April 1997 Bulletin of the American College of 
Surgeons

[[Page S794]]

found that surgeons stated that the appropriate length of stay for an 
appendectomy is zero to five days, while insurance industry guidelines 
set a specific coverage limit of one day.
  The arbitrary limits set by HMO's and insurance plans are resulting 
in unintended consequences. Some 7 in 10 physicians said that in 
dealing with managed care plans, they have exaggerated the severity of 
a patient's condition to ``prevent him or her from being sent home from 
a hospital prematurely.'' Dr. David Schriger, at UCLA Medical Center in 
Los Angeles, said that he routinely has patients such as a frail, 
elderly woman with the flu, who is not in imminent danger but could 
encounter serious problems if she is sent home during the night. He 
told the Washington Post, ``At this point I have to figure out a way to 
put her in the hospital. . . . And typically, I'll come up with a 
reason acceptable to the insurer,'' and orders a blood test and chest 
x-ray to justify admission.
  The Post article also cited Kaiser Permanente's Texas division, which 
``warned doctors in urgent care centers not to tell patients they 
required hospitalization,'' as one Kaiser administrator recalled. ``We 
basically said [to] the UCC doctors, `If you value your job, you won't 
say anything about hospitalization. All you'll say is, I think you need 
further evaluation. . . .' ''
  Ms. Damico, the psychiatric nurse interviewed on NPR said, ``Our 
utilization review nurse gives all of us, including the doctors, good 
advice on how to chart so that our patients' care will be covered. . . 
. We all conspire quietly to make certain the charts look and sound bad 
enough.''
  On August 2, 1998, calling it the ``brave new world of managed 
care,'' the San Jose Mercury News reported, ``to cut costs HMOs are 
shifting the burden of caring for the sick from their staff and 
provider networks to patients themselves and their often ill-prepared 
family members,'' by reducing hospital stays. ``Patients who used to be 
in the hospital for a week after a hip replacement now stay only three 
days; patients who had coronary artery bypass graft surgery are pushed 
out after four or five. Doctors are routinely performing operations in 
outpatient surgery centers, clinics or their offices, which were once 
done in the hospital.'' This article cited, as examples, mastectomies, 
knee surgery, parts of bone marrow transplants, and cancer 
chemotherapies.
  The American College of Surgeons said it all when this prestigious 
organization wrote: ``We believe very strongly that any health care 
system or plan that removes the surgeon and the patient from the 
medical decision-making process only undermines the quality of that 
patient's care and his or her health and well-being. . . . specific, 
single numbers [of days] cannot and should not be used to represent a 
length of stay for a given procedure.'' (April 24, 1997) ACS on March 5 
wrote, ``We believe very strongly that any health care system or plan 
that removes the surgeon and the patient from the medical decision 
making process only undermines the quality of that patient's care and 
his or her health and well being.''
  The American Medical Association wrote on May 20, 1998, ``We are 
gratified that this bill would promote the fundamental concept, which 
the AMA has always endorsed, that medical decisions should be made by 
patients and their physicians, rather than by insurers or legislators.  
. . . We appreciate your initiative and ongoing efforts to protect 
patients by ensuring that physicians may identify medically appropriate 
lengths of stay, unfettered by third party payers.''
  The American Psychological Association, on March 4, 1998 wrote me, 
``We are pleased to support this legislation, which will require all 
health plans to follow the best judgment of the patient and attending 
provider when determining length of stay for inpatient treatment.''
  New treatments, particularly less invasive treatments, have shortened 
many hospital stays, but so also has pressure from insurers. Business 
and Health magazine reported in ``The State of Health Care in America 
1998'' that ``HMOs and capitated point-of-service plans'' were 
associated with the lowest inpatient stays. Other studies reveal that 
in areas with high HMO competition, health care utilization is lower 
for the entire population.'' This study shows that for patients with 
traditional fee-for-service insurance, the average length of stay in 
1995 was 4.9 days. For HMOs, it was 4.2 days. California Health Care 
Association data show that in my state, the average length of stay has 
declined from 5.70 days in 1986 to 4.45 in 1995. A study in the spring 
1996 issue of Health Affairs concluded that the number of inpatient 
days per thousand residents is lower and has declined faster in 
California than the national average. The average length of stay in 
California in 1996 was 5.3 days, while nationally it was 6.4 days. For 
example, a woman getting a mastectomy in New York will stay in the 
hospital an average of 5.78 days, but a mastectomy patient in 
California is likely to stay 2.98 days. (Inquiry, winter 1997-1998).
  Americans are disenchanted with the health insurance system in this 
country, as HMO hassles mount and physicians get effectively overruled 
by insurance companies. Arbitrary insurance company rules cannot 
address the subtleties of medical care. Three out of every four 
Americans are worried about their health care coverage and half say 
they are worried that doctors are basing treatment decisions strictly 
on what insurance plans will pay for.
  This bill is one step toward returning medical decision-making to 
those medical professionals trained to make medical decisions.


           summary of the hospital length of stay act of 1998

  Requires plans to cover hospital lengths of stay for all illnesses 
and conditions as determined by the physician, in consultation with the 
patient, to be medically appropriate.
  Prohibits plans from requiring providers (physicians) to obtain a 
plan's prior authorization for a hospital length of stay.
  Prohibits plans from denying eligibility or renewal for the purpose 
of avoiding these requirements.
  Prohibits plans from penalizing or otherwise reducing or limiting 
reimbursement of the attending physician because the physician provided 
care in accordance with the requirements of the bill.
  Prohibits plans from providing monetary or other incentives to induce 
a physician to provide care inconsistent with these requirements.
  Includes language clarifying that--
  Nothing in the bill requires individuals to stay in the hospital for 
a fixed period of time for any procedure;
  Plans may require copayments but copayments for a hospital stay 
determined by the physician cannot exceed copayments for any preceding 
portion of the stay.
  Does not pre-empt state laws that provide greater protection.
  Applies to private insurance plans, Medicare, Medicaid, Medigap, 
federal employees' plans, Children's Health Insurance Plan, the Indian 
Health Service
   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. 265

       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 ``Hospital Length of Stay Act 
     of 1999''.

     SEC. 2. COVERAGE OF HOSPITAL LENGTH OF STAY.

       (a) Group Health Plans.--
       (1) Public health service act amendments.--
       (A) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 2707. STANDARDS RELATING TO COVERAGE OF HOSPITAL 
                   LENGTHS OF STAY.

       ``(a) Requirement.--A group health plan and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including a self-insured 
     issuer) that provides coverage for inpatient hospital 
     services--
       ``(1) shall provide coverage for the length of an inpatient 
     hospital stay as determined by the attending physician (or 
     other attending health care provider to the extent permitted 
     under State law) in consultation with the patient to be 
     medically appropriate; and
       ``(2) may not require that a provider obtain authorization 
     from the plan or the issuer for prescribing any length of 
     stay required under paragraph (1).
       ``(b) Prohibitions.--A group health plan and a health 
     insurance issuer offering group

[[Page S795]]

     health insurance coverage in connection with a group health 
     plan (including a self-insured issuer) may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan, solely for the purpose of avoiding the 
     requirements of this section;
       ``(2) provide monetary payments or rebates to an individual 
     to encourage the individual to accept less than the minimum 
     protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of an attending provider because such provider 
     provided care to an individual participant or beneficiary in 
     accordance with this section;
       ``(4) provide incentives (monetary or otherwise) to an 
     attending provider to induce such provider to provide care to 
     an individual participant or beneficiary in a manner 
     inconsistent with this section; or
       ``(5) subject to subsection (c)(4), 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.
       ``(c) Rules of Construction.--
       ``(1) No requirement to stay.--Nothing in this section 
     shall be construed to require an individual who is a 
     participant or beneficiary to stay in the hospital for a 
     fixed period of time for any procedure.
       ``(2) No effect on requirements for minimum hospital stay 
     following birth.--Nothing in this section shall be construed 
     as modifying the requirements of section 2704.
       ``(3) Nonapplicability.--This section shall not apply with 
     respect to any group health plan, or any group health 
     insurance coverage offered by a health insurance issuer 
     (including a self-insured issuer), which does not provide 
     benefits for hospital lengths of stay.
       ``(4) Cost-sharing.--Nothing in this section shall be 
     construed as preventing a group health plan, or a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including a self-insured 
     issuer), from imposing deductibles, coinsurance, or other 
     cost-sharing in relation to benefits for hospital lengths of 
     stay under the plan, health insurance coverage offered in 
     connection with a group health plan, or the supplemental 
     policy, 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.
       ``(d) Notice.--A group health plan under this part shall 
     comply with the notice requirement under section 714(d) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.
       ``(e) Level and Type of Reimbursements.--Nothing in this 
     section shall be construed to prevent a group health plan or 
     a health insurance issuer offering group health insurance 
     coverage in connection with a group health plan (including a 
     self-insured issuer) from negotiating the level and type of 
     reimbursement with a provider for care provided in accordance 
     with this section.
       ``(f) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage if there 
     is a State law (as defined in section 2723(d)(1)) for a State 
     that regulates such coverage and provides greater protections 
     to patients than those provided under this section.
       ``(2) Construction.--Section 2723(a)(1) shall not be 
     construed as superseding a State law described in paragraph 
     (1).''.
       (B) Conforming amendment.--Section 2723(c) of the Public 
     Health Service Act (42 U.S.C. 300gg-23(c)) is amended by 
     striking ``section 2704'' and inserting ``sections 2704 and 
     2707''.
       (2) ERISA amendments.--
       (A) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 714. STANDARDS RELATING TO COVERAGE OF HOSPITAL 
                   LENGTHS OF STAY.

       ``(a) Requirement.--A group health plan and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including a self-insured 
     issuer), that provides coverage for inpatient hospital 
     services--
       ``(1) shall provide coverage for the length of an inpatient 
     hospital stay as determined by the attending physician (or 
     other attending health care provider to the extent permitted 
     under State law) in consultation with the patient to be 
     medically appropriate; and
       ``(2) may not require that a provider obtain authorization 
     from the plan or the issuer for prescribing any length of 
     stay required under paragraph (1).
       ``(b) Prohibitions.--A group health plan and a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including a self-insured 
     issuer), may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage under the terms 
     of the plan, solely for the purpose of avoiding the 
     requirements of this section;
       ``(2) provide monetary payments or rebates to an individual 
     to encourage the individual to accept less than the minimum 
     protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of an attending provider because such provider 
     provided care to an individual participant or beneficiary in 
     accordance with this section;
       ``(4) provide incentives (monetary or otherwise) to an 
     attending provider to induce such provider to provide care to 
     an individual participant or beneficiary in a manner 
     inconsistent with this section; or
       ``(5) subject to subsection (c)(4), 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.
       ``(c) Rules of Construction.--
       ``(1) No requirement to stay.--Nothing in this section 
     shall be construed to require an individual who is a 
     participant or beneficiary to stay in the hospital for a 
     fixed period of time for any procedure.
       ``(2) No effect on requirements for minimum hospital stay 
     following birth.--Nothing in this section shall be construed 
     as modifying the requirements of section 711.
       ``(3) Nonapplicability.--This section shall not apply with 
     respect to any group health plan or any group health 
     insurance coverage offered by a health insurance issuer 
     (including a self-insured issuer), which does not provide 
     benefits for hospital lengths of stay.
       ``(4) Cost-sharing.--Nothing in this section shall be 
     construed as preventing a group health plan or a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including a self-insured 
     issuer), from imposing deductibles, coinsurance, or other 
     cost-sharing in relation to benefits for hospital lengths of 
     stay under the plan or health insurance coverage offered in 
     connection with a group health plan, except that such 
     coinsurance or other cost-sharing for any portion of a period 
     within a hospital length of stay required under subsection 
     (a) may not be greater than such coinsurance or cost-sharing 
     for any preceding portion of such stay.
       ``(d) Notice under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in 
     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan; except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.
       ``(e) Level and Type of Reimbursements.--Nothing in this 
     section shall be construed to prevent a group health plan or 
     a health insurance issuer offering group health insurance 
     coverage in connection with a group health plan (including a 
     self-insured issuer), from negotiating the level and type of 
     reimbursement with a provider for care provided in accordance 
     with this section.
       ``(f) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage if there 
     is a State law (as defined in section 731(d)(1)) for a State 
     that regulates such coverage and provides greater protections 
     to patients than those provided under this section.
       ``(2) Construction.--Section 731(a)(1) shall not be 
     construed as superseding a State law described in paragraph 
     (1).''.
       (B) Conforming amendments.--
       (i) Section 731(c) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191(c)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (ii) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191a(a)), as amended by 
     section 603(b)(2) of Public Law 104-204, is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (iii) The table of contents in section 1 of the Employee 
     Retirement Income Security Act of 1974 is amended by 
     inserting after the item relating to section 713 the 
     following new item:

``Sec. 714. Standards relating to coverage of hospital lengths of 
              stay.''.
       (b) Individual Market.--Subpart 3 of part B of title XXVII 
     of the Public Health Service Act (42 U.S.C. 300gg-51 et seq.) 
     is amended by adding at the end the following new section:

     ``SEC. 2753. STANDARDS RELATING TO COVERAGE OF HOSPITAL 
                   LENGTHS OF STAY.

       ``The provisions of section 2707 shall apply to health 
     insurance coverage offered by a health insurance issuer in 
     the individual market in the same manner as they apply to 
     health insurance coverage offered by a health insurance 
     issuer in connection with a group health plan in the small or 
     large group market.''.
       (c) Effective Dates.--
       (1) Group health plans.--Subject to paragraph (3), the 
     amendments made by subsection (a) shall apply with respect to 
     group health plans for plan years beginning on or after 
     January 1, 2000.
       (2) Health insurance coverage.--The amendment made by 
     subsection (b) shall apply with respect to health insurance 
     coverage offered, sold, issued, renewed, in effect, or 
     operated in the individual market on or after such date.
       (3) 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,

[[Page S796]]

     the amendments made subsection (a) shall not apply to plan 
     years beginning before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of enactment of this Act), or
       (B) January 1, 2000.

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

     SEC. 3. APPLICATION TO MEDICARE AND MEDICAID BENEFICIARIES.

       (a) Medicare.--
       (1) In general.--Title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) is amended by adding at the end the 
     following:


      ``STANDARDS RELATING TO COVERAGE OF HOSPITAL LENGTHS OF STAY

       ``Sec. 1897. (a) Application to Medicare.--Notwithstanding 
     the limitation on benefits described in section 1812, or any 
     other limitation on benefits imposed under this title, the 
     provisions of section 2707 of the Public Health Service Act 
     shall apply to the provision of items and services under this 
     title.
       ``(b) Medicare+Choice and Eligible Organizations.--The 
     Secretary may not enter into a contract with a 
     Medicare+Choice organization under part C, or with an 
     eligible organization with a risk-sharing contract under 
     section 1876, unless the organization meets the requirements 
     of section 2707 of the Public Health Service Act with respect 
     to individuals enrolled with the organization.''.
       (2) Medicare supplemental policies.--
       (A) In general.--Section 1882(c) of the Social Security Act 
     (42 U.S.C. 1395ss(c)) is amended--
       (i) in paragraph (4), by striking ``and'' at the end;
       (ii) in paragraph (5), by striking the period and inserting 
     ``, and''; and
       (iii) by adding at the end the following:
       ``(6) meets the requirements of section 2707 of the Public 
     Health Service Act with respect to individuals enrolled under 
     the policy.''.
       (B) Conforming amendment.--Section 1882(b)(1)(B) of the 
     Social Security Act (42 U.S.C. 1395ss(b)(1)(B)) is amended by 
     striking ``(5)'' and inserting ``(6)''.
       (3) Cost Sharing.--Nothing in this subsection or section 
     2707(c) of the Public Health Service Act shall be construed 
     as authorizing the imposition of cost sharing with respect to 
     the coverage or benefits required to be provided under the 
     amendments to the Social Security Act made by paragraphs (1) 
     and (2) that is inconsistent with the cost sharing that is 
     otherwise permitted under title XVIII of the Social Security 
     Act.
       (b) Medicaid.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended by redesignating section 1935 
     as section 1936 and by inserting after section 1934 the 
     following:


      ``STANDARDS RELATING TO COVERAGE OF HOSPITAL LENGTHS OF STAY

       ``Sec. 1935. (a) In General.--A State plan may not be 
     approved under this title unless the plan requires each 
     health insurance issuer or other entity with a contract with 
     such plan to provide coverage or benefits to individuals 
     eligible for medical assistance under the plan, including a 
     managed care entity, as defined in section 1932(a)(1)(B), to 
     comply with the provisions of section 2707 of the Public 
     Health Service Act with respect to such coverage or benefits.
       ``(b) Cost Sharing.--Nothing in this section or section 
     2707(c) of the Public Health Service Act shall be construed 
     as authorizing a health insurance issuer or entity to impose 
     cost sharing with respect to the coverage or benefits 
     required to be provided under section 2707 of the Public 
     Health Service Act that is inconsistent with the cost sharing 
     that is otherwise permitted under this title.
       ``(c) Waivers Prohibited.--The requirement of subsection 
     (a) may not be waived under section 1115 or section 1915(b) 
     of the Social Security Act.''.
       (c) Effective Date.--The amendments made by this section 
     apply to contract years under titles XVIII and XIX of the 
     Social Security Act beginning on or after January 1, 2000.
       (d) Medigap Transition Provisions.--
       (1) In general.--If the Secretary of Health and Human 
     Services identifies a State as requiring a change to its 
     statutes or regulations to conform its regulatory program to 
     the changes made by subsection (a)(2), the State regulatory 
     program shall not be considered to be out of compliance with 
     the requirements of section 1882 of the Social Security Act 
     due solely to failure to make such change until the date 
     specified in paragraph (4).
       (2) NAIC standards.--If, within 9 months after the date of 
     the enactment of this Act, the National Association of 
     Insurance Commissioners (in this subsection referred to as 
     the ``NAIC'') modifies its NAIC Model Regulation relating to 
     section 1882 of the Social Security Act (referred to in such 
     section as the 1991 NAIC Model Regulation, as modified 
     pursuant to section 171(m)(2) of the Social Security Act 
     Amendments of 1994 (Public Law 103-432) and as modified 
     pursuant to section 1882(d)(3)(A)(vi)(IV) of the Social 
     Security Act, as added by section 271(a) of the Health 
     Insurance Portability and Accountability Act of 1996 (Public 
     Law 104-191) to conform to the amendments made by this 
     section, such revised regulation incorporating the 
     modifications shall be considered to be the applicable NAIC 
     model regulation (including the revised NAIC model regulation 
     and the 1991 NAIC Model Regulation) for the purposes of such 
     section.
       (3) Secretary standards.--If the NAIC does not make the 
     modifications described in paragraph (2) within the period 
     specified in such paragraph, the Secretary of Health and 
     Human Services shall make the modifications described in such 
     paragraph and such revised regulation incorporating the 
     modifications shall be considered to be the appropriate 
     Regulation for the purposes of such section.
       (4) Date specified.--
       (A) In general.--Subject to subparagraph (B), the date 
     specified in this paragraph for a State is the earlier of--
       (i) the date the State changes its statutes or regulations 
     to conform its regulatory program to the changes made by this 
     section, or
       (ii) 1 year after the date the NAIC or the Secretary first 
     makes the modifications under paragraph (2) or (3), 
     respectively.
       (B) Additional legislative action required.--In the case of 
     a State which the Secretary identifies as--
       (i) requiring State legislation (other than legislation 
     appropriating funds) to conform its regulatory program to the 
     changes made in this section, but
       (ii) having a legislature which is not scheduled to meet in 
     2000 in a legislative session in which such legislation may 
     be considered,

     the date specified in this paragraph is the first day of the 
     first calendar quarter beginning after the close of the first 
     legislative session of the State legislature that begins on 
     or after July 1, 2000. For purposes of the previous sentence, 
     in the case of a State that has a 2-year legislative session, 
     each year of such session shall be deemed to be a separate 
     regular session of the State legislature.

     SEC. 4. APPLICATION TO OTHER HEALTH CARE COVERAGE.

       (a) FEHBP.--Chapter 89 of title 5, United States Code, is 
     amended by adding at the end the following:

     ``Sec. 8915. Standards relating to coverage of hospital 
       lengths of stay

       ``(a) The provisions of section 2707 of the Public Health 
     Service Act shall apply to the provision of items and 
     services under this chapter.
       ``(b) Nothing in this section or section 2707(c) of the 
     Public Health Service Act shall be construed as authorizing a 
     health insurance issuer or entity to impose cost sharing with 
     respect to the coverage or benefits required to be provided 
     under section 2707 of the Public Health Service Act that is 
     inconsistent with the cost sharing that is otherwise 
     permitted under this chapter.''.
       (b) Medical Care For Members and Certain Former Members of 
     the Uniformed Services and Their Dependents.--Chapter 55 of 
     title 10, United States Code, is amended by adding at the end 
     the following:

     ``Sec. 1110. Standards relating to coverage of hospital 
       lengths of stay

       ``(a) Application of Standards.--The provisions of section 
     2707 of the Public Health Service Act shall apply to the 
     provision of items and services under this chapter.
       ``(b) Cost-Sharing.--Nothing in this section or section 
     2707(c) of the Public Health Service Act shall be construed 
     as authorizing the imposition of cost sharing with respect to 
     the coverage or benefits required to be provided under 
     section 2707 of the Public Health Service Act that is 
     inconsistent with the cost sharing that is otherwise 
     permitted under this chapter.''.
       (c) Veterans.--Subchapter II of chapter 17 of title 38, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 1720E. Standards relating to coverage of hospital 
       lengths of stay

       ``(a) The provisions of section 2707 of the Public Health 
     Service Act shall apply to the provision of items and 
     services under this chapter.
       ``(b) Nothing in this section or section 2707(c) of the 
     Public Health Service Act shall be construed as authorizing 
     the imposition of cost sharing with respect to the coverage 
     or benefits required to be provided under section 2706 of the 
     Public Health Service Act that is inconsistent with the cost 
     sharing that is otherwise permitted under this chapter.''.
       (d) State Children's Health Insurance Program.--Section 
     2109 of the Social Security Act (42 U.S.C. 1397ii) is amended 
     by adding at the end the following:
       ``(b) Application of Standards Relating to Coverage of 
     Hospital Lengths of Stay.--
       ``(1) In general.--The provisions of section 2707 of the 
     Public Health Service Act shall apply to the provision of 
     items and services under this title.
       ``(2) Cost-sharing.--Nothing in this section or section 
     2707(c) of the Public Health Service Act shall be construed 
     as authorizing a health insurance issuer or entity to impose 
     cost sharing with respect to the coverage or benefits 
     required to be provided under section 2707 of the Public 
     Health Service Act that is inconsistent with the cost sharing 
     that is otherwise permitted under this title.''.
       (e) Indian Health Service and Health Care Provided by 
     Tribal Organizations.--Title VIII of the Indian Health Care 
     Improvement Act (25 U.S.C. 1671 et seq.) is amended by adding 
     at the end the following:

[[Page S797]]

      ``STANDARDS RELATING TO COVERAGE OF HOSPITAL LENGTHS OF STAY

       ``Sec. 826. (a) The provisions of section 2707 of the 
     Public Health Service Act shall apply to the provision of 
     items and services under this Act by the Service or a tribal 
     organization.
       ``(b) Nothing in this section or section 2707(c) of the 
     Public Health Service Act shall be construed as authorizing 
     the imposition of cost sharing with respect to the coverage 
     or benefits required to be provided under section 2707 of the 
     Public Health Service Act that is inconsistent with the cost 
     sharing that is otherwise permitted under this Act.''.
       (f) Health Care Provided to Peace Corps Volunteers.--
     Section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)) is 
     amended by adding at the end the following: ``The provisions 
     of section 2707 of the Public Health Service Act shall apply 
     to the provision of items and services under this section. 
     Nothing in this section or section 2707(c) of the Public 
     Health Service Act shall be construed as authorizing the 
     imposition of cost sharing with respect to the coverage or 
     benefits required to be provided under section 2707 of the 
     Public Health Service Act that is inconsistent with the cost 
     sharing that is otherwise permitted under this section.''.
                                 ______